Full text of Commercial and Financial Chronicle : October 14, 1943, Vol. 158, No. 4220, Section 1

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

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Final

ESTABLISHED OVER

Edition

Reg. U.

Volume

New

Number 4220

158

The Effect Of Public Debt On

^

Unsound Tax

Debt of 250 To 300 Billion

Preclude Corporations Repaying Debts, Credit Is

Wholesale

Higher

Level

Price

Predicts

And

Government

Control

Of Money Market To Keep Interest Rates Down-—Warns Taxes
Not

Stifle Initiative,

Accumulate

Dr.

Conference"

of

Finance

at

Druggists

New

York

Association

at

John W.

ing

for Social Research in New York City, last week said

in

institutions

there

only

one

debt,

"To think of
ent size of the

hard way; any

is difficult.

way

debt

dis¬

to

is

Doctor

aster.

Nadler's

ad¬

t i n g

'

\

public debt on our national econ¬

business activity in gen¬

omy, on

and

eral,

the

dangers

must

we

guard against, follows in full: ;
One of the great problems that
will confront the nation in a post¬

period is the public debt.
the solution of this prob(Continued on page 1498)

war

Upon

to

as

United Lt. &
Common, W.

ability."
does

kind

\*c-.

'

•

our

I.

ford

the

Com

of

me r c

York

New
U

n

"B

the debt to ourselves, it con¬
stitutes no burden whatever on

fortu¬

t,

u

the nation.
In

Doc¬

King

;y

the Keynesians have

"the
may be

same

Clearly,
interest

inhabitant is received by another
inhabitant of the nation.
Obvi¬

of

our
re¬

and

rod

u

Willford I. King

almost
or

every

principal paid by

NEW YORK 4, N.Y.
25 Broad St.

2-OGOO

Teletype NY 1-210

one

ously,

cancellation of the debt
(Continued on page 1496)

ctive

Rwy.

reach

sur¬

the

proposed 50%
and the

excess

profits

tax is
90% the prob¬
lem

ceases

b

p n e

to

J''*.

";■*

Company

f

o

Philadelphia,
addressing

in

the

American

Life

Conven¬

tion

at

Chi¬

cago last week.
To
do
away

with the state

administration
of

unemploy-

m e n

t

insur¬

and

ance,

to

transform
into
f

a

d

e

i t
M.

fully

e r a

every

■

a

MANHATTAN

BOKH|MjND

Pay Day

R.H. Johnson & Co.
Established 1927

64 Wall Street, New

CHICAGO 3, ILL.

Teletype CG 1219

plan administered by federal offi¬
cers, as is proposed by the pending

Wagner-Dingell
ate

bill, would cre¬
huge federal machine which

a

could

not

help

repercussions
party

having

no

political
which

matter

in power,, Mr. Linton
said.
•'.■■■''•/.V
(Continued on page 1506)
were
.

e

of

'

inequities and
John W.

a

Hanes

p proac

hes

Illinois

that of danger
t

corporate

o

enterprises generally" and he fur¬
ther declared "that venture
will have

to

risk

dress

little

itself

or

in

capital

inducement

no

enter¬
Mr. Hanes closed his ad¬
corporate

Corporates-Municipals
Special
sively

to

section
Illinois

exclu¬

devoted

corporate

municipal securities starts

and

on page

1490.

by

saying that with the
proper form of corporate taxes,
"businessmen would accept any

For

index

see

page

1508.

tax rate that

might be imposed for
the duration, for they would know
then that our government is in¬
terested in preserving our Amer(Continued on page 1499)

the

chase
bank

Syracuse
Dallas

Brokerage
Broaden your customer

Service
for Banks, Brokers

REQUEST

ON

service with Chase

and Dealers

correspondent

Distributors

W/LONG

and-BOMPANY
ST.!

LOS ANGELES

facilities

York Stock Exchange

Members

«34 SO. SPRING

JERSEY CITY

Hardy & Co.
Members New

INCORPORATED

15 EXCHANGE PL

Bond

York Curb Exchange

New

30 Broad St.

New York 4

Tel. DIgby 4-8400

Tele. NY 1-733

Member federal

Deposit Insurance

Corporation

:I

'

I

HUGH

York 5

Albany
Buffalo
Pittsburgh
Williamsport

Troy

State 8770

;

PHILADELPHIA

BOSTON

135 So. LaSalle St.

-

Wholesale

SECURITIES

INVESTMENT

Rep.

Linton

A.

lized

OF THE CITY OF NEW YORK

WAR BOND
2,i'.

Life

national

Stock Exchange
Exchanges
:■

Geneva

of

dollar

nor¬

I.

Members New York

-

and

tax

prise."

Who is right?

way,

much the stronger side of the case.

con¬

tinues,

p

a

of

mal

to

owe

i versity,

nately,"
tor

e,

corporate

rates

fact,

struggling along under this
huge incubus.
The Keynesians,
however, assure us that since we

peace

"When

said

tions

King,

School

Hirsch, Lilienthal & Co.
London

this

of

Mr. Hanes also

picture of future genera¬

a

in

the

f

o

Insurance

all desire."

we

national debt

PROSPECTUS

other

of

draw

Preferred
'

view

"In

subject which follows in full:
Popular writers are prone

mind,"
Dr. Will-

United Light

and

inevitable

achieving

really con¬
stitute a serious problem?" he asks
in a paper he has prepared on the

Buy

HAnover

war,

too mild. The

seem

of the
but also

defeat

erage

sources

'

<5,

<1^-

be

natural

"

:

Huge, mammoth, unprecedented—all

prodig¬

said

*

not only the danger of the loss

mean

says

Dr. Marcus Nadler

rapidly

mo u n

war

ble to the av¬

of

effect

our

will

now

and that "to

democracy"

adjective which appropriately describes the pres¬
debt, to say nothing of its prospective magnitude,

entirely in¬
comprehensi¬

discusses

the

an

certainly

so

ious

dress, in which
he

system of capitalistic

our

By Enforced Savings

the

and that is the

leads

strangulate it
—:

that it seems

only hope for the future is dependent upon the continued

our

functioning of

:||||!!|The War Debt Problem If

is

way

handle

other

"that-

King Would Solve

as

out

that

public

"Problems of Federal Taxation in Wartime" at the New School

on

also

pointed

to

Willford I.

political
He

unemploy¬
be vigor¬

Provident

Mutual

an

economic

well.

should

insurance

President
the

Hanes, former Under-Secretary of the Treasury, speak¬

of

future

and

The federalization of

according
t o
M. A. Linton,

Of Net Income Be

UnW

New York on Sept. 30, and said that
that will confront the nation in a post¬
war
period is the public debt* Doctor Nadler said that upon the
solution of this problem will depend.';not merely the course
of
business,
but

our

Certain Percentage

Copy

ously opposed by those who advo¬
cate the American way of life,

Signs Of Depres-

their

of the great problems

the

First

Capital Will Be Lacking Too He Avers.

That Amount Is Used To Pay Corporate Debt

,-

Surplus And Investor Assured Of Return

Nadler, Professor
addressed the Wholesale

"Road Ahead

one

At

a

Insurance Control
ment

Exempt From All Federal Income Tax Provided

•

Corporations Must Be Permitted

Marcus"

versity,

Ensue

Destroyed And

Cents

60

~

For

To

Bankruptcies

sion.Venture

Suggests A

1

Opposes Federal
Unemployment

John W. Hanes Declares That When Normal Tax Is So High As To

Economy. Avers Danger Lies In Attempt To Solve
Debt Problem Via Currency Depreciation

Must

Price

York, N. Y., Thursday, October 14, 1943

Dollars Need Not Have Great Adverse Effect On Our

Looks

2 Sections-Section

Office

Pat.

Program Can Destroy
Activities Capitalistic Democracy : Banes

Future Business
Dr. Nadler Says National

S.

In

YEARS

Actual Trading Markets, always

BROKERS and DEALERS

Consol. Natural Gas

for brokers and dealers in

COMMON

in

Circular

Over-The'Counter

on

w.

New

England

i.

Public Service Co.

request

ALL ISSUES

BONDS

Idaho Power
COMMON

BULL, HOLDEN 8c C9

Kobbe', Gearhart & Co.
INCORPORATED

MEMBERS NEW YORK STOCK EXCHANGE

Members
14 Wall st.. new York

5.N.Y.

telephone-rector 2-6300




N.

Y.

Security

45 Nassau Street
.Tel. REctor 2-3600

Dealers

Ass'n

New York 5

Teletype N. Y. 1-576

Philadelphia Telephone:

Enterprise 6015

REYNOLDS & CO.
Members New

120

York

Stock Exchange

Broadway, New York 5, N. Y,

HART SMITH & CO.
IRA HAUPT He CO.

Members

New

York Security

Dealers Assn.

52 WILLIAM ST., N. Y. 5

Bell Teletype

Telephone: REctor 2-7400
Bell

Teletype

NY 1-635

New York

Members New

York Stock Exchange

HAnover 2-0980

NY 1-393

Montreal

Toronto

111 Broadway

REctor 2-3100

Teletype NY 1-1920

PKi>a22ffiffiat';:~'u*"^itt,'M*liit^^
&8&$&sussasw*"

-mm-m

T rading.

t

American
We Maintain Active Markets in U. S. FUNDS

Branlff Airways.:.
CANADIAN PACIFIC 4s,

United Gas improv.
'•'

Residuals

■

Common &' Preferred ;■'

Members'' New

Members X.

Security • Dealers. Ass'n

York

Goodbody & Co.

:

.

,-o'.v.-v;_

Established 1920

V. Stock

r

Members New York Stock Exchange

Teletype NY

.

120

Tel.

Ft, Dodge, Des Moines '& Sou.
•

4's' &

Common ';-

.;/■:y-

of

May, McEwen & Kaiser,; Com.

United

Paper-board, Pfd.

Mitchell & Company
Members

120

Baltimore

Stock Exchange

Broadway. N. Y. 5, M, Y,
WOrth 2-4230

m

By HON. ROBERT HENRY BRAND

ih

^

British

:

Board

the

North

of

British

should

in

ternally

maintained

be

each

Vanderhoef & Robinson
Members New York Curb Exchange

New York 5

Telephone COrtlandt

according to

deflation

or

are

scribed

of

Co.,
the

IN "THE SHEETS"

the Associated Press, the Govern¬
ment would

Tax

dory

assume

that all Vic-

payers

C. E de Willers & Co,
120 Broadway, N. Y. 5, N. Y.
REctor 2-7634

credit.

Ltd.,
ABA

•The

funda-,

Associated

Press

Teletype NY 1,2361

accounts

further explained:

incalculable,

by

New England P. S. Plain

turns

an¬

as

'

Therefore, in the next tax re¬
all taxpayers would take

de¬

was

the speaker
other prerequisite.
)

the credit that

V

tended

as

a

6% & 1% Pfd.

originally was in¬
post-war refund.

The credit amounts to 25%

"The second

"is

OUE LISTINGS

SEE

,

measure,

South Shore Oil

for

American

that

Util Svce Pfd

Southwest

Natural

Sylvania
Citizens

Gas

Industrial

Utilities Common

v

N. Y. Curb Exchange

7-4W9

"

.Bell System

Victory Tax,
.

Rails and industrials

r

.

Preferred

31 Nassau Street

Insurance

§

portion
ranging

a

condition," he said,
single persons, 40% for married
something like ' internal
persons, 2% for each dependent,
mental need of
stability, whether of production,
all, Mr. Brand employment prices, relation be¬ with the rebate in no case to ex¬
ceed 51,000.
asserted. Ow¬ tween
supply and demand, and
The House also passed and sent
ing to the pre¬ other economic conditions, shall
to the/ Senate bills providing for
ponderant in¬ be maintained in the great indus¬
fluence of the trial and trading countries and extension of time for filing for
United States particularly, because of its over¬ relief under the excess profits law
and removing for the duration of
on
the
r e s t
whelming •economic strength, in
the war the duty on ship repairs
of the world,
the United States.
done and equipment installed in
he
told
the
"The third—and of course very foreign
ports.
gathering, this
basic require¬ closely related to the second—is
that stability of exchanges among
ment is more
these
nations,
in other words
i m portant
here than any¬ equilibrium in the balance of pay¬
ments as a whole, including loans,
where else. It

United Cigar Whelan
on

and

which

avoided, is the

Preferred

Traded

Mercantile

&

in¬

country,

inflation

seve r e

Taggart Corporation

i

London

declared in addressing the general session
War Service Meeting the latter part of last month.
That comparative economic sta-y>

most

m

Ltd.,

London,

y

'6s 1952

B§

Mercantile Insurance,

&

Actual Markets in

had made the
There are three prerequisites necessary to achieving, a solution mecessary War Bond purchases,
for the great problems facing nations after the war, Robert Henry payments on insurance and debts
Brand, managing director of Lazard Brothers & Co. and Chairman necessary to qualify them for the

bility

interstate Power y::

5%

Under the

,

Managing Director of Lazard Brothers & Co., Chairman ©I Board of

of

Bell Teletype N. Y. 1-1227

the

from 25 to 40%,

North

branch offices

our

DEALERS! Hi

The House on Oct. 11 passed a
bill providing for a refund through
immediate tax credits of

"y

Direct wires to

REctor 2-7815

NY 1-1557

La.-Birmingham, Ala.

.

Kearney & Treck'er '.

Royal Typewriter, Pfd,

New Orleans,

Victory Tax Slefant
Biil Voted By House

Security, Internal
Stability Esseittlal lit Solving

St., New York 4, N. Y.

HAnover 2-0700

BROADWAY, NEW YORK

1-672

BELL TELETYPE NY 1-423

Elk Horn Coal, Com. & Pfd.

25 Broad

York Stock Exchange
New York Curb Exchange

New

NEW YORK 6, N. Y.

Telephone BArclay 7-0100

Saltex Looms 6s, 1954

Walworth Pfd.

{vfc Donnell £ Co. STEiNER,R0USE&C0.

:

Exchange and Other Principal Exchanges

115 BROADWAY

Excliang-e PI.., 3NT.Y. 5 HA 2-2772

Birmingham Gas.

Warren Bros. Class "B" & "C"

3V2s, '56 - '73

SHAWINIGAN WATER PR. 4s, 1961

IG:^KINa

Alabama Mills

Remington Arms V
^

'.

Cyanamid Pfd.

Botany Pfd, & Common

1949

MONTREAL LT. HT. & PR,

"

■■;■•; ■

for

-

Tennessee Products
■

Thursday, October 14, 1943

Markets; in : .zzz

Emerson Radio
:;

Mat.

•

ww

THE-COMMERCIAL & FINANCIAL CHRONICLE

i486

40

.£,i;.... 1.......-■■ .... t». A.i. fciiriAjJiJutfiAJ ^-l'-—A

t,,

Teletype NY l-liHS

Edward A. Pureed & Co,
Members New York Stock Exchange
Members New York Curb Exchange

65

WHitehall 4-8120

Broadway

Bell System Teletype NY 1-1919

P. B. Shuie Joins

'

only
be
secured, in his
can

I.>:Amer»'Bas &.'p0weir:v%;
Common

Stock

Robt.

Henry

Brand

op 111

L'Doygfas Slice
Common & Preferred

the
trol of events by the

i

by

0 11.

wise

con¬

Government,

shall also be maintained."

V';:/;V

65, 1952

v:;y>;y.

Strutters Wells'

United
will

Common & Preferred

an

for

mand
warned

terprise

is

subjected

to

en¬

in

the

England there
post-war de¬
products, Mr. Brand
intense

that "if all the gates are

opened,

Political security, without which

both

that

States and

be

by the banking system and by in¬

confidence is undermined and

and

all

controls

lifted,
there is likely to be a great in¬
flationary rise of prices at once

risks

(Continued

on page

1493)

H. 6. BRUNS & CO.
20 Pine Street, New

York 5

Telephone: WHitehall 3-1223
Bell Teletype NY. 1-1843,

Cities.. Service Bonds
All Issues'

.

i

it

cuad

a

Members NV Y. Security Dealers Assc.

.

37 Wall

Street, New York 5, N. Y.

Tel. HAnover 2-4850
Teletypes—NY 1-1126 & 1127

Bell

B,

MILWAUKEE, WIS.
Shute has become

Preston

—

BOSTON:

NEWARK:

201 Devonshire St.

associated

744 Broad St.

with the Milwaukee

Company, 207
East Michigan Street. Mr. Shute
was formerly with Morris F, Fox
& Company and prior thereto was
with
Cromwell
&
Cabot, Inc.,
Woodruff & Co. of Chicago and
the Central Republic Company.

wide Reconstruction

Finance

Corporation

was

called

RAILROAD, PUBLIC UTILITY

ciated with

attention

to

the

fact

that'

our

INVESTMENT

Knowledge

a

plan

was

advocated' in

an

now

•

6%

Pf<L-\

■''

member
to

.

FASHION

5%

,

Pfd. & Div.

arrears

Ctfs.

FASHION PARK, Inc.

•

Tide. Wafer Power.

PINE ST., N. Y. 5
Teletype NY

Common

The current situation in Pitts¬
burgh Railways System, payticu%
larlv certain of the underlying
bonds, offers attractive possibili¬
ties for appreciation, according to
a study prepared by T. J. Feibleftian & Company, 41
Broad. St.,
New: York City.
Copies of this
interesting study, which is avail¬
able to dealers only; may be had
upon request from T, J. Feible-

Common

.

;

Columbia Baking, Pfd. & Com.

Fonda, Johnstown &

WHitehall 4-497®
1-609




Simons, Unborn & Co.,
Members New York Stock Exchange

25 Broad
y»<nm,er

St., New York 4, N. Y.

man

& Co.

2-0600

Tele.

NY 1-210

CORPORATION
ST., NEW YORK S. N. Y.

Telephone—BOwling

Green

9-3000

:

Also

Jefferson Lake Sulphur. Pfd. & Corn.
New

:.

}

v.

available

are

memoranda

N.u-Enamei; Oklahoma-Texas
Trust; Pittsburgh, Canonsburg St
Washington 5s. of 1937; Washingtop & Canonsburg First 5s of
1932; and West End Traction 5s

*

*

;

Arden Farms Attractive
possibilities ac¬
memorandum pre¬
pared by Hill, Thompson & Co.,
Inc., 120 Broadway, New York
City.
Copies of this interesting
memorandum may be had upon
cording

England Industries

*NaTnaineI

Oklahoma-Texas Trust

Pgh., Canon. & Washington 5s, 1937
Second Ave. Trac. 5s, 1934
Southern Traction 5s, 1950

offers attractive

67 WALL

Glorias 1932

Galveston-Houston Co.

,

Common stock of Arden Farms

ATLANTIC INVESTING

,

/ inerlca a Fuel & Power 7s 1934 *

■

Valvoline Oil

Bought—$old—Quoted

Pfd.

G.A.Saxlon&Co., Inc.
70

&

Prior Preferred

v

Facilities

York; Stock Exchange.

of 1938.

W. L DOUGLAS SHOE CO.

5% Pfd. & Common

$6

Preferred

.

.Mountain.States Power;•

Macfadden Publications, Inc.

Preferred

Mississippi Power & Light
6%.' jPfd.'.

PARK, Inc.

•

for Investors

Become Partner

on

Common

Illinois Iowa Power

.

asso¬

Amott, Baker & Co.,

'

•

Experience

»

.

BONDS

STOCKS

Pittsburgh Rys. Look Good

■

Empire, District Electric'

INDUSTRIAL

&

Incorporated, 150 -Broadway, New
Paul N, Shaskan will be ad¬
York City.
Mr. Bennett was for¬
merly an officer of Bennett, Lang- mitted To partnership in Shaskan
& Co., 40 Exchange Place, New
worthy & Co.
York City, members of the New
under consideration

countries; it is designed
"encourage private-financial
article by Congressman Charles S. agencies to provide long-term cap¬
Dewey, which appeared on the ital for the sound development of
first page of the "Chronicle" of the productive resources of mem¬
June 24, 1943.
ber countries, and When necessary
Under the Treasury's plans, the cooperate with and supplement
"Proposed United Nations Bank private capital for such purposes."
for Reconstruction and Develop¬
As to the powers and opera¬
ment"; would be capitalized at tions of the bank it is sti™ dated
$10,000,000,000 subscribed by
(Continued on page 1505)
such

MUNICIPAL,

GOVERNMENT,

With Amolf, Baker Go.
Paul SSiaskan To
David V. Bennett is

The Treasury Department made known Oct. 8 the draft of a
proposed United Nations Bank for Reconstruction and Development.
It had previously been indicated in press accounts from Washington
that a post-war international bank which in effect would be a world "

by Treasury officials and iiT referring to these earlier advices in
issue of Oct. 7, page 1428, we *

All Issues ' .;

•

•

Street, New York

David ¥. Benneil flow

Treasury Outlines Flan for
United lations EFC lank

Gas & Electric

68 William

.

'

■yyy^yyAssocfateiyy:;.'.

Members'Xcw York Stock Exchange" /

;

(Special to The Financial Chronicle)

Asserting

dustry.

Indiana' Limestone

R.W.PRESSPRICH&CO.

a

-

request.'

to

a

:

*

Washington & Canonsburg
1st

*

5s, 1932

West End Traction 5s, 1938
♦Analyses

upon

request

T. J. FEIBLEMAN & CO.
Members

New: Orleans Stock Exchange

41 Broad Street
BOwling Green 9-4433

New York 4
Tele. NY 1-493

Volume

'"-o

U.

CHRONICLE
Patent

S.

*

•

■■■

BEekman

Public

3-3341

Cons. Elec. & Gas

Herbert D. Seibert,

William

D.

Riggs,

Thursday,

Business

October

14,

Published twice

Southern Cit. Util.

President

Seibert,

Dana

Thursday

every

and every Monday
(complete statistical' issue—market quo¬
tation
records,
corporation,
banking,
clearings, state mid city news, etc.)
■
Other Offices:

Chicago—In charge of
Western Representative,
Field Building (Telephone State 0613).
London—Edwards & Smith, 1 Drapers'
Gardens, London, E.C.
H.

32

Gray,

Copyright

19J3

by

15.

William

Reentered as second-class matter Feb¬

25, 1942, at the post office at New
Y., under the Act- of March
3,1879.
v:;:; y.
York, 'N.

.

States

United

S E C Should

V

and

$27.50 per year; South and
Central
America,
Spain, Mexico and
Cuba, $29.50 per year;
Great Britain,
Continental Europe (except Spain), Asia,
Australia and Africa, $31.00 per year.
Other

Bank and Quotation Record—Mth. $20 yr.

Monthly Earnings Record—Mth...$20 yr.
State & Municipal Compendium—
Semi-Annual
.$35 yr.
.

(Rep., 111.), warned on Oct. 9 that
the international bank proposal of
the Treasury constituted a world¬
States

NOTE—On account of the fluctuations
in the rate of

might pay out gold and get

exchange, remittances for

foreign subscriptions and advertisements
must be made In New York funds.
.■

Mr. Chiperfield declared the in¬
bank was a fit com¬

WPA
the United Nations Re¬

Rehabilitation

for the world-wide

and

which

is

York

New

Bell

of the

1-2033

Iff

dealers who

the

for

better

part of a fortnight ard convinced
that there is little reason to worry

the

over

invest¬

outlook for the

ment market over the balance
the

of

year.

They

arrived at this
of the dis¬

have

conclusion in

spite

turbing nature of the Treasury's
latest tax proposals which would
strike heavily at large institu¬
tional
the

the

over

last

decade

or

more.

The

cool

reception

accorded

capital

the

of

30

between

roughly

Investment
confident

authorities

that

there

of money around

portunities to

go

is

are

plenty

awaiting op¬
to work. But

they note, too, evidence of grad¬

ual, but nonetheless persistent,
leaning

in

the

direction

of

equity securities.
In

spite of this latter indication,
however, it is considered opinion
(Continued on page 1502)




Broadway, New York 6, n. y.

HAnover 2-8970

to

United

there may

Teletype NY 1-1203

is

States

the

the

...

Mr. Chiperfield

said that, since

the controlling votes in the bank
would be held by countries other
than the United States, those other
countries

continue

might

indef¬

initely making loans on the sound
security of United States gold and
repay

7

in debased currencies.

In

effect, America would be
tossing its gold into a jackpot con¬
trolled
by gold-hungry nations,
and would depend upon

of

those

whether

nations

it

would

back.

the vote

determine

to

get

the

gold

*.

Mr. McGuire's

self-efface-

be

to

ment,

energetically
pursued in the

if
M&WS;
Ta iMM?

w

I.

America,

disclosed

we

.

Broadway,

New

York

City, members off the New
Stock Exchange, most at¬
tractive possibilities for apprecia¬

York

Analyses on Request

>

which

not faced with the unique

and

administrative agency sim¬ paramount problems of the war
ilarly placed, to follow. It is nat¬ and the peace. Those defects do
I
(Continued on page 1500)
ural for any administrative agency

J.F.Reiily&Co.
Members

•

York

New

Ill

Dealers

Security

Assn.

Broadway, New York, N. Y.
R Ector 2-5288
Bell

Post-War Taxes And
With taxes

it

the

on

Unemployment
practically nil,
the

look ahead for a tentative survey of

pertinent to

be

System Teletype, N. Y. 1-MEt

of being raised, apparently for the last

eve

during the war, and with unemployment now

may

probable situation after the war has ended.

Gishoft Machine Co.

Stromberg-Carlson

Unemployment Prospects
first World War only 25%

In the

and services

was

Haloid Co..

of the total output of goods

devoted to mili-<»>

Memoranda

—

—

50% j Actually, the adverse factors will
of the gross national product that j operate
more or" less simultais directed to the war now; there! neously with the favorable ones,
were 4,000,000 soldiers to be de- j aiid the transition period will almobilized compared with about ready be under way when peace
11,000,000 expected to be in the comes..

on

Request

tary purposes, compared with

forces

armed

at

the

end

of

this

—

<

Industries not requiring recon¬
which will also see millions
quitting war plants. version to produce civilian goods,
The potential unemployment like textiles, apparel,
furniture,
problem, therefore, will be much lumber products, and paper and
more severe
after this war than allied products, will begin to level
after the last one.
off at a lower rate of operations.
of

workers

There

that the

is

before

anticipation Industries requiring reconversion,

general

war

Germany will
war with Japan

with

the

a

between

consider¬
the

two.

like the automobile

industry, will

forces

of

our

Bartgis Brothers'
Est 1926

mwn
Hmm&fjo.
COrtlandt 7-6190
Teletype NY 1-84

170 Broadway
Bell System

Jacksonville Gas Corp.
3-5s„ 1942, 5s, 1967 & Mew Coin.

probably take several months to
employ¬

tnifiasa Limestone 6s, 1952

reach the bottom of their

ment levels. The relation, between

production and employment will
be affected by a declining work¬
week, by declining productivity,
and by the retention of employees
Estimates are made that imme¬
to aid in reconversion. These fac¬
diate post-war unemployment will
tors wil be particularly apparent
total 15,000.000 or more, but their
during the transition period and
fallacy is that they concentrate in
in industries where considerable
one
brief period all the adverse
factors consequent upon the war's adjustment has to be made.
Because of high domestic and
ending, and postpone all the fav¬
(Continued on page 1506)
orable
ones
toa
later
period.
Demobilization

Federal Screw Works

The Transition Period

war,

able- interval

Tybor Stores Common

armed

Sher-Keth 3-5%$, 1956 w. s.

consequently
should
be
protracted, rather than sudden.
:

Savoy Plaza 3-6$, 1956 w, s.

Frank C. Masters®! & Co.
Members

New

York

Curb

Exchange

NEW YORK 5

64 WALL 8T.

Teletype NY 1-1140

HAnover 2-8470

The firm declares that their

appraisal

of

the

situation

shows

considerably
under-priced, a conclusion based
not only on the- benefits to accrue
from' the merger but upon devel¬
opments within the industry itr
self. The immediacy of the antici¬
pated rise is. the firm states, is not
very
material to the question,
since the stock offers both specu¬
and

possibilities.

bona
-

fide

investment

!

•

.

\

Copies of the circular discus¬
sing the situation in detail may be
had from Arthur

Company

upon

Wiesenberger &

request. '

:

Public National

Consolidated

Western Union stock,

lative

defects

definite

any

end

Telegraph ierger Seen
Offering Benefits

tion.

Federal Water

which he observed
experience over the

would call for change even were

Harold F. McGuire

Commission,
or

|k>Fafiisworth|^::;v

past 10 years with the securities
laws and their administration has

mmSBM

the

for

in

"Our

that

|

proposing a
platform dif¬
ficult

discussion of the

subject was.a feature of the re¬
cent annual meeting in New York
of
the
Controllers
Institute
of

jt

and that there will be

61

Cr ©well-Collier

perimentation in the future."

35%, with a
voting

world's gold,
it would con¬
tribute
a
far
disproportionate
share of the gold to the bank's
capital.
of

is required.
problems are solved,
be no occasion for ex¬

of

time

the

Company,

All hands naturally anticipate
higher taxation in consequence of
the immense costs of war, but
there is a general feeling that the
new
revenue
bill, which must
evolve, will be shorn of many of
the seemingly punitive, and nonrevenue features proposed by the
Treasury.

Members New York Security Dealers Assn. ;

39

period of reform, but one
which solution of even more

"a

proportionate

The merger of Western Union
Morgenthau's
drastic
program upon its presentation to Telegraph
Company and Postal
Congress presumably has served Telegraph Company, offers, in the
to temper any misgivings in that opinion of Arthur Wiesenberger &
'

quoted

Information

L J. GOLDWATER & CO.

bank
which

new

Secretary

direction.

-

a

said,

the United States would contrib¬

investors who have been

primary outlet for new is¬

sues

conception

world."

chief holder

been back on their reg¬

assignments

in

busi¬

Mr. Chiperfield said,

REPORT
ular

RFC

power.

REPORTER'S
and

not

nize that I am

would be $10,000,000,000, of
ute

OUR

now

with

ference

national inter-

He said:

new

Since

Underwriters

to

y

inter¬

avoid

.

WHitehal! 4-633»

have

i t

its

PstM reoos?est,T recog

tional bank is the long-term

Stock Exchange

Teletype NY

g e n u

in

here

short-term WPA; and the interna¬

Newburger, Loeb & Co.
St., N. Y. 5

jurisdiction are of primary im¬
portance. However, I would re¬
mind the Commission that this is

Adminis¬

meet

to

habilitation Administration is the

The

Members

and all its in-

program

York

New

the

"Journal-American" added:

in the internationalists'

40 Wall

to

he

of

bureau

ton

"Apparently the Relief and Re¬

Bought—Sold—Quoted

sold

-

Statistical

INC.

problems within

that the

feel

self-restraint

Unless those

November.

MORTGAGE COMPANY

bought
Complete

fundamental problems

tration

TITLE

submitted—is that it exercise

suggesting,"

reporting this, the Washing¬

setup in

AND

Dept.

New York

of ALL COMPANIES and

utmost

the

ness." "In thus

lief

NEW YORK

Street,

Commission with respect to the administration of the
Acts, Harold F. McGuire of'the New York law firm of

honest

panion

Issues

Wall

Tclephone! WHitehalt 4-6551

"\

turn.

ternational

All

Exchange

only debased foreign money in re¬

................

.

In
f

United

the

99

Wickes, Riddell, Bloomer, Jacobi and McGuire, of New York, stated
in conclusion that "in summary my program for Commission action

C h i p e r f i e Id

which

1-5

REAL ESTATE SECURITIES

at this time—which is most respectfully

in

ny

analysis and appraisal of the work of the Securities and

Securities

As International RFC

RFC

were.

Exchange

Warns Of World Bank

wide

publications

you

an

In

Representative

thought

CE RTIFICATES

- Harrison 2075
Teletype CG 129

Possessions, $26.00 per year; in Dominion
of 'Canada,

you

TIE €0;

CHICAGO 4

DIgby 4-8640
Teletype NY 1-832, 834

in.

Adopt Program Of

Board of Trade BIdg.

NEW YORK 4

call

Self Restraint: Harold F. Mc6uire

Security Dealers Ass'n

York

in,

Obsolete Securities

Teletype

Members New York Stock

Company

Dana

ruary

Subscriptions t in

New

Broadway

writ©

in,

and you won't be out as much as

& Co.

Telephone HAnover 2-4300

STRAUSS BROS.
Members

AND OUT
Come

25 Broad Street, New
Yopfc

Tel. Bond & Share

(general news and advertising issue)

Fred

•dicer Trask
Sp.

Peoples Lt. & Pwr.

week

a

Utility and Industrial

Go out with the best bids—

Manager
1943

LlCHIflWEIil
awd CO>:»/.KY

PREFERRED STOCKS

Editor and Publisher

.William

B. S.

offerings of

High Grade

'■

Assoc. Gas & Elec.

.,

Spruce Street, New York 8
■

interested in

are

o&mimnv

Publishers

1

We

Assoc. Electric

Office

'

William B. Dana
25

1487

COMMERCIAL and

The

FINANCIAL

.

& FINANCIAL CHRONICLE

THE COMMERCIAL

Number 4220

158

Pacific Goad

Bank & Trust Co.

Natural Gas Co.
(when

SecwUticl

Bought
New

issued)
—

National Radiator

Sold

York Stock Exchange

Company
Contracts

Analysis

Wyeth

&

Co.

'Since 1893*

Hon, Rose STrsster
Established

NEW YORK

LOS ANGELES

Members N.
74 Trinity

Members Los Angeles Stock Exchange

1914

Y. Security

Place, New York 6, N. Y.
Teletype

Telephone'.

BOwling

Dealers Assn.

Green

9-7400

NY

1-375

upon

request

0. E. Unterberg &
Members New York Security

61

Co.

Dealers Assn.

Broadway, New York 6, n. y.
9-3565

Telephone BOwling Green

Teletype NY 1-1666

THE COMMERCIAL & FINANCIAL

1488

CHRONICLE

Thursday, October 14, 1943
DALLAS

MERCK &

CO., Inc.

Bought

sold

—

Dr.

Common Stock

-—

Quoted

Pepper

Republic Insurance
Southern Union Gas Common

Bought

-

Sold

Quoted

-

So'western Pub. Serv. Com. & Pfd.
Dallas Ry. & Terminal 6% 1951

We have

memorandum

a new

outlining the benefits of the

,

This memorandum is

which

we

W-

If there is

-—""

Members N. Y. Stock

of dealers with

a group

a

reasonable
our

possibility of

investigating

your

facilities and service

shall welcome hearing from

we

'■•

5AAA-''''

■

■

and will

As Part Of Mew Deal
the

■

Arthur Wiesenberger
Members New York Stock

Exchange

-SPECIALISTS

NEW YORK 6,

LEVERAGE INVESTMENT COMPANY

IN

Co.

&

plan

Oct.

on

Banking Committee
which
heard
Secretary of the
Treasury Henry Morgenthau, Jr.
explain the bank plan at a recent
closed meeting, told a reporter he
was "opposed to
making loans to
countries

in

the

guise

Senator Taft de¬
clared, "all of the money to be
loaned abroad by the bank would
from the United

come

are

approved the distribution of

to

me

States.

that after the

It

war we

going to have to make

emer¬

loans to other countries for

gency

Consolidated Natural Gas Company

working capital and rehabilitation
of plants and machinery, * but I

Company (N. J.).

believe

those loans ought to be
directly by this government
under authority of Congress."
As outlined by Mr. Morgenthau,
the proposed international bank
made

detail

in

Public Utility Depart'

the

properties, financial

written request.

furnish
Britain

other

countries

The

Co.

Members New

Yor{ Curb Exchange

52 WALL STREET

bank

$3,500,000,000,

$1,000,000,000
the

would

remainder.

make loans

for

,

Senator Taft expressed the con¬

NEW YORK 5, N
:

.

Walter M. Hall

Opens
Advisory Service

Northern

Walter Merrill
years a

Natural Gas

Stock

Fish

Exchange firm of Callaway,
&
Co., announces the re¬

74

N.

Y.

Security Dealers Ass'n
HA 2-2400

Wires

Detroit

-

to

Buffalo

Pittsburgh

-

-

Cleveland

St. Louis

advisory

Mr. Hall offers personal in¬

supervision,

portfolio
general market
analysis for individuals and corpo¬
management

Teletype NY 1-376-377
Private

City.

vestment

Trinity Place, N. Y. 6

investment

service and the opening of an of¬
fice at 115 Broadway, New York

and

rations.

Bureau

which

of

war

Economic

Research

financing bears

upon

study

points

out,

is

claims" is called for in
in the immediate

Western Interesting

post-war period, this could result
—by recourse to
governmental

bers

of the

New York Stock

Ex¬

change, have prepared a most in¬
teresting chart on the Denver

HODSON &

COMPANY,!

Inc.

&

Rio

which

Grande Western

Railroad,

is

securities

creating

new

through arbitrage. Copies of the
had from the firm

chart may be
upon request.

165

Broadway, New York

Dumont Laboratories
Holds Luncheon
Frederick
the

Attractive Situations

D.

investment

Gearhart, Jr., of
firm

of

Kobbe,

Gearhart & Co. of New York at¬

Crowell-Collier, Farnsworth, and tended a luncheon given in Pas¬
Federal Water offer
interesting saic, N. J., last Friday by Allen B.

possibilities
randa

on

according to

these

memo¬

situations

issued

by J. F. Reilly & Co., Ill Broad¬
way, New York City.
Copies of
these
from

memoranda
the

firm

may

upon

be

request.




had

DuMont, President

of

the

Allen

B. DuMont Laboratories, Inc. In¬
formative talks and exhibits per¬
taining to the activities of the
company

affair.

constituted

part

of

he

of making

loans

for

bank

volume

borrowing—in

crease

a

a

—

Quoted

BUCKLEY BROTHERS
Members Philadelphia Stock
Exchange
Members New York Stock

Exchange

Bell

Philadelphia 2, Pa.

Teletype

Phila. RIT 4488

—

PH 265

N. Y. DI 4-1527

per¬

disapprove heartily of any
international lending

agency because I believe it would

be

repetition of what happened

a

the last

alter

loans

to

war

when

bring about

an

We

have

continuing

a

interest

in

Southern Advance

we made

artificial

Bag & Paper Co.

stimulation in exports.

Common Stock

"Any operation of that kind is
bound to

collapse, just as the last
attempt did in 1929, and cause a
situation
had

been

than

if

there

loans made

any

all."

at

The
if

Ohio Senator

rehabilitation

were

thought that

and

relief

boenning & co.
1606 Walnut St.,
Private

of

and

years

down to about

a

a

for

year

then

PH 30

Phone to N.

COrtlandt

made to other countries im¬

mediately
after - the
war
they
ought to be limited to "two or
three billion dollars

Philadelphia 3

Pennypacker 8200

loans

Y.

C.

7-1202

ST. LOUIS

a

scaled

half billion dol¬

yearly."

Associated Electric

Company

Currency And Deposits

war

financing,

than the total

4l/2s & 5s

Bought—Sold—Quoted

in

the

the

First

Civil

of the nation's money sup¬

study is entitled "The Ef¬

>eltason, Tenenbaum, inc.
803

increases that had

World

War

and

War, because of

riety of factors which

are

a

in

Landreth

Bldg.

ST. LOUIS 2, MO.
Teletype—SL

486

St/K

va¬

L.

^

D.

240

Co.

SAINT LOUIS

anal¬

509 OLIVE ST.

yzed.

Bell

further in¬

ply at the time.
Thus the two
phenomena, the study points out,
are closely linked.
The

Sold

institution," Senator Taft

ply which has resulted from it. accumulated in the entire preced¬
Accompanying this, and an im¬ ing century and a half of the na¬
portant factor in the problem of tion's history.
averting inflation after the war, is
It was a far greater percentage
a
similar unprecedented increase
increase than occurred during the
in
"liquid
claims" against the First World War.
Yet, the study
Government, principally War Sav¬ points out, the rise in prices dur¬
ings Bonds.
ing the present war has so far
If redemption of these and other been much more moderate than
"liquid

61

repre¬

the

in the nation's money sup¬

crease

—

1529 Walnut St.,

The most spectacular fact about the Government's

the

Bought

elucidating the various respects in
inflation during the war and after it.

large

Bampton & Rust,
Broadway, New York, mem¬

one

With $15,000,000,000 more money of individuals and business
firms invested in Government obligations as a result of the Third War
Loan just ended, a timely study has just been released by the National

Denver & Rio Grande

Pflugfelder,

have

by

on

permanent

couple

many

partner of the New York

sumption of

Troster,Currie&Sammers

Hall, for

"w. i."

which all

on

this bank would be

seems

manent

lars

The Effect Of War On

Members

it

said. "I

bank might be controlled by pro¬
spective borrower countries, since

Y.

would

policy

viction that administration of the

Telephone: HAnover 2-7530

Natural Gas

post-war relief and rehabilitation,

and

rebuilding of war-damaged cities
and other such projects.

Yor\Stoc\Exchange

Members New

Consolidated

"While I would approve a gen¬
eral

never

$10,000,000,000 in cap¬
of which the United States

would

&

oppose

holding.

worse

Great

Hettleman

would

sentative. Voting power, however,
would be closely related to share¬

ital,
011

he

board of directors

would have

position, earnings, and prospects of Consolidated.
It is available free

that

its affairs would be carried
a

of

effect,"

seems

describes

said

members

investments."

(NEW JERSEY)

our

11

Senator Taft, who is a member^

Standard Oil Company

analysis prepared by

San Antonio

-

PHILADELPHIA

as

"In

the stockholders of Standard Oil

Taft

of the Senate

—

To the stockholders of

The SEC has

Robert A.

Proposed Internal'! Bank
Program Of Deficit Spending

"part of the general New Deal program to create new methods
of deficit spending," said an Associated Press
dispatch from Washing¬
ton, which added:

N. Y.

SECURITIES

& CO.

DALLAS, TEXAS

1-C72

Administration's

other

ment

NY

proposal for a world RFC bank by carrying
his right against it to the Senate floor with a denunciation of
the

Members New York Curb Exchange

•

BROADWAY

An

TELETYPE

Southwestern Securities

Sen. Taft Denounces

to your own

you

Senator

A-

to

7-0100

Utility Preferred Stock®
on

RAUSCHER, PIERCE

CHICAGO

BARCLAY

us

Houston

forward the memorandum. Send for special report F-14.

61

Check

105 WEST ADAMS ST.

NEW YORK
TELEPHONE

All Texas

Exchange and Other Principal Exchanges

115 BROADWAY

,

series of securities studies

available to

application of

business,

«

*.

..

Goodbody <Sl Co.

maintain close and mutually profitable contact.

wJ>oin we

the

n^

of

one

and certain long-

merger

potentials.

term

this situation,

on

*

•

-

prepared

System

Teletype—SL 80

"Money Hoarding" Does Not
Explain the Increase
One phenomenon of the current
situation which

in

some

quarters

has been regarded as symptomatic
of money

Members St. Louis Stock Exchange

hoarding—the great in¬
crease of currency in circulation,
from
roughly $6,000,000,000
on
June 30, 1939, to roughly $16,000,Seaboard Air Line Plan
000,000 on June 30, last—is a con¬
published by the National Bureau
L. H. Rothchild & Co., 120 Broad¬
tinuation of a twenty-five year
of
Economic
Research, of New
way, New York City, have pre¬
York, and is one of a series pre¬ trend, according to the study,
interesting study of
accentuated
during the pared an
pared by that body under the gen¬ greatly
Special Master Taylor's plan of
eral direction
of Dr. Ralph A. war by the monetary necessities
of enormously increased
produc¬ Reorganization for the Seaboard
Young, of the University, of Penn¬
Air Lines; some of the ideas sug¬
tion.
•
sylvania, with grants from the As¬
sociation of Reserve City Bankers
It is almost entirely accounted gested in this study are to be de¬
cided by the court at the hearing
and the Rockefeller Foundation.
for, according to Dr. Whittlesey, now
scheduled for Oct. 25 before
by millions of more workers,
The report opens with the state¬
Federal Judge W. C. Chestnut in
higher hourly wages, more hours
ment that the increase of the na¬
Baltimore.
tion's money supply which took of work per laborer, and the con¬
Copies of the L. H, Rothchild
sequent need for more payroll
place between June 30, 1939, and
the beginning of this year—rough¬ cash in plants and offices, and till study of the Plan may be obtained
ly
from the firm upon request.
(Continued on page 1505)
$37,000,000,000—was
greater
fect of the War

Currency and
Deposits" and its author is Dr.
Charles R. Whittlesey, of the Uni¬
versity of Pennsylvania.
It was
on

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4220

158

Volume

"Rail Securities in Peace Time"
•A Basic

Denver and Rio Grande Western R. R.

•

CANADIAN
SECURITIES

Creating the New Securities

Change in the Making

through Arbitrage
Copies

Aluminium Ltd. Common

request

on

Chart
,

'

•

'•

,

,

/

,

'

'

'1

(

request

on

'

'

'f

-

f.

,

Vilas & Hickey
Members

New

• i

Brown

'

'

PFLUGFELDER, BAMPT0N & RUST

: New York 5, N. Y.

49 Wall Street

*y

*

Company

Calgary & Edmonton Corp. Ltd.

Exchange

Stock

York

J' ' /

Members

Telephone: IIAnover 2-7900

61

Stock

Fanny Farmer, Ltd.

Exchange

Kerr Addison Gold

New York 6

Telephone—DIgby 4-4933

Teletype: NY 1-911

York

New

Broadway

Bell

'

Teletype—NY 1-310

Mines, Ltd.

Minnesota & Ontario Paper

Co.

Noranda Mines, Ltd.

Patterson

Says War Department Has
Unspent Balance Of $119 Billion

P.

Robert

The

also

Under-Secretary

personnel

June 30 and

that

obligated for expen¬

as

that

by Dec. 31,

carry

out the planned military

the United

aid from

duction.

States

Senators)

sought

had

of

number

uniformed

tal

of

than

pay

appraisal

has

one

so

said

terson

transferred. Mr. Pat¬
understood4

he

some

such transfers had been made by
Great Britain to Russia and Tur¬

key.

Turning to

discussion of re¬
contracts, Mr.
Patterson said the War Department
had recovered about $3,000,000,000
by such renegotiations—$1,000,000,000 in cash and $2,000,000,000
a

negotiation of

en¬

in

roll

form

the

war

of

ture deliveries.

3,000,000 men and

reduction

on

fu¬

After the war, he

1

•

The

maximum

amount

of

and

Serial

Special

Stocks

'

296 and 297

N.

NEW

Y.-Phila. Private Wires-—Rector 2-6528

WHitehall

STREET, NEW YORK

3-3450

Teletype: NY

YORK

& 2-6529

5

Reorganization Preferences

this

has

request

been

reduced

SOO

(in reorganization)

to

income of the railroad operating
corporation and the holding com¬
pany.
The extension plan also
provides that the holding company
must dispose of its investment se¬
curities before May 1, 1946. From
the proceeds of such sales, the
first $5,000,000 realized will be
divided equally between the sink¬
ing fund and the company for gen¬
eral corporate purposes. All pro¬
ceeds

in

of

$5,000,000 will
placed in the sinking fund,
The largest investment item con¬
excess

be

Central 5s

Central 4s

When,

Railway Co.

and if issued

as

ALL

1951

Moines

Des

&

Fort

bought

1935

Dodge 4s

Frederic H. Hatch & Co.

ISSUES

sold

-

quoted

-

63 Wall

New York 5,

Street
Bell

N. Y.

plan, the

management has also issued invi¬
tations for tenders of the old, un-

extended, bonds, the bonds ac¬
quired to be used to meet sinking
fund requirements of the future.
Tenders will be accepted up to
So

19.

long

ings continues the liberal sinking
fund provided will result
in a
rapid paring of the ex¬
tended debt.
It is indicated that

necessitous

operations at the 1941-1942 level
would
produce average annual
funds of $3,734,000 for the sinking

equivalent to about 11.5%
the present market appraisal

fund,

of the entire new extended

issue.

The tax burden of the railroad

Sinking

the

much

of

the,

currentr

stems.,

we

net

income

operating
the

above

for the

In. announcing final consumma-

3-9200

Teletype NY 1-515

last year.

1943

The sinking fund from

earnings, which the company

apparently hopes to meet through
the

current

well

may

and

tenders,

for

request

between $4,000,000

run

$4,500,000.

Barring
pected,

a

sharp,

and

unex¬

collapse in earnings, the

sinking fund from 1943 and 1944

coupled

earnings
from

sale

the

of

with

proceeds

holding

com¬

pany's securities could well real¬
ize

the

tended

goal of reducing the ex¬
bond

Reduction

to

issue
such

to
a

$25,000,000.
level

would

far towards completely restor¬

go

ing

the

road's

once

high

credit

standing.

run

For

eight months through August
was

1942

at

full year
least

5.2%

period

like

optimism

r:

York

New

St.,

nevertheless, net results in recent
months have been running con¬
sistently ahead of a year ago.

coming into the sink¬
ing fund from current earnings.
It.is from these potentialities that

WHitehall

the present

as

boom in railroad traffic and earn¬

of

INC.

Broad

Teletype NY 1-897

tion of the readjustment

Oct.

Arnhold and S. Bleichroeder
30

Incorporated

operating
company
has
been
mounting in the current year but,

$1,170,000.

high

as

and

Portland &

earnings should
as

they did

Ogdensburg Ry.
4Vz% bonds

indisposition of Judge Luther B. Way

understand that the hearings in the

case

of the
Due November 1,

SEABOARD AIR LINE

1953

reorganization have been postponed until October 25th when

Baltimore,
plan

Md.
are

Copies

of

our

brief

on

the

Special

still available.

NEW

1. h. rothchild &

Exchange
YORK 5

•••"

'

*

.>

v"

;

TELETYPE NY 1-1310

co.

specialists in rails

'/-'-V
*




Sault Ste. Marie

1938

Iowa

fund

in

WALL STREET
<

Teletype BS 259

they will take place before Federal Judge W. C. Chestnut
on

Members New fork Stock

HANOVER 2-1355

:

Minneapolis, St. Paul &

Mclaughlin, baird & reuss

TEL.

:

two-thirds of the consolidated net

Master's

ONE

CAP. 0425

1-2050

MINNEAPOLIS &

public will be $43,000,000.

Due to the lamentable

Six Selected Defaulted Railroad

Tel.

5

ST. LOUIS RAILROAD

Iowa

!

Circular

WALL

of the funds

V';../v.'.-;*: 120 Broadway

Teletype
PH

1

market appraisal of the entire ex¬
tended bond issue, to say nothing

9

request

148 State St., Boston, Mass.

IER0Y A. STRASBURGER & C(h

Minneapolis & St. Louis 5s 1934
Minneapolis & St. Louis 4s 1949
Minneapolis & St. Louis 5s 1962

ties could well, in themselves, run
to as much as 20% of the present

,

'34

4s,

upon

Bought—Sold—Quoted

proceeds from the sale of securi¬

INCORPORATED
.!
123 South Broad Street
PHILADELPHIA

sent

the

to

4s, '88

Refunding

Copy

Minneapolis & St. Louis 6s 1932

about

Obligations

STROUD & CO.
'

1st

1975

new

,

.

Gold 5s,

reference

General

which

lien

Railroad Securities

,

& St. Paul

Reorganization Plan

particular
•

extended bonds to be outstanding

v.

Guaranteed

with

been

predicted, the Department would
sists of 304,600 shares of New York
In the course of his testimony be criticized for not cutting prices
Central common stock. This alone
on
through
expenditure of Army funds, deeper
renegotiations,
has a present market value of
Mr.
Patterson
said
the Army's rather than for ordering too large
more
than $5,200,000.
As of the
present personnel goal of 7,700,- reductions.
end of last year, there were other
smaller holdings of railroad bonds
(mostly reorganization situations)
which have advanced sharply in
price in
1943.
The
largest of
Equipment Trust Certificates
these, St. Paul and Frisco, alone
V - '
Mortgage Bonds
have a present market value of
women.

',A

Milwaukee

$25,000,000 there will be an an¬
nual sinking fund equivalent to

reports of the globe-touring
that considerable aid

Toronto

This appears as a

of the

Until

had been

in the to¬

civilian

Government
more

extended bond.
low

With the

to the

gaged in clerical work in Wash¬
ington.
The Committee's goal is a re¬
duction of at least 10%

$900 face value of extended 4s,
at a rate of $755 for each $1,000

few hours" (an apparent reference

unsuc¬

men

net cost of only $680

for
or

1-395

Rock Island

The

a

HAnover 2-0980

NY

Montreal

Discussion of the

more

tan said he had heard "in the last

and the

civilians,

by

from

New York

Chicago,

convinced that mate¬

ally to another. The North Dako-

cessfully to find out exactly how
the
reported
reductions
were
'made, how many soldiers had
been put to work on jobs formerly

performed

transferred

been

on

St., N. Y. 5

Bell Teletype

f

'status of the extended bonds.

de¬

emphasized

made

has

fully familiar with the improved

represents
be

WILLIAM

Final

plan

.

as

Committee

the

investors become

as

52

that

considerable amount

strengthened by a re¬
operations," he testified. "It may duction in principal amount and
in fixed charges, and which will
have to be increased."
Senator Nye (Rep., N. D.)' asked benefit from quite liberal sinking
Mr. Patterson to what extent lend- fund provisions.
.,
to

lease

-The

of

be

HART SMITH & CO

time semi-annual interest for the period ended

been

he could ascertain half
of the War Department's civilian
employees
were
doing
clerical
work, while in the Navy the ratio
is one clerical employee to every
five engaged in actual war pro¬
nearly

nessed

to j

is the minimum which the
of Staff states is required

1943,
Chief

the field,

because

situation

the Army of 7,700,000

on

"disturbed"

was

the

if

should

"It

Senator Byrd said the commit¬

tee

prejudice

required."

contained
June 30 and
1,203,239 on Aug. 31. Of the total
reduction, he said, about 3,500
were
cut off in Washington, the

j

men are

announced

cash and exchange of securities will
same

of interest in the bonds and many
rail

has

company

old bonds have recently
selling "flat" around 80. De¬
He said it was the Army Chief ducting the $100 cash on account
of Staff's "urgent desire" that "at of principal that will be paid on
Nov. 1, and the half-year's inter¬
no time shall there be one man in
uniform whose services are not est, this price for the old bonds

Mr. Patterson said the Depart¬

remainder in

"without

a

The

consummated.

original rially higher prices will be wit¬

his

mands."'

ment's civilian pay roll
names

At the

stimulated

Marshall's

C.

reduce

million

8.2

advices, from which' the foregoing
isvquoted, also reported:

1,348,803

George

his authority to raise the Army to

"misleading" since testimony was
lacking as to how many of the
civilians had been supplanted by
military personnel.
Associated
Press
Washington

:

be

consummation

to

made

was

finally to

Nov. 1 will be paid in cash.

goal to this figure from 8,200,000

Byrd (Dem. Va.) Chair¬
man of the committee, commented
that he thought the figure was
Senator

j

Gen.

decision

Aug. 31.

principal in cash and the balance in extended 20-year 4s,

payment of the

000 by the end of this year, "may
have to be increased." He asserted

reduced its civilian
by
145,564
between

of

Nov. 1.

ad-^-

vised the committee that the War

Department

is

voluntary readjustment plan, whereby
refunding 4s which matured last May are to be paid

first and

10%

Congressional Committee on Reduction of Federal Government Ex¬
penditures on Octr8 that the War Department had an unexpended
balance on Aug. 31 of $118,909,000,000.
Of this amount, a total of
slightly more than $64,000,000,000 had not been
diture under contracts, Mr. Patterson reported.

Sun Life Assurance Co.

The Delaware & Hudson
the

War, told the Joint

Under-Secretary of

Patterson,

Railroad Securities

120 broadway
COrtlandt 7-0136

n. y. c. 5

Tele. NY 1-1293

Adams & Peck
63 Wall

Street, New York 5

BOwling Green 9-8120
Boston

Philadelphia

Tele. NY 1-724
Hartford

THE COMMERCIAL & FINANCIAL CHRONICLE

1490

PUBLIC

UTILITY

ALLEGHENY

JEFFERSON

INDUSTRIAL

Thursday, October 14, 1942.

STRUTHERS WELLS

ELECTRIC CO.

CORPORATION

RAILROAD

Standard Silica

CORPORATION
Discussed in

a

Investment

Common

special study by

Research

Merchants Distilling

Department

Common Stock

MUNICIPAL

Special

analysis

request

on

Copy

request

on

Stock

our

Corp'n

.

Common

Stock

I

ROMnC

Ryan-Nichols

DULN lJ j

William A. Fuller & Co.
A IttlYN^COMEANY
incorporated

...

!

CHICAGO
New York

Boston

Members

Tel. Dearborn 9200

105

Chicago 1

•

Members

|fefy::& CO.'Illl

of Chicago Stock Exchange

209 S. La Salle Street

THOMSON & McKINNON

South

;

Tele. CG 116

La

Salle

CHICAGO

York

all

and

■

Stock

FAROLL BROTHERS

'-'St/..

Member. New

Exchange

208

231 South LaSalie Street
CG

New

1309

York

Indianapolis

York

■Stock

principal exchanges

St.

3

Andover 1520

Milwaukee

New
'

So.

and

Salle

La

CHICAGO

Toronto

Phone

Andover

principal

Exchanges/ •

1430

St.

4
Tele.

CG

156

333
■

Chicago City Railway
1st- 5s,

1927

5s,

1938

1938

Old Dominion Power
1951

5s,

in local

transportation in Chicago
since the city was incorporated in
1837.

Dearborn

9600

CG

1200

tion

will

from

extend

the

Companies

Offer Attractive Investment

It

-

estimated

is

to

car

the

or

that

on

'Request

persons

70,000,000 passengers will be
transported through the tubes in
operation. Use of
the system is expected to save

CO.
231

South

Salie Street

La

Chicago 4, Illinois

for

struction

placed in
time.
Con¬

some

the

on

other

been held up because

a

on

links

has

of priorities

which

on

St.,

have
circular

interesting

outlook for

105 South

prepared

-

on

the

railroads.

* an

post¬

Construction

Listed and Unlisted

of

the

1937

link

Copies

be

placed in operation Saturday be¬
gan Dec. 17, 1938, when ground

Securities

broken

was

the

on

Side by Mayor Kelly.
route is

Part

FRED W. FAIRMAN & CO.
208

SOUTH LA SALLE STREET

CHICAGO

4,

ILLINOIS

transfer

&

Co., 208

the

on

second

for

.

Sept.

on

Shore

&

the

South

available

the

25.

street

or

on

La

is

a

recent

Chicago,

these

North

Railroad.

circulars

are

request.

&

Co.,

the

of

cost

portions

as

routes

under

this

of

the

link,

Chicago Stock Exchange
Chicago Board 0/ Trade

costs

construction

of

that

west sections of the

Beil Sys. Tele. CG 537

It's

contribution

be

South

186

under

from

ments

the

82

involve

to

the

Of

system

totals

city's share

for

the

these,

from

and

established in

was

subway
say

glowing terms. They
is recognized as the most

it

modern

Braniff Common

the

8
Steel Products Common

new

in

in

the

world.

Its

nation, if not in
ventilation/ they

declare, is unexcelled in

sub¬

any

way, and it is the first system of
tunnels to use fluorescent lighting
for
illumination.
Stations" are

equipped with the
South

I.a

Salle

Tel. ANDover 3700

St.,

Company
Chicago, lU,

Tele. CGO 650-651

type of escalatoTs, which connect
train platforms
with mezzanine

stations, and operating noises
reduced to
of

a

heavy,

that rest
the

For Over

nal

are

minimum by the use

welded

running

rails

resilient pad insets in
plates. Safe operation is

tie

on

assured by the latest

%
Century

modern

most

and

automatic

control

equipment.

KEAL

ESTATE

SECURITIES

Liberty Baking Corp'n
$1.00 Cumulative

Reliance

Steel

Pt'd.

Com.

Hammond Instrument ,Com.

fer system at

inaugurated

CHICAGO
Teletype CG 1122




by

5690

transfer

to

Enyart, Van Camp & Co., 100
West Monroe St., offer their quo¬
tations and data service on Chi¬
and

cago

Suburban

request.

on

Bank

' '

Stocks

)

bus, a they

must

Unification
While

the

10-cent fare
an

ated

these

and

forward

street

steps

Court,
lively

is

the
the

discussion.

Commerce
this

undergoing
in

still

lines, both

car

are

organization

subject

Commission

which

pealed

in

five-man

by

is

now

court.

ap¬

Meanwhile/

Judge

a

appointed

Michael

L.

Igoe, who has jurisdiction over
the reorganization cases, recom¬

step toward complete

a

tegration and
local

committee

court

there

in¬

no

way

effect

irked

the

by his

unification

City

car

of

to

to

come

unification

talk

is

that

to

the

Mayor might recommend munic¬
ipal

ownership

of

the

traction

Transit

systems, which is being advocated
by

tor Coach

(bus lines) Company
in compliance with an order of

-•

some

local parties.

(Continued

on page

*

the

in

Therefore,
be

what

present
little

rates.

lost with

business

the coming

of

peace

vorable tax payment.

Further, this

loss of income from the reduction
in

the

use

power

for

of

low-priced electric
commercial purposes

should, in all probability, be ab¬
sorbed to a very large degree by
substantial

increase

in

the

use

of power at

higher rates for home
consumption (light, heat, refrig¬
eration, laundry work, etc.). With
the above factors in

inclined

1491)

has

by the utility industry may
be compensated for by a more fa¬

be

-

con¬

of at¬

center

&

McKinnon
space

week's

Westerns.

length

ings in their

on

on

and

devote

them

"Bond

special articles

San Franciscos

to

in

•

Review"
St.

Louis

Chicago &

They also

com¬

Railroad Earn¬

current

"Stock

Re¬
view of the Week," and have
just
issued a special release on Alle-

gheny

Corp.
Anyone interested in obtaining
copy of any of these items may

them, without charge, by
addressing Thomson & McKinnon,
Statistical
Salle St.,

Library,

231

So.

La

Chicago.

Utility Industry
,

ing companies for the satisfactory
currently being afforded

returns

Good For Peace Time
Vilas &
New

York

New York

prepared

Hickey, 49 Wall Street/
City, members of the
Stock Exchange, have

for

distribution

an

to

view

mind,

we

favorably

curities

in* Peace

Time—a

Basic

Change in,the Making/'.given be¬
fore
the
Los
Angeles security
brokers

and

dealers

at

the

L08

Angeles Stock Exchange.

Cons. Natural Gas Co.

Situation of Interest
Consolidated Natural Gas com¬
w. i. offers
attractive possi¬

mon

bilities, according to Reynolds &
Co., 120 Broadway, New York
City,
Stock

members

of

Exchange.

are

circular

the

be had from

purchase of well managed operat¬

ah

tractive reprint of the address of
Arthur C. Knies on "Railroad Se¬

,

a

Surface

Loan

an

may

was

Some

by

ef¬

to

achieve

oper¬

the

if efforts

naught.

dividends

increase

lines,"lial

Council

Their

on our military
expenditures,
the
future' could
bring consecutively lowering na¬
tional' budget requirements/: This
means lower taxes or at least, no

the

the original unification
plan to meet the approval of the
Illinois Commerce Commission.

to

&

this

in The Posi-War Era

have been reached

facilities.

informed

was

Mayor Kelly,

Thomson

their

The Future Of The Public

been severely
ever-increasing
tax burden, but it would now ap¬
pear that since a ceiling seems to

amend

forts

La

St., have analyses of Mer¬

depressed

unification of all

transportation

The

South

chants Distilling Corp. and Stand¬

for

mended separate reorganization
of the elevated and street car
as

War

terruption as they did in
the and also the purchase of
holding
change over from "peace to war¬ companies' securities whose
equity
time activity.
This industry may is
substantially
above
current
be said to be the only one which market
prices.—Andrew F. Lynch,
was prepared
to immediately as¬ Statistical Department, Abraham
sume the obligations placed upon
& Co.
it by the large demands for its
services brought about by the war.
Public utility income available Railroad Securities Look

to

deci¬

a

being

committee

Federal

Third

the public is again
turning to cor-

a

ations should continue without in¬

earlier

plan

a

.

Lines, the Chicago
(elevated lines)

208

industrial companies.

of

Illinois

unify the two properties,
sion

re¬

Federal

The

rejected

year

the

public utility industry is unique in that it will benefit from
the cessation of hostilities
sacrificing but little of the gains it has
derived from the war activity.
With the coming of peace, the com¬
panies' costs should decline and they should then be in a
position to
proceed with the expansion program inaugurated
prior to hostilities.
They are most fortunate in that there is no physical
re-adjustment
necessary as is the case with most^-

taken, the question of uni¬

which

that

The

Problem

in another direction without fur¬

experimental

Chicago

Salle

Brothers,

10

pay

fying the properties of the elev¬
of

on

■

-

obtain
Parol 1

cents.

were

Struthers

porate bonds, with the rails

the elevated

ther unnecessary delay"

Company, and the Chicago Mo¬

3

Phone Central

Rapid

a

on

57

"prepared to act with- expedition

portation set-up was taken this
month, when a city-wide trans¬

(street car)

120 South La Salle Street

the

the

using the street

elevated and street

Meanwhile/another forward
step in Chicago's local trans¬

basis

CASWELL & CO.

to

warned

Unified Transfer System

from

request.

over, and happily was more
than successful, the attention of

North

exclusively continue to pay
fare, although, if they

or

type of sig¬

train

increased

Persons

Now

with

increased

were

of
•

t

considerable

8-cent

desire

of

City officials describe the

135

car

1907

using local
franchise receipts

purpose

bus

were

123.

an

is

modernize local transportation.

Hearst Preferred

Straus Securities

elevated
to

The

traction

a

the

on

is

ment at

be¬

and bus lines.

from 25 to 45, and transfer
points
between the street car and the

subway

$34,270,000

transportation
to

the

$23,130,000.

is

financed

fund that

Maryland Casualty Com.

and

'

Reliance Steel common, and Ham¬
Instrument common.
/

arrange¬

service

new
car

analysis

Corp. $4.00 cumulative preferred;

in¬

were

new

354.

special

La

mond

interchanged

creased

city, is being

to

Copies will be sent

Salle St., will send on request re¬
cent analyses of Liberty Bakeries

fare.

will extend to the west and north¬

being

;

as

up-to-date
brochure
on
Colorado & Southern 4V2S of 1980.

tinuing to hold the

120

Intersections at which transfers
may

La

illus¬

an

tention,
Caswell

All

car.

South

trated

Also .avail¬

Milwaukee

Copies of all

their journeys

starting

231

Ryan-Nichols & Co., 105 South
Salle St., has just prepared a

published
Chicago surface

distribution

report

the

to

Price,

&

St., have available

request.

able

mediums,
however, cannot be used on the

paid by the Federal Government.

Members

Tel. RANdolph 4068

Cost of the

approximately $34,000,000.

of

well

North

near

Salle

Wells Corp., which is available

the

street

on

request.

lines, the first dated Sept. 16 and

street

a

an¬

on

reports

versa.

setup,

Copies of these
be had

may

Salle St., have recently

he

transportation

same

ated

to

alyses

recently qualified

La
Brailsford

impos¬
a

was

Stand¬

stocks.

common

Silica

Missouri.

had upon

Transfer points between the elev¬
Ground Broken in

in

request.

elevated lines, and

or

tween the street

materials.

necessary

Salle

war

lines. Similarly,

may

car

three

com¬

be

not

may

operation

Illinois

ard Silica

ard

Hicks

the elevated lines may trans¬

on

While the first link of the sys¬
tem will be placed in use, other

pletion,

Phone State 0101

Teletype CG 361

data

upon

A. A. Bennett & Co.,

intersec¬

originating

fer to the bus

anywhere from eight
a day.

routes, in various stages of

lines

street

minutes

22

to

users

be had

La

transfer to the bus

can

passengers

bus

regular

companies,

may

three

were

could

been
from

new

elevated

some

the

bus, and vice

rider

car

to

had

transfer

a

the first year of

Situations
Data

coal

and

car

there

transfers

It

Under the

Rapid Transit Company, a
of whose trains will use

tubes,

to

but

as

where

sible

portion
the

lines,

presented.

with the elevated lines of the Chi¬

cago

Three Illinois Coal

between the street

restrictions

principal shopping thorough¬
fare, to a point on the near South
Side.
The subway will hook up

La

request from the firm.

tions

the

COAL SITUATION

in

of this circular may be

elevated

near j

underneath State Street,

area

South

the interchange of transfers be¬
tween the bus and elevated lines

North Side through the downtown

Loop

231

interesting invest¬

and

,

The link to be placed in opera¬

5. La Salie Street

Co.,

situations

ment

in existence providing for

were

&

Salle St., offer

placed in operation. Ceremonies will be held that day, during which
Mayor Edward J. Kelly will cut a ribbon in the subway tubes to

Incorporated

135

Adams

signify their readiness for use, and revenue operation will begin at
midnight the same day. Opening^—
1
of the first link of the system will j
the Illinois Commerce Commis¬
mark one of the major advances
sion.
Previously, arrangements

Midland Utilities
6s,

City of Chicago for many years of a subway
a reality this Saturday, when the first link of
system which has been under construction for nearly six years is

a

1927

Metropolitan West Side Elevated
4s,

Chicago Recommendations

The dream of the

is scheduled to become

Chicago Railways
1st

9

a

revities

request.

upon

the

the

New York

An

interesting

company

may

Reynolds & Co.

upon

>

Volume

And

Readers Comment On "Planned Economy

STEWART

gladdens the heart of man¬
kind to read Doctor Phelps' so
sane, so thoughtful, so hopeful an
exposition of the economical and
•voptical path that leads us up and
cut
of the abyss.
Anyone who
hesitate

should

article

this

reads

before joining the mob and the
Krhear campaign against our pro-

Professor

economics.

of

fj s^ors

Phelps-

has diagnosed the fatal
malady
that has
sickened the
whole U. S. A. and hourly threat¬
existence.
Let us
Phelps and forget our

our

ens

very

read

all

oncoming Civil War in the U. S. A.
CLARENCE II. HAINES

9

•r-';vLV'w

Mass.

Watertown,

the

of

side?

other

We have not

unlimited free

an

enterprise system and necessarily
have not had

for many years.

one

Before going on

it might be well
My un¬
derstanding of the term is: a sys¬
tem
whereby any individual or

,to define free enterprise.

partnership
or
corporation, may at any time
and anywhere promote, organize
group of persons, as a

and

transact

busi¬

using any facilities and con¬

ness,

tinuing to do
do

of

form

any

not

so

long
the

as

trespass

on

they
private

as

property rights of others. Because
of

the

welfare

common

and

the

public convenience, it has become
essential
that
some
limits
be
enterprise which
pari passu involves a "Retreat
from Competition." - placed

For

:

free

on

example, not so many years

there

ago

were

several telephone

systems in some communities, but

continuous business existence

firm's total resources are in excess

In addition to its

$160,000,000.

banking
activities,
Brown Brothers Harriman & Co.

commercial

members

the

of

well

as

investment

as

Brown (both direct descendants

founders), Prescott S. Bush,
Louis Curtis, E. Roland Harriman,
W.
Averell
Harriman
(recently

appointed U. S. Ambassador to
Russia), Ray Morris and Knight
Woolley.

•;

"

firm

Philadelphia

Oct. 10, 1818, "by

on

Alexander Brown and three of his

A

fourth

returned

son

until a short time ago al¬
anyone—with or
without

experience—could start a bank in
.any.
community.
Unfortunately
the outcome of such a laissez-faire

is too well

system

there must be
in

bank

a

banking house of

London

Brown, Shipley &

Co'. In its early

days, Brown
Brothers engaged
principally in foreign trade, but
banking operations gradually be¬
came an important part of its ac¬
tivities and the mercantile opera¬

the
banking functions. The New York
office was opened at 191 Pearl
Street in 1825, the year in which
the Erie Canal was completed. In

The

years.

office

Boston

treat

milestone

on

the

road to a

planned economy!
Much

the

of

politico-economic

made in the past 10 years
accepted as being for
good was stigmatized
Socialistic only 15 years ago.

progress

and

now

the common
as

present

was

A. Harriman &

firms

been formed

by

the two sons of the
leader in

Harriman, a

H.

E.

The Har¬

Co., Inc.

had

land Harriman,

late

American railroading

Now

planned economy is being
stigmatized by various organized
groups who mistakenly think that
'thbir corporations gain an advan¬

Daley, deputy comptroller of the
scheduled

and finance.

be

to

Appointed
Chief Of Army Air
Goodwin

James

appointment

Reconnaissance
was

has

early
con¬

templated issue all set up, provid¬
ing for bonds maturing. in 20
years an$ optional serially 19451961, it is expected that the actual
sale of the issue will be delayed.
.

proceed

The county was all set to

quickly
with

a

the

couple of weeks ago
financing,'but a stum¬

bling block arose when the munic¬
ipal bond law firm of Chapman &
declined

Cutler

vorable legal

,

submit

to

opinion

on

fa¬

a

the pro¬

issue until the validity of

posed

claims

various

funded

be

to

was

certified

by the Illinois Supreme
This disrupted the plans of

Court.
the

county'momentarily.

Chief

as

the

of

of

Army Air

announced in Washing-,

been

a

New York Stock

of the

member

The

J

nancial. difficulties in recent years
and had

than

more

$10,000,000 of

It obtained authority from
the last session of the Legislature

year.

-

the

fiscal

the

of

end

The county then

period.

took steps to sell

under the terms
of the Act of the Legislature, and
the firm of Chapman & Cutler, as
is customary, was retained to han¬
dle the legal details of the finan¬
cing and to submit an approving
legal opinion. The firm drafted
a

funding issue

the

bond

that

ordinance

in¬

was

Mr. Daley.

nothing

nance

on

are

Supreme

pected that

certified by the

Court.

It

is

a

friendly

tax¬

payers' suit will be instituted in
of

the

county

courts

for

an

economy.

bonds. Any. decision

August, 1942, as a Major in the
the Army Air Force. He recently re¬
using of statistical surveys by a turned from England," where Re
Federal bureau, with interpreta¬ commandad a Photo Reconnais¬
tion by trained economists, and sance and Mapping group with the
economy

the, issuance
most

duction facilities.
v
■

"

r

:

*

;

of

our

of

inventories

and

It would tend

consequently

employment problems.

our

Democracy

is

Eighth Air Force.

pro¬

to decrease "inflation and .deflation

'lessen
•

use

representative

During** World

■

mental

;

l/z s of

1980
Request

on

various

the

that

incurred for proper

were

HICKS 6- PRICE
Members

county purposes, were properly
audited

and

Board

of

prior

financial

Local

New York Stock

Exchange
Chicago Stock Exchange
New York Curb Exchange'Assoc:)
Chicago Board of Trade

the

by

Commissioners,

incurred

were

1.

approved

and
Dec.

to

quarters feel

231 S. La Salle St.

that this action should be taken

that

so

arise

question

no

the

to

as

Randolph 5666

CG

•

972

can

ever

of the

validity

bonds.

derlies

the

apparently, that

insistence

action be taken

is
that
issues of Chicago

unfortunate

an

occurred
Board of

issued

were

Electric and Gas

These

Education bonds.

securities

SAN ANTONIO, TEX.

experience

two

on

un¬
court

that

the flotation,

on

Revenue Bonds

retire

to

outstanding tax anticipation war¬
Years after the bonds were

rants.

Bougkt

Sold

—

Quoted

—

issued, the State Supreme Court
not be is¬

ruled that bonds could

sued to pay off tax warrants,

and

subsequently the validity of

one

of

the

and

of Education

Board

of

part

another

was

DANIEL F. RICE & CO.
Members

chal¬

New York Stock Exchange
Chicago Board of Trade
'

and

issues

141 W. Jackson

lenged in court, with the .subse¬
quent
default of interest pay¬
ments.

Teletype

be

taken

forestall

to

bond

future

on

local governmental

any

of

issues

Investment Securities

units.

Public

G. S. Miller With

CHICAGO,

ILL.

George

—

in the

S.

Thomson & McKinnon,

in

Mr.

La

Street

formerly

was

with

for

Field,

Co., and in more recent
with S. B. Chapin & Co.

years

Issues

Trading Markets•

E. H. Rollins & Sons
Incorporated

South La Salte

135

25

&

Glore

Active

Leading Over~Counter Securities

231 South

Miller, who has

Salle

Railroad

-

Municipal

-

We Maintain

Miller has become associated with

La Salle St.

Utility

Industrial

Thomson & IcKmnon

years,

1276

It, thus, is felt that steps

should

been

Blvd., Chicago
CG

CHICAGO

Street,

3
Central 7540

CG 530
Wires

Direct

Principal

Our

To

Offices

In

Cities Throughout
Country

the

Interesting Defaulted Rails
Baird
& Reuss,
New York City,
interesting cir¬

McLaughlin,

One Wall Street,

prepared

cular

selected

six

on

Specialists in

an

defaulted

CHICAGO

railroad

reorganization
prefer¬
Copies of the circular dis¬

ences.

cussing
may

be

the

had

Traction Securities

situations in detail
upon request.

Comprehensive

Lewis With
CHICAGO,

available

.

Slay ton Co.

ILL.

Lewis has become associated with

Inc., whose

Slayton & Company,

analysis
request.

G.

Robert

—

on

Brailsford & Co.

I.

208

S.

La

Salte

Street

main office is located at 111 North

unit

from

selling

the

handed down

Fourth Street, St.
Lewis

was

Louis, Mo.

Mr.

State

Tel.

CG 95.

9868

formerly with Selected

Investments Co.

War

FOREIGN

I,

French Army and later as a

the

Lieutenant

Army

in

the

United

bership,

racy.

home is in Fort Worth,

••




in

the

SECURITIES

CHICAGO—SUBURBAN

Exchange.

His

Texas. V

We specialize exclusively in under¬
writing ami distribution of securi¬

ties,

providing investment dealers

with 'attractive

issues

clients.-Maintaining

ILLINOIS

States

Air Service.
In 1931, he
prominent for his compe¬
with
Captain Frank
M.

became

prise furthers that end, then that
is the American way of democ¬

BANK STOCKS

Colonel

Hall served in the 111th Escadrille
of

SERVING INVESTMENT DEALERS

J

government directed by delegated tition
authorities for the regulation of Hawks, speed flier.
Colonel Hall
our
society in the best interests was born in Atlanta, Georgia. He
of, the majority. If, a iplanned eco¬ is forty-seven years old.
nomy and
a limited free enterColonel Hall still holds his mem¬

•

642

means

of estimates for the

economical

Telephone

&

CHICAGO

injunction to restrain the govern¬

Planned

4

ex¬

the bond ordi¬
is approved by the" County
once

Commissioners,

one

certify

claims

have

by
continuing
cut-throat December,
1931.
Colonel Hall
competition
in
a
laissez-faire was ordered to active duty in

'

640. 641

Sought

county has had definite fi¬

Exchange since

tage

to

attacks

County's Financial Woes

.

State

Hall,

Court Action

The reason,

county has the

While; the

various claims

Reconnaissance Staff

ton,

was

,

approved

the subject
has been said at meetings of the
county
board,
it
is
definitely
known that no approving opinion
will
be
forthcoming
until the

Col. Hall

Staff

CG

CHICAGO 4

Postal

The suit would ask the courts

this week.

While

whose

and

unit,

governmental

troduced by

Colonel

J.

Richard

by

of

Harriman and E. Ro¬

Averell

Board of

the

to

the bank
of the busi¬

of

title

Brown Brothers &

of

submitted

been

to fund the claims that existed as

be

granted—"A Re¬
Competition" and an¬

from

other

Now

paid bills and judgments that exist
as of Dec.
1, 1942, the end of its
last fiscal year, is the subject of
considerable interest in local fi¬

:

.

Co.,
Harriman Brothers & Co. and W.

W.

Tele.

Analysis

Chicago, to

books at the end of the last fiscal

opened in 1844.

riman

CG S78

BLVD.,

8686 and

Colorado 6* Southern

bond issue its un¬

a new

at which address it
for the past 110

Street,

The

of

City

the

bracing

fund into

unpaid bills and judgments on its

to

remained

has

WAR.

Tel.

Tele.

JACKSON

Court.

of Cook County, em¬

move

59

moved

this office was

Wall

3

W.

would be referred to the Supreme

by.

superseded

were

community before a

a

will

charter

known.

definite need for

a

to

England and founded the business
which
later
became
the
well-

nesses

Up

in

established

was

dates from the merger

most

of

the

1833

The

Commissioners

partners of the firm are
Moreau D. Brown, Thatcher M.

tions

Randolph 6960

141

(Continued from page 1490)
FINANCING

COUNTY

nancial quarters.
An ordinance,
exchanges and act as which would authorize the county
the purchase and sale,
to sell an $8,346,000 flotation, has

The

known

Tel.

principal

counselors.

sons.

CHICAGO

3

in

of securities

The

INCORPORATED

BOARD OP TRADE BUILDING

120 South La Salle Street

a

and a
principal

brokers

Kneeland & Co.

Established 1922

Chicago Brevities

a

quarter.
Today,
offices in New
York,
Boston
and
Philadelphia
conducting a complete domestic
and foreign banking business, the
of

Corp'n

r

century

tition^

'

with
of

country

public convenience demanded one
system—"A Retreat from Compe¬
.

CHICAGO

of the few in¬

one

the

in

security

article, "Planned
Economy and Free Enterprise,"
In
the "Chronicle" of Sept.
16
leaves me slightly bewildered as
to his real viewpoint.
It sounds
like an epitaph on the political
economy we have known and a
rationalization of why "our des¬
tiny" of a planned economy will
not work.
May I present some
Doctor Phelps'

views

It is

•

stitutions

with

Interstate Co.

Consolidated Dearborn

C.L. Schmidt & Co.

Teletype CG 993

State 6001

■."V'V

City Public Service Co.

Telephone

Preferred

and

Utilities, Pfd.

its 125th anniversary on

observed
11.

Kansas

Preferred

La Salle St.

39 So.

of Brown Brothers
Harriman & Co., private bankers,
Oct.

Common

for our late brochure

firm

The

; ■

are

V

Write

Phone

Ac

t

.

Central Elec. &

Leason & Co. Inc.

is 125 Years Old

A, B and Preferred

United Stockyards

,

.

North Central

ISSUES

Brunt Bros. Hantaan

It

Howard Aircraft Co,

Preferred

and

Booth Fisheries
•

Rapid Transit Co.

receivedr ,'

Portland, Maine

Common

Chicago

Phelps. discussed ip detail the' extent to which governmentallyplanned and directed economy has influenced what he describes as
the "retreat from competition" in this country.
Apropos of the
views expressed in the article, the following comments have been

W'",'?: BEN

Allied Paper Mills

all

in

of Sept. 16, Doctor

published in the "Chronicle"

article

an

1491.

CHRpNICLE

J
Markets

Enterprise" By Clyde William Phelps

Free
In

& FINANCIAL

THE COMMERCIAL

Number 4220

158

no

for

their

retail de¬

of our own, we compete
way with dealers, but serve
exclusively. Correspondence

partment

Bought

—

Sold

■—

Quoted

iii

Bought

-

Sold

Quoted

no

them

invited.

ZIPPIN & COMPANY
208

So.

La

Salle Street

CHICAGO

Enyart, Van Camp & Co., Inc.
100

CHICAGO

4

RANDOLPH 4696

West Monroe

ANDover

2424

Street

Wholesalers

South La

and

Underwriter®

Salle Street

Chicago
CG, 95,5

.

FLOYD D. < EKF CO.
Exclusively

120

3

'

1492

THE COMMERCIAL & FINANCIAL CHRONICLE

i

Tomorrow's Markets
New York Majestic Corp.

Noyes Says Free Enterprise System
Is "In Balance

Walter Whyte

Linwood I.

4% Non-cumulative Income Bonds

Executives

Says—

With Stock

Market

Descriptive circular will be sent upon request.

Incorporated
Members

.

New

Broad Street, New

41

,

,.

_

';

;

'

limited

by stock overhead.'

HAnover 2-2100

York 4

sell¬

that the
the

advised

Situation

Central Park West, with depth of 177 V2 feet on
on 72nd Street.
It is improved with a 30-story

71st Street and 224 feet

units of from two to

ments in

the usual

divided into 208 apart¬
twelve rooms.
In addition, there are
are both simplex and duplex types.

columns

corner

piers.

or

rather than

through

This space, up to the 19th story, is
used for glass enclosed porches,

in rate.

which

creased interest

into

the

upper

are

so

space

be transformed

can

summer

In

stories the "set backs"

planned that large terrace
is provided for all apart¬

leries

these floors.

on

spacious
gal¬
ceilings
of
extra

and

heighth. There is
the

a

roof open

enclosed
winter.

All

have

apartments

with

large solarium

in

vita

on

and

summer

glass

Entrances to the

provided

are

terraces.

open

ments located

on

in the

in

the

buildings

all three streets.

$9,839,400 of the subject bonds

It would

10 shares of

this

on

basis

to

corporation, evidenced by a
voting
trust •; certificate,
98,394
shares being issued, vesting 100%
of the equity in the property to
bondholders.

Shortly after the reorganization,
the

bondholders

vote

first

erty

totaled
a

%

referendum

a

provided for the payment

balance

of

$94,295.03 of

expenses

and

re¬

a

re¬

of $50,000 for first mortgage

serve

charges

that

in¬

and

sufficient

funds

roll of $42,000 would be re¬
flected in net profit available for

The

$8,825.98 earned
but not distributed June 1, 1943,
*being
less
than
the
required
V4 % multiple, must also be taken
into consideration, as it has been
income in the

current

tributions will

be increased.

Physical
4

Since

affecting

market

still

are

from

precipice
fall into

can

a

cre¬

erty has been kept
physical condition.
Diesel

or,

*

In

taking last week's posi¬

tion I

in

excellent

A

complete
plant has

steam

heating
been paid for from
earnings and
during 1940-1941, the management
replaced all stoves

and

only

would losses be incurred but

has

throughout

been

original

placed upon
the

first

mortgage
the property in 1937

amount

of

$2,500,000

was

held by the Mutual Life Insurance
Co. and called for 4^% interest

for the first five
years, 4%% for
the next five years and for amor¬
tization payments of

$50,000

annum..

for Sale of Property
Equity Position of

Subject Bonds
indenture
be

sold

one

never

kets.

argues with mar¬
One either follows them

leaves them alone. Ration¬

or

alizing

the

Since

4

stock

as

trend

grief.
sS

too

'*

Co.

for

in

per

August 1940; this

until Dec. 29, 1947,
interest and annual

runs

4%

amortization

of

the

for

but

the trust

property

may

less

not

than

contemplated sale has been mailed
to registered holders. In our
opin¬

ion, the income bonds which

$50,000.

corporation has accelerated

carry

100%

of the stock of the owning
corporation are in a very excellent

equity
based

time

position.
the

on

of

was

opinion

following: At
reorganization,

the
of

Our

opinion

as

$5,000,000.

been advised by the
corporation that the annual rent

MARKETS

IN

April 8, the market,

reflected

in

the

familiar
.

line" edict

was

handed down

that this increase has been

plished through

accom¬

additional leases




"I

prise
right
"It
the

system

in

the

*

-

possible

enter¬

balance

SECURITIES
*

*

•

*

SHASKAN & CO.
Members New York Stock Exchange
Members New York Curb Exchange
40 EXCHANGE
Bell

PL., N .Y.

Dlgby 4-4950

Teletype NY 1-953

of

capital

system

in

with
Associated

carry

an

House Group

the

assure

would

revealed

Studying

Various Tax Proposals
The

House

Ways

and

-

Means

was expected to wind
its public hearings this week

the

on

Administration's $10,500,-

000,000

new

calling

for

dividual

'

revenue

higher

and

the

end

our

of

end

the

of

economic

and

program

levies

in¬

on

incomes

corporate

,

that

bring

may

free

our;

is

now.

is

of

people," Mr. Noyes

believe

war

minds

to normal

pursuits."

on
so-called
luxury items.
Treasury's tax proposals were
received favorably by Com¬

The
not

friendly to capital
they believed in the capi¬

papers

were

because

talistic system.

"They realize im¬
portant improvements have been

made and others

creeping

advance

climbing1

with

.

the

gradually

back to

just under the 138.83
highs. Then came a burst of
activity and i t1 pushed
through to 142.50, reaching
.

that

a

proposed

which

due, but they
believe these changes should be
made voluntarily, and,
therefore,
constructively, instead of being
are

10%

would

news¬

000,000 in

retail

raise

sales

tax

about

$6,000,However,

new revenue.

the
Administration
is
strongly
against the sales tax and it is con¬

sidered

doubtful that the Com¬
mittee would report out this rec¬
ommendation despite the growing

sentiment in

Congress for such

As

measure.

the

to

a

Republican

forced on
business by any un¬
friendly administration and in a

suggestion that the Federal Gov¬

destructive manner."

tically in

ernment reduce its expenses dras¬
an effort to avoid a large
bill, it is argued that this could

tax

be

not

Electric & Water Revenue

enjoying the same tax ex¬
empt
feature—indicates
in
the
opinion of Blair & Co., Inc., 44
Wall St.,
New York City, that
electric and water

bonds

revenue

others, offer certain advan¬

among

for

essential

any in¬
Because of the

of

nature

service

it has

been possible to maintain
physical
plant adequate to meet post-war

while

needs,

greatly
increased
during the war period

revenues

have

facilitated

accelerated

an

rate of debt retirement.

4 4

.

The bankers declare that "reve¬
nue

bonds

should

bonds

enjoy

"broader

a

market

and

consequently demand high
prices, the survey notes that steps
being taken in many States to

are

include
of

bonds in the list

revenue

eligible investments for savings

done

to

extent and that

lore,

appreciable

any

taxes, there-

new

inescapable.
Treasury witnesses'

are

The
ments

against

echoed

on

sales

a

argu¬

tax

were

Oct. 7 by Fred M. Vin¬

Director of Economic Stabili¬
zation, who told the Ways and
son,

Means

Committee

that

he

could

"hold-the-line" against infla¬
tion
if
a
10%
sales
tax
were
not

adopted since it would open the
way for increased wages and farm
prices.

almost

vestment program.

Senator

George

Chairman

of

Committee,

the

(Dem..

Senate

declared

Ga.),

Finance
Oct.

on

9

that if the Victory Tax is repealed

—•thus

removing
from

persons

about

the

tax

9,000,000
rolls—the

only practicable substitute would
be

sales tax

a

group

if this low

not to

was

taxation.

;

-

On the

income

Federal

escape

day (Oct. 9), Rep¬
resentative Martin (Rep., Mass.),
House minority leader, stated that
same

Government

would

economy

be

rr^ade an issue in connection with
any

tax legislation.

Adoption of
vocated

on

sales tax

a

ad¬

was

Oct. 10 by Representa¬

tive Robertson (Dem., Va.), mem¬
ber of the Ways and Means Com¬

mittee,
while
Representative
Knutson
(Rep., Minn.), ranking
Copies of the analysis may be,
minority member of the group, is¬
had from Blair & Co., Inc., upon
sued-a statement asserting that
banks and trust funds.

,

figure Sept. 20. All this
time, being wary of the mar¬
request.
'
■>
}.'A
ket, I kept aloof. On the pre¬
vious rally we had been
long] Ease Bah On Weather Data
taken
profits, and
I' saw;
r'; Lifting of censorship restrictions
nothing in the market to war-: on weather forecasts because of
(Continued on page. 1504)
' "improved defense and other war
.

•

Republican members of the Com¬
mittee are hopeful that
necessary
could

revenues

be raised without

Recourse to a sales tax and

be

"would

reluctant to replace the
Victory Tax with the sales tax." ;
very

..

conditions"
Also the fact that the Mutual Life
Insurance
Co.
loaned $2,500,000

shortly

thereafter

credence to
the

loan

a

has

gives

further

11.. by

paid down

to

announced

Price,

on

Oct.

Director

of

•'

Censorship..;i'-y
and

dollar, or about $285 for each
$770 bond outstanding. This value
approximately $200 in excess of
the acquisition price in the cur¬
rent

market

and

will increase

as

first mortgage is further reduced.
As it is a well known fact that

realty values
it

would

are

appear

on

the

uptrend,

that the

subject

bonds in relation to the facts and

future possibilities
levels

underpriced.

are

at

present

Representatives
Chamber

radio /broadcast

of

weather forecasts is the first such
war

direction and barometric pressure.

Oct.
tax.-

12
-

Allegheny Interesting
McKinnon,

231' S,

La Salle

to

urge

the

U.

S.

!

;

referred
page

on

general. sales

a

The, Treasury's tax
in

to

our

1415.

Oct.

7

issue,
V,

ma*

A "Peace" Stock Now

;>

Enjoying "War" Prosperity
"peace" stock

now

enjoying

prosperity is

the Class A
7% cumulative participating stock
of Hearst Consolidated Publica¬

tions, according to an interesting
just issued by
Scherck, Richter Company, Land-

Street, Chicago, 111., have
prepared a special study of the
Allegheny Corp., which the firm

memorandum

believes offers

reth

an

interesting situ¬

Building, St. Louis, Mo. Cop¬
discussing the

ies of this circular

ation at the present time. Copies
of this study may be had from

situation

Thomson

tained from

quest.

&

McKinnon

' V-

upon

re¬

in

detail

may

be

Scherck, Richter

pany on request.

•

program was

•

A

&

of

Commerce

and
the
New York Chamber of Commerce

"war"

Thomson

of

appeared before the Committee

Relaxing the rules against pub¬

$5,000,000 value. As lication
been

was

Byron

is

of the

property as of Oct. 1,
1943, with only one vacancy (a
seven-room apartment) is
$630,000
as compared to
$588,000 as of Oct.
1, 1942, an increase of $42,000, and

the American
said.

the

enjoy a com¬
market was at 138.83. A/Week paratively high degree of stability
in
the post-war period
and in
later it was down to 134.40.
periods of depression which may
Then followed two months of follow."
;
While
tax - supported

the

REAL ESTATE

leaders

up

in

began. News¬
$2,250,000 as of March 31, 1943,
the equity above the
mortgage papers had been confined to pub¬
$2,750,000. This equity lishing weather conditions of their
own localities.
Effective at mid¬
value allocated to
approximately
$7,500,000 income bonds outstanidJ night, Oct. 11, official forecasts are
ing amountrto about 37 cents on usable except for mention of wind
TRADING

11, said "the country
capitalism into som'e

Committee

trial

on

would be

;

Oct.

ness—is

action since the

amor¬

have

the

by the restriction in the

tization

Increased Occupancy and Earnings

the

indenture that the property could
not be sold for less than

as

believe

consideration

to value

The

payments, the sum of
$62,500 having been paid in 1942.
The balance sheet as at March
31,
1943, shows $2,250,000 outstand¬
ing, the next payment of $12,500
falling due Dec. 29, 1943.

is

undoubtedly $5,000,000, evi¬

denced

Nby#

"Anyone who cannot read the
signs pointing in this direction is
blind, indeed.
;
.' '

tages that entitle them to serious

*

averages, has done little. On
that day the famous "hold the

market

in

$5,000,000 unless 40% in principal

consensus

mortgage

made

that

•

This mortgage was funded
by a
new loan from the Aetna Life In¬
surance

saving in

Provision

Provision is

other
follows I:

gave

lone

a

refriger¬

maintenance expenses.

and

which

Bight Row"

Newspaper Advertising

from

capitalistic

column, which tries Situations Attractive
An analysis of basic factors re¬
wolf, was follow¬
ing a mass opinion. But bitter lating to both municipal revenue
bonds and tax-supported bonds—
experience has taught me that both
to be

the

substantial

a

the

opportunity; this was
from Chicago on<3>-

that this

*

prop¬

that not

was aware

often leads to

amount of bonds dissent thereto
within 30 days after notice of such

Prior Lien

The

roll

vasse

Condition

reorganization, the

to

a prin¬
cipal reduction of each $1,000 in¬
come
bond, which now is out¬
standing in the principal amount
of $770.

We

intangibles

week's

which it

rent

distribute $230 in cash as

calls

The
last

a

As distributions for

as

day

the

away

unless

:He said he believed most

The market is still

distributions will

carried forward

dispatch

same

settle down

by the White House. On that
approved the placing of a
building.
mortgage loan upon the prop- i J"ese replacements were all paid day too, the averages were at
in the amount of $2,500,000, for from earnings and the result about 136. Ten days later the

organization

in

market break.

a

of

distribution.

and

to

Chicago,,on

permanently

socialism"

remarks of Mr.

.

hugging

assume

address

appeared the market declined,
mittee members and, as a
result,
system has been and is being tra¬
though at no time did this duced, in the guise of war's neces¬ various substitute plans are under
decline become disorderly sity, to the extent that it will not discussion, although the tax goal
Foremost
be recognizable when peace comes is likely to be lqwered.
enough to warrant calling it
and the country and the world among the possible substitutes is

1%, it follows that
portion of the increased

sizable

ators

which

of

in

slip out of long
Since that advice

get a new hold of it¬
December, 1942, and June, 1943, self, clamber up again.
be the result.

stock of the

common

above

therefore

were

present.

$1,000 bond of this issue and

new

many

increase

period. The sum of only
were issued pursuant to a
plan of $18,940.85 is required to pay a 14%
reorganization under Section 77B multiple of interest and the fore¬
of National Bankruptcy Act. Hold¬ going facts we believe substanti¬
ers of former Majestic Hotel Corp.
ate our opinion that interest dis¬
first 6s received for each $1,000, a

to

"too

quite logical

any

seem

freedom

Press

rooms

offices.
The apartments
special construction eliminates

ten

A

swing

capitalism, because

City

The property owned by the corporation has a frontage of approx¬

1,403

were

readers

positions.

Owning And Operating The Majestic Apartments,

apartment building containing

intangibles clouding

market

and

4% Non-Cumulative Income Bonds With Stock Of
New York Majestic Corporation

on

to

State

of

at

,

Real Estate Securities

imately 204 feet

Association

an

capital and management, and consequently all busi¬

Last week this column felt

Present An Attractive Equity

it,

"I

By WALTER WHYTE

Central Park West At 72nd St., New York

Noyes in

people that retention of the

the

ing to bring about a violent
setback* Rally potentialities

,

York Security Dealers Association

sufficient

ready

form

hugging danger¬
A minor reaction

unloosen

can

Seligman, Lubetkin & Co.

is

■

now

point.

ous

Thursday, October 14, 1943

-

ob¬

Com¬
-

Volume

THE COMMERCIAL 8c FINANCIAL CHRONICLE

Number 4220

158

Political

§f ||

Security^ Internal. :

:f Stability Essential In Solving :&
Post-Wai1 Proteins
(Continued from page 1486)
a
temporary boom.
As de¬
mand diminishes, that boom may
collapse with disastrous results."

I

Turning -i to the ; international
monetary stabilization plans, he
said that none can- be successful,
"except as part of a much larger
policy designed as a whole to
secure normal stability in the most

and

important countries."
"For," he
continued, "since they aim by
means of stabilizing exchanges in
relation to one another in binding
nations together,

just as the gold
standard
did, so the
economic
changes in one nation will be
transmitted to all the rest, and

particularly since
the

most

will

you are so

powerful

nomically

your

affect

eco¬

downs

and

Therefore

all.

us

much

nation

ups

we

deeply concerned with your
stability and your prosperity."
Discussing the prospects of an
expanding world economy, Mr.

are

listeners

his

told

Brand

that

"a

flourishing
international
trade requires stable exchanges;
stable exchanges require that each
truly

,

nation shall have sufficient liquid

position
through seasonal or cyclical fluc¬
tuations. Moreover, international
to

reserves

its

protect

trade will flourish best under con¬
ditions

non-dis¬

and

freedom

of

crimination."
He described the different plans

put forward for an international
Clearing Union or for currency
stabilization — the Keynes, the
White and the Canadian plans—

their first and pri¬
mary aim the desire to provide
all the member nations with liquid
having

as

as

international

reserves—sufficient

purchasing
serves,"

"Such
re¬
in his remarks

power.

said

he

which he termed of
sonal character,
various reasons.
international

wholly

a

"are

per¬

necessary

for

In the first place,

selling

and

buying

absolutely
balanced.
Some nations have deficits, others
is

never

surpluses.
Temporary
deficits
which liquidate themselves are fi¬
nanced by the mechanism of shortterm
banking
credits.
On the
.

other

deficit is
example,

hand, when the
permanent, for

more

where

it

ments

of

is

due

the

to

rapidly

a

require¬

developing

country, long-term loans from the

surplus countries are necessary."
Suppose
a
highly - developed
country were to maintain a high
level of activity within its own
borders, he said, its imports as all
experience shows, would as a di¬
rect consequence greatly increase
to the benefit, of course, of the

exporting countries, the speaker
explained.
"But unless the rest
the

of

world

to

were

achieve

a

similar state of activity and to buy

country's exports to
equivalent degree, the result

the importing
an

would

that

be

it

face

would

a

deficit."

this, he stressed, is the
objective of the British,
American and Canadian schemes.
To avoid

main

He

described them as a
,

starting

"The provision of liquid

point.
reserves

for all member countries

will enable them to start off with

confidence/ What happens

some

in the longer run

depends on the

capacity of each member country
to conduct its affairs with pru¬
dence and also with an eye to its
duties
*

as

a

good neighbor."

full, Mr. Brand's address fol¬

In

lows:
'

The

■"

of addressing the
ers

v

last time I had the honor

Association

American Bank¬
at Atlantic

was

international

that of private

been

and

banking,

a

customed
know

profession which is ac¬
to criticism but which
be

to

useful

honorable

most

a

In the course of

one.

pay

their

Southern

should
then

25

in

troubled 24 or
should, like the rest
have learned a great deal
I

of

lower than that in the North and

these exceedingly
years

Take, for instance,
living of your
population
which
is

way.

standard

the

raised.

be

is, how

the

The

each consumer

can

South

be

problem

enabled

to per¬

1493

shall also be maintained.

Stability
whether

equilibrium,

and

internal

external, in
this world of endless, continuous,
daily, and hourly change are of
or

relative terms.

course

Neverthe¬

of

and,
perhaps
still
deflation,
booms
and
slumps, trade cycles, fluctuating
exchanges and so on, are obvious
to every one.

It is difficult to

given moment whether all
the most important economic fac¬
tors are in equilibrium. I remem¬

feel far less competent to

ter here.

It is the

the future

than I did 26 years

now

prudence,
but in consequence possibly less
power to interest you.
Neverthe¬
less, I shail venture to give you
I

ago.

a

may

have

few reflections

more

certain after-

on

economic and monetary

war

prob¬

It faces

problem which plagued

every

before the
the

more

no

than sketch with the

is

Must the problem

sia, so
gether the heads of each citizen
as

and

producer —- in
deciding what the

consumer

consumer

do

us

basis

by the State, as in Rus¬
to speak, knocking to¬

the

so

its

be solved

other

subject is

But

war.

consumer.

lems which face all of us,

though
large that I can

indeed with

one

words

wants and then by State

enterprise doing its utmost to

see

ber, for instance, that good judges
thought that you were set on a

getting out of step which
matters though it may be very dif¬
ficult to define.
If all the keys
of the piano are in tune, then the
tune can be played.
But if even
one of the keys goes
wrong, then
harmony is lost and confusion be¬
gins to reign.

Now if
tion

of

one

stability

the

in

great industrial countries after the
is

it

that the

obvious

broadest brush.
It should,
however, be possible to place cer¬
tain problems common to all of us

that that amount is produced and

distributed—or

est difficulties will face all of

in

more

perspective, to see some of the
woods at any rate instead of get¬
ting lost in the trees.
What sort of

world do

a

the war?

after

We

we

face

have, in my

opinion, to bear in mind that dur¬
ing it our peoples have had full
employment* and
high
wages.
After it' they will not be content
with less without a very great

can

solve the

we

beehive?

a

A similar question arises in the
external sphere.

How can
tion with productive power

a

na¬

the

more
easily than they can?
We
struggle. It is perfectly true that'
all know that the great benefits
employment under war con¬
of international
trade could
be
ditions could not be very long
maintained; that it is only secured greatly increased, if we could only
devise the framework, in which
at the expense of the gradual de¬

of

and

of

nation's

a

sacrifices

on

capital,
the part of

the

population which in peacetime
they would not endure, and that

if such conditions were long con¬

tinued

they would lead to a break¬
down. But it can be reported that
the

war

has at least shown how

if only there is
market.
In wartime,

be increased,

assured

an

production

national

Immensely
can

this

arises

market

from

Govern¬

ment orders of

all\kinds.But in
peacetime, if we could only tap it,
there

should

also

be

an

assured

market in all the unfulfilled wants
of the ordinary man

and woman.
that if un¬

Thus it will be argued
der

our

present system this un¬

great¬

such trade could prosper.
Again
this is not a matter of charity but,
as

is

of

in
to

the
be

case

solved

of

individual,

the

by the

exchange

services, at bottom

goods and

market.

the

It does not have to

means

to

buy.

It

earn

takes

it

through taxation and loans.
In
peacetime the wants of millions
of

consumers.

make

the

market.

the

leave

ocean

of

sorts

the last,
bad enough, will

was

of

waves

economic

the

world's

in the form of all

disequilibria

all

If

demand.

the

and

a

mand

with

disastrous

will in return




or

nations.

Both persons and na¬

tions must pay

so

irate.

the

was

con¬

alcoholic bev¬

"intoxicating liquors,"

or

My business friend

hastily concurred with the judge,
and, of

course,

did this writer,

so

although he doesn't count in thia
discussion because he is, naturally,

biased. The fact is (and we weren't

bragging), not

of

one

been intoxicated in
have

never

we

"Why in Sam Hill

Drys constantly refer to what

are

now

drinking, right here,

intoxicant? We're not

an

ever

lives. And

been total abstainers.

Said the judge,
do the

had

us

our

ao

taking thl'j

friendly drink to become intoxicated,

results.

yet, with millions of men and
seeking ne wwork, a slow¬
ly diminishing control and a more

and I resent the implication

that lam

women

a

expansion may be ex¬
difficult politically to

partaker of intoxicating liquors,

"Listen," said the judge, "you can

,

drown yourself

by taking too much
enforce,, particularly since it will water aboard;
you can put yourself
imperative that the
demo¬
in the hospital by exposing yourself
bilized population shall be quickly
upstanding country will accept absorbed. Take again agricultural immoderately to the blessed sun¬
In
order
to
feed shine; and it is nothing new that a
charity.
In other words,, the ex¬ production.
porting country cannot be paid hungry occupied nations in the man can dig his grave with his teeth;
except by imports. It may decide next few years we must neces¬ he can eat himself to death. One of
•indeed it will balance its position sarily step up agricultural produc¬
the most prominent men in America,
But
by importing gold, or of course it tion everywhere in reach.
when peace returns these hungry a generation ago, was a teetotaler,
may lend its exports over a long
period.

I would point out,
important,

But

be

nations will at

once

set about with

and this I believe to be

zeal producing once more

that its power

mal

amount

of

their

the

own

and exhausting fever,
expected to get out
of his bed and pursue his normal
but

confidence and subjects enterprise

prolonged,

to risks which are incalculable and

he cannot be

beyond

the

capacity

of

any

avocations

governments to bear.
second

condition

is

that

and trading countries and particu¬

the

moment

his

tem¬

perature drops to normal.
These and many

others' will be
arising out

the abnormal problems
of

the

war

and

are

that stability of exchanges among

and be enabled to t these

nations,

in

other

words

and

nor¬

over-eating undoubtedly has¬

tened his end. I have

seen

him tako

food¬

altogether

the longer term aim
which we must also keep before
us
of minimizing what one may
apart from

call the normal evil of the trade

then acting

food,
But my normal pro¬
fession for the past 35 years has

friend, the judge,

really riled him

stant reference to all

And

years ago.

war,

What

once

That is 26
larly, because of its overwhelm¬ cycle.
As in this war, I was entitle him to such a share in its
ing
economic
strength,
in the
That comparative stability
temporarily as a Brit¬ productive output as. will give him
United States.
should be maintained internally
For, I repeat no
ish Government official in Wash¬ a good living?
in each country, and severe inflaThe third and of course very
ington.
In the last war I was general solution is to be found
tion or deflation avoided, is the
looking after munitions; in this through charity either for persons closely related to the second is
City in, I think, 1917.

for,

(

But the debate itself was not what

boom.
As de¬
diminishes, that boom may

collapse

re-es¬

were

against it.

were

made my

are

rise of prices- at

animated

an

advisability of

tion.'Two of the debaters

temporary

ceedingly

they earn the means to
By finding employment and something like internal stability,
whether of production, employdoing in one, of a myriad
prices,
relation
between
forms services to the community. Jment,
and demand, and other
How then can each individual in supply
conditions, shall be
the community be put in a posi¬ economic
maintained in the great industrial
tion to perform such services for
as

the

on

and two

and all controls lifted,
there is likely to be a great in¬

flationary

quite by acci¬

well-known radio forum,.,.'

tablishing prohibition for the dura¬

very

gates

important busi¬

right in the middle of
debate

opened,

moderate

by bilateral or multilateral
The
exporting
country
cannot give away its exports for
nothing; at least it will not do so
for long.
On the other hand, no

buy?

community

on a

"intoxicants."

barter.

thus

the

dent

an

We had tuned in

erages as

indeed

"The

How cart

president of

ness.

dear

very

judge, and the other

one a

This war, still more than

to lend will again
stuffs. Thus scarcity might in cer¬
with this potential power of sup¬ depend ultimately on its willing¬
ness to import.
For only by im¬ tain directions before long turn
ply, so much the worse for the
into superfluity. There are indeed
system, and we had better try an¬ porting can it receive interest and
obviously possibilites of great ups
other one. So, as upholders of the redemption payments, and if it
does not receive these it will not and downs in the field of primary
present system, we shall be on our
go on lending.
England, for in¬ products, particularly foodstuffs,
mettle.
will
require
carefully
stance, could lend great sums over w h i c h
I can perhaps divide the prob¬
Take again the
many years in the 19th and 20th guarding against.
lem facing each great industrial
centuries because she was also a fact that many nations have been
country into an internal and ex¬
upheld by lend-lease and mutual
great importer.
ternal one.
An internal market
While there is no single or easy aid in order that they shall put
for a country's productive capacity
solution for these great problems, forward their utmost efforts as
can
be found by enabling each
it is not difficult to indicate cer¬ belligerents.
Immediately to ad¬
consumer to obtain what he re¬
tain conditions without which they just themselves so that they can
quires for as high standard of liv¬
meet out of their own exports,
cannot be solved.
ing as the possibilities of produc¬
The first condition, is of course, which may have dwindled to prac¬
tion
coupled
with
its foreign that the world must be
really at tically nothing, their absolutely
trade allow.
And by "obtain" I
peace and that confidence in the minimum import needs to main¬
mean
"earn" by work profitable
long-term outlook should be re¬ tain their livelihood will be im¬
to, the community and' not ob¬
stored.
It is wonderful how soon, possible.
They must necessarily
tained by charity. That indeed is
given a chance, optimism returns be given a little time to turn
the crux of the whole problem. In
to the enterprising.
Nevertheless, round, if chaos is to be avoided.
wartime the Government is the
political
insecurity
undermines If a man has suffered from a high,
filled demand cannot be married

the

with two

us.

high
one
hand and wants which can and they will only gradually sub¬
In your country and mine,
only be fulfilled from' abroad on side.
the other, be enabled to buy what for instance, we shall have a very
it wants by selling to other na¬ large purchasing power in rela¬
the
level
of controlled
tions what they want and what it tion to
can produce more efficiently and
prices and at first a very intense
on

full

terioration

friends;

dining at the .club:

was

time ago

though that

puzzle through private enterprise,
like bees in

This writer
some

takes first the ques¬

internal

war

very

Intoxicants"?

at any

rapidly ascending scale of pros¬
perity something gets out of step.

forecast

Why"

see

viously, 'that
is a many-sided
question, into which I cannot en¬

knew before about

we

'

NEW YORK

inflation

is the complexity of the world, so
limited is human foresight, that I

than

SCHENLEY DISTILLERS CORP..

worse,

permanent upward path in 1929,
But in practice somehow in a very

us,

more

NOTE—From time to time, in this space,
there will appear an. article which we
hope
will be of interest to our fellow A mericana.
This is number one of a series.

less, the immensely injurious ef¬
fects of their opposites in the form

form services to the community
sufficiently valuable to entitle him
the world in general, and about to increase his purchases and in
monetary and economic affairs. this way to help keep your pro¬
But I have to confess that,such ductive capacity employed?
Ob¬

of

ADVERTISEMENT

equilibrium in the balance of pay¬
as a whole, including loans,

ments

most fundamental, need of all, Ow~

(Continued on page 1494)

three

in

helpings of mashed potatoes

ting! This thing just bums
concluded the

So,

.

,

railroad dining car at one sit¬

a

had

we

drank

a

up,)'(

second highball, and

toast to

a

me.

judge.

boys (we each '

our

have one) who aren't

here to get into

wet and dry debates; they'ro '

any

helping to lick Hitler

overseas,

and

Hirohito

(They've

—

Ratso

already

and

done

Japso,
job

a

on

Mussolini—Fatso). And that ineana
one

out—and two to go!

M:0SM:MW:.mark

K. H.

merit

Campbell Joins

Foreign Trade Council
.

-

H.

Foreign Trade1
that Kenneth'

National

The

Council

announces

Campbell joined its

Oct.

1

as

staff on

Adviser.

Trade

Mr,

former Director of'
the Foreign Department and Man¬
ager of the Foreign Credit Inter¬
Campbell

change

was

Bureau

Association
was

on

of

National

the

of

Credit

Men.

He

leave of absence from the

Association since April,

1942, serv--

ing the Government as Chief of :
the Exporters Service Division .of
the Board of Economic

(now

the

Office

.

of

Warfare.

Economic

Warfare), and since October, 1942,.
as

Trade Relations Adviser in the ;

same

office.

THE COMMERCIAL

1494

Political

& FINANCIAL

CHRONICLE

Thursday, October 14, 1943

sides of the ledger of the
Clearing
Union balance it has
nothing to

Security/ Internal

pay

to receive.

or

On

the

a country which is in debit
whole is in debit only to the

a

Clearing

Union,

and

which is in credit

osf-War

gether, just as the gold standard
did, so the economic changes in
nation will

one

all the rest,
you are so

be transmitted

to

and particularly since
much the most power¬

ful nation economically your ups
and
will
downs
affect
us
all.

Therefore,

deeply con¬
cerned both with your stability
and your prosperity. On the other
hand, by the aid they give towards
stable exchanges and by facilitat¬
ing international trade, such plans
will

yve

are

other

make

obstacles

in

the

of expansion and full em¬
ployment so much the easier to
way

It

is

upon

this problem of the
monetary
ar¬
that I wish now to

external

rangements

few words.

say a

It is, of course,

contribution

towards going
solving it that the
British, American, and Canadian
Governments have recently pub¬
lished certain plans for a clearing
union, a stabilization fund and the
as

a

some

to

way

like.

As

they

international banker

an

naturally

have

the

greatest
I am sure
they must have for this audience.
interest

fpr

I

make

must

me,

and

it

clear,

however,

that officially I have had and have
no

whatever

concern

The
are

with

them.

following remarks therefore
of a wholly personal character.

Nor do I intend to discuss

or com¬

of their complex details.
My object is to set out certain
general considerations which must
pare any

be held in mind in any

supposing the first wholly
period is safely

abnormal post-war

past,
or

few

face

world

a

countries

liquid

any

ing

shall

we

which

have

reserves

in

many

represent¬

internationally acceptable

an

of payment.

means

Other

countries

in the

are

With its im¬

acclaimed

Food

ternational

of

There

impregnable
liquidity.
be, no doubt, other

will

creditor countries also.

There will

be others which produce

which will
extent

an

gold and

have, therefore, to that

acceptable international

of payment,

means

so long as the
continues to buy
fixed price. There may
be others, such as some
occupied

U.

S.

Treasury

gold at

a

countries, which will also have
tained

reserves

re¬

of gold or dollars.

But

speaking generally, the great
bulk of countries,
including the
United Kingdom, will have
quite
insufficient international

reserves

for any freedom of action.
How
different, for instance, is the po¬
sition of the United Kingdom in
this respect from that which it
held

when

I

first

In¬

Conferences

to

need

been
was

two

world.

buy

their

because

exports

not

are

great enough and because the na¬
tions which produce surplus sup¬

said,

then

a

the

has

world's

so

standard

sterling standard.

great

wars

have

often

But

wholly

changed the picture.
Our liquid
foreign assets are gone; our in¬
debtedness to

foreign countries

or

countries within the British Com¬




countries

would

have

thrown

are

by

such

been

en¬

of

out

employ¬

automatic

an

sys¬

tem, which secures, as it does,
equilibrium by at any rate tem¬

in

these

trade will flourish best under

of

freedom

crimination.
that

and

Every

multilateral

not

agrees

one

is

secure

is

suffi¬

that nations who

to

buy and sell much
than they are doing cannot

more

find some other and

of

means

rational

more

maintaining equilibrium.

If this is to be

possible, expansion¬
ist countries must be able to rely
on

international

some

credit

which

will

system

allow

of

also

of

countries

so

of

im¬

expansion

in

other

that the increase in their
from

the

world

will

imports
quickly

be

balanced by the increase of their

the

countries

whole.

In

in

debit

as

have,

as

all wish

we

have,
pooling

country to have

tend

international
whole

to

as

countries'

liquid

a

try

which

suits

world

capital, with

or

Un¬

balanced
would

one

one's

have

one's duty.
an

it had

no

means

of

meeting only by

more

other exports.

to

it

do

so.

finds

a

difficulties

that

American

doubt largely

no

the

inherent conditions of
American
situation.
The

the

be

a
good neighbor in the sense
being able to prevent its ups

of

debit which

and

meeting

severe

policy.

United States is indeed too
power¬
ful a country
economically to be
always sure even with the best
will in the world of
being able to

the

purchases,

ever

it

from

accomplished
the other hand,

unnecessary

own

international

country need sell unless it

if

The

If, on
country either ran extravagantly

into

the

critics feel arise

coun¬

all

its

on

that

Or, if it does
relatively suf¬
ficient increase in imports too dif¬
ficult, it can balance its exports
by means of long-term loans, as
England did for so many decades.

country traded.
If
exports, whether of goods,

services,

no

and

as

another

one's

com¬

no

to be provided enable the
the world to buy more

of

But

interna¬

versa.

also.

currency

American and

pooling principle it would

immaterial with

true

rest

country to have

be

of

becoming too great and

depends

is

reserves

permanent deficit; in fact, that
the deficit is merely the shadow

of the surplus and vice

United

balance

on the United States or
other creditor country to have

plus
It

a

der the

the

its

on

bigger surplus with the British
scheme than without it.
Its sur¬

obtain

tional reserves, is as undesirable
it is for another

towards

re¬

countries

a

payment
for
which it feels bound to
press for
the permanent transfer to it of
other

these

pulsion
any

net surplus on its

transactions

of

debtor

But of course there is

in

year

the

international

whole, including international
lending, is the target, and that
one

It is argued

possession

by

surplus

It rests

as a

for

it
on

that the country would end
up not
only with too great stocks of gold
but too great reserves of
the new

assumption that equilib¬
rium, and not simply current ac¬
count equilibrium, but
equilibrium

and year out a

J* too largely.

the

States

the

on

or

"Pon

payments

to

trade, this
principle is fundamental.

that

burden

enabling

might

a

the plan
is based on a real
pooling prin¬
ciple. I believe myself, if we are
to

criticism
undue

a

serves

other words,

multilateral

the
an

creditor
country, of which the
United States is, of
course, likely to
be much the
largest, by

that

as

Those assets will, of
course, be in the main the I. O. U.'s

a

con¬

non-dis¬

trade

rulers

ligence of mankind
cient to

wish both

truly flourishing international
trade requires stable exchanges;
stable exchanges require that each
nation shall have sufficient liquid
reserves
to
protect its position
through seasonal or cyclical fluc¬
tuations.
Moreover, international

their

the intel¬

plies of food cannot in their turn

A

that

days

shall examine whether

sell them?

downs

seriously

smaller countries.

meth¬

affecting

The American

national

income is a large per¬
ods of restriction,
or, to take the
mensely to be preferred to bila¬ exports to the world, and so that
opposite case, if a country sold centage in value of the national
clearing arrangements, bila¬ meanwhile they will possess liquid
income, or national production of
far
more
to
the world
than
it
teral compensation, multiple cur¬ reserves with which their imports
the
whole
world.
The
United
bought from the world and in¬
rency
devices, blocked accounts can be for the time being financed.
States is very largely self-suffi¬
sisted on payment by means of
and so on.
This is, I repeat, presumably,
But nations do not
cient.
But American
industries,
forcing restriction and deflation
adopt and develop these methods the main object which the Brit¬
great and small, find it valuable
on
others, then both would be act¬
because they like them or because ish,
American,
and
Canadian
to export on a
large scale. On the
ing in an anti-social manner. Thus
they want to damage other na¬ schemes all have in mind.
The
other hand, there is no such com¬
to provide countries with
liquid
tions, but because they feel forced provision of liquid reserves for
international reserves is only half pulsion on the United States as
to adopt them when they have no all member countries will enable
there is on the United
Kingdom
the battle.
It is necessary that
start off with
reserves, no means left both to them at least to
to import very
largely in order to
both surplus countries and deficit
maintain their exchanges and yet some confidence.
What happens
live. She has in the
past balanced
countries should, so to speak, ob¬
develop their foreign trade except in the longer run depends on the
her position in other
ways, e. g.
serve the rules of the
game and
by methods which in one way or capacity of each member country
by travellers' expenditure, or by
another
approximate to barter. to conduct its affairs with pru¬ keep within bounds both on the loans, and
ultimately, and despite
credit and debit sides.
This, of of other
These methods may be barbarous dence and also with an eye to its
methods very advantage¬
course,
is far easier said than
compared to a truly international duties as a good neighbor.
ously for the whole world, by very
done.
But these
plans do not
For it must be recognized that
system. I am convinced they are.
great purchases of gold. Now it is
create or add to the difficulties of
But, unless we can develop some these plans only provide a starting
proposed that she should balance
this problem.
It will exist in any
workable
international
it also by accepting, to the extent
system, point. If nothing like equilibrium
case
and must face us whatever
between countries can be achieved
they may be inevitable.
that she wishes to have a net sur¬
teral

.,

I take

it, therefore, that all the

different plans put forward for an
international clearing union or for
stabilization have as their first
and

primary aim to provide all the
nations, members of such schemes,
with

liquid

ficient

reserves, i.e., with suf¬

international

purchasing

power.

;. '

Such

reserves,

and

come

,,

which

on

go,

are

they

necessary

In the first

reasons.

and

if,

place, international buying and
selling is never absolutely bal¬
anced. Some nations have deficits,
others surpluses. Temporary def¬
icits which liquidate themselves
are financed by the mechanism of

do.

we

after taking into

even

ac¬

international lending, some
countries remain permanently in

plus,

Perhaps

count

and

others

derlying idea

provided

reserves

by

these plans just as you have over
series of years absorbed $25,000

a

millions of

that countries like individuals

try

to

in

without

the system would

n

plan,

limit and

have failed in

schemes
poorer

helped,

of

is

due

to the require¬
rapidly developing
country, long-term loans from the
surplus countries are necessary. A
a

good example is the

case

of your

own

country, into which England,
was the greatest
surplus
country, poured loans and invest¬
when she

ment money

during the 19th Cen¬
tury, and which helped to enable
you

to

turn

yourselves

from;

a

them?

Suppose that

highly de¬
veloped country, aiming at these
desirable ends, were to maintain
a high level of
activity within its
own

borders.

a

Its imports,

experience shows, would

as

as
a

all
di¬

The British plan proposes much

larger and
national

tion of

inter¬

generous

than

reserves

other two.

It proposes

do

the

the
crea¬

international

an

currency
to be called bancor and for quotas

live

We
cake

deprive
their

the

cluding

nation

by

the

Union.

debtedness
ber

State

as

between

and

another,

tential indebtedness.
member

countries

debted

as

but

in debit

are

one

or

only po¬

And indeed

are

between

mem¬

never

one

in¬

another,

in credit to the

Clearing Union as a whole.
In
other words, all debits and credits
are pooled.
A country which is
at

any

eq^al

to
countries
debit

to

credit

moment owed by all
together
an
amount
what it owes all other

one

countries

to

is

"out."

some

with

It will be

countries

others,

but

and

if

in
in

both

render

the

in

the

themselves,
Whether
achieve
ence

that
one

of

any

that

can

the

plans

object only

show.

experi¬

What is

Clear

is

the

account, including visible and

international

lending and the
for such long-

use

of

term

lending. Both the American
British plans recognize this

and

surpluses

fact and indicate that further pro¬

posals

will

be

made

in

this

re¬

spect.
The
_

generous
means

of

plan,
r

y

being
o

in the provision
international

long
or

term

accepts

If

none

of

these

acceptable, then exports

be

lect

what

is

bring

uneollectable

will

about general
deflation.

re¬

Moreover, it must be remem¬
bered that unless the
capital and
labor of a creditor

country are al¬
ready fully employed on internal

production,
times

of

and

particularly

in

depre^jon^an increase

of exports, even if it
to the creditor

were

to add

country's surplus

in

the

books

of
the
Clearing
Union, would have important ad¬

vantages of its own. Such exports
would in the first
place have em¬
ployed labor and capital, which
would

not

employed.

otherwise
But

more

have

been

than

that,
through what economists call the
multiplier, i. e., the additional
production, direct and indirect,

fostered by the
expenditure of the
wages of those

British

services

or

on

paid for and must be
diminished. All attempts to col¬

as

invisible exports and imports, but
is inclusive of the whole question
of

cannot

re¬

problem is twofold, not
simply of equilibrium on cur¬

rent

indebtedness.
ways are

^

fully

cannot export
she
imports

imports gold,

striction and

prosperous.

our

other token of international

some

whole

more

lends

of

used

so

have

can

of goods

she
or

merely

world, in¬
stronger
countries

by in¬
other

or

England cannot

than

way

unless

to

as

us

it.

eat

more

the

credit

that

countries

be

of

none

and

much

coun¬

international

but rather

sources

be
disposed of
imports or loans,

exporting; the U. S.

these

but

means

weaker

liquid

member

by this means what are
called impersonal and anonymous
credits are provided.
There is,
therefore, no immediate new in¬

their

her
can

are

get the import she needs without

is
not
only
that
the
countries,while
being
should be persuaded to

within

to

Thus,

all

the surpluses of the creditor
tries should not be so used

of bancor to be distributed to each

rect

consequence, greatly increase
the benefit, of
course, of the

more

at in

within

to determine and

currency

international services.

the standard is not avoidable."

But what is aimed

sur¬

therefore, the holdings

power

creased

live

debit balances

end.

such

always

can

"Measures would be necessary to
prevent the piling up of credit or

an

In the words of the British

banking credits.
On the long run if it did not possess
hand, when the deficit sufficient capacity for self-equi¬
permanent, for example, librium to secure this." ',

it

of

own

beyond their means.
As the British plan says, "If in¬
deed a country lacks the produc¬
tive
capacity
to
maintain
its
standard of life, then a reduction

them to

gold, and thus bring

plus and,

temporary poverty due to war
sacrifices.
It is true, of course,

is

where

mind that the amount of that

of

short-term

ments

as

international token cur¬
But it should be held in

an

rency.

similarly,

the other
more

define the un¬
being that deficits

one may

of are not so much a sign, so to
course,
permanently
in
credit, speak, of wrong doing, and sur¬
then there is no reason why the pluses a virtue, as they are evi¬
creditor
country
or
countries dence of different stages of devel¬
should not absorb all the inter¬ opment, or at this moment of time,
debit

national

secure

As

by this method either other

ampler food imports cannot porary restriction, deflation, pov¬
them in sufficient amounts erty and unemployment, demand

some

the

Under the old gold
standard it would have lost gold
deficit.

a

ment

the

were

all

face

who

debtor

went

similar state of activity

a

buy the importing country's
exports to an equivalent degree,

the world-

into the
to a creditor
country.
35 years ago. Then we
But there is a third set of causes
lending the world about £200 which an economist
writer in the
millions, or say $800 millions a "London Times"
recently defined
year.
We had very great liquid as the most
vital, problem of our
foreign assets. The Bank of Eng¬ age. We all talk of an
expanding
land had only to raise the rate of
economy, of full employment, and
interest and gold flowed in from so
forth.
But how do we

city

to

the result would be that it would

of

are

be carried out if the nations which

for various

try

were

get

resolutions

of

coun¬

inter¬

prosperous

But unless

world

and to

and

position.

How, for instance,

can

one

degree

achieve

the

How couraged to increase their activity
that expanding or the country losing gold would
world economy, that full employ¬ have had to restrict its activity.
ment on which all public men and The gold standard, in fact, forcibly
economists rightly lay such stress.
kept them in step. But the masses
to

we

are

gold stock and strong cred¬
itor position the United States will
represent the

is

their

of

rest

national trade to develop?

mense

course

in

same

then

How

examina¬

tion of them.
Even

the

ditions

overcome.

world's

exporting countries.

Nevertheless, our need for
imports on a very large scale and
consequently our necessity to ex¬
port and for some liquid interna¬
tional capital to finance this great
foreign trade have all grown also.
pace.

tant here than

anywhere else and
can only be secured by the wise
control of events by the Govern¬
ment, by the banking system, and
by
industry.
No
international
monetary schemes, such as those
I refer to later on, can be success¬
ful, except as a part of a much
larger policy designed as a whole
to secure normal stability in the
most
important countries.
For
since they aim by means of sta¬
bilizing exchanges in relation to
one another in binding nations to¬

only to the assets of the Union

impose

debtor countries in effect
to draw

its security.

monwealth grows daily at a great

(Continued from page 1493)
ing to the preponderant influence
of your great country on the rest
of the world, this is more impor¬

country

a

whole looks

as a

aroused

will

other

hand,
as

has

employed in mak¬

ing such increased exports, the
to,
tlx1
of the I cost of the gold received in pay
more

| "

payment, ment for them would probably b<

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4220

158

1495
I

.

orderly economic relations
between themselves and with

exceeded two or three times over

some

by the increase in the national in¬
come.
This advantage which has
accrued in the past in respect to

as

which, for instance,
you have taken in payment gold,
would accrue equally if you were
to take in payment an interna¬
for

exports

which

I sub¬

truism than any system

a

tends

interna¬

increase

to

sity, however, leads me to a fur¬
ther reflection.
While I am all in
principle of an inter¬
national monetary agreement be¬

favor of the

ing arrived at now, I am doubtful
a plan necessarily framed
to suit more or less normal con¬
ditions will be able to bear the
whole burden of the entirely ab¬
normal
needs of the immediate

whether

tional currency.
In general indeed it must,

mit, be

This neces¬

the rest of the world.

and thus
prosperity will re¬

tional trade everywhere,

It is this period
be the most difficult to
provide for. But, supposing such
or poor together. As a great cred¬
provision is made, it remains of
itor the United States can as an the highest importance that there¬
Europe
alternative
to
greater
imports after the countries of
make larger loans. But, speaking should share in the benefits and
international
dound

creditor

of

benefit

the

to

generally, I regard it as more im¬
portant

Of

borrow and lend.
is

more

nations

richer

the

for

course

to

there

when some nations are
developed than others,

room,

far

sell than

buy and

to

make

to

long term loans to the poorer. (In

that short
term lending should be restricted
to
financing transactions which
parenthesis I

are

say

may

in themselves short term.) But

such

long

its

has

lending

term

Is it to be by the

difficulties.

own

post-war world.

which may

We all get rich

and debtor alike.

of government or private
banks? If the former, all sorts of

agency

of any interna¬
The world's peace

responsibilities
tional scheme.

■_

*

I consider certain
limiting conditions should be ob¬
served in long term lending:
Moreover,

is that the borrowing

The first

should

country

the

make

its

see

loan

to

way

sufficiently

pro¬

ductive to pay

in normal circum¬
interest and redemption,

stances

this

and

in

turn

the

that

means

lending country should buy suf¬
ficient imports from somewhere
to
enable
such payment to
be
made.

lending should not be subject to
too

great variations.

the

decades

of

have

thirties

Here again
and

twenties

the

lesson

a

for

us

which most of you will remember
If

well.

borrowing

a

whole

its

bases

country

economy

on

a

large golden flow of lending and
the flow is suddenly stopped, then
it

inevitably thrown

is

confusion,

astrous

into dis¬

Witness

par¬

ticularly the European and South
American countries after

1929.

Turning now back to the main
question, I should like finally

to

ask what is the alternative to some

arrive at an interna¬
tional monetary agreement. There
have been suggestions that what
is called a key-country approach
would be simple and more rea¬
sonable. By that, as I understand,
to

attempt

is meant

some

ment limited

and

the

that

is

stabilization agree¬

perhaps to the dollar

pound sterling.
I think
narrow a
conception

too

for present

circumstances, though

it would be better than a mass of

bilateral

purely
Much

more

cerned

arrangements.

of the world

is

con¬

than the sterling area.

A

purely Anglo-American stabiliza¬
would leave out the great

tion

continent of Europe, which
out

Russia

contains

350

with¬

million

people and which has an interna¬
tional trade greater than that of
Great

Britain

States

together.

continent

the
the

last

war

United

the

That this great

should

which

fate

and

be

saved

overtook

from

it after

is perhaps the most

important aim of post-war states¬
manship.
It behooves all of us,
I think, to refresh our minds upon
the events which then took place
and upon

the consequences of the
chaos into which European coun¬
tries were thrown by uncontrolled

inflation. I had an op¬
portunity both at the Peace Con¬

currency
ference

and

in

the

years

after,

through the whole of the repara¬
tion and post-reparation, oPwatching things from the inside. I per¬
sonally do not hesitate to say that
it was in that period that the seeds
of the present conflict were sowii.

therefore, be of the high¬
est importance that as soon as pos¬
sible after peace all these coun¬
It will,

tries should

be brought back into




and

we

international

of

No doubt the first natural

est.

We must not

force

judge of the pressures
face these countries
what, I know of the condi¬

I

man,

which
from

unemployment
an English¬

As

revolution.

and

exchanges,

blocked

and

bila¬

into

countries

these

teralism

still less with huge

can

may

materials for

home indus¬

our

try, let alone our export industry,
we
must import on an immense
scale.
To secure our imports by
multilateral trade is what we aim

at, and what we consider to be a
doubt

world-policy.
That is no
why the British Govern¬

ment

has

proper

elaborated

lateral scheme.

multi¬

a

But failing such a

must devise some other.
Though it would be a second best,

plan,
I

we

have

what

of

willing seller, a trans¬
always be concluded.
45 million willing buy¬

a

can
are

United

the

in

there

secure

can

by other
When there is a willing

action
There

we

have

must

buyer and

ers

doubt

no

we

Kingdom, and

than that number

more

are

willing sellers in the world of

the

goods they want.
Moreover,
the 45 million buyers can cer¬

tainly

which

goods

the

produce

the sellers want in turn, and

the weak

be

Let

grow
poor

ad

not

to¬

together.
And
plan of
benefit of the

well

as

relieve

to

the

as

of the world it will fail.

is

of

nauseam

prosperous

is to the

States

United

the

rest

Its object

debtor

na¬

tions from paying their debts, but
to enable them to pay

wartime

increase in

its

national

income

viduals, and especially the increase in salaries and

tremendous

influence

on

received
wages,

dollar volume

in the only

Ball Ramos! To 11Y.

the immediate pre-war years.

Despite this generally favorable
outlook, the investment positions
of

kinds

some

curities

are

of retail

not

trade

entirely satisfac¬

tory because of the impact of ris¬

ing

costs

profit

extremely

on

margins,

cludes.

The

the

and

of

increase

an

ards

which

in

way

all

must

we

they

can

living stand¬
at

secure

our

peril.

appointment of Raymond N.
Ball, President of the Lincoln-Al¬

of

con¬

liance Bank & Trust

other

ester,

Co., of Roch¬

York

member of the New
State Banking Board was
as

a

announced by Governor Dewey on

types of companies, on the other
hand, appear to be undervalued,

October 1,

partly because of the adverse in¬
terpretation by investors of many

the

Federal

and

tions

of

State

and

measures

this

recent

works

regulatory
restric¬

necessary

out

years.
on

the

curities of individual companies.

Copies of this booklet may be
the

from

obtained

United

The

Banking Board

The

narrow

study

securities

State

se¬

Just how
ba?is of
pay, namely, by an increase of
their foreign trade. Its obj ect in present market values is shown
addition is to facilitate employ¬ by group comparisons of the sales,
inventories, and book
ment in all countries by the ex¬ earnings,
change of goods; and employment values per $100 invested in the se¬
possible

Tarrytown

Mr.

Ball

appointed to fill
of the late
Perry E. Wurst of Buffalo, which
runs until March 1, 1944.
Mr. Ball,
was

unexpired

who

is

of

director

a

Rochester

term

several.

corporations, has

been

President of the Lincoln-Alliance
Bank since
Mr.

October, 1929.

Wurst, who was Executive

Vice-President
turers

&

falo, died
noted

in

the

of

Traders

Manufac¬

Trust Co.,

September 5,

on
our

issue

of

September

16, page 1124.

States

But that is not -your

trade at all.
aim.

intend

You

to have

a

great

foreign

trade and great exports.
You can only achieve this if other
nations have a great foreign trade
with you.
You must buy their
goods as well as sell them yours;
There is

no other way of getting
paid, and this is true even if you
make them in effect long term

loans of

goods. The ultimate se¬
curity for any evidence of inter¬
national

whether

indebtedness,

gold, bancor, unitas, a short term
credit or a long term bond, is that
it

into

converted

be

can

wealth,

is,

that

satisfies

creditor

human

If

wants.

his

wants

real

something

into

money's

worth, he must import. There is
other way. The debtor cannot
force the creditor to import.
As
long as he stands ready to export,

no

have

he has done all he

standard

real

bilateralism
and

civilization

thought
to

of

we

on

or

unable

had reached. We wish
great country. But
drives,

your

the

devils

materials

of

and

food

raw

needs, scarcity, and un¬

employment will drive very hard.
Our position no longer allows us
the freedom of action

had 30

we

financially

when

ago

years

we

powerful, liquid, and safe,
plenty of room to turn

were

had

and

round.

Now

to

means

we

have to find the
to live

live and

our

means.

can

do

I have

no

within

doubt

we

it, though we shall have a
In the war we have

hard struggle.
been

vastly helped by your leaselend and by Canadian mutual aid.
Only
war

all

could

so

our

make

we

effort, since
normal

pot.

of interna¬

we

common

in

conse¬

when the bugles blow for
peace, immediately be able to pay
our way.
But I know that it is
determination

people

to do

so

as

of

the

soon

British
as

ever

Both we and the rest of
the world would be the better able

possible.
to

do

some

that if
means,

international

we

could

all

devise

fair to all, by which
trade

could

be

con¬

tinuously expanded. One step, if
only one, to that end should be'an

attempt

to elaborate

international
one can

But

we

a

workable

monetary plan.

No

be blind to the difficulties.
should

remember

Bruce and the spider.

the

last

ago

years

many
war

a

very

well

known

English editor, Mr. J. A.
Spender, telling me that he was
talking to an American business

friend

about

Mr.

debts.

war

Spender said to him, "But which
do you want?
Do you want our
goods
one

or our

or

the

gold?

You must have

other."

friend's

His

neither.
We
want
your
money."
Mr.
Spender could only reply, "Do you
think it would help you if we sent
over the Acquitania full of Brit¬
ish £1 paper notes?"
All of us
answer

"We

was,

want

days.

quence,

the

creditor is

the

.

remember

have

means

Nor shall

I

after

total

our

tional livelihood into the
war

to

his exports.

have thrown

we

If

debtor.

import, then there is
nothing the rest of the world can
do except in the end not to buy

needs must when the devil
and

the

of

reached

cooperate with all and, above

all, with

security that the creditor can
obtain depends on himself and not

stage

the

have

we

methods

crude

are

unworthy

Thus the

can.

learned

much

since

those

Foreign
commerce,
we
know, is essentially the barter; if
possible, the multilateral barter
of goods.
It is to facilitate such

Put yourself in his shoes tonight
Think how eager

you'd he to talk to the folks at home

barter without adding to the bur¬
den of any nation which is the

if you were

grand object of all the schemes I
have been discussing.

That's

something to remember when you're thinking

about

making

The American

people are called
upon by force of circumstances to
play the chief role in them. Hav¬
ing been fortunate enough to have
spent years in your great country
and to have the very closest pos¬
sible ties with it, I have learned
to

know

it

well

and

doubt whatever that it

feel

I

no

in the

10 o'clock at
You sec,
to

the

not

a

army

and

away at camp.

Long Distance call between 7 and

night.

that's about the only time

telephone. If the circuits

are

a

soldier

will play

its part with that breadth
look

and

Robert

which is

We have to

strength.

magnanimity
the proper

of out¬
of spirit

ornament of

BELL

TELEPHONE

can get

crowded, he

be able to reach home before taps.

SYSTEM

Buf¬

as was

might con¬
ceivably secure full employment
for all its people as a closed econ¬
omy
without any international

the

employ our people, and we
to maintain, if we can, our
of living.
Barter and

expense

international

kind

this

repeat

me

all

we

which

to

helped it must

the

at

strong. "But that need not be

so.

is

possible, therefore, when
each party has the goods the other
wants, that business should not be
done.
We have to live, we have

to be

are

inevitably

which
will enable them to get paid.
It
not

re¬

action of human nature is that if

an

make life tolerable.

Supper! Large Post-War Retail Sales
The

.

unless

subsistence

.

by indi¬
has had a
of retail trade according to
an
anlyasis of leading merchandising companies just completed by
the research department of E. W. Axe &
Co., Inc., 730 Fifth Avenue,
of faith and a sustained magna¬
New York City.
Although it is not to be expected that purchasing
nimity;
a
certain greatness of
power will remain at the wartime4®^—
———
mind. Such magnanimity is par¬
peak after the war, the deferred Press, P. O. Box 157, Tarrytown,
ticularly
demanded
from
the
demand
for
consumers'
durable
N. Y., or E. W. Axe & Co., for
American people, since the first
goods will generate much post¬ 40 cents each; free to libraries and
aim of the plans we have been
war
business activity, so that the non-profit institutions.
considering is to assist the weaker
national
income
will .' probably
and
not the stronger,
and the
compare favorably with that
of
United States is by far the strong¬
as

sonable

of

. —

Increased Public Purchasing Power Hay

coopera¬

it will be after the war,
requires, no doubt, on the part of
governments and peoples an act
world,

and

standard

it

tion of this kind is feasible in the

gether

to

do

never

To convince oneself that a great
scheme

conditions in which
stability, employment, and a rea¬
be

may

can

without trying.

that

means.

The second is that the stream of

chaos

out of this world of

way

depends more than anything else
on
Europe returning as soon as

raw

,

our

the

political questions will come up; tions of my own country. Let me
if the latter, how far is the private describe
them.
To
fill
our
investor
prepared to take the stomachs, to provide the essential
risk?

find

-

may

THE COMMERCIAL 8c FINANCIAL CHRONICLE

1496

Another

Would Solve

is

§1

to

can

(Continued
leave

mines,

our

farms,

factories, and

transportation
terns still, fully equipped for

sys-

pro¬

duction.
'

Furthermore, it is indubiiably true that most war costs
be

while the conflict
There is no possible way

must

is

on.

paid

future food, future
guns,
future planes, or future
ships. We can use only the equip¬
ment'. already
on hand—not the
to. fight with

-

Is

then

it

that

true

sleepless nights.
And even this is«Jiot> all.

this

war

from

the interest

pay

using

A

only

only

6%

next

the

moment's

main at 2% rests upon

dations. Unless

est

cf

definitely,

stitution of work for idling, while

control

admittedly increasing fatigue, has
also renewed for many the real

has

it

weak foun¬

no

zest

of

for living.
The elimination
unemployment has bolstered
nation's

the

the

morale

less

110

victories

great

than

won

on

the battle fronts.

rates.

After

do

following this

so

Government

itself faced

$12,000,000,000
of

interest

burden whatever upon
and our grandchil¬

no

children

our

dren?

To

that

say

such

is

the

is

going too far," One heavy
will persist for a•long
time.
It is that many a child is
doomed to grow up without a
ease

burden

father's

'

protecting

and
and
wife will sorrow long
for her
missing son or husband. Our heirs
will also find that, in certain re¬
spects, the war has lessened ma¬
terially their economic heritage.
The huge volumes of gasoline and
guidance.

Many

care

mother

a

The

feeling

widespread

is

conservatives

among

well

as

pletely

is to

ment

full employ¬
This line

to war.

go

reasoning
exactly
parallels
of the primitive man who
felt that the only way to get roast
pig was to burn down the house.
01

that

Before

anyone

fully

can

under¬

stand the real nature of the war
debt

problem,

miliarize

he

needs

himself ' with

the

fact

burned

by

and trucks

There are,

offsets

fices.

to

unemployment is entirely

or

faster

As

sacri¬

did

time

dously

increased

that

tremen¬

so

additional

the

worked

tation.

Huge

goods enough to win the

ply

supply of magnesium and

our

the

More important

has

war

and

effectively

a-

still,

than

the

balance, the war has
placed a net economic burden on
future generations is, therefore, a
debatable question.

At
to

of

miles

of

roads

until

True, choice
fruits

few

have

cuts of

have

and

predict
debt

war

for

do

we

is

not

cook's cousin has

our

a

is

present, the

cousin's

war

growth

Federal

gross

$140,000,000,000.

debt

The

is cleared up by August,

to

be

accelerated.

Fur¬

thermore, if the present adminis¬
tration. remains in power, it is
proposed to take two years to
demobilize the armed forces, and,

a

continue

to

run

a

deficit

during

that period.

skimpy. The fact remains, how¬
ever, that, at no time in the na¬

tions

tion's

the Federal Government will then

family

been

war." In

has the •' average
better clothed and
■

the

first

quarter

States

the

than

62%

was

consumption

total 'civilian

fore,

increased rather than shrank.(l)
What

we

have really been

ing, is to support
forces

and

assist

do¬

own-armed

our
our

allies

tre¬

mendously merely by making use
of the spare time

had been

which millions
wasting during the last

tiecade.

The

fight
*

a

major

(11TJ.

May,

1943.

S.
p.

fact

war on

Survey

6;

that

can

we

leisure time

of Current Business,

June,

1943,

p.




S.

3.

out,

a
huge construction
covering. not only the
United States, but all the back¬

ward

nations.

|

Such

a

doubtless

who

do

That

we

2.

That

keep

the 'deficit

banks

active
held

less

in

In

the

than

$4,000,000,-

fore

the

000,000.
on

total

reaches

cor¬

we

going

money

was

000,000,000
would
a

be

of

At this rate,
the $300,-

on

prospective

debt

only $6,000,000,000—or

month's

national

income.

at

not

be

least

1945

times

high

as

in

it is at present.

as

If such a
rise in prices occurs, it will auto¬

words,
inflation,
if
continued,
merely at the present rate, is
likely to mean at least 55% re¬
pudiation before the

war ends,
If
follow up the war with a
|iuge

we

to

Number

our

the thrifty

stopped.
One

Inflation is

debt

today and promises -to remain
Our

Planners

so.

have

completely
price system,
and
are
attempting to
control
prices by regulations and ration¬
ing. The latter process constitutes
lost faith in the free

repudiation in

-

articles

so

far

concerned,

are

substitution therefor of
new

red

and
a

the

limited

consisting of small

currency

square:

the

rationed

as

or

blue

As

coupons.

of

program

why

istration
the

is

of
on

ical

articles.

to

avoid

considerable

any

manual

and cler-^

workers.

Second, our high
officials, our legislators, and the
public in general, all suffer from
(he delusion that it is possible, in
some

way, to postpone

ture

that

main

to the fu¬

considerable

a

stand

more

the old-fash¬
ioned money continues to circu¬
late in increasing volume, black

practically, all wage and rate
cases coming before Boards made

determined

levying

direct taxes

as

as

reasons

.problems
promise to be extremely trouble¬
some.
First, the present Admin¬

more

and

prime
debt

war

tended to

in

two

are

our

However,

long

and

inflation,
are likely

much further.

go

There

part of the
They do not under¬

cost of war.

and bank deposits is
manifestation. of tardy

works

rehabilitation,
hence repudiation,

inflation grows more intense, the
repudiation must
need
be ex¬

This attitude is apparent

public

world

problem

can

national

financial

no

lessen

effort

the

and

required

sources

legerde¬

fraction
national

of
re¬

to
accomplish
the
military

harder and

given

harder to suppress. Furthermore,
it seems
highly probable that,

front.

by the unfortunate decay
ethics evidenced, for

example/by the Federal Govern¬
repudiation of the gold

American people will not tolerate

is, therefore, accepted as

general,
it may be said that, to those who
regard saving as a sin and who

rationing, and inflation will therer
fore produce its normal effect on
prices.
How high this will make

way

think

the price level go
approximated very

which

of

New

Dealers.

It

is

markets

; en¬

public

In

of
the
words,
fairness,
equity, and justice merely as con¬

venient

shibboleths

for catching
voters,
there
can
scarcely be any problem connect¬
ed with the public debt.
credulous

Persons

holding
such
views
have a very easy solution for any
problem which may tentatively
arise.

tion.

Their

solution

is

repudia¬

It may take any one of the

following forms:

> >

1. Straightforward

repudiation.

the

once

ment's

What

/

will

become

war

is

do

we

concluded,

the

only
roughly.

can

know

is

be

that,

whenever the currency supply in¬
faster than the volume of

creases

production, prices rise.
It seems
improbable that physical produc¬
tion can attain a level materially
higher

that

than

there

but

amount

of

is

no

now

limit

circulating

existing,
to

the

medium

which the Government can create

by borrowing from the banks.

results

on

They take it for granted
is impossible to finance

that

it

war

on

a

sound

Inflation

basis.

an

easy

out.

Unfortunately,
stages, inflation

in
its
early
produces results

seem very pleasant.
In the
end, however, it brings disaster.
It
robs
the
thrifty who have

saved to
ance

accumulate

bank

a

baL

to invest in bonds, mort¬

or

or life insurance, and it is
thrifty persons who furnish
the capital which makes economic
progress possible.
Operating in
conjunction with labor monopo¬

gages,
these

inflation

lies,

of.

cause

is the
widespread

commonest
unemploy¬

ment.

For
example, after the first
of the United States
world war, British inflation lifted
Comptroller of the Currency show
wages to levels far higher than
3. Repudiation by lowering the that, on June 30, 1940, demand
the nation could sustain when,
interest paid on the Government deposits in all banks in the na¬
tion totaled slightly more than eventually, the price level fell.
debt.
The
inflated
wage
rates were
$33,000,000,000.(2) Since that date,
4. Repudiation by currency in¬
"frozen" by the labor unions. The
demand ' deposits
in
reporting
flation. :
result was that unemployment on
member banks have risen 60%.(3)
2.

Repudiation

by taxing the
bondholders to pay themselves. \

;

-

The reports

It is unlikely that the debt will

be

directly

selves
a

sort

repudiated.

is better, for it
of

poetic

constitutes

justice, in

that

punishment is meted out to those
who

were so

anti-social

as

to

some

of circulat¬

ing

our

$70,000,000,000
medium to do

money

work.'

save

In May, 1943, the Government
buy war bonds.
This policy,
currently, new"
spent $7,400;000,000. All Federal
costing the Govern¬ is, however, difficult* to execute,

ment less than 2%'.

are

growth in circulating me¬

tendency will
therefore
probably be for the
price level, if uncontrolled, to be

and

be

and

July 31 that,

the interest burdens

half

$300,000,-

The President announced

our

we

lucky,

offset by any
noticeable increase in total phys¬

tion is to

corollary to these fallacies
feeling that,7 saving being
anti-social, confiscation of bonds,

program

into power, it is doubtful that the
debt increase will be
stopped be¬

ourselves

ical production. The

1930,

United

question is not whether

own

A

a

raging torrent.

additional expenditures
consider

dium, will

to have inflation, but
how and When,- if ever,
the present terrific rate of infla¬

over-saving is socially

mortgages,

times

Furthermore, the probabilities

a

a

$70,000,000,000 to
$151,000,000,000, or

than

we

can

been

instead,

injurious.

merely
justice.

If

that

are

have had too much
>

less

circulating medium will

the present
quantity,
actually succeed in raising
enough additional tax revenues to

little

tacts, it is obvious that the

cardinal fallacies:
1.

945,

no

cover

rect

To many, however, this is no
problem at all, for they have come
to accept both of the
following

saving.

How

At present, the cor¬
responding total is around $53,000,000,000. In the face of these

How¬

not

expendi¬

war

2Va

scale.

Presumably, therefore, the total
Such a of demand deposits is now in the
growing indefinitely.
Advocates procedure resembles too closely neighborhood of $53,000,000,000.
of .this program look
upon an in¬ the methods of the highwayman In
addition, the stock of pocket-¬
creasing public debt as no men¬ and is not sufficiently genteel to book
money circulating in the na¬
ace, and hence they see no1 reason appeal to the advocates of the tion is estimated as
being over
New Order.
As they see it, tax¬
for trying to stop its growth.
$17,000,000,000.(4) It appears,
Even if the conservatives come ing the bondholders to pay them¬
therefore, that we are now using
will

greater

1935 to 1939, and, in the interim
mentioned, the bost of living rose
less than 22%.*
Clearly, there¬

Resources

carried

are

program

for the.period

average

National

in

engage

of

the present year, the dollar value
of sales in all retail stores, in the

United

If the recommenda¬

the

Planning Board

fed than it is today in the midst
of

of

..

bonds in order to pay
who do own them.

presumably, the Government will

rarities.

thriftless

gigantic

our

000,000,000.

interest

reality, the debt is not
equally owned, and it is this fact
which gives rise to the problem
of fiow to collect the money from
the

our

ent, the total is probably around matically
confiscate
well
over
$34,000,000,000. In 1930, demand half of the present real worth of
deposits aggregated about $24,- all bonds outstanding.
In other

in

ever,

contracts in its bonds.

:

The coffee supply has been a bit

history

size

charges several times larger than

in
.

cook's

annual

pay

that, if

more

000 of Federal securities. At pres¬

If every citizen

the entire national income!

hanced
war

to

re¬

have risen from

States

indeed, be hypothetically

possible

up

1945, the debt will then be around
$280,000,000,000. However, infla(ion is likely to cause the rate of

trivial.

beef

become

the

grow,

around

the

driving,

been

cannot

one

addition in the past year has been
nearly $70,000,000,000. If the rate
of growth does not
increase, and if

fighting the Germans and

sacrifices

our

mere

by

continue until the middle of

all

equal share of the debt,

an

it would

is

big if!

a

Today, the
is

stopping speed¬

pleasure

It is not the

problem.

a

owned

debt

war

friend is hard to locate.

Italians!

from

it

going to end.
At

ing has apparently been great
enough to-offset our entire mili¬
tary and naval losses incurred to

Aside

In

friend

thoroughly tired of the
♦rip; but, the number of lives
saved by reducing the volume of

date in

the

Who know when the

are

motor traffic and

neither

this fespect, the Keynesians

right.

are

amazing

production,

that

size

to

But

budget. True, we have had
to give up the somewhat doubtful
pleasure of driving our automo¬
biles more or less aimlessly "over
we

war.

know how long the war will last.
In 1916, a rhymester wrote:

dollar

hundreds

is

what

hundred billion

a

producing

easily enough if
tackled intelligently.

present,

likely

V Not only is it doubtful that the
war will weigh down future gen¬
erations—its cost to the present
generation is far less than the av¬
erage man is led to believe when
he reads about

job

hours

handled

But that is

on

for

obvious

be

more

before.

ever

been

nation which has such

can

to produce

us

have.

potentialities
seems

stimulated invention

enabled

Whether,

plants multi¬

rates.

wage

result, the volume of work¬

a

ing

The Big Inch and the Alas¬

than

kan Highway are very helpful ad¬
ditions to our system of transpor¬

aluminum.

In

whole

a

tutes

far

however, significant

new

as

deposits

'

come

poorer.

nor

demand

$81,000,000,000.
If
price and wage controls prove in¬
effective, the increase may, of
course, be much greaaer.
It
therefore
appears
likely

going on steadily for
decade, and, since Amer¬
ica's entry into the war, has be¬

re¬

ment

-

ecbnomic

citizenry

left

tures

has

payments make the

richer

much

about

of the national debt which consti¬

gone

these

are

The

This

than

more

are obviously completely
ignorant of the fact that inflation

a

fome. If $15,000,000,000 are paid,
15,000,000,000
likewise
ceived.

is

and

money

quirers

that

assume

constitutes

that the question of full employ¬

our

are

to

the debt

on

subtraction from the national in-

fa¬

to

erroneous

interest

Halving the in¬
long-term bonds is,
almost equivalent to

on

by the question often repeated
orally and in print: "Are we go¬
ing to have inflation?" The in¬

practically all

effective way to get

$1,000,000,000.

non-

have

may

paper

citizens.

even
highly-educated Americans
know about inflation is indicated

a

New Dealers that the only really

corporations

billion-dollar

held within the nation, it is com¬

planes, tanks one of the relationship between
forever, and the volume of new spendable
it is unlikely that any economical funds and the wage rate. Between
and
satisfactory
substitute
for 1929 and 1932, the volume of new
petroleum will ever be found. spendable funds shrank sharply,
The war has sadly depleted our while
wage
rates declined but
"limited supply of copper.
It has little. The result was that millions
Between 1939 and
helped toexhaust our richest became idle.
iron deposits.
Many other real 1943, oh the contrary, the volume
losses might be added to this list; of new spendable funds increased
oil

Since the debt is

sales to

banking
reached

and insidious way of perpe¬
trating robbery on a hundred-

$300,000,000,000 debt.

as

300,000,000, and bond

the

easy

'

places

depression,

reduce the inter¬

probable, for
inflation furnishes a delightfully

to

on

of
can

to

course,

tion

may therefore find
with the necessity of

paying from
$15,000,000,000

yielded $1,700,000,000, War
Savings Bonds sales brought $1,-

4%. In the

say

While the three methods of

The

war.

taxes

pudiation just mentioned: are all
possibilities, repudiation by infla¬

the

last war, yields on United States
went above 5% and they

may

short-

repudiating half the debt.

to

bdnds

interest

all

long-term bonds

action

the

of

con¬

power

rate

terest rate

tinues to inflate the currency in¬

Sub¬

refund

2%, the excuse for $3,400,000,000 to be financed
by
being that, in time inflation.(5) At this
rate, even if
of depression, it is only fair that
Government spending does not
those bloated plutocrats, the bond¬
speed up, two more years of war
holders, share losses with the rest may increase our volume of

will

government

a

period

such

$100,-

consideration

to

into

Government

the debt

on

of

is

loans

bearing interest at

little significance.
Any assump¬
tion that the interest rate will re¬

cus¬

tomary scale of living must cause
Hitler, and Hirohito to pass many

have

products of tomorrow.

curtailing at all our

increased

practice
term

in¬

show that these calculations have

first page)

without

national

000,000,000 increase.

Snforced Savings
would

of figuring

way

our

$40,000,000,000 in 1932 to $140,000,000,000 in 1943. Therefore we
by

'

that

has

come

Debt Problem
>m

common

say

Thursday, October 14, 1943

for it is hard to get a tax law en¬
acted which will do the trick with

precision,, neatness, and dispatch.
An admittedly half-way meas¬
which is easier to put into

ure

a large scale persisted
up to the
beginning of the present war.

Today, the United States wage
rates are far higher than it would
have been possible to pay had the
currency not been inflated. When,
following the 1920 pattern, the
inflationary
process
stops,
the
total

of

Current

U. S. for
Business

new

' spendable

reduced proportionately, we shall
have
unemployment on a vast
scale. Then our fascists and so¬
cialists

(2) Statistical Abstract of the
1941, p. 285.
:■ 13) 'U.V S.Survey

of

amount

funds available to pay labor will
shrink.
Unless wage
rates are

ism

for

will

has
a

shriek

failed

that

and

will

huge public works

capital¬
clamor
program

Aug.,, 1941,
(41 U.

July,

p. S-13; July, 1943. p. S-15.
1
S.
Survey of
Current Business,-J

1943,

p,

S-17,

'

(5) V.

July,

S.

1943,

Survey
pp.

13

of

Current

and S-18.

Business,

:

Volume

financed
will

This

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4220

158

inflation!

by
further
eventually

paralyze

private enterprise and usher
their "planned economy."

in

medium
will be
2Vg
large as at present. Un¬
der such circumstances, we would
culating
times

,

as

tion therefore arises

the wisest

to whether

as

the orthodox

not

or

1497

procedure is

to follow.

one

Dominion of Canada

The fact has been previously
and
emphasized that, on the whole,
TJie principal economic danger ordinary governmental expendi¬

'

the

at

expect, both national income

present time is, therefore,
To prevent

inflation.

further in¬
flation, taxes and bond
sales
should at once be expanded suf¬
ficiently to make Federal borrow¬
ing at the banks unnecessary.
So much for the present.
What
about the post-war outlook?
Let us first adopt the rather
OPA

that

hypothesis

improbable

the

keeping prices

in

succeeds

to

tures

2Vq.

by

multiplied

be

the

the debt to them¬
Since this is the case, why

people

owe

Since, at present, non-war Federal

selves.

expenditures are around $6,000,000,000 per year (6), after the
war they would probably rise to
2% times that figure, or $13,-

000,000,000. In May, 1943, realized

All Issues

not, as soon as. the war is over,
proceed to take the bull by the
horns and settle the debt problem
made, the first thing to be deter¬

national

around

been

nave

have

$11,100,000,000

$3,400,000,000

some

seen,

to

However, as we

month (7).

per

estimated

is

income

immediately? If this decision

Bought

will

this

do

for

call

more

To

and

saving, sales of war bonds may be
and
the
inflation of

increased

deposits may be slowed
down.
At best, however, we can
scarcely expect to reach the war's
end
without piling up $70,000,-

bank

000,000 to $100,000,000,000 in ex¬
cess demand deposits in banks. As

this

of

debt

ought to be paid off.
Since
our first serious price difficulties
manifested themselves early in

Incorporated
14 Wall

000 per year.
If

working force is to con¬
tinue to be fully employed, an in¬
crease
of 2xk times in our vol¬
ume
of circulating medium may
our

normally be expected to result in

time income
to approximately $200,000,000,000
(2%
times
$92)
measured
of
course
in
the
depreciated cur¬
the

raising

peace

ment is allowed once

be prevented from rising,
especially in view of the fact that
savings bonds are redeemable oh
uemand, and that every one re¬
deemed adds to the volume of in¬

the

not,

unemploy¬

however,

If,

again to run

below

might be

figure

$150,000,000,000 annually.
have

unwise

be

to

off all

pay

Federal bonds held outside

a

and would take away a

of Alberta's

ed

a

tool need¬

the Government in any
price stabilizing program.
How¬
by

this part of the debt might
call for another $100,000,000,000

ever,

As

we

inevitably, the
purchasing :power; of
all the
bonds, mortgages,, life insurance
policies, and bank balances will

.

greatly diminished.

be

Of

For those not

whatever is taken
from the people for interest and
debt retirement will be paid back
course,

to the

people promptly.

It will in

$75,000,- 1.0 sense be a deduction from the
000,000 or $100,000,000,000 neces¬ national income.
This fact will
sary to liquidate the debt to the
not, however, make the Secre¬
banks will likely be anything but
tary's task an easy one,- for each
an
easy task for our fiscal au¬ class of the population will strive
thorities. However, by combining to
escape paying its proportionate
However, to raise the

with the continued share of the tax.
sale of savings bonds, it is possi¬
At present, the well-to-do, that
ble, though admittedly improba¬
is,' all
persons
having incomes
ble, that this floating debt may above
$5,000 receive approximate¬
be eliminated,
and the nation's
ly 10% of the national income.
heavy

taxes

price system may, after a
of

years, once

period

be put on a

more

sound basis.

nation

the

of

banks

interest

should pay

to the

the many bill¬

on

of dollars which the Govern¬

ions

has been injecting

ment

finished,

national

the

the

income

into our

circulating medium.
Most con¬
servative citizens view with hor¬

erty

would

Government

the

with the banks
loan

lend to the

the

individual

the tax.

As security, it would

given a first Tien on say 15%
of his wage, salary, or other in¬
come.
The
Government would
be

insure the bank against

the death

complacence upon our
of using the banks

with

own

method

dollars
In reality,
both
methods
are
equally un¬
sound and pernicious.
Our pres¬
ent
method has two disadvan¬
create

to

of

out

settlement.

the

Since

death

billions of hew

nothingness.

tages: first, it causes fiscal diffi¬
culties for the Government and
taxpayers;

is

class

this

to

diminish

rather than

likely

to

increase.

to

on

of the

disability

permanent

borrower

such security.

materially less than the average

then, if the debt is not
formally repudiated, heavy
must be collected from the

population at large.
To do this
is
always
politically
difficult.
danger that

new

Clearly,
to

be

taxes

There is indeed grave

in

is

man

habit of assuming

the

when

he

banks

would be provided

buys

a

and

clientele

source

of

new

a

lucrative

revenue.

Government,

The

The
with a

car.

having

ob¬

swamped with taxes voted

itself

bank debt, by giving the banks
If newly printed paper money. This
such is the result, the financing of would rid the Government of in¬
industry will necessarily devolve terest charges on this part of the
upon government, and a fascist or debt and would, at the same time,

by the less affluent majority.

socialistic state will be the inevit¬
able

outcome.

policy of liqui¬

dating the debt over a long period

prices

prevent

falling

If the orthodox

second,

banks and the other

therefore, we are
nance

the

war

unwilling to fi¬
a sound basis,

on

off if
quit fooling ourselves by em¬
ploying roundabout methods and
simply print greenbacks to cover
why will we be any worse

The latter procedure
would eliminate interest charges,
our

deficits.

and;

after the war, it would be
more
difficult to retire the

pay off the
Government debt to the banks.

greenbacks than to
Let

us

next look at our

post¬

fiscal problem on the. basis
the assumption that rationing

war

of

and
been

in

view

ingly clear that

it is increas¬
is

now

an oppor¬

report from Edmon¬
Canadian

Minister of Finance
to

This

in
to

of

more

favorably

its

with

terms

of

pointed

ready

thirties.

to operate in

berta

to

of

the

that weakness in the "free"

As

al¬

ket

current

regard to

Dominion

settlement.

refunded, it will
matter for Al¬

make

to

with

early

easy

The

one¬

itself, because, as already men¬
tioned, it is generally believed

the

out,

debt
an

a

look

and

coming

on

holders

is

trend

indicative
in

course,
would

its

compelled

This state of affairs is also det¬

facilitate

then be

are

body in

a

market.

way

which

With

that

public
potential

causes

fortunate holders

trend of interest rates will also
an

narrow

fact

are

rimental to the interests of Canada

obligations.

provincial

The

the

position
the

maturities

immediate

take

stock

market.

knowledge

compel

will

action

Province

exceedingly

"free"

these

buyers to hold off, and the un¬

early

the

country

form

treasury bills originally made to
Alberta at the time of the de¬
pression

the

refusing

is

the

in

loans

renew

this

in

issues

penalized in having to deal

are

in

tune time to force the -issue.

ton indicates that the

internal

arrangements

its debt to

the

the

economy,

present

time, of
misleading.
It
seem
to
be a wise step
therefore if the Foreign Exchange

is highly

Control Board would permit hold¬
in this country of called and

ers

maturing

Treasury.

cash

market

mar¬

adverse

an

Canadian

the

at

of

internal

their

obligations

claims

at

Dominions

inactive

were

steady with the 3s of 1967
in

demand

at

were

bid

ture

supply

and

103Vs.

the

but
more

Nationals

question of fu¬

is

becoming acute.
The 4V2S of 1957 were 117V2 bid.

ternal

issues,

ex¬

the

pattern previ¬
ously outlined seems to be slowly
materializing.
The market, al¬
though quiet now, has an excel¬
lent tone, and as soon as the Fifth
Victory Loan is out of the way, all

Ontarios

in

to

official

the

during the past
rate.
week was quiet but the under¬
tone was definitely firm.
Reverting to the market for
Direct

ac¬

the

below

in general,
the agreed

persisted but again business was
restricted by the lack of supply.

price controls will
abandoned before the

all

ends, and that our

have
war

supply of cir¬




likely

to

an

indirect tax

overlooked

be

by

most

purchasers of goods, hence
the tendency to agitate for the re¬

peal of the tax is less than is the
case when tax money must be di¬

over,to the fiscal
However, it is im¬
probable that any sane tax pro¬
gram for paying off such a huge
debt could be carried through for
rectly

turned

authorities.

(6)tXJ.

July.

S.

1943.

17) U.

S.

July, ; 1^43,

Survey
p.

10.

S-l.

Current
-

of

Survey
p.

of

■

•

•

Business,.

Current
.

;

,,

2.

purchasing power.

The

danger of crushing the

thrifty by discriminating taxation
would be avoided.

a

request from the Postal

the excellent results of the past

spondence mailed

sues,

the

the expected weakening of
rate materialized,
and

free

with

the

exchange

at

11%

dis¬

count, it was possible to make in¬
of

the

Canadian

Forces

Armed

will

seas,

be

delivered

over¬

to

ad¬

dresses in the United States with¬

out

It

collection

is

also

of

charges.

postal

announced

the

that

market.

sidered

as

the

barometer

of

con¬

economy.

We

the

reality,
less than 1% of total dealings in

All

stationed

within

the

Do¬

minion of Canada.

Contrary to the popular concep¬

dollar market should not be

In

price-fixing, rationing,
regimentation
could be Canadian exchange takes place in
promptly abandoned.
'
this market.
The Canadian of¬
3.

forces

tion, the so-called "free" Canadian

Canadian

specialize in

CANADIAN'

and

4.

The

Government

-

Municipal

debt problem

.

'MORAL: " Settle

the war debt

problems in three

months rather

.

Business,

to

Canada, corre¬
at sea free of
fiscal year, and the 4V2S of 1956 postage by Canadian Naval per¬
were
1041/2 well bid. Saskatche¬ sonnel serving on His Majesty's
Canadian
wan were quiet with prices un¬
ships,
censored
and
changed. Albertas however were bearing the censor's stamp or en¬
definitely better, and, as antici¬ dorsed "On Active Service," as
pated, the market should now well as correspondence mailed
free of postage at Canadian Field
move to higher levels.
With regard to the internal is¬ Post Offices by members of the
on

definitely

However, from free
mailing privilege in question
the Canadian point of view, the
is
reciprocal
except
that
said
Such an unorthodox but highly failure of the Foreign Exchange
conservative program would ac¬ Control Board to permit holders privilege does not apply to mail
in this country of called and ma¬ from members of the Canadian
complish the following ends:

...

.

ant

Administration of

were

would be ficial idea originally was evi¬
transferred from the field of poli¬ dently to give some measure of
tics to the field of private finance, freedom to transactions for foreign
and the Federal Treasury, freed account in order to offset in some
a long period of years without be¬
from the war debt incubus, could degree the severe restrictions on
ing overturned at the behest of devote itself to financing current movements of capital which were
political demagogues. The ques- expenses.
A;
imposed on the outbreak of war.
.

Goldman of

New York announces that pursu¬

better

Manitobas

from teresting purchases in this section
upon

Albert

Scotias and New Brunswicks still

1941 level.

1941

Such

processes.
is

we

no

and

possibilities of early development^
in the post-war era,

it places of
years is to be carried out, the
financial
procedure least likely to result in
institutions
in
a
predicament
upsetting
the established
eco¬
1.
Repudiation would be pre¬ turing obligations to cover ex¬
whenever interest rates rise and
nomic order would be to secure
vented—bonds, mortgages, insur¬ change at the official rate is some¬
the values of government securi¬
the required revenue by levying
what difficult to understand.
ties in their portfolios shrink.
If, excise taxes on basic productive ance policies, etc., retaining their
the

the

Aberhart

of Mr.

position in the center of an area that has tremendous

and Quebecs continued portents point to a period of
doldrums, also mainly on tivity with an upward trend.
There was
The typical wage earner would scarcity of offerings.
some
activity in British Columprobably have war bonds enough
bias which were steady and vir¬ Free Mail From
to make a considerable dent in
tually unchanged.
the tax payment. The rest of the
Canadian Armed Forces
The demand for long-term Nova
annual burden probably would be
Postmaster

or

the
well-to-do—the
class
that tained funds to liquidate the in¬
inflation in¬ provides most of the capital nec¬ flationary component of its debt
dulged in by the German govern¬ essary to make the free enter¬ to the banks, could then proceed
ment, but, at the same time, they prise system function—will find to pay off the remainder of its
look

just

arrange

giant personal-

Some local bank
property-short
money needed to

program.

would

pay

a

the paper money

ror

maturity, and in scaling down interest on outstanding debt, the
Dominion Government has unremittingly endeavored to bring about

,

be raised as to why the rest

well

is

war

of

fraction

going

question may

this point, the

At

the

When

possessing the prop¬
necessary to meet the tax,

failing to redeem the provincial obligations

at

A recent

proposed $200,000,000,000
payment might not be far from a
year's national income.
On the

seen,

call for a fifth.

their ill-advised steps in

cut.

The

that the Social Credit Party of Alberta took

the moment

From

banks,
procedure would dis¬
turb the portfolios of insurance
companies and other institutions,
since such

-

continue or,

System Teletype NY 1-920

By BRUCE WILLIAMS

of the

the interest !
assumption that the two figures
on
the Federal debt, figured at
were
equal,
the
Government
31/3%, may well call for $10,000,- might well demand that each citi¬
flation.
000,000. Adding a modest $6,000,- zen pay immediately to the Fed¬
If we depend upon price control
000,000 for debt retirement and eral
Treasury an amount equal to
to protect our economy, it will
$13,000,000,000 for ordinary ex¬ his income for the preceding year.
be imperative for the Government
penditures, the Secretary of the The man who owned his propor¬
to use the most drastic measures
Treasury, if he seeks to balance tionate share of the war bonds
possible to retire its debt to the the budget, will find himself con¬
could turn them over the the
banks, for, until this is done, no fronted with the necessity of rais¬
Treasury.
He would have paid
semblance of economic freedom
ing each year $29,000,000,000 in himself off.
The person having
can be restored to the nation.
Un¬ taxes. In time of prosperity, this
less than his quota of war bonds,
til the excess bank debt can be would take 1/7 of our hypotheti¬
might sell other property and
eliminated, either our program of cal $200,000,000,000 national in¬
thus raise the money necessary
price control and regimentation come.
In hard times, it might
to settle his share of the war debt.
must

Street, New York 5

Canadian Securities

It would probably

banks.

the

to

rency.

prices

Bell

was

by the severest regimentation can

as

Quoted

—

monetary

these excess deposits exist
they will hang like, the sword of
Damocles above the nation.
Only
long

Sold

Wood, Gundy & Co.

mined would be how much of the

the result of current 1941, it might well be decided that
inflation.
This means the circulating medium should be
reduced to the level prevailing at
more
rationing.
By virtually that, if inflation were to imme¬
that date.
This might require a
nullifying the value of the newly diately stop, the income would
contraction of a $100,000,000,000
created
circulating medium, by probably drop to around $7,700,in the Government's indebtedness
higher taxation, and by forced 000,000 per month, or $92,000,000,-

and wages at present levels.

—-

were

than in three

generations!

practice, however, it does
not operate in this way, and
holders of maturing Canadian
In

Corporation Securities

H. E. SCOTT CO.
49 Wall

St., New York 5, N. Y.

WHitehall 3-4784

Tele. NY 1-267S

1493

THE COMMERCIAL & FINANCIAL CHRONICLE

solve

tie Elect Of Public Debt On

it

through sleight of hand

of

come

methods.

decline to

First,

the

fact

that

the

Thursday, October 14, 1943
Statel

the United

should

number

eighty-five billion dol¬

federal debt by the end of the war
may amount to

Future Business Activities
will depend

of

not merely

after

our

stitutions

narine will piay a more
role than before the

well.

the

main

war

high,

bound

are

to

fect

as

it

have

can

the

at

facts.

thousands

the national

on

a

not

banks,

the

debt

purchasing
purpose for power.
It merely gives the saver
the creation of this debt?
When an opportunity to accumulate pur¬
a
debt is created for productive chasing power now when the sup¬
purposes it is self-liquidating in ply of commodities available is
character, and therefore does not

very

constitute

when

burden

a

new

the

on

citi¬

small,

to

be

used

later

on

the

supply of commodities
For example, available is very small, to be used
by the later on when the supply of com¬
Port Authority of the City of New modities available is bound to in¬
York do not impose any obliga¬ crease.
of the country.

zens

the obligations contracted

tions

the

on

citizens

the City

of

On

the

other

hand, when the

of New York, because these bonds
are
based
on
self-liquidating

debt is held by commercial banks,
it leads to an increase in the vol¬

projects.

ume

A great portion of the

of

debt of Sweden is of this charac¬

are

ter.

of the

The

government

borrowed

to

money

of Sweden

build

rail¬

roads, utilities, and other produc¬
tive enterprises.
On the other hand, when

is

contracted

for

a

debt

unproductive

purposes, it has to be borne by the
citizens of the country.
Unlike

purchasing
owners

of

the

tions

tionary

Now, you know that a great
portion of the public debt of the
United

States

contracted for

was

non-productive purposes.
During
the '30s a great deal of the
money,

probably most of it, was spent for
projects of a non-productive char¬
acter.

Since

Pearl

Harbor

greatest

portion

debt

was

used for the

and

a

been

of

deal

great

for

spent

the

of

war

effort,
has

money

destructive

It is therefore

poses.

the

public

pur¬

quite evi¬

dent that the public
debt will
have to be paid by you and me,

children, and those that fol¬

our

low them.
It

would,
to

eous

however,

assume

be
the

that

erron¬

entire

public debt was contracted for
non-productive purposes. New in¬
dustries have sprung up through¬
out the country utilizing
existing
raw

ber

materials.

I refer to the rub¬

industry,

the various phases
industry, to alum¬
magnesium, and so forth.

of the chemical

inum,
All

these

taught
tribute
the

developments

resources

to

the

national

and

future

wealth

will

our

income of the country.
The merchant marine

national

not

has

ex¬




sale

finance^
obliga¬

its

the

that

sense

to

see

to it that the tax burden is

equally

distributed

country,

and

not

all

over

merely

the

placed

a
few corporations and indi¬
viduals, otherwise taxes will un¬
dermine private initiative and will
make it impossible for private en¬
terprise to provide the necessary
employment.
on

We

find,

therefore,
that the
first effect of the rapidly mount¬
ing public debt will be high taxes.
Next, prices.
Prices of com¬
modities

the

in

post-war period
are bound to
be high.
Certainly
they will be higher than during

a

time

will

can¬

whether

In

con¬

this

through

the

ultimate

deficit

the

sales

of

of

financed

was

obligations

investors, but at the

ume

thus creating new deposits. Hence,
as a result of the
war, as a result

debt,

rapidly

as

a

mounting

result

public

of the fact that

large proportion of the govern¬
ment obligations are held
by the
banks, an inflationary gap, a sur¬
plus oj purchasing power, has

in

addition, the increased vol¬

effects

us

of

see

this

background.

what will

are

of

the

debt
the

rapidly
the

on

be

the

on

business activity in

goods,

demand

for goods
to be firm.

post-war period

and

Third, the attitude of the

the

to

If

towards

play

business

gov¬

very

the

gov¬

level

of

activity and the national
income remains high.
Fourth, as a result of the rapid¬
ly mounting debt, as a result of
the

fact

that

in

the

post-war

period the government may have
to pay five to six billion dollars
on debt service alone,
quite evident that money
rates, the cost of money, cannoHgo

per annum

it

is

and

up,

that the government for

number

a

of

endeavor

to

years

to

control

dangers

will

come

the

we

that

we

debt along sound

will
ec¬

lines, and not endeavor

to

the

hard

the

Let

market in order to prevent an in¬
in the debt service.
These,

tional

us

is

Now

let

look

us

the effects

on

As

the

on

for

na¬

on

the

creation

of

the

the

public

through inflation,

a
sharp reduction in the pur¬
chasing power of the currency.

Isn't
tax

inflation
that

body?
it.

worst

imposed

kind
on

Somebody has to

And

will

the

be

can

yet

there

of

any¬

for

pay

undoubtedly

be

people in the post-war
period who will say, "Let us not
taxes.

pay

Let

solve this debt

us

the

dollar."

This

leads

not

the

economic and

social

To

sum
up then, a public debt
$250,000,000,000 to $300,000,000,000 can be borne by the

de¬

new

that

assume

of

expenditures by the government,
and

government.

system of the country.

business activity.
result of the war, the huge

a

the

leads to disaster.

way

solved

dermine

moment

a

of

merely to the wiping out or the
reduction of the liquid
savings of
the people, but it also will un¬

of the country.

economy

no

way

or

of

briefly, will be the effects of the
rapidly mounting debt

is

hard

policy of economy

a

part

Any other
debt

the

hard work, increased
pro¬

duction, and
on

There

way.

and

way,

means

through the printing press or
through the further depreciation

money

posits through sale of government

United

States

without

great

ad¬

effect on the national ec¬
obligations to the banks, the sav¬
ings of the people have increased onomy of the people, on business
rapidly.
The savings are positive activity, and on purchasing power
verse

well

as

negative.

as

The positive

savings of the people
sented,

by

one,

are

actual

cash

The above statement is based

in

hand.

The volume of currency in
circulation today is nearly nine¬
teen

billion

with

seven

August.

dollars,
and

the

period

compared

ernment

sale of obligations to ultimate in¬
vestors
and
not
to
commercial

post-war

great

portion of this
in circulation will

return to

industry and trade.

Two, the savings of the people
in the form

mand deposits. They
in

the

form

of

of

de¬

evidenced

are

increased

in¬

in

vestments

tions.

savings

in the form

of

re¬

payments of private indebtedness.
At the end of the present war very

individuals

and

their

therefore

ing

will

be

will

be

in

credit

improved,

debt,

stand¬

their

and

potential borrowing capacity will
Further¬
larger than before.
more,
an
ordinary
individual,

be

when he has

aside

a

day.

endeavors

to

fraction thereof for

the

At

a

set

rainy

aside

for

more

rainy day

a

than

before,

and therefore they
will be in a position to spend
their current income in full; add
ever

to this the

huge accumulated

the hands of

in

ings

one

that

goods
agination.

tically

the

above

will

im¬
take

(1)

place only if

curtailed

taken

and

prices of com¬
modities do not increase sharply.
If by the end of the war the price
level is twice as high as it is to¬
day, then the purchasing power
of that accumulated savings will
be cut in half.
(2) If confidence

budget

merely to balance the
but gradually to reduce

3.

That

as

soon

be taken

measures

as

to

and

that they will keep

factories
be

feel

If

that they

our

it will produce the
necessary rev¬
for the government, but at

enue

the

time

same

stimulate

private

initiative.

Post-War Outlook For

Rayon Industry Good
While

wartime

production

and

earnings of
during the war,
war

restrictions

tax

limit

imposts

consumer

companies
favorable post¬

rayon

sales prospects place

the in¬
dustry in the "growth" category,
Service, Bos¬
ton, reported on October 4.
The Service further points out;

"Production of rayon yarn and
staple fiber in 1943 will probably
total close to 650,000,000 pounds,

exceeding the 1942 record output
by 4%.
Potential consumer de¬
mand holds well above the indus¬

try's capacity to produce, but strict
regulation of civilian shipments is
likely for the duration.

(3)

goods.

Increased

need for rayon yarns for tire cord
and for various military uses will
continue to press for greater pro¬

"Some increases

being

have been

ex¬

au¬

thorized recently in the proportion
of the civilian supply of rayon

to going
to hosiery
mills.
Profit
.is carried out in an margins on these sales are some¬
orderly fashion without too much what larger than on rayon sold
intervention from the government for such uses as tire cord and
gen¬
(4) If the controls over prices and eral line fabrics.
However, any
the

from

on

will

the United Business

will sdon

employed by private industry

producing

possible

handle

tax system in such a manner that

employed
their
Plants
are
employment,
while
those
who duction.
have been thrown out of the war panded considerably.
if people

prevails

feel

sure

measures

not

the debt.

demand

a

staggers

the

Howevei',

sav¬

the people,

visualize

can

for

through the

2. As soon as the war is over the
deficit of the Government be dras¬

end of the present

most Americans will have set

war

financed

certain limited in¬

a

always

come,

is

banks.

government obliga¬
In addition there are neg¬

ative

few

1.

That from now on the greater
portion of the deficit of the gov¬

billion in

the

now

evidenced

on

following assumptions:

as

In

currency

are

the

half

a

1939.

of the dollar.

repre¬

conversion

war

peace economy

commodities
there

is

a

are

better

maintained

until

adjustment

If

the

above

conditions

we are

gain

in

profits will

be

limited both by rising costs and by
the fact that earnings are already

are

in

tween demand and supply.

there, and if

resultant

be¬

to handle our

federal

the

excess

profits bracket.

"Important technical improve¬
ments in production methods, par¬
ticularly relating to quality and

then the demand for commodities

of

government in the post¬
period amount to a minimum
fifteen billion dollars per an¬
that will necessitate

national income.

must

a
painless way.
Gentle¬
there is only one *way to
handle the public
debt, and that

crease

is

important
the expenditures of the
a

that

see

as

affairs along sound economic lines
and apply good
common
sense,

num,

assumption
our

and

will

public

economy of

following analysis is based

onomic

for

thereafter, prices undoubt¬
be higher than they
during the '30s, and they
may be higher "than
they were
during the '20s.
J;;
edly

role.

guard against in the future?

handle

the

power

people,

well

as

to find ways
to how to solve this

debt in

is

evident

war

mounting

national

Third, what

the

the

demand

years

effects

general?

The

purchasing

of

a

Hence, I believe that in the im¬
mediate

bound

country?

Second,

when

ernment

these:

First, what will be the

hands

create

is great prices tend

development, and

the questions I raise

the

of

were

country.

So much by way of

Now let

volume

and

a

been created in the

a

of the deposits created by

will

the

much

possible to
material reduction

to

quite

people
as

men,

other

business

earnings

very

be

the
public debt, the increased savings
of the people, direct as well as in¬
direct, will constitute a tremend¬
ous

of

will

in hourly wage rates.

time too large a proportion
of the debt is held by the
banks,

same

it

bring about
In

country

wage

decrease, I doubt

therefore

ernment

and

though the weekly

goods.

government

dependent

Second, wages in the post-war
will remain high.
Even

at

supply of

is

period

power

cons¬

income

the price level.

creates

power

purchasing

tant decline of the

the

the national
on

it

be used because of the

sumer

to

is

of

banks, it is infla¬
character — inflation¬

purchasing

new

on

panded, and in all probability in

the

Hence, in the. post-war period,
it will be your task and my task

the

in

when this

con¬

increase of

and

the

to

in

ary

have

how to utilize better

us

national

-

deposits
in the hands

power

of

Government

1

through

reduced

through foreclosure or re¬
organization, a public debt gqes
on until paid or liquidated.

Bank

venture capital.

any

deposits. It the
'30s, and they may even be
is
particularly unfortunate that
higher than during the '20s, for
in war periods when the
supply the following reasons:
of commodities available for con¬
First, the large expenditures by
sumption is so small, the pur- the
government in the post-war
ing power of the people should
period will necessitate a higher
increas^. Hence, if the deficit national income. In part at least

private debt which if it is un¬
productive is either liquidated or
a

deposits.

is

of

and means

un¬

that in the future it will be to the

of

nay,

create

for the

sums

to

interest of business

debt

of

commercial

does

ques¬

It

$250,000,000,000 or
$300,000,000,000
means
a
debt

war.

the

was

government

lic

important

dividuals, firms, corporations, but
not

have to raise

we

What

tion.

spend substantial

even

wouldn't be

of the country.

economy

First,

Thousands,

first

look

us

the

employed and otherwise.

re¬

hundreds of service of five to
six billions of
young men in the dollars
per annum.
During the
The
armed forces are receiving a very
public debt of the United
'20s the federal government never
States on June 30, 1930 amounted valuable training, and that train¬
spent more than four billion dol¬
to a paltry sum of $16,000,000,000. ing, too, will contribute to the fu¬
lars per annum.
During the '30s
Ten years later it #amounted
to ture wealth of the country.
the
federal
expenditures rarely
At the end of the war the feder¬
$43,000,000,000.
And today the
amounted to more than eight bil¬
public debt of the United States al government may own billions lion dollars
per annum.
And now
is over $160,000,000,000.
of dollars of commodities which
in the post-war period we will be
Nobody, of course, can tell how can be used for civilian consump¬ confronted with
the task of pay¬
far the public debt will go.
It tion.
ing in annual debt service alone
will depend entirely on the dur¬
Above all, we have learned our
five to six billion dollars.
This
ation of the war and partly on the lesson.
You know that experience
does not include the retiring of
tax measures that will be taken in is worth money.
A few years ago
outstanding debts.
Another five
the near future.
It is, however, a great many of our citizens be¬
or six billion dollars will be need¬
safe to say that by the time the lieved that the United States can
ed for maintaining a larger army,
follow a policy if isolation.
war Js over the public debt of the
We
navy and air force and the taking
United
States
may
amount
to have learned our lesson, that we
care
of the veterans.
One may
$250,000,000,000 or $300,000,000,000. are a part of the world, that we reach the
conclusion that a min¬
Some have said that this tre¬ must play the role which history
imum federal expenditure in the
mendous increase in the public has in store for us, and this fact
post-war period may amount to
debt
will
lead
to
inflation or in turn, in my opinion, is bound
at least fifteen billion dollars per
sharp increase in prices of com¬ to have a favorable effect, not only
annum.
It is therefore quite evi¬
modities, and a corresponding re¬ on the international policies of the
dent that taxes are bound to re¬
duction of the purchasing power of country, but also on international
main high, even though they will
the dollar.
Others have said that trade relations.
be lower than they are at present.
the public debt will never be paid,
Hence, while a great portion of
Taxes, however, must not be
nor will the debt service be met,
the public debt was contracted for
too heavy, otherwise they will un¬
that some way or other will be non-productive
purposes, part of dermine
private initiative. Taxes
found to wipe out this public debt it
has
been used
in
a
fashion
on
business must take into con¬
through a sleight of hand method. which undoubtedly has increased
sideration the fact that poor years
Others in Washington have said the national wealth of the coun¬
follow good years, and that cor¬
this rapidly mounting debt is no try.
porations must be in a position to
The second
calamity at all; on the contrary,
question that we accumulate
some surplus.
Taxes
it is a blessing in disguise.
have to ask ourselves is how the
must take into consideration the
Let us, therefore, look at the debt is distributed.
Where the
fact that the investor is entitled
public debt and try to analyze to debt is held to a large extent by to some
return, otherwise there
the best of our ability what ef¬ ultimate investors, that
is, by in¬
Let

for

though lower
than at the present time.
A pub¬

the post-war period our merchant

the

of business, but the future
economic and political in¬

course

necessary

$250,000,000,000 or
$300,000,000,000 means that taxes

(Continued from first page)
Jem

lars per annum, it will be a year
of depression, and it may make it

mere

example,

in

In the

1929,

when

a

high

past, for
the

na¬

tional income of the United States
amounted
to
about

eighty-five

in

accumulated

t

hands

guard

post-war period

debt

in¬

of

the

bound to have a
period of very high business ac¬
tivity.
war,

billion dollars, we enjoyed a
year
of great
prosperity, but if in the

the national

tensil
strength, have
enhanced
period, based on
rayon's competitive position with
savings in the
people during the other fibers. After the war some

the post-war

the

we

are

The last point is the danger to

against.

A

to

be

expected, but

public

acceptance

been so

widespread that

public
induce a in consumption

large

undoubtedly will

loss of markets to nylon and pos¬

sibly silk is

are

of

rayon
new

has

highs

in prospect."

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4220

Volume 158

rehabilitation

Unsound Tax Program Can Destroy

system

hope for the future is dependent
upon the continued functioning of
this system of

have, multiplied by daily
our government is
interested in changing our way of
life to some foreign concept, which
we

now

evidences that

strangulate it

only the

of the loss

peace

I

have

been

about

night

asked

the

we

to

ever

talk

tax

new

which has been presented to

the

all desire.

we

tem

of

this sys¬

enterprise is a
recognize what are the

private

failure to

Congress by the Secretary of the

essential

Treasury.

continued

life.

In

form

rates

the

lower

exemptions,

to

in an additional $6,500,000,000. They have also proposed
merging the Victory Tax with the
The

exemptions

for

$1,100, and each
from $350 to $300.
The

tool

exemption for single

industry

whereby

of

credit of

the

taxes

can

an

Ability

repay

their

credit

our

to

them,

upon

the

conducting

for

penalty

form is suf¬

This

proprietors of cor¬
businesses are, of course,

porate

the stockholders.

$2,500,-

Govern¬

that function—

will

be

what

hap¬

of

policy

long-term
all their requirements for

bonds

new

—

equipment,—

expansion—and, at the,
paying
and

dividends

same

on

pre¬

stock instead

common

fixed

business

charges

fell

were

off,
the
high that

so

Preferred stock interest should
a
deductible item of expense

be

continuity of

on the
aggregate amount of
debt payment this year will next
year be includible in net income,
thus increasing net tax

one

of

so

for

on

the

allowing in¬
capital as a
legitimate cost of doing business.

It will

pathetically dealt with in

little

revenue

For

from

our

preserving

:In

(4)

He

to raise from

proposes

estate and

gift taxes

additional

an

$400,000,000.
I

going to discuss with
you this evening the proposed in¬
dividual income taxes, nor the
proposed sales taxes, which Mr.
Morgenthau chooses to call ex¬
cise taxes, nor the estate and gift
taxes, except to say that I sin¬
cerely hope the Democratic major¬
ity in Congress will be successful
in passing these taxes as proposed.
No
tax

I

who votes for such

m^n

bill

to the

going to confine my
to
proposition
No.

am

marks

namely,

the

raising

of

the

re¬

2,
cor¬

and

porate income taxes, normal

which,

surtax,

normal tax

effect,

in

is

all

the

productivity

tion

would

by

For

number of years now,

a

the

federal

tax

has

system

departed

from this

principle.
Heavy flat taxes

laid

are

upon

corporate earnings and then fur¬
ther taxes

imposed

are

the

upon

shareholders.
Even

low flat income tax

a

corporations
of

has

inequity

on

elements

grave

because that

of

part

the corporate income going to the

shareholder

poorest

the

bears

corporate rate of tax as that
going to the wealthy shareholder.
same

When

the

are,
that

rates

corporate

of

Treasury was pursuing a most
short-sighted policy in limiting
depreciation

neither

al¬

corporation.
The quicker a corporation

heard, time and

purpose

earnings

will

become

taxable

a

of income for the

source

Treasury.
And, since taxes always go up,

corporations
off

in

assets

have

would

of

years

low

cor¬

our

and small,
of providing jobs?
great

know that when

that

hostil¬

the Federal
going to be left

for

time

public debt.
private

that

of

danger

to

cor¬

figure?
should

some

real

individual

far-reaching

centive in order to encourage

to reduce their debt

as

in¬
both

rapidly

as

possible during this present pe¬
riod of high earnings.
It

is,

therefore, in

a

spirit of

achieved

heights in a comparatively
period of time.

Many

has proven its

ability to out-pro¬
of the world, in such

safe and sound condition that it

after

the

war

than

to

in the

it has provided

past.
If

in¬

have

debt

obligations
when
their earning power after taxes
seemed quite adequate to pay off

Federal

just

For here

certain

a

percent¬

as
we

simple as that.
provide a two-

will

Incentive to

Incentive to banks to lend.

Number

Two

is

debt.

important, be¬

the lender of other people's

cause

is fearful that the

money

corpora¬

going to continue

does

know

present rate of 40%

that

excess, is already impairing
ability of corporations to re¬
debt.

This
the

is

especially
has

true

corporation

had

capitalistic

not

believed

system

»

and tear has been

celerated and the normal life

pectancy

of

our

productive

ac¬

where

preferred stock.
The

result

is

alredy apparent.

tightened.
And it is daily becoming in¬
creasingly difficult for the small
corporation to borrow
And

money.

for the new enterprise,
history of earnings or a
invested capital base—it is
as

borrow is

Another

that

danger

in

of continued
corporation rates is

venture

little

or

capital

will

inducement

no

itself in corporate

have

to

risk

enterprise.

New

business, which depends so
credit, will find it in¬
creasingly
difficult
to
secure
the

most

very

successful

little left with

which to amortize debt.

in

the

war

that

its

financed with
Of

course

We

ma¬

Repair and replacement has be¬
come
a
problem and
in some

indeed, an impossibility.
Corporations should be allowed

cases,

a

and

the fact
of

number

in

nesses

the

prime
infla¬

vital

weak¬

present

condi¬

corporate

tax law:

prior

in

to

(1) The rate is

the
our

(2)




so

only

high that

cor¬

porate credit is endangered.

entry into this war, I would most

assuredly believe in it now.
It seems to me that our

so

Depreciation

low

create

that

allowance

corporations

enough

reserve

is

cannot

to pay foi!

will pay American firms

$20,137,$9,000,000
cash payment made in
November,
700, in addition

is that
corporations

as

1941.

The

total of $29,137,700
repre¬
$23,995,991 plus $5,141,700

sents

interest at 3%

on all unpaid bal¬
from March 18, 1938, to
Sept.
30, 1947, the date set for the final

ances

payment.
The

:

payments

debt

quarterly

or

a

vast

in

certain
monthly,
yearly payments.

in

industrial

operate

"half

free"
tions

—

system cannot
slave
and
half

and if half the corpora¬
in bankruptcy

the other
successful in
selling their products in that kind
of a depression.
are

It

°

•

began

Sep¬

on

tember

made

by research

the war,
of
our

as

result of

a

is going to render much
machinery obsolete for

social

trial machine.

with

—

The agreement, the State De¬
partment said, had been reached

through

an exchange of notes by
Berle, Jr., Acting Secretary
of State, and Rafael De La
Colina,
Mexican Charge d'Affaires.

The

$23,995,991 valuation placed

the expropriated oil properties
fixed in April, 1942, by a joint

on

was

Corporations

composed of

two

stock:

and Manuel J.

Federal tax law
encourages unsound,
and some¬
times unwise, creation of fixed
maturity debt.
,V
.
'
present

Cooke,

is, therefore, nothing but en¬
lightened self-interest for all of
us to work with all our might to

The

for

the

for

is

that interest
is

ness

the

on

simple

reason

bonded indebted¬

considered

subtraction

a

commission,

experts, Morris
United States,

Zevada, for Mexico.

Standard

Oil

Co.

of

New

Jersey

group has accepted the set¬
tlement under which it will re¬

ceive

$18,391,651, plus interest of

,

This

of

$4,085,327 each.

L.

The

remittance

a

American-Mexican

Three

Number

29

Adolf

This,

a

$3,940,843.
are

The

expected

other

also

to

claimants

accept

the

terms of the settlement.

from corporate

earnings—and, in¬
legitimate one—whereas
preferred stock is, for
strange reason, considered

deed, a
interest
some

For many,

income.

many years,

Ameri¬

industry has been expanded,

can

with

consequent benefit to labor,

and

business

alike,

through the aid of that.type of fi¬
nancing known as the preferred
It carries

a

fixed rate of inter¬

est,. but has no maturity date.
.

It

is

long-term

truly

capital,

and

because of that fact a prem¬

ium

in

terest

To

on

addition to taxable

an

they

are

the

to

$3,796,391, and the balance will be
paid in four annual instalments of

depreciation charges
well as for the
reason that rapid development of
synthetics
and
other
advances

stock.

theory.

We must take, the facts

of

for this reason, as

government

stock.

confronted by a

are

tion, not

common

it will'.

The

three

are

to

financed with borrowed money as

that

are a

against

tion.

There

ability

debt and have contracted to meet

of course, must be raised.

Furthermore, taxes
factor

its

gone—again for the rea¬

ability to repay is
gone—and that is bankruptcy.
Some will say this favors those
corporations
which
have
been
son

are,

Funds for the prosecution of the
war,

because

rates

pres¬

opposed to those which have been

much upon

even

ent

settlement

arising out of the expropriation
of oil properties in 1938.
Under the
agreement, Mexico

Credit has

unless

problem is met many
corporations face ruin.

final

financed with the aid of preferred

high
already bankrupt, under the

this

by

ex¬

chine has been greatly lessened.

outstanding

inability to meet both fixed
charges and current taxes is be¬
coming increasingly serious and

increase

the

normal, and

half will not be very

I

wear

September

on

to accelerate

(1)
(2)

repay

Treasury would be the

before.

The

incentive:

way

the

brought
about by the war, has arisen.
We are driving our productive
machinery three times as hard as

in¬

ever

American
nationals
against the Mexican Government

distinct gainer.
Another condition,

without

the debt.

provide the American people with
an
even higher -standard of liv¬

ing

much lower.

were

corporations

business has

problem of corporate taxation.
I want to keep the private capi¬
talistic enterprise system, which

continue

It is

pay

have

rates

the

will

all

of net income, provided that
amount is used ;to pay off cor¬
porate debt.

the

cause

when

a

industrial

our

age

the

post-war planning.that I approach

duce the rest

from

taxation

come

danger is accentuated be¬

The

the

both

the

and

corporation
with

provide

save

So

for

claims

paying taxes

those earnings at high rates.

on

ever

system.
Exempt

90%

porate enterprises generally.

The

debt to
possible

be reduced to the lowest

We

will

we

Department in Wash¬

announced

viding

indeed, might be called
security program, for it
will guarantee continued employ¬
ment and re-absorption of man¬
power into the peacetime indus¬

of inequities and ap¬

one

curred

Would, it not then be desirable
at

it

—and

be

now

he

with

ceased,

enormous

method of
forcing corporations to pay debt

would

But

become

when tax rates

an

that is bankruptcy.
There is a simple

and

peacetime production.

ple method of providing

with

impaired—and

will

nor

to
we

29 the terms of the
agreement pro¬

rates

high he does not know.

Many corporations fixed their
capital
structures
at
a
period

is

was

like,

The State

ington

written

How

short

Government

Their credit

of life
which

way

concept,

iexican Agreement On
Seized Oil Properties

write off its fixed assets, the soon¬
er this allowable deduction from

to rise.

these

have

debt payments and many of them
went into bankruptcy.

our

accept.

to

ceases

services must be provided

We all

their

meet

government is interested

a

profits

excess

90%, the problem

with jobs.
Is it not strange, therefore, that
someone has not hit upon the sim¬

ities

couldn't

in

can

lowed to

posed 50% and the

proaches

of planning for
the post-war period.
We are all agreed that our men
and women returning from
the

means

railroads

our

changing
some foreign

tion tax rate is

for

porations,

the

interested

fear, as they now
multiplied by daily evidences,

in

our

normal and surtax reach the pro¬
tax is

armed

paid

entirely

time again, during the past year
of group after group being formed
the

be

of the corpora¬

the shareholders.

the

rate, to 50%.

have

You

for the
business in a

privilege of doing

a

possibly be returned
Congress.

can

79th

tions would pay only a tax

corporate form, while the tax on

not

am

ideal tax system, corpora¬

an

is

American way of
industries system—and
our

would not be in

always thought that

of

ac¬

they would know then that

government

life—our

statesmanship.

amount

proper

tax rate that might be
imposed for the duration.

Number Two—Depreciation:

the

a

would

cept any

bankrupt corporations.
It is long-sighted
policy from
every viewpoint.
It is fiscal

businessmen

manner,

the years..

collect

cease

borrowed

on

If these three items were
sym¬

help corporations to re¬
solvent, and that means con¬
tinued employment
and contin¬
ued revenues for the
Treasury
We

by doubling it.

wrong

Namely, to

come.

over

the

terest

to

years

debenture inter¬

or

be proved by the attempt
in high position to cor*

may

some

rect

payments.

And

bond

as

a
proper deductible item.
That this point of view is a fair

•

000,000.

ac¬

est is

retiring debt.
When

the

just

I have

through

maintenance

rather,

rec¬

changes in the rules

cordingly.

us.

Treasury that we should seek.
And, under this plan, the inter¬

at

railroads after 1929.

our

concern

forced

bankruptcies,

precisely

financing

ferred

real

the

at

The rails had pursued a
of

time,

The

Federal

assume

is

pened to

and

desirable,

destroyed

the

But,

changes in the game, and to
ommend

given moment

a

the maximum flow of funds to the

the first signs of depression.

ness, however socially
will be abandoned.

including liquor, beer,
travel,
soda-pop,
and
chewing gum, calculated to raise

is

wholesale

ficiently great, that form of busi¬

tobacco,

up

conferred

means

luxuries,

income

been

If

founded

debt is impaired and

corporations

into

nevertheless, only ways and
of conducting business.

are,

is

ability to repay.

ity to

collected at

enue

responsibility in our
to
recognize these

government

We should remember that it is
not the maximum amount of rev¬

main

borrow

to

ment must

private

Corporations, however, although
attributes
of
personality

so-called

on

a

corporation, or
individual, means simply

banks—and

business in corporate

additional

instrument

an

are

tion income taxes.

in

The

system.

have

creases

our

system is founded—namely credit.

many

He proposed very stiff in¬

pro¬

that thing
whole industrial

If the normal rate upon corpor¬
ations gets so high that their abil¬

$500.
(2) Mr. Morgenthau requested
the
Congress to raise another
$1,100,000,000 from the corpora¬
(3)

which

upon

important

upon

ownership.

to be

sons

the corpor¬
bill is not the

safeguard

we

tribution of the benefits of

per¬

porarily.

est

The rate is not

ficiency and with the widest dis¬

married

$1,200
dependent

to

factor in

1499

reduce to the lowest possible level1 was
devised, there were no cor¬
all private debt.
porate income taxes.
The Treasury may
To me, the real
say, "but this
tragedy is in
will reduce the revenue."
the reluctance of those
charged
That is true, but
only tem¬ with fiscal

that should

rate of taxation.

function with the maximum of ef¬

persons to be lowered from

must

by

Corporations

income tax.
>.

The vital

ate side of the tax

corporate

a

and large, created
and efficiency of our

has,

power

or

its

in

done

industrial

gather

preferred stock

"ability to borrow."

outline, the Adminis¬
tration is proposing: (1) Increased
and

for

needs

Business

broad

of

I will take them in order.

vided

The greatest threat to

to¬

bill,

aid

obligation
treated as a charge against earn¬
ings, rather than as an addition to
earnings.

will mean

now

danger

follows:

will

nor

re¬

capitalistic democ¬

of the war, but also an inevitable
defeat in achieving the kind of

neither like

and

Number One—Corporate credit:

To
not

plant

tion, and,
(3) Corporations financed with

racy.

accept." Mr. Hanes' address in full

we

peacetime produc¬

to

have this fixed interest

(Continued from first page)
our
industrial
of life
—
instead of the fear

way

conversion

the

Capitalistic Democracy: Hanes
ican

of

the

form of

coupon

higher in¬

a

has been exacted.

During our period of great in¬
expansion, the preferred
stock has filled many gaps in the

Buy 1944 Cuba Sugar

The

United

States

Sept. 22 to buy

a

agreed

on

minimum of 4,-

000,000 short tons of 1944 crop Cu¬
ban

sugar

at

f.o.b. Cuban

2.65

cents a

pound

ports.

The

new
contract, the largest
negotiated with Cuba, was
signed in Washington by officials
of the Commodity Credit Corpor¬
ation and the Cuban Sugar Stabil¬

ever

ization Institute.
In
was

Associated Press accounts

it

further reported:

The 1944 sugar crop

is the third
by the
Cuban Government to the United
successive

one

to

be

dustrial

States Government.

financial

sold

In announc¬

asserted

ate

stability of our corpor¬

cant

enterprises.

It

is

unfortunate

that its
it

tors

did

like

"deferred bond"

not

name

lhf>

fimp

thp

something

rather than

war

of

the

stock

cooperation
in the joint

effort."

The
last

nreferred

evidence

of the two countries
crea¬

"preferred stock."
At

ing the deal the State Department
it was "further signifi¬

price paid was the same as
The crop is larger by

year.

1,000,000 tons than the 1942 crqp.

THE COMMERCIAL

"Our Reporter On Governments"

& FINANCIAL

Adopt Program Of

taling

than 2Vz times

more

Self Restraint: Harold F. McGuire

with oversubscriptions to¬
$5,516,000,000 subscribed to the bond

....

deal, $5,381,000,000 to the %% certificates .... Allotments on a 25/0
basis for the bonds above $50,000 .... And now .... For weeks the

(Continued from page 1487)

not lie primarily in the broad pur¬
chance to pick up some of the new poses of the legislation, but in the
cash . .v. For weeks many of them efficiency of the machinery, stat¬
have been nibbling at the regular lists in the hope that they could
utory and administrative, for car¬
get a fair amount of new 2s at par and straighten themselves out for rying them out." In
part McGuire
the next month
The $3,000,000,000 flotation, though, comparing went on to say:

tion

went

think

I

there

that

is

and

ployees

....

$5,000,000 in the April drive, killed this hope .... The banks
in as heavily as they could over last week-end .... But now

with

of,

pension plan
directors, officers,

vision for,

and

others

statement for
to

general

elect

in

the

pro¬
em¬

proxy

meeting called

any

directors.

of

the

con¬

primary-

of the Securities Act

purposes

provide

the

is

prudent

average

investor, through the prospectus,
with

information which will

him

phasis. I refer to those regulations
requiring statement of remunera¬

been waiting for a

banks have

10-year 2s.and invest their surplus

interesting subject for

sideration.;. One
to

the bank drive is through,

now

Thursday/October 14, 1943
other

SEC Should

By S. F. PORTER
And

CHRONICLE

help
deciding whether to pur¬
security. I think that it is

in

chase

a

now

generally conceded, however,and, in fact, has been for years,-

that the Securities Act
prospectus
is of such character that the aver¬

investor does not read it, or,
did, could not understand it.

age

if he

As your Chairman has gener¬ As we all know, that prospectus isagreement upon' the reasons for
a
they're about to enter the open market and buy more bonds to even, consideration of change in the se¬ ally
bulky document, typically run¬
observed, examination of the
up until December comes along and the year-end readjustments take curities legislation and its admin¬
to
some
proxy statements which have been ning
fifty-odd pages,
prior position. ....
istration, as I have thus briefly prepared under these regulations which is printed and distributed
stated them. The major objectives indicates that the Commission has at great cost.
Trading in the 2s and 2K»s should have begun Saturday but
It is normally re-which should be accomplished by placed undue
a gentleman's agreement among the dealers delayed transactions
/emphasis on these plete with legal verbiage and wi,th
shch changes are implicit in the
until Monday
Then along came Columbus Day, again inter¬
and
matters, in that the major por¬ complicated
pessimistically;
statement of the occasions there¬ tion of the statements consist of footnoted
financial
fering with dealings
Also, there's no questioning the fact that
statements.
for.
The broad questions to be dollar
most dealers in Wall Street and probably elsewhere have plenty
signs and might lead the When he receives it, the average
investor generally deposits it in
considered may thus be outlined uninitiated to
of bonds
They bought heavily—in anticipation of the bank
suppose either that
as follows*
buying described above ....
the business to come before the the wastebasket. Now, this is by
no means due
What can be done by the Com¬ meeting was the
At any rate, the bonds opened at 100.6 to 100.8 on the 2s ....
entirely to admin-i
approval of com¬
mission or by the Congress, act¬ pensation
At 100.3 to 100.5 on the 2Us
Slightly below what most
or
that the principal istrative action, or lack of it. But
it does result in
experts expected, but that's probably because most experts did
ing in the field covered by our factor to be considered in electing
part from the
securities laws, or by both,
Commission's view that there be
expect a higher level
Rarely are "most people right" ....
directors
was
the
compensation
included
But the premiums are around the U point level on the 2s, which
in
the
(1) to help industry and its received by them and others in
prospectus in¬
is exactly proper
formation
executives to devote their maxi¬ the preceding fiscal
and from this level, we may look for a rise
dealing with subjectyear.
....

....

to the

And perhaps as the month rolls on, we
.... That might be
the tempo¬

^-point mark

may

rary

high

v<

•

•

....

*

.

and to the

.

.

.

of

V. .J,V

•

TIIE

Vf

*/"«•

1'

;,t.'

'

■

-v.'.'.."

V;

%

"*

h-v :

.i

2V2S

The

this

has

observer

writing about
the 2s than the 2V2s is the simple fact that the 2s are the big, gen¬
erally available issue.
The 2V2s can go into the portfolios of
non-commercial banking investors only.
Corporations, of course.
.\
Individuals, of course.
But commercial banks, no.
Not
reason

.

spent

.

.

.

.

.

until 1953.

.

,

time

more

.

.

.

.

.

.

.

under

the

.

.

.

.

.

these, are buying these, will buy them and will be the prime factor
in their important market fluctuations from now on.
.

As for this columnists's personal opinion—which

interest

issues

for

this

on

banks do make

banks

the

involved.

are

market most of the time.

a

.

ties they buy and trade are more

major movements

over

active and
period of time.

a

.

the situation

compare

;.y?

There

that

the old

was

for instance.

.

.

the

circumstances?

selves,

And the securi¬

.

.

.

Until

.

.

.

But

.

issue

that

.

time

banks'didn't

the

prices generally were
unpopular for a long period.
.

is until

the banks

large quantities.
Since then

\

important
to

the

.

.

.

.

want

.

.

.

as

.

.

long

The

.

.

a

term

The issue remained

And didn't become

the leader

it

.

"following the banks" has been an
Which explains the excess of space devoted
possibilities of the 2s and the minor amount of
.

get back to the 21/2s, in case this policy is of

no

interest

.

the 68/63s is 100.8

.

acting beautifully
.

.

Price

.

....

since the books

ever

the old 69/64s

on

On the 67/62s is 100.18

is 100.6.

now

....

on

the
On

...

The last issue of

2x/2s has been the most important from the point of view of the new
securities, of course, and the sharp rally in those last week was most

singnificant
One

for
less

a

dealer, in fact, believes the 2VzS may get ahead of the 2s
while, due to the lesser amount outstanding and the more or

closed

market

in

them.

.

.

But

,

superiority of the 2!/2s won't last.
for

ties

must

Just

to

the

...

longer view is that the

And the issue

is

good only

want, to hold on for a fairly
long period, then sell
back into another issue of 2V2s or some other flotation.
.

sum

though, this week's trading is telling

up,

next week's will tell

the

us

It has been terrific

success

us
of this Third War Loan drive.

.

and
.

.

.

....

...

...

to

issues getting all the attention outside of the last
four tax-exempt loans, and with the bonds
rising to new high pre¬
miums steadily, the Government market naturally looks wonderful.
.

.

new

And it is in fine shape.

...

Excellent support indicated.

.

.

,

from commercial banks alone.
But where

Well,

do

we

...

from here?

go

this writer

as

Excellent buying power shown.
Good backlog of demand indicated

a

I

reasonable

administrative

play

discretion.

sees

it,

we

.

.

.

rising trend

.

for

carrying into November, if the 2s—to use the issue as
key—reach up to 101—that should take place in the early days

of next month.

.

.

burden

,

.

...




.

The

is

placed

on

man¬

of

always be of paramount
importance.

with ,a view to promoting some
other social or economic reform.

The

or
as

It is unfortunate that any agency
of Government, should wittingly

first, and perhaps the most

important, change which I would
suggest, therefore, would be of
some

re-orientation in

the

I

.

.

turn

us

team effort and

Without

such

create

proxy

importance.

meaning to
regulations let

attention

our

to

The

i''V.

another

series of provisions thereof which
have a somewhat different em-

multiplied if time

serve to indicate
that there is meat in the criticism.
that the Commission's administra¬

tion

of

tended

the
in

securities

after

day.

And

bill

tax

then

'•/

are

The

of such vital
%

-fi

■

,'.••• '

:

prospectus required to

be

furnished to investors affords

be

taking

the

...

an-

headline

year-end

And

space

day

,

adjustments of

issues will enter the

ous

will

commercial

portfolios

situation.

banks

with

will

of

selling

vari¬

:\

be

losing

...

...

end.

some

conservatism

'

....

THE

INSIDE

has

to

as

1943 rolls, toward

;V/ :'

re¬

quire unnecessary expenditure of
time and effort by corporate man¬

irritation,

apathy

stockholders

in

to

investors

unnecessary

create

or

towards

corporate

literature, and to result in confu¬
sion.

It is only
fense
of the

f^ir to

in de¬

say

Commission,

that

ever,

it

has

done

counteract

But,

these

how¬
much,

particularly in the last two
to

years,

tendencies.

in the light of the existing

situation,

we may
appropriately
ask of the Commission that it do
more.

that

Specifically,

it

conduct

examination
and

a

of

its

we May ask
vigorous self-

present

forms

regulations and apply to each

item therein these two tests;
First,
does it ask for information which
is essential?
Second, if the sub¬
ject matter of the item cannot be

eliminated,

the

can

objective

attained

plished in any

lesser

be

manner

interfere
at

to

a

present

activities

with
of

ment?
So

accom¬

which will

degree than

other

necessary

corporate

manage¬

f

much

for the first plank in
the platform for re-orientation of
the ^Commission's
viewpoint and

approach.
The

Commission

has

also

been

charged with seeking to extend its
powers over subjects not confided
its

to

jurisdiction,

or

with inter¬

preting its grant of authority so
broadly as to stretch it to the.
breaking point.
This
criticism,too, is not without justification.
suggest

*

as

the

second

plank

in

a suggested
platform for con¬
duct,in the Commission's affairs

during

the

period

...

Government deposits,
against which they need keep no reserve and gaining regular de¬
posits against which they must maintain reserves.
In short, the
money markets will be in for some tightening.
November and December aren't such easy months to figure out,
and while this columnist is not pessimistic, for the year-end/ his¬
torical records would indicate

laws

instances

some

s.'s

the

in¬

permitted, will

I

And

regula¬
that

foregoing illustrations,,

which might be

an

coperation in the

national interest

,

belabor the

unwittingly,

or

attitude in the minds of any group
of our citizens at this time, when

Com¬

viewpoint and approach.
have three points particularly in

mind.

elicit

formation.

disclosure to stock- sought to be

holders of information material to
them in determining the wisdom

administering the stat¬

mission in

of the

some

designed to

be

technical

that,

cumstances

confine

post-war.

previously recited, it.
strictly within theauthority and not seek

itself

limits of its
new

and

war

in view of the cir¬

fields to conquer.

Closely related to the

sugges¬

tion just made is the further
sug-*
gestion that the Commission not
engage during this period in fur¬
ther
experimentation
and

MARKET

pro¬

Ever notice that

.we

don't have-nicknames for most

new

issues

longer.
Time was when each new financing was dubbed
a special identification as soon as it hit the market.
There
were the "converts,"
for example.
The "Morgues."
,:The
"Mellons."
Recently we've had the "new" and "old taps," but
any

.

.

.

with

.

.

else.

much

.

.

.

Of

.

.

we

.

.

clearly

of

reform,

within

the

even

though

Commission's,

power.

.

get so many new issues these
One must identify each issue
mistake is made.

course,

by its maturity to be sure no
The tax-exempts obviously

.

.

grams

.

are in a marvelous spot now, what
with the tax talks going on in Washington and every observer finally
convinced that exemption is going to be a swell thing to have. .

Scott & Stringfellow Admit
RICHMOND, VA. - Scott &■"
Stringfellow,
Mutual
Building,
members

of

the

Richmond Stock

New

York

and'

Exchanges,, have,

Key issue of this list—the 1965 2%s—selling at 112.12 against a low

.

But in November.

the Situation.

matter, since it can¬
be contended that

figures.
But that is
hardly the point here. The point
is that corporate executives are
apt to feel that the SEC, instead

That

days that nicknames won't do.
resume a

offhand appear

unwisdom of corporate action,
contemplated by the Exchange
Act, is "picking on" executives

.

should

would

pensation

clear that that alone

a

stated is

agement in compiling these com¬

being so, the attitude of the Com¬

not
.

for October and probably for early November.

As

undue

NOVEMBER?

With the

.

small

a

generally

necessarily^ be sufficiently 0f requiring

permit

an

IN

But

may/

.

Oversubscription far above the $18,000,000,000 mark, as predicted here right along.
Premiums quoted, also as reported.
And Morgenthau set with more than
$21,000,000,000 to keep him
rolling through the remainder of 1943.
HIGH

accomplished.

not

flexible—if it is to be efficient

those who

out and get

me

mission's

These have been

public drive closed

fully

would

It

purpose

which

Now, this

not be enough. The securi¬
legislation, however amended,

will

.

.

free
pri¬

utes will

of

attention devoted to the 2V2s.
to you.

out,

came

began stepping in and picking them up in

the tradition

one.

slipping.

.

be

to

...

wonderful

But to

can

formula

to be

plain to

unreasonable.

that, if the

regulations,
require
disclosure
of
compensation ex¬
ceeding a much higher absolute
figure, or a specified percentage
of net profits or net assets, would
be more appropriate.

capital?
seems

also think it

day when the 2%s of 1960/55 first

and

now

some

we

a

on

well

the

duce

a

that change
in the existing legislation will be
necessary if these objectives are

the basis of popularity

on

action

at

was

It

we've

now,

banks,

"sticky" and unpopular and hurt the market for months.
reason

vate

likely to have

based

may

the motivation for the

(4) to facilitate the operation of
liquid, honest and efficient securi¬
ties markets so indispensable to

functioning of

them¬

stockholders

circumstances, it might
modest; under others,

some

very

seem

efficient basis?

system

tions

might

from

character of

agement, to cause undue expense
to the companies
affected, to pro¬

highly

proper

to

and

der

(3) to facilitate, particularly in
post-war period, the flow of
private funds into such enterprise

enterprise

diverting

income

which

omitted

disclosed.

unfairly

that

so

matters

accordingly, why, we may
fairly ask, was this particular fig¬
ure
selected?
Certainly, such a
salary is not unusual, nor does it
indicate greed or unfairness. Un¬

the

but

must, be

are

and

names

act

be

honest

whose

corporate

prise system in the days that lie

an

figure of $20,000 as
for determining

officers

"insiders",

effort and to the preservation, de¬
velopment and improvement of a
healthy and efficient free enter¬

the

the

You may remember that we called them "Morgues"
from the start was awful.
They were

.

their

be of

Because

.

more

not for them—so exact comparisons are futile.

and

.

.

had the problem of separate issues—some for

never

.

point—my preference always has been

one

which

in

.

may

specific

more

stick

-

compensation

(2) to promote the team effort
and cooperative spirit so vital to
successful prosecution of the war

on

the

yard

those

•

.

somewhat

If the purpose of these regulations
be to require disclosure of whether

the

ahead?

.

v
Naturally, billions of the 2V2s will be on the lists this week,
meaning hundreds of thousands of investors will be acutely inter¬
ested in their price movements from now on.
But the 2s still
will be the major trading issue.
Because the banks can buy

some

be

find that the Commission has

selected

formed

1

...

To
we

ters, on the other—always having
due regard to the desirability of
keeping security holders, actual
and
prospective, reasonably in¬

.

course.

efftfrf

war

problems of

post-war period, on the one
hand, and to obviate the neces¬
sity of their devoting those ener¬
gies to relatively unessential mat¬

,

It might even have been
engineered—to get some cheap bonds .... But enough said on that....
The last issue of 2s of 1955/51, as of this day selling at 100.13
to 100.15, reached 101 before this drive was initiated. ...
This issue of 2s is slightly shorter—1953/51—-should hit the same
mark.
Before rumors of the next financing enter the picture,
...

.

.

the

enormous

the

The minor setback in the market earlier this week was entirely

technical, according to best opinion

energies to

mum

get up to % or even higher

holidays start coming in to confuse

admitted Edward,C. Anderson
and
James H. Scott to

rteht

the

these.

before
.

.

.

the

drive

started

of

112.

.

.

..

There's

real

money;

in

firm.

partnership in.

In

the

past

partners in the firm.

both

were'

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4220

Volume 158

Active

1501!
/>/////////tit / / / // / tj / //tit1 tit ittit it titti tj //// /.t / it / / / tit

Trading Markets in

Preferred

General Gas & Electric $5 Prior

Preferred

Massachusetts Utilities Associates 5%

Peoples Light & Power $3 Preferred
Public Service of Indiana Common
^

-

:'r-•V: >/••

•'

<'•:

V.': .**• • 'i/,?;V.v-r»'.

-l;'V'..--:

% '-v* "•'•'n'

*

Laurence M. Marks & Co.
Exchange

Members New York Stock

New York

Street, New York 5,

49 Wall

Teletype N.Y. 1-344

Telephone HAnover 2-9500

Public Utility

Securities
American

(indirectly affiliated with North

Illinois Iowa Power

October 10,1818

Preferred

Illinois Iowa Power

1937, at which time the present $2.50
-preferred stock together with the dividend arrears certificates
(representing the $24 unpaid dividends) and some common stock
were given to the old preferred stockholders.
Due to litigation by
some of these stockholders, dividends on the new issue were omitted

-isystem) was recapitalized .in

for several years,

$2.40

share on the preferred
This is on the assumption

the

though the $24 face value of the
certificates has been set up in the
balance sheet, as an

item in "paid

in surplus."
amounts

dollar

In

have

certificates

current

the

while

$4,061,400

are

arrears

the

face value of

a

$11,596,680, the total amounting to
$15,658,080.
An analysis of the

possibility of settlement of these
arrears raises a number of ques¬

the

that

coupon

issue

funding

rate

property

railroad

the

would, of course, be helpful in
present program, permitting
a
further debt reduction, but as

the

While

Accordingly, the prob¬

Railroad.

is to scale down the funded

lem

refund the bonds at lower
rates, dispose of the rail¬
and terminal
properties if

debt,

coupon

road

private enterprise. It

preferred

/

stock and certificates.

in relation to a possible
sale price, no
immediate action
seems likely.
An attempt to work
out a deal with the Burlington a

letters of credit and in

period,

As

the

first

step

in this over¬

the company recently
sold
its
utility subsidiary, Des
Moines Electric Light Co., to the
United Light & Power system for
approximately $16,000,000.
This
money is now being-used to reTire the $15,834,400 refunding 5V2s
of 1954.
The company recently

use

of dollar

failed.

This bank

potential source
be used either
to reduce debt, or to help clear
up
dividend arrears.
The com¬
pany has sued its parent, North
American
Light & Power, for
some
$20,000,000 or more, claim¬

is

a

private, bank. Our depositors represent

the

SEC

company

can

the bank's

with

We believe
has

promise

be

can

been

worked

that

rumors
some

from

but

Today,

to

reaffirm

nothing tangible has emerged

will

be

enterprise.

representative form of government which

guaranteed freedom for all to

on our one

secure

as

principles of democracy and free enter¬

we

look forward.

further

strengthened if a refunding pro¬
can be consummated and a
Moreau D. Brown

faster pace could be set in
off arrears.
The position

paying
of the
hinge largely

made

issues

The

to

be

re¬

a

toward

Thatcher M. Brown
Prescott S. Bush

Louis Curtis

paying off the

W. A. Harriman

cer¬

tificates.
If

an

with

advantageous

North

Light

Ray Morris
Knight Woolley

settlement

American

1

E. R. Harriman

if the refunding is
beginning could be
v

interest might be

savings in

-effected.

with SEC ap¬

we

gram

likely, substan¬

seems

and keep safe

hundred and twenty-fifth anniversary,

faith in the

our

Aimed with this faith

Summarizing, the position of the
stock

capital along with

accommodating the

prise which have guided this country throughout its history.

thus far.

preferred

own

the task of

to

out
time

is being
settlement,

a

in the

to

the fruits of their labor.

progress

effected toward such

resources

always upheld mutual trust between its citizens and which,

under law, has

triangular settlement may be de¬
layed for some time unless a com¬

have

other

financial needs of sound

together
various security interests, the

successful)

refunding

the

be worked out

proval,
tial

that

large

of able Americans, individuals and corporations. The

address their efforts and their

partners

involved,

are

years,

to Illinois Power Co.

Assuming

a

of funds which might

-solicit proxies for a

name

acceptances to

.

permission
to certificates
seems to
stockholders' on a settlement of current liti¬
meeting Nov. 1, at which time a
gation, although with preferred
refunding program would be pro¬
dividends disposed of (perhaps in
posed, together with a change in several
SEC

requested

country.

early development of commercial

establishing the

finance world trade.

There is another

time

all program,

independence of this

instrumental in organizing the first

was

American railroad. It led in the

reach a settlement satisfy all parties involved. There

and

possible,

with the holders of the

Napoleonic Wars

its partners, has always been active in fostering

is showing substan¬
tial earnings during the wartime
company

year or so ago

this

years ago,

turning point in world history anA the War of 1812

a

founders among

finance.
company's earnings
have been good, preferred divid¬
ing mismanagement some years
end
requirements being earned ago.
North American Light &
nearly-2V2 times in 1942, and the Power is being dissolved under
cash position is better than aver¬ SEC orders but the question of
age, the company is over-bonded,1 subordinating
North
American
largely due to its unfortunate in¬ Co.'s interest has delayed a settle¬
vestment in the Illinois Terminal
ment.
Since both the Courts and
tions in utility

founded. The end of the

This bank, which still includes direct descendants of the

^

of

Sale

hundred and twenty-five

one

was

had established the commercial

approximate

can

day,

the re¬

on

4%.

preferred would outrank the ar¬
on
the "old" preferred al¬ the

rears

v

had marked

per

stock.

this

firm's business

and while extra^

payments were made in 1941-42,
arrears amount to $8.40.
The pre¬
ferred is currently selling at 41%
on the Curb and the certificates at
9.
A combined unit of the two
therefore returns about 5% and
has a claim on about $32 arrears.
Presumably arrears on the "new"

•

On

&

aggregate about $77,000,- Power (or in effect North Amer¬
(including
a
small
issue ican Co.) should be worked out,

funded
000

-

which

gether
tures.

matures

with

this

year,

$6,000,000

A -savings

*•

to¬

deben¬

of- 1%

points in interest would amount
to about $1,159,000, equivalent to

this

might

tenders

of

presumably
chase at

permit
the

would

some

a

request

certificates

for

Brown Brothers Harriman

which

require

&

Co.

pur¬

PRIVATE BANKERS

level above the pre-

'

BOSTON

NEW YORK

*

PHILADELPHIA

Consolidated Natural Gas Co.
COMMON
0/////////////////////////////////////////////////////

Bought— Sold

—

Quoted

vailing

However,

market.

thus

Paul Linz to Be Partner
Paul Linz will become

far North American Co. has shown
little inclination to cooperate

Paine, Webber, Jackson & Curtis
established




with

maintains

that

since

it

the

SEC

the

Commission has

jurisdic¬

no

1879

tion to

claims.

adjudicate the Illinois-Iowa
,

,

,

,

\

,

,

a

61

Broadway,

New

Wm. Kelleher Opens

partner

in Carl M. Loeb, Rhoades

York

& Co.,

City,

members of the New York Stock

Exchange and other leading ex¬
changes. In the past Mr. Linz was
a partner in the firm.

SPOKANE,

WASH.

—

William

Kelleher has opened offices in the
Paulsen Building

to deal in gen¬

eral securities, specializing in lociu
and

Pacific Coast issues.

1502

The Securities Salesmanfs Comet
INVESTMENT TRUST

Have

You

Ever

Met

This

Fellow?

Prospectus on request
Some salesmen appear to possess all that anyone
order to become a top-notch success. Yet despite

AMERICAN

would need in
tfyese surface indica¬

tions of superior sales
We have in mind

Established, growing, Eastern
fund

investment'

Co.

Lord, Abbett &
incorporated

sentative

regarding
qualifications to C. M.,
Doremus & Company, Ad¬
vertising, 50 Congress St.,

investors

is

today

of decline in

GROUPS"

the

Ask your
for

a

dollar during
wartime and post-war periods.
ing

power

before he
this

;

or

World

it

War

DISTRIBUTORS
GROUP,
63

down

is

48

to

in

cents

matic

terms

Another

the
this

highly significant fact

by the chart is that for

first

time .in

nation

exceeded

Tool

history

the

debt

Federal

our

of
has

annual national in¬

our

Machinery Indus¬
Series during the month.
monthly report to share¬
holders of Manhattan Bond Fund,

Long,

that

President,

the

one."

World

national

War,

first

the

income

$70 billion and Federal debt

was

billion.

$3

was

Today national

Treasury 2s, 1951-53.
Wi%
Treasury Notes,

series B,
held by the

already

were

and

S150

billion

debt

Federal

our

with

the

prospect

of mounting to $300 billion be¬

fore the

is

war

over.

folder
which
of

"meat."

folder

American

on

Shares,

"A

Common

Own Your

Business

Way

Sense

Share in American

Industry
and full

Accompanying
this
attractive, pocket-size
same
Fund giving
portfolio information and outlook

achieve¬

for the individual issues held.

of

ment

present

the

railroads

position

increase
from

come

in

1939

of

in¬

$100 million
$900 million in
time the ratio

to operating
reduced from 76.4%

to 62.3%.

Another chart compares
performance of the Railroad

the

Series
with
from

of

New

1943.

In

that

and

the

York

The

period

Average

Railroad

Stocks

various

Lord, Abbett pub¬

include

"Composite
Affiliated
Fund,

was

the

was up

Series
up

investment

Dow-

a

of

New

portfolio

Funds;

UBC;

on

a

Union
"A

a

UBA entitled,

on

fication
and

Bonds";

Among Better
descriptive folder

a

UBA.

on

National
search

the

sent

dealers

and

Re¬

following

under

date

telegraphic inquiry from
dealers has asked

our

with

two

(1) "Do

to

slightly above
the indicated buying range.
Tied
issue

any

or are

low yield securities.

"Do

any

we

such

(1) " 'We

program

direct

to

Keynotes
of

the

some

of

our

aforementioned

BOSTON




"Should

the

Keystone

later

issue

28-year

a

bonds

why

stocks

are

and

new

are

priced

Price
The

bond funds.

offer

to

shareholders

be

any

(

there

further

in respect

to

in

real

behind

high-grade equities is

the

or

the

over

recog¬

day,
to

other

Incomes

last

earnings

they

obtain

if

two

naturally

the

have

higher return

At

nized that
bonds
is

it

time

at

recog¬

*

❖

definitely

fixed,

would

price inflation, by

any

way

be

Railroad

sion

a

latest

in

of

be

there

of competition,

plenty

the

will

News

page report on

an

excellent

two-

"The Railroad Sit¬

Today." It is crammed full
figures supporting the
opinion of the Investment Man¬
agement Department of Distrib¬
utors
Group that discount rail
of facts and

bonds

as a group

better values

are

at their 1939

were

1st

Boston

&

ings of the Fund in
of

"What

These

lows:

Is

Days."

a

Good

were-

Purchases

changes
as

fol¬

BigelowSanford, Cerro de Pasco, Ohio Oil,
—

offering.

Versus

Rails

in touch

are

from

witf

investing

time

to

time

insurance companies

this

section

world

is

a

of

the

in¬

cool

bit

to¬

highest grades of utility isat

sues

the

Most

l%s, 1951; Youngstown Sheet
conv.
deb. 4s, 1948.
Re¬

moment.

and

power

,

.

light

.

issues

brought out since the turn of the
have carried low
coupons,

year

L/ 4s,

and since their
appearance have

1997; Engineers Public Ser¬
vice $5.50 cum. pfd.; United Air¬
craft 5% cum. conv. pfd.

been subject to price
appreciation

-

•

MIT's Brevits quotes the De-

partment of Commerce estimate
that

liquid savings

uals

in

individ¬
three-year period-

the

will

be

of

substantially

larger than the total income of
individuals in the best pre-war
year,

1

yield

S;i

>!«

which
in

has

great

below the 3%

dropped

many

imum return.

the

instances

level which such

buyers still adhere to

J

as

a

min¬

j

-

Consequently there is

a

dispo¬

sition in such quarters
now, deal¬
ers

1929.

discussion

Investment

ward

Tube

.

a

Portfolio

September

New

attractive

an

folder which includes

siz¬

despite

ductions—Northern Pacific Ry. P.

1942-1944

George Putnam Fund has pub¬
lished the Oct. 1 investment hold¬

that

England

4s, 1960; Phillips Petroleum conv.
deb.

the

as

vestment

EliminationsMaine RR. (1st "RR")

&

th(

posses¬

several

operations of large

such

1945.

5s,

in

syndicates

organizations

where

Additions

—Union Pacific and New
RR.

when

the limited size of its

further

Competition

indications

o:

condition;

itself

tenders from

Dealers who

all

of

stock.

were

yesterday
found

Utilities

Plenty

shares

of market

appreciation.

From

touches

spirit which prevail;

banking

find

of

is

issue

of

able

V

featuring the
Group Securities,
group which is 100% in¬

Shares

20,000

preferred

moment,

which the rate of return

on

Public Service of N. J.

its

the

company

stocks, unlike

common

position to discount

a

is

final

surrounding the bidding for these
securities

same

op¬

quar¬

Indicative of the high degree

even

the

the

and

competitive

must

a

putting

cumulative

pinch

steady

element of safety

some

all

closing

their

bonds

be sacrificed.

the

attractive

are

to

feeling

after

bids to be submitted
the Atlanta Gas Light Co.'s
$7,500,000
of
first
mortgage

bolster

to

seeking

for

Those who depend upon their

investment

there

Some of the buying and sell¬
department
heads
among
Street firms were on the
job
Tuesday despite the bank holi¬

three years.

dollar

for sale.

up

ing

the

as
an
outgrowth of the
sharp fall in the purchasing power

of

come

ter of the year.

Stocks

force

vi;

was

portunities in the

investments at current prices.

during

information' desired

a

financing.

Inflation,

driving

sold

are

clearly indicated by
the activity
among officials of
underwriting firms who will be

obligations, which
right, will encounter

market for debt

works

This

senior

ample demand to provide

chart

lists

not contemplating

our

the

of

lows!

(2) " 'Furthermore,
we
would
not,
under
any
circumstances,
make' any

shows

discount

today than they

bonds in either of

direct.'

A

an

describing the
common

through

Funds.

is

uation

or'working on any plans of put¬
ting Governments or low yield

PARKER CORPORATION

Keynotes

folder

vested in discount rail bonds. The

contemplate offer¬

the belief that

from

the

in quick succession three issues of

dealer:

ONE COURT ST.,

of

with

various classes of

Inc.,

wire

The

in

fol¬

dealers may have this same ques¬
tion
in
mind, we quote below
from our telegraphic reply to the

or

that

securities

new

I the auction method, as in the eas<
of
utilities, as new issues now ir

(Continued from page 1487)

present

the Average is only

Rail

upon

At

.

the

Reporter's
Report

nized

an¬

funds:

contemplate,

we

working

"In

dealers,

Our

reported leaning of investors to¬

Distributors Group has released

bond

our

them.

a

conscious effort to be brief and concise-

a

Average showing in color the fa¬
miliar "Buying Range" and "Sell¬
ing Range" parallel bars with the
Average line fluctuating back and
between

In the

subject instead
of the most positive ways to

one

and in consequence are seeking

changes in

we

ing

authorized

to

questions

important

respect

the

one

Talking around

overcoming this handicap.
There is an old adage "Silence Is Golden."
For the fellow who
talks too much—or just talks because he
enjoys doing so it's a prettv
good rule to follow.
'

been

forth

hold any person back.

can

invented.

ever

better choice of words and

long-term

a

was

chart of the Dow-Jones Industrial

of

1943:

shareholders.

from

last

solution

its

story is built around

reasons

"A
of

to

5,

(2)

obtained

for

after the

real

.

will aid in

little folder entitled, "A Guide to
Common Stock Investment." The

Stock

Securities

Corp.

letter

Oct.

or

may be

only

for- another half hour."

me

will

bell-ringing, quickimpression sales pieces. This time
it's a simple and most attractive

these bond funds into Government

Prospectus

of

available

New

York Stocks as of Oct. 1,
1943, reveals that Chicago Pneu-

is

there

and

than

war

The

other

Way to Secure Thorough Diversi¬

lowing
of

Trusteed

folder

Dealer letter

57.0%

144.5%.

of

Union

revised

York

Stocks, Inc.
the Dow-Jones Rail Average
May 21, 1940, to Aug. 15,

Jones Rail

lications

American Business Shares and the

net

expense

was

the

railroad

in

over

operating

revenue

in

an

on

Other recent

their

less than

to

folder

Summary"

At the same

1942.

and

outlined

are

piece is

One chart shows

text and charts.

the

record

The

output

our

Keystone Corp. is out with

.

Railroad

both

only 4,demobilized.

a new

attractive

the

on

is

pur¬

were

purposes

corners

order that

an

ward

Lord, Abbett has released

to

a new

war

minimum of financial restraint.

Business."

Hugh W. Long & Co. has

national

our

permit private business to get into
production
with
a

Fund.

is

an

study of other people, better timing of what you have to
say, giving
thought and study to what you are going to say before you
say it

peace-time

income is estimated at $146 bil¬
lion

last

problem, according to the
discussion, will be in a realistic
overhauling of Federal taxes to

S.
A block of

1946,

the

this

chased $200,000 par value of U.

entered

we

In

be

to

of

50%

after this

pur¬

,

Before

call

Eventually this unfortunate tendency becomes a habit. Once it
attaches itself to its victim it is difficult to break.
Sometimes those
who have this weakness are unaware of their
failing. More careful

"The
potential unemployment
problem,
therefore,"
states
the
article, "will be much more severe

an¬

has

Fund

issue of

lose

be about 11,000,000 men to demo¬
bilize after the war.

In his

W.

Unem¬

elim¬

was

inated from the

Hugh

there

men

military

york

try

nounces
come.

common

7

devoted to

and

Now

Incorporated

street -new

the October

was

poses

of

what it would buy in 1939.

revealed

wall

cents; at present it

73

worth

in

000,000

went

He's what you

4

He's

selling field it is a fatal drawback.
of straight into the heart of
it, is

■

and

Taxes

is* drawn.
only 25% of

output

Civil War the
dollar declined to 44 cents; in

visit.

It is this one weakness that

very

s;<.'

■■

prospects

write to

war

in terms of living costs declined

be

Investment Timing. A sombre pic¬
ture of post-war
unemployment

to 51 cents; in the

first

should

we

ployment" is the title of the dis¬

In the War of 1812 the dollar

the

matter

"Post-War

of this booklet—

the

of

specialty of it.
,

likes to

always got a story. If you are busy, if
there is something important on your
mind, he'll barge right in"and
start to tell you a long involved tale about
something in which you
have not the slightest interest.
He's the type of fellow nobody dis¬

glad to hear from you."

Investment Dealer

copy

a

likes, he's not offensive, he's just the kind, when you see him coming
say to yourself, "here he comes again; I'd better
get out of here

cussion

the purchas¬

makes

you

Income,

for

He

strict confidence.

#

Price Infla¬
tion, Federal Debt, and Business
Activity are all graphically por¬
trayed in this chart. Most signif¬

fellow

"ear-bender."

9, Massachusetts.
replies will be held in

All

"UNDERVALUED

and General Investors Trust..

icant

much—this

Boston

And how!

investmeht literature received
this week is a colorful and highly informative chart showing business
booms and depressions since 1775»
r-r.
y\
This
three-and-a-half-foot chart;
is published by A. W. Smith & Co.,
sponsors
of New England Fund

record

being at the top of the sales organization he is at the bottom.
Unfortunately he has one great fault and he doesn't realize it.
He doesn't know that he, bores people.
He talks too much. Or he
talks about the wrong things at the
wrong time. Or if he talks about
the right things he does so at the
wrong time.
Most of us talk too

information

full

well as in

as

He is very neat and wears his

the unfortunate fact remains that this salesman
barely earns a living.
The only thing that keeps him going is perseverance. Instead of his

your

One of the many striking pieces of

National

Client

Please reply in writing with

investment company sponsors with respect
to their own offerings while they were busy doing their part in the
Third War Loan Drive has given way to a renewed burst of effort.
the job.

exper¬

ment.

The lull in activity of

He is in his middle forties.

clothes well. He is earnest and is a persistent worker. He follows
through and is consistent in whatever he undertakes to accomplish.
He has a strong sense of moral and intellectual
honesty. So far pretty
good—would you not agree?
With all.these good points, plus a
knowledge of what he is selling,

states.

essential.

not

business.

prefers man not over 45 with
sales
training in. investment
field, who wishes to make a
new,
permanent
connection.
Salary plus bonus arrange¬

Back To Business

on

Eastern

-reach the top.

never

intelligent and has had considerable experience in life

assets

repre¬

wholesaling

ience

EOS ANGELES

JERSEY CITY

Investment Tresis

They're back

for

Previous

63 Wall Street, New York
CHICAGO

with

#5,900,000 desires

over

ability they

a
fellow who fits this description perfectly.
distinguished looking. He is friendly, jovial, poised,

He is tall, almost

report,

to

toward some

look
of the

more

kindly

more

attrac¬

of interest tive. ralroad liens where
frequently
folder, on the
maturity is shorter and th(
aviation stocks and Selected In¬
rate of return a good deal
more tc
vestment
Co.'s bulletin
on
the
"Four Freedoms of Investment." the liking of potential buyers.
Two additional items

are

Hare's

Ltd.'s

new

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4220

158

1503

Reduction In Taxes To Stimulate

Royal Bank of Scotland
HEAD

OFFICE—Edinburgh

Branches

Declares

INSURANCE

Is Committed To Take

Business

throughout Scotland

Initiative In

LONDON OFFICES:
3

Burlington Gardens, IV. I
64 New Bond Street, IV.

income

ley

Smilhfield, E. C. I

Charing Cross, S. IV. I
I

views

tax

expressed

plan,

Founders

Steel

the

before

£108,171,956

Associated Banks:

"Why not leave at home for ex¬
penditure by the individual, in¬

Williams

that

come

Deacon's

Bank,

Ltd.

Glyn Mills & Co.

from

bank of

New

south wales

(ESTABLISHED

Paid-Up

Capital

1817)

—-

£8,780,000

-

Reserve

Fund

Reserve

Liability of Prop.

6,150,000

_

8,780,000
£23,710,000

30th
.£150,939,354

Assets
1941

Aggregate

Sept.,

ALFRED

SIR

DAVIDSON, K.B.E.,

General

Head Office:

public works program as
a
general support for high em¬
ployment. The most we can ex¬
pect, and this is no small gain, is
that public works can be planned

Manager

George Street, SYDNEY

undertaken in such

construction

the oldest

The Bank of New South Wales Is

With over

branches

in

of Australia,

all States

in

Zealand, Fiji, Papua and New Guinea,

pnd

London,

and

efficient

offers the

it

and

traders

complete

most

banking service

investors,

to

interested

travellers

theas

in

countries.

OFFICES:

LONDON

Threadneedle Street,

29

E.

own

47

Berkeley Square, W. 1

Agency

arrangements

of the

in

industry

the

dustry itself

in¬

construction

great

a

would

deal

have been accomplished."
The foregoing is from the New
York "Times," which further re¬

Ruml's

Mr.

follows:

remarks

as

"Mr.

Ruml

that
that the
.elimination
of
mass
unemploy¬
ment is the first requirement for
the post-war period, and declared
that business is definitely commit¬
most business

the

take

to

pointed

men

out

agree

initiative

and

do

'Many will go
unless

so

mass

far as to agree
unemployment

be eliminated under a system
private business enterprise, pri¬
vate business enterprise will be
supplanted by some other arrange¬
ment for the production of goods
can

Office

Head

Cairo

1

FUND

.

.

.

.

.

asserted

that

it

would

transition

£3,000,000

employment

£3,000,000

employment

from

full

wartime

to
high peacetime
without cooperation

from Government at every
r

LONDON
and

7

AGENCY

Branches

In

all

C.

E.

and

the

"

Tn

addition,

and Government

SUDAN

require

we

in the attack

success

the

principal Towns in
EGYPT

level,

Federal, State and local.

William Street,

King

be

folly to expect business to make
the

FULLY PAID CAPITAL
RESERVE

services,'he said.

"He

Cairo

Register No.

:

for

by business

the

danger of
he said, 'a
the part of Gov¬
on

unemployment,'

mass

commitment

tion

to

made

Companies of the elec¬

the

the

been

Executive Committee

Association

of

Hugh

B.

(New

York), President,
Blue Ridge Corporation; Edward
C. Johnson, 2nd (Boston), VicePresident and
Treasurer, Incor¬
porated Investors; Hugh W. Long
(Jersey City), President, Manhat¬
Bond

than

to

Kenya

Government

Fund,

Inc.;

and Jona¬

(Los Angeles),
President, The Investment Com¬
pany of America. These men were

ia

'

India, Burma, Ceylon, Kenya
Colony and Aden and Zanzibar *

>■

Subscribed

Capital.—.-£4,000,000
Paid-Up Capital—_-.-£2,000,000
Reserve Fund
£2,200,000

"

,

The

Bank

conducts

every

description

of

banking and exchange business

Trusteeships

and

warned

that

business

may

regard¬
ing the fiscal and monetary policy.
Tt may be apprehensive, not
"

will be hostile

indifferent,
but that, unless the preparatory
organizational work is done now,
the

Executorships

Federal

or even

Government will

be

helpless in executing even the
most
elementary
collaborating
program,' he said.

also undertaken

Colo.-Southern Looks Good
The 41.2 s of 1980 of Colorado &

Southern offer

an

attractive situa¬

tion at the present

time according
to an interesting memorandum is¬
sued by Hicks & Price, 231 South

three year term commencing
tober 1, 1943.

Oc¬

continuing

the

Committee

to

serve

O.

are

Kelley

Investment Trust; George M.

Gil¬

lies, Jr., President, The Adams
Express Company; Merrill Griswold,
Chairman,
Massachusetts
Investors
Trust; James H. Orr,
President, Railway and Light Se¬
curities
Company;
Cyril J.
C.

Tri-Continental Corporation; S. L. Sh©lley, President, Keystone Custo¬
dian Funds, Inc.; Hardwick Stires,
Vice-President, Scudder, Stevens
& Clark Fund, Inc.; Richard Wag¬
President, The Chicago Cor¬

ner,

poration; and Paul Bartholet, Ex¬
ecutive Director of the Associa¬
tion.

"

post-war

period

make the maximum business

upon

Chicago Stock Ex¬

Copies of this memoran¬
may be had from the firm

sustained

fers

named them

Rapid Transit Co.

interesting

possibilities

of¬
ac¬

cording to a late brochure issued

by Leason & Co., Inc., 39

South La

Salle Street,, Chicago, 111.
of

this

Copies

the company ,011 .request.

,

'high employment
and high production,
maximum
activity of private enterprise and

will

Associa¬

the

itself

concern

with

all

genreal interest to the
investment company business, in¬

cluding questions of public policy.
To

date, the Association's efforts

have

In Table

shown

the

of

spective

tribute
stable

to

a

more

efficient

construction

minimum

protection

\

improvement

of

life

and,

in

the

t

and

industry,
against

finally,

a

the
an

operations

31, 1942 and

BANK

Quarter ended September 30

re¬

market

ap¬

Available upon request

Stocks marked

preciation of each.
with

asterisk

an

those

which

&

are

Poor's

Standard

Laird, Bissell & Meeds

t h

m 0 n

of

Investment

Com¬

companies

120

assets of

approxi¬
half dollars,

a billion and a
and includes substantially

mately

all ac¬

companies

management

in

the field.

The Treasury

Hailed

Department's

United

and

gain,

States

with

6.6%,

cfc

pro¬

de

Lisboa, said the Asso¬
ciated Press, which reported:

Table

active

13

same

sponding

percent

ciation of each.
show

two dates

the

Casualty leading
ciation

of

with

68.8%,

just

as

dreadful

and

dangerous if victory should serve
only, to give satisfaction to pluto¬

appetites."

&

C.

&

S.

'New

appre¬

-U.

68.8

74%

9.2
29.7

23 Vb

30

40%

51%

16.4

•

44%

—_

58%
&

,

55'%

V

68%

24.5

17.3

40%

31%

Guar.

.

Aetna

Average

the

Stocks marked with
which

those

28.4

comprise

21.5%

Standard

of interest to compare

now

action

market

with

the

of

insurance

general

market,

PERCENT MARKET APPRECIATION

an as¬

12-31-42 to 9-30-43

%

-

Fire

Cas¬

Weekly

ualty Insurance Stock Index.

(average of 35)
(S. & P. Index)

Dow
Dow

INSURANCE STOCKS

FIRE

PerCent
Market Price

Appre-

ciation

(asked)
12-31-42 9-30-43

Aetna.

Am.

51 %

58'%

13.1

69%

Alliance

79'/a

14.4

25%

19.5

21

20.0

17%

Equitable
Insurance

-Am.

14%

_w

Camden

—_

17.6

23.9

16%

_

44%

50

Association—;

54%

73%

35.5

75%

91 Va

14%

42.7

28%

31%

38%

45%

16.8

8%

10%

24.6

Fund
Ins.

~~

Franklin
Glens

Falls
&

—,—

Republic.

American

"Great

-

.

27%

__

24%

—_

93

w—---1—

'•Home

stock

index

has

appre¬

"North.River

33%

86%

8%

15%

25%

Fire

Laird,

49%

comprise

Insurance

Bissell

&

Meeds,

120

bers of the New York Stock Ex¬

7.6

314

39%

133

52'%

change, have prepared an inter¬

17.2

esting

7.0

6.8

Stock

analytical

New York City
the quarter

Standard
Index,

comparison

of

Bank Stocks for

6.6

16,8'

stocks

to

Broadway, New York City, mem¬

19.6

Average.
18

have

Compared For 3rd Quarter

9.0

92%
39%

37%;
"Sprirfg field F, & M. 124%

"These

would

New York Bank Stocks

25.7

33%

Fire

and

18.2

Paul F. & M.__ 268

States

than double in value to ap¬

13.6

50%

Security
"United

highs,

proach their 1929 highs.

18.3

3«'a

86

Washington—

1936

14.2

23Va

_r

"Phoenix

Insurance

reached their

11.2

64'%

12%

——

43.3%.

more

20.9

51

7%
30%

-

■

index,

stocks have not yet

casualty

the

9.7

42%

Liberty

stock

22.8

56%

"National

and

13.1

30 %

39.5%,

14.5

—45%

Fire

Brunswick

31%
102

71%

A.._

Fire

"National

Poor's

fire

ciated

10.0

29%

—_

of N.

Co.

Merchant's

Prev.

The forward

their

21.6

10%

the

13.0

'

N. Y
''Fidelity-Phoenix

City of

"St.

12.4

49%

of

stocks, how¬
ever, began from the 1942 mar¬
ket low, and not on Dec. 31, 1942;
measuring from the actual low
of the market on April 28, 1942,

19.0

20 3'4

17.4
22.4

Apparently the market is plac¬
ing a favorable appraisal 011 the
outlook fox the fire and casualty
movement

24.7

22%

Jones Industrial Averages.
Jones Composite Averages

insurance business.

9.4

8%
89 Va

42

-Continental/

New

16

7%

Shippers

Bankers &

.

71%
20%

Am.

Balitmore

"Ins;

%

—21 V«

;

Agricultural

16.8
14.9

Casualty Ins,'Stocks (average of 13)- 21v5
Casualty Ins. Stocks (S. & P. Index)- 13.7

I

TABLE

Insurance Stocks

Fire Insurance Stocks

Poor's

&

&

Insurance Stock Index,

summarized below;—

is

comprise

stocks

9

Casualty

It is

ap¬

stocks

13

'

"These

Poor's

appre¬

as

Standard

■,

26.2

16%

Cas..._

Acc.

stocks

are

7.3

6%

Average

Maryland
an

and

appreciation.

terisk

14.8

47%

14 %

Fid.

4.9%

21.5%.

147

68%

Ind.

the

of

17.2

4

Bond
Amst.

S.

43%.

44'%

B._..:

Acc.

Stand.

14.4

128

Dep
Cas.

Pacific

4.9

61%

37

Maryland
"'Mass.

%

149%

54

^

Cas.

"Cont.

are

142%

S._

Surety

Casualty and Surety trailing with

preciation

Appreciation

12-31-429-30-43

.

corre¬ 'Seaboard Surety

market

substantial gain,

a

powerful, rich nation, full of
generosity and capable of large"Peace would be an¬

"Am.

.

Again, all stocks

Hampshire

realize,"

'-Aetna

"Fid.

shown, together with

York Fire..

cratic

of

appreciation

"Pref.

New

could

STOCKS

(asked)

casualty and surety

stocks for the

New

initiative,

■;

Market Price

II, the market prices

colossal effort that only

a

II

SURETY

42.7%,

"Hartford

of

&

the least

Fire

average

Hanover

gal, on Oct. 8 by the newspaper

TABLE
CASUALTY

the group is 16.8%.
In

"Hartford

war

of

appreciation

an

The

Globe

$10,000,000,000 world,
reconstruction
welcomed in Lisbon, Portu¬

other

Insurance

Stock—

bank for post-war

a

Teletype—NY 1-1248-49
Trading Department'

A. Gibbs, Manager

nine

past

Firemen's

appreciation

an

posal for a

"It is

Exchange

Percent

with

-Fire

World Bank Plan

Bell
L.

(Newark) shows the largest gain,

Am.

comprises

with combined

was

the

over

s.

Stock-

Association

Stock

York

BROADWAY, NEW YORK 5, N. Y.
Telephone: BArclay 7-3500

of the 35 stocks has advanced

appreciably

*

of the National

The membership

New

Members
120

It will be noted that every

dex,

STOCKS

as

and also the

percentage

Investment

laws.

Diario said.

con¬

of Dec.

as

of Sept. 30, 1943,

Company Act and State securities

icy,

public-works plan to

NEW YORK CITY

I, the market prices of

confined

ministration

scale

a

Analytical Comparison

35 active fire insurance stocks are

primarily to
regulatory
and other
problems
arising in Connection with the ad¬
been

effective compensatory fiscal pol¬

hazards




Henceforth

matters of

as

sent by

brochure will be

recent

Diario

at'

Situation Of Interest
Chicago

employment.;

"He outlined the goals 'to shoot
for the post-war period and

Chicago Rapid Transit
1

con¬

tribution to high employment and

request.

By

vi

ac-^

1942, up to and including the
day of the third quarter of

■Firemen's

the

market

1943.

''Fireman's

in

the

last

for discharging

dum

New York and

of

this special responsibility of busi¬
ness

in

tion of their stocks since the close

Vice-Presidept,

Quinn,

first and single job.
He said the
Committee is a business man's or¬
up

and

on

Anderson, President, Consolidated

tive

changes.

of the

Street, members

manifested

one

Those

panies

ganization set

fire

Weekly Fire Insurance Stock In¬

"Mr. Ruml explained that the
Committee for Economic Develop¬
ment has taken the peacetime ex¬
pansion of private business as its

'through the expansion and stim¬
ulation of business activity on a
strictly sound business basis to

Salle

-La

7008

pointed out in

was

loting of the Association for The

tion

that through an explicit

that the intentions of Government

In

Enterprise

7008

This Week—Insurance Stocks

comprise

ened.

on

be properly apprehensive

26, Bishopsgate,
London, E. C.

Enterprise

Bank and Insurance Stocks'

elected in the regular annual bal¬

sustain employment and effective

"He

Uganda

Office:

Head

'Branches

the

Colony and

CHICAGO,

SEATTLE

TO

PORTLAND,

fiOll

Lovelace

B.

demand.'

Bankers

AND

FRANCISCO

TELEPHONES

.

Enterprise

BOSTON,

YORK,

as

has

fiscal and monetary policy it will
act when business cannot act to

of INDIA, LIMITED

.

SAN

PROVIDENCE,

As

amendment to the
Association's Charter, to become
effective
October
1,
1943,
the
scope of its activities was broad¬

ernment

NATIONAL BANK

ANGELES,

NEW

vestment

Announcement

tan

•

of

Commercial

CONNECTING:

by the National Association of In¬

Baker

and

■

respectively,

Holds Annual Election

way as

balance

that

of EGYPT

Street

7535

this column on Sept. 16 and Sept. 30
casualty insurance companies reported, in
general, improved operating results for the first half of 1943 com¬
pared with the first half of 1942, also a very substantial growth in
surplus.
This week it is of interest to note how the market ap¬
praises the situation of representative fire and casualty companies,

"

NATIONAL BANK

LOS

HARTFORD,.

'

Investment Cos, Ass'n

its part in creating post-war jobs.

A.

Salle

La

FRanklin

By E. A. VAN DEUSEN

of

with Banks

U. S.

throughout the

S.

135

Square

0650

CG-105

SYSTEM

LOUIS,

needs that modern

'
s

•S./'■'

■

service, he said. He declared that
Congress has not made the provi¬

throughout
the year and year after year.
If
we could only achieve reasonable

ted

C.

a

activities

the

out

even

ported
and largest bank in Australasia.

Chicago 3

f)

Office

a

and
to

WIRE

expect too much

not

Past

HUBbard

"Congress should be encouraged
provide itself with more ade¬
quate technical and professional

times require."

again in order
high employment?

Boston
10

3-0782

to

sion for its'

"We must

5

Street

NY 1-2875
PRIVATE
ST.

maintain

to

Australia and New Zealand

would have

otherwise

Wall

WHitehall

and provisions of our representa¬
tive legislative process.'

be pumped out

to

67

.

his$>-

Society of America at the Wal¬
dorf-Astoria Hotel, and in his ad¬
dress. said:

TOTAL ASSETS

8

New York

Huml, Chairman of the Federal Reserve Bank of New York,
asserted on Oct. 11 that the stimulus to purchasing power, when
needed, may well come through reduction of taxes.
Mr. Ruml,
Treasurer of R. H. Macy & Co., and author of the pay-as-you-go

49

New

Huff, Geyer & Hecht

combat mass unemployment in the post-war period, Beards-

gram to

STOCKS

Creating Jobs

Advocating reduction of taxes rather than a public works pro¬

Bishopsgate, E. C. 2

8 IVest

470

PRIMARY MARKETS IN

Purchasing Power After War Urged By Rural

Incorporated by Royal Charter 1727

&

of

this

ended Sept. 30. Copies

comparison

may

be had

from the firm upon "request.

•

1504

THE COMMERCIAL & FINANCIAL CHRONICLE

DIVIDEND NOTICES

COLUMBIA
GAS

&

Canadian

advices
that the Alberta provin¬

suggest

ELECTRIC

press

months.

opening

discussions

with

repre¬

Directors

of

lias

that there will

Cumulative

No.

Cumulative Preferred

No.

share

per

5% Cumulative Preference Stock
No. 47, quarterly,

$1.25

turities

share

per

10^

share

per

It

payable on November 1,5.1943. to holders of
record at close of business October 20, 1943.
October

7,

1943

recalled

was

Yi%

COMPANY

★

33 Pine Street
The

Board

New

what

a

interest

the

in

*

for

York, N. Y.

of

the

1943

Company,

to

payable

stockholders

business

Checks

will

be

16
Wall
St.,
Transfer Agent.
H.

8,

record

18,

New
G.

SMITH,

in

coupon

a

both matured and

matured, having arbitrarirly
the

duced

Treasurer.

contractual

rate

It

DIVIDEND NO. 57
A

dividend

twenty-

($0.25), plus
dividend

extra

an

of

of

fifty cents ($0.50)
share

stock

of

stock

dividend

no

(34)

October

record
the
No

In

of

stock

30,
of

fractional
lieu

holders

of

seven

cents

share

upon

is

each

will

1943

thirtybe paid
on

shown

as

shares

be

issued.

stock¬

dollar

one

and

paid.

not

for

each

dividend

Ottumwa, Iowa. Geo. A. Morrell, Treas.

was true

Evidence of this improved posi¬
tion is seen in the reported refusal
of

the

Dominion

maturity of $400,000 in

a

provincial treasury bills that
due

came

to

government

on

shares,

($1.07) in cash
which a stock

favorable than

more

in 1941.

renew

will

receive

ably

a

of

company.

fractional

will

and

share

stockholders

to

15,

the

for

per

capital

Co.,

(1)

held,

1943

October

books

&

one

shares

the

on

Morrell

capital

par

four

John

Sept.

on

Dominion

1

government

be¬

last.
The
is said to

hold

$28,000,000 of such obliga¬
tions, representing borrowings by
the province
in the depression
for

years

unemployment

relief

Up

IflSD Fines .Case To Be

to

Sept. 1, the Dominion

has always renewed this debt

it matured, at

Heard By SEC Och 21
Oral

argument

briefs

on

regard to the Sept. 1 maturity,
however, Finance Minister IIs-

sub¬

and

by

tional

the counsel for
Association

of

the

position
rejected

Securities

on

came

$38,000,000 bond

issue

of

Public

Service Co. of Indiana.
The

legality

of price mainte¬
provisions
in
syndicate
agreements has never, it is be¬
nance

lieved, been considered by a court,
the present case being the first
occasion the SEC has had to
sider the question.

The
dealers

NASD

acted

involved

violations

under

in
one

requiring adherance
of

its

members

con¬

against
the
of

its

rules

the

part

"just

equitable principles of trade" as
provided in the Maloney Act, from
which

the

association

draws

its

Hearings

were

in the

previously

"Financial

icle" of September

30th,

due

re¬

Chron¬

1296,

page

an

The current situation in Struth-

Wells Corporations offers at¬

of Toronto

special memorandum issued by

of

Street, Chicago, 111.

this

may

interesting

on

Oct. 9 stated

on

as

fol¬

lows:
One snag in a refunding
plan,
and which proved a
major hurdle
in

the

1941

negotiations, is what

to do about the defaulted interest.

One suggestion is that the
prov¬
would agree to pay this at
the rate specified in the refunding

ince

plan,

and

active to

might make it retro¬
1, 1936, when the

June

government

arbitrarily

cut

the

Copies

memorandum

be had from the firm

request.




upon

the

Undoubtedly there is stronger
support for the advocates of

re¬

funding on the Social Credit
side than in the earlier years of

cided

scheme

that

no

matter

put

was

what

forward,

the

rate should not exceed what the
then

offering
approximately 214%.
was

caucus

relented

and

it

gave
the government a free
hand to negotiate with the bond¬

holders,
it

refunding

nounced Oct.

Under

holders

on the understanding that
woulcf report back to the cau¬

This

followed

was

opening of the fateful

by

Bros,

operation,

an¬

13.

the
of

offer

of

certain

exchange,

isues

the

of

between

1944

and

1953,

may

exchange their bonds for new re¬
funding bonds of 1965 or 1975
maturity which, where redeem¬
able,
have
extended
callable
dates

but

bear

former

the

of interest to the

rates

original callable

dates and thereafter bear interest
at 3y4%.

As

result of the additional

a

exchanges
the

six

series

of

bonds

more

refunding

new

of

1975 maturity have been closed
out

although
are

bonds

of

1965

available in these

particular series.

election

a

the

the

At this

pessimism increased.
Yet I thought I saw enough
signs to advise readers to buy.
a

figure

and

Sold down to about 136.

Re¬

calling

position of the
market at the highs I asked
readers to get out. For even if
a
rally would occur the mass
of
offerings at the highs
would prevent any advance of
more than two points or so.
I
even
played with the idea of
holding on for these possible
two points in order to
get out
even
or
possibly a small
profit. But with the trend
broken, the odds against such
a rally were
increasing daily.
the

As this is

Employee
Retiring After 52 Years
A farewell dinner

the

Bache

given by
Quarter Century Club

Christian

to

tiring

after

was

Schaefer, who is
52

of

years

re¬

service

with the firm of J. S. Bache & Co.

Twenty-nine of the 32 members
of * the

club

were

present.

Bache Miami office.
The
year,

club

organized last
and the dinner, held in the

Blue Room of the Hotel
was

the

by the

second

affair

Brevoort,
conducted

club.

Rail Stocks

Interesting

Certain leased line stocks of the

ern

Lackawanna

Railroad

offer

&

West¬

interesting

possibilities at present levels ac¬
cording to a discussion of the sit¬
uation

contained

"Railroad

in

the

Oct.

that

add

I

occur.

would

the

be

140-42

range

138

if

something I

when the market
For at

tempted to

penetrated

not for

were

am

it

saw

in

was

at 138.

kind of

a

stocks

.

next

18

a

final tabulation

the

The fact that it

tant.

critical point is
mean caution.
a

*

*

came

at

enough to

Union

State in

every

probably

over-sub¬

scribed its quota.
Sales of war savings

bonds in

New York State passed the orig¬
inal $4,709,000,000 quota on Sept.
28 and the new
$5,000,000,000 goal
exceeded

was

Oct. 1.

on

Total sales for the State, as re¬
ported on Oct. 6, were $5,486,446,-

500, it was announced by W. Ran¬
dolph Burgess, Chairman of the
State
The

War

Finance

figure

for

Committee.

individual

sales

($807,700,000) is above the State
goal of $796,000,000.
Quotas for
all other classes of investors

were

also

com¬

exceeded.

Insurance

panies purchased $1,253,400,000 in
bonds; savings banks, $850,200,000;
dealers and

brokers, $606,500,000;
trust funds,

Federal agencies and

$8,300,000; State and local govern¬
$107,800,000; other nonbanking corporations and invest¬

ments,

Total sales of

$4,165,000,000, later raised to
$4,500,000,000. Invidual sales in
city,
totaling
$625,000,000,
was

went above the quota of

000.

holding on by its fingernails
to
a
figure approximating
135.
*

On

*

The

now

Loan

War

drive—

financing operation in
history—began Sept. 9.

Minister To
President
on

Ethiopia

Roosevelt

,

nominated

Oct. 5 John J. Caldwell of Ken¬

tucky
to

United

as

Ethiopia.
serving

been

resident

and

States

Mr.

acting

as

Minister

Caldwell

has

Minister

Consul-General

in

Ethiopia.

at 136 and

a

furnish

its

own

an¬

swer.

It is
world

possible that with the
at

suddenly

war,

news

appear

to

might
change

picture overnight. .Possi¬
probable.

ble but not
*

to suspicion.

market

Third

the largest

the

*

rally the 138 price is
With the

a

$559,873,-

'

market

up the con¬
The market is

are:

bonds in New

war

City through Oct. 5 were $4,852,309,500, or 16.5% more than
its quota. The original city quota

Better to hold off and let the

Summing it all
clusions

$1,895,500,000.

ors,

■

*

The

frac¬

war

*

has

*

passed

the

stage where decisions made
gives it a leeway of on the
battlefield affect world
two points in which to
swing. markets. Political
changes,
Passing through the higher in a
larger sense, are the ones
figure would be a good sign. to watch.
tion this

Breaking

the

would

the

buy

be

any

stock

lower

figure

opposite.

such

on

margin entails too

To

a

many

slim

risks.

l

(More next Thursday.
j
^
{[The views

article

Securities

do not

time< coincide

Chronicle.
Established

,

—Walter Whyte
expressed

in

necessarily at
with

They

those

Members
York

Stock

Exchange

New

York

Curb

Exchange

Cotton

Exchange

New

York

Commodity

Chicago

Attractive Situation

New

Orleans
And

Exchange,
Board
Cotton

other

of

Inc.
Trade

LAMBORN & CO.
99 WALL STREET

NEW YORK 5, N. Y.

Exchange

Exchanges

The 4% non-cumulative income

SUGAR
N.

Y. Cotton

Exchange Bldg.

NEW YORK 4,
CHICAGO

DETROIT

GENEVA,

any

presented
those of the author only.]

1850

New

stocks may
zini & Co. upon request.

this

of the

are

H. Hentz & Co.

bonds, minority
guaranteed telegraph
be had from B. W. Piz¬

Street, New York City.
Copies of this circular may be had
from the firm upon request.

un¬

He expressed the be¬

lief, however, that

me.

explained this
selling as s w i t c h i n g. But
whether it was
switching or
something else isn't impor¬

railroad

and

able to issue
til Oct. 18.

sources

disturbed

Quotations"
issued by B. W. Pizzini & Co., 55

ization

that, since there were
>30,000 individual issuing
agents, the Treasury would not be

selling

that

1

Broadway, New York City. Cop¬
ies,
containing
quotations
on
guaranteed
stocks,
underlying
mortgage railroad bonds, reorgan¬

plained
about

the

open

was

sults" of the loan drive, Secretary
of the Treasury Morgenthau ex¬

could

The

partners, who are not members of
the club, and two former partners,
Stephen D. Bayer and Fred L.
Richards, were guests.
Mr. Schaefer has purchased a
home in Miami, where he plans
to reside.
Jules S. Bache, senior
partner of the firm, made Mr.
Schafer honorary manager of the

on Oct.
incomplete total then
$18,439,000,000.
In praising the "remarkable re¬

to

York

Some

Honor Bache

Department reported

being written the
averages are at 136.20 (Wed¬
nesday noon). The important
point to watch is the 135
price. Should that hold, a
rally carrying stocks back to
about the highs of October

1941

provincial general

within

prices went down to fluctuate

that

War

that the

amounted

to the first week of October

came

parleys bonds of the New York Majestic
between a joint committee from
Corp. offer an attractive situation
the province and the bondholders. according to an interesting de¬
scriptive
circular
prepared
by
Unless
there
is
some
major
Seligman, Lubetkin & Co., Inc., 41
move
that would change plans,
Broad
there may be

12

penetrated

Third

night on Oct. 2, has passed the
$18,000,000,000 mark. The Treas¬
ury

city's bonds optional for redemp¬
tion

Delaware,

coupon interest rates in half.

cus.

possibilities according to

Ryan-Nichols & Co., 105 South La
.Salle

Oct. 1 and the gen¬

discussions, the "Financial Post"

to pay, or

Situation Attractive

a

be¬

the prospect of
early resumption of refunding

Later, the

tractive

A second

for $1,600,000

on

government

and October 7th, page 1404.

ers

for

the administration. On one occa¬
sion the government caucus de¬

existence and powers.

ported

bill

Commenting

and

on

to

the

alleged

request

eral speculation is that Mr. Ils-

violations occurred

about four years ago in connection
with the original distribution of a

is

ley will insist upon payment in
this instance too.

be heard by the Com¬
October 21st.

The alleged

Alberta's

treasury

about 70 dealers for alleged viola¬
tion of a price maintenance agree¬
ment will

province

extension of the loan.

Dealers, Inc., in connection with
fines imposed by the NASD upon

mission

the

able to pay its debt and has

now

Na¬

that

Lehman

New York, account managers
of the group of investment firms
and banks which is carrying out

ley is reported to have taken the

mitted by the staff of the Securi¬
ties
and
Exchange Commission

September

as

rate of 3%. With

a

and

of

maturity

purposes.

>

Philadelphia

re¬

not

exchanges to date under the
plan to

more than $83,000,exchanges under the
1941 and 1942 plans to more than
$166,000,000, Drexel & Co. of

known, of course,
whether the slightly higher rate
would be agreeable to bondhold¬
ers
in view of their original re¬
quest of 4% and considering that
the finances of the province, gen¬
erally speaking, are now consider¬

JOHN MORRELL & CO.

five cents

is

exchanged
week, bringing

past

1942

by

agree to a 3%% coupon in
funding negotiations.

the

000 and total

50%, it is now reported that the
government might be willing to

1943.

by

would

total

re¬

From the end of

week later the averages,
announcement
instead of stopping at 138,
be no further

Philadelphia Refunding
1942, more than $13,000,principal amount of addi¬

during

un¬

jeopardiz¬

between 139 to 141.

$15,000,000,000

Loan drive, which ended at mid¬

reentry and
ing these profits.

But

of

000

interest rate averaging 2.44% on
its debt,

Deadline Nears

as

tional bonds have been

offering to pay an

now

there

City

Al¬

The

{Continued from page 1492)

point

Plan of

refunding

although

However,

berta is

December
3.
at the close

of

extension beyond Oct.
30, 1943, of
the
exchange offer under the

The former asked

pay.

31/2%.

1943.
by Bankers Trust
York
15, N. Y.,

mailed

Co.,

October

of

November

renewal

a

confidence at the hands of the

that

government was wil¬

4%

a

for

Stimulated

rate

plan and the government offered

Directors
has
this
day
declared
a
dividend
of
fifty
cents
per
share
and
a
special dividend of 'twentyfive cents per share on the Capital Stock

of

the

ling to

of

make

ap¬

administration

Philadelphia Exchanges

willing to recommend and

were

BOAT

the

Stimulated

the bondholders' representatives

ELECTRIC

a

the

when

between
collapsed in
difference of

parties

1941, there
only

that

negotiations

interested

Secretary

of

electorate.

is

original

Dale Parker

adoption

major platform

that

would

bond

$22,000,000 in

the

Is Over $18 Billion

rant

This then would be

of the

one

peals

interest.

Common Stock

No. 39,

and

side * to

government

next year.

$31,000,000 in principal ma¬

some

about

"big push"

a

Third War loan Flow

Whyte

Savs

quarters

some

be

Walter

refunding scheme not later than

connection, it is noted that the
province is now: in default on

Stock, 5% Series

58, quarterly, $1.25 per share

the

bring

establishing a program for the
refunding of the province's out¬
standing funded debt.
In
this

6% Preferred Stock, Series A

68, quarterly, $1.50

from

to

the present

March, 1945.

It is claimed in

sentatives 'of bondholders relative
Board

declared this day the following dividends:

The term of

house expires in

cial government is desirous of re¬

CORPORATION
The

Tomorrow's Markets

Municipal News & Notes
Recent

Thursday, October 14, 1943

N. Y.

Exports—Imports—Futurei

PITTSBURGH

SWITZERLAND

DTgby 4-2727

as
.

awraiarvsv.

158

Volume

THE COMMERCIAL & FINANCIAL

Number 4220

Treasury Plan For UmietS Ilaiicns RFC Bank—

Separate From Currency Stabilization Flan
(Continued from page 1486)
guarantee
loans made with private capital to
"The

that

bank

may

the government to any of its po¬
litical subdivisions and to busi¬

CHRONICLE

The Effect Sf War On
money

in retail stores.

In addi¬

tion, enormous additional sums of
currency are needed for the pay¬
ment of the millions of

armed

men

forces.

.

priate formula." Mr. White said,
however, that the formula has not
been
determined
and
that he
could not estimate this country's
share

except

that

it

would

appropriate currency

currencies will

be made, from

account to meet

audited

ex¬

penditures. No loan may be made
in

the

of any country
without its approval.
Payments of principal and in¬
currency

terest must be made

cur¬

by agreement, in the
in which the loan was

or

currency

made.

in free

the

In

event

of

an

acute

the text of the
Treasury's
"Guiding
Principles exchange stringency, payments of
for a
Proposed United Nations interest or principal may be made
for a reasonable period in local
Bank for Reconstruction and De¬
currencies to be replaced subse¬
velopment."
quently with free currencies.
\
The bank will deal only with or
Purposes of the Bank
The bank will encourage pri¬ through the governments of mem¬
ber countries, their central banks
vate financial agencies to provide
and fiscal agencies, and with or
long-term capital for the sound
international
financial
development of the productive re¬ through
agencie^that are owned predomi¬
sources of member countries, and
when
necessary
will cooperate nantly by member governments.
However, with the approval of
with and supplement private cap¬
member countries, the bank may
ital for such purposes.
guarantee
international
loans
placed in their countries, and may
Capital of the Bank
The following is

sell

pledge any of its own se¬
capital of the bank would
amount to approximately $10,000,- curities, or securities taken from
its portfolio in the markets of such
000,000
subscribed by member
countries. With similar approval,
countries according to an appro¬
the bank may sell gold or foreign
priate formula. Member countries
will make an initial payment of exchange held by the bank after
The

20%

on

their shares.

When the bank needs additional

funds

■Si-

for

its

operations, it may
make calls upon the unpaid por¬
tion of subscriptions as needed,
but not exceeding 20% in any one
year. A large part of the capital
would be reserved, in the form of
uncalled subscriptions, as a surety
fund against securities guaranteed
or issued by the bank.
The initial and subsequent pay¬
ments are to be made partly in
gold and partly, in local currency.
The proportion paid in gold, not
exceeding 20% of the payment,
will be fixed by a schedule which
takes into account the adequacy
of the

or

consultation with the Internation¬
al Stabilization Fund.
The
be

resources

used

for

of the bank shall

the

benefit

of

the

member countries.

Management of the Bank
The administration of the bank
will be vested in
tors

a

board of direc¬

consisting of one director,

or

his

alternate, appointed by each
member government.
The board
will appoint an executive commit¬
tee and an advisory council and
such other committees

as

it finds

for the work of the
voting power of the
member countries will be closely
related to their share holdings.
A country may withdraw from
membership by giving one year's
necessary

bank.

gold holdings of each mem¬
The local currencies
held by the bank are to be repur¬ notice.
ber country.

The

The shares of any mem¬

ber country

that withdraws from
membership would be repurchased
gold at the rate of 2% of the sub¬
by the bank over an appropriate
scriptions annually.
period at par or at book value if
chased by member countries with

Powers and Operations
of the Bank

that is less than par.
One-fourth of profit

should be
applied to surplus until surplus
The bank may guarantee loans
equals 20% of the capital. The
made with private capital to any remaining profits will be distribmember

government, and through uted in'proportion to shares held.




this

significant

phenomenon, the author finds, is
that

"some

Government debt, or absorption of
Government obligations now in
bank

Money

businesses

and

indi¬

ings of deposits and currency in
order to provide for growing tax
liability, the purchase of Govern¬
ment bonds, debt retirement, fur¬
ther purchases of goods and other
emergencies. Such accumulations
slacken the rate at which money
circulates.
Heavier balances of
the

treasury have also had

Theory

Criticized
This enhanced "idleness" of

our

total money supply

during the war
provides the basis in the studytogether with other considerations
criticism of the Valid¬

some

ity of the "inflationary gap the¬
ory" which has been so much
stressed in

Washington legislative

and administrative circles.

The

be

total

dollar

figure of in¬
public may
vastly greater than the dollar

come

Being

Now

A final

point very strongly em¬
phasized by Professor Whittlesey
is

the

need

for those in charge
policy to remember that

of fiscal

post-war finances will be deter¬
mined

in

large

part

by

war

finance.

"Probably the

most

important

conclusion to be drawn from the

"Inflationary Gap"

—for

Problems

Created

some

effect."

-

Post-War

received by the

analysis presented in this paper,"
he says of his own report, "is that
the methods of
borrowing em¬
ployed during the war will influ¬
what

ence

banks

the

will

Treasury/ and the

be

able

to

do

in

the

post-war period."
"Fiscal policy is construed much
too narrowly if we think of it in¬

dependently of the circumstances
in which it is expected to
operate.
Not the least of these external cir¬

cumstances is the volume of circu¬

lating medium."
"It

is

essential

to recognize at
policies of today
setting the stage for the poli^

value of goods available for pur¬
chase
by
consumers,
but
this

all times that the

mathematical

cies of tomorrow. This is true in
the realm of fiscal
policy; it ap¬
plies also with respect to central

"gap" has

effect
increasing the general price
level only to the degree that the
added money income is put to use
by the recipients.
an

in

"Income

retained

in

the

form

of idle

balances," the author points
out, "does not exert any direct in¬
fluence on prices."
This frequently overlooked fac¬
tor, he finds, is one of the several
marked influences explaining the

certificates such
When

as

tax notes.

these

are

determine

today

must be done at
and how it

can

both

what

future time

some

be done."

Slate Chamber

Urges

Retail Sales Tax
The

adoption

the

of

taxes

chases

the duration of

war

for

only,

to

retail

raise

pur¬

approxi¬

mately

$5,000,000,000 and to re¬
inflation, was urged in the

tard

program

approved Oct. 7 by the
of
Commerce of the
State of New York. This
proposal
Chamber

was

one

for

of the 12-point program
tax action approved

unified

by representatives of 21
Chambers of Commerce at
cent

meeting

in

State
a

Chicago.

re¬

The

New York Chamber has approved
as a whole the
principles of the

(noted in a separate item
issue).
In taking the sales tax
action,

program

in this

the Chamber said:
"We

have

studied

the

various

alternative taxes which might be

employed to
obtain
additional
funds, and we have come to the
conclusion that the most suitable
of

sources

upon

new

revenue

are

taxes

purchases at retail.

"Such

taxes

would

check

in¬

flationary consumer spending.
"Many of our States now tax
purchases at retail.

Their experi¬

proves that such taxes would
be feasible.

ence

"We
the
in

are

convinced, in viev$ of
increase

enormous

the

hands

of

of

money

that
purchase taxes at rates suf¬
ficiently high to produce approxi¬
mately
$5,000,000,000,
a
year,
consumers,

retail

would not be over-burdensome."

Rock Island Interesting
Raymond & Co., 148 State
Boston, Mass., have prepared
interesting discussion of the
organization plan proposed for

St.,
an
re¬

the
particular refer¬
this railroad's general 4s

short-term

change.

Idle

circles

is

the

nation's money

supply, the money
at the command of individuals and
business firms has

been, as a total,
idle during the war than has
generally realized.

as

computed

Treasury obligations)

by the Federal Reserve Bank of the possibility of strain in

case

-

bank policy and to the
policies of
individual banks. We are
helping
to

inevitably raises, {he question of

Comparatively

upon in
emphasis
given to the fact that, in spite of
the spectacular increase in the

in 101

idly expanding."

viduals have increased their hold¬

velocity of bank deposits

Now

financial

The

clear fact that their vol¬
is not only higher than $ycr
before in their history, but is rap¬

leading cities,

institutional investors.

study being commented

been

the

Traction securities offers in¬
teresting possibilities according to
a comprehensive circular prepared
by Brailsfbrd & Co., 208 South La
Salle Street, Chicago, 111., members of the Chicago Stock Ex¬

or

One notable contribution of the

more

in

"liquid
claims,"
quickly convertible into cash, are
added to our circulating medium
—that is, checking deposits and
currency'—the "liquid resources"
at the command of the public in¬
creased, according to the study,
$72,000,000,000 in the three years
ending in 1942.
"The existence of a large vol¬
ume of obligations payable on de¬
mand (as in the case of demand
deposits and War Savings Bonds)
or after a short period of time (as
in the case of time deposits and

portfolios by sale to indi¬

vidual

any

"The basis for the present con¬
cern over these
liquid claims lies
ume

of

causes

borrowing from banks is, in many moderate rise ' in the American
respects, equivalent to the manu¬ price level during the present war
facture of so much paper money. compared with previous wars, in
As part of his study, Dr. Whit¬ spite of the fact that the nation's
tlesey describes the process by money supply has increased more
which the volume of demand de¬ during the past three and a half
posits in the banks, ultimately years than in the preceding cen¬
coming to the disposal of the gen¬ tury and a half.
eral public, is increased by bank
After-the-War Inflation
purchases of government obliga¬
Problems
tions. This is, he points out, "one
of the most ingenious operations
"It is likely,"
Dr. Whittlesey
of the entire financial system, yet says, "that for some time after the
it is sufficiently subtle to remain war the task of preventing the
a
mystery to most customers of sudden release of reserves of pur¬
banks, and even, it may be said, chasing power—cash and liquid
to many bankers."
claims—will be one of the major
problems of monetary and fiscal
Increase Here to Stay
policy.
"The potentialities inherent in
Formerly, expansion and con¬
traction of checking deposits auto¬ a large volume of idle balances
matically reflected the changing constitute a dynamic element of
money needs of business and the considerable
significance, while
public, but one of the most sig¬ the possibility of exercising some
nificant results of war financing is degree of control over this latest
that, since the vastly increased force
represents
an
important
deposits are now. based on bank strategic problem in the battle
ownership of government obliga¬ against inflation."
Linked with this phenomenon
tions, "any automatic tendency to¬
ward early contraction of the sup¬ of present unused money at the
ply of deposits has now disap¬ command of business firms and
peared." In short, the increased individuals, are so-called "liquid
volume of deposits generated dur¬ claims" which, under our mone¬
ing war may be here to stay.
tary system, can be quickly con¬
Currency
in circulation—that verted into additional currency or
is, paper money and coins-—may checking bank deposits.
be expected to decrease with the
£Tiese "liquid claims"—not in¬
war's end, Dr. Whittlesey holds, cluded by economists in the totals
for various reasons which he out¬ of our "circulating medium" or
lines.
The main portion of the money supply, because they are
nation's money supply, however— not actually used by the people in
its circulating bank deposits—are purchasing property or services—
likely to remain at the high vol¬ consist of time deposits of large
ume established by the war unless
corporations and institutions, sav¬
they are reduced to two develop¬ ings deposits, War Savings Bonds
ments:
partial payment of the and various short-term Treasury

be rencies,

"substantial."

that governmental

The

the amount of the loan and pay¬

proposal each coun¬
this
try would contribute a share to
the fund "according to an appro¬

was

per annum.

ness

or

Under the

firms

declined in the three
from 22.5 to 20.5 times

years

any exceptionally high proportion
of the claims are liquidated at

given time.

the account of the borrower with
ments in the

into existence."

come

Deposits

New York,
war

in the

member
Government, and ness and industrial enterprises in
A further factor tending to the
through the Government to any of the member country.
of larger
amounts
of
The bank may participate in holding
its political subdivisions and to
currency by the public, says the
business and industrial enterprises loans made with private capital or
make loans out of its own re¬ report, is that "many of the indi¬
in the member country.
viduals receiving increased income
"The bank may participate in sources only when the borrower
and dependency allowances have
loans made with private capital is unable to secure the funds from
never'been accustomed to hand¬
private
investment
sources
on
or make loans out of its own re¬
ling their affairs through banks."
reasonable terms.
sources only when the borrower
Shifts in population to new sur¬
The decisions of the bank will
is unable to secure the funds from
be based exclusively on economic roundings, inconveniences in the
private
investment sources on
considerations.
In passing upon way of establishing new banking
reasonable terms."
connections, and the temporary
Further below we give the plan any application to guarantee, par¬
nature of the residence of many
in detail.
It is understood that ticipate in, or make a loan, the
workers have had a like effect.
bank shall give consideration to
Secretary of the Treasury MorOne interesting new aspect of
the soundness of the investment
genthau had informed interested
the larger amount of currency in
committees
of
the
Senate
and project or program, to the bud¬
circulation is that, in terms of
the member
House in closed sessions on Oct. 5 getary position of
total value, $20 bills for the first
regarding the proposed bank. It government guaranteeing the loan time have supplanted
$10 bills
and to the prospective balance of
was explained by Harry D. White,
throughout the country as the
Director of the Treasury's Divi¬ payments of the member country.
most widely used monetary type.
All loans which the bank guar¬
sion of Monetary Research and
author of a previously published antees, participates in, or makes
Greatest Increase in Checking
must fulfill the following general
proposal for post-war monetary
Deposits"'
conditions: (a) payment of inter¬
stabilization, that the Treasury
While- currency in circulation
est and principal must be fully
had not intended to make it pub¬
increased roughly $8,000,000,000 in
lic until it could be submitted to guaranteed by the national gov¬
the three and a half year period
ernment of the member country;
other governments, but disclosures
covered by the study, the other
in London of what is said to be an (b) the investment project or pro¬
main form of "money" used by
gram must have been investigated
incorrect version led the Depart¬
the
American
people, checking
and
approved by a competent
ment to release copies on Oct. 8.
committee; (c) the terms of the deposits in the banks (including
Mr. White emphasized that the
Government deposits), increased
loan must be reasonable, and (d)
draft is not an official document
$29,000,000,000
in
the
on
guaranteed loans the bank roughly
and merely represents the views
same period.
must be compensated for the risk
of the Treasury and other depart¬
One of the new lessons widely
it assumes.
ments.
On Oct. 8 United Press
The bank will impose no condi¬ learned by the American, public
accounts from Washington said:
tions as to the member country during the Third War Loan Drive
"The world bank plan is sep¬
in which the proceeds of a loan just ended was that the reason for
arate from the currency stabiliza¬
are to be spent.
When a loan is confining the $15,000,000,000 Third
tion proposal," Mr. White said;
made by the bank, it will credit War Loan to individuals and busi¬
"either could function separately,
ation between the two should both

Ourrency

(Continued from page 1488)

any

but there would be close cooper¬

1505

Rock Island with
ence

to

of 1988 and the first refunding 4s
of 1934.

Copies of this memoran¬
had upon request.

dum may be

Cgo. Tractions Interesting
The

current

situation

in

Chi¬

cago

Copies

of

this

circular

obtained from the firm.

may

be

upon

request.

.

^

v

1506

THE COMMERCIAL

Competitive Bidding In Rail Securities

Post-War Taxes

Reply Brief By Halsey Stuart & Co. States Study Fails
To Show ICC Has Lesser Authority Than Other ;
Regulatory Bodies
A

comparison

announcements

of

of

the

the

statutes,

the

Interstate

legislative

Commerce

history

other

regulatory bodies, including the Securities
Commission, fails to disclose any real basis for the

the ICC

public

has

lesser

a

interest

authority

involved

or

than

and

Commission

and

that

other

commissions

have

which

required

competitive
bidding, *>
Halsey, Stuart & Co. Inc. and Otis tially a function of the market—
& Co. declare in a
reply brief filed and enables it to consider more
with the

Commission

in

reply to

the

arguments advanced by the
opponents of competitive bidding.
"The advice which the issuer

ordinarily requires in financing,
if it requires any, is just as
readily
obtained under competitive bidcling as under private negotia¬
tion," the brief asserts. "The most

effectively

the

financial

policies

Broker-Dealer Personnel Item's

Unemployment

If you contemplate making additions to your personnel
please send in particulars to the Editor of The Financial
Chronicle for publication in this column.

(Continued from page 1487)
foreign demand, a few manufac¬
turing industries will maintain
present

levels

NEW

time, such as food and kindred
products, tobacco manufacturers,

spondent
pany.

long

a

products,
printing and publishing, products
of petroleum and
coal, and leather
products.

seeking

level

Carrere,
now

of

activity

to

give

conditioned

important advice required in pri¬
vate negotiation is the
adequacy

ment banker the exclusive advisor

of

the price proposed to be paid,
and this can obviously not be ob¬

conditions and prices, yet he owes

tained

and is

from

the

the carriers

underwriter.

body

competent under,
private negotiation to obtain the

his
own

advice they need with
respect to
the most difficult element in fi¬

financial

own

stake

for

his

to

answer

the

claim

that

competitive bidding will result in
nancing—price — they are surely less wide distribution of securities,
competent enough to obtain the Halsey, Stuart & Co., Inc., and
advice they need with respect to Otis & Co. declare that from the
the type of securities to be issued.

"Competitive

record

bidding relieves
the regulatory body of its present
great concern with price—essen¬

it

tively

that competi¬
have actually

appears

sold

issues

been distributed

widely than

more

have negotiated issues.

The

Treasury

ruling

governing

ceiling

salesmen receiving income from commissions

control

of

modified

was

on

of

Oct. 7

by

Commissioner of Internal Revenue Guy Helvering, who has
granted employers of salesmen permission to pay commissions due
to employees for
September and October where neither the rate
of

commission

Oct. 2, 1942.
In

the

nor

other

compensation

was

York

"Times,"

it

ployers of salesmen to ignore,
temporarily, the new bureau rule
Sept. 4 requiring that applica¬
be

made

commissions

for

in

lowing

number

of

fol¬

in

or

the

the

rate

months
on

of

payment

the

the

commissions

basis

same

in

permitted

year.

approval

J-

was

with

employers, who hacl pro¬ the payment of commissions ex¬
tested
vigorously
the
sudden ceeding in dollar amount the pay¬
change of rules. The brokers on ments in the last accounting year
stock
exchanges and over-the- prior to Oct. 3, 1942.
been

especially concerned because

the past year has been

unusually

good for them.
"Commissioner

Helvering

said

"The

Salary Stabilization Unit

of the Bureau of Internal Revenue
has
under
consideration
future

general

what

problems have been discussed in

the rules will be after this month.

the unit this week with
represen¬

possible

about

Although he did not say so, he tative employers. A further state¬
probably will consult with Fred ment to the public on these mat¬
M. Vinson, Director of
Economic ters will be made as soon as prac¬
Stabilization, before reaching a ticable."
decision."

The New York Stock

An announcement in the
matter
by the New York Stock

has

Department of Member Firms

provisions

Exchange

Oct.

8

change

to

members

issued

was

Edward

C.

of

as

the

on

Ex¬

follows

Gray, Director of

by
the

Department:

ury

urged upon the Treas¬
Department continuance of

regulations to
permit the payment of registered
employees on the same basis as

heretofore,
proval

of

Registered
Employees

all

ington, D. C.:

"Treasury Department,
"Washington.
"Press Service

"No.
"For Immediate Release

38-97.

"Thursday, Oct. 7, 1943.

granted

employers approval to
without formal application,

any,commissions due to employees

September

eases

in

which

of commission
any other

or

October, in all

neither

nor

members

of

the
a

absence

blanket ap¬
for

continuance
the

Exchange.

N. Y.

Analysts

Sumner T.

of

the

rate

the

amount, of
compensation, has been

increased since Oct 2, 1942.
"Except in cases where there




adequate

Congress must devise
tem

that

while

McCall, Vice-Presi¬

dent of the American Brake Shoe

Company, will address the lunch¬
eon
meeting of the New York So¬
ciety of Security Analysts, Inc., on
Oct. 14.

Mr. McCall will speak
the American Brake Shoe Co.

the

Denver

&

Rio

and

in
in

year

ameliorating

those

who

embark

ventures

on

and

in taking
unemployment.

prove

a

the slack of

viously be

will ob¬

measures

of

one

factors

the

in

the

most im¬
success

(1)

Some

measures

conversion,

funds,
sures

fore

and

to

to

cancellation

need to

the

These
be

war's

provide
and

government

likely.

seem
will

permit

reserves

relief

with

pay

mea¬

passed be¬

end

or

very

promptly at its end.
(2) Excess profits taxes will
probably be abolished or greatly
quickly after the end of
the war, and if carry-over and
carry-back 1 provisions are kept
they should prove helpful.
reduced

(3)
tax

Corporate

normal

and surtax will

main

before the

for

war

higher
a

Western reorganization.
John L.

Collyer, President of the

B. F, Goodrich

Co., will speak

the

re¬

than

lengthy

above

taxes should not be

in

ness

pe¬

less

conditions,
bar to busi¬

providing sufficient

ployment,
are

a

but

if

tax

em¬

conditions

favorable than this they

are

likely

probability is that post-war

to

cause

difficulties.

taxes will not prove insurmount¬
able

as

a

business

problem.—

From "Investment Timing" issues

by the National Securities & Re¬
search

on

G.

on

Oct. 21

Superintendent

of

Insurance

for

Connecticut, will address the As-

on

Insurance

meetings will be held at
12:30 p.m. at 5-3 Broad. St., New

York

City.

CALIF.—

has

become

Walston, Hoffman

&

265

Goodwin,

Street.

with

Mr. Makin

Montgomery
previously
Company. •

was

Bankamerica

LOUIS,
has

*

MO.—William

become

connected

L.

with

PETERSBURG,

FLA.

Maurice L. Foisy has been added

on

to

the
staff
of
Merrill Lynch,
Pierce, Fenner & Beane, Florida
National Bank Building.

Oct. 8 to stand guard
against Federal

of the several

power

weaken the American system of free
enterprise."
Chicago advices of Oct. 8-to the New York
"Times,"
Prior

to

it

was

appointment of the
the executive group

committee,
;

Opposed

adopted
that

there would be thousands of fed¬

resolution

a

the

public

be

served

best
by
supervision by State Gov¬
ernments, in keeping with con¬
proper

stitutional limits

Supreme

throughout the
exercising
descretion

about

the

money

as

out of work.

are

to

payment
of
federal
benefits to people who

this

use

tory

at

The

system to

temptation
assure

vic¬

the

polls would be well
nigh irresistible to any political
machine, nor would any civil ser¬
vice

rules

against

might
social
off

be

an

need

likely to

stand up
administration
that
influence

the

security machine

of

to

a

stave

"Care

also

should

be

taken

to

The

slowly in the field of tempo¬
disability insurance," contin¬
ued Mr. Linton, who was a mem¬

ber of the Social

Security Advis¬

Council.

should be

Island,

on

"Whatever
a

is

state basis.

done

Rhode

in

experimenting
with
sickness
benefits,
has
already
made a beginning.
As life in¬
surance companies have found out
to their
cost, disability is a tricky
field, full of administrative pit¬
falls.
When administered by a
government agency it is likely to
cost

lot

a

of

needless

money

through unfair claims achieved
by deception, political favoritism,
collusion.

or

"Similar danger lies in the pro¬

the

socialization
the

medical

managers

of

of

medicine.

profession and
our

as

defined by the

during

the

last

•

resolution, urged State in¬

surance

supervisors

their study of

Federal

to

pending

"continue

or

proposed

legislation, touching the
of insurance, all to the

business

end that they
may protect the
policy holders of their respective

States

and

attempt

to

to
of

powers

guard

usurp

the

the

against any
the sovereign

several

American

free enterprise."

States

or

system

of

■

The committee consists of Thos.

go

rary

Court

75 years.

weaken

defeat," Mr. Linton said.

declaring

interests of the insuring
can

country

Both
sociation

meeting.

Makin

eral office-holders

posed

Wym^n Carroll, Jr., Assistant Company stocks.
All

T.

or

Control

Corp., New York City.

"Rubber—Today and Tomorrow,"
at the Oct. 18

FRANCISCO,

George

(Special to The Financial Chronicle)

'

'

of

associated with

Cobb

Federal Insurance

income

probably

substantially

Chronicle)

(Continued from first page)
"Under a system of«this kind

corporations to set aside

SAN

ST.

Financial

or

that:

are

Investors

further reported:

failure in maintaining a satisfac¬
tory level of employment.

Prospects

Protected

legislation which would "usurp the sovereign
States

.

Conclusion

portant

to The

of Insurance Commissioners

In

Post-war tax

of

A special committee of three
State insurance officials was
ap¬
pointed by the Executive Committee of the National
Association

busi¬

new

thus

up

;

Special Committee Appointed To Guard
Against Federal Insurance Control

the

capital
gains tax, and it could go further
in
sympathetic consideration of
ness

&

Gregory.

develop

Congress took a
right direction last

the

In the past he had his
investment business in Chi¬

ANGELES, CALIF —Lev¬
ering E. Taylor has become asso¬
ciated with Blyth &
Co., Inc., 215

enterprises.

step

was

Hogle

(Special to The Financial Chronicle)

West

(Special to The Financial Chronicle)

encourage business

risks

141

Mr.

LOS

an
expanding economy able to
maintain full employment, foster

take

&

F.

America, 130 Montgomery Street.

associated

Co.,

Harbison

Boore

A.

J.

E.

South

FRANCISCO, CALIF.—
Bullock has rejoined the

II.

ST;

it at $20,000,000,annually—will also encourage

to

&

Mr.

with

623

(Special to The Financial Chronicle)

Building.

estimates place

men

and

with

CHICAGO, ILL.—S amuel A. Lamson Brothers &
Company,
McMurray, for eighteen years with
Merchants Exchange Building. Mr.
Schwarz & Co., has joined the
Cobb formerly was with Edward
staff
of Merrill
Lynch, Pierce, D. Jones &
Co., and Slayton & Co.
Fenner & Beane, Board of Trade

the

The

Grande

Street.

Co.

CALIF.—N.

now

(Special to The Financial Chronicle)

amounts
of
revenue
the
Government will require — some

000

become

Boulevard.

(Special

tax sys¬

a

on

Mclnerney of
Wood, Walker & Co., will speak
on

Spring

staff

cago.

reserves

producing

has

is

Company,

previously

SAN

of years.
own

Boore

Gar¬

Murphy
previously with Channer Se¬
curities Company for a number

large

Under

to Meet

On Oct. 15, J. W.

"Commissioner of Internal Rev¬
enue
Guy T. Helvering today

for

in

or

such

Mr.

Co.,

was

ory

The

Exchange is in receipt of
following communication from
the Treasury
Department, Wash¬

for

Street.

&

to The Financial Chronicle)

&

previously with Daven¬

Kneelancl

Jackson

will find them¬

many

short

riod.

the

pay,

the

thereof issuance of

Compensation

Exchange

also

in

that

agreement

for conversion
plants to peace produc¬
tion, but many have not; after
shouldering! income and excess
profits taxes and the ordeal of re¬

severance

soon

Arthur Warner

J.
the

CHICAGO, ILL.—R ichardE.

war

contract

announcement would be made

to

(Special to The Financial Chronicle)

adequate

serves

from

for

as

was

added

has been added

ANGELES,

Button

Chronicle)

port & Co.

they must be reduced substan¬
tially after the war.
Some large
corporations have surplus and re¬

policy regarding the stabilization
commissions, bonuses and sim¬

ilar forms of compensation. These

been

Devonshire

with

is

of

an

as

89

of J.

rison

Adjustment Needed

factor

granted
under revised salary stabilization
regulations issued Sept. 4, 1943,
which required approval before

counter markets were said to have

staff

has

Murphy

amount

Helvering has,
in effect, authorized for the two

The Financial

BOSTON, MASS.— John

Corporate taxes are now at the
highest point in our history, and

new

other compensation—such

any

"The

came

in

base salary—Mr.

as

of

conferences

increase

an

commission

those

year.

announcement
a

of

been

earlier

payment

excess

paid in the preceding
"The

of

of
em¬

of

tions

has

was

blanket order to

a

since

LOS

L.

Tax

incentive, and

pointed out:
"It

increased

been

■

.

Washington advices Oct. 8 to
New

has

to

Garrison

for reconversion.

income

(Special

Devonshire

Milton
(Special

.

selves

By Internal Revenue Commissioner

115

be

reasonable

negotiation,

Rule On Salesmen's Commissions Modified

will

considerable de¬

a

Co.,

.

ANGELES, CALIF.—Wil¬

to the staff of G. Brashears ,&
Company, 510 South Spring Street.

J

there

profit."

In

to

&

Street.

gree

fiduciary obligation to either,
definitely in the deal with

no

If

are

to

as

employment"

:'

MASS.—Henry DeFord, Jr. is now with Kidder, Pea-

by its ability to operate at a
profit. The great post¬
war
backlog of demand and the
accumulated
purchasing
power
built up during the war
are'strong
helpful factors.

"full

to The Financial Chronicle)

BOSTON,

absorb

Trust Com¬

(Special to The Financial Chronicle)

LOS

liam D. Stanfield
(Special

of business to

the Commission must maintain in

Captain John

Mercantile -

and

partner of the firm, is

a

rine Corps in the Pacific.

former peace-time years,
industry will have to operate at a

The ability

the

Commerce Bank

active duty with the Ma¬

on

employment

the

to both borrower and lender

65 Broadway.

As there will be many more in¬
dividuals

high

public interest."
The system which the opponents
of competitive bidding favor, the
brief asserts, "makes the invest¬

Mr. Taylor was
Francisco
corre¬

for

Co.,

them.

which

West Sixth Street.

San

conform

standards

with

formerly

underly proposed financing
plans, and whether these policies
the

formerly

Moody's

for

in

to

YORK, N. Y.—Louis L.

Bucklin,

Investors Service for twelve years,
is now associated wtih Carrere &

than

that

Thursday, October 14, 1943

lumber and timber basic

of

and

Exchange

contention

And

their

the

responsibility with respect to the

have

& FINANCIAL CHRONICLE

J.

Cullen, Deputy Insurance Com¬

missioner

of

New,York; Paul F.

Jones, Illinois Insurance Commis¬
sioner, and John Sharp Williams
3rd,

Mississippi -Insurance

missioner

and

past

Com¬

President

the National Association.

Situations of Interest
The

of
•

f'

;

current

situations in The
National Radiator
Company and
Public National Bank and Trust
Co.

offer

according

attractive

to

possibilities

memoranda

distributed by C. E.

being
Unterberg &

Co., 6L Broadway, New York City,
Copies of these interesting memo¬
randa
upon

may

be had from the firm

request.

voluntary

hospitals have come overwhelm¬ mentation of the doctors and hos¬
ingly to the conclusion that such a pitals, making their services subplan would involve deterioration ject to the control of
govern^

of service

as

well

as

a

vast

regi-1 mental bureaucrats.".

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4220

158

Volume

Repeal Of Chinese Exclusion Laws find
Amendment Of Hatyraliza!ion Act Urged By FDR
called

Roosevelt

President

11 to pass the

Congress on Oct.

on

pending bill to permit the immigration of Chinese people into this
country and to amend naturalization laws which bar Chinese resi¬
dents from American citizenship.
In

special message, the President said he regarded this legis¬
winning the war and of estab¬

a

lation "as important in the cause of

lishing

a

peace."

secure

Mr.#

/

Roosevelt further said that by re¬

pealing the Chinese exclusion laws
"we

correct

can

historic mistake

a

—

"I

confident

feel

and silence the distorted Japanese

these measures,— long

propaganda."

should be taken to correct an in¬

•

1-

,r

which the House
Immigration and
Naturalization reported favorably
The

measure,;:

Committee

on

Oct.

on

7, would repeal the Chi¬

exclusion acts dating back to

nese

1882, put the Chinese on a quota
under the Immigration Act
of 1924, allowing about 100 to en¬
ter
the United States annually;

registration
shares

$20

justice to

Action by
will be an earn¬
purpose to apply the
the good neighbor to

our

the

Congress

est

of

our

policy

of

friends.

now

relations with other

our

peoples."

Co.,

ferred

filed

has

covering

statement

6%

of

Products

convertible

a

By

of

30,000

preferred

the

stock,

the

to

them

at $18

North

6

—

connection

share.

a

Michigan

Avenue,

largest

| their option

exclusive

the

manufacturer of permanent magnets in the
United States and distributes its product

manufacturers

to

of

products

in

which permanent magnets are a component

Among such products are: radio and

equipment,

temperature

and

ized

Arc

relays,

electrical

instruments,
pressure controls, polar¬
back indicators, voltage

traffic
signal
generators, etc.

regulators,
netos,

be

at

of

capital

working

the

is

expanded

$531,230

for

used

opinion

with

pre¬

the sale of

estimated

will

the

In

additional

of issue

manage¬

required

in

production

in¬

controls,

mag¬

rate

for

each

verted,

of

including Dec, 31, 1946,

2 '/a

share

and

shares
of

of

that

stock

date,

at

stock

common

preferred

after

of two shares of

so

con¬

the

at

rate

for each share of

common

'

preferred,.

Registration
EWT

p.m.

statement
Oct.

on

2

effective

of 5:30

as

4:30
EWT

p.m.

Sept. 19.
Oct.

Brailsford &

4

Co.

at

and

$20

per
share by
Kalman & Co., Inc.

basis

and amend naturalization laws to

Chinese

the

allow

citizenship.

1

similar measure is pending
before
the
Senate
Immigration
;

A

Committee.
s

The text of the President's mes¬

follows:

sage

is

"There

pending before
legislation to permit

now

the Congress

Chinese people

the immigration of

this

into

country

and

allow

to

Chinese residents here to become

I regard this

American citizens.

Following is

of victory in this world
first required the concentra¬

strategy
war

the

of

tion

strength

understood

has

She

part of our
the European front.

greater

upon

that

the

amount of

supplies we could make
available to her has been limited
by difficulties of transportation.
She

substantial

that

knows

aid

will be forthcoming as soon as pos¬

Monday afternoons from 3:30
o'clock, beginning Oct. 11, in

to 5

of

the Board of Governors' Room
the New York Stock Exchange.

Mr. Townsend's

topic was "An
Engineer Looks At Plastics." Suc¬

chpmist of the Rohn &

Haas

of

Japan—in

ever-

increasing strength until the com¬
mon enemy is driven from China's

be

"Plastic

Plywood,"

r

"But China's resistance does not

depend alone
and

guns

on

attacks

on

land,

on

and

from the air.

and

her

It

the

Ottinger, President of
S. Plywood Corporation,

U.

and "Nylon," by Theodore

lin,

G. JosDirector of

Relations

Public

E. I. du Pont de Nemours & Co.
The public, as well as members

are

based

Enrollment

invited to attend.

f#r the
the

course may

York

New

20

be arranged at
of

Institution

Broad

St.,
City. Tuition is $5.

New

Fi¬

York

owe

in

her

Allies.

KANSAS

it to the Chinese to

strengthen

that faith.

One step in this direc¬

tion

wipe

is

to

from

the statute

those anachronisms

books

in

our

law which forbid the immigration
of Chinese people

into this

bers of the New

change,
Jourdan
firm

on

York Stock

Avill ^idmit J.
"to
partnership
Oct. 21.

Ex¬

Wallace
in

the

Mr.'Jourdan has

been with the firm for some time
as

office manager.

-'Nations, like individuals, make
We must be big enough
to acknowledge our mistakes of
the past

.

•'

and to correct them.
"By the repeal of the Chinese
laws

exclusion
historic

we

mistake

distorted

can

and

Japanese

correct

silence

a,

the

propaganda.

The enactment of legislation now

pending before the Congress would
put Chinese immigrants on a par¬
ity with those from other coun¬
tries.
The Chinese quota would,
therefore, be only about 100 immi¬
grants a year. There can be no
reasonable apprehension that any
such number of immigrants will
cause
unemployment or provide
competition in the search for jobs.
"The extension of the privileges
of citizenship to the relatively few
Chinese residents /in our country
would operate as another mean¬
ingful display of friendship.
It
would be additional proof that we
regard China not only as a partner
in waging war but that we shall
regard her as a partner in days of
peace.
While it would give the
Chinese
certain

their
cause

a

preferred

other

great

Oriental

contribution

over

of decency and freedom




Sees Bright RaiM* uture
A. A. Bennett &

La Salle St.,

en¬

3%

of

and

be

to

issue

is

is

be

to

offered

named

for

Address—600 Market

in

the

of

State

be

to

offered

competitive

by

uations, according to
prepared by Herzog
Broadway. New York
of these interesting

obtained

be

may

from Herzog &

memoranda
& Co., 170
City. Copies
memoranda

upon

request

Co.

underwriters

utility

operating

will

for

company

and the

be

sale

by

at

the

of

names

supplied

Suit

MINN.—Trial
injunction suit brought by

MINNEAPOLIS,

preferred =stock

furnished

by

bonds

with
of

and

$6,287,063

United
the

Gas

and

sale

G.

of

I.,

amend¬

cash

common

and

Power

&

to

S-l.

from

of

of

the issue

Delaware

stocks

of

to

in¬

redeem

to

Dela¬
Shore

Co., Eastern
merged into Dela¬

be

&

Power

Co.

Statement No. 2-5219. Form

of

its

(9-25-43).

delay

the

case

to

give Govern-

between
La., and
Houston,

express

Underwriting — Principal
underwriters
are
Kebbon,'
McCormick
&
Co.,

named

Offering—Offering price to the public
be
supplied by amendment.
A new
voting
trust
under
which
the common
shares registered will be offered will be
dated Oc.t. 1* 1943.
The old voting trust
will

prior to or concurrently
with the delivery of common stock to the
Proceeds—The

plied to any

filed

a

44th

East

Underwriting
heads
will

the

New

business.

drug

Sachs

Goldman,

—

&

of-underwriters.

group

named

be

Street,

■

by

Co.

Others

amendment.

Offering—Price

public
will be
The preferred
the company's
option, in whole or in part upon at least
30 days'
notice, at prices to be supplied
by
amendment.
Initial
public
offering
supplied

by

to

the

amendment.

will

Oct.

be

redeemable

will

stock

be

plus

15,

at

accrued, dividends

from

to date of delivery.

1943,

Proceeds—The

net

,•
the
with other
applied to
the
redemption of all the presently out¬
standing debentures and preferred stock,

sale

the

of

funds

of

which

preferred

the

will

interest

proceeds

from

stock,

will

company,

be

require, exclusive of accrued
dividends, $6,132,000 for the

and

CHICAGO

&

Southern

a

filed

107,989

SOUTHERN AIR

&

Chicago

registration

■S-2.

shares

value.

Of

"the

shares,,

to

be

of

common

shares

registered

by

offered

for

by

a

par

60,000

voting

under

statem'ent—see
be

to

trust

separate

statement

be¬

through un¬
derwriters at a proposed maximum public
offering price not exceeding $16 per share
not

and

or

exceeding in the aggregate'$960.47,989 shares are registered for

issuance, pursuant to options, at $8 per
share, being an aggregate public offering

working

purposes.

Putnam,

of

Address

Tenn.

Lines,

Municipal

—

for

has

voting

of

a

government

"definite

contracts."

should be adopted
serted.

quickly, he

Airport,

to

One

create

a

for disposal of an esti¬
$50,000,000,000 of surplus
goods after the war, or to

mated

Underwriting

registration

See

—

Carleton

above.

ment

ment attorneys more time to pre¬
case.

Fraud in the sale of certificates

is

the

1943,

company

face

amount

had
of

sinking fund debentures,
due July 1, 1956, (out of $13,700,000 orig¬
inally authorized)
and 56,000 shares of
5(4%
cumulative
preferred
stock,
par
value $100 per share (out of 100,000 shares
of preferred stock originally authorized).
Registration Statement No. 2-5227. Form
(10-6-43).

TUESDAY, OCT. 26
TIIERMOID

COMPANY

Thermoid
tion

Company has

statement

for

filed

a registra¬
4(4% first

$2,500,000

mortgage bonds due Oct. 15,
1958,
124,250 shares of common stock, $1
Address—-Whitehead

and
par

charged in the SEC complaint.

Road, Trenton, N. J.

Business—Manufacture
oue

types

ber

products,

and

sale

automotive

friction

industrial

of

rubber

textile

products

carpet

and

of

vari-

rub¬

and

products,

wool yard and
textile products.

including

asbestos

,

Underwriting—For

bonds—Blyth & Co.,
Eslabrook & Co., $600,000;
Bitting, Jones & Co., Inc., $250,000; Hornblower &. Weeks, $250,000; Paine, Webber,
Inc., $600,000;

Jackson
Noel

&

Curtis,

$250,000;

Van

Abtyne,

&

Co., $250,000; Whiting, Weeks &
Inc., $200,000, and Putnam & Co.,
$100,000.
For the
stock—Blyth
&
Co.,

Stubbs,
Inc.,

111,825
&

Noel

Co.,

shares,

12,425

and

Van

Alstyne,

shares.

Offering—Prices to the public to be
plied by amendment.
stock

and

the

of

all

from

used

to

first

lien

due

Dec.

15,

principal

redeem

payable

Oct.

5,

for

revert

the

to

5%

to

and

in
to

serial

reimburse

used

retire

to

the $400,000 serial

of

notes, due annually 1943-1946.
will

of

amount

funds

all

103%

interest

trust

outstanding
$2,058,000;

of

banks,

to

1943,

sup¬

bonds

at

accrued

1951,

face

capital

working

of

collateral

amount

$900,000

sale
redeem

and

amount

the

bonds
the

will be

face

of

general

Any excess

funds

of

the

company.

Registration Statement No. 2-5228. Form
S-l.

(10-7-43).

DATES

and

We

state¬

sole

Putnam,

is president

trustee,

OF

OFFERING

twenty

practicable

as

there

be

may

authorized

any

deposited

shares

gate of 60,000 shares of common stock as
shown in statement above and voting trust
will

be

offered

to

persons

ex¬

stock purchase options and acquir¬
shares
of common
stock pursuant

ercising

offer

thereto.

The

stock

deposit

ment

to

will

extended

to

by

holders

stock

terminate

the voting

of

under

common

the

agree¬

1944,

1,

Oct.

unless

trustee.

"There

Atlanta

is

no

be

goods

program

of

wartime

can

until production of

catch

up

mand and thereby

are

not

scramble

with the de¬

avoid

for

trial

an

infla¬

goods

that

there,"

The Government's tax
another

to

us.

Light

Co.,

Electric

&

of

subsidiary

a

Gas

Co.,

filed

a

the SEC, for
$7,500,000 of first mortgage bonds, series
due 1963, and 20,000 shares of 5% cumu¬
lative
preferred stock, par value $100 a
share,

on

statement

which

with

sealed bids

will

be asked.

Address—243

Peachtree St., Atlanta, Ga.
Business—Company is an operating util¬
ity
company
engaged
primarily
In
the
business
of
purchasing, distributing and
selling natural gas in 20 municipalities in
Georgia,
and manufacturing, distributing
and selling artificial gas in five munici¬
palities in Georgia and two in South Caro¬
lina.
Incidental to the promotion of its

business, the company also engages In the
merchandising of gas appliances.
It has
been

engaged

the

in

sale

of gas

continu¬

Proceeds—Net

interest

crued

plant

proceeds, exclusive of ac¬

and

dividends,

will

be

ap¬

that funds are avail¬
of $5,875,000 prin¬
cipal amount of general mortgage bonds,
series due 1955, 4(2%, at 104, and $2,150,000 principal amount of general mortgage
bonds, 3%%, series due 1961, at 104/?,
and to the redemption of 13,000 shares of
6% • cumulative • preferred stock at $110 a
plied
able

the extent

to

to

the redemption

siuiru

Underwriting—To be filed by amendment.

Registration Statement No. 2-5211. Form

definite

continuation

continued

Gas

registration

facilities.

"Some sort of control should

said.

filed
whose
deter¬

been

not

unknown

are

Consolidated

8-1.

the

or

have

ously since 1856, except when its
was damaged during
the Civil War.

Planning

ment and

for

dates

ATLANTA GAS LIGHT CO.

the

of

the corporation.
It is
also proposed to offer to the public voting
trust
certificates
representing an aggre¬

ing

mined

after

of

stock

certificates

of Issue#

but

ago,

registration state-,
terms
of
the
voting

the

Under

capital

list

a

more

or

date of the

agreement

thereunder

days

offering
soon

below

present

whose registration statements were

vot¬

director of

a

company.

effective

tionary

their

30,

$12,131,000

3%%

year

UNDETERMINED

ple will have a lot of money to
spend for nonexistent goods," he

pare

15

Memphis,

controls after the war, when peo¬

failed

June

outstanding

'f

■

as¬

has

the

fund

Business—Voting trust,

Mr. Crawford said the Govern¬

also

share,

a

sinking

Inc.

intelligent post-war planning by adopt a policy for disposal of Gov¬
industry, but the chief among ernment-owned war plants, equip¬

war

of

As

trust agree¬

Crawford, President of the National Association of
Manufacturers, said on Oct. 5 jthat the Government's attitude toward
business after the war is the big question mark in American industry's
post-war plans, it was reported in United Press advices from Cleve¬
land on Oct. 5, which went on to say:
Mr. Crawford, also President of Thompson Products Co. here, said
there are five major obstacles to^

lack

$109.50

at

3Vstr/e

debentures at 107%% of their face amount.

C.

the

stock

for the redemption of

15-year

value, of Chicago

par

no

Air

Southern

trustee,

voting

statement

1, 1943, for 500,000 shares

stock,

common

and

LINES, INC.

under voting

ment dated Oct.

To Future Industrial

is

preferred

$13,071,152

outstanding

notes

MAI Says Government's Policy Is Obstacle

these

and

on

registration

a

trust

registered,

evidenced

on

reduc¬

or

for

SOUTHERN AIR

&

Carleion
filed

ment.

Inc.,

no

corporate

trust certificates

Lines,

stock,

loans;

or

(9-27-43).

CHICAGO

the

statement

routes

payment

bank

other

or

ap¬

of the following
additional equip¬

present

on

present

capital

proceeds may be

of

routes;

new

of

tion

LINES, INC.

Air

lative

Proceds—Proceeds

more

or

used

be

Offering—As

SATURDAY, OCT. 16

has

to

ment

net

one

Purchase

purposes:

the

officers, has been

postponed until Oct. 18.

and

Chicago, and I. M. Simon & Co., St. Louis.

ing

program

number

between

the

parent

with

Maryland

mission against

of its affiliates, and a

mail

.

Registration Statement No. 2-5220. Form

sale

together

Co.,

stock

Light

Service Co.
and

be

necessary,

received

preferred

bonds
will

the

stock,

applied

be

the

public

extent

in connection

will

debtedness
ware

the

to

of

from

Improvement

company,

the Securities and Exchange

cate, two

has

\

City.

Business—Wholesale

Memphis,

air carrier of

an

Toy as.

amendment.

proceeds
preferred

portion,

a

price
the

to

post-effective

Proceeds—Net
of

ment

Com¬
Investor's Syndi¬

Airport,

as

HI., and New Orleans,
Memphis,
Tenn.,
and

proposed

Offering—Offering
and

U.

passengers,

Chicago,

are

government policy for termination

SEC Postpones

INC.
Inc.,

v:

Address —155

,

underwriters.

stock

and

ment.

of

of the

.

Street, Wilmington,

bonds

the

bidding

Fred

Gisholt Machine Co. and Strom-

bidders

Delaware.

request.

berg-Carlson, offer attractive sit¬

by

Business—Operates

1,

competitive bid¬

public

a

Underwriting—The

leadership.

Attractive Situation

of

will be terminated

Business—Is

Copies of this circular discussing
the situation may be had from the
firm upon

Oct.

due Oct.
1,
1973, and 40,000
preferred stock, cumulative, par
share.
The dividend rate on the

of

per

000;

will furnish important

collateral

dated

Del.

and

an

has

covering

statement

mortgage
series

preferred stock

ill., have is¬

interesting circular dis¬
cussing
the future of railroad
securities, which the firm believes
sued

Eastern

and

shares

Co., 105 South

Chicago,

value.

York

Tenn.

consti¬

as

it

Delaware,

registration

Federal
people, Judge Gunnac- H. Nordbye and
to the attorneys fox' both sides agreed to

status

first

bonds

1943,

Co.,

registration

a

trust

Co.

into

low—are

try and which

mistakes.

filed

Light

Service

$15,000,000

certificates

coun¬

bar Chinese resi¬
dents from American citizenship.

Public

Registration

CITY,

$383,912.
Address
Municipal

LIGHT CO.

&

&

merger

Light
aggregating $24,822,913.

H. O. Peet to Admit

as

We

Shore

Public

MO. — H. O.
much in the spirit of her people Peet &
Co., 23 West 10th St., mem¬
faith

Power

the

after

ware

and planes
on the sea

is

Delaware
tuted

by

Lawrence

nance.

soil.

DELAWARE POWER

ding, but is not to exceed 4.4%

Also included in the series

price

—

Union Carbide and Carbon Corpo¬
will

Robbins,

value,

THURSDAY, OCT. 14

when

of the New York Stock Exchange

heart

the

specified, are as of 4:30
PM. Eastern War Time as per rule 930 (b j.
Offerings will rarely be made before the day follow¬
ing. W:M'H

the Union Carbide Division of the

ration.

ROBBINS,

&

registration statement for 150,000 shares of
$4 cumulative preferred stock, without par

S-l.

otherwise

$100

and supplies, but also in
and their partners, and investment
carrying put plans already made
for offensive, effective action. We analysts seeking authoritative '-in¬
formation on commercial plastics,
and our Allies will aim our forces
at

These dot

Company, and "Bakelite and
Vinylite," by representatives of

sible—aid not only in the form of
weapons

than twenty days ago.

These issues
are grouped
according to the dates on which the registra¬
J. R. Townsend, Material Stand¬
tion statements will in normal course become effective, that
ard
Engineer of the Bell Tele¬ is
twenty days after filing (unless accelerated at the dis¬
phone Laboratories, was the first
cretion of the SEC), except in the case of the securities of
speaker in a series of lectures on
Synthetic Plastics, conducted by certain foreign public authorities which normally become
the New York Institute of Finance
effective in seven days.

N. Y. Finance Institute

research

great odds.

"China has understood that the

list of issues whose registration state•

a

ments were filed less

legislation as important in the
cause of winning the war and of ceeding lectures will cover ."Cellu¬
lose Plasties," by W. S. Landis,
establishing a secure peace.
Vice-President
of
the
Celanese
"China is our ally.
For many
Corporation of America; "Methalong years she stood alone in the
fight against aggression.
Today crylate Plastics," by Dr. Kenneth
E. Martin, member of the Patents
we fight at her side.
She has con¬
tinued her gallant struggle against Department and former plastics
very

&

redemption of the outstanding 5(V% cumu¬

Plastics Lectures At

on

McKESSON

price

Registration Statement No. 2-520G. Form
(8-25-43).

S-2.

Offered

Underwriters—Brailsford & Co., Chicago,

convert such shares from date

and

to

the

is

company

sound

stock,

MONDAY, OCT. 25

the

McKesson

proceeds from

expenses,

ment,

public of

share.

a

(9-27-43),

Minn.

Paul,

dated July 9, 1943, be¬ cidental to war
program, and in the anand the underwriters, 1
ticipated expanded peace time business.
agreed to sell the pre¬
Holders of. the preferred stock may
at

has

stock

part.

$20.00

preferred

after

Chicago.

directly

St.

F-l.

company

company

The

stock,

capital.

convertible preferred stock).

agreement

an

tween
the

6%

Co.,

Proceeds—Net

value, and 75,000 shares of com¬
stock, $1 par value (reserved for con¬

version

&

Offering price to the

CO.

par

mon

Address

agreement that
overdue —

full

in

is

gress

Steel

Kalman

and

STEEL PRODUCTS

Indiana

ferred

that the Con¬

Security Flotations

OFFERINGS

titles them to such preference.
•

Registration Statement No. 2-5221. Form

Calendar Of flew
INDIANA

1507

statement
effective
5:30
EWT on Oct. 4, 1943.
Approval by SEC—The Securities and
Exchange Commission Oct, 4 gave its ap¬

the proposed solicitation by the
of competitive bids for $7,500,000
mortgage bonds and 20.000 sh^es
of
$100
par value-preferred stock,
The
bonds
will
bear
a
coupon
rate of not
more than 3^%
and the stock a dividend
rate of not-more than 5%
of par.
proval to
company

of first

Awarded—Bom

policy is

issues

awarded to Shields

the bonds as 3s at
at $4Va
div. rate,
at 100.379.
Subject to the approval of the
SEC, the bonds will be reoffere-i at 101.45
and the preferred stock at 102(4.
(This list is incomplete this week)
&

Co.,

100.159

obstacle to future indus¬

planning, he said.

(8-31-43).

Registration

p.m.

Oct.

and

13,

the

1943:

stock

THE COMMERCIAL & FINANCIAL CHRONICLE

1503

11 A. mover 2-01)50

For Dealers

Teletype—N. Y. 1-971
Firm

Trading Markets

Common

Ft. Pitt Bridge

...

stock

of

unusual

in peace

MEXICAN SECURITIES '

air

and

All American

:

all issues'-.

service

MARKS &
FOREIGN

SECURITIES

SPECIALISTS

50 Broad Street

-

INC,

115 communities in

'

and air express.

X

■

ates

.

pick

airplanes,

to

Mfg. Co.

serves

Common

&

M. S. Wien & Co.

oper¬

transport service in certain East¬

Members N. Y. Security Dealers Ass'n

states.

25 Broad St., N.Y.

Urged By U„ S, Bfaamfeerifl
In Place 6f Administration Tax Proposals
as

a

request

on

Teletype

'V1.

:''k:

Members

45

New

INCORPORATED

York

NASSAU

>?.')/• :
Association

Dealers

Security

YORK

NEW

STREET,

TELEPHONE

philadelphia

COUPONS MISSING

Teletype

Bell

telephone

Eugene E. Agger, Commissioner of Banking and Insurance of New
Jersey, states in

tions
tes

and

time

discrimina¬

and administrative

2.

difficul-

be avoided if:

can

1. There
A

are

is

tax

exemptions.

no

imposed at

No

easily

more

Federal

other

taxes

are

that

—now

imposed

The tax is

4.

.

retail sales.

on

imposed on aggre¬

gate purchases.
5. The

.

tax

is

imposed

Fractional

garded.

disre¬

the Associated Press

and

made

commerce,

specific recommendation

110

the

-size

tax,

of

suggested
but Mr. Alvord said a

10%

ment

be

one

merely

as

a

certain

advocated

by

the

Treasury;
"6.

Will be

highly desirable

a

supplement, at least for the dura¬
tion

of

the

to

war,

present

tax

laws, and
"7.

Will be

an

effective aid in

stamping out black markets."
As

indicative

of

the

views

distribution of bank

and

Campaign

William Green, President of the
Federation
of Labor,

ber

of

Representative Doughton respect¬

Commerce

at

luncheon,
Mr. Green said, according to the
Associated Press, that "all labor
asks of private industry is
the
a

right of free
enterprise
we willingly
accord to it.
full recognition
of
the right of workers to join free

same

which

That

means

democratic

unions

of

their

choice and full acceptance of
collective bargaining." Mr. Green

own

I

further quoted as saying:

"If

is

EAGLE 'v;

and

when

such

forthcoming, there will be

need

of

Government

restrictions and

'

laws

normal

and

handicaps

no

and

on

the

cooperative relations

between labor and

industry.

"But if private industry, on the

Bought

—

Sold

—

Quoted

of

tors

international stabiliza¬

an

tion fund

change

clearing union could

or

the

gold

the

or

of

amount

the

of

content

in

gold

this country, bank reserves would
be affected directly, he asserts.
•
"American

banking," states Dr.

Agger, who

is

also

head

of

the

Economics Department and Asso¬
ciate
Director
of the
Graduate

of

School

Banking

at

Rutgers

plan

freedom

of

action

the

for

United States."

Agger in his paper considers
would be

the

consequences

the

money

bimetallism

international

managed

system. A return to the in-

ternatibnal gold standard, Dr. Ag¬

ger says, would require the estab¬
a mechanism to take

lishment of

71

Broadway N.Y. BOwIing Green 9-7027
Boll Taiitypa XT 1-61




a new

and

at¬

anti-union

campaign in the post-war period,
it will only destroy itself and the

free enterprise system along with
it."

Teletype N.

Moxie

Ass'n

Y.

1-1779

Tybor Stores

"It should also be added that the

place of the London money
market, which was formerly the
world clearing center.

Discussing the effects on bank¬
an international agreement

ing of
to

revive

international

bimetal¬

lism, Dr. Agger says:
"If

bimetallism

!

>

truly in¬
ternational in scope, there would
be in each country a fixed price
for the two metals (gold and sil¬
were

ver), and there would be no sep¬
arate market price for them, as
there is none foj: gold under the
gold standard. / >
:
rather

that

fact

than

one,

two

would

metals,
be

em¬

ployed as standards for the mone¬
tary system does have some inter¬
esting implications.
The reserve
base would be broadened, and the
inauguration of the system would

probably add considerably to the
potentialities of credit expansion.
"As under the gold standard, so

international

degree

of

bimetallism,

currency

and

credit management would be pos¬
sible.
pose

There is

no

reason

to sup¬

that under international bi¬

metallism

our

Federal

Reserve

System could not exercise, the
degree of supervision and

same

Great Amer. Industries

adoption of international bimetal¬
lism would

assume

the restoration

of

a free market throughout prac¬
tically the whole range of inter¬

national

economic

relationships.

Undue interference with

interna¬

L. D. SHERMAN & CO.
.Members N.
!

system
based

as

on

BUY WAR BONDS

bimetallic monetary

a

effectively
gold."

it did that

as

for

advanced

The Business

international

Man's Bookshelf

monetary management, Dr. Agger
concludes:

Brazil—A

"The plans imply a considerable
of

national

independ¬
ence in
the management of cur¬
rency and credit. The fixing of tw
and

the

control

of

nomic

tional

Financial

Review—The

and

Eco¬

Chase

Na¬

Bank, Pine Street, Corner
City—paper.

of Nassau, New York

unit

foreign

Capital

ex¬

change rates represent a surrender
of sovereignty in the interest of
an international objective.
Other
provisions restrict the member
countries

Security Dealers Ass'n

Street, N^w York 5

I Tel. WHitehall 4-7970 Tele. NY 1-2218

Analyzing the plans that have
been

Y.

Pine

30

tional trade and investment would

undermine

.

Copper Canyon Mining

already have.

we

'

Reiter Foster

as

Contract
ery

Goods

Industries

and

Renegotiation—Machin¬

and Allied Products Institute,
Street, Chicago

221 North La Salle

—paper.

with

both

con¬

Earning Power of Railroads—
Thirty-eighth Issue, 1943—James
H. Oliphant & Co., 61
Broadway,
New York City—leatherette.

trol.

Indeed, with respect to the
Keynes plan it is stated:
'The
Union might become
the future economic

the pivot of

of the world.' "

>.

government

Effect of War on Currency and
Deposits, The—Charles R. Whit¬

tlesey—National Bureau1 of EcoY
nomic

Research, 1819 Broadway,
23, N. Y.—paper—35c.

New York

the

some

tempts to launch

Members-New York Stock Exchange

management

wider international economic

gold-silver

an

under

movement

Dealers

Electrol

gold

respect to
short-term and long-term credit
operations.; In general the plans
may be regarded as a step toward

contrary, persists in futile and
misguided efforts to destroy the
union

Security

DIgby 4-4832

re¬

out, banking conditions in this
country would be affected directly
by
any
monetary
stabilization
pian which calls for redistribution
of the nation's gold stock.
Fur¬
thermore, if the board of" direc¬

trade

HAY, FALES & €0.

ultimate

that

and! bank

"The

recognition

regulations which place artificial

LOCK

of

fact

rency

reserves

,

was

Phone

alone, would not mate¬
affect such domestic cur¬

and

American

Y.

gold and silver, instead

serves are

banking system of V the
adoption of three possible mone¬
tary standards after the war—the
international gold standard,, inter¬

In

and

of

The

now.

national

Anti-Union

N.

Exchange PL, N. Y. 5, N. Y.

in

rially

for

j

40

it does

this country, Dr. Agger points

what

part of the tax system, will not cautioned business men on Oct. 7
impose burdens which discrimi¬
against any anti-union campaign
nate
jn
favor
of
high-income in the post-war period, declaring
groups and against low-income that the
penalty would be destruc¬
groups;
AVv-^rV
tion of the free enterprise system.
"5. Will render
unnecessary the
Addressing the Boston Cham¬
tremendous
increase
in
taxes

changes in the monegold stock of the United
States directly change the volume

reserves as

and

come; ■

excise

Because

control of bank

the end of the calendar year with¬
in which the war ends.

without imposing unbear- j
burdens, from those receiv¬
ing four-fifths of the national in¬
viewed

Standards Inquiry

the Monetary

by

value of the standard money

"1. Is capable of reasonably sim¬

nues,
able

11,

tary

Dr.

reve-

Oct.

on

agreed upon, however, would have
to retain reasonable independence

reconversion,

Members

Dr.

study of American Banking and Currency Stabili¬

surrender

post-war

S. H. JUNGER CO.

New York City.

sales tax:

"3. Will collect substantial

issued

a

of international
cooperation to achieve monetary
stability be devised.
Any plan

ple and effective administration;
"2. Is desirably deflationary;

When

zation

formulating central bank and credit control policies,

law a provision automatically re¬
pealing the excess profits tax at

trary to the expressed position of
the Treasury,' it is the belief of
a

in

action

University, "is most anxious that a

to

Inquiries invited

States to an international monetary

the United

by

and that there be written into the

"Mr. Alvord testified that 'con¬

"4.

Adherence

dollar

sufficient

reserves

MUTILATED

agreement should not be permitted to interfere with our freedom of

successful

finance

in this direction.

the Chamber that

was

1-576

Honey Agreement Should Hot
Interfere With Credit Control Policies: Dr. Agger

cumulate

of Govern¬

coupled with
the tax program. House Republi¬
cans already have started a drive
economy

sales

york

new

International

Mr, Alvord, on the other hand,
proposed that the tax laws be ad¬
justed to permit industries to ac¬

"Other Chamber witnesses sug¬
a program

a

tion

levy probaly would yield in ex¬
cess of $6,000,000,000 during 1944
and a 5% tax about $3,500,000,000.
gested that

Doughton's apparent incli¬

Enterprise 6015

2-3G00

OR

in

Joining Cooper in the opposi¬
were Representatives Aime J.
Forand
(D., R. I.), and Walter
Lynch (D., N. Y,), the latter fa¬
voring higher corporation taxes.

to
retail
as

the

Mr.

RECTOB

em¬

Doughton, turned out to be
of the principal opponents.

Chamber, an organization

of business

100%

hopeful development, but Repre¬
sentative Jere Cooper D., Tenn.)
who usually works closely with

ad¬

also quote:

we

"The

are

have

we

regarded by sales tax sup¬
porters on the committee as a

7.y-'L-v.'-'i■■

From

vices

cents

than previously

now

ployment."

tax

purchaser.
6.

demands

nation to be "converted" to

the

on

bring

"A sales tax could be absorbed

form rate.
3.

for
wage increases, but would not the
people be patriotically willing to
absorb a 5% levy?

uni¬

a

would

tax

1-1397

5

substitute for the Administration's

tax

this

HAnover 2-8780
Y.

BIDS MADE ON BONDS WITH

$10,500,000,000 tax program is advocated by the U. S. Chamber of
Commerce, whose spokesman, Ellsworth C. Alvord, in testifying on
Oct. 12 before the House Ways and Means Committee, referred to
the Administration's plan as one "supported solely by political ex¬
pediency" and which, he said, "falls of its own weight."
Opposition
was voiced by Mr. Alvord to the^
proposed Treasury tax increases ing the sales tax, the Philadelphia
on incomes of individuals and cor¬
"Inquirer" in advices from its
porations. According to Associated Washington bureau on Oct. 12
Press accounts from Washington stated:
"
Mr. Alvord said a tax imposed on
"I don't have much doubt," Mr.
retail sales "is the most practical"
Doughton said, "that a 10% sales
at

N.

Kobbe, Gearhart & Company

Mail Sales Tax

A Federal retail sales tax

Preferred

and delivery of air mail

up

Trading market and further information

•

Bonds

Merrimack

Aviation, Inc.

Also, for War Department,

cargo

seaboard

ern

New York 4. N. Y.

.

military

Common &

Pennsylvania and five adjacent

with non-stop

states

company,—

war.

By patented device attached

;:v)>;|:r!ABL

Thursday, October 14, 1943

Consolidated Natural Gas

Outlook For Retail Trade, The—
E. W. Axe &

Situation Interesting
The

Securities

and

Commission has approved the dis¬
tribution of Consolidated Natural
Gas

Co.

to

Standard

stockholders

the

Oil Co.

Co., Inc.—The TarryPress, P. O. Box 157, Tarrytown, N. Y.—paper—40c—free to
public libraries and non-profit in¬

town

Exchange

stitutions.

Now Sachs &

The Public Utility Department of
Hettleman & Co., 52 Wall Street,

New York
New

York

City, members of the
Stock

V

of

of New Jersey.

and

Curb

Ex¬

The

firm

name

Sachs & Co.
&

was

Toplitt

of

Melville

)■
F.

changed to Sachs

Toplitt, effective Oct, 7. Offices

changes, has prepared an interest¬ of the firm are located in
ing analysis describing in detail Savoy-Plaza Hotel
Building.
the properties, financial position,
earnings, and prospects of Con¬

the

solidated.
may
upon

Copies of this analysis
be had from Hettleman & Co.
written request.

Arden Farms

INDEX
Common

Page
Bank and Insurance Stocks..',.

1503

Broker-Dealer Personnel,Items

1506

Calendar of New Security Flotations. 1507
Canadian Securities
1497

Investment

Trusts

Memorandum

on

request

1502

......

Municipal News and Notes.......... 1504
Our Reporter's Report
1487
Our

Reporter

Public

on

Governments......1500

Utility Securities

Railroad Securities
Real Estate Securities

Securities

Salesman's

Tomorrow's
Says

.1501

.............1489
1492

Corner....... 1502

Markets—Walter
:

,..,,

Whyte
,1492

iill, Thompson & Co., Inc.
Pdarkets

120

and Situations

for Dealers

Broadway, New York 5

Tel. REctor 2-2020

Tele. NY 1-2660