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financial
Tlie
DMmThtt
VOL. 133.
SATURDAY,OCTOBER 171931.
financial Thronult
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The Financial Situation.
Gold exports are now proceeding on such a scale
as to furnish occasion for uneasiness and even
anxiety; and by reason of their size the Federal
Reserve Bank of New York has been driven into
making another advance of a full 1% in its rediscount rate after last week's advance of 1%, a decidedly wise move, and yet leaving the rate, even
after these two advances, quite low, namely, 3/
1
2%.
Yesterday the Federal Reserve Banks at Chicago
and Boston also raised their rates from 21/
20
/
0 to
3/
1
2%. Engagements of gold have been of huge proportions and are in continuance of the heavy outflow of the metal that has been in progress for so
many recent weeks, the whole constituting a cumulative outflow of the metal of startling magnitude.
As a consequence the Federal Reserve banks are
being drained of their supplies of gold in a way to
suggest caution, notwithstanding that only a short
while ago these supplies were deemed superabundant
to the point of excess and to a degree where they
were deemed a menace rather than an advantage.
For the week ending Wednesday evening of this
week the actual engagements of gold for export have
reached no less than $129,327,000, besides which
$96,686,000 has been earmarked for foreign account,
making a loss for the two combined in the enormous
amount of $226,013,000; that is, nearly a quarter of
a billion dollars in a single week. Just think of that!
But that is not all. This week's engagements follow
equally heavy withdrawals last week and in the
weeks preceding, and, moreover, the outflow still
continues, as the engagements for the two days since
Wednesday strongly testify, the withdrawals for export on Thursday having aggregated $17,215,300,
though offset by a decrease of $1,334,000 in the earmarked gold for foreign account, and the exports
rarnik
NO.3460
yesterday (Friday) having reached $44,471,300, but
with a reduction of $7,732,000 in the earmarked gold.
Last week the exports of the metal reached U8,322,600, besides which $28,013,000 was added to the
earmarked total, while for the month of September
exports were $28,700,000 and the earmarking transactions aggregated no less than $277,000,000, making
$305,700,000.
In other words, since the beginning of September
up to last night the withdrawals of gold have reached
the startling amount of $690,669,200. There have
been some importations of the metal, reducing to
that extent the net loss of gold to the country. but
we need not dwell upon these here. Of the actual
exports of the metal the greater part has gone to
France, this week's shipments alone to France having been $113,875,000, besides $37,332,600 more
engaged for that country on Thursday and Friday,
in addition to $68,695,000 last week and $23,600,000
during September, making the grand total of the
French takings $243,502,600. But there have been
so quite considerable exports to many other diffe nt countries, in particular to Holland, Belgium
and Switzerland, which took, respectively, $28,091r
100, $13,363,700 and $8,823,800. As to the.earmarkings, no information is forthcoming as to the destinations, but no inconsiderable portion of these, too, are
believed to be for foreign account. In the following
table we undertake to show in tabular form the destination of the exports:
GOLD EXPORTS PROM UNITED STATES.
Month of Week Ended Week Ended
Exported to— September.
Oct. 7.
Oct. 14. Oct. 15-16.
Total.
$
$
$
$
$
France
23,600,000 68,695,000 113,875,000 37,332,600 243,502,600
Holland_ _ _ _ 4,200.000 7,972,600 4,814,000 11,104,500 28091,100
Bwitgerland _
700,000 1,467,000
603,000 10,593,700 13,363,700
Belgium_ _ _ _
6,330,000 2,493,800 8,823,800
Mexico
2,314,000
2,314,000
Germany_ _ _
1,220,000
140,000 1,360,000
Poland
22,000
22.000
0th. countr's
200,000
188,000
171,000
559,060
Total
Earmarked
28,700,000 78,322,600 129,327,000 61,686,600 298,036,200
277,000,000 28,013,000 96,686,000 dec9066000 392,633,000
Imports_
305,700,000 106,335,600 226,013,000 52,620,600 690,669,200
46,000,000 2,718,000 12,555,000 1,225,000 62,498,000
Net loss
259,700,000 103,617,600 213,458,000 51,395,600628,171,2011
It is evident from the foregoing record of withdrawals that the United States is being drained of
its supplies of the metal in the same way as Germany
was drained in the first instance and later Great
Britain. Furthermore,the prime factor in the operation has been France. The latter initiated the movement, and the fear, or whatever induced the movement, has now extended to virtually the whole of
Europe. Everyone seems bent on withdrawing whatever capital and funds he or they may have in this
country, including bank balances, and to this has
apparently been added some considerable sales
of
2470
FINANCIAL CHRONICLE
For.. 133.
And the task is rendered all the more impossible
American securities owned abroad, the holders
of the varitumbling over one another in their desire to get rid since repayment of the American share
repayment
also
mean
ly
necessari
would
of their holdings at whatever they may fetch. The ous credits
other
from
time
same
the
at
obtained
credits
the
depreciation in American securities which has been of
Bank
the
to
credit
000
$125,000,
he
banks—t
central
in progress almost uninterruptedly ever since the
simply half of a total credit
stock market crash in the autumn of 1929, and of England having been
at that time and the $25,obtained
000
$250,000,
of
lathas
especially the collapse in bond values which
Bank of Germany having been
terly been taking place and which has no parallel 000,000 credit to the
total credit of $100,000,000.
in the past history of the United States (bond prices only one-quarter of a
repayment was out of the
of
often declining 5 to 10 points in a single day), seems No, the very thought
time to come. In short,
ble
considera
a
for
to have increased the feeling of suspicion that some- question
of a general plan of
part
simply
were
credits
thing must be wrong, else there would be no such a the
trouble and involved
in
countries
n
Europea
for
relief
complete breakdown in security values as has been
banks in the general European
Reserve
Federal
our
taking place.
were necessarily a weakening
All these influences and circumstances have com- tangle. As such they
our Federal Reserve System
though
even
element,
will
it
that
bined to make the average European feel
of great strength and the United
be well for him to get rid of his American invest- occupies a position
its control a superb volume of gold.
ments, even at a loss, and to likewise induce finan- States holds in
prove a drag and a handicap in a
cial institutions and those having floating balances They were sure to
strain, such as has now deand
of
stress
here to convert them into a form where they can be period
quickly realized upon and taken out of the country veloped.
The European financial world was sure to see
at once in the shape of gold. The supposition apeven while the American financial world was
this,
impears far-fetched in the extreme in view of the
all
ous of it,lulled into a state of easy repose
unconsci
posStates
mense gold holdings which the United
ts that came from Washington with
the
by
statemen
of
n
possessio
in
is
eases, the greater part of which
and which assured us that we
the Federal Reserve banks themselves, but appar- recurring frequency
gold that we need never
ently this accurately describes the panicky fears were blessed with so much
score, no matter what
that
with which the foreign world seems to have become entertain any fears on
what might happen.
matter
no
and
we might do
possessed.
into and perpetufell
es
authoriti
the
Then
Reserve
The motives prompting the withdrawals was well
They have repolicy.
of
errors
serious
other
ated
expressed in a recent cablegram which argued that
es to a policy
themselv
d
committe
more
once
cently
the action showed the prudence and foresight "of
which did so
rates,
interest
low
and
money
easy
of
the Bank of France and the French Government,
craze in
stock
market
the
starting
in
mischief
much
pounds
the
which, having lost 20% of the value of
equally
to
cause
destined
which they held, do not intend to run the same risk 1928 and 1929, and was
during
n
of
depressio
period
serious ill effects in the
with dollars."
Rethe
Federal
York
New
in
Here
A large part, if not the greater part, of the unrea- 1930 and 1931.
and
11
2%,
/
only
to
reduced
was
rate
soning fear must be ascribed to the mistaken policy serve discount
bankers' acceptances was cut
pursued in the administration of our Federal Reserve the buying rate for
of 1%. One of the express
figure
low
the
to
fantastic
System. The Reserve authorities have insisted upon
to force foreign capital
was
this
in
doing
objects
participating in all the European financial involveto return home, thereby
here
held
foreign
and
funds
aloof.
ments when they ought to have held rigidly
the metal and correctof
flow
an
outward
inducing
banks,
The credits extended to the European central
in the distribution
tment
the
maladjus
ing
so-called
,
observers
t
it mist now be admitted by all competen
gold. In other words, the
have been a serious mistake, besides being wholly of the world's stock of
countries and foreign
without warrant of authority under the Federal Re- purpose was to help foreign
gold of which they
the
of
n
serve Act. The credit of $25,000,000 to the Bank banks to the possessio
now they find it
which
but
need
in
so
sadly
seemed
of Germany became a frozen asset almost from the
simply
recalling
by
cost
our
at
to
so
obtain
easy
day that it was granted, since it was known beforeand
great
volume
such
in
here
held
funds
the
home
hand that it would have to be extended over and over
a
of
as
here
ed
matter
maintain
really
were
which
The
and could not be repaid for a long time to come.
n
Europea
affairs
while
on
were
precauti
and
safety
Engof
Bank
credit of $125,000,000 extended to the
upset and at a time when there was not the
land was an even worse mistake, since it was pal- so deeply
suspicion that flight from the United States
pably evident when it was made that the flight from least
dollar could ever occur.
the pound which was then in progress, could not be
Finally the Federal Reserve banks, in the carrying
prevented, thus making early repayment wholly out
out of their easy money policy, have pursued a fatuof the question. And the same is true of the credits
ous course of credit inflation, forcing Reserve credit
to the minor countries in which our Reserve banks
through the open market operations of the Reout
have so freely indulged. They were all non-liquid
serve banks when the member banks would not avail
from the start.
in of the borrowing facilities afforded by the Federal
• We are told that these credits are all payable
Reserve System even at the unconscionably low resubnot
gold or American dollars, and therefore are
2%, which was the official rate
discount rate of 11/
coung
borrowin
ject to depreciation even where the
Reserve
York
District. In other words,
New
in
the
of
Bank
the
try goes off the gold basis. But imagine
credit and Reserve notes
Reserve
pushed
have
they
turning
credits,
England, compelled to liquidate the
by
to their holdings of Govon
adding
circulati
into
credit
the
of
over $125,000,000 in gold in repayment
s
to their bill holdings
also
and
securitie
ernment
Reserve
Federal
to that amount obtained from our
banks
member
the
were
whenever
willing to dispose
do
to
ing
undertak
Bank, or the Bank of Germany
they
are
when
now
until
forced
of
to take over
them,
obtained
credit
the same thing in cancellation of the
of
the
want
foreign
holdings
bill
banks
which
the
by it in this country.
OCT. 17 1931.]
FINANCIAL CHRONICLE
to convert their investments into gold, they find
themselves in a decidedly extended condition, far
from the liquid state in which banks holding all the
reserves of the member banks should always keep
themselves.
Even now in the period of great stress and trial
they keep on inflating both the volume of Reserve
credit afloat and the volume of Reserve notes in
circulation. They are taking over with wonderful
alacrity the bill holdings of the foreign banks who
want to dispose of them in order to obtain gold, and
they are offsetting the gold exports by the issue of
Federal Reserve notes to take their place.
This week's Federal Reserve statements ought to
prove an eyeopener in that respect. During the week
the acceptance holdings of the 12 Reserve institutions were further increased in amount of no less
than $149,051,000. This presumably represents the
throwing over of bills held by foreign banks which
wanted to convert them into gold, but why should
the Federal Reserve banks help these foreign banks
in discounting the bills at the low buying rate established by the Federal Reserve System? The Reserve bank's buying rate for acceptances has been
raised very tardily the last two weeks, and on Thurs4%,though
day the buying rate was still as low as 2I/
8%. Why should the
yesterday it was raised to 31/
Reserve banks make a market for the bills at all,
and thus afford facility for the acquisition of the
gold, thereby making gold exports easy and
cheap?
Why not compel these foreign banks to have recourse to the open market? In that case we may
be sure the open market rate would rise so quickly
that these foreign banks, obliged to take a loss, would
not be so anxious to dispose of the bills. Not unlikely there is some agreement or understanding by
which the Reserve banks bind themselves to take over
the bills whenever the foreign banks decide to dispose of them. If so, the Reserve banks are not an
entirely free agent in the matter. But if 60, Reserve
practice in that respect should be changed. Every
foreign bank functioning as a central bank, makes
it a practice to put obstacles in the way of a gold
outflow where that can be done by legitimate means
and some by illegitimate means. The Reserve banks,
on the other hand, appear to be directly encouraging
the movement.
Be that as it may, the bill holdings of the Federal
Reserve banks are now close to three-quarters of a
billion dollars, or, in exact figures, $730,407,000.
This compares with only $185,492,000 a year ago on
Oct. 15 1930. Holdings of United States Government securities have decreased this week some
$11,000,000, but still stand at the very high figure
of $727,431,000 as against only $601,614,000 a year
ago on Oct. 15 1930. The discount holdings, representing direct borrowing by the member banks, have
also increased quite heavily during the week, rising
from $463,393,000 Oct. 7 to $627,579,000 Oct. 14. It
should be noted that at the latter figure comparison is with only $210,439,000 12 months ago, showing
that these discounts are nearly three times what they
were a year ago.
Altogether the volume of Reserve credit outstanding has increased during the past week alone in the
amount of over $303,000,000, the amount Oct. 14
standing at $2,104,443,000 against $1,801,217,000
Oct. 7. On Oct. 15 last year the total of the bill and
security holdings was no more than $1,003,817,000,
2471
thus disclosing an addition for the 12 months in the
huge amount of $1,100,626,000. In other words, the
amount of Reserve credit outstanding has more than
doubled during the 12 months. If that is not inflation we do not know what can properly be called by
that name. And this has occurred while business
has remained extremely depressed, thereby reducing
trade demand for accommodation to small dimensions. It has also occurred while Stock Exchange
borrowing, as measured by brokers' loans by the
reporting member banks in New York City, has been
steadily dwindling. These brokers' loans were further reduced during the week in amount of $73,000,000, and are now less than a billion dollars, being, in
exact figures, only $928,000,000, which compares
with $2,752,000,000 a year ago on Oct. 15 1930—that
is, these brokers' loans are only about one-third of
what they were at the corresponding date in 1930.
The same policy of inflation is reflected in the
figures showing the volume of Federal Reserve notes
outstanding. During the week there was another
increase of $51,828,000 in the volume of these Reserve notes, raising the total of these notes in cir- •
culation from $2,269,989,000 Oct. 7 to $2,321,817,000
Oct. 14. A year ago, on Oct. 15 1930, the total of
Reserve notes in circulation was no more than
$1,372,211,000. At the same time there has been a
loss during the week of nearly $200,000,600 in the
gold Reserves of the 12 Reserve banks, reducing the
total from $3,036,950,000 Oct. 7 to $2,836,014,000
Oct. 14. Moreover, the amount of the gold reserves
is now $143,323,000 less than it was a year ago, when
the total was $2,979,337,000.
Of course all this involved a further sharp reduction in the ratio of reserves to liabilities. With gold
holdings diminishing and Reserve notes expanding
and Reserve deposits also larger, substantial reductions in Reserve ratios are inevitable. During the
present week this ratio was further reduced from
67.1% to 61.8%. As indicating how greatly the
situation has altered in that respect during the past
12 months, it is only necessary to say that whereas
the Reserve ratio now is only 61.8%, a year ago on
Oct. 15 1930, it was 80.9%. And the power of foreign banks to withdraw gold cannot be said by any
means to have been exhausted. The foreign bill
holdings, it is true, have been further reduced in
amount of $40,238,000, and are now down to the low
figure of $40,571,000, which compares with $439,103,000 last year at this time; but, on the other hand,
foreign bank deposits have increased no less than
$78,765,000 during the week and now stand at $231,387,000 as against only $4,970,000 on Oct. 15 last
year.
In these circumstances it was doubtless wise
that W. Randolph Burgess, Deputy Governor of
the Federal Reserve Bank of New York, should
have been sent abroad to assure the central banks
of Europe that despite all the changes in recent
months the Reserve banking system still holds a commanding position of strength. On Monday of the
present week the New York "Times" published a
special cablegram from Basle, Switzerland, dated
Oct. 11, saying that action by the central banks to
check European alarm as to the stability of the dollar was expected to follow the conference on that
day of Governors of eight banks of issue who met in
the headquarters of the Bank for International Settlements and heard a detailed exposition of the
American monetary situation by Randolph Burgess
2472
FINANCIAL CHRONICLE
of the Federal Reserve Bank of New York who had
come to Basle especially for that purpose.
We are told that Mr. Burgess, supporting his
statements with a formidable array of figures and
economic data, "made a convincing argument in defense of President Hoover's new National Crelit
Corp. against charges depicting it as concealed inflation—charges which have caused people in all parts
of Europe to join in a panicy selling of dollar exchange in the past week." The cablegram continued
as follows:
"It was learned to-night that Mr. Burgess's explanation, which lasted more than an hour and a
half at a five-hour conference of central bankers
to-day, made an extremely good impression on his
auditors who included the Governors of the central
banks of France, Great Britain, Belgium, Germany,
Switzerland, Holland, Sweden and Italy. Also
present were a Japanese representative; Gates W.
McGarrah,President of the World Bank; Leon Fraser, its Vice-President, and Pierre Quesnay, its
Manager.
"Several of these expressed themselves as profoundly impressed and greatly comforted by the
information disclosed by Mr. Burgess, and it became
evident that any future attacks on the dollar will
encounter strong opposition from the banks of issue.
"Mr.Burgess,it is known, made a convincing argument to prove that the National Credit Corp. would
in no way mean inflation, but would merely utilize
a banking process which is already common practice
in Europe. He said it was customary for European
banks to lend on bonds and that the new American
corporation would be merely utilizing the legitimate
assets of private banks for this recognized European
device in banking.
"He then made a detailed report of the exact monetary situation in America, demonstrating that the
Federal Reserve would have ample gold cover to
meet the withdrawals which have been accumulating
since Britain suspended the gold standard. Giving
the amount of the enormous gold reserve in America
and detailed information concerning this gold and
the probable demands on it, he showed that there
was no cause for alarm because for the first time in
months gold had begun flowing toward Europe
again."
It is to be hoped that the favorable view here taken
of the results of Mr. Burgess's visit will be confirmed. The continued large takings of gold, however, for export and for earmarking, right up even
to last night, as indicated further above, make it
plain that European public opinion has by no means
as yet been fully assured on the subject of Mr. Burgess's mission. There may be no inflation growing
out of the National Credit Corp. which is being organized at the instance of President Hoover, but our
analysis above of the Federal Reserve statements
makes it plain that there is and has been inflation.
of a most striking character by the Federal Reserve
System itself. The volume of Reserve credit outstanding, we found, now is $1,100,06,000 greater
than it was 12 months ago, the total having more
than doubled during the year, and the volume of Federal Reserve notes in circulation is nearly a billion
dollars larger than on Oct. 15 last year, the total
now at $2,321,817,000 comparing with only $1,372,211,000 on Oct. 15 last year.
Not only that, but, as was pointed out by us last
week, both the amount of Reserve credit outstanding
and the amount of Federal Reserve notes in circulation are in excess of any figures reached during the
height of the stock market craze in 1928 and 1929.
[VoL. 133.
That, therefore, is the point that needs guarding and
fortifying. To make matters worse, there is talk in
high official quarters in Washington of 'broadening
the facilities and functions of the Federal Reserve
banks—one change advocated being to allow the Reserve banks to discount even railroad securities.
This, if permitted, would mean letting the Reserve
System drift from safe Moorings.
In view of all this, it cannot be deemed strange
that the feeling of distrust and suspicion regarding
the state of affairs in the United States has not been
altogether allayed. In the last analysis it cannot
be denied that in its main characteristics the state
of things now prevailing in the United States bears
a remarkably close resemblance to the state of things
prevailing before the unfortunate upheaval in Germany and the still more unfortunate upheaval that
came later in Great Britain. We have first a large
outflow of gold; secondly, considerable credit inflation, and thirdly, we have the need of balancing the
budget, so that our Government expenses will not
run in excess of Government revenues. This last
has received very little attention as yet in the United
States, though the Government deficiency in this
country for the current fiscal year seems likely to
run anywhere between $1,000,000,000 and $2,000,000,000—a deficiency, in other words, as great as
for two or three of the leading European countries
combined. If we would regain the confidence of the
outside world in the security and stability of the
American financial and monetary system, we must
make full provision for possible ill results in all of
these particulars.
As it happens, one unfortunate feature at the
present time is the depreciation that is taking place
in the market value of United States Government
securities. In other words, Government borrowing
is being conducted at increasing cost. There are
various reasons for this, the two chief among them
being the rise in interest rates growing out of the
huge gold exports and secondly the certainty of large
new issues of Government obligations owing to the
steadily increasing deficiency of Government revenues, and also the refunding of the large mass of
short-term issues maturing at an early date and
which will have to be replaced with new issues of one
kind or another. The $803,294,400 of Treasury
bonds dated Sept.15 1931, maturing on Sept.15 1955,
but which are redeemable at the option of the United
States on and after Sept. 15 1951, which were disposed of at par at the beginning of September, yesterday sold down to 91. This is a loss to the buyer of
9% in the short space of about six weeks, and when
applied to the whole issue of $803,294,400 means a
total depreciation of over $72,000,000. It had been
supposed that United States Government issues at
least would be exempt from the general shrinkage in
security values. The higher cost at which the $50,000,000 of 90-day Treasury bills offered for subscription were disposed of the present week constitutes a
tell-tale of the same description. Tenders for this
were received on Tuesday and aggregated $127,834,000, of which $51,641,000 were accepted at an
average rate on a bank discount basis of 23
/
8% per
annum. On the face of it this does not seem so bad,
but in offering $100,000,000 of 91-day Treasury bills
for sale on Sept. 28 the Treasury received subscriptions totaling $213,103,000 and accepted $100,761,000
on an average discount basis of only about 1.23%.
OCT. 17 19314
FINANCIAL CHRONICLE
Moreover, if we go a little further back we shall find
that on July 24 the Treasury disposed of $51,806,000
of 91-day bills at an average rate on a bank discount
basis of only 0.46% per annum. However, money
market conditions have changed greatly in the interval, and we think have changed for the better,
since the earlier rates were inordinately low and
were really indicative of a diseased condition.
2473
was also true for September. Shipments of cotton
last month increased to China and Japan, to Germany and some other European countries.
Exports of gold last month increased very greatly
and were the largest for any month in more than a
year; there was a small decrease in gold imports
as compared with August. Gold shipments in September amounted to $28,708,000 against imports 01
$49,240,000. For the nine months of the year gold
exports were valued at $30,545,000 and imports
$367,217,000, the excess of imports being $336,672,000. In the same period of 1930 gold exports
were $101,656,000 and imports $287,481,000, the latter exceeding exports by $185,825,000.
There may be a little improvement in the foreign
trade statement of the United 'States for the month
of September. A small gain appears in the value of
both exports and imports of merchandise as compared with the preceding month. The loss, however,
continues very heavy compared with a year ago. ExCrop conditions improved during September in
ports from the United States last month were valued
at $181,000,000 and imports $171,000,000, the excess some sections and in others there was some deof exports being $10,000,000; in August exports terioration. Larger yields were indicated at the
amounted to $164,822,000 and imports $166,670,000, close of the month for some of the leading crops, and
the latter exceeding exports by $1,848,000. In Sep- for others a reduction was thought probable. This
tember of last year the value of merchants' exports was the substance of the story told in the October
was $312,207,000 and of imports $226,352,000, ex- crop report issued this week by the Department of
ports being larger than imports for that month a Agriculture at Washington. The indicated yield of
year ago by $85,855,000. The lass in exports in Sep- corn was slightly reduced. The Oct. 1 condition of
tember this year compared with a year ago was $131,- corn was placed at 71.4% of normal against 69.5%
207,000, or 40.2%, and- in imports $55,352,000, on .Sept. 1, an advance during September of 1.9
points. On Oct. 1 a year ago the corn crop harvested
or 24.5%.
that year showed a condition of only 58.8% of
in
this
year
of
the
months
of
value
For the nine
an unusually low ratio. The probable yield
normal,
$1,842,509,000
was
exports
compared
merchandise
with $2,952,150,000 for the same period of the pre- of corn this year is now placed at 2,702,752,000
ceding year, a decline this year of $1,109,941,000, or bushels, which compares with an estimate of 2,715,37.6%. Merchandise imports were valued at $1,619,- 357,000 bushels on Sept. 1, a decline during that
281,000 against $2,401,312,000, the latter the value month of 12,605,000 bushels. The harvest of corn
for the first nine months of 1930, the loss in imports from the crop of 1930 was only 2,093,552,000 bushels,
this year being $782,031,000, or 32.6%. The excess the lowest yield for a great many years, drouth conof exports over imports for this year to date has ditions having then prevailed. In seven of the 10
been $223,228,000 against $551,138,000 for the nine years prior to 1930 the harvest of corn for each year
months of 1930. Compared with the earlier months was larger than that now indicated for 1931, and for
of this year merchandise exports in September three of these seven years the yield was in excess
showed no improvement, while imports for the same of 3,000,000,000 bushels.
Spring wheat suffered a further slight setback
period (in September) recorded a relatively smaller
decline from September of last year than is shown during the past month. Production is now placed
at only 109,106,000 bushels compared with the harfor the nine months.
It will appear that a part of the unfavorable show- vest last year of 251,162,000 bushels. The yield of
ing in the September export statement of this year durum wheat this year is indicated at 19,629,000
was due to the heavy reduction in cotton enports in bushels against the harvest last year of 57,105,000
that month. The decline in cotton exports last bushels and of other spring wheat this year of
month compared with a year ago was very much 89,477,000 bushels compared with last year's prolarger than in any month since January. Ship- duction of 194,057,000 bushels. The combined proments abroad of cotton for the month just closed duction of winter and spring wheat is now placed at
were 562,500 bales against 216,300 bales in August 884,000,000 bushels, 21,000,000 bushels above last
and 908,850 bales in September 1930. The reduction year's crop and 62,000,000 bushels above the five-year
last month from a year ago was 38.1%. The loss in average. The quality of durum wheat is placed ;ii
value, however, continued at a very much higher 83.8% compared with 87.7% last year and the sixratio than the decline in quantity. The value of year average of 90.5%. Quality of other spring
cotton exports last month was $23,457,000, that wheat is 82.7%, which compares with 86.5% in 1930
amount being $39,410,000, or 62.7% less than the and the six-year average of 88.3%.
value a year ago. Deducting the value of cotton exFor some of the other crops the prospects are exports from the total of merchandise exports in Sep- cellent. The yield of tobacco promises to be in excess
tember this year, and the remaining amount was of any previous record, amounting to 1,661,000,000
$157,543,000, which sum compares with $249,340,000 pounds. Production from the 1930 crop was 1,611,for that month in last year. The loss this year in 000,000 pounds. The yields of some of the other
exports other than cotton is thus reduced to 36.8%, crops are also indicated as slightly larger than the
which compares with a decline in total merchandise earlier reports showed. The important potato crop
exports for September of 40.2%.
promises a production this year of 375,000,000
of
Commerce
directs attention to bushels against last year's harvest of 343,000,000
The Department
exports
last
month show an in- bushels. The Department, in its report, says that
cotton
that
the fact
shipments
grain
in the month were crop prospects improved during September about
that
also
crease;
considerably larger. The gain in cotton exports was 1%. There was an absence of early frost, so that
due to the exceptionally low total for August, which there was no interference with the maturity or bar-
2474
FINANCIAL CHRONICLE
vesting of the late crops such as beans, potatoes, peanuts, tobacco, hay and cotton. It was too dry in
the South last month for sweet potatoes, grain
sorghum and sugar cane; also, on the great plains
for corn and late flax. The yields per acre are now
indicated at 10.9% above the low production of last
year, but are still 0.9% under the average of the
previous 10 years. The large yields this year were
in cotton and tobacco. There was a shortage of hay,
chiefly in the West. A rather light production of
feed grains is promised, with average crops of potatoes, sweet potatoes and rice. In addition to wheat,
cotton and tobacco, rather large crops are promised
of beans, peanuts and most fruits.
The New York stock market, after the sharp rise
of last week, has the present week again reversed
its course and been tending downward, though with
a recovery the latter part of the week. The weakness was occasioned by the unfavorable developments abroad. At the half-day session on Saturday
last the market was very little changed, but on Tuesday, after the intervening Sunday and the observance of Columbus Day as a holiday on Monday,
prices moved sharply downward, and the downward
course continued on Wednesday and Thursday,
though on this last mentioned day somewhat of a
rally occurred, which, however, was not fully maintained at the close. All this was due, as already
stated, mainly to the fact that an unusually long
budget of bad news was received from across the
ocean. The friction between Japan and China regarding affairs in Manchuria grew in intensity and
seemed to presage actual war between the two countries. In Germany the Nationalists and the so-called
Nazis, under the leadership of Adolph Hitler, agreed
to join forces against the Ministry of Dr. Bruening
with the reassembly of the German Parliament,
thereby endangering Dr. Bruening's control. The
overthrow of the Bruening Ministry would have destroyed the prospect of conciliatory co-operation
between France and Germany, lately achieved, and
possibly have undone all the good work in that direction so far accomplished. The danger on that score,
however, was averted by the action of Dr. Bruening
in threatening to resign and maintaining stern opposition to the Hitlerites. However, for a time the
danger was feared and acted as a depressing influence upon the stock market. The German Parliament yesterday gave Dr. Bruening the vote of confidence desired.
The news of the clash between theProvisionalPresident of the Spanish Republic and the new Assembly
of Spain on the question of the severance of relations
between Church and State was also an unsettling
feature. Domestic conditions showed no material
change, trade remaining exceedingly depressed and
the "Wall Street Journal" reporting the steel mills
of the country engaged to only 29% of capacity. The
Pullman Co. reduced its guar. dividend from $1 a
share to 75c.; the Nash Motors also reduced its guar.
div. on common from $1 a share to 50c. a share,
though, on the other hand, the F. W. Woolworth Co.
declared an extra dividend of $2 a share on the common stock (par $10), in addition to the regular
quar. div. of 60c. a share on the same issue. The
Hawiian Pineapple Co., Ltd., decided to omit the
quarterly dividend usually payable about Dec. 1 on
its capital stock. The Western Union Telegraph Co.
on Oct. 13 announced a reduction of 10%, effective
•
[VoL. 133.
Nov. 1, in the wages of all land line employees exclusive of messengers. At the same time the company let it be known that the directors at their
meeting on the same date reduced the dividend for
the last quarter of 1931 on the shares of the company
2%. On Friday the market in some
from 2% to 11/
measure regained tone on rumors that the InterState Commerce Commission was about to announce
its decision on the application of the railroads for
an advance in rates, granting a portion of the advance, and at the same time it was reported that the
railway unions were preparing to make a voluntary
reduction in wages to be in effect, however, only
during the continuance of the existing depression in
trade. The call loan rate on the Stock Exchange continued at 2% until Friday, when there was an advance to 21/
2%.
Dealings have been of only moderate size. At the
half-day session on Saturday the sales on the New
York Stock Exchange were 826,378 shares; Monday
was Columbus Day and a holiday; on Tuesday the
sales were 1,249,297shares; on Wednesday,1,636,475
shares; on Thursday, 1,375,700 shares, and on Friday, 1,420,773 shares. On the New York Curb Exchange the sales last Saturday were 161,860 shares;
on Tuesday, 245,905 shares; on Wednesday, 264,511
shares; on Thursday, 253,341 shares, and on Friday,
242,504 shares.
As compared with Friday of last week, prices are
irregularly changed, as the recovery on Thursday
and Friday offset many of the early losses. General
Electric closed yesterday at 297
/8 against 30% on
Friday of last week; Warner Bros. Pictures at 7%
against 7; United Corp. at 141% against 14; North
American at 371/
2 against 38; Pacific Gas & Elec. at
35% against 361%; Standard Gas & Elec. at 377
/8
against 37%; Consolidated Gas of N. Y. at 711/2
against 72%; Columbia Gas & Elec. at 211/
4 against
22; Brooklyn Union Gas at 911
/
4 against 94; Electric
Power & Light at 22% against 21%; Public Service
of N. J. at 63 against 64; International Harvester
at 26% against 28; J. I. Case Threshing Machine at
48% against 45%; Sears, Roebuck & Co. at 38%
/
s; Montgomery Ward & Co. at 11%
against 395
against 11%8; Woolworth at 53% against 54; Safeway Stores at 47% against 50%; Western Union
Telegraph at 88 against 943%; American Tel. & Tel.
at 135% against 136; Int. Tel. & Tel. at 16% against
17%; American Can at 83 against 831/
8; United
States Industrial Alcohol at 24% against 25%;Commercial Solvents at 11% against 11%; Shattuck &
Co. at 14% against 133%,and Corn Products at 43%
against 457
/
8.
Allied Chemical & Dye closed yesterday at 80
against 78% on Friday of last week; E. I. du Pont
de Nemours at 57% against 61%; National Cash
Register at 171% against 18; International Nickel
at 9 against 87/8; Timken Roller Bearing at 24%
against 25; Mack Trucks at 1834 against 19%; Yellow Truck & Coach at 51/
8 against 5; Johns-Manville
at 331/
8 against 40; Gillette Safety Razor at 13%
against 131/2; National Dairy Products at 267
/
8
against 27%; Associated Dry Goods at 103% ex-div.
against 12%; Texas Gulf Sulphur at 247
/8 against
25; American & Foreign Power at 145/s against 141%;
General American Tank Car at 457
/
8 against 46; Air
Reduction at 63 against 647
/8; United Gas Improvement at 227
/
8 against 22%; National Biscuit at 45%
against 46%; Coca Cola at 108 against 109; Continental Can at 37% against 38; Eastman Kodak at
Oc.r. 17 1931.]
FINANCIAL CHRONICLE
108 against 112; Gold Dust Corp. at 211/
8 against
21/
1
4; Radio-Keith-Orpheum class A at 8% against
8%; Standard Brands at 151/
4 against 151
/
4; Paramount Publix Corp. at 14 against 14; Kreuger & Toll
at 7% against 8; Westinghouse Elec. & Mfg. at 47
against 471/4; Drug, lac., at 53 against 53%; Columbian Carbon at 43 ex-div. against 46; American
Tobacco at 873
/
4 against 89; Liggett & Myers at 55
against 547
/8; Reynolds Tobacco class B at 39%
against 40; Lorillard at 13 against 13%,and Tobacco
Products class A at 8% against 8.
The steel shares have continued to be a weak
feature. United States Steel closed yesterday at
687
/8 against 70/
1
4 on Friday of last week; Bethlehem
Steel at 28% ex-div. against 29/
1
4; Vanadium at 18
against 18%; Crucible Steel at 24 against 247
/
8, and
Republic Iron & Steel at 63
/
4 against 7/
1
4. In the
auto group Auburn Auto closed yesterday at 119
against 120% on Friday of last week; General Motors at 25% against 261/
8; Chrysler at 143
/
4 against
14%; Nash Motors at 20% against 211/
4; Packard
Motors at 5% against 47
/
8; Hudson Motor Car at
10 against 10/
1
4, and Hupp Motors at 4% against
47
/
8. In the rubber group Goodyear Tire & Rubber
closed yesterday at 24% against 231/2 on Friday of
last week; B. F. Goodrich Co. at 63
4 against 7%;
United States Rubber at 71/4 against 73
/
8, and the
preferred at 113
/
4 bid against 14.
The railroad sham have also been much depressed. Pennsylvania RR. closed yesterday at 34y8
against 37% on Friday of last week; Atchison Topeka & Santa Fe at 116/
1
4 against 118; Atlantic
Coast Line at 65 against 70; Chicago Rock Island &
Pacific at 28% against 27%; Erie RR. at 147
/8
against 137
/
8; New York Central at 621/
8 against
637
/
8; Baltimore & Ohio at 39% against 391/
8; New
Haven at 44% against 45%; Union Pacific at 117
against 120; Southern Pacific at 56% against 57;
Missouri Pacific at 16 against 16%; Missouri-Kansas-Texas at 9% against 8%; Southern Railway at
19 against 18%; Chesapeake & Ohio at 321/
8 against
31%; Northern Pacific at 26 against 26%, and
Great Northern at 29 against 283
/
4.
The oil stocks have moved with the general market. Standard Oil of N. J. closed yesterday at 31%
against 317
/8 on Friday of last week; Standard Oil
of Calif. at 31% against 32%; Atlantic Refining at
12 against 11%; Freeport-Texas at 20 against 17%;
Sinclair Oil at 67
/8 against 7; Texas Corp. at 183
/
4
against 18%; Richfield Oil at /
78 bid against /
78;
Phillips Petroleum at 6 against 6/
1
4, and Pure Oil
at 6 against 6/
1
4.
The copper stocks have sagged somewhat. Anaconda Copper closed yesterday at 147
/8 against 155/
8
on Friday of last week; Kennecott Copper at 121/
8
against 13; Calumet & Hecla at 4% against 47
/
8;
Phelps Dodge at 7% against 8; American Smelting
& Refining at 24 ex-div. against 24, and Cerro de
Pasco Copper at 13% against 13%.
Price trends on the stock exchanges in London and
Paris were moderately irregular this week, with
business reported at a brisk pace in most sessions
notwithstanding the universal financial unsettlement now in evidence. The dealings were marked
,by alternate advances and recessions of small proportions, which left quotations yesterday much
where they started last Monday. The Berlin Boerse
remained closed all week, and there is still no indication of an early resumption of trading. Unofficial
2475
trading is increasing in Berlin, with a fair demand
reported for German bank stocks. The Vienna and
Budapest exchanges also remain closed, these institutions, together with the German and Scandinavian
exchanges, having suspended Sept. 21 on the British
gold payment suspension announcement. The Copenhagen exchange resumed dealings Thursday, and
prices were off slightly from the final quotations of
Sept. 19, probably as the result of an agreement
among 'brokers to execute orders only within fixed
limits.
In the British and French markets sentiment is
undergoing distinct improvement, according to press
reports. Gains in British export trade are forecast
as a result of the decline of sterling exchange, and
there is also confidence regarding the outcome of the
general election late this month. Both in London
and Paris fewer doubts than formerly are expressed
regarding the German position. The proposals by
President Hoover have been well received, and it is
generally believed they will be followed by action on
reparations and other inter-Governmental debts.
The extensive gold takings at New York are expected
to aid European markets in surmounting what is
generally described in trans-Atlantic markets as the
"confidence crisis." Much satisfaction was expressed
in London,Tuesday, when the regular official return
on unemployment disclosed a reduction of 33,252 in
the weekly total, bringing the figure down to 2,791,520. French unemployment is officially reported at
39,369, this figure representing the number receiving
relief. The Socialist leader, Leon Blum, estimates
that 650,000 are completely unemployed in France,
while a further 2,500,000 are only partially employed,
according to this authority.
The London Stock Exchange was firm at the opening Monday, with a fair amount of business reported
despite the fact that dealings are confined to cash
transactions only. Advances were pronounced in
British industrial stocks, and home rail shares also
showed a better tendency. Toward the close irregularity developed, and some of the gains were lost.
British funds were steady throughout. Tuesday's
session was less active, with a good deal of profit
taking in progress. Quotations were down somewhat
in the speculative sections, but a few exceptions appeared, chiefly in the motor group of issues. British
Government securities declined slightly on weakness
in sterling exchange. Further irregularity developed
Wednesday, with a moderate amount of liquidation
attributed to the uncertainties of the Sino-Japanese
dispute and other disturbing international news.
The industrial list was easier, partly as a result of
unsettling overnight reports from New York. British
funds were well supported and small fractional gains
appeared. Price movements Thursday were narrow
and irregular until just before the close, when a
better tendency developed. Textile stocks enjoyed
an upswing at the end, but most other sections
showed only minor movements. British funds were
again in demand during the session. Small gains
were again the rule in dealings yesterday at London.
The Paris Bourse was uncertain in the initial session of the week, prices swinging back and forth with
some rapidity. Disquieting reports were circulated
regarding the American money market, and in the
absence of trading at New York much hesitancy appeared at Paris. Greatest net changes for the day
were recorded in French bank stocks, which declined
materially. An improved tendency marked Tues-
2476
FINANCIAL CHRONICLE
[Von. 133.
was remarked. "It was made known," the report
continued, "that when the year's moratorium on
intergovernmental debts expires next July, the
United States will not insist that European payments shall be resumed, except on the basis of the
capacity of the debtor nations to pay." In a Washington report of last Saturday to the New York
"Herald Tribune" it was remarked that American
public sentiment would hardly favor a reduction of
war debts unless accompanied by a decrease in German reparations payments, and on this question the
French attitude is supremely important. The success of any general disarmament plan, moreover, also
hinges on the attitude of France, which is the strongest Continental military power. These considerations lead to the conclusion that the forthcoming
Departure of Premier Pierre Laval from France discussions will deal mainly with debts and disyesterday has heightened the interest in the conver- armament.
Indicative of the importance attached in all Govsations to be held in Washington by President Hoover and the French statesman on questions of in- ernment circles to the Washington conversations
terest to both countries. Several official pronounce- with Premier Laval were reports from Rome, last
ments were made this week on the meeting, which Saturday, that they will be followed by a visit to
will begin Oct. 22, while informal conjecture regard- Washington by Foreign Minister Dino Grandi, of
ing the possible results of the discussions increased Italy. Signor Grandi will sail from Naples, Nov. 7,
markedly. Economic aspects of the forthcoming and he is expected to spend ten days in Washington
visit were emphasized in most comments. M. Laval as the guest of President Hoover, conferring on matand members of his Cabinet held, on Thursday, their ters relating to disarmament and debts. Confirmafinal conference before his departure, and the plans tion of the Rome reports was made in Washington
of the French leader, which are said to contain no Sunday,in a statement which indicates that the visit
definite proposals, were approved. In a radio ad- will be made the occasion for "personal acquaintance
dress, delivered on the same day, the Premier re- and discussion." There were reports this week that
marked that a serious crisis is shaking the world Chancellor Heinrich Brnening of Germany may visit
and that governments are "endeavoring by means the United States after settlement of some of the
which have been revealed as insufficient to stem an pressing problems facing him at home, but these
evil which is being communicated from one country rumors were neither denied nor affirmed.
The discussions of "problems of mutual interest
to another." He hinted that isolation cannot be
considered as a sufficient preventive against the con- to France and the United States" will not be contagion, as the interests of nations are so intertwined fined to the leading statesmen of the two countries,
that no one can be completely sheltered from dangers according to reports current both in Paris and New
which menace the others. After referring to the York. Mr. J. P. Morgan, who is in Europe, was
negotiations which followed the Hoover debt sus- received in Paris Tuesday by Premier Laval, with
pension proposal,M.Laval remarked that his govern- whom he is understood to have discussed "the attiment, while safeguarding its essential interests, has tude of large American banking interests toward
taken its part in international collaboration, more the financial and economic crisis." While in the
necessary now than ever before. Some comments French capital, Mr. Morgan also talked with Clemon the forthcoming visit were made in Washington, ent Moret, Governor of the Bank of France, and with
Wednesday, by Secretary of State Henry L. Stimson, other French officials. Also of interest is a visit
who indicated that no fait accompli will be set before of Charles Farnier and Robert Lacour-Gayet, both
the French Premier on his arrival. The conversa- of the Bank of France, now being made to the United
tions are to be purely informal and tentative, he States. The two French central bank officials
added, and M. Laval will have the utmost freedom of arrived in New York Tuesday, but they refused to
selection in the topics which he may care to discuss discuss the purpose of the visit beyond saying they
with Mr. Hoover. French reports that M. Laval are here mainly to repay a recent visit to France by
will be presented with a "cut and dried program" Governor Harrison of the Federal Reserve Bank of
New York, and to discuss matters of common inwere discredited by the Secretary.
That the questions of intergovernmental debts terest with the officials of the Reserve System. It
and disarmament will form an important part of has been understood for some weeks that the French
M. Laval to Washington
the conversations is considered a foregone conclu- bankers may accompany
here.
arrival
latter's
the
after
sion. Informal reports from Washington late last
week stated that President Hoover has sounded out
Directors of the Bank for International SettleSenators and Congressmen on their attitudes toward
held their first formal meetings in Basle, last
ments
arrangefunding
a possible downward revision of the
and Monday, since Great Britain and the
Sunday
United
States
the
ments with European debtors of
countries suspended gold payments.
Scandinavian
suggested,"
a
far
Government. "Concessions so
momentous
developments and the unithe
of
view
In
said,
"Times"
York
Washington dispatch to the New
that followed, worldunsettlement
financial
versal
in
the
reduction
material
"include a naval holiday,
the
in
taken
was
interest
deliberations of the
wide
repaGerman
in
cut
a
and
size of European armies,
rations of perhaps as much as 25%." The position banking authorities who compose the B. I. S. direcof the Administration on the question of the Euro- torate. The interest was heightened, moreover, by
pean debts was clarified in an authoritative way, it the informal presence at the gathering of W. Ran-
day's dealings on the Bourse. French bank stocks
gained substantially and other sections also made
progress, partly as a result of short covering. After
an uncertain opening, Wednesday, prices on the
Bourse again improved, but the movement was not
extensive. Net changes for the day were unimportant,
with gains predominating. The tendency Thursday
was distinctly downward, with French bank stocks
showing the heaviest losses. Other issues were more
resistent and in some instances the losses were confined to a few francs. Reports of a weak tone in
New York produced some liquidation, it was said,
while the fortnightly settlement also caused selling.
Changes yesterday were small and unimportant,
while dealings were restricted.
OCT. 17 1931.]
FINANCIAL CHRONICLE
2477
dolph Burgess, Deputy Governor of the Federal Re- currency in France
and Poland, according to Paris
serve Bank of New York. In compliance with the and Warsaw dispatc
hes to the New York "Times,"
United States Government stand against active par- and holders of the substant
ial amounts of American
ticipation of Federal Reserve officials in the pro- currency circulating in
both countries rushed to
ceedings of the B. I. S., Mr. Burgess is reported to transform their funds into
francs and zlotys. In
have attended an informal conference of Governors Paris an evening newspaper,"La
Liberte," described
of eight banks of issue in Basle,'Sunday, thus avoid- the United States as "going
joyously toward inflaing the regular meeting. He spoke at some length tion," while headlines in several
popular papers in
on the American monetary situation, Basle dis- Warsaw are declared to have
hastened the selling
patches state, and demonstrated convincingly that of dollars through intimations that they
are in danthe dollar is in no danger despite the heavy with- ger. It is reported, and may well be
believed, that
drawals of gold from New York for European ac- the banks made the desired exchanges
with alacrity,
count. The belief in some European circles that bringing the "flight" to a hasty end.
Of interest
organization of the National Credit Corporation also were the remarks on the stability of
the dollar
means inflation in this country was disproved by Mr. made in Basle, Sunday, by W. Randolp
h Burgess,
Burgess, a report of Sunday to the New York Deputy Governor of the Federal Reserve
Bank of
"Times" said. He showed,it was remarked, that the New York. At an informal meeting of central
bankUnited States holds $1,000,000,000 in foreign ex- ing authorities, Mr.Burgess is said
to have explained
change and that twice this amount could be with- that no program of inflation is
contemplated in the
drawn before the dollar would be endangered. An United States, and that foreign
withdrawals of
urgent suggestion is understood to have been made $2,000,000,000 could be met here.
These statements
by the American official for a more complete and were widely circulated in Europe
and apparently
rapid interchange of information between the Fed- aided in the speedy restoration
of normal confidencf
eral Reserve and European banks of issue.
in the dollar.
Important, also, were statements made by Montagu Norman, Governor of the Bank of England, reMonetary disturbances occasioned by the unprecegarding the situation in Great Britain. A dispatch dented European credit crisis were somewh
at augof Monday to the "Times" asserted that "immediate mented, Monday, when announcement
was made at
fears for what England's position will be were some- Helsingfors that Finland had joined
the list of
what reassured by information furnished by Mr. nations suspending gold payments. The
British
Norman." It was remarked in a report to the "Her- colonies of Northern and Southern Rhodesi
a decided
ald Tribune," however, that Mr. Norman warned on the same day to link their currenc
y with sterling
the bankers that "Great Britain can take no step at its depreciated value. Althoug
h it was thought
before the election of Oct. 27, and that restoration for a time that the Union of South
Africa would folof the gold standard for domestic purposes even then low suit, such intentions were denied,
Tuesday, by
would require months and possibly years." Al- C. W. Malan, Minister of Railway
s, who declared
though it was reported in advance of the Basle meet- that South Africa would remain on the
gold standing that the bankers would consider plans for the ard. The action taken in Finland aroused
much inestablishment of an international currency and for terest, as the Bank of Finland had repeatedly stated
the calling of an international monetary conference, it could maintain the gold standard.
The suspension
no serious consideration was given these matters. was accompanied by an increase in
the discount rate
The formal directors' session, Monday, was largely from 8% to 9%,and by an increase
of about 25% in
routine. A statement was made by Dr.Hans Luther foreign exchange rates, as quoted
in Helsingfors.
of the Reichsbank, indicating that Germany is in There was some discussion in Warsaw
late last week
better position to meet short-term obligations owing of Poland's ability to remain on the
gold standard,
to the one-year suspension of intergovernmental with officials taking the position that
no sign of
debts. Decision was reached to renew the $25,- weakness should be evinced on this point.
In the
000,000 B. I. S. share of the $100,000,000 credit ex- Scandinavian countries prices have
tended to rise
tended the Reichsbank in association with the Bank since gold suspensions were announc
ed on Sept. 28,
of England, the Bank of France, and the Federal some of the advance amounti
s
ng to 20% and 30%.
Reserve banks. The directors also voted to renew In Austria and throughout
the Balkan countries, a
the 40,000,000 schilling B. I. S. portion of the 190,- "veritable confusion
of exchange restrictions" has
000,000 schilling credit extended the National Bank been applied during
recent weeks, according to a
of Austria, and a $1,000,000 portion of a $3,000,000 Vienna dispatch to
the New York "Times," and incredit granted the Yugoslavian central bank. The ternational trade
has become steadily more difficult
bank officials were authorized to call a meeting in and complicated
as a result.
Basle of all countries which have restricted exchange
dealings or trade in the present crisis. It is indiAlthough the suspension of gold payments by the
cated that a date for these sessions will be fixed Bank of Englan
d was announced less than a month
after consultation with the countries involved, which ago, reports from London
this week indicate that
will probably include Austria, Hungary, Poland, the political campaign for the national election
to
Rumania,Bulgaria and Yugoslavia,and perhaps also be held Oct. 27 far overshadows the grave
financial
Germany, Italy and Czechoslovakia.
question at the moment. Sterling continues to fluctuate narrowly at a discount of about 20%. There
Misleading reports circulated in some European is not much current discussion of stabiliz
ation,
countries regarding President Hoover's plan for re- whether around present levels or at other
figures.
lieving the economic depression caused a consider- The economy program of the Government
remains
able "flight from the dollar" in such lands late last a matter of acute interest, however, and
also of
week. The reports were to the effect that the plan some resentment. As a protest against
reductions
is a step toward inflation. They gained greatest in their pay, more than 140,000 civil servants
, with
2478
FINANCIAL CHRONICLE
their relatives and sympathizers, paraded on the
Thames embankments, last Sunday. The election
campaign, meanwhile, is progressing along lines previously indicated. Stanley Baldwin, Conservative
leader, is basing his appeal for votes largely on a
tariff platform. The Laborites, under Arthur Henderson, claim that capitalism has broken down and
they have proclaimed a drastically socialistic program in the event of their return to power. The Liberal party is badly split, with one section remaining
faithful to the free trade program, while another
group is supporting the National Government and,
indirectly, a protective tariff. There are, altogether,
nine parties, groups or factions campaigning for
votes. The most picturesque feature of the struggle
is the stand being made by Prime Minister Ramsay
MacDonald for re-election as a Laborite in the Sea.
ham constituency. Although the Seaham Labor executive chose another "official" candidate, Mr. MacDonald decided to stand independently under the
same banner. While making a speech before a group
of miners, Thursday, Mr. MacDonald was interrupted so frequently by boos and catcalls that he was
quite unable to proceed and had to abandon the
speech.
[VoL. 133.
end. The Reichstag reassembled Tuesday for its
usual autumn session, and Dr. Bruening promptly
announced a plan for the redemption of German
short-term indebtedness and the clearing up of the
reparations question. He pleaded with the Reichstag to abandon the pursuit of partisan interests.
Niceto Alcala Zamora resigned his office as Provisional President of the Spanish Republic Wednesday, as a result of a decision by the National Assembly to effect a complete severance of Church and
State under the new Constitution now being drafted
by that body. A tense political situation was produced by the resignation of Senor Alcala Zamora,
who opposed the decision bitterly. He was quickly
succeeded, however, by Manual Azana, who held the
portfolio of Minister of War in the Cabinet. Minister of the Interior Miguel Maura also resigned his
office, and was succeeded by Cesares Quiroga. Both
the retiring officials are devout Catholics, and as
leaders of religious political groups they remained
opposed to the separation to the end. After taking
over the Provisional Presidency, Thursday, Senor
Azana stated that the Spanish Republic, although
founded only six months ago,is immovable. "We are
as strong as if we had held power for a long time,"
mission consists of
Continued rule in Germany of the moderate Gov- he said. "Our fundamental
s republic with
prosperou
ernment headed by Dr. Heinrich Bruening as the fabricating a great, strong,
nt is ReGovernme
The
leader of the Center groups in the Reichstag was peace and justice for all.
."
Spaniards
all
for
is
Republic
the
assured, yesterday, when the German Parliament publican, but
Church
the
on
Assembly
National
the
of
The
decision
rejected attempts to defeat the reconstituted Cabinet. A motion of non-confidence presented by the question was taken Tuesday, after weeks of debate.
, few
National-Socialists was defeated by a vote of 294 to Although separation was regarded as inevitable
actually
form
drastic
the
take
it
would
expected
specific
against
270, while further motions directed
Ministers also suffered defeat. These results of voted. By a vote of 287 to 41 the Assembly decided
the Parliamentary test give ample assurance, it is to insert an article in the Constitution providing
exists." Under other
believed, that Chancellor Bruening will remain in that"no official State religion
are to be closely
clergy
the
of
office for at least six months more, and will thus provisions activities
be expelled from
to
are
Jesuits
the
while
be able to carry out his extensive plans for Govern- regulated,
was heated, and
Chamber
the
in
The
debate
Spain.
mental economy and the improvement of the Governdispatches
Madrid
reported.
ing
was
some
fist-fight
ment's relations with other countries. Some uncerin the
war
a
religious
of
y
the
possibilit
indicated
tainty regarding the future of the Bruening regime
to
devoted
fervently
are
which
,
Basque
Provinces
ion
a
after
conversat
was expressed late last week,
between President von Hindenburg and Adolph Hit- the Catholic lehurch.
ler, the National-Socialist leader. It was intimated
Relations between Japan and China have reached
last Saturday, however, that the venerable German
in many years as a consePresident had merely impressed upon the Fascist the most delicate stage
the old dispute regarding
of
reopening
a
quence
of
leader the "precarious position in which Germany
by the Council of the
action
Concerted
a.
Manchuri
finds itself" on the eve of a great demonstration of
States GovernUnited
the
and
Nations
of
League
the Fascists and Nationalists at Bad Harzburg.
to preserve
week
this
early
n
undertake
was
ment
is
it
The demonstration occurred Sunday, and
the main
tely
East, but unfortuna
noteworthy that the speeches were confined to do- peace in the Far
by
an
interobscured
been somewhat
mestic politics. The Fascist leader and Dr. Alfred issue has
and
precise
nature
extent
the
over
debate
Hugenburg, head of the Nationalist faction,formally national
participation in the League efforts. It
American
of
GovBruening
the
of
overthrow
joined forces for the
indeed, that Geneva is far more interappear,
would
ernment and the calling of early general elections.
the presence of an official Amerobtaining
in
ested
The most sensational statements were made by Dr.
in its sessions on Manchuria than
tive
representa
ican
Hjalmar Schacht, former President of the Reichsitself. While the debate on
problem
the
in
settling
bank, who accused the Cabinet of giving false incontinued to extend its
Japan
,
proceeded
point
this
formation regarding Germany's financial position.
seizing
more towns in the
by
a
Manchuri
in
sway
much
"Our foreign indebtedness, for instance, is
the soldiery of
expelling
and
areas
Chinese
purely
Dr.
report,"
higher than was stated in the Basle
the
from
The current
Province.
ng
Hsueh-lia
Chang
bewill
public
Schacht charged. "For fear that the
of
the
killing,
late in
outgrowth
an
are
incidents
portk
Reichsban
come nervous, it is not said that the
army
by
Chiofficer,
either
Japanese
a
of
August,
and
exchange,
of
folio consists only partly of bills
and
alleged
soldiers,
attempts by
nese bandits or
that in its statement is included gold cover for some
of
the
section
a
bomb
to
Japanese-owned
the Chinese
hundreds of millions which in a short time is due to
an
Railway.
incursions
Manchuri
Japanese
be repaid." A reply to these charges was made Mon- South
drastic
and
areas
followed
rather
reaty
day by Dr. Hermann Dietrich, Finance Minister, into non-t
reports
were
Tokio
employed,
measures
who declared they were untrue from beginning to punitive
Ocr. 17 1931.]
FINANCI A L CHRONICLE
2479
stating that these somewhat exceeded the intentions war to uphold her
dignity and sacred rights in the
of the civilian members of the Wakatsuki Cabinet. face of internationa
l agreements to safeguard world
An acrimonious diplomatic exchange between Tokio peace." There was a
disposition in Shanghai to take
and Nanking did not improve matters.
this statement as intended largely for foreign conThat the aims of Japan are pacific was repeatedly sumption. In Tokio every
effort was again made
proclaimed by the Tokio Government while the inci- Monday for direct negotiations
with China for setdents were developing. Territorial ambitions were tlement of the dispute. Baron
Shidehara, Foreign
specifically denied, and it is understood inter- Minister,sent a formal note to
the League of Nations
national assurances of an official nature have been indicating the readiness of his
Government to open
given on this point. The immediate desire of Tokio, discussions with the Chinese
leading to evacuation
dispatches from that capital indicate, is to secure of Manchurian territory. The
sole preliminary, he
a regime in Manchuria that will be friendly to said, was "agreement on several
fundamental prinJapan, which has investments of about $1,000,000,000 ciples which would form
the basis for restoration of
in South Manchuria and a considerable official normal relations." Althou
gh the nature of the
establishment as well. Chang Hsueh-liang, Man- fundamentals was not disclo
sed, it was again stated
churian military leader, has consistently opposed that Japan asks for no new
rights or concessions in
Japanese expansion in the Province, and, despite Manchuria.
Japanese urging, formed a close alliance with the
Geneva began to occupy the center of the stage
Nationalist Government at Nanking. According to in this situation when the
League Council resumed
Tokio reports he will not be allowed to resume his its deliberations Tuesda
y. Aristide Briand, of
military rule of the Province. Incursions of Japa- France, veteran of a
dozen similarly unsettling innese troops into non-treaty areas is not regarded as a ternational incidents, assumed
the presidency of the
very serious matter in the Japanese capital, it is Council, which met in an
atmosphere of the gravest
said, and even the bombing of the Chinese city of anxiety. The Chinese delega
te, Dr. Alfred Sze, and
Chinchow last week is held "trivial." Tokio authori- the Japanese representati
ve, Kenkichi Yoshizawa,
ties are determined to settle the dispute by direct restated their respective cases,
each charging that
negotiation, reports state, and any advice or inter- the other nation is to
blame. While the session was
ference by the League or any of the powers would in progress Dr. Sze
announced dramatically that
be resented. In Nanking, of course, every effort has Japanese airplanes at
the very moment were conbeen made to secure League or other interference.
tinuing to bomb Chinese towns. Prentiss Gilber
t,
The growing seriousness of the Manchurian situa- American Consul-Gener
al at Geneva, attended the
tion occasioned last week a call for a meeting of the meeting, but took no
part in the official discussion.
League Council to study the problem and endeavor The position of the
American representative was far
to settle the dispute amicably. The meeting was from clear, as no formal
invitation for his attendance
arranged for Tuesday, but the gravity of the matter at the Council
table had been issued. M. Briand
caused many of the Ministers to assemble in advance summed up the
sense of the meeting at its close by
of the date. Much satisfaction was caused by assur- saying the "Counc
il had resolved to fulfill its
ances from Washington that the United States is duty."
willing to co-operate in the effort to solve the ManAttempts to solve the Sino-Japanese problem
were
churian question. After discussions in Washing- subordinated
, Wednesday, to the effort to define the
ton late last week with the Japanese Ambassador, position of the
United States in the League activiKatsuji Debuchi, and the Chinese Charge d'Affaires, ties, and
secure full participation of our representaYung Kwai, Secretary of State Stimson was said tive in the
Geneva gathering. Little attention was
to feel that delay would be dangerous and that inde- paid to the report
s of Chinese uprisings in Manpendent efforts might be made by this Government churia and furthe
r extensions of Japanese control.
to secure a friendly adjustment of the difficulties. A secret Counci
l meeting was called by M. Briand,
Collaboration of this ,Government with the League and the
argument was presented, it is said, that the
of Nations was again affirmed, however,and arrange- United States
might be invited to participate in the
ments made for American representation in the Council's
deliberations as a signatory of the KelloggCouncil meeting scheduled for Tuesday. A state- Briand
treaty outlawing war. It was reported that
ment was issued last Sunday, quoting the text of on this
matter the Council vote must be unanimous.
a note from Mr. Stimson to the Secretary-General of but
the Japanese delegate refused his consent
in
the League, in which the Secretary stated that the the
absence of instructions from Tokio. To get
American
Government, acting independently around
this aspect of the matter, a ruling is reported
through its diplomatic representatives, will
en- to have been adopted whereunder an invitation
for
deavor to reinforce what the League does. "It
is American participation might be made a matter
of
a
most desirable," Mr. Stimson said, "that the Leagu
e majority vote. Anxiety was naturally created in
in no way relax its vigilance and in no way
fail to the United States by these moves, and in order to
assert all the pressure and authority within its comallay the apprehensions Secretary Stimson declared
petence toward regulating the action of China
and that the United States was not in the League and
Japan in the premises."
that he did not take seriously charges that, by attendThe seriousness of the situation was
again em- ing the Council sessions and pledging co-operation
phasized. Monday, when Chiang Kai-sh
ek, President in the Manchurian crisis, this country was enteri
ng
of the Nationalist Oovernment of China,
issued a the League either by the back door or the front door.
statement saying that Chinese patien
ce has been Optimism was expressed in Washington regarding
tried to the last degree. "If the Leagu
e of Nations eventual settlement of the Manchurian dispute.
In
fails her, China will take the matter
into her own Tokio it was indicated that Japan would
consent to
hands," President Chiang remarked.
"China will American participation in the Council
deliberations
not hesitate to make the supreme sacrifice,
bank- provided an agreement were made for simila
r reprerupting the country for half a century, by
going to sentation in future disputes.
2480
[VOL. 133.
FINANCIAL CHRONICLE
The Bank of England statement for the week ended
The League Council finally decided, late Thursday,
14 shows a gain of £178,857 in bullion, which
Oct.
parto issue an invitation to the United States for
the total holdings up to £136,743,526, as combrings
not,
ticipation in the deliberations on Manchuria
with £159,021,270 a year ago. Circulation
pared
Japanese
the
withstanding determined opposition by
£2,615,000, and this, together with the
contracted
question.
this
on
1
13
to
delegate. The Council voted
holdings brought about an increase of
gold
in
gain
yesterearly
followed
Council
of
the
session
A public
day, and an invitation issued for an American ob- £2,794,000 in reserves. The ratio of reserves to
server to sit at the Council meeting and take part in liabilities shows an increase of 3.54%, rising from
the discussions insofar as they relate to the Kellogg- 36.96% on Oct. 7 to 40.50% the present week. A
Briand treaty. Mr. Yoshizawa demonstrated with year ago the ratio was 54.05%. Public deposits
admitted ability on behalf of the Japanese Govern- increased £3,847,000 while other deposits fell off
ment that American participation was a matter of £9,329,187. Other deposits include bankers' acoff
principle, and required a unanimous vote. His oppo- counts and other accounts. The former fell
on
Loans
£569,379.
latter
the
and
grounds
£8,759,808
juridical
on
was
sition, he made plain,
and
£6,500,000
decreased
t
tion
securities
governmen
communica
formal
a
issued
Council
alone. The
on the matter late Thursday, stating that a private those on other securities £1,760,377. The latter
meeting had been held to examine the proposal for consists of discounts and advances which decreased
.
an invitation to the United States, "one of the pro- £2,820,512 and securities which rose £1,060,135
we
Below
6%.
at
unchanged
is
rate
of
The
discount
expressed
moters of the Paris pact." The members
the opinion, it was said, that the Manchurian dis- show a comparison of the different items for five years:
BANK OF ENGLAND'S COMPARATIVE STATEMENT.
pute involved not only the execution of obligations
1928.
1927.
1929.
1930.
1931.
of
those
from
also
but
Oct. 17.
Oct. 19.
Oct. 18.
Oct. 15.
arising from the Covenant,
oa. 14
the Pact of Paris (Kellogg-Briand treaty). The Circulation
2256,710,000 357,080.692 360,244,812 133,500,675 135,538,625
12,397,382 9,550,806 11,216,889 22,096,598
situation in Manchuria remained unchanged while Public deposits - - 14.441,000 102,230,672
107,001,643 100.012,304 99,380,618
121.408.642
Other deposits
The
Geneva.
in
progress
in
were
disputes
these
Bankers' accounts 70.098.863 66,163,417 69,875,903
37.125,740
36,067,255
Other accounts-- 51.309,779
Chinese declined to begin direct negotiations with Govt.securities.
- 57.625.906 42,301,247 76.076.855 34,015,308 47,549,619
41,489,543 56,176,572
Japan until Tokio ordered the withdrawal of troops, Other securities- -- 40,852,469 28,009,992 25,460,180
& advances 14,077.651 5,128,036 4,936,473
and the Japanese maintained they cannot evacuate Securities
20.523.707
22,881,956
26.774,818
notes & coin 55.033,000 61,960,578 32,688,077 53,396.549 35,425,429
the territory in the absence of an authority capable Reserve
Coln and bullion-136,743,526 159.021,270 132,932.889 167,147,224 151,214,054
Proportion of reserve
of protecting life and property.
Proceedings of the fourth Pan-American Commer
cial Congress were brought to an end in Washington, Tuesday, after 10 days of discussion by the delegates of the 21 American republics of means fo
promoting inter-American trade and good-will. A
general act was adopted at the final conference embracing all resolutions accepted during the plenary
sessions, and it will be submitted to all the American governments for their consideration. The resolutions, a Washington dispatch to the "Herald
Tribune" states, ranged from recommendations for
a customs preference agreement among American
republics and the calling of an international silver
conference, to proposals for the unification of traffic
laws. Vice-President Curtis delivered the final address in behalf of the United States. He remarked
upon the greater need of such discussions in periods
of economic adversity than in times of prosperity.
Sebastiao Sampaio, Brazilian Consul-General at
New York, made the last speech of the conference.
Replying to Mr. Curtis, he said the delegates did
as much
their best to work out a program designed
the
three
in
trade
of
needs
the
meet
to
as possible
world.
the
of
crisis
unique
this
in
Americas,
to Ihtbilities
Rank rate
40.50%
8%
54.05%
3%
28.04%
6%
48%
4h%
29 3-16%
4h %
a On Nov.29 1928 the fiduciary currency was amalgamated with Bank of England
notes issues adding at that time £234,199,000 to the amount of Dank of England
notes outstanding.
The French Bank statement for the week ended
Oct. 9, reveals a further gain in gold holdings, this
time of 725,623,850 francs. Total gold now is 60,539,238,174 francs, in comparison with 49,448,030,937 francs the corresponding week last year and
39,776,491,766 francs the year before. An increase
is shown in French commercial bills discounted and
in creditor current accounts of 778,000,000 francs
and 3,045,000,000 francs while advances against
securities fell off 72,000,000 francs. An increase
appears in note circulation of 334,000,000 francs,
raising the total of the item to 81,847,081,590
francs. Total circulation last year was 73,968,455,295
francs and the year before 66,900,760,840 francs.
Credit balances abroad and bills bought abroad increased 1,898,000,000 francs and 153,000,000 francs
respectively. The proportion of gold on hand to
sight liabilities is now 54.79% as compared with
55.84% a week ago and 53.54% a year ago. Below
we furnish a table of the various items with comparisons for three years.
BANK OF FRANCE'S COMPARATIVE STATEMENT.
Status as of
Changes
its rate of
The Bank of Finland on Oct. 13 raised
Oct. 9. 1931. Oct. 10 1930. Oct. 111929.
for Week.
Gerin
8%
are
Francs.
Francs.
Francs.
Franca.
discount from 732% to 9%. Rates
60,539.238,174 49,448.030,937 39,776,491,766
7% in Portu- Gold holdings_ _ _ _Inc. 725,623.850
Austria;
in
10%
Hungary;
in
000000
15.727.636.450
and
6,567.842,420
7,188,830.509
many
Credit ha's. abed.Ina.1.898,
532% in Italy; aFrench comm'r'l
gal; 654% in Spain; 63/2% in Ireland;
bills discounted _Inc. 778.000.000 7,390,429.273 4.749,219,444 8,179,106,462
Denmark, and in b13111s bgt abed__Inc. 153.000,000 12.961.950.505 19,045,327.189 18,647,899,425
7% in Norway and Sweden;6% in
and 23/2% Adv. Mt.seeurs„Dec. 72,000.000 2.844,051,284 2.886,498,046 2.469,146.436
Belgium,
in
England;3% in Holland;23/2%
Note circulation__Ino. 334,000.000 8E847.081,590 73.968.455.295 66.900,760,840
London open Cred. curr. accts..-Inc.3.045,000000 28,641,883.526 18,394,474,359 18,671,087,274
in France and Switzerland. In the
of gold on
were Prop.
hand to sight liamarket discounts for short bills yesterday
1.05%
54.79%
Dec.
53.54%
46.48%
week, and bilities
53‘@5/%,the same as on Friday of last
b
France.
in
Includes bills discounted abroad.
purchased
bills
Includes
a
54@
against
11-16@5%
5
for three months' bills
London
58% the previous Friday. Money on call in
Advancing rates in all departments of the money
rate
market
open
the
Paris
At
%.
3
4
3
en Friday was
together with further extensive gold withmarket,
continues at 13/%,and in Switzerland also at 1 8%.
drawals for European account, were again recorded
OCT. 17 1931.]
FINANCIAL CHRONICLE
2481
this week, in continuance of the movements already $96,686,000, and imports of $12,555,00. The daily
in progress as the short business week started. The statement for Thursday reflected exports of $17,chief incident was the advance of the Federal Re- 215,300, and a release of $1,334,000 from earmark.
serve Bank of New York rediscount rate, Thursday, Yesterday's account showed exports of $44,471,300,
from 2/
1
2% to 3/
1
2%, this charge having been ad- release from earmark of $7,732,000, and imports of
vanced from 1/
1
2% to 2/
1
2% only a week before. The $1,225,000. Since the beginning of September (the
Boston and Chicago Reserve Banks yesterday also British gold suspension occurred on Sept. 21), gross
advanced from 2/
1
2% to 3/
1
2%, and other banks of losses of gold in this market through exports and earthe system are likewise expected to increase the markings have amounted to $700,669,200, while the
charge.
net loss, after deducting imports, amounts to
The rediscount rate advances of last week and $638,171,200.
this week have set in motion a series of advances in
the rates charged in all departments of the money
Dealing in detail with call loan rates on the Stock
market. The bill buying rate of the New York Re- Exchange from day to day,2% was the ruling quotaserve Bank was increased Tuesday from the level of tion for both renewals and new loans up until Fri13
/
4% for one to 90-day bills to 21/8% for one to 75-day day, when there was an advance to 2/
1
2% all around.
bills and to 2y4% for 76- to 90-day bills. The rate The market for time money is unchanged,there being
was again advanced yesterday from these levels to a little or no demand for this class of accommodation.
uniform charge of 3/
1
2% for one- to 90-day bills.
Rate on all maturities is 3% bid, though this is
Dealers in bankers' bills naturally followed these purely nominal. The market for prime commercial
advances with corresponding increases in the market paper has been fairly brisk, but limited on account
rates quoted on bills. Two advances in yield rates of the shortage of paper. Rates were advanced on
aggregating %% were effected Tuesday, while in- Thursday and for choice names of four to six months'
creases yesterday ranged from 1% to 1%% for the maturity are now 3@3%%. Names less well known
different maturities. Commercial paper rates also are 4%.
were moved sharply upward, with a considerable
amount of confusion reported in the market.
The market for prime bankers' acceptances was
Call loans on the Stock Exchange were 2% for quiet this week, with the supply of paper sufficient
renewals and new loans alike as trading for the week to meet all requirements. Two changes in rates were
started Tuesday. This official rate was maintained made on Tuesday, while yesterday, with the advance
Wednesday and Thursday, although dealings in the in the discount rate from 2/
1
2% to 3/
1
2%,there was
Street market were reported at 2/
1
2%. Renewals a large general advance all around. The quotations
yesterday were at 2/
1
2% on the Stock Exchange, and of the American Acceptance Council for bills up to
the figure was maintained also for new loans, with 90 days are now 3/
1
2% bid, 3/
14% asked; for four
plenty of funds offered. Time money rates also months' bills, 33
/
4% bid, 3/
1
2% asked; for five and
hardened markedly.
six months, 4/
1
2% bid and 41/
4% asked. The bill
The effect of the advances on short-term Govern- buying rate of the New York Reserve Bank was inment financing began to appear Tuesday, when tend- creased on Tuesday from 13
/
4% for one- to 90-day
ers were opened on an issue of $50,00,000 in 90-day bills to 2/
1 8% for bills running from one to 75 days,
Treasury discount bills. Award of the bills was and to 2/
14% for bills running from 76 to 90 days.
made at an average rate of 23
/8%, computed on an Yesterday there was a further advance to a uniform
annual bank discount basis. The Treasury sold on rate of 31/
8% for all maturities from one to 90 days.
Sept. 28 an issue of $100,000,000 in 91-day bills at The Federal Reserve banks again showed a large furan average figure of 1.22%, while during last sum- ther increase in their holdings of acceptances during
mer the rate on similar instruments dropped at times the week, the total rising from $581,356,000 to $730,under 1/
2%.
407,000. Their holdings of acceptances for foreign
In recognition of the upward revisions of money correspondents, however, further declined from $80,rates, the New York Clearing House Committee an- 809,000 to $40,571,000. Open market rates for
nounced late Thursday an all around increase of/
1
2% acceptances also remain unchanged, as follows:
in deposit rates. Interest on deposits of mutual
SPOT DELIVERY.
savings banks in the commercial institutions was
—180 Days— —130 Days— —120D—
M. Asked.
ad. Asked.
Bid. Asked.
increased from 1% to 1/
1
2%, while the rate paid on Prime ellgible bills
314
3
314
8
29(11 294
deposits of other banks, trust companies, private
—90Days— —60Days— —40Days—
bankers, corporations and individuals with large
M. Asked.
Bid. Asked.
Bid. Asked.
214
294
214 234
299 234
balances was advanced from /
1
2% to 1%. The in- Prime eligible bins
FOR DELIVERY WITHIN THIRTY DAYS.
terest on time deposits also was marked up, to a
Eligible member Imam
1131 bid
general level of 1/
1
2%. The informal committee of Eligible non-member banks
194 bid
bankers regulating rates on foreign deposits in this
••••••ro.I
market took similar action yesterday, rates being
Three of the Federal Reserve Banks have this
advanced /
1
2% all around to 1% on the demand de- week increased their rediscount rates to
332%—
posits of banks, bankers, corporations and indiviz., the New York Reserve Bank, Boston and
viduals, and to 1/
1
2% on those of central banks and Chicago. In the case of the New York Bank,
its
foreign governments. Time deposits of all classes
rate was increased a week ago from 1M to 2%;
will be paid 2% hereafter.
this week, on Oct. 15, the Bank announced that,
The outward gold movements which are playing
effective Oct. 16, the rate on all classes of paper and
an important part in these revisions of money rates
for all maturities, has been raised from *4 to 3327
0.
continued this week on an unabated scale. The gold
The present increase in the rate of the Boston
statement of the Federal Reserve Bank of New York Federal Reserve Bank is
likewise the second in a
for the week to Wednesday night showed exports of week; on Oct. 10 its rate
was raised from 2% to
$129,327,000, earmarkings for foreign account of *6%,and yesterday
it was advanced to 3%.
2482
FINANCIAL CHRONICLE
The Chicago Federal Reserve Bank yesterday
increased its rate from 23/2 to 33'%; the 23/2% rate
had been in effect since May 9 1931.
There have been no other changes this week in the
rediscount rates of the Federal Reserve Banks. The
following is the schedule of rates now in effect for
the various classes of paper at the different Reserve
banks:
DISCOUNT RATES OF FEDERAL RESERVE BANKS ON ALL CLASSES
AND MATURITIES OF ELIGIBLE PAPER.
Federal Reserve Bank.
Rage Os Effect
on Oct. 17.
Date
Established.
Previous
Rate.
334
3%
Oct. 17 1931
Oct. 16 1931
May 7 1931
Oct. 10 1931
May 15 1931
Jan. 10 1931
Oct 17 1931
May 9 1931
Sept.12 1930
May 21 1931
May 8 1931
May 22 1931
234
214
314
214
3%
334
2%
3
4
334
3%
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
a
3
3
3
3%
2%
334
3 ,
3
2%
3
Sterling exchange continues unchanged in all important respects since Great Britain's suspension of
the gold standard on Sept. 21. The market is still
hesitant about taking a position in exchange operations until after the outcome of the British elections
on Oct. 27. On Monday, Columbus Day, there was
no market in New York. The range this week has
been from 3.853/2 to 3.91 for bankers' sight bills,
compared with 3.7734 to 3.933/2 last week. The
range for cable transfers has been from 3.853
% to
3.91, compared with 3.783.. to 3.94 a week ago.
The most significant event bearing on exchange
this week was the increase in the rediscount rate
of the New York Federal Reserve Bank from
2% to 332%, announced on Thursday afternoon.
It will be recalled that on Thursday afternoon of
last week the Federal Reserve Bank increased its
rediscount rate from 13/2% to 23/2%. The 1%
rate had been in effect since May 8, when the rate
was reduced from 2%. The firming up of money
rates in New York has also an important bearing on
the future of sterling exchange. On Friday of last
week banker's acceptance rates were raised M% on
3 % on long
short maturities and by % and 4
maturities. On Tuesday there was a further fractional increase in bill rates here and on Friday
New York dealers made a further large advance.
Thirty, 60 and 90-day bills are now 33.1% asked,
120-day bills 332% asked, 150 and 180-day bills
ith% asked. The asking rate on bills represents
the yield to the investor. The increase in bill rates
here carries the implication of firmer money rates,
which might be expected to result in due course
in the commercial banks paying higher rates on
deposit. Call money and time money against
Stock Exchange collateral and rates on commercial
paper have also advanced. Present bill rates are
the highest since June 4 1930.
The increase in the Federal Reserve Bank's rate,
following upon the advance made last week, is
believed to be due largely to the exceptionally
large gold exports recorded this week, which
amounted to $129,327,000, in addition to which
there was an increase of $96,686,000 in gold earmarked for foreign account. The entire foreign
exchange market has been demoralized since Great
Britain's suspension of the gold standard. Exchange
brokers say that the present market is highly reminiscent of the market during the period of uncontrolled fluctuations previous to the stabilization of
the currencies a few years ago. The absence of any
[VoL. 133.
satisfactory futures market makes the financing of
legitimate commercial transactions difficult, as the
normal means of insurance through hedging operations in futures are not available. Banking authorities claim that the breakdown in futures trading
is partly responsible for the sharp rise in the cable
rates. Under ordinary circumstances demand for
cable transfers would be accompanied by sale of
futures to protect the position and this tends to
stabilize matters. But under the present circumstances the demand is all in one direction and there
are consequently no compensating hedging operations to set up a demand for dollars, with the result
that the dollar rate has suffered.
The exceptionally heavy selling of dollars on
European account in the past few weeks has furnished a singular example of the far-reaching effects
following the dislocation of an important currency
such as sterling. On the face of the matter there was
no reasonable justification for the selling as the
dollar is by far the strongest of all the currencies.
Nevertheless the continued selling caused the spread
of fantastic rumors throughout the Continent regarding the position of United States currency. The
real reason, however, for the selling is probably that
many of the European nations were on the gold
exchange standard and a large portion of the world's
bank reserves were in the form of foreign currencies
instead of gold, and most of this was in sterling and
dollars. The sterling reserves were automatically
frozen with the suspension of the gold standard in
England, and to prepare against eventualities the
various banks immediately converted their dollar
balances into gold. These operations were of course
on a large scale, and the heavy selling of this nature
undoubtedly induced much speculative and nervous
selling of dollars from other sources. The sentiment
in financial London has undergone distinct improvement in the past week. Markets have been inspired
by Prime Minister MacDonald's election manifesto,
by confidence in the result of the appeal to the
country for the return of a strong national government, by reports of improving export trade, and
by the comparative steadiness of sterling. Daily
fluctuations in the value of the pound sterling are
still somewhat wide, but they have been much
narrower than in the immediate sequel to the abandonment of gold. The gold arriving weekly in the
London bullion market from South Africa is apparently still being held back awaiting buyers. Approximately £3,550,000 of South African bar gold accumulated in the London market in the past three
weeks. According to reports current in London
on Thursday nearly £1,000,000 of this South African
gold was taken for shipment to Paris on Tuesday.
On Wednesday, there was £30,000 bar gold from an
unannounced source available in the open market,
which was taken by the trade and the Continent at
106s. 6d. per ounce. This week the Bank of England shows an increase in gold holdings of £178,857,
the total standing at £136,743,526, which compares
with £159,021,270 a year ago.
At the Port of New York the gold movement for
the week ended Oct. 14, as reported by the Federal
Reserve Bank of New York, consisted of imports of
$12,555,000, of which $6,311,000 came from Argentina,$5,019,000 from Sweden,$926,000 from Canada,
$132,000 from Mexico and $167,000, chiefly from
Latin American countries. Gold exports totaled
$129,327,000, of which $113,875,000 was shipped to
1
OCT. 17 1931.]
FINANCIAL CHRONICLE
France, $6,330,000 to Belgium, $4,814,000 to
Holland, $2,314,000 to Mexico, $1,220,000 to Germany, $603,000 to Switzerland, and $171,000 to
other European countries.
The Reserve Bank
reported an increase of $96,686,000 in gold earmarked for foreign account. In tabular form the
gold movement at the Port of New York for the
week ended Oct. 14, as reported by the Federal
Reserve Bank of New York, was as follows:
2483
grain bills at 3.843/
2. Cotton and grain for payment
closed at 3.84.
Exchange on the Continental countries presents
no striking new features since the German and
British crises. Interest centres this week on the
German mark, owing to hesitancy and doubt as
to the political outcome or the resignation of Chancellor Bruening's Cabinet last week. The fact that
the National Socialist leader, Adolph Hitler, had a
GOLD MOVEMENT AT NEW YORK, OCT. 8-14, INCLUSIVE.
Exports.
Imports.
conference
with President von Hindenburg for more
$113,875,000 to France
$6,311,000 from Mgentina
6,330.000 to Belgium
hour
5,019,000 from Sweden
on Saturday last gave rise to grave
an
than
4,814,000 to Holland
926,000 from Canada
circles as to the strength of
financial
in
doubts
2,314,000 to Mexico
132,000 from Mexico
167,000 chiefly from La•in1,220.000 to Germany
Foreign exchange trading
position.
Bruening's
Dr.
603.000 to Switzerland
American countries
became largely nominal, awaiting the result of Dr.
171,000 to other European
countries
Bruening's speech before the Reichstag on Friday,
$12,555,000 total
$129,327,000 total
when a vote of confidence was expected to be either
Net Change in Gold Earmarked for Foreign Account.
extended
or refused. A refusal would mean, of
Increase $96,686,000
course, Hitler and the radical element would come
The Reserve Bank's weekly gold statement is into power, in which event the mark exchange and
always as of the close of business 3 p. m. on Wed- credit situation would be clouded. On Friday of
nesday. On Thursday, the Bank reported additional
last week mark cable transfers closed at 23.45,
gold exports of $19,327,500, of which $9,984,700
after having sold as high as 23.65. Because of
went to France, $6,559,100 to Holland, $2,493,800 to Saturday's events and of an exceptionally strong
Belgium, $267,900 to Switzerland and $22,000 to
display of radical power in mass.meetings on Sunday,
Poland. On Thursday, there was a decrease of$1,the mark dropped off to 23.00, and on Wednesday
334,000 in gold earmarked for foreign account. On declined to 22.75, recovering later in the day
and
Thursday, the receipt was reported of $307,000 of holding steady throughout Thursday in a nominal
gold at San Francisco from China. Yesterday, market around 23.00, and closing Friday at
23.20.
Friday, the New York Reserve Bank reported an
The steadiness in the mark on Thursday was due
import of $1,225,000 gold from Canada and gold
to a growing conviction that Chancellor Bruening
exports totaling $42,359,100, of which $27,347,000 would receive the Reichstag's vote of
confidence
went to France, $10,325,800 to Switzerland, $4,on Friday—which he did. Chancellor Bruening's
‘..45;4-00 -to Holland and $140,000 to Germany. speeches calling for
stability of the mark seem to
There was a further decrease of $7,732,000 in ear- have met with great approval
among all sections
marked gold On Friday, approximately $7,300,of the people. The fact that President von Hinden000 of gold was received at San Francisco from
burg accepted the Presidency of the future Economic
Japan.
Council is everywhere accepted as proof of his
Montreal funds continue at a severe discount, confidence in Chancellor Bruening. The Governapparently unwarranted by the prosperous condition ment has again stated that the Reichsbank has
and strong financial position of the Dominion. It given the German Treasury no credit and that the
would seem that the excessive discount on Canadian major part of the Bank's bill portfolio consists of
exchange is largely due to the flow of Canadian funds ordinary commercial paper. Emergency acceptto New York security markets in search of bargains. ances created during the crisis amount to but 1,200,Normally Canadian funds at this season are at a 000,000 reichsmarks of the total portfolio. It is
discount of around 1%. On Saturday of last week believed possible that the Reichsbank may soon
Montreal funds were quoted at 934% discount. On advance its rediscount rate. It is admitted in comMonday there was no market owing to the Columbus petent quarters that the permanent maintenance of
Day holiday. On Tuesday the discount was 11%, the mark on a gold basis depends upon the dimenon Wednesday, 1134%, on Thursday at 113/
2, and sions of the favorable merchandise trade balance.
on Friday 1134% discount.
There is a continued drain on the Reichsbank reReferring to day-to-day rates, sterling exchange serves for service of foreign bonds, repayments of
on Saturday last was steady in a dull half-day mark deposits, and other necessary transfers. To
session. Bankers' sight was 3.864@3.91; cable meet this drain monthly export surpluses averaging
transfers, 3.87@3.91. On Monday, Columbus Day, 200,000,000 marks have been calculated to be
there was no market in New York. On Tuesday, necessary. In the last quarter the monthly export
sterling was steady, displaying a slightly firmer tone. surplus was 280,000,000 marks. Since the depreThe range was 3.8734@3.90 for bankers' sight and ciation of the pound sterling and the Scandinavian
3.88@3.90 for cable transfers. On Wednesday the crown, however, some doubt has been expressed of
market continued steady but quiet. Bankers' sight export surpluses of equal magnitude.
was 3.86%@3.89; cable transfers, 3.87@3.90. On
French francs are somewhat easier. It will be
Thursday sterling was easier. The range was 3.87@ recalled that on Friday of last week the Bank of
3.8834 for bankers' sight and 3.87h@3.883/ for France increased its rediscount rate from 2% to
cable transfers. On Friday sterling was still easier, 23/2%. No especial significance is attached to the
the range was 3.853/2@3.873/ for bankers' sight increase in the Bank of France rate, and in view of
and 3.85%@3.88 for cable transfers. Closing quo- the higher rates put into effect in other centers within
tations on Friday were 3.8694 for demand and 3.87 the past few weeks, it seems only reasonable to
for cable transfers. Commercial sight bills finished believe that there will be a still further increase
at 3.84; 60-day bills at 3.80; 90-day bills at 3.78; in the French bank rate. This week the Bank of
documents for payment (60 days) at 3.80, and 7-day France shows an increase in gold holdings of 725,-
2484
FINANCIAL CHRONICLE
623,850 francs, the total standing at record high of
60,539,238,174 francs on Oct. 9, which compares with
49,448,030,937 francs on Oct. 10 1930, and with
28,935,000,000 francs in June, 1928 following the
stabilization of the franc. As noted above, the
Federal Reserve Bank of New York reported the
export of $113,875,000 gold to France during
the week. This follows upon a total export to
France in the previous two weeks of $92,103,000.
The Reserve Bank reports a further increase this
week of $96,686,000 in gold earmarked for foreign
account. The total of such gold earmarked since
Sept. 21 thus amounts to approximately $392,633,000. By far the most of this earmarked gold is believed to have been for account of the Bank of France.
As European countries withdraw gold from Paris the
French bank either earmarks or withdraws corresponding amounts from New York. The shifting of
central bank and private balances from New York
to the Continent is for the most part conducted
through the medium of the franc and has been of such
proportions since Sept. 21 as to drive francs up
to undOsirable levels, were no controlling force
applied. :Consequently the Bank of France has been
a heavy buyer of foreign exchange and in the last
three weeks its sight balances abroad, as its statement
for Oct.9 shows, have increased 3,364,000,000 francs
to 15,727,000,000 francs. The presumption is that
most of this represents the purchase of dollars.
Finland has suspended the gold standard. On
Tuesday,the Bank of Finland raised its rediscount
rate to 9% from 73/2%. In a statement issued by the
National Bank of Finland following the suspension
it was asserted that the Bank could have maintained
the gold: standard but was forced to abandon it
owing to the importance of exports to England which
constitute 40% of Finland's total exports. The
Finnish Parliament will assemble on Oct. 20 to
sanction the decision made by the Bank of Finland
On Oct. 12 to abandon gold.
The London check rate on Paris closed at 97.87 on
Friday of this week, against 98.12 on Friday of last
week. In New York sight bills on the French centre
3 , against 3.943/i on
finithed on Friday at 3.934
at 3.93%, against
transfers
cable
week;
last
Friday of
3.94%, and commercial sight bills at 3.93%, against
3.94. Antwerp belgas finished at 14.04 for bankers'
2 for cable transfers, against
sight bills and at 14.043/
13.98 and 14.00. Final quotations for Berlin marks
were 23.15 for bankers' sight bills and 23.20 for
cable transfers, in comparison with 23.44 and 23.45.
Italian lire closed at 5.18 for bankers' sight bills and
at 5.19 for cable transfers, against 5.17 and 5.19.
Austrian schillings closed at 13.50, against 13.50;
exchange on Czechoslovakia at 2.963/2 against
5 g; on
2.963/2; on Bucharest at 0.599', against 0.59/
Poland at 11.22, against 11.20 and on Finland at
2.51%, against 2.51%. Greek exchange closed at
1.28 3-16 for bankers' sight bills and at 1.283/ for
cab,le transfers, against 1.28 3-16 and 1.283/2.
Exchange on the countries neutral during the war
is in all, important respects unchanged since the
financial crises in Germany and Great Britain.
Transactions in the Scandinavian currencies are
extremely limited. Holland guilders are exceptionally
firm, ruling around a high for the year of 40.65.
Since Friday last the guilder has ranged from 40.40
to 40.65, the average price being around 40.55, which
compares with par of 40.20. For several weeks Swiss
[VOL. 133.
francs have been ruling exceptionally strong. The
firmness in both currencies is due largely to the flow
of funds from other countries to enjoy greater security in the Amsterdam and Swiss markets. The Spanish Finance Minister has proposed an amendment of
the banking law to contain a declaration in favor of
the gold standard and increased official control over
the national bank as well as a tax on note circulation.
The limit of credit by the Bank of Spain in favor of
the treasury will be raised. In an exceptional exchange or monetary crisis the Government will have
the right to increase the Bank rate. The Government estimates the 1931 budget deficit at 502,000,000.
pesetas.
Bankers' sight on Amsterdam finished on Friday
at 40.57, against 40.52 on Friday of last week; cable
transfers at 40.58, against 40.55, and commercial
sight bills at 40.25, against 40.45. Swiss francs
closed at 19.60 for checks and at 19.63 for cable
transfers, against 19.80 and 19.82. Copenhagen
checks finished at 22.00 and cable transfers at 22.05,
against 22.20 and 22.25. Checks on Sweden closed
at 23.20 and cable transfers at 23.25, against 23.45
and 23.50, while checks on Norway finished at 22.20'
and cable transfers at 22.25, against 22.55 and 22.60.
Spanish pesetas closed at 8.98 for bankers' sight bills
and at 8.99 for cable transfers, against 9.02 and 9.03.
Exchange on the South American countries presents no essentially new features. Under the influence of the new exchange restrictions, details of
which were received in New York from Buenos
Aires on Tuesday, Argentine pesos scored a sharp
advance in Wednesday's somewhat nominal market.
The rate went up 128 points on the day to 23.28.
However, even at this the peso rate is low when it
is considered that par is 42.45. The new decrees
place all exchange operations under the control of
a committee appointed by the Minister of Finance.
All exporters are obliged to sell exchange covering
shipments in the local exchange market and to prove,
before a shipping permit may be granted, that the
exchange operations have been completed or will be
effected locally in accordance with such regulations
as the Finance Minister's exchange committee may
establish. All sales of produce for export must be
made in foreign currency. Deposits in local banks
belonging to foreign banks or companies domiciled
abroad may be disposed of without restrictions up
to the total of their balances as of Oct. 10, but all
new orders for payments in Argentine paper pesos
originating abroad may not be effected unless accompanied by a corresponding reimbursement operation
in foreign currency. The Provisional Government's
control measures are designed principally to halt
heavy exportation of foreign capital. The Government is refusing to allow Argentine investors to
remit abroad for the purchase of Argentine bonds
in foreign markets where the low quotations offer
higher interest than is available locally. Somewhat
similar decrees were put into effect in Brazil on Friday
of last week. These decrees effect a moratorium
in the payment of private debts in foreign currency.
Most of the Brazilian press viewed the decrees as
the only means of bridging a difficult situation until
the year ends, "when improved general conditions
should relieve the exchange market." The moratorium clause which requires debtors to deposit
the milreis equivalent of foreign bills in local banks
at the rate of twelve milreis to the dollar is causing
OCT. 17 1931.]
FINANCIAL CHRONICLE
discussion, since the Government does not guarantee
this rate at the expiration of the moratorium. The
press points out that a similar Uruguayan moratorium (decreed there last week) guarantees the
debtors a fixed rate on removal of the moratorium.
On Wednesday the Bolivian Government published
a law establishing a 30-day suspension in commercial
obligations contracted abroad in foreign money.
The Government is authorized to suspend the law
before the termination of the period or to prolong
it as circumstances require.
Argentine paper pesos closed on Friday at 23.21
for bankers' sight bills, against 22.13 on Friday of
last week and at 23.28 for cable transfers, against
22.20. Brazilian milreis are nominally quoted 5.45
for bankers' sight bills and 5.50 for cable transfers,
against 5.20 and 5.25. Chilean exchange is nominally
quoted 121
%, against 121A. Peru, not quoted.
Exchange on the Far Eastern countries is in a more
or less demoralized condition. Recent events in
Europe have depressed the quotations for exchange
on India and the Straits Settlements while the
threatening situation in Manchuria is having an
adverse effect on the Chinese and Japanese units.
Silver prices are more satisfactory than in many
weeks, but the threatening Sino-Japanese situation
has resulted in curtailing the market, thence the
Chinese exchange quotations do not rightly reflect
the silver market which normally they do. The
Chinese quotations on Friday of last week advanced
on average 25 points owing to the improvement in
silver prices but receded again early this week with
the market exceedingly quiet. Yen exchange is
fairly steady considering the fact that the Chinese
boycott against Japanese goods must have a serious
effect on Japanese export business. The Japanese
foreign trade in September resulted in a favorable
trade balance of 6,000,000 yen, bringing the total
adverse balance since Jan. 1, last, to 76,000,000 or
64,000,000 yen less than for the corresponding period
in 1930. The excess flow of gold and silver from
Japan since January amounted to 56,000,000 yen.
Yen exchange in recent weeks has been affected by
the buying of dollars in the Japanese market and
abroad, but buying has slowed up perceptibly since
the gold operation of the Yokohoma Specie Bank.
In order to maintain the gold standard the Japanese
government made a shipment of specie and simultaneously raised the rediscount rate of the Bank of
Japan. On Thursday a special dispatch to the Wall
Street Journal from Tokio stated that the Yokohama
Specie Bank had shipped 15,000,000 yen gold on the
SS. Hikawa Maru and will send identical shipments
on the SS. Toba Maru on Friday and the Lisbon
Maru on Monday, making a total since the first
of the month of 75,000,000 yen. Other ships sailing
on Oct. 22 and on Oct. 29 will carry an additional
30,000,000 yen. Gold holdings of the Bank of Japan
now amount to 790,000,000 yen, while note issue
plus deposits amount to 1,399,000,000 yen, giving
a gold cover of 57%.
Closing quotations for yen checks yesterday were
49 3-16©49, against 49 3-16@491%. Hong Kong
closed at 255
%®25 13-16, against 251
/
8@25 9-16;
Shanghai at 32 13-16@331%, against 331%@3331;
Manila at 49 8, against 49 8; Singapore at 47%
against 4738; Bombay at 291
%, against 29.95, and
Calcutta at 2914, against 29.95.
2485
Pursuant to the requirements of Section 522 of the
Tariff Act of 1922, the Federal Reserve Bank is now
certifying daily to the Secretary of the Treasury the
buying rate for cable transfers in the different countries of the world. We give below a record for the
week just passed:
FOREIGN EXCHANGE RATES CERTIFIED BY FEDERAL HESE:RPM
BANKS TO TREASURY UNDER TARIFF ACT OF 1922.
OCT. 10 1931 TO OCT. 16 1931, INCLUSIVE.
Country and Monetary
Una.
Noon Boons Role for Gable Tranders in New
ram
l'atue in UM ed States Al1.ney.
Od..10.
EUROPE$
A made,schIllIng
139680
.139900
Belgium. belga
Bulgaria, ley
.007150
Czechoslovakia. kron .029617
Denmark. krone
.221153
England, pound
sterling
3.894875
Finland, markka
.025141
France,franc
.039496
Germany, reichsmark .233944
Greece, drachma
.012889
Holland, guilder
.405905
Hungary. pengo
.174600
Italy. Ilra
.051692
Norway, krone
.222000
Poland, zloty
.112175
Portugal,escudo
.039750
Rumania, leu
.005971
Spain. peseta
.090247
Sweden. krona
.233423
Switzerland, franc- .197688
Yugoslavia, dinar
.017650
ASIAChina.338125
Chetoo tadl
Hankow tael
.327187
Shanghai tad
.326500
Tientsin teal
.335208
Hong Kong dollar
.248500
Mexican dellar_..... .233750
Tientidn or Pei)
,
dollar
234583
Yuan dollar
.231250
India, rupee
282750
Japan, yen
493535
Singapore (s.S.) dollar .448750
NORTH AMER.Canada, dollar
.908203
Cuba, peso
1.000062
Mexico, peso (silver). .359200
Newfoundland. dollar .907500
SOUTH AMER.Argentina, peso (gold) .483180
.051188
Brazil. mUrels
Chile. peso
.120800
Uruguay, Peso
.336250
Colombia, peso
.965700
Od. 12. Oct. 13. Od. 14. Oct. 15, Oa.10:
$
$
.140000
.140089
.007135
.029616
.221937
3
.139333
.140222
.007143
.029622
.220925
x .889166
.025105
.039395
.228722
.012856
.405800
.174675
.051678
.223218
.111933
.038900
.005950
.090117
.234800
.196331
.017650
3.880500
.025120
.039395
.226947
.012878
.405259
.174830
.051728
.222112
.112100
.039850
.005948
.089969
.234245
.196082
.017671
.333541
.327031
.323303
.336041
.250357
.234375
.333541
.327031
.321354
.335208
.248958
.230833
.333333 .3352013
.326875 .326631
.320714 .32
.335000 .3386
.250173 .2520
.233125 .2310
.236250
.232918
.285166
.493458
.445000
.233750
.230416
.284750
.493283
.450000
.232083
.228750
.284791
.493210
.450000
$
$
.137944 .139214
.140658 .140411
.007115 .aong
.029616 .0296
.219366 .2196
4.875238
.025083
.039391
.229352
.012891
.405645
.174675
.051728
.220246
.112033
.03890
.005933
.089835
.232720
.196152
.017743
HOLIDAY.
.8517
.023
.039
.2299
.01288,
.40559'A
.1745.
.0517
.22001>
.1120
.038
.005
.0897,50
.231731
.19590
Anna
.234563
..231260.
•.283330.
.4931136.
449375.
.898308 .888593 .883713 .88 :..
.999781 1.600312 1.000156 1.0...,v
.359900 .363600 .380233 .358
.894437 .886000 .881609 ..881 ..
.501491 .527447 .527819
.053500 .053571 .054887
.120800 .120800 .120800
.334666 .326500 .329333
.965700 .965700 .965700'
..527. .
.057.t...
.1206..
.314 0, I
.96. ..
The following table indicates the amount of bullion in the principal European banks:
odour 161(6).
October 15 1931.
Banks ofGold.
Silver.
Total.
Gold.
Silver.
Total.
England __l36.743.526
136,743,526159,021,27
159,021,
France a__ 484,313,905
(d)
484.313.905395,584,247
(d)
1395,584. 7
Germany b ax.nag.,cfl c994,600 56,980.35010l.533.750
994.600 102,528.
Bpaln
91,071,000 21,987,000 113,058.000 99.021.000 28,261,000 127,282
Italy
58,120,000
58,120,000 56.587,000
56,587
Netherl'ds. 66.016,000 2,556,000 68,572,000 32,982,000 1,950,000 34,912.
Nat'l Belg. 71,342,000
71,342.000 38,227,000
86,227,
Switzerl'd. 42,684,000
42,684,000 25,588,000
25,588.
Sweden_
11,033,000
11,033,000 9,565,000
9,565,0
Denm ark
9,118,000
9,118,000 8,138,000
8,138,
Norway
6.556,000
6,556,000
Total week 1032983181 25,537,600 1058520781 937.681,267 31.205.600 68,886,B;
Prey.week 1019944333 26,345,600 1048289933946,680,232 31,498.600 978,178, s
a These are the gold holdings of the Bank of France as reported In the new
of statement. b Gold holdings of the Bank of Germany are exclusive of gold
abroad, the amount of which the present year Is £4,977,850. c As of Oct. 7 1Ii
d Silver is now reported at only a trifling sum.
The United States and the Sino-Japanese
Controversy.
The controversy between China and Japan which
has loomed into prominence during the past two
weeks is one of those international quarrels in which
the obvious disparity between the parties in political
development and physical resources, the political
ambitions of one of them, and the denial by each Or
certain statements of fact or purpose made by the
other make an intelligent decision on the merits of
the case exceptionally difficult. The difficulty has,
been increased by the action of the Chinese Government at Nanking in appealing to the League of Nations, by the insistence by Japan that the matter was one for settlement between Nanking and Tokyo.
alone, and by the extraordinary course of Secretary.
of State Stimson in exhorting the League Councii!
to act with vigor, assuring it of co-operation by the
2486
FINANCIAL CHRONICLE
[voL. 133.
United States in whatever the League may do, and at Geneva,for communication to the Secretary Gen. virtually asking that an American official be invited eral of the League, a note which is unique in American diplomatic history. Expressing his belief that
to join in the Councils' proceedings.
co-operation in the future handling of this dif"our
to
back
• The immediate phase of the conflict goes
matter should proceed along the course which
ficult
and
detachment
Sept. 18, when a Chinese military
followed ever since the first outbreak of
been
has
Peitaying,
at
clashed
some Japanese railway guards
near Mukden. The next day the Chinese garrison at the trouble fortunately found the Assembly and
Peitaying was disarmed by Japanese troops, various Council of the League of Nations in session," and regovernment buildings and strategic points within calling the deliberations of the Council, the machinand without Mukden were occupied, and several ery provided by the Covenant "for handling such
places on the South Manchurian Railway, all out- issues as between States members of the League,"
side of the so-called treaty limits, were taken over by the arguments presented to the Council by the
the Japanese. The first clash at Peitaying was Chinese and Japanese, and the course of action out'ascribed by the Japanese to the blowing up of a part lined by the Council for the disputants, Mr. Stimson
of the railway,by Chinese troops, as a result of which declared that "it is most desirable that the League
it became necessary, in view of the tense situation in no way relax its vigilance and in no way fail to
between the nationals of the.two countries in the assert all the pressure and authority within its comregion, to safeguard Japanese residents by disarm- petence toward regulating the action of China and
ing the Chinese forces and occupying territory. The Japan in the premises." "On its part," the note conNanliing Government, on the contrary, officially de- cluded, "the American Government, acting inde'itied that Chinese troops were responsible for blow- pendently through its diplomatic representatives,
.ing„ tip a part of the railway, and charged the will endeavor to reinforce what the League does and
will make clear that it has a keen interest in the
.Japanese with acting without provocation.
the
in
and is not oblivious to the obligations which
matter
representative
Japanese
the
19
Sept.
On;
Connell of the League reported to that body that the the disputants have assumed to their fellow-signaJapanese Government had taken "all possible tories in the Pact of Paris as well as in the Nine,meashres to insure that this local incident should Power Pact should a time arise when it would seem
•not I ad•to any more serious complications," a state- advisable to bring forward those obligations. By
ment which. the Council received "with satisfaction." this course we avoid any danger of embarrassing the
On ept. 21, however, the Nanking Government, in- League in the course to which it is now committed."
The text of Mr. Stimson's note was not made pubg Article XI of the Covenant of the League,
,requ sted immediate action by the Council to pre- lic until last Sunday. On Monday, Mr. Stimson
:vent further conflict, restore the status quo, and de- authorized the American Consul at Geneva to attend
termine what reparation, if any, should be made by the sessions of the League Council, to begin the next
Japan. The response of the Council was the dis- day,if invited to do so. The Council met on Tuesday
patch, on the 22d, of notes to the two Governments under the presidency of M. Briand, and heard from
requesting a withdrawal of troops from the region the 'Chinese and Japanese spokesmen opposing
and the avoidance of any acts likely to provoke fur- statements which press dispatches characterized as
ther clashes. In this request the United States was bitter. The official presence of an American repreinvited to join, and on Sept. 24 the Department of sentative, however, was objected to by the Japanese
, State,: in identical notes to the two Governments, representative on the ground that the United States,
:urged abstention from further hostilities and observ- not being a member of the League, was not entitled
, 4nce of international agreements in the distribution to participate in the Council's deliberations, and the
; of their respective forces. The reply of the Japanese American Consul and some of his staff attended only
Government was a disclaimer of war intentions as observers. At the conclusion of the first session
and an assurance of the withdrawal of troops as fast M. Briand declared that "we cannot allow ourselves
as the safety of Japanese nationals and their prop- to be lost in the details of this conflict and in running down the truth of'this allegation or that," and
erty justified.
the League "will fulfill its duty with all the
that
announced
Nanking
Government
the
4
On Oct.
that it would wait until the 14th, the date at which necessary firmness as soon as it has full knowledge
the League Council was expected to reconvene at of the causes and scope of the conflict." On Thurs. Geneva, to allow Japan to make good its assurances. day an Associated Press dispatch from Tokyo reThe question of a settlement, however, became com- ported that the Foreign Office had that day "inplicated by the insistence of Japan upon negotiating structed its delegation in Geneva to use every effort
only with Nanking, and by reports of increasing dis- to see that the proposal for including an American
order in Manchuria. Instead of withdrawing troops representative in the League of Nations Council durJapan sent more, and on Oct. 8 twelve Japanese ing discussion of the Sino-Japanese trouble be
naval airplanes bombarded Chinchow,the temporary dropped." Japanese advices received at Geneva on
capital of Marshal Chang Hsueh-liang on the Peip- the same day stated that Japan would consider
Whether the bombardment American participation "unfair and irrational." On
^ ing-Mukden Railway.
of the Tokyo Cabinet, or Friday, however, the Council formally overrode the
approval
had the tacit
the commander of the objections of Japan and invited the United States
which
for
something
was
is not clear, to be represented in its deliberations, on the ground
responsible,
alone
was
forces
Japanese
Japanese that the United States, as one of the chief sponsors
the
from
forthcoming
was
disavowal
but no
Government, and press dispatches from Tokyo indi- for the anti-war Pact, might properly be consulted
cated that the Cabinet, while disturbed over the pos- when the question of a possible violation of the Pact
sible effect of the action abroad, was not in a posi- was at issue. It was announced that the invitation
had been accepted, and the American Consul sat
tion to antagonize the army.
the Council, although not with the privilege
with
On Oct. 9, the day following the bombardment,
voting.
of
Secretary Stimson cabled to the American Consulate
OCT. 17 1931.]
FINANCIAL CHRONICLE
The United States has every interest in the maintenance of peace in the world, and it may well feel
concerned when any situation arises by which world
peace is menaced. The extraordinary course which
the Department of State has taken, on the other
hand, seems to us in a high degree improper and
dangerous. The United States is not a member of
the League. The election of 1920 was an emphatic
repudiation of membership in the League, and
nothing that has happened since has changed the
verdict which the country, speaking through the victory which it gave to the Republican candidate for
President, rendered at that time. It is certainly a
remarkable thing that a Republican Secretary of
State in a Republican Administration, with the decision of the country well known, should not only
assume to remind the Council of the League of its
opportunities and responsibilities in the SinoJapanese quarrel, but should also assure the League
that the American Government "will endeavor to
reinforce what the League does" by the independent
action of its own diplomatic representatives. Such
an assurance would have been bad enough if it had
been given after the decision of the Council was
known and its program made public, but to give it
in advance was to promise "reinforcement" of action
of. whose nature neither Mr. Stimson nor anyone else
was as yet aware.
If the assurance of blindfold co-operation which
Mr. Stimson has given was unwise as well as unwarranted, his action in virtually asking that an American representative be permitted to sit with the
Council was presumptuous. The Japanese Government was well within its rights in objecting to the
presence of an American as contrary to the League's
constitution. If the United States is not a member
of the League, no American has any business in
either the Council or the Assembly. The action of
the Council, moreover, in refusing to give weight
to the constitutional and legal objections of Japan,
lays that body open to the charge of disregarding
the League Covenant for the rather obvious purpose
of getting the United States to share League responsibilities. In any case, the invitation of the Council
could not have been accepted without going directly
counter to the emphatic negative which the American
people have given to membership in the League.
Mr. Stimson's action is, further, unnecessary because of the existence of two international agreements under either or both of which the United
States could, if it felt it wise to do so, call Japan to
account without going out of its way to inform the
League of its purpose. As one of the sponsors for
the Kellogg-Briand anti-war pact, the United States
might with propriety have inquired of Japan
whether its military operations' in Manchuria are
not of a nature to constitute "war as an instrument
of national policy" such as the pact, to which Japan
is a signatory, solemnly renounces. The United
States might still press the point if Japan were to
maintain, as it has thus far, that the Manchurian
trouble is a local matter in which it can deal only
with China, and that it has no intention of waging
a war in Manchuria. In the second place, the ninePower treaty guaranteeing the territorial integrity
of China, which was signed by the nine Powers,
including Japan, having territorial possessions in
the Far East, expressly provides, in Article VII,
that "the contracting powers agree that whenever a
situation arises which, in the opinion of any one of
2487,
:
them, involves the application of the stipulations of
the present treaty, and renders desIrable discussion
of such application, there shall be full and frank communication between the contracting Powers concerned." No fuller warrant than this could be
asked for an extension of the good offices of'the
United States if the situation in Manchuria were.
regarded as calling for intervention, and the warrant needed neither the advice nor the co-operation
of the League for its exercise.
The Administration might well have avoided adding the Sino-Japanese imbroglio to the long list.of
things in which it seems anxious to take a hand, if
the practical difficulties of outside action in the .
matter had been more fully weighed. No country in
its senses would think of going to war with Japan
over an alleged infringement of Japanese rights in
Manchuria, even if the permanent occupation of
Manchuria by Japan were clearly the issue. The only
resource which the League possesses appears to be
some kind of economic boycott, applicable, of course,
only if, when and as the members of the League con- •
sent to resort to it, and the present moment is singularly inopportune for a concerted move to suspend
international trade in any direction in which trade
is profitable. It seems inconceivable that Mr. Slimson himself should not have known that the League
was as good as pOwerless, and that none of the "sanetions" which it might order, and which the United
States is made to promise to "reinforce," could be
joined in by this country without manifestations of
public resentment which would be heard at Washington. Unless Japan yields, as it quite possibly
may, and sidetracks the whole performance at
Geneva by assenting to an investigation, or by some
other action which will not seriously jeopardize its'
claims in Manchuria, the controversy with China
must apparently be left to settlement between Nanking and Tokyo. Whatever the outcome, the regrettable course which Washington has taken will return
to plague us. It has already earned for the -United
States the open resentment of the people of Japan,
and the promise of a controversy with that coUntrY
that may continue for some time. There is not the
least reason for expecting that it will earn us respect
anywhere else.
Fairplay for the Railroads.
In the midst of all sorts of panaceas to cure our
economic ills, consider the railroads r What would
become of the country without them? There are, to
be sure, some other means of transportation, motors'
and airplanes, but they are unregulated, sporadic in
effort, wholly insufficient to do the work of the railroads, subsisting chiefly by nibbling the edges off
the traffic heretofore accorded to the roads. Perhaps waterway transportation looms as a future
possibility, but at present it is more in prophecy
than in actuality. The American people themselves,
and all their complexity of industries, are absolutely
dependent upon the operation of a colossal, interconnecting two hundred and fifty thousand miles of
railroads.
Stoppage for a single week or month would paralyze all kinds of business. Huge cities would find
themselves on the verge of starvation. Manufacturers would be compelled to close their factories.
Farmers would be unable to market their crops.
Merchants could not replenish their stocks. Citizens
could not pursue their vocations. Almost universal ,
2488
FINANCIAL CHRONICLE
[vol. 133.
unemployment would ensue. The dead hand of inac- ultimately, to own the roads, Socialism will be upon
tivity would lie on all the land. This is no fanciful us from which there can be no escape save by revolupicture. It is cold, hard fact. The key industry of tion. Now is the time for the people to think and
all our industry is the railroads. We fail to realize act. Four Eastern trunk line systems have been
the truth of this statement because our railroads formed by the roads. Already Congress has given
never fail us. Through storm and calm, through into the hands of the Commission the formation of
winter and summer, by night and day, these tireless similar systems. If there is anything in representaservants of the people perform their work. They tive government this idea of consolidation has been
are indispensable to every phase of our civilization.
approved. There ought to be no difficulty over
If, then, in a collective sense of ownership, one details, for the mind of the roads is better equipped
were to try to name the most precious possession than that of the Commission. But looking over the
of the American people he would be compelled to whole field of the "depression," it must be apparent
chow the railroads as a whole. We have for years that unless the roads can be allowed to help themhad our minds directed to the plight of the farmers. selves by the removal of their shackles the hope of
Do they not constantly, and to some extent thought- prosperity among the people is blasted for years to
lessly, rely on this perennial service of the rails? come. Herein "public opinion" should be the
Are not cars and trains, terminals and roadbeds, arbiter!
Motor-car companies, using public paved highways
always ready and waiting to serve those who must
travel, and who must transport the products of plow they do not own and did not build, inadequately
and loom, and exchange the works of hand and ma- taxed, if at all, loosely joined together though claiming coast-to-coast facilities, are increasing in hauling
chine, in order to live and prosper?
'So common is our reliance upon these railroads in passengers and freights along lines parallel to the
our acceptance of their unending services, that we railroads from which the roads have no adequate
almost forget that they, too, in order to continue relief. These motor-car companies are practically
must also live and prosper. Consumption and use, independent of the Inter-State Commerce Commisthe third member of the trilogy of human endeavor, sion which holds the railroads in its vice-like grasp.
would perish without this intermediary. More than Why people should prefer to ride in these stuffy
.a hundred years of investment and construction and buses in preference to the Pullman car is not entirely
improvement have gone into the corporate being of explained by scenic views along the way, but it seems
these long lines of double rails laid upon rights of demonstrated that a few dollars saved in fare (which
way bought and paid for by a huge consortium of the railroads are not permitted to meet) is a strong
stockholders and director-managers. So great is inducement. It may be that something "new"
the value of the total investment in dollars that com- always attracts, the fact remains they do so ride—
putation takes years of investigation, and estimate, and every dollar earned is taken away from the older
and then fails, because of the impossibility of assess- and more indispensable railroads.
ing the worth of the elements of good-will, going
It may be too much to expect that the "public,"
concern, and reconstruction.
in the pursuit of its needs and pleasures, will stop
The time has come when it must be impressed upon to think of the economics involved in this compethe American people that they are in danger of tition, yet the huge taxes paid lighten the load upon
losing this priceless possession. The railroads are the citizens and ought to be considered in the Volunnot able to make the quota of profits allowed them tary free bestowal of patronage. Thirty or 40 bilby a not too friendly law. They are independently lions of taxpaying property is worth preserving.
chartered corporations and yet tied to the rules and And these railroads, as well as the people, have an
regulations of an Inter-State Commerce Commission important stake in this problem. One might say:
formed in an era of antagonism to the establish- "Tear away the shackles imposed by the Commisment of rates according to what the "traffic will sion," but a moderate "regulation" is shown to be
bear." Shippers clamored for charges that would salutary, and there is little objection to it. But
eliminate the dividends on so-called "watered stock." ought not this regulation be extended to the motors?
Politics shouted against an alleged grip of the roads
While the railroads are owned impersonally and
upon farmer, merchant and manufacturer. Into the collectively by all the people, their shares are owned
power of this Commission was granted the establish- increasingly by individuals—investors and emment of a "reasonable rate." Through bankruptcies ployees. Their bonds are held in the same way.
innumerable, the roads lived and served. A World Both the stocks and bonds are low in price at the
War came and the Government seized them bodily to present time owing to several causes, the "depresbe operated by a Director-General. They were re- sion"; the continued ebb in the securities markets;
turned to their original ownership, though in an the continued high wages,some Of them based on war
almost ruined condition. Again they rose to magical times; the low returns in earnings; and the increasefficiency and marvellous service. Now, in the ing public demand for improvements and extensions
trough of a world-wide "depression," they are re- which is constantly made by patrons who are always
duced to the necessity of seeking either an increase asking for the best service in everything regardless
in freight rates or a lowering of the scale of pay of cost or the justice of procurement. Millions have
for the railroad operating force, or perhaps of both been spent on the introduction of safety devices, on
the elimination of grade crossings, on the laying
combined.
of heavier rails, and on the securement of steel
people
down
permit
the
if
We undertake to say that
and
of engines of greater pulling power.
cars
posbankruptcy
and
into
their railroads to go down
Safety
and efficiency are the two watchwords of
at
this
operation,
and
ownership
sible Government
crucial time in their history, their indifference to railroad management. Some of these changes are
their own interests and to the rights of the roads will betterments that inure to the profits in the long run,
visit upon 'them a calamity that will not lift in a but they require vast sums of money and must wait
hundred years. For if the Government is permitted, for direct returns. In all these things the railroads
OCT. 17 1931.]
FINANCIAL CHRONICLE
2489
therefore, may be beneficent or baneful. Borrowing
from all the banks to purchase the doubtful securities of some of them may have the air of helpfulness,
and prove, in the end, a poor dependence. Work is
a fundamental producer. Resources turned into salable articles and products must find a market, or
they increase the difficulty of clogged-up trade.
Liquidity of assets, of any kind, is mobility. They
must have the quality of easy transformation into
cash, or new credits themselves more easily transformable. But credits have come to rest on time as
well as on tangibles. Credit always extends itself
into the future. When there are enough loans paid
into the bank, by day and month, to provide for the
withdrawal of cash for current business requirements, then there is no curtailment of the banking
processes. But when the reserves are invested in
long-time loans and there is call for especial or abnormal amounts of cash, the bank finds itself in hard
straits. To outward appearances a bank may be
running at its full powers, and yet be weighted down
with these "frozen assets." A transfer of frozen
assets to an improvised institution to hold them
awaiting maturity may assist the bank, but it will
not furnish the means to pay them when due. Nor
can the bank by any legerdemain pay them. Extensio nof time favors the makers of such notes. But
actual payment can only come through the work,
the enterprise, of their original makers. There is
no way actually to pay debts but to pay them in the
terms in which they are drawn. Work and utilized
resources alone can pay them.
It follows that once the real liquidation is under
way,through the toil, thrift and saving of the people,
it may'be a disservice to relieve the original pressure
for payment at its source. On the other hand, if bad
banking has clogged the group of banks with frozen
assets it may be good for the depositors and bad, in
the long run, for the bank suddenly to liquefy these
"Confidence."
assets. Experiments on a large scale with credits
It is probably true that in the minds of men there is, therefore, open to some question. Will this
is a notable lack of faith in the future of the volume process increase "confidence" in banks or diand momentum of "business." But confidence rests minish it?
Another point comes up for consideration. If
on many elements. We may have courage and yet
be stricken by fear. We may, in our own country, the financial centers of the country tie up their credit
be assured of immeasurable resources only lightly power, will they not by that much diminish their
developed, and yet realize that there are not the cash ability to come to the relief of their small bank
and credit required to exploit them. We may have customers in the "interior"? They have taken 2%
the will to project new enterprises, yet doubt that (if not in excess of 10% of their capital and surthe time is ripe for experiment. We may wish to plus) of their total bank deposits and placed it in a
save or to spend, and have no assurance that either pool, a group pool. But the old-time "correspondent
is our immediate duty. We may feel that our banks system" still obtains, and "correspondent banks" in
are essentially sound, yet be conscious of an irresist- great centers are, to a reasonable extent, obligated
ible pull of wants and needs that cannot be set aside to look after the needs of the interior institutions
which cause us to withdraw deposits as the only safe- which depend upon them. Will they be able to fulfill
this obligation to the same extent as before with 2%
guard of family and business welfare.
In some degree these elements exist in prosperity of their deposits committed in the new way indias well as in adversity. The proof of the pudding is cated?
in the eating. There is no trick of hypnotic sugges- • However, we are endeavoring to define "confition that will absolve us from these ideas. It would dence." If it is an intangible belief in the combined
prove a calamity if there was. Man proposes, God strength of a banking system of collective banks, all
disposes. We cannot, like the aeronaut, rise above interwoven and interdependent, then the mere transthe clouds. And patent panaceas for a quick restora- fer of "frozen assets" from individual banks to a
tion of prosperity are only too apt to plunge us "credit corporation," comprised of 2% of pledged
deeper into the gloom. Thus when credit is based assets o'f such banks as buy its debentures, has
on actual business transactions that themselves, at merely changed the resting place of the "frozen
their termination, liquidate our debts, it is on a firm assets." If by reason of the time element these
foundation. When it is based on credits already "frozen assets" are only temporarily thawed out,
over-extended it may swell to a bubble, merely to they will freeze again in the hands of the National
.explode by its own expansion. Increased credit, Credit Corporation or they will return to plague the
are anticipatory and "up-to-date." As a whole, since
their return to private ownership, and as they stand
to-day, the railroads of the United States are in a
better condition than they ever were. They are
guided by the best minds in financial and mechanical
affairs to be found in the country. They are conscious of their great public service. But they are
making no money r
It is our purpose in this necessarily sketchy article
to call attention to a duty of our citizens and to the
public import of present conditions, requirements,
and to the effects of the present state of the railroad
business. And at the outset we deem it just to say
that if rates are increased they should be borne without protest and in a spirit of popular good-will
toward an indispensable factor in our civilization.
Come what may, and the roads are conscious of their
need to meet all corners in transportation, there is
nothing in sight to supplant them. Air and water
may intervene, but not supplant.
In all our industries there is none greater than the
railroads. But they must earn dividends. Possible
reductions in wages, possible increase in rates, possible loosening of regulatory laws, possible consolidated systems that will reduce expenses and increase
efficiency of service, must be, ought to be, recognized by the people, the politics, and the legislation
of the country as imperative on the roads—but only
as the roads may decide. Reasonable rates lie in the
roads, not in the Commission. Wage schedules lie
in the roads, not in the union brotherhoods. The
time has come when the roads (while willing to consider and negotiate with all parties in interest) must
demand their inherent rights to live. If, by continued neglect, they shall ultimately pass into public
ownership, the consequences will be on our own
heads.
2490
FINANCIAL CHRONICLE
banks that rediscount them. But this does not seem
conducive to the revival of confidence. Because a
new way has been found to discount assets not eligible at the Federal Reserve banks does not make them
"good," and hence we are not any better off than
before.
Credit easily adds, subtracts, multiplies and
divides. It is extinguished only by payment. It
can be paid only by products and work. These must
terminate in service, exploitation of resources, sales
in markets; in a word,turned into cash or its equivalent, for payment on debts. There is a cancellation
of debts by the exchange of credits, but pledging
these credits, trading or transferring these credits,
does not provide this cancellation; it prolongs the
time when such offsets may be invoked. It might
also be asked whether an "interior" bank would not
have a better opportunity to collect its "frozen
assets" when they are in its own portfolio, crying for
cancellation, than when these frozen assets are in
the portfolios of a "National Credit Corporation."
Thus there is more than one aspect to the matter.
Confidence is not increased by resort to expedients
which are not themselves free from objection, however well meant. And it is somewhat risky to tamper
with the indurated practices of a century-old banking system. If the people are panic-stricken over
the safety of their deposits—taking away the slow
but good assets to turn them into money,long before
they are due, must appear to any man to afford only
temporary relief; if it does that, will the "interior"
banks suffer a loss of confidence in the long run?
Will the people come to their senses and be reasonable, seeing soon their own folly? It is reasonable
to way that most of the banks that are going to fail
have already failed.
No rediscount ever converted a bad note into a
good one. After all is said,"confidence" is placed in
the individual bank doing business at the old stand.
If all the ineligible banking paper could be paid at
once there would be a certain strengthening for
every bank. But the good bank has a good care not
to weaken itself by taking over too much of the burden of its weak neighbors.
The World Crisis—Avoiding the Abyss.
Oct 1 1937.
Editor "Commercial & Financial Chronicle":
May we not, even now, before it is too late, determine the
causes of the existing deadlock in industry and finance;
and, by fixing the blame for what has happened, stay the
forces that threaten our civilization?
For if it be true, as the new book" 'Prosperity'Problems"*
undertakes to prove, that America's dazzling rise in "Prosperity" from 1919 to 1929, reaching in its questionable
effects to every quarter of the globe, was, in point of fact,
nothing less than the continuance, in a modified form, of war
inflation, certain facts of the highest importance, bearing
on the solution of our troubles, irresistibly follow:
What Inflation Is and Is Not.
Inflation is business more or less completely out of the
control of rational men—those who in ordinary times direct
the course of the world's industry and finance. It is business
driven by a popular craze for luxuries, improvement making, borrowing, speculation, and the buying of shares in
visionary schemes by large bodies of men and women,
acting under the spell of a common mighty delusion—
precisely as was true on an increasing scale during America's
"New Era."
Inflation is what happens when the train of business and
financial events is switched by some untoward means, such
as the World War, off from the safe main track of Capital* "Prosperity" Problems, by Arnold G. Dana. For sale by Tuttle,
Moorhouse
& Taylor Co., New Haven. Conn., 1931. 451 Pages. Price
[VoL. 133.
ism, with all its protective devices of well-tried efficiency,
and plunges down a steep decline upon an open side-track
under the expanding impulse of an artificially created purchasing power.
No self respecting capitalist in his right mind ever willingly
countenanced any such diversion, whether by the use of
irredeemable paper money or bank loans, of corporate
outlays or wage expansion; and it would not have occurred
in this instance in the United States, had not world economists of the highest standing, themselves misled—like the
captain of the Titanic—by wholly exceptional circumstances
—repeatedly reassured the nation, saying:
"It is astounding this rapidly accelerating growth of American business, but it cannot be inflation, because commodity
prices, while high, tend to decline and do not continue to
mount as during all past inflations."
Nevertheless in recent months economists have gradually
come to see that America's inflation, temporarily tripling
in current money value the income of the American people,
was in a class by itself—an inflation fostered by extraordinary circumstances; and, in so far as. commercial prices
were concerned, promoted by the maintenance of prices
unjustifiably high rather than by the general soaring of
prices.
Not only so, but until the recent break in the building
trade, whenever the abnormally high prices for building
commodities relaxed a little, the slack was more than absorbed by advancing union wages until these reached fantastic figures and represented in the aggregate, together
with similar increases in other unionized industries, a mounting purchasing power beyond belief for magnitude. In New
York City as high as $10 a day was fixed in the building
trade for unskilled labor and $15 to $18 for skilled labor for
an 8-hour day in a 5-day week; and in one case on record,
at the higher rate allowed for overtime and holidays, carpenters in Greater New York obtained as much as $27
for a single day's work.
These figures, and others not greatly less in the smaller
cities, are the "pegged" rates for the faithful unionist today, (though unofficially scaled by stress of unemployment
in many cases), and it is these arbitrary rates that are being
paid by the Federal Government in its relief-measure building for the avowed purpose of perpetuating what must be
considered the fictitious dream of an exploded era.
The Responsibility for the Inflation.
Now if it be true, as it is claimed, that America's peace
time "prosperity" was essentially a rank inflationary growth
it follows:
1. That the penalty for its rise and final disastrous
collapse does not belong wholly or chiefly to capitalism.
For who would condemn and think of scrapping an entire
transportation system of well-established merit, without an
inquest, simply because, during a heavy fog, someone,
mischievously or by blunder, had turned the traffic from the
main track to a siding never intended or fitted for heavy
through-business.
2. Capitalists and investors generally were deceived quite
as completely as labor, respecting the nature of this so-called
prosperity, and in millions of instances are suffering acutely
in consequence. This is proved no less by the shocking
succession of bank failures involving a multitude of depositors, the vast aggregate of defaulted bonds and real estate
mortgages, the sales under foreclosures and the mounting
toll of suicides among men of affairs, than by the general
shrinkage, aggregating more than one hundred billions of
dollars ($100,000,000,000), in the market value of American stocks, bonds and real estate.
3. For this state of affairs the captains of industry and
finance like those in command of ships at sea must assuredly
shoulder some major, though indirect, responsibility for their
lack of judgment and foresight. They were misled by
wrong lights and faulty charts, but there were strong indications that they were off their course and, if they had not
been so absorbed by record making, they would have suspected their approach to rocks and shoals. But this responsibility does not extend to the other officers, the crew or
the passengers aboard the ships of capitalism that were
traversing this prosperity flood.
4. True it is that during this era of prosperity monstrous
fortunes were accumulated (and in many cases later lost)
and the evils of the machine age developed with lamentable
rapidity—faster than any permanent adjustment could take
place in the labor situation. But these features add little
to the case against capitalism or to the claims that humanity
OCT. 17 19311
FINANCIAL CHRONICLE
always assumes to have against accumulated wealth in times
of distress.
The ungainly fortunes were for the most part the outcome
of the outrageous speculation and those other inflationary
processes which capital itself deplores; and the too rapid
development of facilities for producing machine made goods
—was it not forced on capital by the labor shortage, the high
wages and the restricting of immigration that his false
prosperity and would-be philanthropists brought about?
Those Directly Responsible.
On the other hand the direct responsibility for the catastrophe does lie:
(a) As already stated, on the economists of the world,
especially the foreign economists, supposedly well versed
in such matters; and also on the short-sighted financial
agencies and Government bureaus that, taking upon themselves to advise, mistook our disease and persistently encouraged a policy of accelerating expansion that hastened
and magnified the losses of the inevitable day of doom.
(b) It also lies with sundry persons and nations, who
aided and abetted those war influences and mistaken policies
which caused the world's monetary gold to be drawn from
the channels of trade into the coffers of one, later of two,
leading nations, making such inflation possible; and also
notably on those who promoted the absurd contradiction
of huge levies on sister nations for reparations and interallied debts on the one hand, and high imposts on imports
of commodities on the other, thus preventing the normal
functioning of international trade and foreign settlements.
(c) The responsibility also rests on those financial authorities at home and abroad who countenanced and encouraged bank loans and other credit expansion in their own
and other nations without discriminating between outlays
that were to be made for purchases permanent and selfsupporting and those involving the creation of an excessive
amount of luxuries and improvement making; and likewise, also, on those official mentors who applauded heavy
exports of agricultural and other machinery, and failed to
warn that these when put in use might cause a glut in
production.
(d) Furthermore, not a little responsibility rests on those
authorities, national and corporate, who permitted small
coteries of daring speculators grossly to manipulate stock
prices (exciting and misleading the public and coining for
themselves millions of luxury making profits); and the borrowing for this purpose of vast sums of bank or corporate
funds to the upsetting of world credit, although the purpose
of the loans so made was a matter of common knowledge.
(e) Last but not least, the responsibility falls upon the
well-meaning but over zealous labor leaders, who in their
efforts to improve the status of their constituents, promoted
the inflation of wages in leading industries in a manner and
to an extent that was certain, in the end, to "kill the goose"
and cause the heavens to fall, as they have fallen and are
still falling "on the just and on the unjust."
So far, these leaders of American labor appear not to have
the slightest comprehension of the enormity of the calamity
and the completeness of the deadlock which they did so
much to cause and are helping so greatly to aggravate.
Some Aspects of the Collapse.
Finally, if "'Prosperity' Problems" be justified in its
contentions, we must, must we not, conclude that while the
American inflation served to supply, to an otherwise impossible extent, from its flood of inflated credit, the capital
needs of Europe after the war, it also, with the tacit approval
of world economists, encouraged the nations at large, mistaking the ephemeral character of the then current growth
of business for sound development, greatly to overburden
themselves with American loans and to over-expand their
productive capacity, while still laboring under the curse
of crushing war debts and the demoralization that the
World War occasioned.
It was natural, therefore, when the American business
and financial bubbles began to burst and American buying
power collapsed, that industry and commerce throughout
the world should suffer a contraction so great and so sudden
as to embarrass'national finances in many lands and to leave
in first or second hands huge stocks of commodities and industrial projects which the financial exigencies of the holders
(American and other credits being withdrawn or greatly
curtailed) would force upon the market, thus iiroducing
just such a demoralization of prices as we have seen since
both for commodities and for securities.
2491
Impossibility of Maintaining Gold Standard.
These circumstances would clearly explain the present
necessity for curtailing the gold standard in the case of numerous countries. Such a standard, with its normally untrammelled interchange of gold for drafts, checks and other current funds, presupposes a high degree of public confidence.
Recent events have impaired confidence in financial circles
throughout the world and have set adrift, not only the
uncommonly heavy floating credits of the post-war period,
but to an exceptional extent the funds recently lodged in
numerous foreign investments, but now nervously seeking
a more assured resting place, with a decided preference in
many instances for gold.
Neither a bank nor any group of banks, nor any nation's
financial system can stand uncrippled if panic or nearpanic seizes any large part of the community served; and
Great Britain as world banker, open to drafts from every
quarter of the globe, was naturally, therefore, one of the first
to have its gold supply dangerously depleted. In effect,
it had undertaken to honor in gold any or all of the credits,
domestic or foreign, committed to the care of its banks, even
for a single day—an impossible task in times like these, with
gold in such urgent request.
The World Recovery Awaits American Readjustment.
If all this be so, and if it also be true that the crash originated in the greatest of the world markets, it follows, does it
not, that in that market must begin the adjustments,
national and international, industrial and social, which are
required to release buying power and thus to set the world's
machinery of industry and commewe in normal operation?
Conclusion—All Must Co-operate.
In conclusion, being confronted, as we are, by the bursting
of one of the mightiest of credit inflations in all history,
involving a bewildering curtailment of employment and
business, how futile, how reprehensible, are any selfish
considerations whatever, individual or national—those
threats, acts and policies—which stir up enmity and hinder
humanity, on the verge perhaps of social disaster, from
reaching a position of safety.
As well might one on the flanks of Vesuvius, amidst the
terrors of a great eruption, delay the flight of stricken
victims while he vainly strives to re-establish his blighted
vineyards, as with these inflationary bubbles, collapsing, as to
insist on retaining fanciful wage scales, burdensome international contracts and national walls, barriers, aloofness.
The very ground on which civilization stands is quaking,
but Capitalism is not the cause of this upheaval. At worst,
it is only one of numerous causes which result from a disastrous delusion of worldwide acceptance; and only by the
loyal co-operation of all can a still greater calamity be
averted.
In other words, however viewed, whether from the'American or the foreign standpoint, it is increasingly evident,
that the evils with which the established order is having
a life and death struggle, exist in spite of, not because of,
that Capitalism to which society owes the greater part of
its material advancement during the past two centuries.
On the other hand,equally manifest is it that if Capitalism,
as an economic system, is to survive and be the means of
re-establishing social equilibrium, it stands in the utmost
need, not only of united self-sacrificing action to that end,
but also of new protective devices to prevent future flagrant
abuse of inflation and speculation, to hinder tyrannical
aggregations, whether of capital or labor, and to promote
those international bonds and associations that make for
universal concord and co-operation.
ARNOLD G. DANA.
New Haven, Conn.
Strength of Municipal Bonds.
[By William R. Compton.]
The period through which we are passing has no exact
replica, but out of forty years' experience in the financial
world, a review indicates that all cycles of depression have
a relationship and each time curative means are adopted,
and hopefully, to avoid recurrence. There seems, however,
to be no general panacea and the gradual return to prosperity,
while certain, is a question of time.
With the continued ease of money, however, a dispassionate view as affecting values of our State and municipal
bonds is worthy of consideration. Only a few weeks past,
special bonds of this character were in great demand. In-
2492
FINANCIAL CHRONICLE
vestors were seeking either very short-time or long-time
obligations of the more important and favored commonwealths and municipalities. A sense of general values was
forgotten. "Scarcity value" was apparent. Investors and
dealers were bidding actively for securities that were almos
Impossible to obtain, while others of sound value, where
supply was plentiful, were not in demand. A prime i stration is the present-day market for New York City Corporate Stock, which is a direct obligation of the premier
city of the world, a 414% interest yield has been obtainable
free from Federal Income taxation, regardless of the remarkable record of tax collections. Recent reports show that
unpaid taxes on real 'estate in New York now average
about 13i% for the years 1927 to 1929 and are under 5%
for the year 1930. Not all people pay their taxes promptly
but the residue, in the main, is sure of collection and no
substantial losses in revenues will occur.
The disparity of municipal values relating to communities in different sections of our country is not only unwarranted but ludicrous. The holdings of important life insurance companies and savings banks in our country indicate
very clearly that the administrators of these trust funds
do not share in this sentiment. The wide distribution of
their investments in practically all populous sections of this
country and their continual ownership are substantial proofs
of their abiding faith in the integrity of the average State
and municipality. It must be remembered that in a majority of cases adequate ad valorem taxes are levied, or
other adequate revenues are provided, for the payment of
outstanding bonds.
A fair guide to the investor is a rule that a 1% ad valorem
tax levied for municipal indebtedness should provide sufficient funds to care for interest on all outstanding maturities. To be excepted is a class of bonds where payment is
provided through special revenues such as gasoline taxes
pledged for State highway bonds and earnings from municipally-owned utilities, that is, water, electric light plants, etc.
Consideration should also be given to the amount of floating indebtedness. Grave errors have been made in this
respect. Certain communities are faced with destruction
of credit through too generous use of short-time financing,
but many have learned their lesson and communities are
courageously mapping out programs which will assure the
return of public confidence. This is being accomplished
through economy, postponement of capital expenditures, increase in taxation and funding of short-time obligations into
longer-time bonds.. The average State and city administrators and the inhabitants thereof are jealous of public credit
and realize that only through a sound financial program can
additional funds be provided at low interest rates. States
and municipalities whose credit is impaired by excessive
debt • must postpone even needed improvements until such
time as natural increase in property values and taxable
wealth, plus the retirement of a portion of the existing
indebtedness, justifies the expenditure.
The common sense and general business prudence of the
American people will eventually unravel our present day
problems as they have in the past. Above all we must not
lose faith in the ability of our commonwealths and municipalities to care for indebtedness. A mere default here and
there through over-expansion constitutes no general menace
to municipal securities and is not to be compared with the
percentage of defaults in any other form of securities.
, Taxes are a first lien on all property and no business can
survive, and no mortgage indebtedness is sound, until payment is provided. Therefore, well-governed States and
municipalities, regardless of sectional lines, are entitled to
credit. State and municipal indebtedness, being free from
the Federal income tax, constitutes a favored form of investment and without this provision the cost of borrowing
would be excessive and the burden would fall heavily on
all tax-payers. The construction of schools, roads, public
buildings, sewers and utility plants, cannot be avoided and
the expenditure of these vast sums greatly stimulate trade
and add to the resources and comfort of the American
people.
TiAe whole financial structure of this country is predicated
on the integrity of our Government, States and municipal
[VoL. 133.
sub-divisions; therefore, investors can be assured that this
for of investment still constitutes the acme of secu ity.
roposes the Establishment of a Clearing Nous
for Foreign Credits in New York.
Last April several representatives of large European and
American banks spent a few days in Vienna conferring with
their correspondents. While there, they did not get even an
inkling of the crash that was, shortly afterwards, to befall
the great Austrian Credit Anstalt and its subsidiary the
Amstel Bank in Amsterdam. Bankers all over the world'
were dumbfounded when it developed that both banks owed
over 200 million dollars, mostly to foreign institutions. The
roster of creditors reads like the Almanac of Gotha of finance, nearly every important European and American institution being represented.
It appears that the Austrian Credit Anstalt published a
statement of its condition only once a year, and when sent
out it was already several months old. If any institution
extending it credit would have asked for a detailed and,
up-to-date balance sheet, the Managers would, undoubtedly,
have resented such a demand, pointing out that the Credit
Anstalt was the biggest Austrian bank, 76 years old,
founded and controlled by the great house of Rothschild.
Its President was Baron Louis Rothschild, head of the.
Vienna branch of the famous family.
Until lately, the very same conditions existed in German
banks. No foreign institution ever dreamed of asking the
Darmstadter or Dresdner Banks in Berlin, both of which
got into serious difficulties during last July, for a detailedi
report of their liabilities. These two institutions were too
big, with such tremendous ramifications that such a thing
simply wasn't done. For the last few years they were
literally flooded with offers of credit from all quarters,
and the inquisitive inquirer would have been curtly told,
"that they did not care to deal with people who doubted
their solvency."
Mr. Leopold Fredrick, well known authority on International Finance, maintains that in view of past happenings, credit transactions with foreign countries will have to,
undergo radical changes. He claims that had the world's.
bankers insisted that all institutions, big as well as small,
submit a detailed statement of their condition every month,
mentioning for what purpose advances and acceptance credits.
were used, only a comparatively small part of the German.
short term obligations (amounting to about 1,300 million
dollars) would now be "frozen." These comprehensive reports would soon have disclosed the huge over-extension of
the German banks, and the diversion of borrowed short term
money into capital investments. The tremendous upheaval
in the securities markets of the world might then not have.
happened. Moreover, the suspension of the Gold Standard
in England and other countries could perhaps have been
avoided.
In order that future losses in international transactions
may be minimized, Mr. Fredrick has written to Mr. Albert
H. Wiggin, head of the Chase National Bank, proposing the
establishment of a Clearing House for Foreign Credits in,
New York. This institution, functioning independently,
with the co-operation of all important banks in the world,
should be able, according to Mr. Fredrick, to accomplish
something which the individual credit giver—for fear of
losing his business—is at present unable to enforce, namely,
the submission of a monthly and detailed financial statement from all borrowers. This would help check overextension of credit. Mr. Fredrick's letter to Mr. Wiggin
reads as follows:
"New York, Oct. 1st, 1931.
Mr. Albert H. Wiggin,
Chairman Governing Board,
The Chase National Bank,
New York City, N. Y.
Dear Mr. Wiggin:
On account of the suspension of the gold standard in England the financial community of New York will have to assume a very heavy burden and,
responsibility.
With the improvement of business the acceptance credit transactions in
this city- will become larger than ever and it behooves the banks and:
bankers to take steps now in order to avoid, if possible, the repetition of
such occurrences as the Austrian Credit Anstalt and the "still halten"
affairs M Germany.
OCT. 17 1931.]
FINANCIAL CHRONICLE
2493
It is well known, by this time, that better co-operation between the
As soon as a credit is granted to the foreign borrower, the member banks
banks in Europe and those in the United States could have considerably will, immediately,
inform the Clearing House, giving all details.
minimized recent losses in the credit field. For this reason, I am writing
When in running order, the Clearing House for Foreign Credit in New
you to propose the establishment of a Clearing House for Foreign Credits
York will have a record of every advance or acceptance credit of any
in New York.
Importance granted not only by its members but also by banks
abroad.
, This institution (to be set up by American banks and bankers doing
The Credit Clearing House in New York is to be managed by
a Board
an international business) would gather all the information on banks
and of Directors chosen among the heads of foreign departments. of member
merchants abroad who are seeking credit in the United States. It would banks, and the Federal Reserve Bank should
also be represented. Its
demand their monthly balance sheets showing all items in detail,
espe- manager will have to be someone with extensive practical credit experience
cially advances, the acceptance credits granted and how the
borrowed in the United States and foreign countries.
money was used. The balance sheets of all borrowers to be uniform and
The expense of such an institution will be very small, considering
the
showing the credit lines given to them.
billions of dollars involved—the cost to be pro-rated among the member
The new institution to suggest to local bankers in London, Paris, Amster- banks and bankers.
dam, Zurich and other cities the setting up of similar agencies
I would suggest that you study my proposition and confer with other
for the
purpose of exchanging and checking up credit reports.
bank heads for the purpose of naming a committee which would work out
All the Credit Clearing Houses will keep in close touch with the Bank the details.
I have been interested in the introduction of the dollar in international
for International Settlements in Basle and with the government
banks transactions since 1911 when
I became Director and Treasurer of the
all over the world.
American Smelting & Refining Co. and affiliated corporations.. By May
The Federal Reserve Bank in New York will also have to
lend it a 1915 I was able to report to the First Pan-American Financial
Conference
helping hand. It can do this the more readily as the new body
will prove in Washington considerable progress in South America. Two years
later,
very useful to it, especially as it will be able, as much as possible,
to detect the Chilean Government accepted my proposal to have custom duties
paid
through its checks and counter checks, the existence of 'finance bills.'
in 90 days sight dollar bills whereas formerly London drafts lied the
No borrower will receive accommodation unless he has
deposited his monopoly. In 19113 I conducted a campaign among New York bankers,
detailed monthly balance sheet with the proposed institution. Due
to credit asking them to recommend the opening of dollar credits to their customers
restriction, this rule can easily be enforced at present.
abroad.
The new body will do away with the necessity of keeping
foreign credit
You will probably remember that in 1903 I originated the idea of a
files in each individual American bank, which in itself will
constitute an Coupon Clearing House, which was put in operation in New York in 1923.
appreciable saving.
As you will see, my interest in an active dollar acceptance market in
Whenever an American bank or banker is being approached by a foreign
New York is of very long standing and my sincerest desire is to see our
borrower, all he will have to do is to ask the Clearing House for
Foreign city definitely established as the financial center of the world and funcCredit for a report which surely will be more thorough than the
few guarded tioning as such with as little loss as possible.
lines one gets to-day from a foreign correspondent or the meager
printed
Very truly yours,
report of the borrower which is very seldom up-to-date.
(Signed) LEOPOLD FREDRICK!'
Gross and Net Earnings of United States Railroads for the
Month of August
There is nothing to say in commenting upon our
compilations of the earnings of United States railroads for the month of August beyond repeating the
observations made in reviewing the earnings statements of all recent previous months, namely that
the results are poor in the extreme with scarcely a
qualifying circumstance to modify the adverse character of the showing. The losses are heavy as compared with a year ago in both gross and net earnings, the same as in all the months preceding, almost
back to the time of the stock market collapse in the
autumn of 1929, and at the present time there is
not a ray of hope that would warrant expectation
of better results in the immediate future.
These remarks are a characterization of the exhibits which we have been obliged to make month
after month all through the year 1931, and they
apply with special emphasis in the present instance
since the showing for August is uncommonly poor,
and it compares with results uncommonly poor in
the same month of last year. In commenting on the
unfavorable showing made by our compilation in
August 1930 we said they furnished the most striking illustration we had yet had of the way in which
the returns of these transportation agencies of the
country had suffered reductions of their revenues
and to an extent which seemed almost tantamount
to utter collapse. But it now appears that the unfortunate experience of last year was simply a prelude to an even worse experience to come the present
year. Both in amount and ratio the loss for August
last year exceeded that of all previous months of
that year as far as the gross earnings were concerned, and the same remark applied in the case of
the net earnings as far as mere amount of loss was
concerned, though in ratio there was one preceding
month at that time, but only one, namely, the previous March, where the percentage of decrease was a
trifle higher, being 27.46%, as against 27.21% for
August. For August the present year the comparison is distinguished in much the same way,
the further loss now suffered, as far as absolute amount of falling off is concerned, being
in excess of that of any preceding month of
1931 in the case of gross and net earnings alike.
In brief, after a falling off in gross earnings last
year of $120,696,915, or 20.58%, as compared with
August 1929, we have the present year in August a
further shrinkage of $101,751,861 as compared with
the shrunken earnings of 1930, and after a falling
off in the net earnings in August 1930 of $52,063,396?
or 27.21%, there is now for August 1931 a further
shrinkage of $44,043,146, as compared with the
shrunken net of 1930, or 31.64%. The gross for
August 1931 is only $364,010,959, as against $586,397,704 for August 1929, a loss for the two years of
over $222,000,000 in this single month, and the net
for August 1931 (before the deduction of the taxes)
stands at only $95,118,329, compared with $191,197,599 in August 1929. In other words, the net for
August 1931 is, roughly, only about half the net
for 1929.
Month of August—
1931.
Inc. (+) or Dec.
1930.
243,024
Mites of road (172 roads)-242,632 lip
+392
00le
$364,010,959 $465,762,820 —$101,751,861 21
Gross earnings
Operating expenses
268,892,630 326,601.345 —67,708,715 17.70
Ratio of earnings to expenses70.15%
73147%
+3.72% --$95,118,329 $139301,475 —844,043,148 31.64%
Net earnings
In seeking to account for this prodigious contraction in revenues, the explanation is of course the
same as heretofore: business depression of the most
extraordinary character. We said a year ago, in the
first stage of the falling off, that the explanation
was to be found in the great and general prostration
of all the country's industries from one end of the
land to the other, and with hardly any exception
to the rule. Indeed, we went further then and said
the depression might be said to have reached an acute
stage in August, not having the least notion at that
time how much worse the depression was to become
before the lapse of another year and how much further it was to proceed. The statistical data in support of the cumulative nature of the depression continued through two successive years are available
in the usual abundant measure. First and foremost
of course stand the statistics regarding the depression in the automobile industry, which unquestionably is suffering a setback beyond all others owing
to the fact that the motor car, for family use at least,
partakes largely of the nature of a luxury. The Wit-
2494-
FINANCIAL CHRONICLE
[VOL. 133.
0 bushels
put of motor vehicles in the United States in August bushels in 1931 compared with 171,520,00
0
of
and
199,656,00
1930,
period
ing
the present year was only 187,197 as against 224,368 in the correspond
1929.
of
five
weeks
same
the
in
in August 1930 and 498,628 in August 1929.. In bushels
Doubtless, however, the best way to indicate the
other words, in this single month the number of
shrinkage in railroad traffic, and the large
general
than
_ automobiles turned out in 1931 was 311,431 less
the shrinkage, is to refer to the car loadof
extent
numthe
in the same month two years ago. Indeed,
freight. On that point the statistics
revenue
of
ings
about
only
was
ber of cars produced in August 1931
Car Service division of the American
the
by
compiled
1929.
'36% of that produced in August
that for the five weeks
- The iron and steel statistics tell the same story. Railway Association show
cars were loaded with
3,747,284
The make of iron in the United States in August in August 1931, only
of the United States
railroads
the
on
- 1931 was no more than 1,280,526 gross tons, as revenue freight
period of 1930,
same
the
in
cars
4,671,829
against 2,523,921 tons in August 1930 and 3,755,680 as against
ing period of
correspond
the
in
cars
5,600,706
tons in August 1929. Here the 1931 production was and
will
it
be seen, is
1930,
from
off
falling
The
1929.
steel
of
. barely one-third of that of 1929. In the case
as com1,853,422
than
less
no
with
and
cars
924,545
only
reached
ingots, the production in August 1931
of
story
the
diminished
tells
which
1929,
with
pared
in
tons
August
3,060,763
1.719,462 tons as against
than anything else could.
1930 and 4,939,086 tons in August 1929. Here again business more forcibly
With such uniformly heavy reductions in traffic
the 1931 figure is only about 38% of that of two
of the country, as here
years ago. The significance of such a contraction of all classes and in all parts
by the separate roads
earnings
in
as here indicated should not be overlooked, for they related, the losses
of
y
the same widespread
necessaril
are
tell us that in this most important of all the coun- and systems
. We have
in
large
magnitude
equally
and
try's industries, namely, the iron and steel trade, character
leading
few
of
a
the
of
mention
make
to
only
room
that
production proceeded at only about one-third
of the general
ns
illustratio
as
systems
or
roads
of two years ago.
roads and no secBut wherever we look the story is much the same shrinkage from which no class of
The great East
exempt.
virtually everywhere. The decline in the volume of tion of the country has been
happens in
always
nearly
trade or of manufacture is only a fraction of what and West trunk lines, as
at the
stand
revenues,
it was two years ago, the fraction alone varying, time of falling traffic and
in
earnings.
decreases
of
amount
being larger or smaller according to circumstances, head of the list for
system reports
as the case might be. With industrial establishments The Pennsylvania Railroad regional
loss in net
$4,348,148
and
gross
in
loss
8
idle to such a great extent, coal mining was neces- $11,397,99
in
loss
1
gross and
$14,144,86
follows
which
of
earning,
sarily on a greatly reduced scale. The quantity
The New
last
year.
August
in
net
in
loss
in
$6,789,227
States
the
United
bituminous coal Mined in
in gross
off
falling
$6,956,569
shows
Central
York
with
compared
tone,
30,534,000
August 1931 was only
the
Including
35,661,000 tons in August 1930; 44,695,000 tons in and $1,781,065 falling off in net.
Harbor
Belt,
Indiana
the
and
August 1929, and 50,578,000 tons back in August Pittsburgh & Lake Erie
Lines is a de1923. At the same time the quantity of Pennsy]- the result for the New York Central
of
deand
gross
$2,323,766
in
$8,051,584
vania anthracite mined was only 4,314,000 tons in crease of
4
decrease
$14,690,84
after
comes
which
net,
the month the present year against 6,081,000 tons, crease in
net in August last
and 5,735,000 tons, respectively, in August 1930 and in gross and $6,570,881 decrease in
behind $4,863,984
falls
Ohio
&
Baltimore
The
1923.
year.
August
August 1929, and 8,672,000 tons back in
having suffered a
after
in
net,
$2,112,435
and
in
progross
been
has
known,
Building construction, as is
of $1,079,175 in
and
in
gross
$4,180,557
of
The
decrease
time.
some
quite
ceeding at a slow pace for
of
other parts the country, the
F. W. Dodge Corp. reports that the construction net in August 1930. In
same. In the Southwest,
the
contracts awarded in the 37 States east of the showing is precisely
decrease of $2,899,350 in
a
suffered
• Rocky Mountains in August 1931 provided for ex- the Atchison
net on top of $6,324,392
in
$1,187,663
penditures of only $233,106,000 against $346,643,800 gross and of
in net last year;
$3,520,493
of
and
gross
in
in August 1930, $488,882,400 in August 1929 and decrease
$6,090,792
shows
decrease in
Pacific
comSouthern
the
$516,970,200 in August 1928. The agricultural
in
net,
decrease
following
$2,801,713
and
gross
because
munities, of course, suffered most acutely
and
gross
$1,942,554
in
decrease
decrease
$4,633,700
the
of
of the low market value of all the products
Rock
Chicago
&
the
Island
year;
Pacific
last
in
net
in
es
communiti
these
of
farm, the purchasing capacity
to
its
of
in
*2,592,682
decrease
gross
added
has
which
besides
a
as
result,
• being enormously curtailed
and
1930
to
its
deAugust
$1,806,906
in
$3,334,656
market
to
farm
the
of
products
the
of
'the movement
in net last year.
Was also greatly curtailed. Except in the spring crease of $1,273,031
the Union Pacific shows a
north,
Coming further
wheat sections of the Northwest, where the yield of
in
gross and of $2,643,537
$4,667,135
" wheat was severely reduced by prolonged drouth, reduction of
in gross and $876,reduction
$2,268,532
after
• the present season's crops have been of good average in net,
month
same
year. The Burlast
the
in
net
in
• size, and the winter wheat yield in the Southwest is 956
reports
,114,457
Quincy
diminution in
&
lington
the' largest in many years. Nevertheless, farmers
in
net,
$1,193,334
following
and
$2,264,837 degross
mararetto some extent withholding their crop from
and
$806,224
gross
in net in Audecrease
in
crease
acand
ket, owing to dissatisfaction with the price,
The
Chicago,
year.
, St. Paul &
last
Milwaukee
gust
the
from
. cordingly we find that the grain movement
gross and
$3,874,388
shows
in
decrease
Pacific
reheavily
was
Western primary markets, which
in
in
net,
decrease
$3,630,940
following
$1,779,919
a
suffered
1929,
* duced in 1930, as compared with
Great
in
net
a
$979,786
and
year
ago.
The
gross
We
year.
present
further large reduction in the
Northern which had a loss of $2,302,662 in gross and
give the details of the grain movement further along
$770,017 in net a year ago, suffered a further dein'this article and will say here only that in the five of
of $3,492,586 in gross and of $1,716,062 in net
crease
corn,
wheat,
of
receipts
weeks ending Aug. 29 the
Pacific has
otit, barley and rye aggregated only 117,329,000 the present year, while the Northern
•
111
OCT. 17 1931.1
FINANCIAL CHRONICLE
added $1,810,807 to its decrease of $1,785,731 in gross
last year and $619,511 to its decrease of $989,282 in
net in August last year. In the South the Louisville
& Nashville falls $1,747,832 behind in gross and $189,213 in net, after a decrease of $2,647,090 in gross
and of $1,132,163 in net last year, while the Southern
Railway has suffered .a decrease of $1,602,662 in
gross and of $1,071,076 in net, on top of $2,389,685
decrease in gross and $865,813 decrease in net in
August last year. In the table which we now present
we show all changes for the separate roads and systems for amounts in excess of $100,000, whether increases or decreases, and in both gross and net. As
illustrating in a striking way the universal character of the contraction in revenues it will be noted
there is only one road having an increase in gross
in excess of the amount mentioned, namely the International Great Northern, and in that case the
improvement follows of course from the oil developments in Texas. In the net earnings this same road
is the only one reporting an improvement in net in
excess of the amount mentioned along with the Yazoo
& Mississippi Valley, which latter through a reduction in operating expenses 'has succeeded in turning
a loss in gross into a gain in net.
PRINCIPAL CHANGES IN GROSS EARNINGS FOR THE MONTH
,OF AUGUST 1931.
Increase.
Decrease.
Internat Gt Northern... $565,337 Wabash
9692,709
Alton
684,490
Total (1 road)
$565.337 Denver dc R0Western-599,084
Texas & Pacific
574,095
Decrease. Kansas City Southern
566,584
Pennsylvania
$11,397,998 Seaboard Air Line
509,710
New York Central
a6,956,569 Union RR
480,719
Sou Pacific (2 reads)._ _ 6.090,792Long Island
455,463
Baltimore & Ohio
4,863,984 Los Angeles & Lake Erie448,540
Union Pacific (4 roads).- 4.667,135 Western Pacific
433.722
Chicago Burl & Quincy-- 4,114,457 Grand Trunk
Western.423.143
Chic Milw St P & Pacific 3,874,388 Nash Chatt & St
Louis
388,878
Great Northern
3,492,586 Minneapolis & St Louis..
385,214
Chicago & North Western 2,993,025 New On Texas & Mexico
Atch Top & 8 F(3 roads) 2,899,350
(3 roads)
379,400
Chicago RI & Pac(2rds) 2,592,682 Chicago & East Illinois..
337,740
Missouri Pacific
1,953,094 Maine Central
314,274
Illinois Central
1,863,086 Detroit Toledo & Ironton
308,109
Northern Pacific
1,810,807 Mobile & Ohio
293,939
Norfolk & Western
1,787,159 Western Maryland
290,100
Louisville & Nashville- 1,747,832 Chicago Ind & Louisville
262,052
Southern Ry
1,602,662 St Louis Southwestern..
247,174
Erie (3 roads)
1,597,813 Wheeling & Lake Erie.220,537
St 1,-San Fran (3 roads). 1,586,653 Chicago Great Western__
214.315
NYNH& Hartford
1.570,288 Central RR of Georgia..
211,862
Duluth Missabe dz Nor
1,414,309 Ter RR Assn of St Louis211.421
Reading Co
1,352,681 Florida East Coast
203,469
Minn St Paul & S S M. 1,348,974 Colorado & Sou (2 roads)
188.054
Central of New Jersey-- 1,319.482 Spokane Portl & Seattle178.145
Chesapeake & Ohio
1,178.861 Northwestern Pacific_ -174,134
Lehigh Valley
1,166,401 Buff Roch & Pittsburgh173,669
Del Lack & Western- 1,163,757 Lake Sup & Ishpeming__
172,127
Pere Marquette
1,134,345 Yazoo & Miss Valley-162,660
Boston & Maine
1,052,385 Lehigh & New England149,580
Missouri-Kansas-Texas..
987,658 Monongahela
149,426
Pittsburgh & Lake Erie..
948,333 Indiana Harbor Belt....
146,682
Atlantic Coast Line
916.611 Gulf Mobile & Northern126,636
N Y Chicago & St Louis826,453 Burlington & Rock Isl.124,646
Bessemer & Lake Erie
783,589 Belt Ry of Chicago
114,109
Elgin Joliet & Eastern_.
755,016 Pittsb & West Virginia..
111,884
Delaware & Hudson....
740,636
Chic St P Minn & Omaha
Total (69 roads)
733.545
$97,646,732
a These figues cover the operations of the New York Central and the
leased lines-Cleveland Cincinnati Chicago St St. Louis, Michigan Central,
Cincinnati Northern, and Evansville Indianapolis & Terre Haute, Including Pittsburgh & Lake Erie and the Indiana Harbor Belt, the result
is a decrease of $8,051,584.
PRINCIPAL CHANGES IN NET EARNINGS FOR THE MONTH
OF AUGUST 1931.
Increase.
Internat Groat Northern $337,861 Bessemer & Lake Erie-- Decrease.
$529,394
Yazoo & Miss Valley-118,838 Pittsburgh & Lake Erie.
482.851
MissouriPacific
480,856
Total (2 roads)
$456.699 M issouri-Kansas-Texas
418,744
Chesapeake & Ohio
398,486
Decrease. Atlantic Coast Line
391,003
Pennsylvania_
$4,348,148 Chic St P Minn & Omaha
372,838
Southern Pacific(2 roads) 2,801.713 Boston & Maine
364,488
Union Pacific(4 roads)... 2.643,537 N Y Chicago & St Louis.
364,048
Baltimore & Ohio
2,112,435 LongIsland
340.539
Chi R I de Pac (2 roads). 1,806,906 Reading Co
304.063
al.781.065 Alton RR
New York Central
301,574
Chic Milw St P & Pacific 1,779,919 Delaware & Hudson
279,726
1,716,062 Kansas City Southern
Great Northern
261,063
Chicago & North Western 1.562,824 Minneapolis & St Louis_.
249,957
1,193,334 Union RR
Chicago Burl & Quincy
243,222
Atch Top & S F (3 roads) 1,187.663 Seaboard Air Line
228,804
Norfolk & Western
1,145,367 Western Pacific
228,443
1.104.968 Los Angeles dr Salt Lake.
Duluth Missabe & Nor
217.381
1,071,076 NashClaatt & St Louis._
Southern Ry
210,887
NYNH& Hartford.- 1,050,120 Texas & Pacific
199,089
965,875 Louisville &
Elgin Joliet & Eastern.189,213
802,088 Grand Trunk Western..
Del Lack & Western....
181.651
684,397 Western Maryland
Central Rv of New Jersey
152,823
Minneapolis St P&E3SM
663,915 N 0 Tex & Meg (3 roads)
137,367.
647,018 Lake Sup & Ishpeming..
Wabash
135,316
639,210 Denver & H 0 Western_ _
St 1,-San Fran (3 roads).
134,831
638,396 Northwestern Pacific._ _
Pere Marquette
132,547
619,511 Mobile & Ohio
Northern Pacific
130,868
570,883 Wheeling & Lake Erie_ _ _
Lehigh Valley
117,525
551,387
Erie (3 roads)
Total (69 roads)
536,328
Illinois Central
$42.803,742
a These figures cover the operations of the New York Central and leased
lines-Cleveland Cincinnati Chicago & St. Louis. Michigan Central.
Cincinnati Northern and Evansville Indianapolis & Terre Haute. In.
eluding the Pittsburgh & Lake Erie and the Indiana Harbor Belt, the
result is a decrease of $2,323,766.
2495
We need hardly say that when the roads are arranged in groups or geographical divisions, according to their location, heavy losses appear this year
as they did last year in gross and net earnings alike,
in the case of each of the great districts into which
the country is divided, namely the Eastern, the
Southern and the Western, and likewise in the case
of all the different regions in each of those districts.
Our summary by groups as below. As previously
explained we group the roads to conform to the classification of the Inter-State 'Commerce Commission.
The boundaries of the different groups and regions
are indicated in the footnote to the table.
SUMMARY BY GROUPS.
District and Region
Cross Earning
Month of August1930. Inc.(+) or Dec.(-)
1931.
Eastern District3
$
8
%
New England region (10 roads).--- 16,310,427 19,565,687 -3,25.5,260 16.62
Great Lakes region (31 roads)
70,593,036 87,414,736 -16,821,700 19.25
Central Eastern region (26 roads) 74,268,274 97,648,068 -23,379,794 23.95
Total (67 roads)
161,171,737 201,628,491 -43,456,754 2L26
Southern DistrictSouthern region (30 roads)
40,794,723 49,619,037 -8,824,314 17.78
Pocahontas region (4 roads)
19,937,074 23,038,111 -3,101,037 13.47
Total (34 roads)
60.731,797 72,657,148 -11,925,351 15.04
Western DistrictNorthwestern region (17 roads).- 44,728,735 62,239,704 -17,510.969 11.35
Central Western region (24 roads)_ 63,574,767 83,851,432 -20,276.665 24.19
Southwestern region (30 roads)
33,803,923 42,386,045 -8,582,122 20.25
Total (71 roads)
142,107,425 188,477,181 -46,369.756 24.58
Total all districts (172 roads)-364,010,959 465,762,820 -101,751,361 21.84
District and RegionNet Earning
Month of August -Mileage--1931.
1930. Inc.(+)or Dec.(-)
Eastern District1931. 1930.
$
New England region-- 7.304 7,329 4,253,693 5,908,557 -1,654,864 28.03
Great Lakes region_.- 27,942 27,941 14,015,293 20,712,268 -6,696,975 32.36
Central Eastern region 25,015 25,031 18,755,804 28,959,809 -10204,005 35.24
Total
60,261 60,301 37,024,790 55,580,634 -18555,844 33.40
Southern DistrictSouthern region
40,071 40,071 6,796,688 9.804,950 -3,008,262 30.70
Pocahontas region... 6,119 6,032 8,152,469 9,761.235 -1,608,766 16.49
Total
46,190 46,103 14,949,157 19,566,185 -4,617,028 23.62
Western DistrictNorthwestern region_ 48,884 49,002 12,430,066 21,023,186 -8,593,120 40.87
Central Western reg'n 52,185 52,073 20.035,809 29,482,413 -9,446,604 32.06
Southwestern region 35,504 35,153 10,678,507 13,509,057 -2,830,550
20.97
Total
136.573 136,228 43,144,382 64,014,656 -20870,274 32.61
Total all districts 243,024 242,632 95,118,329 139,161,475 -44043,146 31.64
NOTE.-We have changed our grouping of the roads to conform
the classification of the Inter-State Commerce Commission, and the followingtoindicates
the
confines of the different groups and regions:
EASTERN DISTRICT.
New England Region.-This region comprises the New England States.
Grow Lakes Region.-This region comprises the section on the Canadian
boundary
between New England and the westerly shore of Lake Michigan to Chicago.
and
north of a line from Chicago via Pittsburgh to New York.
Central Eastern Region.-This region comprises the section south of the
Great
Lakes Region, east of a line from Chicago through Peoria to St. Louis and the
Mississippi River to the mouth of the Ohio River, and north of the
River to
Parkersburg, W. Va., and a line thence to the southwestern cornerOhio
of Marylan
and by the Potomac River to its mouth.
SOUTHERN DISTRICT.
Southern Region.-This region comprises the section east of the Mississippi River
and south of the Ohio River to a point near Kenova, W. Va., and
a line thence
following the eastern boundary of Kentucky and the southern boundary
of Virginia
to the Atlantic.
Pocahontas Region.-This region comprises the section north of the southern
boundary of Virginia, east of Kentucky and the Ohio River north to Parkersburg,
W.Va.,and south of a line from Parkersburg to the southwestern corner of
Maryland
and thence by the Potomac River to its mouth.
WESTERN DISTRICT.
Northwestern Region -This region comprises the
adjoining Canada lying
west of the Great Lakes Region, north of a line fromsection
Chicago to Omaha and theme
to Portland and by the Columbia River to the Pacific.
Central Western Region.-This region comprises the section
south of the Northwestern Region, west of a line from Chicago
to Peoria and thence to St. Louis, and
north of a line from Bt. Louis to Kansas City
and thence to El Paso and by the
Mexican boundary to the Pacific.
Southwestern Region.-This region
the section lying between the Mississippi River south of St. Louis and acomprises
line from St. Louis to Kansas City and thence
to El Paso and by the Rio Grande
to the Gulf of Mexico.
Western roads in August, as we have pointed out
above, suffered a heavy falling off in their grain
traffic, which is all the more noteworthy as it follows a heavy diminution in their grain movement
in August last year, as compared with August 1929.
In 1930 the falling off extended to all the different
cereals save corn, the movement of which was considerably larger than in 1929, but in August the
present year corn also shared in the falling off. The
receipts of wheat at the Western primary markets
for the five weeks ending Aug. 29 1931 were only
80,388,000 bushels as against 105,413,000 bushels in
the corresponding five weeks of 1930; the receipts
of corn were only 15,222,000 bushels against 23,641,000 bushels; of oats, 15,216,000 bushels against
28,277,000 bushels; of barley, 5,207,000
bushels
2496
[VoL. 133.
FINANCIAL CHRONICLE
against '9,537,000, and of rye, 1,296,000 bushels gust 1931 as against 680,663 bales in August 1930;
against 4,652,000 bushels. Receipts of the five 449,405 bales in 1929, and 238,345 bales in August
cereals combined for the five weeks of 1931 reached 1928, as is'shown in the table we now present:
OF COTTON AT SOUTHERN PORTS IN AUGUST AND
.only 117,329,000 bushels as against 171,520,000 RECEIPTS FROM
JAN. 1 TO AUG. 31 1931, 1930 AND 1929.
less
-bushels in the same five weeks of 1929, and no
Since Jan. 1.
August.
than 199,656,000 bushels in the corresponding period
Ports.
1930,
1929.
1931.
1929.
1930.
1931.
of 1929. In the following table we give the details
47,398 273,088 335,028 645,820
4,084
47,007
Galveston.
91.810 439,553 619,320 671.084
47,299 239,199
of the Western grain movement in our usual form: Houston, &c
WESTERN FLOUR AND GRAIN RECEIPTS.
Rye.
ow.
Ranee
1 Wks.En.d. Flour.
Wheat.
corn.
(bush.)
(bush.)
Aug. 29.
(bush.)
Obis.)
(bush.)
(bush.)
108,000
577,000
1931 ___ 1,212,000 16,698,000 5,514,000 4,532.000
381.000
810,000
1930 __ 1.066,000 10.446,000 8,184,000 8,430,000
Minneapolis662,000 1.972.000 2,039,000 1,052,000
9,275,000
1931
680,000 5,001,000 4,529,000 3,140,000
21,002,000
1936
Dultdh37,000
470,000
350,000
60,000
3,149,000
1931 _.
603,000
835,000
686,000
122,000
13.691,000
1930
Milwaukee29,000
499,000 1,212,000 1,237,000
95,000 6,510,000
1931 -__
48,000
1930 ___ 130.000 1,400.000 1.203.000 3,551,000 2,500,000
Toledo2,000
13,000
548,000
94.000
8,340,000
1931.
9,000
6,000
758,000
73,000
2,863,000
1930.
Detroit49,000
65,000
76,000
29,000
303,000
1931.
46,000
2,000
117,000
35,000
305.000
930.
Indianapolis dk Omaha2,000
9,074.000 3,500,000 3,382,000
1931 _
116,000
2,000
19,230,000 4,664,000 3,828,000
1930 M.Louis10,000
301,000
1931 _ 611,000 7,039,000 1,845,000 1,527,000
111,000
287,000
622,000 12.610,000 3,013,000 2,377,000
. 1930
Peoria4,000
472,000
961,000
683,000
552,000
1931
258,000
176.000
465.000
310,000 1,964,000 1,653,000
1930 --- 239,000
Kansas Mt
246,000
9.000 15,872,000 1,555,000
1931
718,000
15,415,000 2,613,000
1930
St. Joseph250,000
570.000
2,928,000
1031 _
418,000
739,000
3,084,000
1930 _
'Mc/4th4,000
12,000
15,000
4,793,000
193r _
4,000
35.000
4,142,000
1930
Mous City
3,000
156,000
198,000
21.000
857,000
1931
22.000
738.000
101,000
336,000
909,000
1930 '
New Orleans
Mobile
Pensacola
Savannah
Brunswick
Charleston
Wilmington
Norfolk_
Corpus Christi
Lake Charles
Beaumont
Jacksonville
Total
31,919
5,528
7.348
61,126
16,437
6,000
2,105
540
14
84
330
902
105,079 279,283
8,083
11,401
6,714
1,354
195,283 680,663
485,971 508,316 595,417
222.337 102,748 102,902
1,248
12,346
37.697
51.318 180,750 187,893 147,744
6,000
90,489
55,482
44.458
1,519
15,220
18,924
138
23,690
37,945
47,698
49,922
2,183
19,439 125.078 317.812 235,192
5,109
18,781
110
5,398
1,675
1,422
49,480
11,180
449,405 1,902,424 2,241.652 2,503,537
Results for Earlier Years.
In considering the heavy losses in earnings, spealang of
the roads collectively in August this year and last year$101,751,861 in gross and $44,043,146 in net in 1931 following $120,696,915 loss in gross and $52,063,396 in net in 1930
-it is important to bear in mind that comparison is by no
means with totals in August 1929 of unusual size. August
1929 was before the advent of the stock market panic in
that year, when the industries of the country, therefore,
were still in a state of great activity. Yet, notwithstanding
this, our compilations then showed only relatively slight increases over the totals for August 1928-no more than $27,835,272 in the gross, or 4.99%, and $16,758,860 increase in the
net, or 9.62%. Moreover, this came after relatively poor
or indifferent results in August of the previous year, when
our tabulations registered the very trifling gain of $165,107
in gross, though owing to curtailment of expenses the showing as to the net was much better, a gain of $9,835,559 ap1031 ___ 2,185,000 80,388.000 15,222,000 15,218,000 5,207,000 1,296,000 pearing, which, however, was only a partial recovery of
1930- 2.057,000 105,413.000 23.641,000 28,277,000 9,537.000 4,652,000
heavy losses sustained in August 1027 as compared with
WESTERN FLOUR AND GRAIN RECEIPTS.
Rye.
Barley.
Corn.
Oats.
Wheat.
August 1926, when our tabulations registered no less than
Flour.
Jan 1 to
(bush.)
(bush.)
(bush.)
(bush.)
(bush.)
Aug. 29. (Obis.)
$22,686,735 decrease in gross and $15,697,472 decrease in net.
CItcaoo872,000
6,725.000 48,275,000 37,971,000 10,848,000 2,572,000
The fact must not be overlooked, however, that the 1927
1930 --- 7.619,000 22.153,000 54,200,000 22.354,000 3,224,000 1.430,000
ld'inneapoltssucceeded considerably improved results in the
shrinkage
2,597.000
7,689.000
7,194.000
5.905.000
51,391,000
1931
52,298,000 8.078,000 10,881,000 11,125,000 5.614.000 two years preceding. In August 1926 our tabulation showed
1930
Duluth372.000 $23,857,842 gain in gross and $12,989,753 gain in net, and in
31,874,000 1.379,000 1.485,000 1,138.000
1931
900.000 2,086,000 1.856,000 2,047.000
33,180,000
1930
August 1925 $47,021,764 gain in gross and $31,821,455 gain
110,000 In net. Contrariwise, the improvement in 1926 and 1925
1931- 479,000 15,671,000 5,179,000 2.702,000 5,026.000
382,000
1930 ___ 732,000 3,190,000 8,630.000 5,775,000 7,859,000
followed a heavy decrease in August 1924, at least in the
Toledo6.000
33,000
651.000 4,582.000
8,429.000
1931
gross, and to that extent the gains in these two years con24,000
19,000
3,928,000
804,000
9,832,000
1930
..Detroitstituted a recovery merely of what had been previously lost.
116,000
482,000
310.000
184,000
898,000
1931
158,000 However, in both the gross and the net the combined gain
23,000
469,000
306,000
1,202,000
1930
Indianayolie et Omaha4.000 of 1925 and 1926 far exceeded the falling off suffered in
31,298.000 27,016,000 9,352,000
1931 _
127,000
10,000
35,308.000 37,400.000 14,415,000
1930
1924. In truth, in the case of the net the shrinkage in 1924
Louis85,000 was very small, economies in operations and savings in
4,332.000 29,004.000 15,297,000 11,931.000 1.210.000
1931
133,000
788,000
4,953,000 36,714,000 20,093,000 13,701,000
1930
expenses having acted as an offset to the heavy reduction
'Peoria1931 _-_ 1.920.000 2,333.000 6,674,000 2,814,000 2.387,000 2,392,000 in gross revenues, and this small loss in net then was
215,000
2,745,000
4,970,000
16,546,000
- 1,572,000 1,551.000
times over by the big increase in 1925,
City1930'Kansas
2,000 made good many
11,000
27.000 87,402.000 19,502,000 2,213,000
1931
67,071,000 22,449,000 4,523,000
entirely apart from the further increase in the net earnings
1930
Alt. Joseph2,000 In 1926. In brief, gross earnings in 1924 fell off $55,952,018
5,000
9,982.000 7,712,000 1,873,000
1.931.
8.903,000 8,081,000 1,424,000
1930 _
but net earnings only $2,148,281, and this was followed by
Wichita95,000
135,000
21.078.000 1,418,000
$47,021,764 gain in gross and $31,821,455 gain in net in 1925,
r931.
167,000
18,772,000 3,237,000
1930 _
and $23,857,842 gain in gross and $12,989,753 gain in net in
Sioux City5.000
59,000
1,166.000
1,450.000
1,909.000
_
1931
August 1926. In both gross and net, therefore, the 1926
24,000
182,000
2,164.000
1,720,000 4,679,000
1930 results were the best on record for the month of August.
TOW6,343,000
The setback In 1924 was due to the great slump in busi1931 ___13,483,000 339,542,000 130,336,000 58,577,000 20,535,000 10,154,000
1930 -14,878,000 291,892.000 185,469,000 86,587,000 27,831.000
ness experienced in the summer of that year pending the
The Western livestock movement, on the other outcome of the Presidential election, a slump which, of
hand, appears to have been somewhat larger than in course, was reflected in diminished traffic and railroad
the month a year ago. At Chicago the receipts com- earnings. The shrinkage in traffic and in revenues was
prised 15,282 carloads in August this year against naturally of striking proportions in contrast with the year
(1923), which had been marked by an extraordi14,921 carloads in August 1930; at Omaha 7,457 car- preceding
narily heavy traffic and exceptionally good results. The
cars
6,572
City
Kansas
at
and
5,718,
loads against
year 1923 was a period of very great trade activity, and
as compared with 6,377 cars.
of the trunk lines in the manufacturing districts of
many
As to the cotton traffic in the South, this was very the country then recorded the largest traffic and gross
light. Gross shipments of cotton overland in Au- revenues in their entire history. As a result, the August
gust 1931 were only 18,099 bales as against 24,146 1923 compilations were noted for the magnitude of the gains
hales in August 1930; 22,527 bales in 1929, and disclosed in gross and net alike-the addition to the gross
18,470 bales in August 1928. At the Southern out- earnings then having been no less than $90,181,967, or
.ports,the receipts reached only 195,263 bales in An- 19.06%, and the addition to the net $49,897,384, or 57.59%.
OCT. 171931.]
FINANCIAL 'CHRONICLE
2497
111
The magnitude of the improvement then followed in part
because comparison was with extremely bad results in the
year preceding-1922. In its general results, August 1922
was one of the worst months of that year. Business revival
had then already made considerable headway, but adverse
Influences of large size were retarding recovery and in some
respects operated to cause a setback. Bath the coal miners'
strike and that of the railroad shopmen reached a climax in
that month. The coal strike had been in progress since
the previous April 1, and in that long interval no anthracite
whatever had been mined, while the soft coal output had
been confined entirely to the non-union mines; this latter,
though by no means inconsiderable, amounting, indeed, to
3,000,000 to 4,000,000 tons a week, fell far short of current
needs. The result was a scarcity of fuel supplies to the
extent of interfering seriously with mercantile and manufacturing operations in many different parts of the country.
The shopmen's strike on the railroads came in at that time
to accentuate the trouble, the consequence being that even
the non-union coal could not all be sent to market. It was
then that President Harding made his memorable address
to Congress. Fortunately, when things were at their worst
a turn came for the better. A truce was patched up between
the miners and the operators under which work was resumed
on the basis of the old wage scale. The settlement in the
case of the anthracite miners did not come until after the
close of August, but the settlement with the soft coal miners
was reached about the middle of the month, though even
here full resumption did not occur until about the last
week of the month. All this naturally proved costly to the
roads. In addition, the roads, in the matter of gross revenues, also suffered by reason of the horizontal reduction
of 10% in freight rates made by the Inter-State Commerce
Commission effective July 1 1922. Altogether, therefore,
conditions in August 1922 for the rail carriers were highly
unfavorable throughout the month. On the other hand, the
fact should not be overlooked that in August 1921 (with
which comparison was then being made) there was a reduc
tion in expenses of prodigious magnitude—so much so that
though gross earnings then suffered a shrinkage of $50,119,218, due to business depression, net recorded an improvement of no less than $248,237,870, expenditures having been
reduced in this single month $298,357,088. This improvement in the net then did not, it should be understood, mean
an absolute addition of that amount to the net, but represented to a very great extent the wiping out of very heavy
deficits suffered by these rail carriers in 1920.
In August 1920 the roads had fallen $125,167,103 short of
meeting their bare operating expenses, not including taxes,
while in August 1921 there were net earnings above the expenses of $123,070,767. In no small measure the prodigious
reduction in expenses in 1921 followed from the huge augmentation in expenses the year before. In August 1920
expenditures had run up in amount of $319,579,099—this on
a gain of $83,071,497 in the gross, leaving net diminished,
therefore, in amount of $236,507,602. The truth is, the
statement for August 1920 was one of the worst on record,
due to the peculiar circumstances existing at the time. The
roads had been returned to private control on the previous
Mar. 1 but for a period of six months thereafter (or until
the end of August) Congress had provided that the carriers
should receive the same amount of net income as they had
been receiving as rental during the period of Government
control—except in cases where a carrier preferred to take;
Instead, its own net earnings, which very few elected to do.
Expenses were running very heavy at the time and were
further increased by the wage award announced by the
Railroad Labor Board the previous month, and which was
made retroactive back to May 1. This wage increase was
estimated to add at least $50,000,000 a month to the payroll of the railroads, apart from the retroactive feature.
While the retroactive feature had been in great part taken
care of in the June and July returns, nevertheless some of
it also was carried forward into the August returns. In
1921, on the other hand, the railroads got the benefit of the
wage reduction which went into effect July 1 of that year,
and which on a normal volume of traffic—the traffic in
1921, of course, was away below the normal—was estimated
to work a reduction in expenses of about $33,3.13,000 a
month.
Even prior to 1920 net results had been steadily growing
smaller. For instance, in August 1919 our compilations
showed a loss in both gross and net—$32,636,656 in the
former and $31,315,528 in the latter. In 1918, while the
showing was not unsatisfactory under the increase in rates
then made by the Director-General of Railroads as a war
measure, the situation nevertheless was that an addition
of $135,759,795 in the gross brought with it an addition of
no more than $24,312,758 to the net. Going back yet a year
further we find that in 1917 a gain of $39,771,575 in the
gross was accompanied by a decrease of $4,668,838 in the
net. In the following we show the comparisons back to 1906.
Gross Earnings.
Year.
Year
Given,
Year
Preceding.
Net Earnings.
(+) or
(—).
nc.
Dec.
Year
Given.
Year
Inc. 1+) or
Preceding. I Dec.(—)-
August.
$
3
$
•
1906 ___ 137.589.560122.898,468 +14,691,092 48,074,911 42.719.768 +5.355.143
1907 ___ 144,913,337128,178,064 +16,735.273 45,629,104 44.849,985
+779,119
1908 ___ 206,755.864241,122,442 34,366,578 75.028,707 84,251,096 —9,222,389
1909 ___ 236,559,877206.877,014 +29,682.86 90,384,539 75,319,538 +15,065,001
1910 ___ 254,005.972235.726,000 +18,279,972 89,517.075 90.176.937
—659,863
1911 ..243,816,494245,784,289 —1.967,695 86,224.971 86,820,040
—595,069
1912 ___ 276,927,416251,067,032 +25,860,384 99,143,971 87,718,505+11.425.466
1913 ___ 259,835.029255,493,02 +4,342,006 83,143,024 92.249,194 —9,106,170
1914 ___ 269,593,446280,919,858 11,326,412 87,772,3841 87.300.840
+471,544
1915 ___ 279,891,224274,618,381 +5,272,843 99,713,
89,673,609 +10.039,578
1916 ___ 333.460.457278.787,021 +54,673.436125.837,849: 99.464.634+36,373.215
1917 --- 373,326,711 333.555,136 +39,771,57 121,230,736125,899,546 —4,668,810
1918 ___ 498,269,362362,509,561 +13575979 142.427,118118,114,360 +24,312,758
1919 --- 469,868,678 502.505,334 32,636,658 112,245,680 143,561,208 —31,315,528
554,785,471 471,714,375 +83,071,497 *123942810 112,564,791 -236,507,601
1920
0,119,21: 123,070,767I•125167103 +248237770
1921 ___ 504,599.664554,718,882
1922 ___ 472,242,561 504,154,065 31,911,05 86,566.595 123,353,665-36,787,070
1923 ___ 563.292,105473,110,138+90,181.967136,519.553 88,622,169 +49.897.384
1924 ___507.406.011563,358,029 55,952,018134,669,714 136,817,995 —2,148.181
1925 ___ 554,559,318 507,537,554+47,021,784 168,558,666 134,737,211 +31,821,455
1926 ___ 577,791,746553,933,904 +23.857,842 179,416,017 166.426.264 +12,989.753
1927 ___ 556,406.662579,093.397 22,686,7 16 .013.942 179,711,414-15.697,472
+165.107173.922.684164,087.125 +9.835.659
1928 --- 558.908,120556,743.013
1929 --- 585,638,74057,803.468 +27,835.272 190,957,504 174,198.644 +16,758.860
1930 ___465.700.789 586,397.704-120896 915 139,134,203 191.197.599 —52,063.396
1931 - - 364,010.959.465,762,820-101751 861 95.118,329 139.161,476-44,04L146
• Deficit.
Note—In 1906 the number of roads Included for the month of August was 91: In
1907, 86: in 1908 the returns were based on 231,220 miles; in 1909 on 247,544 miles:
In 1910 on 238,493 miles; in 1911 on 230,536 miles; In 1912 on 239,230 miles: In 1913
on 219,492 miles: In 1914 on 240,831 miles: in 1916 on 247,809 miles: In 1916 on
245,516 miles;in 1917 on 247.009 miles; in 1918 on 230,743 miles: in 191900 233,422
miles: in 193000 199.957 males; In 1921 on 233,815 miles: In 1922 on 235.294 miles:
In 1923 on 235.357 miles; in 1924 on 235,172 miles: In 1925 on 236.750 miles; In 1926
on 236,759 miles; In 1927 on 238,672 miles; in 1928 on 240,724 miles; In 1929 on
241,026 miles; in 1930 on 241,546 mike; in 1931 00 243,024 miles.
1
Consolidation of Railways into Four Systems Proposed by Eastern Lines—Elimination of Proposed Wabash Seaboard Group is Sought by Four Major Roads
in Petition to Inter-State Commerce Commission.
Application was made to the Inter-State Commerce Commission Oct. 3 by the four major Eastern railroads viz: The
Baltimore & Ohio, the Chesapeake & Ohio, the New York
Central and the Pennsylvania railroads to amend the Commission's consolidation plan of Dec. 9 1929, so as to provide
tor the formation of four new systems in Eastern territory in
ieu of the five sys toms contemplated by the Commission.
Complete dissolution of the "Wabash Seaboard" system
proposed by the Commission in its plan for the unification of
of the Nation's rail properties into 21 independent systems,
and reallocation of the component parts of that grouping
among the foregoing roads is contemplated. The proposal
of the Eastern trunk lines is made in a joint application filed
with the Commission "to reopen the subject and to change
and modify in certain respects the plan" of the Inter-State
Commerce Commission. The Commission is asked to accept the principle that the public interest will best be served
by consolidating the Eastern railroads into four systems
instead of five, and to amend its own plan to harmonize with
the proposal of the Eastern group.
The reallocation recommended by the Eastern trunk lines
would add 10 railroads to the Baltimore & Ohio; five to the
Pennsylvania; and three to the New York Central in the
event of actual consolidation. The Virginian is to be jointly
owned and operated by the Pennsylvania and the Chesapeake & Ohio with the New York Central enjoying joint
rates and through routes over it. The petition provides for
the allocation of the so-called "bridge lines" in fractional
2498
FINANCIAL CHRONICLE
[Vol.. 133.
while, since the closing of the formal record, there had occurred many and
Interests among the four parties, providing for equal and open important
changes of conditions affecting railroad properties. Acquisitions
access to the New England gateway and to the Pittsburgh of interests or control, complete or partial, of carriers, through stock ownership, lease, or sale, had taken place; new industries and traffic had been
district for all.
developed; changes in rates, routes and movements of traffic, both freight
The financial consideration of the matter is not gone into and
passenger, had occurred; new and competitive forms of transportation
in the petition, that portion of the proceedings being reserved had come into being or extended their scope; and new lines of railroad had
for the individual applications to follow approval of the been built, old lines abandoned, and facilities improved, approximately
having been added to the net investment in road and equip"Four-party Plan" by the Commission through amendment 84.100,000,000
ment in the six years 1924-1929, inclusive. Moreover, as to the effect of
of its plan.
these and other types of changed conditions there neither was ntx upon the
The proposal of the Pennsylvania RR. to operate along record could have been a presentation of views by the carriers interested.
The law, however, required the Commission to adopt a plan of consolidathe south shore of Lake Erie under trackage rights over the tion;
and in doing so the Commission, in the light of the circumstances, and
Nickel Plate, a matter which was subject to arbitration for speaking of applications such as the present, stated:
"Section 5 (5) provides that after we have adopted a plan, as we here
many months, is not included in the plan. The Pennsyldo, we may, either upon our own motion or upon application, reopen the
vania refrained from pressing its claims in consideration of matter for such changes or modifications as in our judgment will promote
the fact that the New York Central refrained from pressing the public interest. Such applications will afford opportunity for further
consideration upon adequate and recent records of the various parts of
certain claims of its own.
plan."
The allocation of terminal facilities and interchange tracks the
III. CONSIDERATION OF COMMISSION'S PLAN.
on the west shore of the Hudson River at New York makes
In view of their deep interest in the subject, set forth above, the applipossible the operation of passenger trains of the Van Swerin- cants,
upon the promulgation of the Commission's Plan, gave careful
gen lines into the Pennsylvania Station on Manhattan Island, consideration thereto, with reference both to the feasibility of its consummation and to its effect,ifconsummated,upon the public interest. Systems
an advantage which they do not now possess.
Nos. 3, 4, 5 and 6, as set forth therein, were built up around the systems
The applicants hold that the plan they propose will permit of
the applicants, respectively. With respective to by far the greater
the serving of all Eastern points by at least two competitive part of the allocation made to those systems, the study made by the applirail systems, each system having access to at least two At- cants has led them to agree with the conclusions of the Commission,it being
in this application that over 95% of the mileage allocated in
lantic ports. Access to anthracite and bituminous fields will contemplated
the Commission's Plan to those systems, respectively, shall remain allobe practically equal to all, and the capital structures of the cated to the same systems. While in respect of the remaining allocations
those systems, and also in respect of the failure to make certain allocafour groups will be more evenly balanced as well as their to
cations to them, grave difficulties were encountered, it is unnecessary here
earnings power, than would be the case of five systems in to state these in detail; for, in their study of System No. 7—WabashSeaboard, the difficulties were found and are belleved by the applicants to
the East.
insuperable. It has, therefore,seemed to the applicants that if progress
Under the proposed plan the Pennsylvania system would be
was to be made in furthering the National pollcy of consolidation, it would
total 16,500 miles, the New York Central 13,000 miles, the be necsesary to reallocate the railroad properties Included in proposed
Chesapeake & Ohio 12,500 miles and the Baltimore & Ohio System No. 7 among other systems. Such reallocation is the more desirable in that it is believed that it is essential both in the public interest and
11,000 miles. Computed on the basis of returns for 1929 In
the interest of the applicants.
investment in road and equipment would be as follows:
IV. CHANGES PROPOSED IN THE COMMISSION'S PLAN.
$2,500,Central,
York
New
$3,300,000,000;
Pennsylvania,
Accordingly, following the publication of the Commission's Plan, and
000,000; Chesapeake & Ohio, $2,000,000,000, and Baltimore with the purpose
of preserving and protecting their own interests in a
manner which would, at the same time, promote the public interest and the
& Ohio, $2,000,000,000.
National policy more effectively than the Commission's Plan, the appliOperating revenues, expenses and income of the systems cants
have held many conferences with one another, seeking to reach an
would be about as follows: Pennsylvania: Revenues, $943,- agreement that would effectuate the purposes aforesaid. It was a further
$205,500,000.
purpose
of the applicants in seeking to reach an agreement to be able to
$650,000,000;
income,
expenses,
000,000;
afford the Commission the assurance, necessary to.the accomplishment of
New York Central: Revenues, $706,000,000, expenses, any
plan of voluntary consolidation, that adequate financial resources would
$528,000,000; income, $130,000,000. Chesapeake & Ohio: be marshalled in support of the plan. On Jan. 2 1931, having reached an
as to certain modifications (which included the principal modifiagreement
income,
$373,000,000;
Revenues, $528,000,000; expenses,
proposed to be made of the Commission's Plan, the applicants
$113,000,000. Baltimore & Ohio: Revenues, $484,000,000; cations)
forwarded a letter to the Commission advising it of said modifications.
expenses,$361,000,000; income,$90,000,000.
[For full text of letter see "Chronicle" Jan. 10 1931. page 226.1
In the said letter certain matters were stated to be in process of adjustThe text of the carriers' joint application follows:
ment, and it was further stated that conferences in connection with the
To the Inter-State Commerce Commission:
plan therein submitted (in the said letter and herein referred to as the
Oome now the Baltimore & Ohio RR., the Chesapeake & Ohio By., "Four-System Plan") would be continued for the purpose of dealing with the
the New York Central RR. and the Pennsylvania RR.,respondents in the short line railroads and various trackage and terminal grants essential to
above entitled proceeding, and hereby make application to the Commission round out the four systems, and that as soon as practicable the matter would
to reopen the subject and, upon hearing, to change and modify, by supple- be presented to the Commission in a definite way to the and that the
mental or other proper order entered herein, but to the limited extent and Commission might, as indicated in its report adopting the plan, reopen the
only for the purpose hereinafter set forth, its plan (hereinafter generally matter for such changes or modifications as would, in the Commission's
referred to as the "Commission's Plan"), adopted and published herein Judgment, promote the public interest.
under date of Dec. 9 1929, for the consolidation of the railway properties of
Certain of the matters referred to as in process of determination or
the Continental United States into a limited number of systems [compare adjustment have now been determined or adjusted; conferences have been
plan in "Chronicle," Dec. 28 1929, page 40251. and in support of this held for the purposes stated in the letter aforesaid; and the preparation and
application the applicants respectively show:
formulation of the Four-System Plan has now been completed, so far as
the same lies within the power of the applicants, and is, in the judgment of
I. STATUS AND INTEREST OF APPLICANTS.
the applicants, ready for submission to the Commission.
Each of the applicants is a carrier by railroad subject to the Inter-State
The changes proposed to be made in the Commission's complete plan
Commerce Act, and operates in the Eastern territory of the United States. may be
stated as follows:
The applicants allege that both by reason of their location and business
1. The Delaware & Hudson from System No. 1-Boston & Maine to joint
and by reason of the proposed allocations of railroad properties to them- ownership by the Four Systems herein proposed:
selves and to others, made by the Commission's plan aforesaid, they have,
2. The New York Ontario & Western By. from System No. 2-New
individually and collectively, a very great and substantial interest in the
Haven to System No.3-New York Central;
said plan or in any plan that may hereafter be considered or adopted by the
3. The Lehigh & Hudson River By. from System No. 2-New Haven to
Commission for consolidations in Eastern territory; and the applicants
System No. 5-Baltimore & Ohio;
have accordingly given great consideration to the subject of such consoliThe Lehigh & New England RR. from System No. 2-New Haven to
4.
dations, potential or proposed, ever since the enactment of Transportation
joint ownership by the Four Systems herein proposed;
Act, 1920. in which there was adopted as a National policy the consolida5. The Virginian By. from System No. 3-New York Central to joint
tion of the railway properties of the Continental United States into a
ownership by Systems No. 4-Pennsylvania and No. 6-Chesapeake & Ohiolimited number of systems.
Nickle Plate:
II. STATUS OF THIS PROCEEDING.
6. Detroit Toledo & Ironton RR. from joint ownership by Systems
A brief reference to the historical background is essential to the proper No. 5-Baltimore & Ohio and No. 7-Wabash-Seaboard to System No. 4Pennsylvania;
presentation of the matters dealt with in this application.
7. The Delaware Lackawanna & Western RR. from System No. 6On May 111920, the Commission, pursuant to the provisions of Transportation Act, 1920. above referred to (now included in Section 5 of the Chesapeake St Ohio-Nickel Plate to System No. 3-New York Central:
8. Wabash By., Toledo Peoria & Western RR. and Norfolk & Western
Interstate Commerce Act), entered an order instituting the investigation
in the present proceeding. On Aug. 3 1921, the Commission published By. from System No. 7-Wabash-Seaboard to System No. 4-Pennsylvania;
Tentative
9. Lehigh Valley RR., Wheeling & Lake Erie By. and Chesapeake Sc
a
and served upon the respondent carriers in this proceeding
Plan of Consolidation. No testimony was taken prior to the promulga- Ohio By. of Indiana from System No.7-Wabash-Seaboard to System No.6tion of the Tentative Plan, but there after, during the years 1922 and Chesapeake & Ohio-Nickel Plate;
10. The Pittsburgh & Western Virginia By., except that portion west of
1923, hearings were conducted at which the respondent carriers and others
the Akron Canton & Youngstown By. from System
gave testimony. Tne hearings concerning the Eastern group were held in Gould's Tunnel and
-Seaboard to joint ownership by the Four Systems herein
1923, beginning in May and concluding in October. All of the statistical No. 7-Wabash
of the Pittsburgh & West Virginia west of
evidence concerning that group, with possibly some incidental exceptions, proposed, and that portion
was of a year not later than the calendar year 1922. The entire record Gould's Tunnel from System No. 7-Wabash-Seaboard to System No. 8Plate;
Ohio-Nickel
&
Chesapeake
rpe
was closed in October 1923. Such evidence as was introduced, while
11. Western Maryland By. and Ann Arbor RR. from System No. 7scatted as carefully and thoroughly as was then found possible, of necessity
was related to the Tentative Plan as the subject then under consideration, Wabash-Seaboard to System No. 5-Baltimore & Ohio;
12. Chicago & Eastern Illinois By.from System No. 11-Chicago & North
and hence is without specific reference either to the Commission's Plan as
Western to System No.6-Chesapeake & Ohio-Nickel Plate;
finally promulgated or to the plan hereby proposed.
13. Chicago Indianapolis & Louisville By. from joint ownership by
is
it
The Commission's Plan was promulgated Dec. 9 1929. While
apparent from the accompanying report of the Commission that it con- Systems No. B-Baltimroe & Ohio, No. 8-Atlantic Coast Line and No. 9sidered statistical and other information relating to periods subsequent to Southern to System No. 5-Baltimore & Ohio.
14. The Monogahela By. from joint ownership by Systems No.'3the closing of the formal record, it is clear that there was not, and in the
natire of the case could not be before the Commission a complete or ade- New York Central No. 4-Pennsylvania, and No. 5-Baltimore & Ohio,ito
ownership by the Four Systems herein proposed;
joint
Meanquate showing of the conditions existing as of the date of the plan.
OCT. 17 1931.]
FINANCIAL CHRONICLE
16. Pittsburgh Chartiers & Youghiogheny By. from joint ownership by
Systems No.3-New York Central. and No.4-Pennsylvania, to joint ownership by the Four Systems herein proposed;
16. Montour RR., not allocated in said plan, to joint ownership by the
Four Systems herein proposed;
17. Other allocations of carriers, principally short lines and connecting
and terminal railroads, other arrangements. and trackage and other rights,
all as particularly set forth in detail in the Four-System Plan.
Wherever herein or in said Four-System Plan a carrier or property Is
named, unless an exception is particularly named, it is intended to include
all subsidiary owned, controlled, leased, or operated lines.
2499
Wheeling & Lake Erie Ry.—Traffic and trackage rights from Terminal
Junction to Yorkville. Ohio.
Wheeling & Lake Erie Ry.—Zanesville to Canton (or Cuyahoga Falls), O.
Wheeling & Lake Erie Ry.—Creston to Toledo, Ohio, or over New York
Central RR. as shown above.
Wheeling & Lake Erie By. and Wheeling & Lake Erie Belt—Connection
between Baltimore & Ohio R11. and Wheeling & Lake Erie Belt and
between Baltimore & Ohio RR. and Michigan Central, Pere MarMarquette, Ann Arbor and Detroit & Toledo Shore Line, via the
Wheeling & Lake Erie Belt at Toledo. Ohio.
Wheeling & Lake Erie By. and Wheeling & Lake Erie Belt at
Cleveland.
Ohio—Connection to reach the tracks of Cleveland Union Terminals
Co. at Cleveland. Ohio.
System No. 6—Chesapeake & Ohio-Nickel Plate—
Chesapeake & Ohio Ry.:
Covington & Cincinnati Elevated RR. and Transfer and Bridge Co.
Pere Marquette Ry.:
Flint Belt RR.
New York Chicago & St. Louis BE.
Erie RR.:
Chicago & Erie RR.
New York Susquehanna & Western RR.
Wilkes-Barre & Eastern RR.
New Jersey & New York RR.
Bath & Hammondsport BE.
Lehigh Valley RR.
Bessemer & Lake Erie RR.
Chicago & Eastern Illinois By.
Chicago Heights Terminal Transfer BE.
Wheeling St Lake Erie Ry.:
Lorain & West Virginia By.
Pittsburgh & West Virginia By.(West of a point at or near Gould's Tunnel).
Pittsburgh & Shawmut RR.
Pittsburgh. Shawmut & Northern RR.
Detroit & Mackinac By.
Manistee & Northeastern By.
V. THE FOUR SYSTEM PLAN.
The effect of making the changes and modifications of the Commission's
Plan, as above set forth, would be to group the railroad properties of Eastern
territory (excluding New England except the Boston & Albany RR. which
is leased to and a part of the New York Central and in the Commission's
Plan is allocated to System No. 3-New York Central) into four systems,
in accordance with the Four-System Plan hereby proposed, which is, as
follows:
System No. 3—New York Central—
New York Central RR.:
Fulton Chain By.
Raquette Lake Ry.
Chicago River & Indiana RR.
Louisville & Jeffersonville Bridge & RR. Co.
Muncie Belt By.
Federal Valley By.
Pittsburgh & Lake Erie RR.:
Lake Erie & Eastern RR.
Delaware Lackawanna & Western RR.:
Harlem Transfer Co.
New York Ontario & Western By.
Ulster & Delaware RR.
Trackage to New York Central System.
Baltimore & Ohio System:
Reading Co.—Newberry Jet., Pa., to Rupert. Pa.
New Construction.
Lehigh & Hudson River Ry.—Andover Junction, N. J., to Maybrook.
N.Y.
Portland, N. Y., to Portage. N. Y.
Chesapeake & Ohio-Nickel Plate System:
Trackage to Chesapeake & Ohio-Nickel Plate System.
Pere Marquette Ry.—Grand Rapids, Mich., to Muskegon, Mich.
New York Central System:
Lehigh Valley RR.—Avoca. Pa., to Waverly, N. Y.
Delaware Lackawanna & Western RR.—From the Lehigh Valley conPittsburgh & West Virginia Ry.—flopedale Jct.. Ohio, to a point at or
nection at Pittsten. Pa, or thereabouts, via Kingsland to Hoboken,
near Gould's Tunnel.
N..1. (Including the right of Joint use of passenger facilities at Hoboken
Wheeling & Lake Erie Ry.—Kent, Ohio. to Mogadore. Ohio.
and the right to make connection with the Erie RR. at or near Croxton
Wheeling & Lake Erie Ry.—Diliondale, Ohio, to a point near Unionvale.
Yard for freight service), and from Kingnland. via Kingsland Cut Off,
Ohio—Adena to Neff, Ohio.
to a point of connection with the Pennsylvania RR. passenger line at
System No. 4—Pennsylvanta-or near Kearney Junction (including the right to make connection
Pennsylvania RR.:
with the Greenwood Lake Division of the Erie RR. at or near ArlingLong Island RR.
ton). For system and joint system use, bridge rights, passenger and
Baltimore & Eastern RR.
freight.
Pennsylvania & Atlantic RR.
Michigan Central RR.—St.Thomas,Ont..to Courtright. Ont.(or Lease).
Philadelphia & Beach Haven RR.
Michigan Central RR.—St. Clair Springs. Mich.. to Richmond. Mich.
Rosalyn Connecting RR.
(or Lease).
Waynesburg & Washington RR.
Kanawha & Michigan Ry.—Arraltage to Hobson, Ohio.
Western Allegheny RR.
Pennsylvania
System:
Philadelphia & Camden Ferry Co.
Pennsylvania RR.—Indianapolis, Ind., to Louisville, Ky.
Toledo Peoria & Western RR.
Pennsylvania RR.—From a point of connection with the Lehigh Valley
Norfolk & Western By.
at or near Newark to and from Pennsylvania RR. passenger station
Wabash Ry.:
on Manhattan Island.
New Jersey Indiana & Illinois RR.
Pennsylvania
RR.—West Brownsville Jct., Pa., to a connection with
Detroit & Western By.
the West Side Belt RR. at or near Clairton, Pa.
Detroit Toledo & Ironton RR.
Baltimore & Ohio System:
Trackage to Pennsylvania System.
• Baltimore & Ohio RR.—Dayton, Ohio, to Cincinnati, Ohio.
New York Central System:
Buffalo Rochester & Pittsburgh By. (including Allegheny & Western
New York Central RR.—Newark, N. Y.. to Genessee Jet., N. Y., or
Ry.)—Butler, Pa., through Punxsutawney and DuBois, to Clearfield.
over Lehigh Valley as shown below.
Pa.
New York Central RR.—Cleveland. Ohio, to connection with Lorain
Buffalo Rochester & Pittsburgh Ry.—LeRey to Rochester, N. Y.—
Ashland & Southern RR. at Lorain. Ohio.
including Joint use of Rochester terminals and Rochester Belt Line
New York Central RR.—Wellington. Ohio. to Crestline, Ohio.
and branch of the Belt to Charlotte Docks.
Baltimore & Ohio System:
Baltimore & Ohio Mt.—Butler. Pa.. to New Castle, Pa.
Baltimore & Ohio RR.--Girard, Ohio, to Haselton. Ohio.
Lehigh & Hudson River Ry.—all or any part thereof.
Baltimore & Ohio RR.—Warwick. Ohio. to Greenwich. Ohio.
Joint—New York Central, Pennsylvania, Baltimore & ohio and Chesapeake
Chesapeake & Ohio-Nickel Plate System:
& Ohio-Nickel Plate—
Lehigh Valley RR.Delaware
& Hudson RR.:
1—National Docks Ry.—Waldo Ave.(Jersey City) to connection with
Cooperstown & Charlotte Valley RR.
Edgewater Branch near the Morris Canal.
Greenwich & Johnsonville Ry.
2—Edgewater Branch—conneetion with National Docks By. to conSchoharie Valley By.
nection with proposed tracks on Jersey City water front.
Napiersville Junction By.
Lehigh Valley RR.—Phelphs Jct., to Wadsworth Jct., N. Y., or over
Lehigh & New England RR.
New York Central RR. as shown above.
Montour RR.
•
Pere Marquette Ry.—La Crosse, Ind.. to Hanna,Ind.
Pittsburgh Chartiers & Youghiogheny Ry.—Trackage over the P. RR.
System No. 5—Baltimore & Ohio—
Woodville Jct.. Pa., to Van Emmen, Pa. to reach new construction of
Baltimore & Ohio RR.:
P. C. & Y. RR.and Mongahela By., Van Emmen to Clarksville. Pa.
Baltimore & Ohio Chicago Terminal RR.
Monongahela By.
Dayton & Union Rail Road.
Pittsburgh & West Virginia By.(east of a point at or near Gould's Tunnel).
Staten Island Rapid Transit By.
Elgin Joliet & Eastern Ry.
Reading Company:
Akron St Barberton Belt RR.. and Akron Canton & Youngstown Ry.
Atlantic City RR.
Joint—New York Central and Pennsylvania—
Peoples By.
Central Indiana Ry.
Central RR. of New Jersey.
Cherry Tree & Dixonville RR.
Lehigh & Hudson River By.
Cambria & Indiana RR.
Western Maryland By.
Lake Erie & Pittsburgh By.
RR.
Arbor
Ann
Manistique and Lake Superior RR.
Joint—New York Central (60%). Chicago & North Western (20%) and
Buffalo Rochester & Pittsburgh By.
Chicago Milwaukee St. Paul & Pacific (20%)—
Buffalo & Susquehanna RR.
Indiana Harbor Belt RR.
RR.
Alton
Chicago &
Joint—New York Central and Chicago Rock Island & Pacific—
Chicago Indianapolis & Louisville By.
Kankakee & Seneca RR.
Trackage to Baltimore & Ohio System,
Joint—Pena,sylvania and Chesapeake & Ohio-Nickel Plate—
New York Central System:
Virginian Ry.
Now York Central RR.—Monroeville, Ohio, to Toledo, Ohio, or over
Joint—Baltimore & Ohio and Chesapeake & Ohio-Nickel Plate—
Wheeling & Lake Erie By. as shown below.
Detroit & Toledo Shore Line RR.—One-half interest now owned by
Grand
New York Central RR.—Charieston, W Va.. to Kanauga, Ohio.
Trunk to Baltimore & Ohio System and one-half interest now owned by
Delaware Lackawanna & Western MI.—Rupert. Pa., to Plymouth
Nickel Plate to Chesapeake & Ohio-Nickel Plate System.
Junction, Pa.
All established and now existing through routes between the
Pennsylvania System:
comprising the Four Systems are to be maintained. The New York carrieti
Central
Pennsylvania RR.—Sinnemahoning. Pa., (or Driftwood), to Williams- System shall have joint rates
with the Virginian By. via Deepwater on
westport, Pa.
bound traffic; also, subject to the limitations of the law,
on eastbound
Pennsylvania RR.—West Brownsville Jct., Pa., to a connection with originating west of Swiss, W. Va.
the West Side Belt RR at or near Clairton, Pa.
The term "trackage." unless otherwise specified,
means bridge trackage
Chesapeake & Ohio-Nickel Plate System:
only. Each of the systems shall have the right to full
trackage on reasonChesapeake & Ohio Ry.—Kanauga. Ohio. to Dundee. Ohio.
able terms over all or any part of any of the joint
railroads in which an
Pere Marquette Ry.—Toledo, Ohio, to Detroit. Mich.
ownership interest has been allocated to such system.
2500
FINANCIAL CHRONICLE
[VOL. 133.
(1) Carriers Representing the Major Part of the Properties Involved Unite in
Ai,ocation of Other Lines.
Submitting the Four-System Plan.
The remaining railroads in Eastern territory (excluding New England)
The consolidation policy adopted by Congress is one to be effected by
other than those named in the foregoing Four System Plan (except certain
action
and
assent of the carriers involved, subject to the necesso-called "terminal properties" not allocated by the Commission) have voluntary
been allocated in the Commission's consolidation plan of Dec. 9 1929. to sary finding by the Commission, in each case, that the public interest will
Systems No. 3, No.4, No. 5, No. 6 and No. 7. These railroads, consisting be promoted by what is proposed and that the conditions of Section 5 of
mainly of independent short lines and including a few jointly controlled the Inter-State Commerce Act have been or will be fulfilled. Because of
connecting and terminal roads, may be tentatively assigned to the Four the greater likelihood of accomplishment, it is submitted to be manifestly
Systems now proposed by adaptation and modification of the Commission's in the public interest and in consonance with the declared policy of Congress
Five System allocation to conform to the proposed assignment of the prin- that the carriers representing the major part of the properties involved in a
cipal railroads with which these short lines connect. In most cases the consolidation plan for any district should unite, as here, in an agreed plan
assignment herein made follows that indicated by the Commission's Plan. to be submitted for the Commission's approval.
(2) Four-System Plan Would Meet the Essential Requirements of the Law.
In some few instances for reasons which appear to be sound the Commission's
allocations have been approximately modified and certain plant facility
The proposed Four-System Plan would meet the essential requirements
and industrial common carrier railroads as listed below have not been of Section 5 of the Inter-State Commerce Act that in the division of railway
allocated to systems.
properties into systems competition shall be preserved as fully as possible,
The following allocation of such railroads other than those named in and that wherever practicable the existing routes and channels of trade
the foregoing Four System Plan, determined as above stated, is necessarily and commerce shall be maintained, and that, subject to the foregoing
tentative and subject to change by the Commission, upon its own motion requirements, the several systems shall be so arranged that the cost of
or upon application of the carriers involved, as may be found appropriate transportation as between competitive systems and as related to the values
in the public interest.
of the properties through which the service is rendered shall be the same,
so far as practicable, so that these systems can employ uniform rates in the
System No. 3--New York Central— Winifrede RR.
efficient management earn subKanawha, Glen Jean & Eastern RR. movement of competitive traffic and under
Chicago, Attica & Southern RR.
stantially the same rate of return upon the value of their respective railway
Boyne City Gaylord & Alpena RR. Ludington & Northern By.
properties.
Euclid RR.
Lakeside & Marblehead RR.
(3) Four-System Plan Provides for All the Carriers in Eastern Territory
East Kentucky & Southern By.
Lowy!lle & Beaver River RR.
(Excluding New England).
Morehead & North Fork RR.
Marcellus & Otisco Co.
Nelson & Albemarle Ry.
The proposed Four-System Plan provides for the allocation of all or
Norwood & St. Lawrence RR.
Ry.
Virginia Central
substantially all the carriers, large and small, in Eastern Territory, outside
Campbell's Creek RR.
Buffalo Creek RR.
of Now England. It is a practical plan for effectuating the Congressional
Delaware Valley Ry.
Susquehanna & N. Y. RR.
purpose and intent in respect of railroad consolidations and the co-operative
Unadilla Valley By.
Williamsport & North Branch Ry.
use of railroad facilities, and contributes to the establishment of an efficient
System No. 4—Pennsylvania—
Arcade & Attica RR.
Joint New York Central, Pennsyl- National railway transportation system.
(4) Main Stems and Direct Routes.
vania, Baaimore & Ohio and
Bellefonte Central RR.
Chesapeake & Ohto-Nickel Plate—
Couderspert & Port Allegany RR.
Each of the proposed four systems would have adequate main stems beRR.
Co.
Schoharie
RR.
&
Coal
Middleburgh &
East Broad Top
tween the Atlantic Seaboard and the Middle West,and direct routes between
Hickory Valley RR.
Genessee & Wyoming RR.
Important cities and industrial centres.
Huntingdon & Broad Top Mountain Alton & Eastern RR.
(5) Producing, Consuming and Population Centres.
Northampton & Bath RR.
RR. & Coal Co.
Under the proposed Four-System Plan nearly all of the principal proKane & Elk RR.
Joint New York Central and Penn- ducing, consuming and population centres of Eastern territory, excluding
Kishacoquillas Valley RR.
sylvania—
New England, would be served by two or more and In many instances by
Ligonier Valley RR.
Beaver \Talley RR.
all four systems.
Maryland & Delaware Coast By.
RR.
&
Clarion
Franklin
Lake Erie
(6) Access to Fuel Supply and Commercial Distribution of Coal.
Pittsburgh & Susquehanna RR.
Pittsburgh, Lisbon & Western RR.
Each of the proposed four systems would have access to sources of fuel
Sheffield & Tionesta By.
supply as well as participation to a large extent in the commercial distribuChesaYork
Central
and
Joint
New
Stewartstown RR.
tion of coal.
peake & Ohio-Nickel Plate—
Strasburg RR.
(7) North Atlantic Ports.
Susquehanna River & Western RR. Owasco River Ry.
West Pittston—Exeter RR.
Each of the proposed four systems would have access to at least two
Tuckerton RR.
Dansville
&
Mount
Morris
RR.
of
the five principal North Atlantic ports, and none of these principal
Tuscarora Valley RR.
ports would be without competitive service.
Washington, Brandywine & Point Morristown & Erie RR.
(8) Lake Ports, Ohio River Crossings and Lake Michigan Ferry Routes.
Joint New York Central and CanLookout RR.
Each of the proposed four systems would have substantial access to the
adian National—
Winfield RR.
lower Great Lake ports, Ohio River crossings and Lake Michigan ferry
Massena Terminal.
Dents Run RR.
routes,
and thus participate in the transportation of the large volume of
Chesapeake Beach Ry.
Joint Four System Joint Group and
traffic passing through and over them.
ficootac Ry.
the Boston & Maine—
Chesapeake Western Ry.
Troy Union RR.
(9) Physical and Financial Strength.
Franklin & Pittsylvania By.
Joint Pennsylvania and B. & O.—
The four systems proposed would have the necessary physical and finanInterstate RR.
New York & Long Branch RR.
cial strength to serve the public efficiently and economically and to coMarion & Rye Valley Ry.
Raritan River RR.
ordinate their services with waterways, highways, airways and other
Virginia Southern RR.
Cumberland & Pennsylvania RR.
modern means of transportation.
St. Louis & Hannibal RR.
Johnstown & Stony Creek RR.
(10) Four Systems Would Assure More Effective Competition than a Greater
Lake Erie & Fort Wayne RR.
Delaware
&
Joint Pennsylvania and
Number of Systems.
System No. 5—Baltimore & Ohio—
Hudson RR.—
In addition to their physical and financial strength the four systems
Castleman River RR.
Wilkes-Barre Connecting RR.
proposed would be well articulated and reasonably balanced with one
Kansas & Side11 RR.
Joint Pennsylvania and New York another and would
thus assure a greater amount of actual and effective
Maryland & Pennsylvania RR.
New Haven & Hartford—
competition than would be possible with any number of systems in Eastern
Mount Hope Mineral RR.
Connecting RR.
New
York
territory
greater
Riterville
than four.
Mount Jewett, Kinzua &
Joint Pennsylvania and Atlantic
RR.
VII. THE PROPOSED FOUR SYSTEM PLAN THE BEST PLAN
Coast Line RR.—
Quakertown & Bethlehem RR.
THAT CAN BE EFFECTUATED.
Winston-Salem Northbound By.
Rahway Valley Co.
As declared in the letter of Jan. 2 1931, from the Presidents of the appliJoint Baltimore & Ohio and ChesaStone Harbor RR.
cants
to
the
Commission, the agreement set forth in that letter in respect
peake & Ohio-Nickel Plate—
Ursine & North Fork By.
of the Four System Plan is interdependent and could not have been reached
Ironton RR.
Valley RR.
upon any different basis of allocation. Probably no single one of the
West Virginia Northern RR.
Plant Facility and Industrial Com- groups herein proposed is exactly what those interested in the group
Wharton & Northern RR.
mon Carrier Railroads Allocated would wish it to be. In order to reach a common understanding it has
Wlldwood & Delaware Bay Short
to Systems—
repeatedly been necessary for all of the interests involved to make conLine RR.
Aliquippa & Southern RR.
cessions. It is believed, however, that each of the systems resulting from
Yale Short Line RR.
Benwood & Wheeling Connecting Ry. the suggested grouping will be able to operate more effciently and serve
Preston RR.
Chestnut Ridge By.
the public better than the same number of miles operated in a less coBuffalo Creek & Ganley RR.
Conemaugh & Black Lick RR.
ordinated manner as at present. The applicants accordingly say that they
Rowlesburg & Southern RR.
Cornwall RR.
are unable to present any other changes or modifications than those herein
Strouds Creek & Muddlety RR.
Dexter & Northern RR.
proposed. In their judgment the proposed Four-System Plan is pro
West Virginia Midland Ry.
Donora Southern RR.
eminently the best solution of the problem of railroad consolidation in the
Winchester & Wardensville RR.
Etna & Montrose RR.
Eastern territory of the United States, excluding New England, which can
Brownstone & Middletown RR.
Fairport Painesville & Eastern RR.
be effectuated.
Tionesta Valley Ry.
Glenfield & Western RR.
VIII. APPLICANTS WILL PROCEED WITH THE EFFECTUATION
Grasse River RR.
East Berlin RR.
OF THE FOUR SYSTEM PLAN WHEN APPROVED BY THE
Emmitsburg RR.
Indiana Northern By.
COMMISSION.
Kelly's Creek & Northwestern RR.
Valley River RR.
The applicants propose, if and when the Commission shall approve the
System No. 6—Chesapeake & Ohio- Kelly's Creek RR.
changes and modifications in and to its plan of Dec. 9 1929, prayed for in
Lake Champlain & Moriah RR.
Nickel Plate—
Lake Terminal RR.
this application, so as to provide for the incorporation in said plan of the
Chicago & Illinois Midland By.
Four-System Plan herewith presented, to proceed with the formation of
Lorain & Southern RR.
Jacksonville & Havana RR.
RR.
Connecting
unified systems pursuant to said Four-System Plan in accordance with
McKeesport
Louis
By.
Chicago Springfield & St.
such applicable provisions of law as may at the time be in force and under
Muncie & Western RR.
Arcadia & Betsey River Ry.
such rules and regulations and on such terms and conditions as may be
New Haven & Dunbar RR.
Detroit, Caro & Sandusky Ry.
definitely submitted to and found by the Commission to be just and reasonPatapsco & Back Rivers RR.
East Jordan & Southern RR.
EngNew
Bethlehem
&
able in the premises.
Philadelphia
Middletown & Unionville RR.
PRAYER.
land RR.
New York & Pennsylvania By.
Skaneateles RR.
Wherefore, the applicants jointly apply to the Commission to reopen
Port Huron & Detroit RR.
South Buffalo By.
the subject and, upon hearing, to change and modify, by supplemental or
Prattsburgh By.
Steelton & Highspire RR.
other proper order, its plan, adopted and published by it under date of
Unity Railways.
RR.
Plymouth
&
Merton
Dec. 9 1929, for the consolidation of the railway properties of the ContinUpper
Kanawha Central By.
ental United States into a limited number of systems, to such extent as
THE
PROMOTE
may be necessary to provide for the incorporation therein of the FourVI. THE PROPOSED MODIFICATIONS WOULD
System Plan hereinabove set forth.
PUBLIC INTEREST.
The applicants pray and apply for such further or other orders or authorThe applicants allege that It would promote the public interest for the
the premises, under any other applicable provision or provisions of
Commission to change and modify the Commission's Plan to such extent, ity in
but only to such other extent, as may be necessary to provide for the In- the Inter-State Commerce Act, or of any other law, as the Commission
Corporation therein of the Four-System Plan aforesaid, for the following may deem necessary or proper.
Dated, Oct. 1 1931.
reasons:
OCT. 17 1931.]
FINANCIAL CHRONICLE
2501
Indications of Business Activity
THEiSTATE OF TRADE—COMMERCIAL EPITOME.
Friday Night, October 16 1931.
In the East the weather of late has been unseasonably
warm, but in other parts of the country the temperatures
have been nearly or quite normal with beneficial effects
upon business. In fact there are signs that the business
morale of the country is slowly improving. Certainly there
is some tendency to more optimistic leanings, though nowhere is there marked improvement in business. But the
state of mind of the country seems to be gradually improving.
In the wholesale lines, however, though business has gained
somewhat the orders are for the most part for prompt delivery and the supplying of the more urgent needs. Cooler
weather in the West has caused a better business in heavy
clothing and other articles. In the steel business the feeling
is rather more cheerful, though there has been no actual
improvement in business.
In the retail business, the larger sales of clothing brought
about by cool weather have imparted a rather more confident tone. Collections, it must be admitted, are still
slow throughout the country, though there is some slight
improvement in the East. But that is very far from being
the case in the West and the South. A number of new
bank failures have been reported in the country during the
week. The better tone of the stock market has been a
feature and quite a long list of commodities also show advances. There is little doubt that most of these markets
have a substantial short interest, which might be stampeded
if the news relating to these several commodities should
suddenly become better. Retail failures are smaller than
last week. Wheat has advanced 23c.or 63
% to 7c. recently,
partly on a better export demand coincident with a falling
off in Russian offerings to Western Europe. The trend of
sentiment in grain, cotton and some other commodities is
toward the buying side on the ground that prices for such
products are unreasonably low, despite the admitted fact
of heavy supplies. It is believed that Europe will have to
buy North American wheat more freely. Cotton has advaned $2 to $2.50 a bale, owing to a steady trade demand,
home and foreign, and the lack of any really aggressive
hedge selling. Besides, there is a plan with heavy backing
to hold back 7,000,000 bales until July next year. Home
consumption, moreover, is increasing. And the war cloud
in the Far East is not going unnoticed. The Japanese
buying of cotton is by some, rightly or wrongly, connected
with the situation in Manchuria. Rubber on most months
is somewhat higher regardless of a falling off in the consumption during September. Here, as in the case of cotton
and wheat, the supplies are very large, but on the other
hand, the question arises whether 5-cent rubber does not
discount everything bearish in the situation. A recovery of
confidence is, of course, in the end the remedy for the prolonged depression in trade at home and abroad. Sugar
ended this week unchanged to 5 points lower, with cost and
freight saws reported at 1.40c. At one time, there was
covering on Licht's estimate of a reduction of 2,300,000
tons in European beet production. But, on the other
hand, producing interests are understood to be persistent
sellers of the distant months against actual sugar, and there
is at this time no general buying for a rise, indeed the trading
in futures has been small. Coffee advanced 10 points,
with fsome covering of hedges against recent liberal sales
of actual coffee; also there was the signing of a decree by
the President of Brazil, declaring a 60-day moratorium,
and the continued destruction of coffee is hastened in the
State of Sao Paulo by an internal loan. Moreover, there
has been considerable covering. Provisions have been firmer
and lard shows a rise for the week of 3 to 15 points. Hides
under heavy liquidation have declined 15 to 43 points net.
Cocoa is off 1 to 3 points. Silk has risen 2 points on December. At the same time, the consumption of raw silk in this
country has been big enough to neutralize the effect of a
heavy movement into sight in Japan. Meanwhile, the silk
trade is hampered by the more or less disturbing political
news from Japan and China, though it is noticeable that
there is no pressure to sell here. Not a few think that any
marked decline under the existing circumstances is improbable.
Furs are in better demand as usual at this time of-the year.
A fair business is being done in hardware,electrical appliances
and refrigerators. Baltimore is having a good business in
house furnishings. It is noticeable that in New York retail
business is no better as a rule than it was a year ago, if it is
as good. Wool has been quiet and steady, but the textile
strike at Lawrence, Mass., has been a more or less disturbing
factor. The demand for leather has been slow. The shoe
trade notices a falling off in the demand. The automobile
industry is slow. Petroleum in the Mid-Continent area is
firmer at the recent rise in prices, and some think stabilize.tion is near at hand or at any rate not far off. It remains to
be seen what effect the reopening of the Oklahoma wells will
have. At Pittsburgh the glass industry is dull. At Portland,
Ore., flour mills are busy on orders for China. Dry goods
at wholesale throughout the country have been in somewhat
Better demand. At the same time wholesale and jobbing
failures show a slight increase.
Unfinished cotton goods have been more active than for
some time past. At one time there were rumors of sales of
some 30,000,000 to 40,000,000 yards of print cloths, sheetings and broad cloths. Large sales were reported of 38%inch 64x60 5.35 yard at 3%0. but later the price asked for
this year's shipment was 334c., and for 1932 delivery, 33/s0.
Good sales were reported of 39-inch 4 yard 80 squares at 5 to
53c. for December to February shipment. Prices for late
delivery cotton goods have been noticeably strong, and mills
have refused to consider lower bids. Bag manufacturers
were buying sheetings more freely encouraged at times by
somewhat easier quotations. Unfilled orders of standard
cloths showed some increase for the month of September as
against a sharp decrease in August. There was more activity in worsted and woolen fabrics. Broad silks were firm,
though no general improvement in actual trade.
The stock market on the 13th inst. declined in many
cases two to four points with nothing new or stimulating in
regard to the proposed increase in freight rates of 15% and
the Japanese and Chinese situation not by any means reassuring. The trading fell off to 1,200,000 or 2,000,000 less
than on the 9th inst. There were still restrictions on. short
selling. Besides theoretically something of a reaction was
due after the quick rise last week of 10 to 20 points. Leading
the decline were United States Steel, American Telephone,
Santa Fe, Auburn, American Can, American Tobacco,
B;J. I. Case, Consolidated Gas, Eastman, Southern Pacific,
du Pont, Western Union and Union Pacific. On the 14th
inst. prices fell again and bonds were rather irregular, United
States Government issues being ia some cases up if domestic
bonds sagged. Some active foreign issues moderately while
others declined. Belgian Government advanced 1 to 3;
French Government,1X; Kingdom of Italy 1, and German
Government, 2. In stocks railroad issues led the decline
but for an exception Western Union dropped eight points
when its dividend was reduced $2 to the basis of $6 a year.
Vulnerable:spots as declines revealed were Santa Fe, United
States Steel, Auburn, American Telephone, Eastman,
Reading, Union Pacific and du Pont. Rallies were insignificant. Nearly 50% of last weeks' advance had been
lost up to the close on the 14th inst. The sales then were
1,636,300 shares.
One detail attracted attention, i. e., a sale of 45,000 shares
of International Nickel at 8%,declining later to 8% to 8%,a
net loss of X. The wiseacres are beginning to discuss the
size of the United States Steel dividend to be declared in
less than two weeks. Some have decided that the old rate of
$1 quarterly will be maintained despite the leanness of the
year 1930; others could not shake off the conviction that it
will be reduced; still other crystal gazers could plainly see
that it is to be omitted. Suffice it for the moment that the
subject is beginning to be talked about. Stocks on the 15th
inst. advanced, though they reacted in the last hour. The
Federal Reserve Bank rediscount rate rose to 33/%,a recent
rise of 2%. The trading was in only 1,375,000 shares. It
was a prpfessional market whose changes in prices were
largely due to technical conditions. Gold continues to go
out, and in less than a month this country's loss has reached
nearly $650,000,000. It has had no effect that would have
once been incredible. On the 15th inst. the leaders in
the
rise were American Tobacco, New York Central, Santa
Fe,
2502 _
FINANCIAL CHRONICLE
[VoL. 133.
Manchester had a better export business. A cable says
American Telephone, Auburn, Macy, Helme, Pennsylvania
Machinery Makers, Ltd., which is
RR., Southern Pacific and American Water Works. Only capitalization of Textile
firms of textile machinists will be
re
Lancashi
six
merge
to
Steel,
States
in
United
fractional net advances took place
00, 6% cum. pref. shares
£1,788,0
including
00
m
£3,403,0
American Can, General Motors, Union Pacific, Bethlehe
capital by the participating
e
aggregat
34
£7,282,6
against
has
market
stock
the
in
e
Steel and Pullman. The underton
cabled:"In the last few weeks Germany's
changed for the better. That seems plain enough. The companies. Berlin
d active but has had little effect
continue
has
trade
organization of the $500,000,000 banking pool has done not foreign
institution has now announced
That
nk.
Reichsba
the
on
financial
body
the
a little to inject greater confidence into
exporters who do not deliver
to
credits
decline
will
it
that
bonds,
and commercial of the United States. Government
ely. Despite depreciation of
immediat
balances
foreign
and
l
industria
railroad,
while
lows
to
new
it is true, declined
sterling, German exports to England remain large and
public utility issues showed a tendency to rise.
have been placed in this country
To-day stocks advanced 3 to 6 points on railroad shares considerable British orders
British import duties."
possible
against
on
preparati
Norfolk
in
and
Haven
including Union Pacific, Santa Fe, New
here fell to 44 degrees at
ures
temperat
inst.
12th
the
On
S.
& Western. Utilities advanced 2 points or more. U.
furs came back. The range of
and
s
overcoat
and
of
m.
s
a.
6.30
regardles
sharply
rallied
then
and
Steel declined early
44 to 58 with a wind of 25 miles an hour.
predictions in some quarters that the dividend will be temperatures was
Peekskill, N. Y., the first ice of the
near
reduced, something that would not surprise many, yet At Indian Lake,
had 41 to 56 degrees, Chicago,
Boston
reported.
was
still
season
selling
Short
higher.
points
Steel actually ended 23
Cleveland, 44 to 54; Kansas
60;
to
42
i,
54;
to
Cincinnat
48
the
be
has a ring through its nose. The next big thing will
to 54; St. Paul, 40 to 58;
48
e,
decision of the I.-S. C. Commission on the question of City, 50 to 52; Milwauke
74 to 86; Omaha,48 to 50;
Orleans,
New
48;
34
to
,
MeanMontreal
days.
few
a
in
increasing freight rates. It is expected
Me., 42 to 52; Portland,
,
Portland
to
60;
48
hia,
was
Philadelp
while the selling of United States Government bonds
Spokane,32 to 64; St. Louis,
58;
to
46
Indeed
54;
Seattle,
48
to
Ore.,
reached.
were
lows
new
and
persistent and heavy
. Treasury 3s were 9 points under their recent level. The 50 to 54; Winnipeg, 32 to 56.
To-day the temperatures here were 59 to 64 degrees and
decline in bonds was general coincident with the rise in the
e
elsewher
the
forecast was for showers to-night but fair and cooler on
and
here
3%
to
nt
Federal Reserve rediscou rate
month
and fair on Sunday. Yesterday Boston had 58
a
Saturday
New York City bonds have dropped in less than
way
New ork, 58 to 74; Philadelphia, 60 to 72;
to
under
64
degrees,
is
selling
this
all
while
And
dome dozen points.
o 54; Chicago, 48 to 60; Cincinnati,
on
comparis
Me.,
,
in
Portland
high
still
the yield on bonds, it is remarked, is
to 60; Detroit, 48 to 62; Milwaukee,
48
,
50 to 64; Cleve
with that on money.
to 66; St. Paul, 44 to 66; t. Louis,
50
four
City,
of
g
Ka
48
to
58;
reopenin
the
with
that
Adams, Mass., reported
46 to 70; Los Angeles, • to 80;
City,
Lake
Corp.,
to
62;
on
50
Associati
mills of the Berkshire Fine Spinning
ttle,
Francisco, 56 to 70;
San
78;
into
Sre., 50 to
Portia
after a five-day shutdown, a 10% cut in wages went
nd
, 50 to 5
Montreal
78;
to
68
.
,
Ber.,
reduction
,
t
Hamilton
50
the
by
affected
were
effect. About 3,000 workers
of
makers
66.
to
mipeg,
34
W
At Lewiston, Me., the Bates Manufacturing Co.,
than
bedspreads, is operating with 40% more employees
ol. Leonard P. Ayres of Cleveland Trust Compa
last year at this time, and the M.C. Stone Co., shirt manu
Says Bad News Is Getting Behind Us With Grea
dou
faeturers, has secured sufficient orders to enable it to
Rapidity—Outlook More Hopeful Than 10 Years
,
its greatest previous production, has enlarged its p
This Month.
'Ago
!
addi'ma
added new machinery, and hired about 200
months in our financial history have produced more
Few
textiles
that
stated
reports
N.
C.,
e,
Charlott
s.
employee
s important business developments than this past
showed considerable promise of improvement. The demand numerou
r, it is noted by Col. Leonard P. Ayres, ViceSeptembe
opened.
for goods has been broadening since the week
of the Cleveland Trust Company. of Cleveland.
t
more
Presiden
operate
to
willing
being
of
ns
Buyers show indicatio
company's Business Bulletin, issued Oct. 15.
in
the
Ohio,
past.
weeks
freely than they have been doing for several
also made the following observations:
Ayres
Col.
part
to
In
by
It is believed their long-deferred seasonal buying is going
Great Britain went off the gold basis for her money, and was followed
efforts
that
wired
announced a
C.,
N.
develop steadily. Burlington,
a number of other nations. The United States Steel Corp.
strike wage cut, and large numbers of other companies have followed the example.
to induce workers of the Burlington mills group to
The American Legion voted not to demand additional bonus payments.
normal
The
failed.
ly
apparent
cut,
Japan
in face of a 10% wage
Mr. Swope presented his plan for stabilizing industrial employment.
WilmingAt
carried forward hostilities against China. After eight years of negotiation
number of men and women are at their work.
Early
systems.
merged
great
Wilfour
for
the eastern railroads agreed on plans
ton, N. C., the Spofford mills are running at night. At
in October the President presented his platurfor credit extension.
recently
which
Mill,
Yarn
low
records
son, N. C., the Wilson Cotton
While these stirring events were taking place a series of new
the average
since were
being made in prices and production. During September
resumed an operating schedule after being closed down
decline was
plant
the
by nearly a third, and the percentage of
fell
of
prices
stocks
keep
to
orders
enough
great bull market
last spring, has received
greater oven than that of October of 1929, when the
r.
Novembe
Comof
severe.
last
on the present schedule until the
The decline in bond prices was correspondingly
have crashed.
owners
and earnings made new lows.
mill
loadings
Lawrence
railroad
and
prices
modity
that
wired
Mass.
,
Lawrence
reached a low point last
the 10%
The industrial production index of this bank had
normal level. It rose to
definitely rejected arbitration of the strike against
December that was 28.2% below the computed
Mass.
Lynn,
At
Juno figure was 27.4; that
out being conducted by 24,000 workers.
21.8% In April. and then declined again. The
Co.,
Shoe
August figure was a decisive now low of 31.1%
Pilgrim
the
and
The
28.4;
for
was
July
started.
have
s
two new companie
square under normal. Almost all the elements of the index showed declines after
manufacturers of women's shoes, has added 5,000
adjustments had been made.
At seasonalexperience
shows that we do not often have months characterized
feet of floor space and had employed 80 more persons.
Past
an by as much important business news as was September, and we never have
Lawrence, Mass. the Bolts Rubber Co. had purchased
bad news. This is a
many months in succession that produce so much
s it is well to remember that
additional mill and would add 250 employees.
negative kind of consolation, but nevertheles
us now with extraordinary rapidity.
Washington wired that reports from 41 localities on condi- we are getting the bad news behind
been
Repeatedly in the past the final declines of long depressions have
tions affecting business and employment were published by marked
of unfavorable developments.
groupings
just such cumulative
by
and
relief
more hopeful now than
the President's organization on unemployment
In very many important respects the outlook seems
showed some improvements in many sections of the country. it did 10 years ago this month. Securities.
in
The rate of activity in New England is still higher than
way for two years,
The declining market for securities has been under
clothing,
shoes,
of
on
Producti
country.
the
y of its beginning It is
the rest of
and now that we have passed the second anniversar
fairly
is
y
In the diagram
its
machiner
course.
review
to
table
cheerful,
and
enlightening, although not
furniture, hosiery, knit goods
months is (this we onilt.—Ed.1 the short vertical lines in the upper portion show the
eight
first
the
for
ion
consumpt
Wool
active.
Jones averages of 30 active
high and low records each month of the Dow
In September of 1999
ahead of last year.
industrial stocks, and 20 leading railroad stocks.
on
level
The low point touched in
low
was
381.
new
the high of the industrial averages
Prices of farm products which reached a
the two-year period
in
decline
extreme
The
86.
was
during the last 30 days, October of this year
Sept. 15 have continued to decline
was a little more than 77%.
inbeen
having
period
The record of the rail stocks has been closely similar. In September of
increases in livestock prices in this
prices, according to an 1929 the high point of the rail averages was 189. The low in October of
sufficient to offset the drop in crop
re.
this year was 46. The extreme decline in the two years was a little less
ent of Agricultu
announcement Oct. 15 by the Departm helped carry the than 76%. During most of the bear market the decline in the railroad
have
Grain, cotton and potato prices
has been less drastic than that of the industrials. In both cases the
last month while stocks
declines have been more severe than any recorded in earlier declining
general level downward since the middle of
upded
have•ten
markets.
the prices of cattle, hogs, butter and eggs
In the lower portion of the diagram the two lines represent the course
according to
ward. Sale of electric energy in August 1931
of bond prices compiled from the. Dow Jones averages. The solid line
of
decline
a
showed
the National Electric Light Association
represents average prices of 10 high grade industrial issues, while the dashed
classed as high
• 2.5% from August 1930. For the 12 months ended Aug. line shows the prices of 20 railroad bonds, of which 10 arebond
prices rose
of second grade. The industrial
period
being
as
10
similar
and
grade.
a
from
4%
of
31, sales represented a decline
autumn
during the first part of the drop in stocks, and held up well until the
last year.
2503
FINANCIAL CHRONICLE
of 1930. Since then they have been declining, and recently they have fallen
sharply. The advance in the rail bonds continued into this year, but recently
they too have gone down.
The serious decline in bond prices has come exceptionally late in this
depression, instead of appearing as one of the early symptoms of general
recession as it usually has in past depression periods. So far it has proved
exceptionally severe as compared with earlier precedents. An upturn for
bonds will be a most favorable development when it comes, for most past
• recoveries have been ushered in by rising bond markets, and increased
volumes of bond transactions. Perhaps it has begun. . . .
Cars and Trucks.
There are more motor trucks on the public roads of this country than
there are freight cars on the railroads. Moreover, most of us see many motor
trucks many times a day, but we see freight cars only occasionally. Probably
it is mainly because of simple but direct influences such as these that most
of us have fallen into the easy assumption that the motor trucks are serious
competitors of the railroads in the business of carrying the freight of the
country from place to place. In reality the motor trucks do only a small
part of the hauling of freight, and most of that which they do is confined
to short distances.
In the diagram the upright columns on the left show the tons of carrying
capacity of all the freight cars on our railroads annually during the past
16 years. The columns on the right show the carrying capacity of all the
motor trucks. The capacity of the freight cars in the latest years is about
21 times as great as that of the motor trucks. We have no accurate data
showing the ton-miles of carrying actually accomplished by the two methods
of freight transportation, but the best estimates indicate that the ton-miles
of the freight cars may be about 30 times as great as those of the motor
trucks.
Most of the motor trucks are relatively light vehicles used for city deliveries and on farms. About three quarters of them are Fords and Chevrolets.
Less than 10% of them are common carrier trucks. There is no doubt that
they are carrying some freight that the railroads would like to have, but
It may well be that the aid they render the railroads as a supplementary
freight carrying agency more than offsets the loss they cause the roads
by direct competition.
However this may be, it is clearly true that there is no present prospect
or possibility of the motor trucks supplanting the railroads in carrying the
bulk of the freight that must be transported. Nearly three quarters of all
the freight moved consists of such commodities as coal, ore, lumber, and
agricultural products which must be carried in bulk for long hauls and at
low transportation costs. For such service we must continue to rely on the
railroads. The present difficulties of the railroads are not due primarily
to truck competition, but to two other causes. The first is that the production of freight has fallen to almost unbelievably low levels, and the second
is that the freight rates allowed the roads are too low.
Race for Liquidity.
The most difficult problem, as well as the most dangerous condition,
relating to this depression in this country, is reflected in the lines of the
diagram this we omit.-Ed.1 at the foot of this page. The solid line in the
diagram shows monthly for the years of this century how much money it
would have been necessary to invest in prime commercial paper to return
an income of $1 a year. The swings of the line are wide. In 1920 the investment necessary to bring in this return would have been tees than $13.
In the summer of 1931 the corresponding investment would have been $57.
or four and a half times as much. In both cases the investment would have
been an almost riskless one.
The dotted line shows the investment in good railroad bonds that would
have been required in order to bring the same return of $1 a year. The
swings are not nearly so wide. They range from $25 in 1902 down to $14
In 1920. However, the important fact about the diagram does not relate
to the character of the swings, but it is rather that the lines are acting in
this depression in ways that are very different from those followed in earlier
depressions. There are three of these earlier cases. In the depression of
1903-01 both lines moved down together, and then turned and recovered
together. The same things happened in the depression of 1907-08. Again
in the depression 10 years ago in 1920-21 the declines and recoveries of the
lines took place together, or nearly so.
In this depression the two lines started a fairly typical recovery after the
stock market crash in 1929. Then as business slowed down the banks bid
continuously more and more for the short-term, liquid, riskless funds
represented by the commercial paper. The solid line kept on rising to
heights never before approached. Meanwhile bond prices stopped advancing,
and dipped in the closing months of 1930, and then after a brief recovery
turned sharply down and continued to fall in 1931. Under present conditions a high premium is being bid for short-term liquid funds, while bonds
that cannot be turned into immediate credit through rediscounting at the
Reserve Banks are being sacrificed.
There has been increasing evidence in recent weeks that the most difficult
and serious problems of this depression were credit problems. The fundamental trouble has been that credit was being restricted and contracted,
instead of being expanded, and as long as this continued the depression
would continue. Virtually all strong financial institutions have been
striving to attain ever greater liquidity of assets. They have been bidding
competitively for the inadequate supply of commercial paper, and shortterm Federal obligations, on which money could be borrowed at Reserve
Banks, but they have been reluctant to buy or hold corporate bonds, or
to make slow loans, no matter how sound the ultimate security might be.
This policy of seeking maximum liquidity is one that is good banking for
individual institutions, but bad banking for the country as a whole. Its
influence has been making for lower security prices, instead of higher ones,
and for the restriction of new enterprise, instead of its stimulation. The
purpose of the plan proposed by the President is to break the vicious circle
of deflation that leads to further deflation, and to substitute credit expansion.
times the dividends. Only one of the 1881108 has suspended dividends. In
September of 1929 the outstanding common stock of the 25 corporations
had a market value of just over 21 billion dollars, and last month this had
declined to a little more than seven and one-half billions. Dividends were
running two years ago at an annual rate of about 690 millions, and now are
about 580 millions.
The middle line represents prices as multiples of earnings available for
common dividends. At the peak of the market these stocks sold for about
19 times earnings, and last June for 17 times. This slight decline in the priceearnings ratio illustrates the faith that the investing public has in the future
earning capacity of stocks. The ratio is twice as high as it was from 1924 to
1925.
In general it has been the practice of these corporations to pay out as
dividends about three-fifths of the earnings available for such purposes.
The average over the six-year period prior to 1930 was 61%. Earnings
have fallen in the past two years far more rapidly than dividends have been
reduced. In the first quarter of this year dividend payments rose in ratio
to 140% of earnings, and at the end of the second quarter they were still
above 100%.
Federal Reserve Board Reports Increase in Department
Store Sales in September.
Preliminary figures on the value of department store sales
show an increase from August to September of somewhat
less than the estimated seasonal amount. The Federal
Reserve Board's index, which makes allowance both for
number of business days and for usual seasonal changes,
was 84 in September on the basis of the 1923-1925 average
as 100, compared with 88 in August and 91 in July. The
Board's advices Oct. 10 also state:
In comparison with a year ago, the value of sales for September, according to the preliminary figures, was 14% smaller. The aggregate for the
first nine months of the year was 9% smaller.
PERCENTAGE INCREASE OR DECREASE FROM A YEAR AGO.
Federal Reserve District.
Reston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
*September.
Jan. 1 Number of Number
of
to
Reporting
Cities.
Stores.
Sept. 80.*
+2
-12
-16
-26
-6
-23
-19
-21
-19
-20
-27
-12
99
52
42
34
57
24
50
20
18
27
18
72
-7
-8
-10
-11
-4
-10
-12
-13
-8
-10
-14
-10
_.9
L.*
0..4Ca 0CO a.du O.O.C040
OCT. 17 1931.]
225
513
-14
Total
*September figures preliminary: in most districts the month had the same number
year.
last
and
year
this
days
business
of
Annalist Weekly Index of Wholesale Commodity Prices.
The "Annalist" Weekly Index of Wholesale Commodity
Prices advanced to 100.3 for the week ended Tuesday,
Oct. 13, after having stood unchanged for three weeks at
99.9. The "Annalist" continues:
Practically the entire increase was caused by the general advance in
domestic agricultural products. The immediate response of these commodities to the President's financial proposals and the ensuing stock
market activity reflects again their dominance by external factors. A
revival either of business activity or of confidence as to the future would
spell a general recovery of demand, and any signs of either, whether well
founded or not, are eagerly clutched at.
THE ANNALIST WEEKLY INDEX OF WHOLESALE COMMODITY PRICES
(1913-100.)
Farm products
Food products
Textile products
Fuels
Metals
Building materials
Chemicals
Miscellaneous
All ortmmndltlm
Oct. 13 1931.
Oct. 6 1931.
Oct. 14 1930.
83.2
113.0
86.4
125.6
100.4
113.1
97.3
90.4
100.2
*81.4
113.5
•86.3
126.2
100.5
113.5
*97.3
92.2
111.8
131.5
107.4
153.0
105.9
AO A
121 fl
131.1
106.0
96.5
•Revised.
Weekly Wholesale Price Index of the National Fertilizer
Association Shows Slight Gain for Week Ended
October 10.
The weekly wholesale price index of the National Fertilizer
Association, which is based on 476 price quotations computed weekly, showed a small gain for the first time in
several weeks. The computation for the week ended Oct. 10
indicated a rise of one fractional point in the general index
number. During the preceding week the general index
number declined one full point, which was the largest
decline in several months. The latest index number is
66.4; a week ago it was 66.3; while a month ago it was
67.6. A year ago the index number stood at 83.3. (The
index number 100 represents the average for the three
years 1926-1928.) The Association's index further states,
under date of Oct. 12:
Stock Prices.
Prices of high grade common stocks have now cancelled in their long
decline the advances of the bull market that culminated two years ago.
If we measure stock price levels by the ordinary averages, we find that groups
of representative industrial issues are selling at about the quotations of
1924, but that they are still far higher than they were in 1921. If we measure
prices as multiples of dividends, we shall reach the same conclusions, but
K they are considered as multiples of earnings, they are still relatively high.
In the diagram the highest of the three lines represents the monthly
prices of the common stocks of 25leading corporations expressed as multiples
during
of the dividends being paid. The line fluctuates about the 18 level
about 18
the first three years of the period, showing that prices averaged
times dividends, and that the rate of return was not far from 6%. In 1927.
the line
Of the 14 groups comprising the index, four advanced, four declined
1928, and 1929 prices rose far more rapidly than dividends, and
no change during the latest week. The groups which
climbs until in August of 1929 it shows that stocks were selling for almost and six showed
were fats and oils, foods, fuel and miscellaneous commodities.
advanced
3%.
more
than
little
a
32 times the dividends, and were yielding
were lust less than The declining groups NVETO textiles, grains, feeds and livestock, metals,
By September of 1931 prices had dropped until they
normal level in 1924. 1925, and building materials. The largest gain was shown in the group of
18 times the dividends, which was about the
were less than 12 foods, due to improved prices in a number of the important commodities.
and 1928. At the low levels of early October the prices
[VoL. 133.
FINANCIAL CHRONICLE
2504
The largest loss was noted in the group of grains, feeds and livestock. of the way out of the depression. His observations were
The losses in the other groups were comparatively small.
mailed to the Association's 25,000 members Oct. 5.
Price changes during the latest week were somewhat larger in number
Balancing these favorable factors, however, he says, are
and
advanced
commodities
than for the preceding week. Twenty-one
33 commodities declined. While a larger number of commodity prices the lack of relief in the unemployment situation, continudeclined than advanced, it should be noted that listed in the number of ation of smaller car loadings and the generally reduced
commodities that advanced were many of the most heavily weighted
commodities. Among the important commodities that advanced during volume of business, according to the credit head. A fourth
the latest week were silk, lard, butter, eggs, sugar, flour, potatoes, wheat, item that is not entirely favorable is one called "pantry
oats, choice cattle, heavy hogs, silver, rosin, bituminous coal, rubber banking," which Mr. Heimann cites as being responsible
and leather. Listed among the commodities that declined were cotton,
wool, burlap, cottonseed meal, apples, corn, bran, light weight hogs, in a large measure for the sudden and rapid rise of money
sheep, lambs, pig iron, heavy melting steel, gasoline, hides, and coffee.
in circulation throughout the country. Mr. Heimann says:
The index numbers and comparative weights of the groups are shown
Any one possessing even a fundamental understanding of economics
below:
ought to realize that taking money out of circulation can have but one
WEEKLY WHOLESALE PRICE INDEX-BASED ON 476 COMMODITY tendency, and that is to prolong the present depression. While there has
PRICES (1926-1928=100).
been some mismanagement of banks, there can be no doubt that a great
many of our banking institutions were soundly managed, but nevertheless
Latest
Per Cent
went down in the storm, simply by reason of a lack of faith on the part of
P18
Week
Each Group
Oa. 10 canny Month Year
Sears to the
depositors. Frenzied mob psychology, as well as vicious gossip, have
Groups.
Apo.
Apo.
Week.
1931.
Total hula.
started runs that have ended in disaster, not alone for the banks and their
stockholders, but for the entire community and the nation as well.
86.3
70.7
70.8
71.3
Foods
23.2
83.0
59.3
Our citizenry does not seem to realize that if a bank is soundly managed
58.6
58.8
Fuel
16.0
82.7
54.9
50.4
49.8
Grains, feeds and livestock
12.8
there is a certain moral obligation on the part of a depositor to show faith
66.8
54.9
50.0
49.5
Textiles
10.1
in times of stress. The entire banking system, as well as the entire credit
78.6
67.6
65.9
66.1
Mlseedaneous commodities
8.5
of the world,is built upon confidence, and when that is destroyed the nation
91.8
88.6
88.6
88.6
Automobiles
6.7
87.0
77.9
76.3
5.5
76.0
Building materials
suffers. Any citizen who resorts to "pantry" banking when there are
82.4
77.0
75.8
75.6
Metals
C.2
good. sound, conservatively managed banks in the community-and there
97.3
89.3
88.8
88.8
40
House furnishings
are few communities in the United States that do not possess these-is not
79.3
59.2
61.5
63.1
3.8
Fats and oils
a good citizen.
95.0
86.8
86.8
86.8
Chemicals and drugs
1.0
86.3
75.3
71.2
71.2
.4
Fertilizer materials
Regarding unemployment, the credit head says that "the
95.9
81.2
80.1
80.1
Mixed fertilizer
.4
95.6
95.2
95.2
95.2
Agricultural implements
.3
unemployment situaton is indeed alarming, and suffering
is of wide extent. Every one deplores this condition and
willing hands, unable to find work, deserve our sympathy
and our help. But we will never help them by jamming
Activity-September
Annalist's Index of Business
dole legislation through Congress. The only answer to
Figures 2.5% Below August-New Low Level for unemployment is employment; for any dole system breeds
indolence and serves as a deterrent to the return of prosPost-War Period.
perity."
The "Annalist" Index of Business Activity for September
again shows a decline to a new low level for the post-war
Trend of Business in Hotels During September.
period, the preliminary figure for that month being 71.0,
In their survey of the trend of business in hotels, Horwath
as against 73.5 for .August and 78.2 for July. The
"Annalist" adds under date of Oct. 16:
& Horwath state that total sales decreased 18%, room sales
And a further sharp decrease in freight car loadings was again a major
16% and restaurant sales 21%. These represent little
the
of
factor in the decrease shown by the combined index, although all
other components for which September data are available, except the ad- change from previous monthly comparisons of this year with
justed indexes of cotton consumption and zinc production, also show last. The survey further states:
inn n
•n ............• ........1.1....4
no A
an R
070
*552
Pig iron production
Steel ingot production
Freight car loadings
Electric power production
Bituminous coal production
Automobile production
Cotton consum ptlon
Wool consumption
Boot and shoe production
Zinc production
September.
August.
July.
39.4
37.3
67.3
.81.0
69.2
*39.9
83.9
AZZ'ooa-4<:4-4"..a.
b
decreases from the preceding month. Among these other components
which declined, the most important, as measured by their influence on the
composite index, were automobile production and steel ingot production,
with electric power production, pig iron production and bituminous coal
production contributing lesser amounts to the total decline.
The textile industries, especially cotton and woolen goods, continue to be
the bright spots of the present industrial situation. After a sharp reaction
which carried it from a July peak of 89.2 to 81.7 in August. the adjusted
index of cotton consumption rose to 83.9 for September; and the adjusted
index of wool consumption for August (the latest month for which data are
available) stands at 115.0, or 15% above estimated normal. Activity in
the boot and shoe industry was also well maintained through August, for
which month the adjusted index stands at 103.8, or 3.8% above estimated
normal.
Table I gives for the last three months the combined index and its components, each of which is adjusted for seasonal variation and long-time
trend. Table II gives the combined index by months back to the beginning
of 1926. The adjusted index of electric power production is based on an
estimated output of 7,380,000,000 k. w. h. in September, as against the
Geological Survey total of 7,629.000,000 k. w. h. in August and 7,765,000,000 k. w. h. in September 1930.
TABLE I-THE "ANNALIST" INDEX OF BUSINESS ACTIVITY AND
COMPONENT GROUPS.
47.4
45.6
74.0
86.0
73.8
59.6
89.2
129.8
103.3
44.8
*93.6
45.3
January
February
March
April
May
June
July
August
September
October
November
1931.
1930.
1929.
1928.
1927.
1926.
74.4
76.2
78.0
80.8
78.1
76.5
78.2
73.5
*71.0
---
95.0
94.2
91.2
05.0
90.0
89.0
86.4
83.1
82.4
79.5
76.1
751
105.5
106.1
104.3
108.8
110.1
108.9
109.9
108.1
107.3
105.7
96.9
02.1
0000000000,2C,C,
CO CO
NW CAN tOO CO
78.2
73.5
*71.0
Combined index
•Subject to revision.
TABLE II-THE COMBINED INDEX SINCE JANUARY 1926.
102.2
104.7
106.9
104.4
104.8
103.4
101.5
101.8
100.9
98.2
95.5
93.7
102.3
103.2
104.7
103.7
101.6
103.2
102.8
105.0
107.1
105.7
105.7
105.0
rs...........1....
•Subject to revision.
Executive Manager of National Association of Credit
Men Notes Favorable Trade Factors, Opposes
Dole and "Pantry Banking" Methods.
Stabilization of commodity prices, a slight improvement
in international affairs and the elimination of wasteful
measures in business are cited by Henry H. Heimann,
Executive Manager of the National Association of Credit
Men, in his monthly review of business, as factors which
may well be of sufficient importance to mark the beginning
The occupancy was 58%, and the increase over August was the same
as in previous years-about 4 points. The room rate declined 7 points
from the same month of 1930-saghtly less than in recent months.
Twelve per cent of all contributors had higher sales this September than
fast-not as high a percentage as in August, but higher than the average
for the year so far.
Detroit was the only city which showed an increase in sales over last
year, and that was due to the American Legion Convention. The gain
was entirely in room business-10%-the restaurant falling 5% below
September 1930. The rates of decrease of all the other groups are so
nearly alike that it looks as though they are finally reaching the same level,
and usually when that happens the upturn begins. However, increases
in sales over the corresponding months of the previous year are not likely
In the near future, because of the general shrinkage in the country's pocketbook. It is obvious, therefore, that the cost of operating hotels must be
adjusted to the new level of business.
The following comparison with 1928 shows that several of the groups
have continued to drop, but the total decrease is the same as in August:
April.
New York
Chicago
Philadelphia
Washington
Cleveland
Detroit
California
Other cities
Total
Decreases from Same Months hi 1928.
June.
May.
July. August. Septem'r
-24.1% -25.1% -28.1% -29.4% -31.4% -32.2%
-18.8 -16.9 -19.4 -31.5 --28.3 -29.0
-27.2 -28.3 -34.9 -34.5 --32.3 -38.7
-19.5 -22.7 -16.3 -25.5 --28.3 -27.7
-8.5 --21.2 -38.7
-20.1 -20.1 -26.1
-24.3 -26.0 -32.9 -38.4 --40.0 -23.9
-21.1 -22.3 -16.9 -27.9 --28.2 -33.3
-17.1 -21.4 -27.5 -20.7 --26.7 -24.4
-19.7% -22.4% -23.7% -23.9% - 27.6% -27.5%
Horwath & Horwath also furnish the following ana ysis:
Sales.
Occupancy,
Roonsliale
Analysis by Cities in
PerCentof
Which Horvath se PerCentofInc.(4-)orDec.(
Thts Same Ma. Inc.(+)
Horwath Offices
Total. Rooms. Bestow's. Month. Lao Year orDec.(-)
Are Located.
New York City
Chicago
Philadelphia
Washington
Cleveland
Detroit
CalLfornla
Texas
All other cities rePorrg
Total
58
-20
-20
-18
19
-16
+4
--18
19
--20
--18
--18
--14
00.-15
--12
+10
-17
--18
-19
-22
-23
-22
-24
-21
-5
-19
-21
-21
53
64
47
46
63
57
41
55
59
72
52
49
70
53
45
63
68
-18
-16
-21
ss
64
--10
--10
--4
--9
--2
+2
-8
-6
-7
-7
Loading of Railroad Revenue Freight Shows
Some Increase.
Loading of revenue freight for the week ended on Oct. 3
totalled 777,837 cars, the highest for any week so far this
year, the Car Service Division of the American Railway
Association announced on Oct. 13. The previous high week
this year was that of May 2, when 775,291 cars were loaded
with revenue freight. The total for the week of Oct. 3 was
an increase of 39,808 cars above the preceding week due to
an increase in the loading of all commodities. It was,
however,a reduction of 193,418 cars below the corresponding
OCT. 17 1931.]
FINANCIAL CHRONICLE
week last year and a reduction of 402,110 cars under the
same week two years ago. Details are outlined as follows:
29,343,825
36,124,956
Allegheny DistrictBaltimore dr Ohio
Bessemer & Lake Erie
Buffalo Sc Susquehanna
Buffalo Creek & GauleX
Central RR.of New Jersey
Cornwall..
Cumberland & Pennsylvania
Ligonier Valley
Long Island
Pennsylvania System
Reading Co
Union (Pittsburgh)
West Virginia Northern
Western Maryland
Total
Pocahontas DistrictChesapeake Sc Ohio
Norfolk & Western
Norfolk & Portsmouth Belt Line
Virginian
Total
Southern DistrictGroup AAtlantic Coast Line
Clinch field
Charleston & Western Carolina
Durham & Southern
Gainesville Midland
Norfolk Southern.
Piedmont Sc Northern
Richmond. Fred. & Potomao
Seaboard Air Line
Southern System
Winston-Salem Southbound
Total
Group BAtabarna, Tenn. & Northern
Atlanta. Birmingham & Coast
AU.& W.P.-West RR.of Ala
Central of Georgia
Columbus Sc Greenville
Florida East Coast
Georgia
Georgia & Florida
Gulf Mobile Sr Northern
illinois Ceatrni System
Louisville dr Nashville
Macon, Dublin & Savannah
Mississippi Central
Mobile & Ohio_
Nashville, Chattanooga & St.L
New Orleans Great Northern
Tennessee Central
41.099,973
The foregoing, as noted, cover total loadings by the
railroads of the United States for the week ended Oct. 3.
In the table below we undertake to show also the loadinns
for the separate roads and systems. .It should be understood, however, that in this case the figures are a week behind those of the general totals-that is, are for the week
ended Sept. 26. During the latter period only 13 roads
showed increases over the corresponding week last year.
Among them are included the New York Ontario & Western
Ry., the Pittsburgh & West Virginia Ry. and the Louisiana
& Arkansas Ry.
Total
Total Revenue
Freight Loaded,
1931.
Eastern DistrictGroup ABangor & Aroostook
Boston & Albany
Boston & Maine
Central Vermont
Maine Central
N.Y. N. H.& Hartford
Rutland
Total
Group 13Buffalo, Rochester & Pittsburgh
Delaware & Hudson
Delaware Lackawanna & West_
Brie
Lehigh & Hudson River
Lehigh Sr New England
Lehigh Valley
Montour
New York Central
New York Ontario Sc Western
Pittsburgh & Shawmut
Pitts. Shawinut & Northern
Ulster & Delaware
Total
Group C
Ann Arbor
Chicago. Ind.& Louisville
C. C. C.& St. Louis
Central Indiana
Detroit & Mackinac
Detroit & Toledo Shore Line
Detroit, Toledo & Ironton
Grand Trunk Western
Michigan Central
Monongahela
New York. Chicago & Si. Louis
Pere Marquette
Pittsburgh dr Lake Erie
Pittsburgh & West Virginia.
Wabash
Wheeling & Lake Erie
1930.
1929.
Total Loads
Received from
Connections.
1931.
1930.
1,292
3,668
9,917
773
3,559
13,001
878
2,056
3,825
11,567
937
4,596
15,355
862
2,368
4,238
14,161
1,067
5,037
19,198
841
301
5,587
10,981
3.021
2.287
12.858
1,178
391
6,345
12,954
2,916
3,383
14,453
1,530
33,088
39,198
46,910
36,213
41,972
3.847
6,776
11,053
13,634
188
1,889
9,046
2,246
25,216
2,336
497
419
48
5,078
9,711
12,184
16,037
221
2,025
10,486
2.673
33,556
1,660
611
550
57
6,222
11,551
17,224
22,449
322
3.476
14,594
2,894
42,537
2,288
795
598
60
1,208
7,574
6.299
14,958
2,210
1,238
.
7,007
68
29,287
1,930
23
239
131
1,912
9,031
7,083
19,157
2,374
1,705
8,565
109
37,247
2.563
42
434
103
77,195
94,849
125,020
72,172
90,320
614
1,983
9,518
60
372
231
1,463
3,157
6,337
3,582
5,582
4,684
4.321
1.412
6.961
3.576
676
2,419
11,842
73
443
241
2.205
7,793
8,885
5,504
6.650
7.725
7,122
1,267
6,963
4,313
768
3,080
15,104
91
796
946
3,507
5,326
13.233
7,248
8.432
10,834
9,704
1,744
9,821
6,799
1.111
2.110
11,776
90
126
1,871
834
5,326
7.599
223
8,733
3,914
4,699
563
8,020
2,428
1,751
2,886
15.674
102
144
2.532
1,471
7,529
9.952
476
12,325
5,510
7.780
1.026
11,350
3,281
53.353
70,104
99,350
59,423
83.839
Grand total Eastern District_ 163,636
204,151
271,280
167.808
216,131
Total
Total Loads
Received from
Connections.
1931.
1930.
1929.
1931.
1930.
29,223
3,245
573
150
8,284
608
324
138
1.620
73,614
16,017
5,614
65
3,405
37,752
6,088
664
204
10,763
406
394
173
1,710
92,671
17.826
11,998
49
3,908
49.592
7,279
589
300
14,990
706
511
241
1.768
123,060
23,516
14,367
59
4,651
16,292
1,375
199
8
12,021
39
24
16
3.359
41,441
18.044
2,958
21,241
3,363
371
4:10
14,654
111
38
32
4,262
52,967
23,146
7,420
3
4,980
142.880
184.606
241,637
100,073
132.596
24,260
19,001
1,072
3,866
28,316
23,460
988
4,240
33,874
28,558
1,100
4,829
8,750
4,136
1,609
619
10.586
.5,994
2,421
485
48,199
57,004
68,361
15,114
19,486
8,858
1,210
412
164
62
2,080
521
388
7,948
22,742
200
12,610
1,433
736
169
37
2,445
496
468
10,340
27,039
231
12,336
1,554
515
258
79
2,645
575
578
10,009
33,131
222
5,305
1,238
787
324
98
1,395
750
2,529
3,378
12,869
1,160
6,326
1,368
1,016
372
104
1,691
1,032
2,687
4,404
15,907
1,236
44,585
56,054
61,902
29,833
36,143
315
713
702
3,972
271
469
1,135
504
934
24,325
19,425
160
x227
2,262
2,710
906
577
256
973
914
4,764
447
539
1,338
715
1.345
29,040
25,024
233
324
2,996
4,297
961
716
305
1,076
1,111
5,117
828
676
1,175
408
1,954
39.219
32,105
181
498
4,106
5,011
1,111
717
175
501
1,054
2,273
254
485
1,308
232
812
9.291
3,885
260
361
1,259
2,028
392
604
210
627
1,475
3,022
409
858
1,476
500
1,293
12.743
5,721
373
318
2.001
2,617
454
723
59,607
74,882
95,601
25,174
34.820
Grand total Southern Dist- _ 104,192
130,930
157,503
55,007
70.963
1,471
19.629
2,927
22,414
3.970
9,909
779
3,862
359
13,681
712
2,159
6,212
11,100
1.102
1.561
27,418
3.888
28,374
5,480
15,470
1.477
7,225
485
22,842
864
3,272
8.915
15.179
1,635
2.110
35.289
3.910
35.282
6.407
21,703
2,173
9,659
631
28,333
881
3,830
11,733
17,980
2,102
1,988
9,727
2,357
7,449
3,518
120
434
4,202
189
2,378
389
1,737
2.284
2,615
1,159
1,715
13,613
3,684
9,999
5,082
235
702
7,925
282
2.891
435
2,539
2,815
3.370
1,685
100,286
144,085
182,023
40.456
56,972
25,795
200
3,827
18,698
14,945
3,004
1,332
3,775
661
1,889
1,171
172
21,172
249
305
15,884
922
1,516
32,430
323
4,834
25.633
19,173
3,810
1,452
4,691
044
2,165
1,583
215
28,184
308
289
19,341
1.061
2,159
335.968
435
4,794
31.961
24,289
5.161
2.745
6,188
1,046
2,361
1.886
402
32,818
454
455
24,482
1,047
2,205
5,518
42
3,355
6,750
7,922
2,176
1,297
2,684
13
1,315
314
96
3,641
219
855
9,042
9
1,897
7.734
49
3,330
9,408
10.265
3.257
1,352
3,565
14
1,796
419
40
4.872
358
1,236
11,890
27
2,662
115,517
148.295
179,037
46.145
62,274
204
224
259
1,560
ISO
2.474
347
2,055
2,207
217
1.043
87
6,336
17,378
40
99
10.336
3,239
394
7,934
4,717
1,950
39
238
537
398
2,134
278
3,009
348
2,676
1,916
207
1,391
143
7.664
22.721
38
151
13,981
3,626
497
10,312
6,045
3,237
39
294
635
476
2,080
498
2.399
544
3,220
2.448
461
1,610
223
9.240
30,842
67
222
18.046
5.060
448
12 280
7,550
4,551
103
2,550
478
164
1,376
33
2,137
929
1,900
1,144
685
223
298
2,533
8,168
49
124
3,484
1,205
260
3,806
3,893
2,353
52
3,734
464
267
1.864
58
2,281
1.440
2,771
1,214
904
758
631
3.804
10,892
37
105
5,252
1,983
521
4,641
3,447
3,321
71
63.319
81,586
103.298
37,844
50,460
Northwestern DistrictBelt Ry. of Chicago
Chicago & North Western
Chicago Great Western
Chic, Milw. St. Paul dr Paciflo
Chic St. Paul, Minn. St Omaha
Duluth, Missabe & Northern_ _
Duluth, South Shore & Atlantic
Elgin, Joliet & Eastern
Ft. Dodge, Des. M.& Southern
Great Northern
Green Bay & Western
Minneapolis & St. Louis
Minn. St. Paul dr S. S. Marie_
Northern Pacific
Spokane, Portland & Seattle
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS!
(NUMBER OF CARS)-WEEK ENDED SEPT. 26.
Railroads.
Total Revenue
Freight Loaded.
Railroads.
Miscellaneous freight loading for the week of Oct. 3 amounted to 292,284
ears, an increase of 18,031 cars above the preceding week this year but
101,774 cars under the corresponding week in 1930 and 187,645 cars under
the same week in 1929.
Loading of merchandise loss than carload lot freight totalled 219.097 cars,
an increase of 2,278 cars above the preceding week this year but 25,746
cars below the corresponding week last year and 53,902 cars under the
same week two years ago.
Grain and grain products loading for the week totalled 37,731 cars, an
increase of 748 cars above the preceding week this year but 4,842 cars under
the same week last year and 11,818 cars below the corresponding week
two years ago. In the Western Districts alone, grain and grain products
loading for the week ended on Oct. 3 totaled 25,508 cars, a decrease of
4,196 cars below the same week last year.
Forest products loading totaled 25,716 cars, an increase of 181 cars
above the preceding week this year but 15,836 cars under the same week
in 1930 and 34,974 cars below the corresponding week two years ago.
Ore loading amounted to 27,724 cars, an increase of 1,918 cars above the
week before but 13,706 cars below the corresponding week last year and
38,184 cars under the same week in 1929.
Coal loading amounted to 141,957 cars, 13,234 cars above the preceding
week but 25,911 cars below the corresponding week last year and 60,600
cars under the same week in 1929.
Coke loading amounted to 5,719 cars, 1,004 cars above the preceding
week this year but 3,047 cars below the same week last year and 6,437 cars
below the same week two years ago.
Live stock loading amounted to 27,609 cars, an increase of 2,414 cars
above the preceding week this year, but 2,556 cars below the same week
last year and 8,550 cars under the same week two years ago. In the Western
Districts alone, live stock loading for the week ended on Oct. 3 totaled
21,679 cars, a decrease of 2,525 cars compared with the same week last year.
All districts reported reductions in the total loading of all commodities,
compared not only with the same week in 1930 but also with the same
week in 1929.
Loading of revenue freight in 1931 compared with the two previous
years follows:
1931.
1930.
1929.
3,490,542
4,246.552
4,518,609
Five weeks in January- :1 :?,
'
2_-.
2,835,680
3,506,899
3,797 183
Four weeks in February
2,939,817
3,515,733
3,837,736
Four weeks in March
2,985,719
3,618,960
3,989,142
Four weeks in April
3,736,477
4,593,449
5.182.402
Five weeks in May
2,991,749
3,718,983
4.291,881
Four weeks in June
2,930.767
3,555,610
4,160,078
Four weeks in July
3,747,284
4,671,829
5,600,706
Five weeks in August
2,907,953
3,725,686
4,542 289
Four weeks in September
777,837
971,255
1179,947
Week of Oct. 3
Total
2505
Total
Central Western DistrictAter'. Top.& Santa Fe System..
Bingham Sc Garfield
Chicago Sc Alton (Alton)
Chicago, Burlington dr Quincy
Chicago, Rock Island Sc Pacific
Chicago Sc Eastern Illinois
Colorado Sc Southern
Denver & Rio Grande Western_
Denver Sc Sait Lake
Fort Worth & Denver City
Northwestern Pacific
Peoria Sc Pekin Union
S. P. (Pacific)
St. Joseph Sc Grand Island
Toledo, Peoria Sc Western
Union Pacific System
Utah
Western Pacific
Total
Southwest DistrictB
Alutroin
InAo Sio
i-ull
t(
1)
ic
ercnIsland
Fort Smith Sc Western
Gulf Coast Lines_
Houston Sc Brazos Valley
International-Great Northern
Kansas, Oklahoma & Gulf
Kansas City Southern
Louisiana Sc Arkansas
1 itch fle.d & Madison
Midland Valley
Missouri dr North Arkansas
Missouri-Kansas-Texas Lines
Missouri Pacific
Natchez & Southern
Quanah •ems & Pacific
St. Lout., tlan Francisco
St. Lout.. Southwestern
San Ant..nlo. Uvalde Sc
Southern Pay, In Texas & La
Texas Sc Pacific
Terminal RR. Asso. of St. Louis
Weatherford Min. Wells Sc Nor,
I
Total
Previous figure.
[VOL. 133.
FINANCIAL CHRONICLE
2506
Chain Store Sales During September Showed a Decline
of About 33% As Compared with 1930.
According to a compilation issued by Merrill, Lynch &
Co., of this city, 44 chain store companies including three
mail order concerns show total sales for the first nine months
of 1931 of $2,450,431,379, against sales of $2,554,823,130,
in the corresponding period of 1930, a decrease of 4.08%.
Three mail order companies alone show sales for the first
nine months of 1931 of $414,377,043, against $468,266,313,
in the first nine months of 1930, a decrease of 11.50%.
Excluding the mail order concerns, 41 companies show sales
for nine months of 1931 of $2,036,054,336, against sales of
$2,086,556,817, in the same period of 1930, a decrease
of 2.42%.
Results for September 1931 as reported by 44 chain store
companies, including three mail order concerns, show total
sales of $279,183,721, against $294,704,280, in September
1930, a decrease of 5.26%. The three mail order concerns
alone show sales for September of $44,513,096, against
$52,211,682, in September 1930, a decrease of 14.74%.
Excluding the mail order concerns, 41 chain store companies
show sales for September 1931 of $234,670,625, against
$242,492,598, in September 1930, a decrease of 3.22%. A
corporative table follows:
Month of September.
1931.
1930.
Dec.
$
$
%
3.0
Gt. AU.& Pacific.:74,641,542 a77,019,441
Bears, Roebuck_ __ c24,431,663 c28,030,215 12.8
2.7
8..W.Woolworth_ 21.732.066 22,353,063
9.8
Kroger Groc.&Bak el 7,775.250 el 9,710,244
4.6
Safeway Stores.- _ 17.152,488 17.974,158
Montgomery Ward 17,505,467 21,332,576 17.9
8.6
14,576,703 15,956,478
J. C. Penney
2.7
10,956.810 11,265,218
S.S.Kresge
First Nat.Stores- _ 110,210.402 110,200,760 x0.09
3.8
MacMarr Stores-. 6,795.044 7,063,385
6,162,333 6,850,862 10.0
National Tea
5.570.271 5,286,333 x5.3
W.'I'. Grant
3.3
S.H.Kress Co-- - 5,294,860 5,478.003
4,342,185 4,081,440 16.3
Walgreen Co
0.6
McCrory Stores
3,259.761 3,278,310
a2.803,321 a2,523,352 111.1
H.C. Bohaek_
F.& W. Grand2.772,314 2,748,980 x0.8
Silver Stores_
a2,700,771 a2.675,021 x1.3
Grand Union
2,388,478 38.2
J. J. Newberry-- - 2,584.79
9.6
Nat.13ella8 Hess._ 2,575,961 2,848,891
Dominion Stores.. a2,043,597 al.702.309 120.0
2,163,927 2,135,571 31.3
Childs
8.9
Daniel Reeves_ __. a2,107,651 a2,315.482
4.1
2,095,921 2,186,108
Melville Shoe
2,006.391 1,934,364 13.7
Lerner Stores
1,695,09r 2,036.809 16.7
McLellan Stores
G.C.Murphy_ _ _ 1,489.681 1,343,980 110.8
7.7
Interst. Dept.131s. 1,404.991 1,522,468
1,366,111 1,314,415 x3.9
Peonies Drug Sts
Waldorf System
1,296,260 1,288,971 58.5
1,185,125 1,165,044 x1.6
Neisner Bros
1,122,747 1.472,003 23.7
Lane Bryant
Western Auto Sup.
6.9
972,500 1,044,500
(Kansas City)_ 6/30,043 x10.3
750,305
Schiff Co
481,047 x30.5
628,105
Bickfords
555.142
625,741 11.3
Amer.Dept.Stores
471,757 x8.8
513.210
Edison Bros
381.294 x7.7
Winn & Lovett_
410.873
348,901 113.7
396.746
Kline Bros
8.5
414.564
379,205
Sally Frocks
302.512 16.7
Nat. Shirt Shops
251.910
177.301 :19.6
212.189
M.H.Fishman _ _ _
146,959 xl .7
149,596
1Cay bee Stores_ _
8.5
145,928
133,393
Morison Flee.Sup.
Total 44 chain
store & mall
4 79,183.721 294.704,280
order cos
44,513,09 52.211.682
B mail order cos
east of the Rockies was $222,843,000.
CONSTRUCTION CONTRACTS AWARDED-37 STATES EAST OF THE
ROCKY MOUNTAINS.
New Floor
No. of
Projects. Space(Sq. Ft.)
Month of September1931-Residential building
Non-residential
Public works and utilities
1930.
$
I
%
2.2
b 5962559621609817691
7.4
d232908 349d251637 498
0.8
194,797.11: 196,460,281
4.6
f174179.358c182660.843
5.4
156,445,223 165.447,527
157.024,734 191,153,121
17.8
117.968,737130.415,127
9.5
99.893.424 101,015,230
1.1
80,244,118 82,370,942
2.5
60,157.207 64,934,771
73
57.682,775 63,442,049
9.0
49,277,825 45,493,443
x8.3
46.527,657 45,978,362
x1.2
41,052,322 38,685,843x6.1
29,062,811 29,217,086
0.5
123.069,65740.646,280 111.7
1.1
24.869,598 25.168.902
3.0
125.610.858 126.403,855
15.6
20,473,196 19.371.977
24,443,960 25.475,694
4.0
18.5
119.058.908117,927.576
17,951,383 19,939,865
9.9
123,331,555.125.330.665
7.89
19.865,891 21,097,025
5.8
16.2
18.234,312 17,160,776
81
14,491,559 15.767.573
12,945,678 11,126.751 :16.3
x2.6
15.143,599 14,759,336
14.4
12,818,545 12,274.839
1.9
11,584,689 11,812,214
x4.4
11.045.244 10,573,150
7.2
11.789,717 12,705.649
9,269,400 10.234,600
7,299.337 7.000,836
5,851,691 4,347.443
5.771,767 6,212,134
4,331,272 3.074.851
3,800,271 4.153,785
3,507,451 3.026.590
3,298,597 3.439,830
2.618,411 3.137,880
1,726,171 1,410.053
1,324,560 1,178,718
1,325,161 1,334,442
9.4
24.2
:34.6
7.0
:40.8
8.5
:17.9
4.1
16.5
x22.4
212.3
06
5.26 24504313792554823130
14.74 414,377.043468,268.313
4.08
11.50
The F. W. Dodge Corporation Contracts Show Scattered Gains for September.
The valuation of construction contracts awarded in the
37 States east of the Rocky Mountains in the month of
September 1931 was $79,743,800 less than in September
1930, the figure for September of this year being $252,109,700
against $331,863,500 in the same month last year. The decrease in the valuation for the nine months ended Sept. 30
1931, in comparison with the same period last year was
$1,119,691,200, the totals being $2,563,707,800 against
$3,683,399,000.
Exceptions to the rule of a general loss of 26% in third quarter construction contracts for the 37 States east of the Rockies from the third quarter
of 1930 are found in certain construction class gains by F. W. Dodge Corp.
Among these gains Is a 29% advance in engineering in Upstate New York.
6% in the same class In the Middle Atlantic district; 34% in a non-residential building in the Chicago territory; 3% in non-residential and 248%
in engineering in the New Orleans district, and 14% in engineering in Texas.
Two of the 13 Dodge territories east of the Rockies showed gains in total construction for the third quarter as contrasted with the 1930 period.
During the month or September non-residential building was the most
important major construction class forming 3112.417,500 of the entire $252,700 total for the month. Residential building amounted to $54,552.800.
and public works and utilities to $85,139,400.
An advance over September 1930, is found in the 121.545,400 total for
the Upstate New York territory which compares with $16,039,400 in Sep-
$54,552,800
112,417,500
85,139,400
252,109,700
19.688.000
20,021,800
1,483.500
98.534,600
124,236.800
109,092,100
11,495
41,193,300
331,863,500
50,1302
22,351
15.384
151,345,300
136.392,100
5,773.500
669,394,700
911,647,700
982.665,460
88,537
297,510,910
32,563,707.800
58.183
31,509
16.901
174.153,700
221,786,500
12,804,700
844,949,200
1,455,176,200
1,383,273,600
106,593
408,744,900
$3,683,399,000
1931-Residential building
Non-residential building
Public works and utilities
Total construction
12,992,000
16,722,900
353,200
30,068.100
Nine Months Ended Sept. 301931-Residential building
Non-residential building
Public works and utilities
Total construction
5.096
2,209
1,800
9,105
Total Construction
Dec.
Valuation.
6.097
3,252
2,146
Total construction
1930-Residential building
Non-residential building
Public works and utllitlee
Nine Months Sales
1931.
2.42
3.22 2016054 356 2046556 817
41 chain store cos_ 234.670 625 242.452.508
a Four weeks to Sept. 26. 530 weeks to Sept 28. c four weeks to Sept. 10.
436 weeks to Sept. 12. e four weeks to Sept. 12. f 36 weeks to Sept. 12. p five weeks
to Sept. 20. 134 weeks to Sept. 26. t Jan. 3 to Sept. 26. 5 Year to Sept. 26. x Increase.
tember oflast year. The Southeastern territory gained slightly over September 1930 with $14,886.100. The district around New Orleans, totalling
$6,637,000 for the month, led by more than two million dollars over the
comparative month of 1930.
The gain over August in the entire 37 States, when totals were low, was
well distributed among various special clams, only public buildings, residential buildings and social and recreational structures, declining under
August totals. Of these special classes conunercial buildings amounting to
$29,060,200 in September compared with $19.417.300 in August; $10.969.600 for September in factories comparing with $4,749,800 in August. Educational buildings amounted to $21,155.100 In September against 119,266,700
In August. Religious and memorial buildings as well as public works and
utilities made better showings for the month just ended.
Contemplated projects as reported during September are under those of
both August and of September 1930. Several districts, however,show slight
advances in proposed work over August 1931, the Upstate New York
territory, the Middle Atlantic States and the Southern Michigan peninsula
all producing some go-aheads over the previous month. The total In
contemplated projects reported during September for the entire 37 States
CONTEMPLATED WORK REPORTED-37 STATES EAST OF THE ROCKY
MOUNTAINS.
1930.
1931.
No. of
Projects
Month of SeptemberResidential building
Non-residential building
Public works and utilities
5,537
2,351
1.993
9,881
Total contruction
Nine Months Ended Sept. 30Residential building
Non-residential building
Public works and utilities
Valuation.
$67.028.900
74,651.100
81,163,000
No. of
Projects
Valuation.
6.690
3.550
2.450
$148,819,100
131,345,600
210,275,400
$222,843,000 12.690
$490,440,100
55,908 $919,590,000 64.575 $1,300,457,700
27,042 1,236,953,400 38,219 2,339,803,300
19,042 1,512,362.600 22,591 3,195,239,400
101.991 83.668.906.000 125,43516.835,550,400
Total construction
Consumption of Coal by Electric Power Plants in the
United States Declined Approximately 11.7%
During the Month of August, As Compared With
the Same Month in 1930.
According to the United States Bureau of Mines, Department of Commerce, consumption of coal by the electric
utilities in August amounted to 3,229,311 tons. In comparison with the corresponding month of last year, this is a
decrease of 429,319 tons, or 11.7%. All regions shared in
this decline, but it was chiefly accounted for by the utilities
operating in the Southeast, Southwest, and in the States of
the far West. Relatively moderate losses were reported by
the plants operating in the New England, Middle Atlantic,
and Middle Western States.
CONSUMPTION OF COAL BY ELECTRIC POWER PLANTS IN THE
UNITED STATES, AS REPORTED BY THE U. S.
GEOLOGICAL SURVEY.
Net TOM Consumed
Region
No. of
Plants.
New England
Middle Atlantic
Ohio
Southern Michigan......
Illinois-Indiana
Lower Missouri Valley_ -I.ake Dock Territory
Southeast
Southwest
So. Rocky Mountain
No.Rocky Mountain_ _ _
Pacific
62
150
85
37
116
164
117
158
Total
97
986
Inc.(+1 or Dec.(--)
Aug. 1930. Aug. 1931. Net Tons. Per Cent.
227.711
1,271,993
339,097
172.032
669.984
267.465
78.712
407.337
74,157
39.881
9,981
280
210.858 -16,853
-7.4
1,158.083 -113,910
-9.0
322,203 -16,894
-5.0
151,951 -20,081 -11.7
615,263 -54,721
-8.2
245,650 -21,815
-8.2
174.620
-4,092
-2.8
247.480 -159,857 -39.2
59,787 -14,370 -19.4
34,771
-5,110 -12.8
8,645
-1,336 -13.4
-280 -100.0
3,658,630
3,229,311 -429,319
1
-11.7,
Consumption of Coking Coal at By-Products Plants
in August 1931 Showed a Falling Off of About
333% As Compared With the Corresponding
Period Last Year.
According to the United States Bureau.of Mines, Department of Commerce, consumption of coking coal at byproduct plants continued to decline in August. The total
OCT. 171931.]
FINANCIAL CHRONICLE
2507
quantity of coal charged in by-product ovens during the
month amounted to 3,526,041 tons. In comparison with
August 1930, this is a decrease of 1,767,774 tons, or 33.4%.
With the exception of New England and Southern Michigan
where small gains were reported, each of the coke producing
regions shared in this decline. The largest losses occurred
in Ohio and Illinois-Indiana where consumption was 44.9%
less than in the corresponding month of last year.
The good seasonal advance in the food industries reflected fairly general
improvement with definite gains in canning and candy. A large increase
In one beverage firm more than offset widespread seasonal losses.
The printing. paper goods and chemical industries all reported a gain.
due to most of the firms holding or enlarging their August working forces.
Many of the brick, tile and pottery firms were taking on help but other
stone, clay and glass industries moved irregularly. Lay-offs in a number
of saw and planing mills, and closure of two piano factories sent both these
groups down noticeably.
A gain of 4% in New York City was the largest reported by any city.
and resulted from good increases in the metals, clothing, and furs, leather
and
rubber goods. Irregular changes in the Syracuse district. cauood
CONSUMPTION OF COKING COAL AT BY-PRODUCT PLANTS, AS
small net loss in employment: this was the only district with a decline in
REPORTED TO THE BUREAU OF MINES.
forces. The 4% increase in Utica represented mainly the additions of
help in two textile firms. In the Albany-Schenectady-Troy district, a
Net Tons Consumed. Inc. (-I-) or Dec.(-) large part of the 4%
No. of
gain resulted from partial replacement of forces in
Region.
Plants
Aug. 1931 Aug. 1930. Aug. 1931. Net Tons. Per Cent. one metal firm. Increases in the food, wood, and paper and paper goods
industries in Buffalo more than offset metal losses so that there was a net
New England
195,204
+4,793
199,997
5
+2.5
gain of 1%. Improvement in men's clothing and canning and reopening
Middle Atlantic
2,234.540 1,380036 -854.504 --38.2
24
of a metal firm accounted largely for the 2% rise in Rochester. EmployOhio
401,330 -327,575 -44.9
728,905
15
ment in Binghamton increased over 1% due to advances in shoes, chemicals
Southern Michigan
348,956 +42,103 +13.7
306,853
7
Illinois-Indiana
904,831
498,680 -406.151 -44.9
14
and furniture. Payrolls totals were reduced in all of the up-State cities
Lower Missouri Valley
128,760 -29,506 -18.6
158,266
except Binghamton and Utica.
Lake Dock Territory_..
5
521.702 --177,994 -25.4
Southeast
699,696
14
FACTORY EMPLOYMENT IN NEW YORK STATE (PRELIMINARY).
Mountain and Pacific
46,580 _-18,940 -28.9
3
65,520
1}
Total
88
5,293,815
3,526,041 --1767,774 -33.4
Percentage Change
August-Semember 1931.
Industry.
Total State. N. Y. City.
Gas Utility Sales Declined During First Eight Months.
A decrease of 7% in gas sales and 4% in revenues is indicated by the comparative operating reports of manufactured
and natural gas utilities for the first eight months of 1931,
said Alexander Forward, Managing Director of the American
Gas Association, before the 13th Annual Convention of the
Association at Atlantic City, N-. J., on Oct. 13. This compares in other-fuels with a decline of 17% in production of
bituminous coal and of 8% in output of crude petroleum.
Mr. Forward further stated:
Reports from companies representing over 90% Of the manufactured gas
Industry Indicate sales for the first eight months of 1931 of 237 billion
cubic feet,a decrease of only 2% over the corresponding period of 1930.
Reports from a group of natural gas companies representing more than
85% of the public utility distribution of natural gas indicate sales of nearly
465 billion cubic feet for the first eight months of 1931, a decline of only
9% from the corresponding period of 1930. The revenues of these companies
for the same period aggregated about 193 million dollars,compared with 206
million a year ago.
Natural gas sales for industrial purposes declined by more than 15%. but
this was practically offset by the Industry's program of expansion into new
territory where gas service was not previously available. The consumption
of natural gas for the generation of electric power during the first eight
months of 1931 continued at a rate about 8% above the preceding year,
despite the fact that during the same period the production of electric
power decreased by nearly 5%.
The declining trend in water gas production continued during the current
year, production for the eight months* period averaging more than 3%
under the levels of the previous year. The quantity of coke oven gas
produced however, Increased 8%•
Stone, clay and glass
Miscellaneous stone and minerals
Lime, cement and plaster
Brick, tile and pottery
Glass
Metals and machinery
Silverware and Jewelry
Brass, copper and aluminum
Iron and steel
Structural and architectural iron
Sheet metal and hardware
Firearms, tools and cutlery
Cooking, heating and ventilating apparatus
Machinery and electrical apparatus
Automobiles, airplanes, &a
Railroad equipment and repair shops
Boat and ship building
Instruments and appliances
Wood manufactures
Saw and planing mills
Furniture and cabinet work
Pianos and other musical instruments
Miscellaneous wood, ctc
Furs, leather and rubber goods
Leather
Furs and fur goods
Shoes
Gloves, bags, canvas goods
Rubber and gutta percha
Pearl, horn, bone,.to
Chemicals, oils, paints. Ati
Drugs and industrial chemicals
Paints and colors
Oil products
Photographic and miscellaneous chemicals
Pulp and paper
Printing and paper goods
Paper boxes and tubes
Miscellaneous paper goods
Printing and bookmaking
Textiles
Silk and silk goods
Woolens, carpets. felts
Cotton goods
Knit goods, except silk
Other textiles
Clothing and millinery
Men's clothing
Men's furnishings
Women's clothing
Women's underwear
Women's headwear
Miscellaneous sewing
Laundering and cleaning
Food and tobacco
Flour, food and cereals
Canning and preserving
Sugar and other groceries
Meat and dairy products
Bakery products
Candy
Beverages
Tobacco
Water, light and power
+1.1
+0.7
-1.7
+8.4
-3.8
+1.5
+4.8
-0.1
-0.2
-0.7
-0.6
+1.2
+0.8
+3.9
-0.4
-3.2
+18.6
+3.1
-1.3
-7.1
+2.1
-10.4
+4.8
+2.5
+0.8
+11.2
-0.8
+10.2
+19.4
+3.7
+1.4
+1.2
+1.1
+2.4
+1.1
-0.4
+1.0
+8.8
+4.7
-0.2
-1.8
+0.6
+8.4
+17.2
-2.7
+0.2
+7.2
+8.4
+2.1
+18.9
+9.8
+11.7
+5.1
+1.7
+11.3
-1.8
+74.5
+3.5
+1.4
+3.6
+10.8
+0.1
+3.1
+0.4
-8.9
+8.1
-3.0
-14.8
+7.7
+10.4
+2.6
+0.7
-0.8
4-4.4
1-14.7
---1.1
+2.8
+17.2
4-2.4
---12.7
4-2.4
-30.8
+4.1
+5.8
+11.2
-8.7
+113.5
-4.8
+2.4
+8.1
+5.1
+0.1
+2.9
+6.0
-2.9
+5.7
+9.8
+5.6
-0.6
+1.5
+4.7
-4.0
-8.0
New York State Factories Report Seasonal Activity
+10.3
+7.1
in September.
+1.2
+17.2
Seasonal activity in New York State factories raised em+10.2
ployment almost 3% and payrolls nearly 2% from August
+11.7
+5.9
to September, Industrial Commissioner Frances Perkins
+1.9
+2.1
the
This
first
Oct.
was
stated
9.
improvement since the
No change
+1.4
spring seasonal advances. Due to these changes, the index
+2.2
of factory employment, based upon the average of 1925-1927
+2.1
+0.4
as 100, moved up to 73.4 and the index of payrolls to 66.2.
+13.8
-6.7
Average weekly earnings declined from $26.33 to $26.06.
+2.6
Thw statements are based upon information furnished by
-0.5
a fixed list of firms reporting each month to the Division of
Total
+4.4
+2.7
Statistics and Information of the New York State Department of Labor. The firms were selected to represent the
diverse types of manufacturing located throughout the No Marked Changes Reported During August in
Business in Cleveland Federal Reserve District from
State. The survey by Commissioner Perkins continues:
The advances this month were In accordance with the seasonal improvePrevious Month-Conditions in Rubber and Tire
ment usually recorded in September. For the past 16 years, the average
Industry.
gain at this time has amounted to 1.9% in forces and 3.4% in payrolls.
The Federal Reserve Bank of Cleveland states that general
The downward movement of the past two years placed employment this
September 13% below last year and 27% below two years ago. A greater business in the
Fourth (Cleveland Federal Reserve) District
loss in payrolls lowered them.22% from September 1930 and 37% from
in late August and the first part of Sept. remained at apSeptember 1929.
Most of the main industry groups reported employment gains in Septem- proximately the same low levels as a month ago and so far
ber ranging from 1 to 11%. Payrolls, however, did not always show an there have been few indications of any seasonal advance in
Increase. Advances in half of the metal industries caused this group to
record its first gain of any size since the spring of 1929. However, the those lines which generally experience improvement at this
movement was irregular. Most of the silverware and jewelry firms were time of the year. A few scattered reports of some expansion
adding a few workers. Reopening after a partial shut-down in one plant have been
received, chiefly in the production of consumers'
offset general losses in the instruments and appliances group. Large gains
in a few plants explained the rise in shipbuilding and in machinery and goods, but this has been more than offset by weakness in the
electrical apparatus. Fairly large reductions in several of the railroad equip- more important industries of the District. Based on various
ment and repair shops made this division record the largest loss in the
indexes,activity in August was at the lowest level yet touched
metal group. All the other metal industries showed irregular changes.
Every industry in the clothing group reported a gain, with the advance in the current depression. The Bank in its Oct. 1 "Monthly
in New York City generally exceeding that up-State. Replacement in one Business Review" continues:
firm and a large gain in another caused the men's clothing shops to record
Production in the steel industry contracted sharply, falling in August to
a gain not usual at this season. The other clothing industries were very 31% of capacity and, including some variations in early September, was at
the
maintaining
improving
August
or
generally
level of employment. about this level in the third week of the month despite the fact that in
most
This was truo also of fur and leather goods except shoes, where the majority past years there has been some expansion at that season.
of firms were lowering forces. The sharp rise in cotton goods resulted
production
dropped in August, though seasonal movements
Automobile
from general increases together with large gains in two plants. Makers of of other years indicated that a slight increase might have been
expected.
woolens, carpets and felts were definitely laying off workers.
Parts and accessory, machine tool, and hardware manufacturers reported
2508
FINANCIAL CHRONICLE
little change in the level ofearly September operations from those prevailing
In July and August.
Bituminous coal production declined from July to August,though in Peet
years there has been an increase at that time. Output was 18% below last
year. Shipments of coal from Lake Erie ports In August were only 1.5%
below Aug. 1930, but for the year to date the discrepancy from last year
was25%.
Lake shipping of all types has been in very reduced volume, iron ore
receipts being less than half as large as In 1930. Distribution of freight by
railroads has failed to show the usual seasonal expansion and the adjusted
index touched a new low level in September. Retail and wholesale trade in
thte district receded in August, after allowing for seasonal variations, and
stocks were further reduced.
Life insurance sales in Ohio and Pennsylvania in August were 10% below
last year and lower than for any corresponding month since 1924.
Building activity was very much reduced, contracts awarded in August
being 48% below the same month last year. Tire production dropped seasonally in August, according to the preliminary reports, but output In July,
the latest month for which complete data are available, exceeded the same
period of 1930 by 23%. Activity at men's clothing factories increased more
than seasonally in August and shoe production was 1.5% greater than in
Aug. 1931.
Agricultural crops in this District were proportionately larger and in
better condition than in other sections of the country, but very low prices
have reduced farm Incomes sharply. Employment and payrolls dropped
again in August and wage reductions were quite numerous.
[Vou 133.
86 a year ago and 102% in Aug. 1929. Combined sales in August were 25%
below last year and were nearly 40% below the same month two years ago.
Although In past years there has been some seasonal improvement in these
four lines from July to August, this year dry goods sales were the only ones
to expand and then they were 26% below last year. Grocery sales declined
9% from July to August and were 28% below last year. Hardware sales
also were9% smaller in August than in July, but were 25% under Aug. 1931.
Drug sales receded 12% and were down 9% In August compared with a year
ago. Sales reductions in the first eight months compared with the same
period of 1930 were, groceries 18%, dry goods 26% hardware 23% and
drugs8%.
Grocery stocks were reported only 4% below last year, but other lines
showed declines of more than 20%.
Reporting drug firms were the only ones to Indicate a greater falling-oft In
accounts receivable than In sales. Collections have been rather poor.
Lowest Levels in Years Reached by Several Business
Barometers in Richmond Federal Reserve District
During August.
Several barometers of business reached the lowest levels
In a number of years in the Fifth (Richmond) Federal Reserve District in August, says the Richmond Federal Reserve Bank, but there were also indications of some seasonal
The Bank reports, as follows, the rubber and tire industry: pick-up in trade. The Bank, in its "Monthly Review,"
Rubber Tires.
dated Sept. 30, continues:
in
Production of tires in July and August receded from the peak attained
Rediscounts at the Federal Reserve Bank of Richmond increased beMay and June, the drop in August being greater than seasonal. This was tween the middle of August and the middle of September, in keeping with
of
part
only
tires,
replacement
of
sales
in
reduction
sharp
rather
a
by
caused
a seasonal trend, and the volume of Federal reserve notes in actual cirwhich was seasonal. The industry, however,continues in a better position culation also rose moderately with the beginning of fall crop marketing.
than most basic industries,for, according to "Tire Review," manufacturers'
Reporting member banks in leading cities experienced little demand for
shipments of tires for renewal consumption were approximately 27,800,000
loans, but deposits declined slightly, the banks increased their investments
casings
26,946,000
with
compared
1931,
of
months
first
the
eight
in
casings
stocks and bonds and their cash in vaults and their borrowing at the
shipped in the same period of 1930. Production of tires for all purposes was in
individual accounts figures in the four weeks
slightly below last year because of the sharp reduction in sales of original reserve bank. Debits to
ended Sept. 9 1931, showed the lowest total for any four weeks in many
equipment tires.
1931 total was only 12.7% below
Tire production in July (the latest month for which complete figures are years, but in spite of this fact the
10 1930, when price
available) was 23% ahead of the corresponding month of 1930, and cumula- the total reported for the four weeks ended Sept.
than they are this year.
tive production for the first seven months was only 2.5% below the same levels in many lines were materially higher
in member
Savings deposits in mutual savings banks and time deposits
period of a year ago.
potential purchasing
The falling-offfrom the spring production peak,so far, has been only 13%, banks are higher than a year ago, indicating a large
Commercial
while in the same period of 1930 the drop was over 30%. Shipments of power on the part of the banking section of the public.
pneumatic tires showed little change from June to July, but In the latter failure figures for the 12 Federal reserve districts for August show that
month were about 11% larger than production. This caused a reduction of the Fifth district made the best record in the country in number of
stocks, which on Aug. 1 equaled only 1.8 months'supply, the lowest for any insolvencies in comparison with the number reported in August 1930, and
it compared
month since Aug. 1928.
the liability record was also not unsatisfactory, although
Employment in August at 22 reporting Ohio rubber concerns declined quite unfavorably with liabilities in August last year, when very low
sales.
and
in
the
district is
reported
production
decline
4% from July, thus confirming
totals were reported.' The employment situation in the Fifth
The number employed was 22% below last year.
signs of early improvement, but indications are
no
shows
and
bad,
quite
Consumption of crude rubber by manufacturers in the United States in
Coal prothat it is better than in some other sections of the country.
August was estimated to be 27.586 long tons, compared with 31,937 tons
showed a seasonal increase over July production, but
August
in
duction
however,
In
tons
rubber,
Aug.
1930. Imports of crude
in July and 30,575
production in August 1930. In the two latest months for
continued above one year ago, the increase in August compared with a year was less than
June and July, West Virginia took the lead
ago being over 10%. At 38.370 long tons, they compared with 41,004 tons which figures are available,
The textile situation in the Fifth district
Imported in July. Domestic stocks of rubber on Aug. 31 were estimated at In bituminous coal production.
cotton prices
continues unsatisfactory, especially in view of steadily falling
241,816 long tons, an increase of over 50% from Aug. 1930.
doubly hard to secure forward orders, but
Rubber prices have declined more than 80% since February 1929 touching in recent weeks which make it
the district in August materially exfive cents a pound in September. The present low price has stimulated new cotton consumption in the mills of
and the district consumed a larger
uses of rubber, and products, which heretofore have been unprofitable, are ceeded consumption In August 1930,
last month than in the
percentage of all cotton used in the United States
being experimented upon by the rubber companies.
Building permits issued in the leading Fifth
In its survey of retail and wholesale trade conditions the same month a year ago. provided
than the permits
work
for 17% less
district cities in August
Bank says:
issued in August 1930, which in turn was approximately 27% below the
Retail Trade.
in August for contotal for August 1929, and contracts actually awarded
Although some improvement was reported from July to August in retail struction in the district totaled only a little over half the aggregate
trade in the Fourth District,the expansion was not up to the seasonal move- awards in August last year. Retell trade as reflected in department store
ment of past years. The adjusted index of department store sales dropped sales in August averaged 8.4% less than sales in August 1930, a larger
from 81.2 in July to 79.6% of the 1923-25 monthly average in August and decline than has been reported in most recent months, but wholesale trade
falling below the
was lower than for any month since Feb. 1922.
showed seasonal improvement last month, although
Compared with one year ago, the dollar value of sales in August was off level of trade in August last year. Both wholesale and retail percentages,
nearly 15% and the discrepancy between sales in the first eight months of which are based on dollar figures, are affected to some extent by price
this year and the same period of 1930 was about 10%. As has been pointed changes during the past year. In agriculture, the upper section of the
out repeatedly, however, the drop in sales Is partly accounted for by the
last year, but
Fifth district is in much better condition than at this time
reduction In prices. The "Fairchild" index of retail prices of department
crop yields in MaryCarolinas are not so favorably situated. In 1930
store articles, which has been computed only since the first of this year, was the
by
the
drought, but
drastically
cut
were
land, Virginia and West Virginia
11.5% lower in August than in January.
seriously affected by it. This year all sections of
In the Individual (Ufa.; declines were generally quite pronounced. Youngs- the Carolinas were not
but prices are on the whole even lowersQlan
town reported a reduction of 32%. Toledo 24%, Columbus 21%, Akron the district have fine crops,
prices are the lowest since before the Woild
19% and Wheeling 18% from Aug. 1931. The other principal cities they were last year. Cotton
importance in the two Carolinas. Tobacco
showed losses which were smaller than the falling-off in the entire District. War, and cotton is of paramount
with most other post-war years, but are
Normally there is an Increase in stocks from July to August, but this year prices are also low in comparison
feature of the agricultural situathe dollar value of stocks on Aug. 31 was slightly smaller than a month much better than cotton prices. The best
food and feed crops, which tends
earlier and 15% below one year ago. The seasonally adjusted stock index tion is the increase in acreage planted to
was 71.7% of the 1923-25 monthly average compared with 83.4 one year ago. to make the farmers less dependent upon their cash crops and reduces the
The stock turnover rate In August was the same as last year, but credit they need for their operations.
the cumulative rate for the first eight months was 2.32 compared with 2.19
In reporting retail and wholesale trade conditions the
In the same period of 1930.
the
in
Bank says:
The ratio of credit to total sales was 56.1 in August as against 60.6
Retail Trade, 34 Department Stores.
corresponding period of 1930. but accounts receivable were only 7% smaller
than a year ago. Collections in August on accounts receivable on July 31
Department store sales in the Fifth Federal reserve district in August
amounted to 28.8% compared with 31.2% in Aug. 1931. a reduction of compared favorably with July sales, but averaged 8.4% less than sales
about 8%.
in August 1930, according to reports from 34 leading stores in 13 cities
Decreases were reported in all the various departments except millinery of the district. Total sales this year, through Aug. 31 were 3.5% less
ago,
year
a
Increase
of
from
14%
an
showing
former
the
rugs,
and oriental
than sales from Jan. 1 through August a year ago.
despite the lower prices. While the change in styles of women's headwear no
Stocks on the shelves of the reporting stores increased 2.1% during
doubt has resulted in larger sales in allied departments, this fart Is obscured August, but on Aug. 31 stocks averaged 9.9% less in retail selling value
by price declines. Dollar sales of women'scoats and dresses were 15 and 21% than stocks on hand on Aug. 31 1930. The increase in stock in August
off
smaller, respectively, than in Aug. 1930 and misses' clothing sales were
shoes was seasonal, and was caused by the receipts of early fall merchandise. The
11%. Men's clothing sales were down 14%, boys' clothing 18% and
and reporting stores turned their stocks .256 times in August, and since Jan. 1
about 13%. House furnishings showed a drop of 5%, toilet articles
stocks have been turned an average of 2.403 times, a higher figure than
books and stationery 6%, and women's hosiery 27%.
last 2.125 times for the corresponding eight months last year.
Sales at reporting wearing apparel stores in August were 11% below
Collections during August In 82 of the 34 reporting stores averaged
year and in the first eight months were off 10%•
in 24.4% of receivables outstanding on Aug. 1, a higher figure than 23.6%
Chain drug and grocery stores experienced a rather decided falling-off
a year ago. Collections last month were seasonally
sales in August. the reductions from a year ago being 10.5 and 12.1%. collected in August
this year.
respectively. Cumulative sales for the first eight months were 2.6 and 3.9 slower than in July of
below the same period nf 1930.
Wholesale Trade, 64 Firms.
Furniture sales were practically unchanged from the low level reported
Sixty-four wholesalers and jobbers in five lines reported on their August
In July.
business. There was some seasonal increase in sales last month, increases
Wholesale Trade.
in comparison with July sales being reported in dry goods, shoes and
August dollar sales of 78 reporting wholesale firms, representing four
but grocery and drug sales declined about 5% last month. In
major lines, were only 64% of the 1923-25 monthly average compared with hardware,
Oar. 171981.]
FINANCIAL CHRONICLE
comparison with August 1930 sales, sales last month were lower in dollar
amounts in every line, the decreases ranging from 8.4% for shoes to 23.0%
for dry goods. Total sales from Jan. 1 through August this year were
lower in every line than sales during the corresponding eight months of
1930, the declines ranging from 5.9% for both shoes and drugs to 25.1%
for hardware.
Stocks of groceries and drugs increased slightly during August, while
dry goods stocks remained practically the same and shoe stocks declined.
On Aug. 81 stocks in all four lines for which figures are available
were
lower than on Aug. 81 1930, but the decline in groceries was slight.
Collections in shoes and hardware were somewhat better in August this
year than in August 1930, but the other three lines showed smaller percentages of outstanding receivables which were collected during the month.
Business Conditions in Dallas Federal Reserve District
as Reported by Dallas Federal Reserve Bank.
The following on business conditions in the Dallas Federal
Reserve District is taken from the Oct. 1 "Monthly Business
Review" of the Federal Reserve Bank of Dallas:
The drastic decline in the price of cotton and a further moderate recession
in the price of many other agricultural commodities greatly reduced
the
farmers' purchasing and debt-paying power, which was reflected in the
poor consumer demand for merchandise in rural sections and in
smaller
than usual purchases at wholesale establishments. Sales in a majority
of
wholesale lines, from which reports are received by the Federal Reserve
Bank, failed to show the usual seasonal expansion in August, and
distribution in all reporting lines reflected a large decline from a year
ago.
Merchants continue to buy very cautiously, orders being for small quantities to cover mostly immediate needs. While retail distribution in larger
centres, as evidenced by sales of department stores, was 16% smaller
than
in August last year, the decline was smaller than in July, and sales
reflected
a gain of 12% over the low July volume which was more than seasonal.
After declining for three consecutive months, the business mortality
rate
turned upward in August. The number of commercial failures was considerably larger than in either the previous month or the corresponding
month last year. The indebtedness of defaulting firms was only slightly
larger than in July and showed a smaller increase over the corresponding
month last year than was the case in the previous month.
Tempering to some extent the effect of the decline in the price of agricultural commodities is the larger prospective production of the district's
principal crops. On the basis of Sept. 1 estimates of the Department of
Agriculture, the indicated production of practically all crops for this
district showed an increase over that a month earlier and in most instances
greatly exceeds the actual production in 1930. The improved outlook
for
food and feed crops is particularly encouraging as ample supplies are
assured
for use during the coming season. Weather conditions have
been very
favorable for harvesting and good progress has been made with most crops.
Cotton picking has proceeded slowly due in part to the lateness of the
crop.
Livestock and their ranges are in fair to good condition in most
sections
of the district.
Federal Reserve Bank loans to member banks rose from $13,355,000
on
Aug. 15 to a seasonal peak of $14,268,000 on Sept. 4, and
then showed a
steady decline to $13,651,000 on Sept. 15. This latter
figure compares
with $13,339,000 on the same date in 1930. The loans of
Reserve city
banks increased slightly between Aug. 12 and Sept. 9, but their
invest,ments were reduced considerably. The daily average of
combined net
demand and time deposits of member banks, which amounted
to $746,063,000 in August, reflected a further decline of $17,098,000 as
to July, and was $74,298,000 lower than in the corresponding compared
month last
Year. There was a heavy demand for the United States securities
issued
on Sept. 15. Subscriptions to the one-year 134%
Treasury certificates
totaled $33,706,500, but allotments of only $2,088,000 were
On
the other hand, allotments of $49,985,150 were made againstmade.
the $57,075,150 subscriptions to the 24-year 3% Treasury bonds.
The volume of building reflected a further decline. The valuation
of
Permits issued at principal cities was 15% less than in July and
61% below
August 1930. The production and shipments of cement reflected a
decline
as compared to the previous month, but shipments were moderately
larger
than a year ago.
2509 '
Although the demand for groceries at wholesale in the
Eleventh District
usually shows an expansion in August, there was a decrease
of 3.8% this
year. Sales were also 18.5% less than in the same month last
year. Distribution in the southeastern part of Texas held up better than
in other
sections. Reports indicate that there was a continued weakness in
prices.
There was only a slight decline in collections.
CONDITION OF WHOLESALE TRADE DURING AUGUST 1931.
Groceries
Dr,' goods
Farm implements
Hardware
Drugs
Percentage of Irwrease (-I-) or Decrease (-) inNet Sales
Net Sales
Stocks
RatioolCollecAugust 1931 July 1 to Date August 1931 ions
Compar. with Comyar. with Corn par. with Aug.toDuring
Accts.
Aug.
July Same Period Aug.
July &NotesOutst.
1930. 1931. Last Year. 1930. 1931, on July 31.
-18.5 -3.8
--14.8
--9.5 A-1.3
61.6
-38.0 +57.0
--34.4
--32.9 --2.2
23.3
-6.3 +19.6
-27.2
3.4
-32.5 -7.1
--28.1
--14.0 --1.6
27.7
--25.1 --7.8
-7.9 +1.4
--I8.3
34.9
Retail Trade.
Retail trade in larger cities reflected some improvement during August.
Sales of department stores were 12.3% larger than in July, and while they
were 16.2% lower than a year ago the decline was smaller than in the
previous month. While business during the first half of September was
retarded somewhat by the prevailing warm weather, the opening of schools
and featuring of fall goods at low prices were a stimulus to activity. Distribution during the period January through August 1931 was 11.9% less
than in the same period of 1930.
Inventories of merchandise held on Aug. 31 reflected a seasonal increase
of 10.3%, but were 11.6% below a year ago. The rate of stock turnover
during the first eight months of 1931 was 1.88 as compared to 1.86 in the
corresponding period of 1930.
Collections declined considerably during the month, being the lowest
in many years. The ratio of August collections to accounts outstanding
on Aug. 1 was only 28.1% as against 31.7% in July and 29.9% in August
1930.
Further Reductions in Prices of Automobiles-New
Truck Model Also Announced.
All Toledo (0.) dealers of the Willys-Overland Co. are
advertising price reductions of 10% to 25% on new current
models following the recent announcement by the factory
that it would produce cars in excess of requirements during
the remainder of the year to provide employment for its
workers. The delivered price of the fully equipped Willys
six sport sedan, according to a Toledo dispatch, has been
reduced by $156 to $549; Willys six coaches $71 to $579;
Willys six four-passenger coupe $136 to $564; Willys six
two-passenger coupe by $121 to $549; by $100 on WillysKnight custom de luxe and standard sedans and by $75 on
Willys-Knight coaches.
The H. H. Franklin Manufacturing Co. has reduced
prices on all Franklin cars, the reductions ranging up to
$500, according to an announcement. The price of the series
15 line is now $1795, against $2295 formerly, and the base
price of the De Luxe line is now $2395, against $2695 formerly.
The Devaux-Hall Motors Corp. has reduced the price of
its standard sedan $10 to $685 f. o. b. factory, according
to a Detroit dispatch. Other body types have been increased
from $35 to $70. The company is now operating four days
a week on a combined schedule of approximately 700 cars
We also quote from the "Review" the following details a month for both the Grand Rapids and Oakland plants.
The General Motors Truck Co. is introducing a new 13,i
as to wholesale and retail trade:
to 2-ton truck priced at $595 to $665 at the factory,the lowest
Wholesale Trade.
priced unit ever offered by the company. Production has
The demand for merchandise in wholesale channels of distribution
was
started on the new model, known as the T-18. Trucks
very sluggish during August. Although this season usually
witnesses a
large expansion in wholesale trade, it was not in evidence this year.
While now produced by the company range in price from $595 to
sales In two reporting lines were larger than in July, they were
appreciably $7,990.
smaller in three lines. In the case of all lines, decreases from last
year
were recorded both in August and combined July and August sales.
The Dodge Bros. Corp. has reduced the chassis price on
Both
wholesalers and retailers are exerting an effort to keep their
inventories the Dodge four and six cylinder UF-10 series half-ton
under control and to operate on a scale well within the demands of
current trucks $60 and $70, respectively,
to $375 and $445, the lowbusiness. Contrary to seasonal tendency, there was a general
decrease
in collections.
est price ever placed on these units.
Following
the opening of the fall buying season at leading
centres early
In August, there was a seasonal increase of 57% in the business of
wholesale
dry goods firms during the month. This increase over
July, however,
was much smaller than usual. August sales, which were 38% less than
a
year ago, reflected the desire of merchants to keep their orders in close
alignment with the fluctuations in consumer demand. Collections
showed
a decrease of 6% as compared to the preceding month.
The sales of farm implements at wholesale during August were 19.6%
larger than in the previous month, partly because of the small volume of
sales in July. As compared to the month of August 1930, distribution
reflected a decrease of 6.3%. and for the period from July 1 to Aug. 31 it
showed a decline of 27.2%. Inventories were reduced somewhat during
the month. As compared to the previous month, August collections registered a substantial decline.
Contrary to the usual tendency at this time of the year, the volume of
business transacted by wholesale hardware firms in this district during
August reflected a further decrease of 7.1% from the preceding month,
and it was 32.5% under that of August 1930. Demand for hardware and
equipment in east Texas continued brisk despite the shut-down in petroleum
production during the latter part of the month. Total August collections
were 14.7% less than the July figure.
The August Bales of wholesale drug firms failed to reflect the usual
seasonal increase over the preceding month. Instead, there was a general
decline of 7.8% from the July volume, and distribution was 25.1% less
than in August last year. Total sales in July and August were 18.3% below
the volume of the same two months in 1930. Collections reflected a perceptible reduction as compared to July.
September Consumption of Crude Rubber by Manufacturers in United States Lower-Imports Increase-Inventories Higher.
Consumption of crude rubber by manufacturers in the
United States for the month of September decreased 14%
as compared with August. The usual seasonal decline is
11%. September consumption is estimated to be 23,638
long tons as compared with 27,586 long tons for August and
25,515 long tons for September 1930, according to statistics
released by The Rubber Manufacturers Association.
Imports of crude rubber for August amounted to 40,505
long tons, an increase of 5.6% over the August figure of
38,370 long tons, and 2.6% above September 1930.
The Association estimates total domestic stocks of crude
rubber on hand Sept. 30, at 254,324 long tons, an increase of
5.6% over August and 49.7% over Sept. 30 1930. Crude
rubber afloat for the United States ports on September 30
is estimated at 62,420 long tons as against 61,469 long tons
on Aug. 31 and 60,924 long tons on Sept. 30 1930.
FINANCIAL CHRONICLE
2510
Shipments of Pneumatic Casings and Tubes Continue
in Excess of Production—Inventories Again Fall
Off.
According to the Rubber Manufacturers Association, Inc.,
figures estimated to represent 80% of the industry,show that
shipments of pneumatic casings and tubes continue at a
higher rate than production. During the month of August
1931 there were produced, according to these estimates, a
total of 3,124,746 pneumatic casings—balloons and cords—
and 11,643 solid and cushion tires, as compared with 3,332,489 pneumatic casings and 16,064 solid and cushion tires
in the corresponding period last year and 3,941,187 pneumatic casings and 13,370 solid and cushion tires in the preceding
month of the current year. Shipments during the month
under review totaled 3,967,987 pneumatic casings and
15,758 solid and cushion tires, as against 4,369,526 pneumatic
casings and 16,051 solid and cushion tires in July 1931 and
4,139,900 pneumatic casings and 23,519 solid and cushion
tires in August 1930. Pneumatic casings on hand as of
Aug. 31 1931 amounted to 7,117,037 as compared with
7,935,565 at July 31 1931 and 8,678,164 at Aug. 31 1930.
Output of balloon and high pressure inner tubes during
the month of August 1931 totaled 3,548,335 as against
3,964,174 in the preceding month and 3,836,880 in the same
month last year. Shipments amounted to 4,240,403 inner
tubes,as compared with 4,609,856 in August 1930 and 4,664,964 in July 1931. Inventories at Aug. 31 1931 declined to
7,019,217 inner tubes as compared with 7,671,801 at July 31
last and 8,589,304 at Aug. 31 1930.
The Association, in its bulletin dated Oct.9 1931,gave the
following data:
FoL. 133.
woods, 226 mills, production 34% less, shipments 27%
less and orders 28% under the volume for the week a year
ago.
Lumber orders reported for the week ended Oct. 10 1931
by 573 softwood mills totaled 152,263,000 feet, or 5%
below the production of the same mills. Shipments as reported for the same week were 172,268,000 feet, or 7% above
production. Production was 160,306,000 feet.
Reports from 269 hardwood mills give new business as
18,385,000 feet, or 20% above production. Shipments as
reported for the same week were 19,395,000 feet, or 26%
above production. Production was 15,371,000 feet. The
Association, in its report, also states:
Unfilled Orders.
Reports from 480 softwood mills give unfilled orders of 462,891.000 feet,
on Oct. 10, 1931, or the equivalent of 10 days' production. This is based
upon production of latest calendar year-300-day year—and may be compared with unfilled orders of 517 softwood mills on Oct. 11 1030,01 760,304,000 feet,the equivalent of 15 days' production.
The 415 identical softwood mills report unfilled orders as 444,131,000
feet, or the equivalent of 10 days' average production, on Oct. 10 1931,
as compared with 752.131,000 feet, or the equivalent of 17 days' production
for the same week a year ago. Last week's production of 452 identical
softwood mills was 149,562,000 feet, and a year ago it was 209,572.000 feet;
shipments were respectively 161.568.000 feet and 224.308.000: and orders
received 142.237,000 feet and 216,649.000. In the case of hardwoods,
226 identical mills reported production last week and a year ago 13,830,000
feet and 20,863.000; shipments 17,915,000 feet and 24,605,000; and orders
16,791,000 feet and 23,174,000.
West Coast Movement.
The West Coast Lumbermen's Association wired from Seattle the following new business, shipments and unfilled orders for 224 mills reporting
for the week ended Oct. 10:
SHIPMENTS.
UNSHIPPED ORDERS.
NEW BUSINESS.
Feet. 1111
Feet.
Feet.
Coastwise and
Domestic cargo
Domestic cargo
intereoastal.
_43,385,000
-105.571.000
_
_
30,651.000 delivery_
delivery
16.689,000
74.489,000 Export
Export
13,674,000 Foreign
27,951,000
71.380.000 Rail
Rail
29,331,000 Rail
INNER
AND
CASINGS
7,553,000
PNEUMATIC
Local
Local
7,553,000
PRODUCTION AND SHIPMENTS OF
TUBES (BY MONTHS).
Total
95,578,000
251.440,000
Total
81,209,000 Total
[From times estimated to represent 80% of the lndustrY•1
Production for the week was 84.459.000 feet.
For
Tubes.
Inner
the year to Oct. 3 170 identical mills reported orders 0.3% above
Pneumatic Casings.
Production, and shipments were 4.8% above production. The same numShipOutInvertShipOutImenber of mills showed a decrease in inventories of 9.1% on Oct. 3 as compared
meats.
torts.
meats.
Put.
put.
tors,
with January 1.
Southern Pine Reports.
1931—
7,165.846 2.939,702 2.995,479 7,551.503 2.898.405 3,249,734
January
The Southern Pine Association reported from New Orleans that for
2,720.135
3,132.770
2,721,347
7.936,773
3,188,274
7.628,520
February
8,011,592 3,730,061 3.297,225 8,379.974 3.559,644 3,031.279 125 mills reporting, shipments were 13% above production, and orders
March
8.025.135 3.955,491 3,945,525 8,330,155 3.693,222 3.708.949 10% above production and 3% below shipments. New business taken
April
8.249,856 4.543.003 4.332.137 8,438,799 4.329,731 4.224,594 during the week amounted to 28.686.000 feet. iprevious week 28,434.000
May
8.357,768 4.537,970 4,457,509 8,403.401 4,286,467 4.317,543 at 115
June
mills); shipments 29.589.000 feet (previous week 31,542.000); and
7.935.565 3,941,187 4,369,526 7.671,801 3,964,174 4.664,964
July
7.117,037 3,124,746 3.967,987 7,019.217 3.548,335 4,240,403 production 26.149,000 feet, (previous week 24.303.000). Orders on hand
August
at the end of the week at 109 mills were 74.592,000 feet. The 113 identical
1930—
mills reported a decrease In production of 40%, and in new business a de9,539,353 3,588,862 3,505,404 10.163.267 3.685,410 3,885,717
January
a year ago.
9.928.838 3,644,606 3,356,104 10,428,968 3,707.066 3,469.919 crease of 29%, as compared with the same week
February
3,781,789
3,952.921
The Western Pine Association, of Portland. Ore., reported production
10,010,173 3,890.981 3.773,865 10,543.026
March
10,461.208 4,518,034 4.071.822 11.027,711 4,408,030 3,078,697 from 87 mills as 21,364,000 feet, ,,hipments 21.337.000 and new business
April
10.745.389 4,573.693 4,173,177 11,081,523 4,428,377 4.058,847 19.127.000. The 61 identical mills reported production 31% less and new
May
10.621,634 4,097.808 4,234,994 10.889.444 3,959,972 4,212.082
June
9.449,318 3.193,057 4,357,836 9,325.602 3,151,107 4,684,182 business 55% less than for the same week of 1930.
July
The California mills of the Western Pine Association, (formerly the Cali8,678,184 8.332.489 4,139,900 8,589,304 3,836.880 4,609.856
August
7,849,411 2,692.355 3.524.141 8,052,121 3,053,424 3,632.458 fornia White Jr Sugar Pine Manufacturers AssolatIon, of San Francisco),
September
2,777.985
3,161,048
8,413.578
2,799,440
2,865.933
7,842.150
October
from 33 mills as 20.437.000 feet. shipments 16,891.000
_ 7,675.786 2,123,089 2.267,465 8,250,432 4,143.609 2.230.654 reported production
November
of 23%
7,202.750 2.251,269 2,688,960 7,999.477 2,448,195 2,729,973 and order, 16,355,000. The 23 identicai mills reported a decrease
December
in
production and a decrease of 40% in new order,,compared with the same
THE
IN
RUBBER
CONSUMPTION OF COTTON FABRICS AND CRUDE
week last year.
PRODUCTION OF CASINGS, TUBES, SOLIDS AND CUSHION TIRES
The Northern Pine Manufacturers of Minneapolis. Minn., reported
AND OUTPUT OF PASSENGER CABS AND TRUCKS.
production from 7 mills as 801.000 feet, shipments 1,600.000 and new
bu Ines 1,143,000. Tne same number of milts repo.sted production 62%
Production.
Consumption,
less and new business 55% less than fo: the same week of 1930.
The Northern Hemlock and Hardwood Manufacturers Asalciation. of
Passenger
Crude
Cotton
Trucks
Cars.
Gasoline
Oshkosh, Wis., reported production t.om 17 mills a; 1.798.000 feet, shipRubber
Fabrics
(100%)
(100%)
(100%)
ments
(80%)
1.052.000 and orders 1.171,000. The 15 Identical mills reported
(80%)
Prodm:tion 9% less and new business 19% lem than for the same week
(Gallons)
(Pounds)
(Pounds)
Calendar years:
165.963,182 518,043,062 10,708,068,000 3.929,535 535,006 last year.
1928
The North Carolina Pine Association, of Norfolk, Va., reported produc177,979,818 515,994,728 12,512,976-00 3,093,428 486,952
1927
600.413,401 13,633,452.000 4,024,590 576,540 tion from 80 mills as 5,298.000 feet, shipments 6,221,000 and new business
222,243,398
1928
810,549
4,811,107
208,824.653 598,994,708 14.748.552,000
1929
4,572,000. The 39 identical mills reported a decrease of 11% in production
158,812.462 476,755.707 16,200,894.000 2,939,791 569.271
1930
and an increase of 6% In new business, compared with the same week last
Month of:
33,521
144,878
12,738,467 86,318.980 1.127,832,000
Year.
Jan. 1931
189,264 39.975
Hardwood Reports.
12.002.161 36,651,119 1.097,208.000
Feb. 1931
241.728 47,696
14.040,803 41,850,638 1,303,302.000
Mar. 1931
The Hardwood Manufacturers Institute, of Memphis, Tenn., reported
299,736 53,131
15,243,625 45,016,344 1,402.800,000
April 1931
280,041 47,812 production from 252 mills as 14.828.000 feet, shipments 18,021,000 and
18,009,764 53,417,709 1,499,904.000
May 1931
213,741 42.556 new business 17,222,000. The 211 identical] mills reported a 33% decrease
17.084.749 51,279,827 1,611,540,000
June 1931
186.258 36.923
1.657,446,000
46,696.925
15,139,769
1931
July
158,851 32,890 In production and a 28% decrease in new business, compared with the same
1,657,446,000
36,231,633
11,745.425
Aug. 1931
week of 1930.
x These figures include Canadian production and cars assembled abroad the parts
The Northern Hemlock and Hardwood Manufacturers Association, of
of which were manu aotured In the United States.
truck production, Oshkosh. Wis., reported production from 17 mills as 543,000 feet. shipNote.—WRh the exception of gasoline consumption and car and
1929 are estimated to represent approxi- ments 1.374.000 and orders 1,163.000. The 15 identical mills reported
the figures shown above since January with
75% for prior years.
a decrease of 39% in production and a decrease of 28% in orders, compared
mately 80% of the industry as compared
with the same week a year ago,
Drop—Favorable Shipment Ratio
Production of Lumber for Four Weeks Ended Oct. 3
Continues.
1931 by an Average of 673 Mills Approximately
Lumber orders dropped below production for the week
32.4% Below Same Period Last Year—Shipments
in favorable
and Orders Also Fall Off.
ended Oct. 10, though shipments continued
reports
telegraphic
in
indicated
is
it
production,
relation to
give herewith data on identical mills for the four weeks
We
which gave
from 825 leading hardwood and softwood mills
Oct 3 1931, as reported by the National Lumber
ended
proorders 5% below and shipments 9% above a combined
Manufacturers Association:
reported
mills
820
earlier
week
duction of 175,677,000 feet. A
An average of 673 mills whose production during the first three-quarters
of of this year aggregated three-quarters of 10 billion feet, reported as follows
orders 10% above and shipments 20% above production
to the National Lumber Trade Barometer:
168,467,000 feet. Comparison by identical mill figures for
Four Weeks Ended Oct. 3—
1930.
1931.
shows—
ago
the latest week with the equivalent period a year
980.476.000
Production (feet)
662,966,000
9E8.585.000
for softwoods,452 mills, production 29% less, shipments 28% Shipments (feet)
748.554.000
1.020,381,000
608,218,000
less and orders 34% less than for the week in 1930; for hard- Orders received (feet)
Lumber
Orders
OCT. 17 1931.]
FINANCIAL CHRONICLE
Production in 1931 was 32.4% below 1930 and 55.3% below the record
of comparable mills in the same four weeks of 1929. Orders received
in 1931 were 31.8% below 1930 and 48.2% below 1929. Shipments in
1931 were 22.7% below 1930.
On Oct. 3 1931, gross stocks as reported by 357 softwood mills were
4,023,190,000 feet, compared with 4,388,969,000 feet a year ago. In
other words, they were the equivalent of 95 days average production of
the reporting mills on Oct. 3 1931 and the equivalent of 103 days average
production on Oct. 4 1930.
On Oct. 3 1931. unfilled orders, as reported by 624 mills-both softwoods
and hardwoods-were 623,996,000 feet. compared with 931,941.000 feet
a year ago. That is, they were the equivalent of 12 days' average pro
duction on Oct. 3 1931 and the equivalent of 19 days' average production
on Oct. 4 1930.
West Coast Lumbermen's Association Weekly Report.
According to the West Coast Lumbermen's Association,
reports from 226 mills show that for the week ended Oct. 3
1931 there were produced a total of 82,874,815 feet of lumber,
93,303,062 feet ordered and 102,665,336 feet shipped, as
compared with 92,048,619 feet produced, 88,308,601 feet
ordered and 102,646,895 feet shipped during the preceding
week. The Association's statement shows:
WEEKLY REPORT OF PRODUCTION, ORDERS AND SHIPMENTS.
226 mills report for week ended Oct. 3 1931.
(All mills reporting production, orders and shipments for last week.)
Production
82,974,815 feet (100%)
Orders
93,353,062 feet (12.51% over production)
Shipments
102,715,336 feet (23.79% over production)
COMPARISON OF CURRENT AND PAST PRODUCTION AND WEEKLY
OPERATING CAPACITY (345 IDENTICAL MILLS).
(All mills reporting production for 1930 and 1931 to date.)
Actual production week ended Oct. 3 1931
94,239,243 feet
Average weekly production 39 weeks ended Oct. 3 1931
120,549,658 feet
Average weekly production during 1930
158,918,303 feet
Average weekly production last three years
196,082,476 feet
S Weekly operating capacity
299,087.730 feet
x Weekly operating capacity Is based on average hourly production for the 12 last
months preceding mill cheek and the normal number of operating hours per week.
WEEKLY-COMPARISON (IN FEET)
-FOR-225-IDENTIC
A-MICL_-1931.
(All mills whose reports of production, orders and shipments are complete
for the last four weeks.)
Week EndedOct. 3.
Sept. 28.
Sept. 19.
Sept. 12.
Production
82,874,815 92,048,619 93,748,623 75,318,885
Orders (100%)
93,303,062 88,308,601 95.056,740 80,420,716
Rail (32%)
29,748,048 29,380.854 29,375,058
24,647,371
Domestic cargo (35%)
33,139,555 40,924,448 44.134,248 31.953,718
Export (22%)
20,135,698
10,074,016
13,792.151
16,321.739
Local (11%)
10,279.761
7,929.283
7.755,283
7,597,888
Shipments (100%)
102,665,336 102,646,895 95,769,200 79,843,174
Rail (29%)
29.859.879 29.529,404 29,607,210 26,033,217
Domestic cargo (41%)- 42,353,101
42,201,814 42,281,890 33,478,627
Export (20%)
20,172,595 22,986.394
16,124,817 12.733,442
Local (10%)
10,279,761
7,929,283
7,755,283
7,597,888
Unfilled orders (100%)
271,838,643 285,928,729 304,492,291 313.963,723
Rail (27%)
72.184,984
72,391.073 74.239,918 75,065,942
Domestic cargo (44%)
119,199,342 131,038,081 135.218,757 140,460,245
Export (29%)
80.254,317 82,499,575 95.033.616
98,437,536
195 IDENTICAL-M1118
(All mills whose reports of production, orders and shipments are complete for 1930
and 1931 to date.)
Average 39
Average 39
Week Ended
Weeks Ended
Weeks Ended
Oct. 3 1931.
Oct. 3 1931.
Oct. 4 1930.
Production (feet)
101.027.721
81.073,700
139,944.212
Orders (feet)
91,340,565
101,723,186
133,631,920
Shipments (feet)
99,847,482
108,051,952
139,428,336
DOMESTIC CARGO DISTRIBUTION WEEK END. OCT. 3 1931 (101 Mills).
Orders on
CalcellaHand BeOrders
lion Adgin's 11 eek Received. justmeats,
Oct. 3 1931.
Washington & Oregon
Feet.
Fed.
(88 M1118)California (67 mills)--- 42.224,120 11,844.765
Atlantic Coast (73 mills) 73,946,523 15.873.503
Miscellaneous(16 mills). 6,726.517 1,943,000
Shipmerits.
Unfilled
Orders
Week Ended
Oct. 3 1931.
Feel.
Feet.
Feet.
323.780 8,111,691 45,633.414
48,220 27,627,899 62,143,907
2,205,118 6,464.399
Total Wash.& Oregon 122.897,160 29,661,268
Reporting domes, cargo
1,109,076
527,033
only (4 mills)
372,00037,944,708 114,241,720
124,006,236 30,188,301
372,000 38,736,241 115.086,296
Totals
Brit. Col. (13 Mills)California (4 mills)
Atlantic Coast (13 mills)
Miscellaneous(4 mills).Totals British Col- --Reporting domes. oars
only
Totals
791,533
844,576
162,000
1,218,000
4,163,623 2,732,254
1,573,222
57,000
562,000
701,193 4,454.860
75,000
818.000
1,739.824
1.555.222
6,954,845 2,951,254
701,193 5.091,860
4,113,046
6,954,845 2,951,254
701,193 5,091,860
4,113,046
Total domestic cargo_ 130.961.081 33.139 555 1.07a 193 43.828.1(11 110 100 142
The Paper and Pulp Industry in August-Paper
Production Decreased 4% from July.
According to identical mill reports to the Statistical
Department of the American Paper and Pulp Association
from members and co-operating organizations, the daily
average of total paper production in August decreased 4%
under July and was 6% under August 1930. The daily
average wood pulp production in August was 6% below
July 1931, and 12% under August 1930. The survey issued
by the Association Oct. 9, also said:
Compared with August a year ago,the daily average production
registered
a decrease in the following grades: Newsprint, uncoated book, paperboard.
writing, hanging and building papers. Compared with July 1931, the
following percentage decreases were registered in the daily average production: Newsprint, 11.2%; paperboard, 4.8%; bag, 1.1%, and building, 10.1%.
The eight months' cumulative total of production of paper was 9.9%
below the corresponding period in 1930 while shipments were 9.2% smaller
than a year ago. All the major grades of paper, excepting newsprint, have
shown improvement in production at the end of the eight-month period as
compared with the end of the seven-month period.
2511
The eight months'cumulative total of wood pulp production for this year
was reported as 17% below the level of the same period in 1930.
Total shipments of wood pulp to the outside market were 31.7% below
the level of the eight months' total of 1930. Bleached sulphite and mitscherlich pulp shipments to the open market were greater than in the first
eight months of 1930 while kraft pulp shipments registered no change from
the 1930 level.
Total wood pulp inventories showed a continued decrease and at the end
of August, were 25% below the level of August 1930. Ailgrades, excepting
easy bleaching pulp, showed inventories below the level of August 1930.
REPORT OF PAPER OPERATIONS IN IDENTICAL MILLS FOR THE
MONTH OF AUGUST 1931.
Production,
Tons.
Shipments.
TOM.
88,344
70,224
153.523
45,537
11,934
21,109
6,687
3,261
14.141
4,647
89.047
68,771
154.392
44,469
12,797
21.961
6,949
2,337
14,681
4,997
419,407
3,518,720
3.006.881
420,301
3,519,452
3.876.675
Grade.
Newsprint
Book, uncoated
Paperboard
Wrapping
Bag
M Ming,&a
Tissue
Hanging
Building
Other grades
Total-Ali grades, Aug. 1931._
Total-All grades,8 mos.'31
Tntill- A Merriam 8121m. *30
Stocks on Hand
End of Month,
Tons.
_
32.607
48,269
58.695
43,901
5.133
46,926
4,128
3,029
13,945
2,963
259.596
259.596
266.248
REPORT OF WOOD PULP OPERATIONS 1N IDENTICAL MILLS FOR THE
THE MONTH OF AUGUST 1931.
Shipped Dur- Stocks on Hanel
lag Month. End of Mona,
Tons.
Tons.
Grade,
Production,
Tons.
Used During
Month, Tons
Groundwood
3ulphite news grade.Sulphite bleached
Sulphite easy bleaching
Sulphite mitscherlichKraft pulp
Soda pulp
Pulp-Other grades-
56.965
26,386
18,868
2.379
2,716
26.987
16,550
445
63,610
25,243
16,257
1.901
2,595
22,949
13,765
309
1.507
797
2,652
160
702
4,610
2,712
68
59.432
6,470
2,859
1,203
1,325
4,228
2,932
231
TotalAll grades,Aug.1931
151.296
Ail grades.8 mos.'31 1,371,011
All grades,8 mos.'30 1,652,442
146,629
1,244,501
1,441,672
13,208
117,102
171.399
78.680
78,680
104,219
Agricultural Department's Official Report on
Cereals, &c.
The Crop Reporting Board of the United States Department of Agriculture, made public late Saturday afternoon,
Oct. 10, its forecasts and estimates of the grain crops of the
United States as of Oct. 1, based on reports and data furnished by crop correspondents, field statisticians and cooperating State Boards (or Departments) of Agriculture.
This report shows that the production of winter wheat is
now placed at 775,000,000 bushels, which is the same as
the Department's estimate a month ago, and compares with
612,000,000 bushels harvested in 1930. The production of
spring wheat is estimated as of Oct. 1 to be only 109,000,000
bushels, which compares with a production of 251,000,000
bushels in 1930 and a five-year average production of
274,000,000. The probable production of corn is now
Placed at 2,703,000,000 bushels, which compares with
2,094,000,000 bushels harvested last year and 2,614,000,000
bushels harvested two years ago, and a five-year average
production of 2,761,000,000 bushels. The condition of
corn on Oct. 1 was 71.4% of normal, comparing with
58.8% on Oct. 1 1930 and a 10-year average of 77.0%.
Crop prospects generally improved about 1% during Sep- •
tember. Below is the report:
Crop prospects improved about 1% during September.. Maturing
or harvesting of various late crops such as beans, potatoes, peanuts,
tobacco, hay, and cotton, was aided by the general absence of destructive
frost and by the warmest September on record, but in the South it was
too dry for sweet potatoes, grain sorghum and sugar cane,
and in the
Great Plains area it was too dry for corn and late flax. Combining all
crops, Yields per acre are now expected to be 10.9% above the very low
yields secured last year and 0.9% below the average of crop yields during
the previous 10 years.
In comparison with recent years there are large crops of cotton and
tobacco, a shortage of hay, chiefly in the West, a rather light production
of feed grains that is being offset by the feeding of wheat and by the increased production of cottonseed, about average crops of potatoes, sweet
potatoes, and rice and rather large crops of several of the other important
food products, including wheat, beans, peanuts and most fruits.
Corn.
The corn production forecast is 2,702.752,000 bushels, a decrease of
0.5 of 1% from the September estimate. Warm September weather
favored maturing and drying corn quite generally but reduced the yield
in some Western States. The crop matured without frost damage with
exceptions in some Northern States. Husking is under way throughout
the Corn Belt States.
The forecast is 29.1% larger than the short crop of 2,093.552.000 bushels
in 1930, but 2.1% under average production during the previous five
years.
Corn production in the Corn Belt States is estimated at 1.839.048.000
bushels, compared with 1,547.996.000 bushels In 1930. The Ohio, Indiana,
Illinois, Michigan, and Wisconsin crops total 788,906,000 bushels, against
537.571.000 bushels in 1930 with all of these States except Wisconsin
showing a heavy increase in production over that of last year. Corn
production for the seven Corn Belt States west of the Mississippi River
Is estimated at 1,050.142.000 bushels, compared with 1.010.425,000 bushels
in 1930. Increases over the 1930 crop in Iowa, Missouri, and Kansas mor ;
than offsetting heavy reduction in other States in this area;
•
The average yield per acre is reported at 25.6 bushels, compared with
20.6 bushels in 1930, and 28 bushels the average for the previous tenyear period.
The adverse effects of drouth conditions are reflected by a further reduction in the Minnesota, South Dakota, Nebraska and Kansas crop.
Iowa and Missouri crops are the same, while some improvement over the
September prospects is reported in all Corn Belt States east of the Mississippi River. The prospect in most of the other States was maintained
or Improved.
CORN.
Condition Oct. 1.
State.
Me____
N. H__
Vt -___
Mass_ R.I___
Conn....
N. Y...
N. J___
Pa --Ohio -Ind _-III
MichWis
Minn
Iowa_..
Mo
N.Dak.
S.Dak_
Neb.__
Kan..._
Del_..__
Md
Vt.
W.Wa_
N.0
S. C
Oa._
Fla
Ky _ _
Tenn
Ala
Miss
Ark
La
Okla
Texas
Mont
Idaho
Wyo.__
Colo
N.M
Aria_ _ _
Utah
Nev
Waah
Ore- ...
Calif
[VOL. 133.
FINANCIAL CHRONICLE
2512
Production.a
Yield per Acre.
10-yr.
10-yr.
5-year
Aver. fediAver.
Average
1920- 1930. 1931. 1920- cated
1929. 1931. 1925-1929.
1929.
%
%
84
87
86
85
87
86
82
83
81
81
78
78
77
81
78
86
78
74
74
74
66
83
81
80
83
78
70
73
82
80
77
72
70
70
69
68
70
69
86
80
69
71
84
89
90
82
86
86
91
94
91
86
89
81
69
71
45
56
64
59
51
77
74
69
44
62
54
73
40
58
34
35
39
74
72
66
68
39
48
55
46
18
44
37
62
44
85
85
91
60
76
85
86
77
82
86
%
86
97
103
87
88
92
96
84
94
92
89
83
77
70
60
75
79
68
20
51
57
81
86
92
90
85
72
62
66
92
86
76
84
87
69
60
71
39
78
47
41
79
84
75
77
75
84
88
Bush.
41.4
44.6
44.5
43.2
40.9
43.6
35.8
42.0
42.0
38.6
35.8
35.5
33.6
39.2
34.4
40.1
28.3
24.1
25.5
26.6
21.4
33.2
39.0
26.8
33.7
20.7
15.1
12.9
13.6
27.2
23.9
14.2
16.7
18.1
17.1
20.0
20.5
18.2
38.7
20.2
15.4
18.2
27.3
25.1
25.2
36.8
32.8
33.4
Bush.
43.0
46.0
48.0
44.0
42.0
45.0
41.0
42.0
51.0
45.0
40.0
37.0
33.0
32.0
26.0
35.0
28.5
21.0
5.5
17.0
18.0
35.0
40.0
31.0
36.0
23.0
15.2
11.0
11.0
32.5
27.0
15.2
21.5
24.0
17.5
17.5
21.0
10.0
33.0
13.0
9.
21.0
29.0
22.0
20.0
37.0
34.0
31.0
1.00)
Bushels.
511
611
3,447
1.893
384
2,329
22,761
7.914
55,127
140,330
160,599
329.948
48.142
82.368
142,337
442,0;5
170,204
21,553
100,527
223,580
126,793
4.570
21,593
44,077
10.432
48,754
21,484
47.997
8,038
81,751
69,912
39,253
33.312
33,315
20,936
56,605
87,327
5,304
2,680
3,261
18,551
3,544
1,141
498
50
1,791
2,682
2.535
1930.
1,000
Bushels.
546
585
2,752
1,794
378
2,142
16,920
6,048
26,840
88,358
116,066
228,506
25,276
79,365
139,190
368,388
73,935
19,058
79,840
247,106
82,908
2,815
7,276
17,227
5,772
51,865
25.806
43,261
7,500
30,402
39.832
29,505
22,540
8,404
12,309
36,436
86,710
2,160
1,365
3,696
41,234
3,612
1,122
496
44
1,482
1,980
2,700
1931 Forecastfrom
Condition
Oct. 1.
1,000
Bushels.
602
644
3,168
1,584
336
2,385
22,673
7,056
64,107
159.030
178.960
338,180
44,352
68,384
122,564
406,630
174,734
25,158
30,030
171,632
119,394
5,040
20,400
47,833
15,624
60,513
24,958
40.953
7,084
91,488
80,082
46,983
48,461
46,344
21.158
54,968
112.203
2,070
1,386
2,951
16,965
5,964
1,044
330
40
1,443
2,074
2.790
DURUM WHEAT.
10
Year
Ave. 1930. 1931
19201929.
State-
Minnesota- --North Dakota_
South Dakota_
Montana
B ushei s.
14.7 17.0 14.1
12.3 11.7 x5.3
12.4 12.0 x5.2
13.2 7.5 x2.5
Four States_ 12.4 12.0
5.5
Quality
aProduction.
Yield Per Acre.
Oa.'31
Prelim(nary
Estimate.
6-Yr.
Aver.
1924- 1930. 1931,
1929.
%
%
%
_
Per Cent.
T housand Bushels.
86
89
1,692 86
3,400
3,390
86
89
51,270 35,720 12,460 91
78
84
5,387 90
12,210 17,760
79
90
90 86
225
372
5-Yr.
Aver.
19251929.
1930.
67,243
19,629
57,105
90.5
87.7
83.8
Oats.
The preliminary production of oats of 1,173,999,000 bushels shows an
increase of only 13,122,000 bushels over that reported last month. Production in 1930 was 1,358,000,000 bushels and the average for five years
heat during
previous was 1,317.000,000 bushels. The drouth and extreme
in the central States.
July seriously affected prospective yields, especially
and
The
Minnesota
Wisconsin.
Yields were especially low in the Dakotas.
with 91.2% last
quality of the crop is reported to be only 79.8% compared
year's crop being the lowest
year and average of 86.1%, the quality of this
since 1926.
OATS.
Yield per Acre.
State.
5-year
10-yr.
Average
Aver.
1920- 1930. 1931. 19251929.
1929.
Production x
1930..
October
1931
Preiftninary
Estimate.
Quality
10-yr.
Aver. 1930. 1931.
19201929.
1,000
1.000
1.000
%
%
%
Bush. Bush. Bush. Bushels. Bushels. Bushels.
91
96
4,270 92
5.002
4,982
Me
38.5 41.0 35.0
84
93
92
273
264
417
N.H--_ _ 38.6 44.0 39.0
2,124 91
93
94
2,184
2,976
Vt
36.3 39.0 36.0
80
91
132 86
190
284
Mass
34.5 38.0 33.0
90
98
85
60
70
68
R.I
30.4 35.0 30.0
90
87
261 86
288
431
Conn
30.0 32.0 29.0
92
86
80
26,506
37,632
32,845
29.0
N.Y...... 32.4 42.0
87
91
1,428 83
1,480
1,523
30.0 37.0 34.0
N.J
80
94
30,496 87
35,025
36,048
Pa
33.2 37.5 32.0
78
94
85
61,012
62,964
71,629
Ohio
34.8 36.0 37.6
76
91
61,236 83
58,920
62.796
Ind
30.0 30.0 31.5
78
93
83
141,984
144,218
139,917
34.0
33.5
Ill
32.4
74
91
45,990 86
53,352
51.427
Mich
32.7 38.0 31.5
94
69
72,355 86
101,976 108.680
Wis
38.9 44.0 29.0
74
91
86
121,744
170,048
150,632
Minn_ 34.8 39.5 28.0
96
80
215,762 243,945 191.952 88
Iowa
35.8 39.0 31.0
85
92
54,473 81
44,660
40,320
Mo
23.0 27.5 30.5
66
81
17,373 83
39,585
47,475
N.Dak.._ 24.8 21.0 a9.7
59
84
18,360 86
69,600
63,575
S. Dak
28.8 29.0 a7.5
78
91
89
54,163
83,720
72,304
22.4
32.2
29.0
Neb
91
96
49,352 84
40,341
34,210
Kan
24.2 30.4 31.0
82
90
165 86
120
106
Del
28.0 30.0 33.0
81
90
86
2,178
1,592
1,664
Md
31.4 32.5 33.0
86
84
5,216 86
2,831
4,289
22.6 19.0 30.5
Va
82
77
4,004 87
2,972
5,490
W.Va_
25.3 20.5 26.0
89
82
86
8,181
6,521
5.570
20.9 22.8 27.0
N.C
88
83
10,935 85
9.016
9,352
23.3 24.5 27.0
8.0
86
83
84
8,642
5,934
8,414
Cla
19.7 23.0 25.5
83
84
175 79
150
172
17.5
15.0
Fla
14.2
2.702,752
2.093,552
2,760.753
25.6
88
75
4,887 85
2,512
5,957
C1.13-- 77.0 58.8 71.4 28.0
Ky
21.7 16.0 27.0
86
82
83
4,200
2,920
4,479
earlier years, not so Tenn__.. 20.4 20.0 25.0
87
74
4,202 81
1,908
a Data for 1930 revised on basis of 1929 census, but for
1,979
18.6 17.5 22.0
Ala
87
71
1,166 81
432
1,092
revised.
Miss
19.3 18.0 26.5
88
83
Wheat.
5,479 80
2,750
4,382
Ark
21.9 25.0 29.3
86
75
1,218 80
420
864
month
29.0
a
20.0
La
estimated
those
22.5
from
91
89
Yields of spring wheat show little change
82
47,104
29,232
25,720
24.0 28.0 32.0
bushels as compared Dkla
93
80
76,398 82
40.012
43,615
ago. Total production is now estimated at 109,106,000
texas
25.8 27.5 42.0
75
80
average
(1925-1929)
87
-year
5
the
2,664
year
and
6,475
last
16.751
bushels
a9.0
17.5
28.2
with 251,162.000
85
94
4,410 93
5,719
6.458
42.4 43.0 35.0
[dab°
76
of 274,687,000 bushels.
80
2,288 93
3,888
4,130
and
16.0
North
27.0
;Vyto
32.4
of
States
Minnesota,
four
77
88
4,416 90
Production of durum wheat in the
6,700
5,699
Polo
28.6 33.5 23.0
bushels, practically
81
75
1,254 88
735
955
,7.14
South Dakota and Montana is estimated at 19,629,000
22.8 21.0 33.0
90
100
490 90
bushels below last
455
37.000,000
but
about
502
estimate
35.0
month's
35.0
ida
32.2
last
the same as
78
93
1,200 93
1,848
2,407
below the five-year average.
Jtati_
39.6 42.0 25.0
77
98
78 94
year's production and 47,000,000 bushels
108
75
qev
36.4 36.0 26.0
at 89.477,000 bushels, about
88
89
7,850 88
7,680
9,719
Other spring wheat production is estimated
50.0
vash
48.0
46.2
87
118,000,000
94
year
and
last
91
8,214
produced
amount
9,594
the
than
10.665
33.4 41.0 37.0
)re
105,000,000 bushels less
77
90
1,541 89
3,360
4,850
Little change is shown from last
30.4 35.0 23.0
lab! _
bushels below the five-year average.
of a further reduction in North Dakota.
70 R
01.0
exception
55.1
the
with
112000
1
nA9.
zAR
1
ora
Q111
estimate
1
K
012
0
.10
1
'2/
rr a
month's
winter and spring wheat is now placed at
The combined production of
earlier years not so reyear s
for
but
last
above
census,
bushels
1929
of
basis
21,000,000
on
is
about
revised
which
z Data for 1930
884,000,000 bushels,
abandoned or cut for hay since
above the five-year average.
vised. a Yield includes allowance for acreage
crop and about 62,000.000 bushels
at 83.8% as compared with 87.7% July 1.
reported
is
wheat
durum
of
Barley.
Quality
(1924-1929) of 90.5%. Quality of other
last year and the six-year average
at 215,889,000 bushels, an increase
with 86.5% in 1930 and the six-year
The production of barley is estimated
spring wheat at 82.7%, compares
but 35.5% below production in 1930
forecast,
the September
over
1.6%
of
average of 88.3%.
production during the previous five years.
OTHER SPRING WHEAT.
and 18.5% leas than the average
the lowest on record,due chiefly
The yield per acre this year is apparently
Dakotas where over 36% of the sown
Quality
to severe drouth conditions in the
nProduction.
Veld Per Acre.
wore mostly favorable
conditions
season
Late
acreage was located this year.
In all States are up to or slightly
Oct.'31
for harvesting and threshing and yields
6-Yr.
Prelimto the drouth, the quality of barley Is
10
above September Indications. Due
(nary Aver.
5-Yr.
Year
l yco
::
p
inrest e ini
a
96eraanld
en
thp0
islg8
d
86
esuta;Tyee
1 wQ
e%
a%
.5
nt
th2
n
ofis
a.9
. Tgheis
vera
d77
%
na
Esti- 1924- 1930. 1931. repo
1930.
Ave. 1930. 1931. Aver.
state__
the
mate. 1929.
1925t
en
ra
d
a
e
e
t
last
r
y
1920%
%
California.
%
1929.
and
northwest
1929.
barley States of the
10- Yr. A verage.
Thou sand Bus Sets.
Buckwheat.
B ushel a.
98
93
92
66
63
112
21.0
22.5 22.0
95
Maine
95
21 91
20
27
buckwheat crop is forecast at 10,594,000 bushels. This production
21.0
20.0
The
19.1
Vermont
87
89
180 86
170
forecast of a month ago, and about a third
168
17.1 17.0 20.0
would be about the same as the
86
New York
89
231 z86
210
124
but still a fifth less than the average
Pennsylvania- z16.2 21.0 21.0
82
92
larger than the very short crop of 1930
428 85
342
112
22.5
19.0
19.0
years. The reduced production as
91
96
210 85
225
Ohio......... 14.8 15.0 21.0
101
production during the previous five
due largely to the smaller acreage
is
80
average
94
83
1,564
Indiana
2.541
3,128
compared with the five-year
17.4 21.0 18.4
74
84
258 82
198
Illinois
to be only slightly below that
89
15.6 18.0 21.5
planted, for the yield per acre is expected
79
85
82
1,258
1,407
Michigan
1,313
21.0 17.0
86
86
Wisconsin..... 17.8 15.9
usually secured.
16,011 12,013 z84
17,404
14.2
13.0
Flaxseed.
86
89
680 85
Minnesota
665
588
14.5 17.5 17.0
90
82
126 83
168
fowa
147
13.4 14.0 18.0
Flaxseed prospects showed only a slight decline during September as
82
85
23,229 z88
64,087
Missouri
63,184
x4.3
and the first half of August had
10.2
72
81
9,120 z90
high temperatures and drouth during July
North Dakota_ 10.4 11.6 x3.8 17.474 25,775
77
86
1,120 88
3,008
3outh Dakota_ 9.8 16.0 8.0
2,896
already reduced the condition of the crop to the lowest on record. The
13.3
78
82
83
144
to
440
gebraaka
due
were
unfavorable weather early in
prospects
190
further declines in
8.4 11.0 9.0
83
88
28.806 11.439 z89
EGIII688
13.8 8.5 14.5 66,502 15,457
September in the States of Minnesota. Wisconsin and Wyoming. No
83
94
93
9,200
Montana
16.382
73
25.6 29.0 23.0
81
1,080 92
change was indicated in forecast production in the Dakotas and Montana.
Idaho
2,548
2,645
16.8 14.0 9.0
81
85
2,304 88
Wyoming
4,868
5,542
No serious loss from frost damage was reported.
16.9 16.5 12.0
86
75
87
567
"Poiorado
420
619
Production is now forecast at 11,474,000 bushels, compared with 11,769,75
16.2 14.0 21.0
93
law Mexico
1,330 92
2,624
2,841
19.0
32.0
28.2
81
bushels indicated last month, 21.369,000 bushels produced last year
90
000
Ptah
92
264
286
336
25.8 26.0 22.0
93
87
%wads
and 20,917,000 bushels the average production during the previous five
20.837 19,253 10,669 89
12.0
13.0
15.3
81
_
Washington
90
1,980 90
4.462
4,709
years.
17.2 23.0 18.5
)Mon
The crop IS very poor in the Dakotas and Montana. The indicated
89,477 y87.2 86.5 82.7
104,057
207,445
6.7
11.9
y12.8
United Metal
production in these States is only 4,934,000 bushels compared with 13.so
not
years:
earlier
for
but
070.n00 bushels In 1930 and an average of 13,705,000 bushels during the
a Data for 1930 revised on basis of 1929 census
abandoned or cut for bay since previous five years.
revised: :Yield Includes allowance for acreage
wheat.
spring
July 1; 1 Short MIS &TOMO: 7 All
OCT. 17 1931.]
FINANCIAL CHRONICLE
2513
duction. The crop has been harvested under favorable
Rice.
conditions and is
Rice production in California is forecast at 7,375,000 bushels which is reported to be curing exceptionally well with only slight
damage from
125,000 bushels below the Sept. 1 forecast but more than 100,000 bushels "house-burn" or "pole sweat" which usually causes considerable
damage
more than either the crop of 1930 or the average for the previous five years. especially in years of hot damp weather during the curing period.
In the three southern States (Arkansas, Louisiana and Texas), a 34
The production of the fire-cured types, including Virginia dark-fir
ed,
million bushel crop is now expected. This will be 200,000 bushels more than Clarksville and Hopkinsville, and Paducah, is estimated to be
206,752,000
last year's crop and about one million bushels more than the average for the pounds which represents an increase of about 24% from the
1930 crop of
five years, 1925-1929.
166,191,000 pounds. Increased acreage combined with substantially
In Louisiana weather has been excellent for harvesting and about one- higher yields account for the increased production of these types,
compared
fourth of the crop has been threshed.
with last year.
tobaccos,
Among
cigar
production
the
of
the
filler
types
is
estimated to
Grain Sorghums.
be 90,206,000 pounds, represnting an increase of about 12% from the 1930
Prospects for grain sorghum declined 5,000,000 bushels during September
production of 80,341,000 pounds, while the production of the binder types
as a result of exceedingly dry weather in the southern Great Plains area
is estimated to be 85,395,000 pounds, representing a decrease of about 9%
where most of the crop is grown. Including sorghum that will be fed in
the bundle without threshing, the production of grain sorghum for all from last year's production of 93,363,000 pounds. The production of the
wrapper types is expected to be considerably below last year, the present
purposes is estimated as equivalent to 129,059,000 bushels compared with
a very short crop of 86,514,000 bushels last year and an average production estimate being 8,519,000 pounds, compared with 11.696,000 pounds harvested
last year.
of 124,933,000 during the previous five years. The yield per acre is expected
CROP REPORT AS OF OCT. 1 1931.
to be 19.1 bushels compared with 14 bushels last year and an average of
The Crop Reporting Board of the United States Department of Agri19.8 during the previous five years.
culture makes the following forecasts and estimates for the United States,
Hay.
from reports and data furnished by crop correspondents, field statisticians
The preliminary estimate of hay production is 88,352,000 tons.
This is and co-operating State Boards (or Departments) of Agriculture and Agri134% above the forecast of Sept. 1 but would be slightly below the short cultural Colleges:
crop of last year and below production in any previous season since
1913.
Last year production was 89,675,000 and the average during the
Condition.
Total Production in Millfons.(a)
previous
five years (subject to revision) was 107,424,000 tons. The reduced
proOct. 1
duction this season results chiefly from the drouth which has affected most
Indicated by
Croy.
10-year
Condition (b)
of the area from the Pacific Coast east to Michigan. Kansas and
Texas and
Average Oct. 1 Oct. 1 5-Year 1930.
also parts of Georgia and adjoining States. Most other sections
1920-29 1930. 1931. Average
Sept. 1 Oct. 1
secured
fairly good yields of hay notwithstanding widespread injury to meadows
Per Ct. Per Ct. Per Ct. 1925-29
1931. 1931.
and new seedings from the drouth of last year.
Corn, bushels
2.761 2,094 2,715 2,703
71.4
58.8
The tame hay crop is estimated to be 72,292,000 tons, slightly larger Winter wheat, bushels- 77.0
___
___
___
547
612
c775
c775
than last year's crop of 77,850,000 tons, but much below the
five year Durum wheat, 4 States,
bushels
average of 94,364,000 tons. The average yield per acre is reported
67
57
20
c20
at 1.45 Other spring wheat, U.S.
tons compared with 1.44 tons in 1930 and the 10-year average of
1.56 tons.
bushels
207
194
91
c59
The quality of the 1931 hay crop reported at 84.8% was
822
863
below the All wheat, bushels
886
c884
average quality of 88.7%.
Oats, bushels
1,317 1,358 1,161 c1,174
265
335
212
The preliminary estimate of alfalfa hay production is 25,537,000 tons, Barley, bushels
c216
Rye, bushels
46.1
48.1 c36.2 06.2
which is little different from the Sept. 1 forecast of 26,016,000 tons. The Buckwheat,
77.3
52.2
80.1
13.4
bushels
7.9
10.6
10.8
production in 1930 was 28,615,000 tons, and the five-year average produc- Flaxseed, bushels
604
732
41.4
21.4
20.9
11.8
11.5
tion is 29,300,000 tons. The yield per acre of alfalfa is estimated at
Rice, bushels_d
81.1
80.4
83.2
40.9
41.3
40.4
41.7
2.08 Grain sorghums, bush.d_ 77.1
124.9
70.3
50.2
86.5 134.4 129.1
tons per acre, about 20% below the 10-year average and substantially
---------94.4
Hay, all tame, toas
77.8
77.9 c79.3
below even the 2.46 tons secured last year although that was the lowest Hay, wild, ton;
13.1
11.8
c9.1
c9.1
yield reported in the 13 years for which comparable records were available. Hay, alfalfa, tons
29.3
28.6
26.0 c25.5
79.3
63.5
56.1
Lower yields are due to drouth in some of the important alfalfa hay produc- Pasture
bushelsTimothy
seed,
_
e83.0
75.6
80.5
1.48
2.03
---__
ing States west of the Mississippi River.
Clover seed (red and MThe yield per acre of red, alsike, and crimson clover for hay is reported
ello), bushels
74.2
65.8
67.0
1.40
1.46
at 1.45 tons per acre, compared with 1.32 tons in 1930. and an
Alfalfa
bushels_
seed,
070.9
___
61.2
53.6
average
Beans. dry edible, bush.d ------------18.4
21.9
yield of 1.57 tons.
18.7 c20.0
Soy beans
e80.2
82.2
67.4
The condition of alfalfa for seed on Oct. 1 is 53.6% of normal,
compared Peanuts (tor nuts), lbs
58.8
73.6
73.1
796
727
913
929
with 46.6% on Sept. 1,61.2% on Oct. 1 1930 and an average Oct.
1 condi- Cowpeas
tion of 70.9%.
Velvet beans
e72.4
68.5
56.4
Apples, total crop. bush_
57.6
48.7
70.5
The condition of timothy for seed is given at 80.5%
174
164
223
223
compared with Apples,com'l crop bbls_ _
59.4
54.2
69.3
32.6
33.7
38.9
37.6
79.1% on Sept. 1. On Oct. 1 1930 it was 75.6% and the average
Oct. 1 Peaches,total crop, bush. 582.7 152.8 179.8
g55.2 g53.6
77.7
c77.9
condition is 83%.
Pears, total crop, bush. 67.3
68.8
64.3
22.1 g27.6
24.1
24.1
Grapes,tons_b
The condition of red and alsike clover for seed is reported at 67%,
75.2
80.5
54.3
g2.40 g2.46
1.85
1.63
come49.8
59.6
41.1
52.0
44.0
76.1
pared with 60.2% on Sept. 1. On Oct. 1 last year the condition was Pecans, lbs
77.9
Potatoes, bushels
76.2
69.5
66.8
381
343
361
375
65.8%, and the 10-year average is 74.2%.
Sweet potatoes,bushels
62.7
74.9
67.8
80.3
62.2
83.9
77.2
No estimates of averages of hay seed crops have as yet been made
69.9
77.6
1,357 1,641 1,648 1.661
79.4
for Tobacco, lbs
86.8
85.4
Sugar beets, tons
77.0
7.36
this year.
9.20
7.13
7.18
58.6
074.7
82.4
Sorgo for sirup, gallons
28.6
12.9
24.3
24.4
Potatoes.
sugar cane tor sirup,gals e60.4
62.9
61.7
21.2
18.4
20.4
19.1
The condition of the late potato crop as of Oct. 1 and reported
---------Broomcorn,
--145.0
tons_
d
150.2 147.9 c146.5
prob____
____
____
31.4
Hops. lbs. d
23.4
able yields indicate a total production of 374,751,000 bushels of
23.5 c25.3
potatoes compared with the estimated 1930 production of 343,236,000
aData for 1930 mostly revised on basis of 1929 census, but for earlier years;
bushels.
Over much of the Northeastern and Central sections of the
not so revised. b Indicated production increases or decreases with changing concountry. ditions
during the season. cPreliminary estimate. d Principal producing States.
September was quite favorable to the growth of the crop.
Many e Short time average. f Production In percentage of a full crop. g Includes some
localities received the benefit of much needed rain during the month,
which quantities not harvested. Is Production is the total for fresh fruit, juice and raisins.
afforded some relief from drouth conditions and permitted the crop
Thousands of tons.
to take
on added bulk. Light frosts have occurred, but no killing frosts
were
reported in major localities up to Oct. 1. The increased size of
Acreage a
Yield per Acre.
the crop
since the Sept. 1 forecast is found principally in the Eastern and
Central
Acres.
1,000
Inasurplus late potato States. Prospects in the Western States,
for the
Crop.
1931 10-Yr.
cated by
most part, remain practically unchanged from a month ago,
5-fl,
Per Ct. Avge, 1930. Conti'n
the water
shortage being a limiting factor. Production in the 19 surplus late
Avge. 1930. 1931.
of
1920Oct. 1
States
1925-29
1930. 1929.
Is now forecast at 255,372,000 bushels, or nearly 9% more than last
1931.6
year;
in the 16 deficit late States 73,734,000 bushels, or 3% more than a
year ago
bush. 99,568 101,413 105,557 104.1
Corn
28.0
20.6
25.8
The yield per acre for the country as a whole is given at
" 36,466 39,514 c40,692 103.0
14.9
106.9 bushels, Winter wheat
15.5 d19.0
compared with 108.4 bushels in 1930 and a 10-year average of
wh't,4 St's_ "
5,380 4.763 3,543 74.4
12.4
12.0
d5.5
110.6 bushels. Durum
Other spring wheat,
Sweet Potatoes,
" 15,604 16.243 13,434 82.7
U.S.
12.9
11.9
d6.7
September's dry, hot weather over most of the South has
" 57,449 60.520 57,669 95.3
All wheat
14.2
14.3 d15.3
prevented Oats
" 42,553 40,125 41,248 102.8
the sweet potato crop from sizing up as expected on
31.1
33.8 d28.5
Sept. 1. Barley
"
10,222
12,901
12,771 99.0
25.2
26.0 d16.9
Absence of rainfall reduced the moisture supply that is
normally counted Rye
"
3,601 3,525 c3,294 93.4
13.5
13.7 d11.0
upon to develop the crop during September, and yield
746
589
588 99.8
18.6
prospects suffered Buckwheat
13.5
18.0
accordingly. The Oct. 1 forecast is for a production
"
2,909 3.692 3,132 84.8
7.6
5.8
3.7
of 77,157,000 bushels, Flaxseed
Rice a
949
959
958 100.0
nearly seven million bushels less than expected a month
41.2
43.1
43.5
ago, but still nearly Grain sorghums e
6,494
"
6,174 6,760 109.5
19.8
14.0
19.1
one-fourth greater than the estimated production
last year. There are Hay,all tame
tons 59,172 54,080 54,591 100.9
1.56
1.44 d1.45
possibilities of even lower yields than now expected
" 13,872 13,810 13,283 96.2
.86
.99
should there be insuf- Hay wild
d.68
Hay, alfalfa
ficient rainfall after Oct. 1.
" 11,171 11,653 12.304 105.6
2.62
2.48 d2.08
Beans, dry edible e_bush. 1,691 2,142 2.071 96.7
10.2
11.1
d9.6
Tobacco.
Soy beans f
2,212 3,109 3.805 122.4
---------Weather conditions during September were generally
702
669
695
favorable for the Peanuts (for nuts)-lbs. 1,096 1,087 1,337 123.0
development of late tobacco and unusually favorable for
Cowpeas f
1,773 1,450 1,883 129.9
--------harvesting and Velvet beans f
5108
126
112 88.9
-- curing of the early crop, which is nearly completed in the main
producing Potatoes
bush. 3,389 3,167 3,506 110.7 110:6 1-0-8:9 10-6:9
areas. Reported probable yield per acre and condition at time of
832
"
722
871 120.6
hart eel Sweet potatoee
86.2
95.2
88.6
indicate a crop of 1,660,992,000 pounds, which is not materially above
Tobacco
1,787
2,117
lbs.
2,096
99.0
775
764
792
the
tons
675 h821
h754 91.8
10.3
11.9
10.4
Sept. 1 forecast but about 1.2% above the record crop of 1,641,437,000 Sugar beets
Sorge for syrup
gals.
364
201
64.2
89.5
80.7
273 135.8
harvested last year and approximately 22% above the average production Sugar cane
for syrup "
120
113
118 104.4 181.9 163.2 161.6
during the previous five years.
Broomcorn e
lbs.
272
394
312 79.2 318.4 254.8 d298.5
23
The production of flue-cured is indicated to be 694,194,000 Pounds, Hors e
21 109.7 1,268 1,202 d1.181
20
which is slightly less than the Sept. 1 forecast and about 19% less than the
Data for 1930 mostly revised on basis of 1929 census, but for
1930 crop of 859,831,000 pounds, but nearly 4% above the average producearths' yearn
not so
b Indicated yield Increases or decreases with changing
tion during the five years, 1924-1929. The decrease in production of during revLsed.
the season. c Acres remaining for harvest. d Preliminary conditions
estimate.
this type compared with last year is accounted for mainly by reduced acreage e Principal producing States. (See sheets for separate
crops.) I Grown alone for
In all flue-cured States. The production of flue-cured in North Carolina, all purposes. g Short time average. h Planted acreage, 90% of which is usually
harvested.
this
type,
of
71%
growing
about
is
estimated
to be 491.080,000
the State
pounds, compared with 577,520.000 pounds produced in 1930. All other
flue-cured States show material decreases in prospective production comForeign Crop Prospects.
pared with last year.
The latest available information pertaining to cereal crops
Burley prospects improved somewhat during September, the indicated
production having changed from 455,222,000 pounds on Sept. 1 to 467,- in foreign countries, as reported by the Foreign Service of
773,909 pounds on Oct. 1. The burley crop in Kentucky, the State pro- the Bureau
of Agricultural Economies to the United States
ductng about 73% of this type, is expected to be 342.125.000 Pounds. Conspared with 2 • n;:,0,(01 pounds last year. The burley crop in other States, Department of Agriculture at Washington, and given out
rth OP'131ina is expected to exceed the 1930 pro- on Oct. 10, is as follows:
with the or........
Wheat.
Estimates of the 1931 wheat production in 28 foreign countries reported
to date total 1,836,000,000 bushels against 1,995,000,000 bushels produced in the same countries in 1930 when they represented about 52%
of the estimated world wheat crop, exclusive of Russia and China.
The Canadian crop was estimated in September at 271,000,000 bushels,
compared with 398,000,000 bushels in 1930. Early inspections and tests
showed the crop to be high in both grade and protein content, although
of
inspections during August and September showed a smaller volume
contract grades than in the same months of 1930.
15.The European crop, exclusive of Russia, now appears to be about
conditions
000,000 to 20.000,000 bushels greater than last year, whereas
50.000,000
ly
approximate
of
earlier in the season had indicated an increase
offset
bushels. Increases in Italy, France and Germany are practically
Poland. The esby decreases in Spain, Czechoslovakia, Rumania and
available
are
reports
timates of production in 19 countries for which official
not included
total 1.092,000.000 bushels, the same as in 1930. France is
semi-official
In these totals as the official estimate is not yet available. A
The unfavorable
estimate indicates an increase of 26,000,000 bushels.
the quality
reduced
weather conditions in western and northern Europe
wheat is reported to be of
as well as the quantity of the grain. Italian
good quality.
that the production in
Recent reports confirm previous indications
the increase in acreage.
Russia this year will not equal that of 1930 despite
conditions the quality of this
In view of the rather unfavorable weather
that of last year.
Year's crop Is expected to be below
wheat-producing counThe acreage sown to wheat In the two principal
less than a year ago.
tries of the Southern Hemisphere is considerably
17.235,000 acres, which
The second estimate of the acreage in Argentina is
last year. Early forecasts
is a decrease of 19% from the acreage sown
decrease of approximately
of the probable acreage in Australia indicated a
25%.
Rye.
in 17 European countries
The estimates of the 1931 rye production
with 835,596,000 bushels in the
compared
as
bushels,
total 696,382,000
1929. These 17 counsame countries in 1930 and 857,311,000 bushels in
exclusive of Russia.
tries represent about 90% of the European rye crop,
has resulted from the smaller
A part of the decrease in production this year
acreage.
Feed Grains.
countries, which last year
The 1931 barley production In 27 foreign
Hemisphere total, exraised more than 60% of the estimated Northern
bushels, a decrease
clusive of Russia and China, is estimated at 821,307,000
countries. The 20 European
of 18% from the 1930 harvest in those
7%
from the promore than
countries reported show a net decrease of
largely to smaller crops in Rumania,
duction in those countries last year. duo
Germany, on the other hand,
Spain, Czechoslovakia and Hungary. In
increases
and in France, according to unofficial estimates, there have been
African countries rein the barley crops this year. In the four North
in
increase
a
large
2%,
than
ported there has been a net increase of more
in Algeria.
the crop of Morocco being offset by a corresponding decrease
1% over the
Japan and Chosen together show an increase of more than
the 1931-32
1930 production. The acreage sown to barley in Argentina for
there,
record
on
the
is
largest acreage
harvest is 1,458,000 acres, which
regions
according to the second official estimate. In the Volga and eastern
seeding
of the U. S. S. R. there are complaints of drouth, and the barley
early seeding
Ii making slow progress, especially in the northeast, where
Is essential.
reported totals
The 1931 corn production in nine foreign countries so far
bushels
554,458,000 bushels, a decrease of 0.3% from the 556,092.000
production in the
produced in the same countries last year. The total
ising
corn-ra
important
eight European countries reported, including the
1930. The crop
countries of the Danube Basin, is 0.1% larger than in
above that of last
In Rumania has turned out well, being more than 29%
10.000,000 bushels,
year. In Jugoslavia there has been a decrease of nearly
The main corn crop in
and in Spain of more than 5,000,000 bushels.
is estimated at
Italy, which usually amounts to about 95% of the total,
bushels last year,
only 72,594.0(0 bushels, compared with 112,823.000
season. The 1930-31
on account of severe drouth during the growing
the largest on record
corn crop in Argentina of 372,590,000 bushels was
to the present time.
there, and exports have continued very heavy down
so far reported, which
The 1931 oats production in 22 foreign countries
Northern Hemisphere
last year accounted for nearly 54% of the estimated
1,524,362,000 bushels, a
total, exclusive of Russia and China, totals
countries. The
those
in
harvest
decrease of about 21% from the 1930
shows a net gain of
production in the 18 European countries reported
to large increases in
nearly 4% over that of last year, due principally
Poland and Italy. The
Germany and France, and smaller increases in
and Hungary. The
largest decreases were in Rumania, Sweden, Spain
net decrease of nearly
three North African countries reported show a
estimate of the area
34% from the 1030 production. The second official
acres, which
sown to oats in Argentina for the 1931-32 harvest is 3,504,000
harvest.
1930-31
Is 11% below the acreage for the
ANNUAL 1928-29
GRAINS: PRODUCTION, AVERAGE 1909-10 TO 1913-14,
TO 1931-32.
Harvest Year.
Aconite
1909-10
to 1913-14.
1928-29.
1929-30.
1930-31.
1931-32.
.
1,000
Bushels.
690.103
197,119
b11,481
1,000
Bushels.
914.876
566.726
11,031
1,000
Bushels.
809.176
304.520
11.333
1.000
lhoitzels.
863,430
397,872
11,446
1,000
Bushels.
884,286
271.400
15,778
Total N.Amerlea(3).
898,708
1,492.633
1,125,029
1,272,748
1.171,464
•
993.065
58,335
383,827
1,094.735
70,543
330.271
1,070.393
77,600
359.547
1,092.434
63,967
429,366
1,091,640
71,221
385,745
2,333,985
2,988,182
2,632.574
2,858,515
2,720,073
Estimated world tot
excl. Russia Chin' 3.041,000
3,998.000
3,551,000
3,818,000
36.093
2,094
869,038
43,366
14,618
826.864
41,911
13,1110
857,311
45.149
22.018
835,596
36.233
7.576
696.382
907.225
884,848
912,382
905,763
740.191
Crop and Countrte
Reported-a
WheatUnited States
Canada
Mexico
Europe (19)
North Africa (4)
Asia (3)
[Vol,. 133.
FINANCIAL CHRONICLE
2514
Tot. above countri
(29)
Rye-United States
Canada
Europe (17)
Toti. above countries
(19)
Estimated world tot
930 000 1.011 000 1.000.000
excl. Russia <lc China 1.025 000
a Figures in parenthesis indicate the nunaper of countries included. b Four-Year
average.
GRAINS: PRODUCTION IN SPECIFIED COUNTRIES, 1928-29 TO 1931-32.
Harvest Year.
1931-32.
1928-29.
1929-30,
1930-31.
1,000
Bushels.
357,487
136,391
1,000
Bushels.
302,892
102.313
1.000
Bushels.
334,971
135.160
493,878
405,205
470,131
288,405
660,344
106,703
115,634
731,250
100,621
117,986
673,098
81,529
112,317
623.997
83.432
113,878
1,376,559
1,355,062
1,337.075
1,109,712
Est. No. Hemisphere total excl.
1,663,000
Russia and China
1,700,000
1,663,000
1,228,369
300,516
1,358.052
49.595
Crop and Countries ReportedBarleyUnited States
Canada
Total No. America (2)
Europe (20)
Africa (4)
Asia (2)
Total No.IlemLsphere (28)
Oats1United States
Canada
1,439.407
480,413
1,000
Bushels.
215,889
72,516
1,173,999
360,591
1,919,820
1,528.885
1,807,647
1,534,590
1,634,651
18,727
1.786,06^
21,643
1,457,591
20,985
1,510.447
13,915
Total No. Hemisphere (23)
3,573,198
3,336,588
3,286,223
3,058,952
Est. No. Hemisphere total excl
Russia and China
3,841,000
3,642,000
3,583,000
2,818,901
2,614,132
2,093,552
2,702,752
21,374
62,514
138
8,763
49.592
71,612
20,272
108,512
24,793
95,840
157
9 113
70,631
163.285
37,005
251,410
28,739
112,823
156
8,142
55.395
136,393
30,514
177.940
23,424
72,594
118
8,740
57,320
126,686
31.385
230,302
342,767
652,234
550,102
550.569
7,665
5,455
5,990
3,889
3.169.333
3,271,821
2,649,644
3,257,210
Est. No. Hemisphere total excl.
3 091 nen
Russia_
3.700 000
3.101.000
Total No. America (2)
Europe (18)
Africa (3)
CornUnited States
(pain
Italy (main crop)
3witzerland
Czechoslovakia
EI unvary
lurmslavia
Bulzaria
Rumania
Total Europe (8)
Worocco
Total No. Hemisphere (10)
Aid for Agriculture Asked in Corn Belt-Iowa Executive
Calls Meeting of Governors in Region.
Governor Dan W. Turner has written the Governors of
the Corn Belt States proposing a conference on economic
conditions and possible steps to aid agriculture during the
low-price period. Advices to this effect were contained in
a Des Moines, Iowa, dispatch Oct. 12 to the "United States
Daily," which also had the following to say:
The suggestion was made to the Governors of Kansas, Minnesota, North
Dakota, South Dakota, Ohio, Indiana, Missouri, Illinois, Wisconsin and
Nebraska.
"What we need is cheaper money," he said, "and if it is going to benefit
many of the farmers it must be had without a long period of delay. In
is vital
the case of the corn farmer who does not feed livestock, we think it
that means should be worked out whereby he can hold his corn for a better
price. In the case of the farmer who wishes to feed his corn we think it
Is urgent that means should be worked out whereby he can obtain funds
at a reasonable rate of interest to carry forth this project.
in
"It is my thought that we should have a Conference of Governors
the not far-distant future not only on the subject I have outlined above,
producing
but on general economic conditions in the great agricultural
gathering around
center of the country. I sincerely believe that we can, by
will be cona table and talking the matter over, work out some ideas that
structive and help in the present crisis."
Shipment of Bartered Wheat to Brazil.
The following Richmond advices are from the "Wall Street
Journal" of Oct. 9:
The British freighter Martha sailed from Baltimore for Santos, Brazil,
with 240,000 of the 25,000,000 bushels of wheat the Federal Farm Board
has exchanged for Brazilian coffee in her hold.
In exchange for the wheat the Brazilian Government is giving the government agency 1.050.000 bags ofcoffee. This was the first shipment to leave
the port under the agreement.
First Brazilian Coffee Arrives in New York in Trade
for Wheat-130,000 Bags Reach Brooklyn in
Brazilian Ship.
The first shipment of Brazilian coffee to reach this country
in the international barter of 25,000,000 bushels of American
wheat for 1,050,000 bags of coffee was received on Oct. 13
at the Bush Terminal docks, in Brooklyn. A representative of the Federal Farm Board stood by to supervise the
unloading, which will take seven days, according to the
New York "Times" of Oct. 14, which further stated:
This initial cargo, arriving aboard the Ayuruoca, 12,000-ton governmentcontrolled Brazilian ship, consisted of 130.000 bags of standard-grade
Santos coffee More than 250 stevedores transferred the bags to the
dock and then by carloads to the Bush Terminal warehouses, where the
entire shipment will be held for ten months, according to the pre arranged
contract terms. The purpose of this clause was to prevent a flooding of
the coffee market.
The next shipment will arrive Oct. 24 aboard the Parnahyba.
Raymond L. Valentine, representative of the Farm Board and the
Stabilization Corporation, was present with Charles Crooks, pier superintendent, to check the cargo. Mr. Valentine declined to discuss any
phase of the matter except to say that the coffee would be held "about
a year and then disposed of according to contract." He said the Farm
Board wanted no publicity.
OCT. 17 1931.]
FINANCIAL CHRONICLE
Mr. Crooks said that consummation of the Contract would not jeopardize
coffee interests in this country and added that the final disposition would
be "at market prices."
Although wheat is being shipped to Brazil from a dozen other American
ports, coffee is received only at Brooklyn.
The Ayuruoca, piloted by Captain H. Vargas, belongs to the Lloyd
Brasileiro Line. It is docked at Pier 7, 41st St., Brooklyn.
2515
Rumanian Peasants to Decrease Wheat Acreage.
On Oct. 8 the Department of Commerce at Washington
stated:
According to a current report in Rumania there is a tendency on the part
of the peasants in that country to reduce their wheat acreage during the
coming year, the Department of Commerce i informed in a report from
Kenneth M. Hill, Asst. Trade Commissioner in Bucharest. It is stated
that the peasants have received such low prices recently that they are inclined to turn their activities towards producing other things which appear
to offer a more profitable return. Chief among the alternatives mentioned
are the raising of cattle and poultry for export, fruit culture, &c.
Exports of wheat this year are apparnetly exceeding governmental estimates, but it is estimated that despite the export bonus the farmers are
not receiving more than an average for their entire wheat crop or about 30
cents per bushel.
Germany Barters Coal for Brazilian Coffee on the
Same Basis as U. S. Traded Wheat.
In an effort to maintain a favorable balance of trade and
especially to offset the effects of English coal "dumping" in
the German Ruhr, mining industries concluded an agreement
with the Brazilian Government on Oct. 8 (says a Berlin
cablegram on that date to the New York "Times") to exRussia Delivers Breadgrains to Czechoslovakia.
change 500,000 tons of Ruhr pit coal for a corresponding
Russia has just started delivering breadgrains which were
quantity of Brazilian coffee, which is to be taken over by purchased some time ago by several large inporters in
Prague,
German coffee importers. The cablegram added:
according to Czechoslovak information received in the DeThe deal is similar to that made by the American Farm Board, which
partment of Commerce from K. L. Rankin, Commercial
traded wheat for coffee. The amount to be traded is less than 8% of the
monthly coal output of the Ruhr district and is less than 6% of that at the Attache in that city. In making this known Oct. 8, the
pitheads at present.
Department also stated:
Significance is attached to this deal by the fact that Brazil heretofore
The first shipment of 200 metric tons (3,000 bushels) ofrye is being loaded
has not been among the German coal export markets, while Germany imports large quantities of Brazilian coffee. If all the imports of Brazilian in Hamburg to be sent by the Elbe River to Decin (Tetschen), Czechocoffee could be handled by an exchange for coal, Brazil would, on the basis slovakia. Other shipments will shortly follow, Czech report state.
It has not, as yet, been passible to confirm the rumor that new orders
of 1929 figures, absorb 25% of the German coal exports. This, roughly,
for 50,000 metric tons of breadgrains were recently placed with Russia.
would be 5% of the total coal output of Germany.
Great importance also is placed in the fact that questions of money or
credit are completely excluded from the transaction.
Starch Cartel Formed in Czechoslovakia.
From Sao Paulo (Brazil), Oct. 8, a message to the New
After negotiations extending over two years, 70 of the
York "Times" stated:
Czechoslovak starch companies, controlling fully 90% of the
Reports circulating in Rio de Janeiro last week. saying Germany was
eager to effect a coal-for-coffee trade with Brazil, were confirmed to-day. potato starch output of the country, signed a cartel agreeGermany is ready to supply Ruhr coal in whatever quantity Brazil desires ment, effective Sept. 1 1931, according to information refor its equivalent in coffee.
eeived by the Department of Commerce from Sam E.Woods,
Associated Press account from Berlin, Oct. 8, said:
Asst. Trade Commission in Prague. On Oct. 8 the DepartThe newspaper "Tageblatt," telling to-day of negotiations for the barterment added:
ing of half a million tons of Ruhr coal for a quantity of Brazilian coffee,
suggests that the negotiations might be extended to include a trade of coal
for Canadian wheat.
The agreement controls prices and terms and provides for a mutual sale
organization which will have headquarters in Prague. The Czechoslovak
trade hopes that the new agreement, which replaces the old cartel, that
broke down two years ago, will have a stabilizing effect on the local starch
industry. It is understood that the Government has promised financial
aid in exporting starch and potato flour. The current potato crop in the
provinces of Bohemia, Moravia and Silesia is promising while in Slovakia
and Sub-Carpathian Ruthenia prospects are not so favorable. The Czechoslovak starch production season begins Oct. 1.
Brazilian Coffee Growers Oppose Exchange of Coffee
for German Coal—Fear Dumping of Their Product
by Germans.
The following Sao Paulo advices Oct. 10 are from the
New York "Times":
Threat of Far Eastern War Holds Up Wheat ShipBrazilian coffee exporters have sent a protest to the Rio de Janeiro Govments from Seattle.
ernment against the proposed exchange of Brazilian coffee for German coal
and ask that the deal be prevented. Dispatches from Berlin have said the
Under date of Oct. 13 a dispatch from Seattle to the New
negotiations are progressing well.
The coffee growers assert the deal threatens to ruin the whole European York "Times" said:
market, as they say that the German interests will dump the coffee they
receive throughout that continent.
The coal offer comes from a Ruhr syndicate, which offers 1,000,000 tons
of coal for the equivalent in coffee. While the interests concerned are
private, the growers hold the government can intervene because tariff and
export privileges figure in the plan.
Coffee Council of Brazil Seeking $109,600,000
Loan.
Under date of Oct. 9 a cablegram from Sao Paulo (Brazil)
said:
National
War clouds in the Far East to-day cast their shadows on the Seattle
waterfront, where shipping men have been preparing for the movement of
the Nanking Government's purchase of wheat and flour from the American
Farm Board.
War between Japan and China would mean that not a pound of the 433,000 tons of wheat and flour could be landed at Shanghai or any other
port in the republic, because it would be contraband and all the charters
made for the movement of wheat and flour from Seattle and Portland
would be cancelled because shipowners would refuse to send their vessels
into the war zone.
Private information received in Seattle to-day said no more Japanese
ships would be sent to China until the situation clarified.
The firm of W. L. Comyn & Sons of Seattle has chartered six vessels
for the movement of wheat and flour to China.
The National Coffee Council is seeking Secretary of the Treasury Whitaker's permission for the issuance of 200,000 contos ($109,600,000 at par)
of internal loan bonds to be used in financing the destruction of 4,000,000
sacks of coffee immediately. The loan would terminate in one year and be
guaranteed by a ten-shilling export tax. Senhor Whitaker is reported to
favor the loan and Rio de Janeiro permission is expected next week.
Production, Sales and Shipments of Cotton Cloth
During September.
Statistical reports of production, shipments and sales
of carded cotton cloths during the month of September,
1931, were made public Oct. 12 by the Association of Cotton
Italian Coffee Duties Raised.
Textile Merchants of New York. The figures cover a
United Press advices from Rome, Oct. 16, are taken as period of five weeks. Production during September
follows from the New York "World'Telegram":
amounted to 272,118,000 yards, or at the rate of 54,424,000
Customs duty on bean coffee and roasted coffee was increased 300
lire yards per week. This was 4.1% more than the rate of proper quintal by a decree effective to-day. The increase raised the
on bean coffee to 740 lire quintal and on roasted coffee 1,023 lire. duty duction during August, according to the Association, which
further reports as follows:
French Wheat Crop Reported Deficient.
Although no official figures have as yet been released
indicating the French wheat production for 1931, the French
grain trade estimates that the domestic crop will approximate
7,000,000 tons (257,000,000 bushels), according to a report
received in the Department of Commerce from George W.
Berkalow, Asst. Trade Commmissioner in Paris. The Department on Oct. 8 likewise said:
At the present time, relatively large quantities of American hard
winter
and Danube soft wheat have been imported within the limits of the
restriction now in effect. It is believed, however, that in view 10%
of the
deficient crop, Government action will be taken to increase the
amount of
foreign wheat used for domestic flour manufacture above the 10%
limit.
Furtherinore, on the basis of present estimates, forecasted import
quotas
of foreign wheat for France during the coming year should equal last year's
contingent or approximately 1,500,000 tons (55,000,000 bushels), according
to the French report.
Shipments during September were 278,049,000 yards, equivalent to
102.2% of production. Sales during the month amounted to 287,708,000
yards, or 105.7% of production.
Stocks on hand at the end of the month amounted to 244,924,000 yards,
representing a decrease of 2.4% during the month. For the third consecutive month there was established a new low figure for stocks on hand since
these figures became comparable on Jan. 11928. Stocks were at their peak
at the end of June 1930, since which time they have been reduced over
221.000,000 yards, equivalent to 47.5%. This reduction has been steady
and consistent and the present figure is abnormally low in view of the
large number of mills and variety of fabrics included in these statistics.
Unfilled orders on Sept. 30 1931 were 227,167,000 yards, representing
an increase of 4.4% during the month.
Although the September sales of cotton textiles exceeded production,
they were nevertheless below seasonal volume. In spite of this, the industry further improved its statistical position by increasing unfilled orders
as well as decreasing stocks. For 15 consecutive months the consumption
of goods has consistently exceeded production and the prevailing low
prices should further stimulate the consumption.
These statistics on the manufacture and sale of carded cotton
cloths
are compiled from data supplied by 23 groups of manufacturers and selling
agents reporting through the Association of Cotton Textile
Merchants of
2516
FINANCIAL CHRONICLE
New York and the Cotton-Textile Institute, Inc. The groups cover upwards of 300 classifications or constructions of carded cotton cloths and
represent a large part of the production of these fabrics in the United States.
Produaion Statistics, September 1931.
The following statistics cover upwards of 300 classifications or constructions of carded cotton cloths, and represent a very large part of the
total production of these fabrics in the United States. This report represents yardage reported to our Association and the Cotton-Textile Institute,
Inc. It Is a consolidation of the same 23 groups covered by our reports
since October 1927. The figures for the month of September cover a period
of five weeks.
September. 1931
(5 Weeks).
Production was
272,118,000 yards
Sales were
287,708,000 Yards
Ratio of sales to production
105.7%
Shipments were
278,049,000 yards
Ratio of Shipments to Production
102.2%
Stocks on hand Sept. 1 were
250,855,000 yards
Stocks on hand Sept. 30 were
244,924,000 yards
Decrease 2.4%
Change in stocks
Unfilled orders Sept. 1 were
217.508,000 yards
Unfilled orders Sept. 30 were
227,167,000 Yards
Increase 4.4%
Change in unfilled orders
Use of Cotton Twine Instead of Jute Twine by Post
Office Department.
The Secretary of Agriculture, Arthur M. Hyde Oct. 9
cited the action of the Postoffice Department in substituting
cotton for jute in its specifications for large purchases of
twine as an example of how Government departments are
co-operating to aid in the present emergency. This is noted
in the "United States Daily" of Oct. 11, which further said:
[VOL. 133.
exclusively as a money crop, which is true of most of the cotton producing
area in the United States.
The cotton producing areas of the world include Asiatic States or Provinces, which produce 8,000,000 bales annually; the African States, approximately 2,000,000 bales; European countries, 25,000 bales; South and
Central American countries and the West Indies approximately 1,000,000
bales; Mexico 175,000 bales and the United States approximately 15,500,000
bales.
The American producer formerly supplied the world with cotton, but
these figures indicate that foreign growers are becoming keen competitors
to our domestic producers. My understanding is that their cost of production is only about a fraction of that of our domestic growers, and this
is another problem of our industry that must be taken into consideration.
The international conference has already been suggested by Egyptian
authorities, as well as by many Americans. It is to be hoped, Mr. President,
that those suggestions will meet with your approval and that you will find
it feasible and proper to request the conference at the earliest possible
date with a view of finding a solution for the many problems now confronting the producer of cotton.
Wage Scale Ruling Stops State Building—Illinois Suspends Pay Pending Court Test of Validity.
Public work amounting approximately to $4,700,000 is
affected by notice sent to contractors by State officials that
all payments for work performed will be stopped immediately
as a result of an opinion by the Illinois Attorney General,
Oscar E. Carlstrom, concerning a recent decision of the
Sangamon County Circuit Court that the new prevailing
wage scale law is unconstitutional. We quote from an
account Oct.8 to the "United States Daily"from Springfield
Ill., which likewise stated:
The notice was sent to contractors on 72 highway and bridge sections
For the purpose of tying packages of letters the PostalIce Department involving $4,500.000 worth of work and to seven contractors engaged in
building construction amounting to $200,000. It was signed as to the highutilizes about 80 carloads or close to 3,000,000 pounds of twine a year.
For many years the postal service has been using jute twine. Jute is way work by the Director of the Department of Public Works and Buildings,
H. H. Cleveland, and the Chief Highway Engineer, Frank T. Sheets, and
imported from India.
At the request of the Department of Agriculture the PosteMce Depart- as to the building work by the State Supervising Architect, 0. Herrick
ment will specify cotton twine for use in the postal service, and an advertise- Hammond.
ment is about to be issued calling for bids for 1,300,000 pounds, covering
Attorney General Carlstrom ruled that any further action of the Departthe needs of the service for a six months period beginning Jan. 1 1932. ment of Public Works and Buildings, until the appeal taken to the Illinois
The cotton industry has indicated that it is possible to manufacture a Supreme Court from the decision of the Sangamon County Circuit Court is
special cotton twine that will compete favorably with the jute as to price, determined, in furtherance of contracts already made or in making new
quality and usefulness.
contracts on bids already received, or with a view of soliciting new bids
for work, conditioned upon the payment of prevailing wages, would be at
the risk of the Department.
Cotton Mills of England, as Result of Lower Sterling
"I know of no way of letting contracts for building State highways in this
Exchange, Buying More Spot Cotton.
State other than by competitive bids," Mr. Carlstrom stated, "and until
the constitutionality of the prevailing wage law shall be finally determined,
The cotton mills of England, benefitting by lower sterling it
cannot be known whether the compulsory payment of the prevailing rate
selling
and
more
cotton
buying
spot
are
more
exchange,
of wage for the work contemplated shall be one of the necessary elements to
be
considered in making up such bids."
yarns and cloths than they have for many months, accord"the gravity of the unemployment situation in this State,"
ing to the New York Cotton Exchange Service. Lancashire theRecognizing
Attorney General advised the highway officials that every legal means
and
spinners have purchased cotton actively for immediate
would be exhausted to enable the State to relieve the situation. The apare now pending in the Supreme Court.
forward needs during the past week. The Exchange Service peals from the lower court ruling
Mr. Carlstrom stated that he would request the court to hear the cases and
said:
13,
on Oct.
render a decision on the validity of the law at the earliest date possible in the
The stock of "outside growths" at Liverpool is being rapidly sold and October term.
American
on
business
Import
demand for American cotton is broadening.
cotton at Liverpool is handicapped by the fluctuations in the parity and
Census Report on Cotton Consumed in September.
exchange but there are indications that Liverpool will buy freely in the
For detailed report of cotton consumed in September,
next few weeks. China has placed some big orders for cloth at Manchester.
Higher silver and the anti-Japanese boycott have helped. Inquiry from see page 2621.
most other outlets has been good, but Indian business Is still disappointing.
Business with India is hampered by the tariff of that country.
Production During September.
Cottonseed Oil
For
detailed report of cottonseed oil production during
World Discussion on Cotton Sought—Request Made September, see page 2622.
to President Hoover by Representative McDuffie.
President Hoover was urged, Oct. 6, by Representative
Italy Increases Import Duty on Rice.
McDuffle (Dem.), of Monroeville, Ala., who conferred with
The Italian Government has increased the rates of import
him at the White House, to call an international conference duty on rice according to a radiogram received in the Deat the earliest possible date "with a view of finding a solu- partment of Commerce from Commercial Attache Mowatt
tion for the many problems now confronting the producer of M. Mitchell at Rome. Under date of Oct. 13 the Departcotton." Request for the calling of such a conference was ment said:
The new duties, in paper lire per 100 kilos gross, are as follows (old ratty;
made in a letter Representative McDuffle presented to the
in parentheses):
which
7,
Oct.
of
Daily"
States
"United
President, said the
Rice, In the husk. 41 (11): partly husked. 50 (16.50); cleaned, 60 (23.90):
rice meal, 60 (23.90).
gave the letter as follows:
My dear Mr. President: While recognizing the problems involved in the
enforcement of an international agreement to curtail the acreage to be Cuts in Salaries and Wages Announced by du Pont
planted in cotton for the next cotton year much good might be derived from
de Nemours Co.—Six-Hour Day for du Pont
a conference of all the cotton producing nations.
Concerns.
Indeed, the problem of new uses for cotton, while being studied by a
bureau of our Government, should be given consideration in such a
Wilmington (Del.)advices Oct.8 said:
of
improvement
conference, as well as the question of marketing and the
The E. I. du Pont de Nemours Co. salaried employees will go on a five' grades. An international discussion of the overproduction of cotton could day week beginning Nov. 1, with a 10% cut in wages. About 8,680 emprobability
much
is
there
and
industry,
the
to
injury
no
certainly work
ployees,including 1,900 in Wilmington, will be affected.
it would impress cotton producers everywhere of the absolute necessity of
Further press advices from Wilmington (Oct. 14) stated:
curtailing acreage.
Adoption of a six-hour day by several du Pont concerns, as a means of
The latest and best figures available show the world consumption of providing work for unemployed, was announced here to-day. The plan,it is
cotton for the cotton year 1928-1929 was 25,882,000 bales; for 1929-1930 expected, will provide jobs for a largo number.
25,209,000 bales, and for the year 1930-1931, 28,483,000 bales. The world
The shorter day will be put into effect at once by the du Pont Rayon Co.
production of cotton in 1930-1931 was 26,400,000 bales. Of the world and the du Pont Cellophane Co., which employ the largest number of work1929in
whereas
cotton,
American
was
48.5%
consumption in 1930-1931,
ers among the various du Pont units.
1930 51.7% of the world consumption was American cotton.
The plants of the companies, located at Buffalo, Richmond and WaynesThe total consumption of American cotton in 1930-1931 was only bury, Va.. and Old Hickory, Tenn., now employ about 10,000 persons
10,907,000 bales as against 13,095,000 bales for the year 1929-1930; The reduction in the working hours will make it possible to add from 10 to
15,076,000 for 1928-1929, and the record consumption year of 1925-1926 15% more names to the payrolls,thus insuring a wider distribution of wages.
The exact number of additional employes to be taken on at the various
the world used 15,780,000 bales of American cotton. This shows a decrease
last year in the consumption of American cotton of 30.9% under the plants will depend on local conditions and the class of work done in the
consumption of the year 1926-1927; 27% decrease for the year 1928-1929, several departments.
The change is to be made as rapidly as plant operations can be adjusted
and 16.2% under the year 1929-1930.
These figures do not present an encouraging outlook for the American to new conditions and additional workers engaged. It is expected that it
producer, especially in those sections where cotton is relied upon almost will be in complete operation within a short time.
OCT. 17 1931.]
FINANCIAL CHRONICLE
2517
cents a barrel to $2.15 per barrel on Thursday, Oct. 15,
Procter & Gamble Cut Salaries and Wages.
Associated Press accounts from Cincinnati, Oct. 8, stated: by the leading purchasing agencies. Prices of other PennProcter St Gamble Co. has reduced salaries and wages of all its employees sylvania grade crudes were unchanged. The lower price
and executives between 10 and 15%. William Cooper Procter. Chairman, was brought about by the lifting
last week of restrictions
said the cut was made to bring costs of production and distribution in line
which had held production of Pennsylvania district crude
with prevailing economic conditions.
below requirements.
Efforts to bring about Federal intervention in the East
Corrigan-McKinney Steel Company Cuts Wages.
Texas situation on behalf of disgruntled producers brought
A 10% reduction in all salaries and wages of Corrigan- forth
an order from Governor Ross Sterling to General J. F.
McKinney Steel Co. employees effective Oct. 1, has been
Wolters, commander of the State troops occupying East
ordered, Henry T. Harrison, Vice-President and General
Texas fields under martial law, to ignore a temporary inManager, said on Oct. 6, according to Associated Press
junction issued by Judge Randolph Bryant of the Federal
accounts from Cleveland on that day. This it is stated
District Court. This injunction sought to restrain the
reduces wages of common labor from 50 to 45 cents an hour.
Railroad Commission and the State militia from interfering
with the "free and unrestrained production" of oil and gas
S. K. Wellman Co. of Cleveland, Brake Lining Manu- from
five wells owned by the Brock-Lee Oil Co. This comfacturers Increases Wages 15%.
pany desired to increase daily output to 5,000 barrels. As a
Associated Press advices from Cleveland, Oct. 16, pub- result of the Governor's firm stand, General Wolters deslished in the New York "World-Telegram" said:
patched troops to the Brock-Lee lease to prevent opening
Business is so good at the S. K. Wellman Co., brake-lining manufacthe flow beyond the legal limit of 165 barrels per well.
turers here, that every employee has had a 15% increase in salary this year.
Meanwhile the Oklahoma Corporation Commission has
J. T. Seaver, Vice-President, said the company had overpowered the
depression by "going after new business every day and by constantly ex- extended until November 1 the present proration order
for
perimenting to improve the quality ofsiur product."
The company's sales in dollar values were 20% higher in the first nine oil fields throughout that State. In the Oklahoma City
months of 1931 than they were in the same period a year ago, despite a field, opened last Saturday after an enforced shutdown of
24% price cut on their product in January 1931. Measured in
feet, the two months, production more than doubled that ordered
sales of the company's product were 48.9% greater than a year ago.
by Governor Murray. However, producers expressed their
willingness to abide by the Governor's limit of 180,000
Weekly Refinery Statistics for the United States.
barrels per day.
Reports compiled by the American Petroleum Institute
Price changes follow:
for the week ended Oct. 10, from companies aggregating
October 15.-Bradford grade crude and Pennsylvania grade crude in
3,662,100 barrels, or 95.2% of the 3,848,500 barrel estimated New York Transit Lines reduced 10c. per barrel to 12.15 by leading purdaily potential refining capacity of the United States, in- chasers.
Prices of Typical Crudes per Barrel at Wells.
(All gravities where A. P. I. degrees are not shown.)
dicate that 2,400,100 barrels of crude oil were run to stills
Bradford. Pa$2.10 Eldorado. Ark.. 4()
60.48
daily, and that these same companies had in storage at Corning. Pa
.75 Rusk. Texas. 40 and over
.68
Illinois
.80 Salt Creek. Wyo.. 40 and over
.70
refineries at the end of the week, 30,253,000 barrels of Western Kentucky
.75 Darst Creek
.52
Mideontinent. Okla.. 40 and above_ 1.00 Sunburst. Mont
gasoline, and 135,210,000 barrels of gas and fuel oil. Reports Hutchinson,
1.05
Texas.40 and over-... .61 Santa Ye Springs. Calif..40 and over .75
received on the production of gasoline by the cracking Spindletop. Texas. 40
and over
.71 Huntington, Calif.. 26
.72
Winkler. Texas
.71 PetroUa, Canada
1.73
process indicate that the companies owning 95.6% of the Smackover,
Ark., 24 and over
.45
potential charging capacity of all cracking units, manufactured 3,466,000 barrels of cracked gasoline during the REFINED PRODUCTS-STANDARD REDUCES BUNKER FUEL
AND DIESEL OIL AT COASTAL POINTS-GASOLINE LOWweek. The complete report for the week ended Oct. 10
ERED IN OHIO-SPOT GAS FIRM IN CHICAGO.
1931, follows:
Effective yesterday the Standard Oil Co. of New Jersey
CRUDE.RUNS TO STILLS GASOLINE AND GAS AND FUEL OIL
STOCKS
reduced its price on bunker fuel oil, grade C, and Diesel
WEEK ENDED OCT. 10 1931.
(Figures in Barrels of 42 Gallons)
oil 10g. a barrel at all Atlantic seaboard points, and at
New Orleans and Baton Rouge. Other major companies
Per Cent
Per Cent
will follow with similar action, it is reported. The new
Potential
Crude
Oper.
Gas
out
Capacity
District.
Runs to
of Total a Gasoline
Fuel Oil
prices for bunker are 60c. a barrel at New York, Baltimore,
ReportStills.
Capacity
Stocks.
Stotts.
intr.
Report.
Boston and Norfolk; 55e. a barrel at Charleston; 45c. a
East Coast
100.0
3,337.000
75.2
3,949.000
10,540,000 barrel at Baton Rouge and New Orleans, and 75c. a barrel
Applachian
91.8
701,000
72.9
1,267.000
1.526.000 at the Canal Zone. New Diesel prices are $1.30
Ind.. Illinois, Kentucky 98.9
2,237,000
a barrel
74.1
3.616,000
5.124.000
Okla., Kans., Missouri. 89.6
1,737,000
57.0
2.803,000
5,107.000
at New York, Baltimore and Boston; $1.15 a barrel at
Texas
91.3
3,748.000
70.0
5,199,000
11.419,000
Louisiana-Arkansas.--- 98.9
1,163.000
72.1
780.000
3,499.000 Baton Rouge and New Orleans, and $1.25 at Canal Zone.
Rooky Mountain
89.3
378,000
37.9
1.275.000
821.000
California
97.1
Local competitive conditions brought about a reduction
3,500,000
56.4 *11,364.000
97,174.000
Total week Oct. 10
95.2
16,801,000
65.5
30,253,000 135.210.000 of lc. per gallon in service station prices in Summit County
Daily average
2,400,100
Ohio, announced by Standard of Ohio. New prices are
Total week Oct. 3_._ 95.0
16,036,000
62.7
30,683,000 135,580.000
Daily average
2,290,900
16c. per gallon for X70 and 19c. for Sohio. Spot gasoline
Total Oct. 11 1930
95.6
16.597,000
66.5 635,588,000 139,457,000 in the Chicago market holds firm, as indications continue
Daily average
2,371.000
that East Texas will not be allowed to "run away" from
Texas Gulf Coast
2.877.000
99.8
77.3
3.884,000
8.095.000 restrictions holding its crude output to a basis comparable
Louisiana Gulf Coast_ 100.0
804.000
77.9
585.000
2.558.000
In all the refining districts except California, figures in this column represent with other fields. United States motor grade continues
gasoline stocks at refineries. In 'California, they represent the tots inventory
of on a basis of 3%c. to 34c. a gallon.
finished gasoline and engine distillate held by reporting companies wherever located
within continental United States-(stocks at refineries, water terminals
Continued lagging on the part of foreign buyers has
and
all
sales distributing stations, Including products in transit thereto). b
Revised In brought about a reduction in export
Indiana-1111nols district, due to transfer to "bulk terminals" of
prices, which are now
previously
reported as "at refineries:* c Included above in table for week stocks
ended Oct. 10.
quoted: U. S. Motor,3c.-43c.;60-62 400 e.p., 3%c.-4Ha.;
Note.-All figures follow exactly the present Bureau of Mines' definitions.
Crude
oil runs to stills include both foreign and domestic crude. In California,
stocks of 61-63 gravity, 390 e.p., 4c.-434c.; 64-66 gravity, 375 e.p.,
heavy crude and all grades of fuel oil are Included under
the heading "gas and fuel
oil stocks."
4c.-43c. a gallon, bulk cargo lots.
The local bulk market continues unchanged, with rePetroleum and Its Products-New East Texas Allow- finers
still posting prices at 53
/0. to 63,4c. per gallon for
able in Effect-Bradford Crude Reduced-State above 65
octane at refineries, tank ear. The only change
Disputes Federal Authority in Issuance of Texas
of note in New York State during the week was an advance
Injunction.
of lc. per gallon in tank wagon and service station prices
With the new allowable per well of 165 barrels per day at Utica, announced by the Standard of New York.
now in effect in the East Texas field, and with a 10%
Demand for 41-43 water white kerosene shows a slight
reduction ordered throughout all other Texas producing improvement, with tank oar price holding at 5e. per gallon
fields, economists estimate that it will be possible to hold refinery.
that State's total production to about 900,000 barrels per
Price changes follow:
Oct. 16.-Standard Oil Co. of New Jersey announces 10c. reduction
day. The order further restricting output was put in effect
in bunker fuel and Diesel oil, effective immediately. New prices per
last Saturday.
barrel for bunker fuel oil are: 60c. at New York, Baltimore, Boston
and
Oklahoma, which opened its fields last Saturday, will Norfolk;
55C. a barrel at Charleston; 45c. a barrel at Baton Rouge
and
hold to a daily production of about 540,000 barrels, thus re- New Orleans, and 75c. a barrel at Canal Zone. Diesel prices: $1.30 at
New York, Baltimore and Boston; $1.15 at Baton Rouge and
New Orleans,
turning the oil industry to a stabilized condition which, it and
$1.25 at Canal Zone.
Oct. 15.-Standard of Ohio reduces service station prices
is hoped, will bring about an equalized price basis.
lc. per gallon
Summit County. Ohio. New prices are 16c. for X70 and
The price of Bradford grade crude oil and Pennsylvania in Oct.
10c. for Soldo.
14.-Standard of New York
grade crude in New York Transit Lines was reduced 10 station prices lc. per gallon in Utica.advances tank wagon and service
Gasoline, U. S. Motor. Tank Car Lots, F.O.B. Refinery.
5.04-.0434
Arkansas
N. Y.N. Y. (Bayonne)
05-.07
California
Colonial-Beacon-$.06
Stand. 011, N. J..$0.06
Angeles.ex...0411-.07
Los
.06
Crew Levi&
Stand. 011, N. Y. .06
05-.0514
Gulf Ports
aTeycas
.06
Tide Water Oil Co .06
.05% Tulsa
Gulf
Richfield 011(Cal.) .06 Si
.0534
Pennsylvania...
.06
Continental
Warncr-QuinEnCo .051e
Republic 011
Pan-Am4Pet. Co.. .06
Chicago
.044-.05
Shell Eastern Pet- .06
New Orleans. Si. .05-.05x
,"Texaco" 5 634o.
New York
Atlanta
Baltimore
Boston
Buffalo
Chleago
[VOL. 133.
FINANCIAL CHRONICLE
2518
Gasoline. Service Station, Tax included.
$ 149
3 15 Kansas City
163 Cincinnati
162
16 Minneapoils
20 Clevetand
118
Orleans
19 New
.144 Denver
131 Philadelphia...... _ 10
16 Detroit
17
Francisco
San
14
158 Houston
129
.19 St. Louis
14 Jacksonville
Bulk Terminal Stocks of Gasoline Below That of a
Year Ago-Gasoline in Transit on Oct. 10 Higher
Than Last Year's Figure.
The American Petroleum Institute above presents the
amount of gasoline held by refining companies in bulk
terminals and in transit thereto, by Bureau of Mines' refining districts, east of California. The Institute in its
statement says:
It should be borne definitely in mind that comparable quantities of
gasoline have always existed at similar locations as an integral part of the
system of distribution necessary to deliver gasoline from the points of
manufacture to the ultimate consumer. While it might appear to some
Refinery.
F.O.B.
Lots,
Car
Tank
that these quantities represent newly found stocks of this product, the
Kerosene, 41-43 Water White,
5 02%-.0311 New Orleans,ex-S0.03H Industry itself and those closely connected with it have always generally
N.Y.(Bayonne)..-2.051 Chicago
.0431-.03%
Tulsa
North Texas.
.031 Los Ang .eX- .0454-.06
known of their existence. The report for the week ended Aug. 22 1931
was the first time that definite statistics had ever been presented covering
Fuel 011, F.O.B. Refinery or Terminal.
"0"-$.55-.65
the amount of such stocks. The publication of this information is in line
Gulf Coast
California 27 plus D
N.Y.(Bayonne)2.754.00{Chicago 18-22 D..4211-.50 with the Institute's policy to collect, and publish in the aggregate, statis2.70
Bunker "CS
.65
1.40 New Orleans "0"....
Diesel 28-30 D
tical information of Interest and value to the petroleum industry.
For the purpose of these statistics, which will be issued each week, a
Gas Oil, F.O.B. Refinery or Terminal.
l'Tulsabulk terminal is any installation, the primary function of which is to supply
!ChicagoN.Y.(Bayonne)38-36 D ind.__s.oi R-.02 other smelter Installations by tank cars, barges, pipe lines or the longer
211 D plus......$.03)(-.04I 3246 D Ina....s.oignu!
haul tank trucks. The smaller installations referred to, the stocks of which
are not included, are those whose primary function is to supply the local
trade.
a retail
Up to Aug. 22 1931 statistics covering stocks of gasoline east of CaliCrude Oil Output in United States Continues At
Ago.
Year
a
With
fornia
reflected stocks held at refineries only, while for the past several
Compared
As
Decreased Rate
years California gasoline stocks figures have included, and will continue
the
that
estimates
Institute
Petroleum
American
The
to include, the total inventory of finished gasoline and engine distillate
States held by reporting companies wherever located within continental United
daily average gross crude oil production in the United
as States-that is at refineries, water terminals and all sales distributing stafor the week ended Oct. 10 1931, was 2,162,700 barrels,
tions including amounts in transit thereto.
I
week,
compared with 2,147,450 barrels for the preceding
output
an increase of 15,250 barrels. Compared with the
daily,
for the week ended Oct. 11 1930 of 2,366,800 barrels
barrels
204,100
of
decrease
a
represents
the current figure
California
per day. The daily average production east of
as
barrels,
1,657,200
was
1931
10
Oct.
ended
week
for the
week,
preceding
the
for
barrels
compared with 1,649,750
of
an increase of 7,450 barrels. The following are estimates
districts:
by
production,
gross
daily average
DAILY AVERAGE PRODUCTION (FIGURES IN BARRELS).
Oct. 331. Serf.26'31. Oct. 1130.
Oct. io .ai
Week Ended549,100
264,300
273,500
251,550
Oklahoma
115,950
107,850
107,250
107.600
Kansas
80,200
67,100
64,200
84.500
Panhandle Texas
62,600
54,100
53,900
53,750
-North Texas
47,650
25.900
25,400
26.800
Texas
West Central
270,350
204,850
199,000
203,350
West Texas
40,550
57,850
57,250
57,750
East Central Texas
429,250
381,400
403.900
East Texas
101,050
.57,100
55,300
55,150
Southwest Texas
40,300
29,200
29,200
28,900
North Louisiana
52,400
38,100
37,600
37,500
Arkansas
168.600
123,600
121,000
122,200
Coastal Texas
27,150
25,300
29,750
29,900
Coastal Louisiana
112,500
104,500
110,150
105.900
Eastern (not including Michigan)
7.550
12,100
13,450
15.500
Michigan
47,700
36,650
36.550
37,650
Wyoming
9,000
7,900
7.450
7,600
Montana
4,150
3.950
4,300
4,550
Colorado
39,800
43,150
34,100
43,150
New Mellon
590,200
500,600
497.700
595,500
California
Total
2,162,700
2,147,450
2,193,350
2,366,800
-Continent
The estimated daily average gross production for the Mid
West Central,
field, including Oklahoma, Kansas, Panhandle, North,
and
West, East Central, East and Southwest Texas, North Louisiana
as compared
Arkansas. for the week ended Oct. 10 was 1.290,750 barrels,
6,750 barrels.
with 1,234,000 barrels for the preceding week, an increase of
(Arkansas) heavy
The Mid-Continent production, excluding Smackover
an increase
oil, was 1 ,264,250 barrels, as compared with 1,257,450 barrels,
of 6,800 barrels.
districts for the
The production figures of certain pools in the various
of 42 gallons,
current week, compared with the previous week, in barrels
ex
follow:
Ended-Week
-Week EndedOct. 10.
Southwest TexasOct. 10, Oct. 3.
Oklahoma2.100
2,100
Chapman-Abbot
5,050
4,650
Bowlegs
19,300 19,300
12,500 12,500 Darst Creek
Bristow-Slick
7,400 7,400
12,250 12,250 Luling
Burbank
10,400 10,600
1,350 1,450 Salt Flat
Carr City
North Louisiana8,300 8,850
Earlsboro
900
900
Barepta-Carterville
2,500
2,150
Earisboro
East
5,900 6,600
1,450 1,450 Zweite
South Earlsboro
Arkansas1,450 1,600
K0128WIS
3,150 3,150
9,700 9,950 Smackover, light
Little River
26,600 26,550
3,450 3,100 Smackover, hears
East Little River
Texas
Coastal
1,050
950
Maud
21,400 19,200
1,750 2,050 Barbera Hill
Mission
6,150 6,200
1,850 20,900 Racoon Bend
Oklahoma City
20,300
20,400
County
Refuel°
12,700
12,050
Si. Louis
11,400
Sugarland
11,350
2,150 2,200
sesright
Coastal Louisiana5,550
5,250
Seminole
5,150
8,000
East
liackberrY
1,100
1,100
East Seminole
550
600
Old IlackberrY
Kansas-17,750 Wyoming16.800
Rita
21,600
23,100
Creek
Salt
14,750 14,250
Sedgwick County
Montana12,900 13,000
Voshell
4,300 4,250
Kevin-Sunburst
Panhandle TexasNew Mexico42,200
43,800
County
Gray
36.950
36,950
High
Hobbs
13,500
13,700
Hutchinson County....
Balance Lea County-- 3,900 4,000
North TexasCalefornies11,700
11,700
Archer County
25,700 25,200
6,800 Elwood-Goleta
North Young County- 6,650 12,400
20,100 19,600
Ilungington Beach
12,300
Wllbarger County
14,000 14,000
Inglewood
Weil Central Texas-59,500
60,500
Rills
Kettleman
5,000 4,300
South Young County
76,200 76,700
Long Beach
West Texas61,300
51,000
et
midway-Suns
Crane dt Upton Counties 20,500 19,700 Playa Del Rey
21,200 20,600
7,2.50 7,000
Bator County
60,400 60,500
28,100 28,600 Santa Fe Springs
Howard County
11,900 11,600
Beach
24,750 23,800 Seal
Reagan County
40,000 40,800
Avenue
Ventura
37,150
37,500
Winkler County
70,700 68,200
Yates
Pennsyleania GradeBalance Pecos County- 2,050 2,900
7,850 8,100
Allegany
East Central Texas29,150 29,850
50,000 49,500 Bradford
Van Zandt County
6,700 7,700
Kane to Butler
East Texas6,000 6,400
143.500 136,500 Southeastern Ohlo
Rusk Co.-Joiner
155,500 143,450 Southwestern Penna.- 3,500 3,500
Kilgore
13,700 14,600
Gregg Co.-Longview-104,900 96,450 West Virginia
Gasoline at "Bulk Terminals."
Figures End of Week.
District.
Oct. 10
1931,
Oct. 3
1931.
Oct. 11
1930.
Gasoline "in Transit."
Figures End of Week.
alas
1931.
Oct. 3
1931.
Oct.11
1930.
East Coast
7,156,000 7,267,000 8,546,000 2,057,000 3,074,000 1,969,000
6,000
34,000
49,000
267,000
237,000
Appalachian
286,000
77,00
57,000
Ind., Ill., Ky.. _ 2,381,000 2,286,000 2,045,000
Okla., Kan., Mo.397,000
406,000
202,000
Texas
219,000
237,000
14,000
183,000
393,000
Louistana-Arkans _
359,000
Rocky Mountain_
Total east of Calif. 10,825,000 10,799,000 11,243,000 2,163,000 3,199,000 1,975,000
Texas Gulf
Louisiana Gulf- _ -
211,000
327,000
193.000
309.000
177,000
173,000
Income from State Gasoline Taxes Increased $14,146,398
in Six Months.
State gasoline taxes produced total earnings on motor fuel
of $244,746,853 in the first six months, the American Petroleum Institute has been informed by the U. S. Bureau of
Public Roads. This income represents an increase of
$14,146,398 over the $230,600,455 earnings of the first half
of 1930. It does not include county and city gasoline tax
collections. The Bureau's report further shows:
Gross taxes assessed prior to deduction of refunds totalled $260,871,050
as compared with 2243,100,002 in the corresponding period of 1930, an
Increase of $17,771,058. Exemption refunds deducted from gasoline
taxes amounted to $16,124,197, an increase of $3,624,650 over the $12,499,547 exemptions in the first half of the previous year. Other receipts,
such as from licenses, totalled $1,625,782, a gain of $1,244,138 over the
$381,644 total for six months of 1930. Grand total earnings were $246372,635, an increase of $15,390,536 over the $230,982,099 total for the
corresponding period of 1930.• Gasoline gallonage taxed totalled 7.117,874,233, an increase of 208,011,157 over the 6.809,863,076 gallons taxed
In the first halfof 1930.
Collection costs and the amounts of gasoline tax income diverted to
miscellaneous purposes showed declines. Collection costs dropped $172,304
from $995,719 for 1930 Hirst half to $823,415 for 1931 first half. Diversions
declined $3,049,791 from the 1930 first half total of $12,833,287 to the
1931 first half total of $9,783,496.
Estimating from this report, State gasoline tax income in the latter half
of 1931 need be only $41,519,710 per month for the total income of the
year to equal the $493.865,117 total earnings of 1930. Average earnings
per month in the latter half of 1930 were $45,810,777, which would indicate
that 1931 total earnings on State gasoline taxes will exceed those of 1930.
especially In view of an expected increase in consumption. The estimated
total for 1931, based upon earnings to date plus earnings in the latter half
of 1930,1s $508,011,515. or about $500.000.000 for the first time In history.
Large increases in exemption claims were apparent in most States.
Among the larger gains were those of California, where exemptions increased
to $2,212,544 from $1,797,792; Idaho, Increase to $593,733 from $76,741;
Kansas, increase to $1.206,815 from $592,513; North Dakota, Increase to
$516,764 from 2453,978; South Dakota, increase to 81,005,592 from $787,747; and Iowa. Increase to $649,830 from $462,328. Decreases were shown,
among other States, in Arkansas, Maine,Michigan, North Carolina, Pennsylvania, and Texas.
Some changes were indicated In disposition of tax receipts. A total of
$10.156,541 was spent upon city streets, with no comparative figure for the
first half of 1930. The amount spent on State highways was $158,332,132
against $157,390,770 In the corresponding period Of 1930. The amount expended for local roads was $48,416,879 as compared with 244.894,169.
State and county bond payments totalled $18,860,172 against $14,868,154.
World's Petroleum Production During 1931 Estimated
at 1,379,000,000 Barrels, a Decline of Approximately
39,000,000 Barrels As Compared with Last Year.
Preliminary figures at present available indicate that the
world's petroleum production in 1931 will aggregate close
to 1,379,000,000 barrels, or about 39,000,000 less than
wi
FINANCIAL CHRONICLE
OCT. 17 1931.]
. 2519
in 1930 and 105,000,000 barrels under the peak production Production and Shipments of Portland
Cement Again
of 1929, according to Valentine R. Garfias, Manager of
Fell Off During the Month of September-Inthe Foreign Oil Department of Henry L. Doherty & Co.
ventories Also Decline.
Mr. Garfias further reports as follows:
According to the United States Bureau of Mines Depart-.
The 1931 figures further show that the oil production in the western
hemisphere, notwithstanding available oversupplies, will decline close ment of Commerce,the Portland cement industry in Septemto 69,000,000 barrels while the aggregate production of the Russian. ber, 1931, produced 12,092,000 barrels, shipped 13,671,000
Rumanian and Persian fields will increase about 32,000,000 barrels, it barrels from the mills, and had in stock
at the end of the
being interesting to note that the increase in production of Russia, Rumania
and Persia will be equivalent to about 76% of the decline in the United month 22,734,000 barrels. Production of Portland cement
States, thus emphasizing the futility of trying to remedy world-wide in September 1931 showed a decrease of 25% and shipments
conditions in any commodity by controlling but few of the sources of a decrease
of 24.4%, as compared with September 1930.
supply.
The outstanding development during the year has been the more effective Portland cement stocks at the mills were 3.9%, higher than
steps taken in the United States and Venezuela towards the normalization a year ago. The total production for the nine months
endof production resulting in an aggregate decline of over 60,000,000 barrels
in the face of the largest potential production in the history of the American ing Sept. 30 1931, amounts to 99,673,000 barrels, compared
with 126,917,000 barrels in the same period of 1930, and the
fields.
These conditions have served to focus the attention of the industry total shipments for the nine months ending Sept. 30, 1931,
on the feasibility of remedial measures even under such serious handicaps
as the inadequate legislation which burdens the American operator. The amounts to 102,807,000 barrels, compared with 128,673,000
industry, furthermore, realizes more and more clearly that the oil reserves barrels in the same period of 1930.
which are now being- wantonly wasted will be sorely needed at some future
In the following statement of relation of production to
time and that the American consumer will then have to rely for its needs
capacity the total output of finished cement is compared
more and more on higher priced foreign oil.
Definite steps have been taken during the year towards the building with the estimated capacity of 165 plants at the close of
of the pipeline system connecting the Baba Gurgur field of Iraq near
Kirkuk, to the Mediterranean seaboard at Acre near Haifa in Palestine September 1931 and of 166 plants at the close of September
and at Tripoli in Syria, it being planned to terminate this project, in- 1930. The estimates include increased capacity due to
volving the building of over 1,000 miles of pipeline and extensive harbor extensions and improvements during the period.
improvements, sometime in 1935.
RELATION OF PRODUCTION TO CAPACITY.
United Slates.
I
...... ......to
wa.-=-41ibb,..folo14
00m,Iwcwotow.o000
-40.-Ca 00000000000,-
Sept. 1930. Sept. 1931. Aug. 1931. July 1931. June 1931,
The conservation of petroleum took a new impetus in 1931 which cul
minated in the proclamation of martial law in Oklahoma and Kansas as The month
55.3%
60.2%
, 75.7%
62.0%
65.4%
50.2%
a means to avoid further waste. These measures have been only partially The 12 months ended
1 65.2%
52.0%
53.8%
55.2%
and temporarily successful, but it should be noted that notwithstanding
the successful development of the extensive and very productive East PRODUCTION, SHIPMENTS. AND STOCKS OF FINISHED PORTLAND
CEMENT, BY DISTRICTS. IN SEPTEMBER, 1930 AND 1931. (IN
Texas fields, the output in 1931 will be about 42,000,000 barrels lower
THOUSANDS OF BARRELS).
than in the previous year. This is the best proof that some very tangible
results have been obtained in the conservation of the most valuable of
Shipments.
Production.
Rocks at Mid
our national fuels. In trying to cope with the fundamental causes of the
District.
of Month.
overproduction of oil, the necessity of uniform and adequate legislation
becomes every day more apparent.
1930. 1931. 1930. 1931. 1930. 1931,
The United States consumed locally in 1931 about 44,000,000 barrels
3,273
3,813 3,108 4,986 5,422
more than the American fields produced and the oil exports increased Eastern Pa., N..0., & Md
New York and Maine
1.238
1,467 1,500 1,069 1,280
this deficit to 164,000,000. The oil imported to this country will aggregate Ohio. Western Pa. and W. Vs__ _ 1,873
1,984 1,224 3,079 3,344
close to 85,000,000 barrels thus reducing the adverse balance to 79,000,000 Michigan
1,242
1,381
807 2,279 1,912
Wis., Ill., Ind. and Ky
2,171
which represents the amount of oil that will be taken out of storage
2,716 1.995 2,751 2,648
during Va., Tenn., Ala., Ga., Fla.& La_ 1,198
1,178 1,032 1,814 1,725
the year.
Eastern Mo.,Is., Minn.& S. Dak 1,748
2,116 1,341 1,569 2,361
W.Mo., Neb., Kan.. Okla.& Ark. 1,233
Russia.
1,227
886 1,643 1,305
Texas
679
599
688
707
539
It Is estimated that the production of Russia will be close
to 158,000,000 Cole..Mon1..U1ah,WYo. dr Idaho
260
258
224
508
532
barrels, showing an increase of 23,000,000 from the previous
806
905
593 1,020 1,050
year, which California
increase coupled with the voluntary curtailment of the Venezuelan
Oregon and Washington
403
439
273
484 .616
production, places Russia ahead of Venezuela as second in rank.
Should
Total
16.124
12.092
18.083
13.671
21.889
22.734
the Russian Government continue to meet with success in
the intensive
PRODUCTION. SHIPMENTS, AND STOCKS OF FINISHED PORTLAND
development of selected oil regions, it is very likely that this
country
will remain as the second largest producer for an indefinitely
CEMENT, BY MONTHS, IN 1930 AND 1931. (IN THOUSANDS OF
long time.
BARRELS).
Vmezuela.
Production.
Shipments.
Stocks at End of
The production of Venezuela is estimated at close to
Month.
118,000,000 barrels,
Month.
or about 20,000,000 barrels lower than the previous year.
This reduction
has been brought about largely through the conservation
1930.
1931.
1930.
1931.
1930.
1931.
policy followed
by the major oil producing companies which voluntarily
have
8,498
8,595
4,955
4,692
27,081
27,759
their output to conform with similar programs of conservationadjusted January
8,162
5,920
7,012
5,074
28,249
in the February
28,812
United States.
March
11,225
8,245
8,826
7,192
30,648
29.676
11,245
13,340
13,521
April
11,184
30,887
29,715
Rumania.
17,249
May
14.010
17,224
14,200
30,891
29,554
The production in Rumania increased about 7.000,000 barrels in
17,239
June
14,118
18,781
16,077
29,364
27,602
1931, July
13,899
17,078
20,153
26,289
15,545
25,934
bringing the total to 48,000,000, and thus placing Rumania as fourth
in August
17,821
13,549
20,299
15,172
23,824 224,313
rank ahead of Persia. The disorganized development of these
16,124
18,083
12,092
fields September
13.671
21,889
22.734
at a time where world-wide co-operation is essential, offers one
14,410
15,599
20,697
of the October
November
serious obstacles to successful co-ordination of the industry.
11,098
8.784
23,056
December
8,480
5,688
25,838
Other Countries.
Total
16(L9(15
158.744
The orderly development of the Persian fields continues, the
a Revised.
1931
output being estimated at 47,000,000,showing an increase ofabout
Note.-The statis Ins above presented are compi ed from reports for September
2,000,000 received
by the Bureau of Mines, from all manufacturing
from the previous year. The fields of Dutch East Indies should
produce for which estimates have been included in lieu of actual returns.plants except three,
at approidmately the same rate as the previous year, while the
Mexican
fields continue their gradual decline with a production close to
34,000,000
barrels, or 5,000,000 barrels lower than in the previous year. The
pro- Production and Shipments of Refined Copper Conduction in Colombia will be somewhat curtailed in line with the
similar
tinue to Decline-Smallest in Many Yearsaction taken in the American and Venezuelan fields.
There is little of importance worth noting in regard to the
Inventories Largest in History.
development
of other producing countries, as will be seen by the following table,
which
Although September production of refined copper in
shows their output for 1929 and 1930 as given by the United
States Bureau
of Mines, and that of 1931, representing the preliminary
estimate based North and South America, was again the smallest for any
on figures so far available.
ESTIMATED WORLD PRODUCTION OF PETROLEUM.
CountryUnited States
Russia
Venezuela
Rumania
Persia
Dutch East Indies
Mexico
Colombia
Peru
Trinidad
Argentina
India
Sarawak
Poland
Japan
Sakhalin
Ecuador
Egypt
Canada
Germany
Iran
Others
Totals
1931.
1930.
856,000,000
158,000,000
118,000,000
48,000,000
47,000,000
39,000,000
34,000,000
18,000,000
11,500,000
10,000,000
10,000,000
8,000,000
5,000,000
4,400,000
2,000,000
2,000,000
1,700,000
1,800,000
1,700,000
1,200,000
800,000
900,000
898,000,000
135,165,000
137,675,000
41,680,000
45,420,000
40,150,000
39,530,000
20,346,000
12,458.000,
9,120,000
8,910.000
8,280,000
5,830.000
4,840,000
1,950,000
1,670,000
1,559,000
1,910,000
1,500,000
1,161,000
750,000
819,000
1,379.000.000
1.418.723.000
1929.
1,007,323,000
99,507,000
137.472,000
34,689,000
42,145,000
38,072,000
44,888,000
20,385.000
13,422,000
8,716,000
9,391.000
8,366,000
5,279,000
4.988,000
2,010,000
1,076,000
1,350,000
1,864,000
1,121,000
711,000
798,000
668,000
1.484 041 (MO
month in years, shipments decreased even faster, likewise
to the lowest in many years,reports the "Wall Street Journal"
of Oct. 14. As a result, stocks of refined copper increased
24,121 short tons, making stocks of refined copper in North
and South America at the end of September 479,896 short
tons, the largest in the history of the industry. Stocks of
copper also increased abroad so that world stocks of refined
copper are now the largest in history.
Stocks of blister copper also increased in North and South
America during September,so that total copper above ground
made a new record of 658,321 tons.
Smelter production in both North and South America
showed little change in total, so that, owing to the shorter
month, the daily average was higher for both continents in
September than in August. Mine output for the United
States likewise showed little change in total tonnage for
September compared with August, but the daily average
was 1,270 tons compared with 1,256 tons in August, continued the "Journal."
FINANCIAL CHRONICLE
2520
The following table gives, in short tons, the output of United States
mines, blister and refined, production of North and South America, Great
Britain, &c.:
Production.
Mines, United States
z Mister, North America
x Blister, South America
Stocks (End of Month)North and South America:
Blister (loci "in process")
Refined
Total
Great Britain:
Refined
Other forms
Total
Havre
JAMUL.
June.
July.
45.580
66.812
24,812
44,473
65.110
24,785
38,606
60,066
24,611
38.925
62,237
23,334
38,088
61,183
23,020
190,578
398,667
187.353
413,474
179,658
440.417
176,105
455.775
178.425
479.896
589,24.5
600.827
620,075
631,880
658,321
15,085
1,452
17,003
1,382
21,423
1.243
25,157
1,344
25,269
1,595
16,537
11,045
8.361
18,445
12.073
8.079
22,680
10,252
7.517
26,501
10,709
9
26,864
13,300
1
sIncludes direct coPper. 7Not yet available.
The following table shows in short tons shipments and production of
refined copper by North and South American producers and refineries:
Shipments.
Total.
Daily
Rate.
193I-September
August
July
June
May
April
March
February
January
88.704
90.190
96,408
98.275
102,695
100,501
102,058
99.853
102,458
2,890
2,909
3,110
3.276
3,313
3,374
3.292
3,566
3.305
22.124
29.016
26,321
33.251
26,684
32.218
36.797
39,415
45.597
40.459
45,016
43.144
50,217
42,265
54.567
74.685
60,636
60.209
62.583
74,832
69.465
83.468
71,949
86,785
111,482
100,051
105,806
1930-December
November
October
September
August
July
June
May
April
March
February
January
106,366
112.646
118.229
116.004
120.778
123.179
124.821
132.183
• 7124.531
127,064
•
121,195
•
132.374
3.431
3.755
3.814
3,867
3,896
3,974
4,161
4,264
4.151
4.099
4,328
4.270
39,169
45.051
38,246
37,873
38,319
42,466
44.818
49.115
29,196
30.523
29.597
30,358
69.854
62,693
75.703
65,169
56,810
75.436
71,887
75.760
50,017
73.644
61.879
69,932
109,023
107,744
113,949
103.042
95,129
117,802
116,705
124.875
79.213
104.167
91,476
100.290
• 1,459.370
3,998
454.731
808,784
1,263,515
138,203
145,376
152.840
134.343
148.648
153,513
156,447
161,784
161,285
163,561
141,385
154,472
4,458
4,846
4,930
4,478
4,795
4,952
5,215
5,219
5,376
5,276
5,049
4,983
35.652
37,879
53,461
45.921
45,035
40,204
48,461
55,123
57,708
59,946
50.150
57.054
58,150
68,979
105,729
98,043
96,970
98.720
95,258
93,743
99,051
105,860
98,771
100,135
93.802
106,858
159,190
143,964
142,005
138,924
143.719
148.866
156.759
165.806
148,921
157,189
1,811,857
4,964
586,594
1.119.409
1,706,003
Total 1930
1929-December
November
October
September
August
July
June
May
April
March
February
January
•
•
•
•
•
•
•
Total 1929
If:porta
Domestic.
Total.
1,657,681
983,460
674.221
1.627.849 4.448
1928
1,466,709
824,844
641,865
1,476.506 4,045
1927
1,428,035
902,174
525,861
1,440,454 3,946
1926
1,415,724
831,171
584.553
1.352.309 3,705
1925
1.319.783
753.389
566.395
1.300.332 3.553
1924
I Beginning 1926, Includes shipments from Trail refinery in British Columbia.
y Includes imports of cathodes.
The following table shows production In short tons by United States
mines, according to types of mines:
Porphyry mines
Lake mines
Vein mines
Custom ores
Total crude produced.
x Partly estimated.
3.80 cents could be maintained without much difficulty, they have shown
no hestiation in.-following the market down five or ten points a week.
The price held steady at 3.50 cents until Tuesday, when 3.45 cents was
quoted, and yesterday as low as 3.40 cents was offered.
August. September
May.
Production.
[VOL. 133.
JanuarySeptember. Sept. 1931
June.
July.
August.
18,312
5,422
18,313
2,426
18,187
3.692
15,127
1,222
18,163
4.168
15,294
x1,300
18,105
4,054
14,629
x1,300
165,833
40,630
167,145
x22,403
44472
38.228
38.925
38,088
396.011
Prices Hold Up in Non-Ferrous Metal Trade-September Copper Statistics Below ExpectationsLead Dull-Zinc Down.
Demand for copper and lead moder tted considerably
in the last week, but producers held their prices firm at
the previously quoted levels, "Metal and Mineral Markets"
reports, adding:
Steel Output Continues at About 29% of Capacity-Demand is Better-Prices Unchanged.
Moderate improvement in the demand for steel from the
automobile, farm equipment and radio industries and the
railroads, together with the better sentiment resulting from
the efforts of the administration at Washington to mobilize
the credit resources of the country, presents a somewhat
brighter business picture says the "Iron Age" of Oct. 15.
Although increases in business are still spotty and not
sufficiently large to lift steel ingot production above the
29% rate of a week ago, the operations of finishing mills
in some lines are higher than those of recent weeks, and
further acceleration is promised for the latter half of October,
continues the "Age," further stating:
Motor car manufacturers have bought less steel during the week than
was expected, but have released a good many contracts for parts, and
further steel orders are certain to develop before the end of the month to
insure deliveries for the production of new models, which is slated to begin
in many automobile plants on Nov. 2.
Farm equipment manufacturers are increasing their orders and inquiries
for steel for new production schedules, which in some instances will be
begun early in November. The railroads, though slow with their annual
rail inquiries and quiescent in plans for new rolling stock, are placing more
liberal orders for steel for car repairs. The radio industry, while not a
large tonnage user of steel, is expanding its steel requirements for seasonal
manufacturing programs.
Railroad purchases of steel for car roofing and other repairs indicate
enlarged shop operations. Inquiries for rails and rolling stock are undoubtedly being held in abeyance in many cases until the railroad rate
decision and plans of the administration for financial aid for the carriers
are known. Meanwhile, the Erie has come into the market for 35,000 tons of
rails and the Louisville & Nashville for 20,000 tons.
Some tin plate contracts have been signed since the new price of $4.75
a base box was announced, and, though can companies will not require
shipments before January or February, mills may anticipate these requirements by rollings during the remainder of the year.
Pipe orders are being worked off, and new business may not come in time
to prevent a decline in operations. Structural steel has slumped this month.
Bookings of the past week were only 11,500 tons, and new projects barely
10,000 tons. Business in plates is also exceedingly dull, one factor being
the small purchases of the oil industry.
Operations of open-hearth furnaces and mills have increased at Cleveland
and in the Valleys, but have declined quite sharply at Chicago. While
some companies are running at 30 to 35% of ingot capacity, others are
doing much less, and one good-sized independent Is below 20% this week.
Pig iron production may be lower this month, a merchant furnace having
been blown out in the Chicago district, and there has been a loss of two
stacks in Alabama.
Though prices of most steel products remain fairly firm, pig iron Is
weak in some districts, and scrap has had further decline at St. Louis and
Cincinnati. At Pittsburgh, Chicago and in Eastern Pennsylvania the
scrap market is dull but steady.
A general broadening of business activity and returning confidence in
Great Britain, coupled with some recession in output of iron and steel in
France, Upper Silixda and Luxemburg, are now noticeable effects of the
British abandonment of the gold standard, according to cable dispatches
to the "Iron Age." Welsh tin plate is enjoying a more active demand,
both domestic and foreign, and tin plate bar makers are more heavily sold
than in years. British export business Is somewhat difficult, owing to new
tariff barriers raised by certain countries and the rapid fluctuations of
sterling exchange.
The "Iron Age" composite prices for pig iron and finished steel are unchanged at $15.34 a gross ton for the former and 2.1160. a lb. for the latter.
A comparative table shows:
Finished Steel.
Based on steel bars, beams, tank plates.
Oct. 13 1931. 2.116o. a Lb.
2.116e. wire, rails, black pipe and sheets.
One week ago
These products make 87% of the
2.1180.
One month ago
2.1354. United States output.
One year ago
Low.
High
2.102e. June 2
2 142e. Jan. 13
1931
2.121o. Dec. 6
2.362c. Jan. 7
1930
2.362o. Oct. 25
2.412e. Apr. 2
1929
2.314c. Jan. 8
2.391o. Dec. 11
1928
2.293c, Oct. 25
2.453e. Jan. 4
1927
2.403c, May 18
2.463e. Jan. 5
1926
2 560c. Jan. 6
2.3960. Aug. 18
1925
Pig Iron.
Based on average of basic Iron at Valley
Oct. 13 1931, $15.84 a Gross Ton.
$15.34 furnace and foundry Irons at Chicago.
One week ago
15.42 Philadelphia, Buffalo, Valley and 111rOne month ago
16.29 mingham.
One year ago
High
Low.
$15.90 Jan. 6
$15.34 Oct. 6
1931
18.21 Jan. 7
15.90 Dee, 16
1930
18.71 May 14
18.21 Dec. 17
1929
18.59 Nov.27
17.04 July 24
1928
19.71 Jan. 4
17.54 Nov. I
1927
21.54 Jan. 5
19.46 July 13
1926
22.50 Jan. 13
18.96 July 7
1925
Steel Scrap.
Based on No. 1 heavy melting steel
Oct. 13 1931. $8.83 a Gross Ton.
g8.83 quotations at Pittsburgh, Philadelphia
One week ago
9.17 and Chicago.
One month ago
12.92
One year ago
High.
Low.
$11.33 Jan. 8
1931
18.83 Oct.
15.00 Feb. 18
1930
11.25 Dec. 8
17.58 Jan. 29
1929
14.08 Dec. 3
16.50 Dee. 31
1928
13.08 July 2
15.25 Jan. 11
1927
13.08 Nov.22
17.25 Jan. 5
1926
14.00 June 1
20.83 Jan. 13
1925
15.08 May 5
The September copper statistics were regarded as more unfavorable
than was expected, viewed in any light, but sellers have so far been able
to sell all they desired at the seven-cent price. Lead was dull: zinc gave
way a bit further, going below 34 cents, but is still well above the year's
low of 3.20 cents.
metal stocks undershot
All estimates of the September increase in copper
also increased: stocks in
the mark. Refined was up 24,000 tons. Blister
and export shipments
domestic
Great Britain and France were up. Both
set a new low record by a large margin, and even though the average
delivered, the daily rate of mine
Price for the month was about 73i cents,
output In North and
production in the United States, and of smelter
only satisfaction to be
South America, showed a slight increase. The
is not voluntarily
curtailment
derived from this situation is that if sharp
that
agreed upon by producers, prices are likely to drop to such a figure
most of them will be forced to shut down completely.
The increase in demand for lead that followed immediately after lower
prices were announced in the preceding week was not maintained in the
business
seven-day period that ended yesterday. Developments in the
world are being scrutinized carefully and consumers restricted purchases
In a summary of the iron and steel markets, the magazine
of lead during the week to bare necessities. Sales booked so far for October
shipment amount to anproximately 23,500 tons.
of Cleveland, Oct. 12, says:
"Steel,"
last
the
in
pound
a
Straits tin advancel slightly more than one cent
Time is increasingly on the side of steel producers, and as the late fall
week. The firmer tone was inspired chiefly by the increased stability of
sterling exchange. Thus were put to rest some of the rumors of difficulties approaches such imnortant outlets for steel as the railroads and the autoin handling the affairs of the tin pool. Though the large interests in zinc mobile industry apparently cannot much longer defer covering certain minfelt early in September that the situation was well in hand and that the imum requirements.
OCT. 17 1931.]
FINANCIAL CHRONICLE
Stimulated also by the President's creation of a billion dollar credit pool
to divert to industry funds now frozen in bank credits, a development which
will not affect steel directly but cannot help quicken all industry,sentiment
In steel has lifted considerably.
Previously has steel been falsely buoyed by recurring vain hopes of improvement; in the past week a 29% production rate was maintained with
difficulty: the most sanguine do not look for any appreciable bulge-yet
the outlook for the long pull is brighter.
Inexorably the time during which the automobile industry can produce
new models for dealers' stocks and display at the January shows is narrowing,and Detroit counts upon four good production weeks this quarter. Ford
has bought 10.000 tons of steel, chiefly sheets and strip. Chevrolet is about
to specify for its 1932 line, other General Motors units are figuring.
Particularly in the Mahoning Valley are substantial hopes being built
upon an improved automobile situation, affecting the mills late this month.
This week and last were the first two weeks in months that autobody sheet
makers have operated consecutively.
Whatever the I. S. C. Commission rules concerning freight rates, some
needs that have been restrained because of this proceeding and certain
requirements for maintenance must develop shortly. In addition, the next
month will mature rail inquiries from the principal carriers. The Erie,it is
reported, will buy 35,000 tons for 1932 compared with 41,000 tons for 1931.
Because the President's credit pool is largely a salvage operation, partially for the small home owner, no marked immediate impulse to building
is foreseen, but a continuation of public works-mainstay of the structural
market for some months-is assured. Last week structural steel awards
totaled 23,900 tons, bringing 1931 bookings to date to 1,559,636 tons, compared with 1,504.587 tons in the comparable period of 1930.
Implement and tractor manufacturers in the Chicago district may benefit
soon from further Russian orders. If the Continental Construction Co.
extends its 20-inch gas line northward from Chicago and the Sun Oil Co.
lengthens its 10-inch line in northern New York, pipe mills will book orders
for 40.400 and 4,000 tons, respectively.
Viewing the steel markets by products, little variation is evident from
week to week. In plates and bars, bookings are off slightly. Whatever
change has developed in sheets and strip has been on the side of improvement, and in the case of wire, one maker has registered a 45% gain this
month. A characteristic of all finished steel prices is their firmness.
In the past week steel production averaged 43% at Buffalo, 35 at Cleveland, 30 at Birmingham and in eastern Pennsylvania, 28 at Chicago and
Youngstown and 25 at Pittsburgh. Because open-hearth operations are
staggered at Buffalo, the rate there will drop to 35% this week; otherwise
no changes are indicated. In September, when the daily ingot output was
59,523 tons, lowest in exactly a decade, the rate was 28.02%.
In pig iron the trend is toward improved shipments but it is barely
perceptible. The price situation is easier both at Chicago and eastern Pennsylvania, where some grades are lower.
The easier situation in pig iron has dropped "Steel's" iron and steel composite four cents this week at $30.78. Softening in scrap has lowered the
scrap composite nine cents to $8.58. The finished steel composite stands
at $48.22.
Steel ingot production for the week ended Monday
(Oct. 12) was at slightly better than 29% of theoretical
capacity, compared with about 293'% in the preceding
week and better than 28% two weeks ago, according to the
'Wall Street Journal" of Oct. 13, which goes on to say:
U. S. Steel is at around 32%,against a shade over 32% a week ago and
2521
Production of Bituminous Coal and Anthracite During
September at Higher Rate Than in Preceding
Month, But Continued Below That for the Corresponding Period in 1930.
According to the United States Bureau of Mines, Department of Commerce, preliminary estimates show that for the
month of September 1931 there were produced a total of
31,806,000 net tons of bituminous coal, 4,352,000 tons of
anthracite and 77,500 tons of beehive coke, as compared
with 30,534,000 tons of bituminous coal, 4,314,000 tons of
anthracite and 69,500 tons of beehive coke in the preceding
month and 38,632,000 tons of bituminous coal, 5,199,000
tons of anthracite and 166,900 tons of beehive coke in the
corresponding period last year.
The average daily rate of production of bituminous coal
during the month of September 1931 amounted to 1,257,000
net tons, as against 1,527,000 tons in the same month in
1930 and 1,174,000 tons in.August 1931. The Bureau's
statement follows:
Total for
Month.
(Nd Tons).
No. of
Working
Days.
Average per Cal. Year
IVorking
to End of
Days
SePtember.
(Net Tans). (Net Tons)
Sept. 1931 (Preliminari)sBituminous coal
31,806,000
25.3
1,257.000 281,927.00C
Anthracite
174,100
44,162.00C
25
4,3.52,000
Beehive coke
987,90C
26
2,980
77,500
August 1931 (Revised)Bituminous coal
30,534,000
26
1,174,000
Anthracite
4,314,000
26
165,900
Beehive coke
69,500
26
2,673
September 1930Bituminous coal
1,527.000 339.642,00C
38,632,000
25.3
Anthracite
50,030.00C
208,000
25
5.199,000
Beehive coke is.
166.91)0
6.419
2.263.50C
26
a Slight revisions of there estimates will be issued in the weekly coal report about
the middle of the month. b Final figures.
Bituminous Recovery Delayed Owing to Warm Weather
-Domestic Situation Better-Prices Rise.
Warm weather kept the bituminous coal markets of the
country under its thumb in September and delayed the
expected upturn in domestic business until the last week
in the month, the "Coal Age" reports. In spite of the
prevailing temperatures, however, a slight but definite
inprovement in the domestic situation was noticeable, adds
the "Age," which further goes on to say:
31% two weeks ago. Leading independents are approximately unchanged
Dealers showed some disposition to replenish stocks and price advances
at slightly under 28%. the same as the week before. Two weeks ago
these gave promise of a more satisfactory realization in the coming months.
companies were at 27%.
The
steam trade continued in its long-standing slump. Slack and screenings
At this time last year the average went down nearly 1%%
55%.U. S. quotations were surprisingly firm, however, easing off in only a limited
Steel showing a drop of 1%% to a fraction over 60%, whileto
Independents number of cases.
were down a little over 1% to a shade under 52%. In the same week
of 1929
September proved to be a slow month in the principal anthracite markets
the average dropped 5% to 79%, with U. S. Steel off 7% to
82%, and of the country. Warm weather, coupled with extensive stock replenishindependents down 3% to a little under 77%. In the corresponding
week of ments in August, slowed the movement from the mines and prevented the
1928 the average was up a fraction to nearly 87%%. U. S. Steel
dropped usual fall recovery. Buckwheat and rice were the favored sizes, and
almost 2% to 87%, while independents rose 2% to 88%.
stove displaced egg as the most active domestic size. Chestnut improved
its position slightly. Pea was neglected, and decreased consumption
Unfilled Steel Tonnage Lowest Since July 1927.
made barley soft.
Production of bituminous coal in September is estimated at 31,806.000
Unfilled orders on the books of subsidiaries of United
net tons, an increase of 1,272,000 tons over the August output of 30,534,000
States Steel Corp. at Sept.30 were only 3,144,833 tons which tons,
but a decrease of 6,826,000 tons from the total in September 1930.
is 24,624 tons less than at the end of August and the lowest Anthracite production is estimated at 4,352,000 net tons for September.
This
compares
with 4,314,000 tons in the preceding month and 5,199,000
level the figure has reached since July 31 1927 when the backin September a year ago.
log was 3,142,014 tons. The unfilled tonnage at Sept. 30 tons
The "Coal Age" index of spot bituminous prices (preliminary) settled
1930 was 3,424,338 tons. Below we show the figures by at 133% for September,against 130Ji for August. Corresponding weighted
average
prices were: September, $1.613; August, $1.58%.
months for six years. For figures of earlier
"Chronicle" of April 17 1926, page 2126.
dates, see
UNFILLED ORDERS OF SUBSIDIARIES OF U. S. STEEL
CORPORATION.
End of Month.
1931.
1929.
1928.
1927.
1926.
January
4.132.351 4,468,710 4,109,487 4.275,947 3,800.177
February
. .
4.479.748 4.144.341 4,398,189 3,597.119 4.882.739
March
3,995.330 4.570,653 4,410,718 4,335.206 3.553.140 4,616,822
April
3 897.729 4,354,220 4,427.763 3,872,133 3.456,132 4,379.035
3.867.976
May
3,620.452 4.059.227 4.304,167 3,416,822 3,050,941
June
3,479.323 3,968.064 4,256.910 3.637,009 3,053.246 3.649.250
3.478.642
July
3 404,816 4.022.055 4.088.177 3,570,927 3.142.014
August
3.169.457 3,580,204 3.658,211 3,624.C43 3,196.037 3.602,522
3.542,335
September---3,144,833 3,424,338 3,902,581 3,698.368 3,148,113
October
3,481,763 4.086,562 3,751.030 3.341.040 3.593.509
November_ 3.639,636 4,125.345 3,643,000 3,454,444 3.683.661
December
3,943.596 4,417.193 3.976,712 3,972,874 3.807,447
3.960,969
Glen Alden Coal Mines Reopen-Full Operation
Planned as Strikers Return to Their Jobs.
Associated Press advices, Oct. 12, from Scranton, Pa.,
are taken as follows from the New York "Times":
With the exception of one colliery where repairs are being made, and
at several which have been closed permanently, all anthracite mines of
the Glen Alden Coal Co. in Lackawanna and Luzerne counties resumed
operations to-day, after having been idle nearly two weeks because of
an unauthorized strike of 29,000 men.
As the miners returned to their jobs, S. D. Dimmick, Vice-President
of the company, announced that full operations would continue for some
time.
"There are plenty of orders on hand," he said.
The strike, which was called by insurgents because of grievances, was
adjusted Friday (Oct. 9) by John L. Lewis, International President of
the Miners' Union, who came into the hard-coal fields and conferred
with insurgent leaders.
Anthracite Shipments Declined During September
1931.
Shipments of anthracite for the month of September
1931, as reported to the Anthracite Bureau of Information,
Philadelphia, amounted to 3,372,926 gross tons. This
is
a decrease as compared with shipments during the preceding
The strike was re:erred to in our issue of Oct. 10, page 2343.
month of August of 29,055 tons and, when compared
with
September 1930, shows a decrease of 526,479 tons. Shipments (No. of tons) by originating carriers are as follows:
Canada Exempts Anthracite Coal from Dumping Duty.
Sept.1931. Aug. 1931. Sept. 1930. Aug. 1
930.
Anthracite coal imported into Canada from all countries
Reading Company
874,713
788,531
788,762
932 584
Lehigh Valley RR
477,870
509,973
573.873
745772 is exempted from dumping duty under appraisers' bulletin
Central RR. of New Jersey
286,081
324,132
348,133
452'289 No. 3745 dated
N es
RR__ _
,
Pets., Lackawanna .Sr Itern
347,214
544 87n
Sept. 30 1931, reports Commercial Attache
Delaware &Hudson RR. Corp
415.485
374,526
651:901
U19,
M
:,
Pennsylvania RR
Lynn W.Meekins to the Department of Commerce. Under
353,313
319,338
417,828
506,320
260,811
Erie RR
377,894
367,801
489,939 date of Oct. 5, the Department says:
198,641
New York, Ontario Jr Western fly.
199,000
86,237
Lehigh Or New England RR
Total
86,128
146,275
161,373
119,991
217,010
3 372,926 3,401,981 3,899,405 4.821,790
Dumping duty applies only to goods of a class or kind
made or produced
in Canada, when the selling price to the Canadian customer
is less than the
fair market value of the product as sold for home consumption
in the country
of export. Anthracite coal has been ruled to be of a class or kind not
produced in Canada. The regular import duty on anthracite coal not otherwise provided for is 40 cents per ton (2,000 pounds) from all foreign nonBritish countries, including the United States, and such coal is free of duty
under the British preferential tariff.
Bituminous Coal and Pennsylvania Anthracite Output
Continues Lower Than in 1930.
According to the United States Bureau of Mines, Department of Commerce, there were produced during the week
ended Oct. 3 1931 a total of 7,856,000 net tons of bituminous
coal, 1,266,000 tons of Pennsylvania anthracite and 19,200
tons of beehive coke. Output during the week of Oct.4 1930
amounted to 9,304,000 tons of bituminous coal, 1,528,000
tons of anthracite and 38,800 tons of beehive coke, while
during the week of Sept. 26 1931 production reached a total
of 7,432,000 tons of bituminous coal, 1,080,000 tons of
anthracite and 18,100 tons of beehive coke.
During the calendar year to Oct. 3 1931 there were produced 285,580,000 net tons or bituminous coal, as against
343,669,000 tons during the calendar year to Oct. 4 1930.
The Bureau's statement follows:
Estimated Weekly Production of Coal by States (Net Tons).
Week Ended
Sept.26'31. Sept.1931. Sept.2730. Sept.28'29.
State377,000
279,000
205,000
199,000
Alabama
44.000
51,000
34,000
34,000
Arkansas
242,000
168,000
116.000
139,000
Colorado
934,000 1.285.000
755,000
713,000
Illinois
387,000
306,000
233,000
226,000
Indiana
95,000
69,000
45,000
53,000
Iowa
71,000
51,000
49.000
46,000
Kansas
787,000 1,042,000
645,000
662,000
Kentucky-Eastern
308,000
183,000
146,000
146,000
Western
55,000
38,000
35,000
35,000
Maryland
18,000
15,000
5,000
8,000
Michigan
86.000
60,000
66,000
53,000
Missouri
88,000
45,000
61,000
48,000
Montana
50,000
36,000
24,000
29,000
New Mexico
83.000
36,000
26,000
33,000
North Dakota
540,000
459,000
441,000
Ohio
419,000
92,000
53,000
39,000
41,000
Oklahoma
Pennsylvania(bituminous)1,850.000 1,732,000 2,377,000 2,989.000
107.000
99,000
84,000
76,000
Tennessee
22,000
19,000
16,000
19,000
Texas
122,000
110,000
87,000
Utah
102,000
274,000
212,000
208,000
201,000
Virginia
60,000
50,000
28,000
Washington
'
1,659,000 1,898,000 2,269,000
West VIrginia--Southernb 1,662,000
777.000
583,000
465,000
441,000
Northern_c
167.000
123,000
107,000
Wyoming124,000
5,000
3,000
1,000
Other
BITUMINOUS COAL.
The total production of soft coal during the week ended Oct. 3 1931,
including lignite and coal coked at the mines, is estimated at 7,856,000 net
tons. Compared with the output in the preceding week, this shows an
increase of 424,000 tons, or 5.7%. Production during the week in 1930
corresponding with that of Oct. 3 amounted to 9,304,000
tons.
Estimated United Stales Production of Bituminous Coal(Net Tons).
1930
1931
Cat. Year
Cal. Year
Week.
to Date..
to Date.
Week.
Week Ended8,920,000 325,262,000
7,244.000 270,292,000
Sept. 19
1,487,000
1,466,000
1,219,000
1,207,000
Daily average
9,103,000 334,365,000
7,432,000 277,724,000
Sept.26..b
1,468.000
1,517,000
1,220,000
1,239.000
Daily average
9,304,000 343,669,000
7856.000 285,580,000
Oct.3 c
1,470,000
1,551,000
1,222,000
1 309,000
Daily average
a Minus one day's production first week in January to equalize number of days
two years. b Revised since last report. c Subject to revision.
The total production of soft coal during the present calendar year to
Oct. 3 (approximately 234 working days) amounts to 285,580,000 net tons.
Figures for corresponding periods in other recent calendar years are given
below:
In
the
1930
1929
[VOL. 133.
FINANCIAL CHRONICLE
2522
343,669,000 net tons
394,685,000 net tons
1928
1927
364.190,000 net tons
394,654,000 net tons
As already indicated by the revised figures above, the total production
of soft coal for the country as a whole during the week ended Sept. 26 1931
is estimated at 7,432,000 net tons. Compared with the output in the preceding week, this shows an increase of 188,000 tons, or 2.6%. The following table apportions the tonnage by States and gives comparable figures
for other recent years:
states
L000
Total bituminous coal
Pennsylvania anthracite
Total all coal
Sept. 1923
Average.a
406,000
31,000
214,000
1,587.000
550,000
117,000
95,000
713,000
248,000
40,000
27,000
73,000
68,000
56,000
27,000
861,000
65,000
3,585,000
119,000
26,000
103,000
245,000
58,000
1,474,000
857,000
165,000
4,000
7,432,000 7,244,000 9,103,000 11,682,000 11,814,000
714,000
892,000 1,140,000 1,980,000
1,080,000
8.512,000 8,136,000 10,243,000 13,642,000 12,528,000
a Average weekly rate for the entire month. b Includes operations on the
N.& W.,C.de 0., Virginian and K.de M. c Rest of State. Including Panhandle.
PENNSYLVANIA ANTHRACITE.
Production of Pennsylvania anthracite increased sharply during the week
ended Oct. 3. The total output is estimated at 1,266,000 net tons, a gain
of 186,000 tons, or 17.2%, over the output in the preceding week. Production during the week in 1930 corresponding with that of Oct. 3 amounted
to 1,528,000 tons.
Estimated Production of Pennsylvania Anthracite (Net Tons).
1930
1931
Daily Awe.
Week.
Daily Ave.
Week.
210,000
1.260,000
148,700
892,000
190,000
1,140,000
180,000
1,080,000
254,700
1,528,000
211,000
1266,000
WeekEndedSept. 19
Sept. 26
Oct. 3
BEEHIVE COKE.
The total production of beehive coke during the week ended Oct. 3 is
estimated at 19,200 net tons. This is an increase of 1,100 tons, or 6.1%
over the output in the preceding week, and compares with 38,800 tons
produced during the week in 1930 corresponding with that of Oct. 3. The
cumulative production during 1931 to Oct. 3 amounts to 996,900 tons, as
compared with 2,289,600 tons in 1930.
Estimated Weekly Production of Beehive Coke (Net Tons).
1930
1931
Week Ended
to Date..
Oct. 4 '30. to Date.
RegionOct. 3'31.b Sept.26 '31.c
780,500 1,655,500
28,800
14,200
Pennsylvania
16,000
361,700
90,300
4,200
1,300
West Virginia
1,100
188,400
86,500
4,000
1,200
Tennessee & Virginia
1,000
84,000
39,600
1,800
1,400
Colo., Utah & Washington 1,100
United States total
Daily average
19,200
3,200
38.800
6,467
18,100
3,017
996,900 2,289,600
9,702
4,224
a Minus one day's production first week in January to equalize number of days
In the two years. b Subject to revision. c Revised since last report.
-
_A.
V 5-2, V
Current Events and Discussions
The Week with the Federal Reserve Banks.
The daily average volume of Federal Reserve Bank credit
outstanding during the week ending Oct. 14, as reported by
the Federal Reserve banks, was $2,036,000,000, an increase
of $279,000,000 compared with the preceding week and of
$1,010,000,000 compared with the corresponding week in
1930. After noting these facts, the Federal Reserve Board
proceeds as follows:
Bills discounted
Bills bought
United States securities
Other reserve bank credit
Increase (4-) or Decrease (-)
Since
Oct. 161930.
Oct. 7 1931.
$
3
+418.000.000
+164,000.000
+149.000,000 +545,000.000
-11,000,000 +125,000,000
-8,000,000
-17.000.000
Oct. 14 1931.
3
628,000,000
730,000,000
727,000.000
39,000.000
TOTAL RES'VE BANK CREDIT-2.125.000.000 +286,000.000 +1.081.000,000
-95,000,000
4 424,000,000 -218,000.000
Monetary gold stock
-21,000.000
1 775,000,000 +10,000,000
Treasury currency adjusted
Money in circulation
Member beak reserve balances
5473,000,000 +42,000,000
2 223,000.000 -54,000,000
+973,000,000
-217.000,000
On Oct. 14 total Reserve Bank credit outstanding amounted to $2,125,- Unexpended capital funds, non-mem628,000.000 +91,000,000 +209,000,000
ber deposits. &a
000.000, an increase of $286,000.000 for the week. This increase corresponds with increases of 542,000.000 in money in circulation and $91000000
of
decrease
a
and
Sec..
deposits.
in unexpended capital funds, non-member
Returns of Member Banks for New York and Chicago
$218,000,000 in monetary gold stock, offset in part by a decrease of $54.Federal Reserve Districts-Brokers' Loans.
000.000 in member bank reserve balances and an increase of $10,000,000
In Treasury currency, adjusted.
with the returns for June 29 1927, the Federal
Beginning
Holdings of discounted bills increased $83,000,000 at the Federal Reserve
also commenced to give out the figures of
Board
Reserve
at
each
516,000.000
Philadelphia,
at
$19,000,000
York,
New
Bank of
Cleveland and San Francisco, $11.000,000 at Chicago,$6.000.000 at Kansas the member banks in the New York Federal Reserve District
at all Federal Reserve banks. The sytem's holdings as well as those in the Chicago Reserve District, on Thursholdings of
of bills bought in open market increased $149,000,000, while
simultaneously with the figures for the Reserve banks
United States bonds declined $10,000,000 and of Treasury certificates and days,
themselves, and for the same week, instead of waiting until
bills $1,000,000.
City and 5184.000.000
Beginning with the statement of May 28 1930 the text
accompanying the weekly condition statement of the Federal
Reserve banks was changed to show the amount of Reserve
Bank credit outstanding and certain other items not included
in the condition statement, such as monetary gold stock
and money in circulation. The Federal Reserve Board's
explanation of the changes, together with the definition of
the different items, was published in the May 31 1930 issue
of the "Chronicle" on page 3797.
The statement in full for the week ended Oct. 14, in comparison with the preceding week and with the corresponding
date last year, will be found on subsequent pages-namely,
pages 2568 and 2569.
Changes in the amount of Reserve Bank credit outstanding
and in related items during the week and the year ended
Oct. 14 1931 were as follows:
the following Monday, before which time the statistics,
covering the entire body of reporting member banks in the
different cities included, cannot be got ready.
Below is the statement for the New York member banks
and that for the Chicago member banks for the current
week as thus issued in advance of the full statement of the
member banks, which latter will not be available until the
coming Monday. The New York statement, of course, also
includes the brokers' loans of reporting member banks.
The grand aggregate of brokers' loans the present week
records a decrease of $73,000,000, the amount of these
loans on Oct. 14 1931 standing at $928,000,000. The
present week's decrease of $73,000,000 follows a decrease
of $171,000,000 last week and a decrease of $191,000,000
in the four preceding weeks. Loans "for •own account"
fell during the week from $798,000,000 to $699,000,000,
OCT. 17 1931.]
FINANCIAL CHRONICLE
loans "for account of out-of-town banks" increased from
$77,000,000 to $85,000,000, and loans "for account of
others" from $126,000,000 to $144,000,000. The present
week's total of $928,000,000 is the lowest since Dec. 26 1927
when the amount was 98.541,000.
CONDITION OF WEEKLY REPORTING MEMBER BANKS IN CENTRAL
RESERVE CITIES.
New York.
Oct. 14 1931. Oct. 7 1931. Oct. 15 1930.
Loans and investments—total
7,538,000,000 7,648,000,000 8,318,000,000
Loans—total
4,670,000,000 4,801,000,000 6,175,000,000
On securities
All other
Investments—total
U.S. Government securities
Other securities
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Total
Loans and investments—total
Loans—total
On securities
All other
Investments—total
U.S. Government securities
Other securities
Investments—total
U.S. Government securities__
Other securities
7,831,000.000
—85,000,000 +1,346,000,000
4,194,000,000
3,637,000,000
—29,000,000 +1,224,000,000
—56,000,000 +122,000,000
Reserve with Federal Reeve banks 1,727,000,000
Cash in vault
271,000,000
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Increase (+) or Decrease (—)
Since
Sept. 30 1931. Oct. 8 1930.
—89,000,000
+16,000,000
—75,000,000
+59,000,000
12,739,000,000
6,824,000.000
309.000.000
—488,000.000
—151,000.000
—67,000,000
—818,C00.000
—917,C00,000
+162.000,000
1,131,000,000
2,881,000,000
—151,000.000
—190,000,000
—514,000.000
—723,000.000
274,000,000
+120,000,000
+235.000,000
Borrowings from Fed. Res. bank
2,868,000,000 2,847,000,000 2,143,000,000
W. Randolph Burgess of New York Federal Reserve
Bank at Basle for Informal Talk—American Will
Not Aid World Bank Officially But Will Seek and
Give Facts—Gold Moves Worry Board—Views of
Britain Since Suspension Eagerly Sought.
Reporting that W. Randolph Burgess of the Federal
Reserve Bank of New York would not attend the formal
meeting of the Bank for International Settlements at Basle,
Oct. 11, a cablegram to the New York "Times" Oct. 10
added that Mr. Burgess as the personal guest of President
Gates W. McGarrah would converse informally not only
with the directors of the bank but with its personnel. The
Oct. 10 cablegram from Basle to the "Times" continued:
751,000,000
65,000,000
791,000,000
61,000,000
794,000,000
45,000,000
5,484.000,000 5,801,000,000 5,665,000,000
1 034,000,000 1,047,000,000 1,489,000,000
87,000,000
94,000,000
36,000,000
88,000,000
81,000.000 106,000.000
1,025,000,000 1,055,000,000 1,160,000,000
Borrowings from Federal Reserve Bank_ 121.000,000
Loans on secur. to brokers & dealers
For own account
699,000,000
For account of out-of-town banks- 85,000,000
For account of others
144,000.000
On demand
On time
Oct. 7 1931.
2,403,000,000 2,469,000,000 3,640,000.000
2,267,000,000 2,332,000,000 2,535,000,000
1,781,000,000 1,756,000,000 1,080,000,000
1,087,000,000 1,091,000,000 1,063,000.000
Reserve with Federal Reserve Bank..
Cash in vault
2523
58,000,000
29,000,000
798,000,000 1,702,000,000
77,000,000 514.000,000
126,000,000 536.000,000
928,000,000 1,001,000,000 2,752,000,000
644,000,000
284,000,000
682.000,000 2,149,000,000
319,000,000 603,000,000
Chicago.
1 691,000,000 1,692,000.000 2,032,000,000
1,147,000,000 1,150,000,000 1,560,000,000
664,000,000
483,000,000
666,000,000
484,000,000
932,000,000
628,000,000
544,000,000
542,000,000
472,000,000
319,000,000
225,000,000
317,000,000
225,000,000
179,000,000
293,000,000
Reserve with Federal Reserve Bank.
._ _ 165,000,000 179,000,000 191,000,000
Cash in vault
18,000,000
18,000,000
14,000,000
Net demand deposits
1102.000.000 1,118,000,000 1,302,000,000
Time deposits
475,000,000 483,000.000 652,000,000
Government deposits
9,000,000
10,000,000
5,000,000
Due from banks
129,000,000 130,000.000 188,000,000
Due to banks
239,000,000 279,000,000 369,000,000
Borrowings from Federal Reserve Bank_
4,000,000
1.000,000
* Revised.
Complete Returns of the Member Banks of the Federal
Reserve System for the Preceding Week.
As explained above, the statements for the New York and
Chicago member banks are now given out on Thursday,
simultaneously with the figures for the Reserve banks themselves, and covering the same week, instead of being held
until the following Monday, before which time the statistics
covering the entire body of reporting member banks in 101
cities cannot be got ready.
In the following will be found the comments of the Federal
Reserve Board respecting the returns of the entire body of
reporting member banks of the Federal Reserve System for
the week ended with the close of business on Oct. 7:
Contrary to reports, he comes not as the bearer of any definite plan for
solving the world monetary crisis but rather on an informative errand—to
obtain information concerning the World Bank and its relations with
European central banks. In return, he willsupply to them details concerning
the situation in the United States.
Mr. Burgess talked to-day with Montagu Norman, Governor of the Bank
of England and the only board member yet arrived in Basle. He also conferred at the bank with Leon Fraser. Pierre Quesnay and others of the permanent staff, but to-morrow he will be present during the important discussions which are always held among board members on the day previous
to their meetings.
In addition, he will have personal conferences with Clement Moret of
the Bank of France, Dr. Hans Luther of the Reichsbank and Dr. Vincenzo
Azzolini of the Bank of Italy. Then, although he will not attend the formal
bank meetings on Monday (Oct. 12), he will be on the bank premises and
will have luncheon with the directors, who are always served in the bank's
dining salon in order to avoid interrupting their discussions.
There was an atmosphere ofgreat uncertainty here to-night as the bankers
were assembling. The World Bank was founded on.the basic principle of
the gold or gold exchange standard, and since the last meeting of the board
was held four member nations—Britain, Norway. Sweden and Denmark—
have suspended the gold standard.
There is nothing in the Bank's statutes which forbids this. On this
question its situation is like that of a hospital which refuses patients with
contagious diseases, but once patients are admitted there is no ejecting them
should they fall victims to the contagion.
All the officials are agreed, however, that suspension of the gold standard
by European nations is threatening to become epidemic in this financial
hospital, which would have its whole value to the various communities
ruined if the contagion were allowed to spread.
Therefore, great interest attaches to what Mr. Norman will tell the
board members to-morrow of Britain's situation, and the discussions which
will follow, but there is no great optimism as concerns the possibility of
finding any grounds for common action. No one seems sure what will be
proposed or how his own proposal will be accepted by the other members
of the board.
The same uncertainty prevails concerning what action will be taken
Monday on the renewal of German short-term credits. The Wiggin report.
recommending slashes in reparations and debts, and Premier Laval's proposals to President Hoover and the Hoover bank-pool plan, concerning
which Mr. Burgess brought full information, will form the background of
the discussions.
But all these proposals cannot be adopted and the Bank will necessarily
be obliged to postpone action. This cannot be done, however, with Austria,
whose 250,000,000-schilling ($35,000.000) credit expires next week, with
only 50,000,000 schillings repaid. Austria has not sent a representative here,
but negotiations will be conducted with Vienna by wire.
The Federal Reserve Board's condition statement of weekly
reporting
member banks in leading cities on Oct. 7 shows decreases for the week
of
$418,000,000 in loans and investments, $488,000,000 in net demand
deposits,$151,000,000 in time deposits,$67,000,000 in government
deposits
and $89,000,000 in reserves with Federal Reserve banks, and
an increase of
$120,000,000 in borrowings from Federal Reserve banks.
W. Randoph Burgess of the New York Federal Reserve
Loans on securities declined $215,000,000 at reporting
member banks
Bank Reassures Europe on Dollar—Move by CenIn the New York district, $11,000,000 in the
Cleveland district, $9,000,000
each in the Boston and Chicago districts,
tral Banks to Allay Panic Likely—Hint United
$8,000,000 in the Richmond
district and 3265.000,000 at all reporting banks.
"All other" loans declined
States May Join World Bank—Hoover Bank Credit
$52,000,000 in the New York district, $15,000,000 in the Chicago
district,
Plan Explained—Federal Reserve Representative
$8,000,000 in the San Francisco district and
$68,000,000 at all reporting
banks, and increased $8,000,000 in the Boston district.
Tells Financiers at Basle It Mobilizes But Does
Holdings of United States Government securities declined
$28,000,000
Not Create Credit.
In the Philadelphia district, $8,000,000 in the Cleveland
district,$7,000.000
in the Boston district and $29,000,000 at all reporting
Indicating that action by the Central Banks to check
banks, and increased
19,000.000 each in the New York and Richmond districts. Holdings
of European alarm as to the stability of the dollar was expected
other securities declined $31,000,000 in the New York district
and $56,000,to follow the conference on Oct. 11 of Governors of eight
000 at all reporting banks.
Borrowings of weekly reporting member banks from Federal Reserve banks of issue who met in the headquarters of the
Bank for
banks aggregated $274,000,000 on Oct. 7, the principal changes
for the International Settlements on that date and heard a detailed
week being increases of $61,000,000 at the Federal Restrve Bank of
New
York, $20,000,000 at Philadelphia, 112,000.000 at Cleveland,
expose of the American monetary situation by W. Randolph
$10,000,000
at San Francisco and $7.000.000 at Chicago.
Burgess of the Federal Reserve Bank of New York, who
A summary of the principal assets and liabilities of weekly reporting
member banks, together with changes during the week and the year ending came to Basle especially for this purpose, a cablegram from
Basle, Oct. 11 to the New York "Times" further said:
Oct. 7 1931, follows:
Increase (-F) or Decrease (--)
Mr. Burgess, supporting his statements with a formidable
array of
Since
figures and economic data, made a convincing argument in
Oct. 7 1931. Sept. 30 1931. Oct. 8 1930.
defense of
President Hoover's new National Credit Corp. against charges
here deLoans and investments—total_ __ _21,689,000.000 —418,000,000 — 1,608.000.000 picting it as concealed inflation—charges
which have caused people in
parts
all
of
Europe
to
join
in
a
panicky
selling
of
Loans—total
dollar
13,858.000,000 —333,000,000 —2,955,000,000
exchange in the
past week. It was learned to-night that Mr. Burgess'
explanation, which
On securities
6,081,000.000 —265,000,000 —2,179,000,000 lasted more than an hour and a half, at a five-hour
conference
of Central
Ali other
—68,000,000 —775.000,000 bankers to-day, made an extremely
7,777.000,000
good impression on his auditors. who
2524
FINANCIAL CHRONICLE
[VOL. 133.
It was the general opinion to-night that Mr. Burgess had convinced the
included the Governors of the Central Banks of France, Great Britain,
of the soundness of the dollar and its security from the European
Belgium, Germany, Switzerland, Holland, Sweden and Italy. Also bankers
which caused the recent heavy gold exports from America. Mr.
present were a Japanese representative; Gates W. McGarrah, President attacks
showed, it is learned, that the United States holds $1,000,000,000
of the World Bank; Leon Fraser, its Vice-President, and Pierre Quesnay, Burgess
of foreign exchange and demonstrated that twice that amount could be
Its Manager.
withdrawn before the dollar would be endangered.
Many Admit Being Impressed.
Also Reassured on England.
Several of these expressed themselves as profoundly impressed and
greatly comforted by the information disclosed by Mr. Burgess. and it
Immediate fears for what England's position will be also were somebecame evident that any future attacks on the dollar will encounter strong what reassured by information furnished by Mr. Norman, and the bankers
opposition from the Banks of issue.
left Basle to-night believing that Germany, relieved of the Young Plan
Mr. Burgess, it is known, made a convincing argument to prove that burden, remains in an excellent position for meeting short-term obligations
would
but
the National Credit Corp. would in no way mean inflation,
as they fall due. The World Bank itself voted to-day to renew its 1625,merely utilize a banking process which is already common practice in 000,000 share of the $100,000,000 credit granted to Germany by it, the
Europe. He said it was customary for European banks to lend on bonds Bank of France, the Bank of England and the Federal Reserve.
the
and that the new American corporation would be merely utilizing the
This action by the World Bank practically makes it certain that
legitimate assets of private banks for this recognized European device three other institutions, all represented here to-day, will take similar
in banking.
action on the credit, which is due on Nov. 4, and probably will be renewed
in
He then made a detailed report of the exact monetary situation
for three months.
America, demonstrating that the Federal Reserve would have ample
After hearing a report by Professor Bruins, a Dutch expert appointed by
gold to cover to meet the withdrawals which have been accumulating the World Bank to study the Austrian situation, the bank voted to renew
the
of
amount
the
Giving
its 40,000,000 schilling portion of the 190,000,000 schilling credit to Austria
since Britain suspended the gold standard.
concerning due on Oct. 16 with the certainty that the other institutions involved
enormous gold reserve in America and detailed information
no
was
will take the same action. The Bank also renewed a $3,000,000 credit to
this gold and the probable demands on it, he showed that there
flowing
by
the Royal Bank of Jugoslavia, $1,000,000 of which was contributed
cause for alarm because for the first time in months gold had begun
the World Bank.
toward Europe again.
Exchange Meeting Called.
Misinterpretation Acknowledged.
In addition to these measures to relieve the credit situation, the World
it afterduscussing
in
Governors,
European
some
that
understood
is
It
Hoover Bank took one strong initiative step at its meeting this afternoon with a
ward, admitted there had been European misinterpretation of the
Europe to view to remedying the paralysis of foreign exchange dealings in Central
bank pool plan and condemned the campaign which swept
out that Europe, due to restrictions that have now practically strangled trade. The
the detriment of the dollar and dollar securities. They pointed
at this board decided to authorize the directorate to call a meeting in Basle of
this was the worst possible policy European nations could adopt
off from all countries where trade restrictions have been established in order to cotime, when its immediate result would be merely to cut Europe
America. ordinate these rulings and eliminate the confusion now prevailing. The
the possibliity of obtaining valuable short time credits from
and date for this meeting will be fixed after consultation with the countries
complete
more
a
for
suggestion
urgent
They welcomed Mr. Burgess'
European involved, which will include Austria, Hungary, Rumania, Bulgaria, Poland,
and
Reserve
Federal
the
between
information
of
interchange
rapid
Jugoslavia and probably Italy, Germany and Czechoslovakia.
hanks of issue.
institution
In order to clear up all the difficulties created by the confusion as to
Precisely what form co-operation between the American
the
but
gold standard, the board approved to-day the action of its officials in
the
meeting,
this
at
outlined
was
not
take
and European banks may
toward fixing a gold value for payment of service on the Young Plan bonds. This
discussion is sure to have a moral effect on the European attitude
America's insures that the holders will be protected from any endeavor to make paythe dollar. Mr. Burgess, by his frank and full statement of
whole-heartedly ment in any depreciated currency. This action was taken by the bank by
position, gave earnest of the Federal Reserve's willingness
ultimately virtue of its authority as trustee under The Hague agreements.
to co-operate, and inspired some hopes that this program would
For the
Names Member of Farm Board.
lead the Federal Reserve actually to enter the World Bank.
and the
present, it is believed, some regular system of communication and liaison
An instance of close co-operation between the League of Nations
Reserve
Federal
the
inform
will
will be devised by which the World Bank
World Bank, which, in order principally to mollify American interests,
posted.
well
Bank
toWorld
place
the
took
keep
will
another,
Reserve
and the Federal
were established as completely independent of one
the board
day when the World Bank board agreed to name a member of
Status of Pound Discussed.
Mortgage Society. This institution was
Another important phase of to-day's discussion turned on the monetary of the International Agricultural under League control.
be
situation created by the depreciation of the pound and by its weakening created by the League and will monetary situation, the maintenance of
All matters concerning the
effect already felt on other currencies. Montagu Norman, Governor
suggestions for an international currency were
of the Bank of England, defined Great Britain's situation and the Gov- the gold standard and
agreed
of
left to the individual action of each Bank, which, It is understood,
ernors of tho Banks of Sweden. Italy and Holland made statements
orally to do all possible to prevent tho crisis becoming more aggravated
some importance. .Mthough several means of dealing with the situathe
that
found
was
It
meeting on Nov. 9.
tion, which is openly feared may wreck the gold standard, were suggested between now and the next
unsettled and there are so many prospects, notably
and discussed, it is learned on good authority no serious consideration political situation is so
which might alter the whole character
was given to any proposal which would create an international currency in the Laval-Hoover conversations,
exchange, debts and reparations, that any attempt
to replace sterling in international contracts. No solution was offered of the problem of credit,
would be premature. In the meantime those
which met with general approval and inasmuch as Britain's position neces- at a concerted decision
work out suggestions which can readily be dissarily remains an unknown quantity until after the elections, there is studying the problem will
applied if political matters improved.
little possibility of any monetary suggestions being seriously entertained cussed and more easily
the President
Mr. Burgess, who is the guest of Gates W. McGarrah,
until they have taken place.
a few days in Basle before returning to New York.
To-morrow all members of the Board will meet and probably will urge of the Bank, will remain
temporary measures to prevent other countries going off the gold standard
Immediately. They also will probably renew the $100,000,000 shortSees Federal Reserve Bank as European Ally—
term loan of the World Bank to Germany, which falls due on Nov. 4, France
Government.
Notes Signs of More Active Participation With
and the bank's 190,000,000 schilling loan to the Austrian
The Associated Press advices from Basle, Oct. 11 said:
Institutions Abroad—W.R. Burgess Arouses Hopes
—Report of Deposit by Reserve Bank With World
A declaration of confidence in the American dollar and an assurance
that President Hoover's latest financial plan is "decidedly not a measure
Bank.
of inflation" were given to an informal conference of chiefs of nine EuroThe following Paris account, Oct. 9, is taken from the
pean and Japanese banks to-night by Randolph Burgess.
He explained in detail President Hoover's plan for a national credit New York "Times":
in collaboinstitution and declared that it would not create more credit, but only
Signs of more active participation of the Federal Reserve Bank
make existing credit more available to the public.
of issue appeared to-day as W. Randolph
banks
European
with
ration
States
monetary
of New York, left
Any rumors and suggestions, he said, that the United
Burgess, Asst. Governor of the Federal Reserve Bank
system is threatened with a gold shortage are "absurd." His pronounce- Paris to take part as an observer at the conferences and meetings this weekdirectors at Basle.
rnent was regarded here as the answer of the Federal Reserve System to
of
end of the flank for International Settlements board
recent reports of instability of the American financial structure.
shortly after Mr. Burgess's visit with officials
France,
of
Bank
the
While
an
call
to
It was generally believed that the directors are not likely
here to-day, made public an unexpected decision to raise the French discount
international money conference. The opinion seemed to be that any rate simultaneously with the Federal Reserve Bank's increase, it was learned
decisive move would be untimely now, while the mutts of the conferences on good authority that the Federal Reserve, which has always maintained
of President Hoover and Premier Laval are awaited, as well as the result
the appearance of complete aloofness from all transactions of the Basle inof the British elections.
stitution, had recently become a depositor on the books of the World Bank.
In financial circles here these two circumstances are taken as a much more
of Mr.Burgess's mission than all the numerous reports of
Bank for International Settlements Proposes Parley serious indication
his coming as the bearer of a vast scheme for raising credit for the banks of
to Harmonize Currency Restrictions Now Hurting Issue
in difficulties. While such an enterprise would not be excluded from
International Business—Sets Its Own Gold Basis the informal talks among bankers and might meet with support in
any plan which would provide uncontrolled credit oppor—Pending Hoover-Laval Conversations, Directors certain quarters,
tunities depending largely on French contributions would meet with the
Adjourn After Renewing Loans to Austria and same obdurate objections as consistently encountered in the past.
Plan of Co-operation Seen.
Germany—Participation of W. R. Burgess of New
advancing its discount rate was not
York Federal Reserve Bank and Montagu Norman. The Bank of France's action to-day in
necessitated by local conditions and tends to confirm the belief that the
Postponing any thought of concerted action on the mone- two institutions are moving toward a plan of co-operation which Charles
Lacottr-Gayet of the Bank of France, who are now on
tary crisis until after the Hoover-Laval conversations and Fernier and Robert
for their way to New York, hope to elaborate.
the British elections, the board of directors of the Bank
, Naturally, the World Bank at this meeting will be gravely concerned
International Settlements in session at Basle, Switzerland with the international monetary situation and with the disequlibrium of the
meeting gold standard. Recent events have gone strongly counter to the functions
separated at night on Oct. 12 after a two-day
cablegram), which the World Bank was created to execute in regularizing and facilitating
"Times"
York
New
a
(said
however,
which,
movements of capital.
which theSuspension
of the gold standard by Britain, the Scandinavian and South
succeeded in easing the tension on several points
were
Banks
countries creates an inconsistent situation for the World Bank,
Central
American
existed when the representatives of the
12, in accordance with its statutes, does not admit dealings with banks except
called together. This cablegram, under date of Oct.
in gold or on the gold standard basis. On this subject the bank directors
are awaiting with keen interest a statement from Montagu Norman.
also had the following to say:
of England, Governor of the Bank of England.
Declarations by Montagu Norman, Governor of the Bank
depondent on
.
To a certain extent the whole future of the World Bank is
representing
Dr. Hans Luther of the Reichsbank and Randolph Burgess,
some system of breaking the paralysis gripping the international money
the Federal Reserve Bank of New York, calmed anxiety considerably
market, because,deprived by the moratorium'rind:the Young plan functions,
on three principal causes for alarm
OCT. 17 1931.]
FINANCIAL CHRONICLE
2525
the chief reason for the World Bank's existence is
As parts of the old empire, Austria, Hungary and
concerned with that
even Czechoslovakia
problem, The disruption of exchange levels has caused
a serious obstacle all were more prosperous than are the separate States
to the Bank's workings, for the interchangeability
protected by high
of money is essential in tariff walls. In a customs union, it is argued,
they would find prosperity
its operation.
again.
Smaller Deposits Shown.
How desperate the present situation is may be inferred from
an editorial
At the same time, the September statement of
the World Bank shows a statement by the well-known publicist, Fritz Jellinek,
which was published
sharp decline in deposits and on other items
of the balance sheet, which yesterday in the Prager Tagblatt, a newspaper
which is friendly to the
would still further hamper the Bank's operation
s unless remedied. These Czechoslovak Government. It reads:
difficulties,in the opinion of many,can be overcome
only by a strict program
"The further existence of at least 4,000,000 inhabitants
of collaboration between the gold controlling countries
of Czechoslovakia
and the report of the and the prosperity of the republic as a
whole depend on the conclusion
Federal Reserve becoming a World Bank depositor
is regarded as the first immediately, certainly in the next
half year, of an economic alliance
step in that direction.
between Czechoslovakia, Austria and Hungary, and eventually
In some European circles it is even interpreted to
also Yugomean an impending slavia.
direct participation of the Federal Reserve in the
World Bank, which they
"It is necessary as a loyal citizen to make it clear to all
maintain has been limited in effectiveness through the
other citizens
necessity of mainof the republic that if such an alliance is not concluded
taining the fiction of American isolation while in reality
the economic
keeping the Federal
Reserve completely informed exactly as though it were
situation
of
country
our
will
sink
to
the same level as during and after
a charter member of
the institution.
the Thirty Years' War. This, perhaps is the last opportunity
to retrace
our steps along the fateful economic path we have been treading
since
1918."
New York Federal Reserve Bank Denies Placing
Statement Is Censored.
Special
Deposits With Bank for International Settlements.
This part of the Prager Tagblatt's article was censored and appeared
as
a blank space in all but the earliest issues of the newspaper. In
The following is from the New York "Times" of
its eveOct.
10:
ning
issue the Tagblatt explained that exception had been taken, not
No special deposits have recently been placed
to
by the Federal Reserve the newspaper's advocacy of a customs union,
Bank of New York with the Bank for Internati
but to the strength of the
onal
authoritatively stated last night. The Federal Reserve Settlements, it was arguments with which that advocacy had been supported.
Bank has maintained
The chances for realization of the Benes plan are more favorable
correspondence relations with the World Bank since
at
May 17 1930, and, the moment than at any other time
from time to time since then, has made
in the last 12 years. Hungary, which
small deposits with it, it was exis in desperate straits financially, might be ready to earn financial support
plained. The World Bank regularly maintains
deposits with the Federal
from France and free admission to what is already its best grain market—
Reserve Bank of New York.
Czechoslovakia—by entering such an economic alliance.
Funds deposited by the Federal Reserve Bank
with its correspondents are
But in Austria the Pan-German sentiment, which was able to
reported each week in the Federal Reserve statement
put the
, issued every Wednesday night. According to the latest statement
of the system, made on Oct.7. Government behind the customs union proposal with Germany against
deposits in foreign banks amounted to $8,748,00
opposition
the
of
the
majority
Austrian
of
manufactu
rers,
will
0.compared with $8,752,000
put up
the week before, a decline of $4,000. This
statement indicates that the a bitter fight against entering a combination from which Germany would
Federal Reserve had not increased its foreign deposits
up to last Wednesday. be excluded. It is also already being asked here how Austria's entry into
The Federal Reserve Bank of New York
reported as of last Wednesday a customs union with Czechoslovakia and Hungary could be reconciled
deposits in foreign banks amounting to $3,213,00
0, compared with deposits with the decision of the World Court that she was unable under the Geneva
of $3,217,000 the previous week.
protocol to enter a similar alliance with Germany.
The Federal Reserve Bank is not. a stockhold
er in the Bank for International Settlements, having been forbidden
by the Department of State
to join the other central banks of the world
in the institution. It has, how- Premier Bennett Asks Canada to Lead
the World—
ever, maintained close relations with the
World Bank since its inception.
Says 'Some Nation' Must Start Recovery, 'Why
Prior to the formation of the World flank, the
Agent General for Reparations Payments maintained an account with the
Not Canada?"
Federal Reserve Bank of
New York. When the World Bank was
opened and took over the task
Expressing unbounded confidence in Canada, Premier
of distributing reparations payments,
the deposits held by the Federal
Reserve Bank here for the account of the
Agent General were transferred Bennett declared on Oct. 14 that some nation must lead
to the account of the World Bank.
the way back to better
economic conditions and asked,
"Why should it not be Canada?" The Canadian Press
advices from Montreal to the New York "Times" thus
Debt Moratorium Status Reported
Considered—Govquote the Premier, and add:
ernment Said to Regard Question on
Basis of
"The world's troubles may not be over, but ours will be the sooner
Capacity to Pay.
over
the sooner we march fearlessly to meet them," he said.
From the "United States Daily" of Oct. 11
The Prime Minister spoke at the convocation of McGill Universit
we take the which
y,
bestowed upon him the degree of Doctor of Laws. McGill graduates
following:
,
President Hoover is willing to consider
the question of international
debt payment on the basis of the capacity
of the debtor nations to pay, it
was stated orally on behalf of the
American Government on Oct. 9.
Government officials have not suggested
any general extension of the
moratorium or postponement of the war
debts, it was said. The President,
however, still adheres to his position
as
June 20. At that time he said definitely outlined in a statement issued
that the object of the settlement
of debts owned the United States
was the capacity to pay under normal
conditions consistently with American
policies and
conditions existed when the moratorium was agreed principles. Abnormal
to, it was pointed out.
The American Government has no desire to
extract any money that another
nation cannot pay and it has to recognize the
existing situation, it was said.
The ono-year moratorium was an emergency
matter to meet the emergency situation, according to the American Governme
nt's view. The
United States is in the same position now. It is the
view of the President
that debtor nations as well as individuals should not
extract
funds beyond
the capacity to pay. But this does not imply that
nations should not pay
their just obligations within their capacity to pay.
This is the basis on
which the Government is working. Nothing
revolutionary in character is
contemplated.
gathered in a three-day reunion, accorded to him an enthusiastic welcome.
"Canada is more powerful to-day than ever before," Mr. Bennett declared, "with greater ascertained resources and with an economic structure
which has been tested by hard times and has triumphantly stood the test,
with a people whose wisdom has increased with experience and whose
resolution has been strengthened by trial. Why then cannot we go forward
once again?
"Let us be confident. Let us be bold and put to shame those who in
their assumed wisdom forecast unending trouble, and in the greed that
springs from fear prefer themselves and their own interests and exploitation
to the welfare of Canada as a whole.
"The storm may not have spent itself, but the worst is over. Pause and
ask yourselves: Why do we hesitate? What do we fear? Where is the gain
that comas from vacillation and dismay?
"What can be done? The first thing to do is to take stock of ourselves.
Wherein have we failed? Have we been too prodigal and reckless?
"Our industries when under wise executive direction have grown in
productivity and solidarity. Our system of finance has proved its soundness
and is unexcelled throughout the world. Our banks have been impregnable
bulwarks against panic and the dislocation of business. Investigations
continue to disclose the unparalleled richness of our national resources.
Thrift and economy are no longer precepts to be scoffed at, but the guiding
rules of our daily life. We have learned patience and have
developed
fortitude. Tribulation has brought us still closer together.
"Apply what tests you please and you will see that we have changed
indeed, but changed for the better."
New Customs Union Proposed in
Europe—Czechoslovakia, Austria, Hungary and Eventua
lly Yugoslavia Named in the Benes Plan—French
Support
Claimed—But Disapproval of Britain, Italy
and
Germany Held Likely.
Rate of Exchange for New York Funds Fixed by CanaIt was stated in a Vienna cablegram Oct. 10
dian Railway Commission.
to the New
York "Times" that a tentative plan for a customs
Canadian Press advices from Ottawa, Ont., Oct. 14 stated:
union of
Czechoslovakia, Austria, Hungary and eventual
The rate of exchange for New York funds governing in Canada
ly also Yugo- Oct.
from
15 to 31 inclusive will
slavia is understood to have been outlined three
12.4i% premium, It was announced to-day
days before by the Railway Commission.beDuring
this
period
surcharge
rate
the
on
of
to the Austrian Minister at Prague by Dr. Eduard
nal freight shipments will be 7%, and the passenger surcharge
Benes, internatio
will be based on a 12% exchange.
Czechoslovak Foreign Minister. The cablegram
went on
to say:
American Dollars for Canada Paper—New York ExSuch a plan, Dr. Benes made it clear, would have the
full approval of
France, although it probably would meet with the
change Eagerly Sought, Especially in Trade to
disapproval of Germany,
Italy and Great Britain.
East.
Although Dr. Benes' communication to the Austrian
Minister was rather
The following from Winnipeg, Oct. 14, is from the New
to test the feeling of Austria than to make final proposals he
has already
worked out the broad lines of this new economic grouping
in Central York "Journal of Commerce":
Europe which would in some respects succeed and in others
amplify the
Little Entente, of which he also was the real founder.
Events Point to Alliance.
The steady economic degeneration of the countries which
succeeded the
old Austro-Hungarian Empire, Austria's recent desperate
attempt to
escape by an economic alliance with Germany and, finally, the
currency
crisis which at the moment is making trade in Southeastern Europe
almost
Impossible have pointed to the inevitability of the economic if not
political
reassembling of its constituents.
Canada's great export trade in paper. particularly newsprint and in pulp
for foreign paper makers, will be pressed onward now that Canadian
dollars
have gone to discounts ranging usually around 11c. and 12c. under
New
York funds. It is not apprehended the tonnage outgo will be noticeabl
y
diminished by this unsettlement. The trade problem will be to keep
the
export settlements as far as possible on the basis of New York funds.
American consumers of Canadian paper and pulp products
were in 1930
supplied with these goods to the value of $133,280,932. Total
exports from
Canada for the year in these products had a value of $177.500,
221. of which
$39,059,979 went out as wood pulp. Of these export4$4
4,319,289 went to
Australia, Japan and China chiefly.
a
2526
FINANCIAL CHRONICLE
[VoL. 133.
securities. The actual
to add enormously to their holdings of Government
August, against $150,in
00,000
$728,0
was
named
last
the
for
figure
'eligible paper' had fallen from
000,000 in 1929, while during the period
$1,141,000,000 to $316,000,000.
se in note circulation and
"Add to this the actual and potential increa
calculation of the minimum
it is clear that this is a major factor in any
United States gold requirements."
Sets Figure at $1,700,000,000.
the National City flank of New
By a calculation based on figures of
States,"at the last gasp,"
York, the "Economist" estimates that the United
gh "tho practical limit is far
althou
gold,
in
00
,000,0
$1,700
could part with
below that figure."
European Central Banks together
"Rough calculation shows that the
Par.
at
rts
Impo
sh
$1,400.000,000," the article says.
Briti
on
Canada to Assess Duty
still hold foreign exchange equal to about
not all could be disposed of.
and
York
New
in
wing
s
follo
dollar
in
is
"Not all this
,
The Canadian Government has issued the
include large foreign, including dollar
not
does
figure
the
,
riwise
effective Sept. 30 Contra
Order in Council dated September 29 and
gs of commercial banks.
holdin
gold
potential threat to America's
Meekins to the
"It seems likely, therefore, that the
1931, reports Commercial Attache Lynn W.
if partially carried out, and this
is sufficient to cause inconvenience, even
:
erce
ount rate is indicative of this."
redisc
Department of Comm
York
New
ge
the
in
exchan
se
of
increa
week's
ions of the rates
"Having regard to the disturbed condit
the Acting Minister of National Revbetween Great Britain and Canada,
on goods
duty
for
value
the
ting
Expteced to Help European
enue orders and directs that in compu
n, the rate of exchange shall be United States Gold Exports
Imported into Canada from Great Britai
tion.
the par value thereof."
Situa
being
g,
sterlin
pound
the
to
fixed at $4.86 2-3
and Commerce
Figures collected by the Federal Department of Trade
millions those of
Indicate that exports for the present year exceed by many
payments have always
last year. One factor in the present situation is that
e importers have
been exacted on the basis of the gold dollar, and Chines their currency.
of
suffered in these transactions because of the depreciation
ncreasing premium
But now, with American funds commanding an ever-i
advantage if the
over the Canadian dollar, the exchange shows a decided
funds. The paper
trade in Canada can receive for these exports New York
of wheat, and
and pulp exports are now second in importance to the exportworld in gold.
the
in the latter payment is being insisted on throughout
payment.
So the paper and pulp industry may require similar
cablegram to the New
Under date of Oct. 10 a London
Salaries.
said:
Members of Ontario Cabinet Cut
York "Times"
w of gold from America, as the city
take the following
Although the present heavy outflo able to the American market, and
From the New York "Times" we
accept
ther
altoge
be
sees it, may not
(Oct. 14):
on on
it reflect an unwholesome situati
Canadian press advices from Toronto
although the immediate reasons for
rs
the following:
The Toronto "Telegram" to-day carries
into
s of all Ontario semants, to come
"A graded cut, or levy, in salarie
was learned to-day at Parliament
it
upon,
d
decide
been
has
1,
force Nov.
buildings.
d exprogram of economy and reduce
"Announcement to this effect in a
the Ontario Cabinet
from
ed
expect
is
year
fiscal
penditure for the 1932
either this week or next.
of the Cabinet. It also is said a reduc"This cut will apply to members
ity paid members of the House.
tion will be made in the yearly indemn
the cut is likely to be $500.
and
$2,000
at
now
The indemnity stands
explanned with a view to reducing
are
said,
is
it
ions,
reduct
e
"Thes
e
least $5,000,000,In order to balanc
penditures for the next fiscal year by at
for unemployment and the contrasting
the present mounting expenditures
reduced revenues.
reduction of salaries, roughly $1,000."The Government will save, in the
0,000 annually."
000, total salaries being around $10,00
unhesitatingly declared in financial quarte
this side of the Atlantic, it is
ibution of America's superfluous gold.
that it constitutes a partial redistr
ion is considered certain, despite the
situat
ean
Europ
That it will help the
lation
present being served by the accumu
at
is
e
purpos
useful
no
fact that
ental markets whose only immediate
of gold now in progress in Contin
need of it is to allay panic.
in raising its discount rate was
ly
The Federal Reserve Bank's action
of the fact that gold is possib
ition
recogn
partial
as
was so
considered here
ca. But the action on the rate
into
flowing away too fast from Ameri
well
it appears to fit perfectly
mild in character that, on the whole,
the general scheme of things.
rvative
Stanley Baldwin, Conse
Election Manifesto of
re Unity to Improve
Empi
and
f
Tarif
Leader, Asks
British Industries,
leader in Great
nt—Premier,
Stanley Baldwin, Conservative party
Salary Cuts by British Columbia Governme
t Government,
nalis
Natio
Cabinet Ministers, &c., Affected.
Britain and deputy head of the
ementing that
suppl
8,
Oct.
on
esto
manif
d:
issued an election
Victoria (British Columbia), Oct. 11, state
d the previous
issue
d,
onal
MacD
ial service have which his new chief, Ramsay
Salary reductions affecting every branch of the provinc
"Times," which
York
New.
will lop about
the
and
to
ment
es
ia
Govern
advic
Columb
on
British
the
Lond
day, says
been announced by
expenditures. A study of posa quarter of a million dollars a year off its
ies said in part:
public services to effect further econom
Britain's position
sible reductions in staff and
is being made.
to 10%, the larger salaries being
The salary reductions will range from 2
cut most.
the indemnities of members
The Government has no power to reduce
it is expected to arrange
of the Legislature, but when the House meets
5%.
of
to take a cut
$750 a year or 10%. Premier
Cabinet ministers will take a cut of
reduced by $900. Chairman H. B.
Tolmie's salary of $9,000 will be
a salary of $15,000, will be reduced
Thomson of the Liquor Board, with
$1,500.
t, Finds Dollar
Sir Walter Layton, British Economis
Can Meet Any
rve
Rese
ral
Fede
es
clar
Sound—De
ys Gain in
s—Sa
Bank
for
ble
Emergency—Sees Trou
ence of Public
Evid
Is
ica
Amer
in
n
latio
Circu
Note
Distrust.
York "Times,"
In a London cablegram Oct.9 to the New
ws:
follo
as
d
Sir Walton Layton is quote
al treaties to improve
Mr. Baldwin again urged imperi
ve in the cirduties, as may be most effecti
by "prohibitions, quotas or
Imperial Conference at
ded
suspen
the
hoped
he
said
cumstances." He
lead to
life of the new government and
Ottawa would be held during the
toeconomic unity.
l party put out a proclamation
The free trade faction of the Libera each party and faction will have
before
follow
to
night, and there is more
for in the coming campaign.
enable
told the public just what it stands
clamored for as necessary to
being
is
front"
d
"unite
a
gh
t emerAlthou
Great Britain in her presen
ign
the Nationalist Government to save
campa
al groups are going into the
affair,
gency, at least six distinct politic
thorough going partisan
a
was
which
n,
electio
last
the
fight, while in
d in it.
only the three old parties were engage
No Nationalist Party in Field.
for supnment which is appealing
Gover
alist
Although it is the Nation
phrase "Nationalist party"
the
,
groups
tuent
consti
l
severa
port through its
ly will not
of the situation, and probab party so
has not yet crept into discussion
But a
divergencies of opinion.
of the
be the came of jealousies and
ives
object
ize with the avowed
a factor
labeled, temporarily to harmon
simplify the situation and be
y
greatl
would
,
nment
present gover
of success.
opinion that
of groups and divergences of
It Is in the present confusion
restored to power. It is a
being
of
hope
only
its
the Labor party has
ign, but a
eve of the opening of the campa
slim hope, however, on the
alist
necessarily mean a vistory for the Nation
not
would
defeat
st
Sociali
majority may be so small in the House
Government. The government Liberals plus other small factions may
of Commons that the free-trade to hold the balance of power and be
strength
have sufficient aggregate
t.
the Socialists as with the Nationalist Cabine
Just as likely to side with
aign mani-
leading financial publicists, who
Sir Walter Layton, one of Britain's
dollar as unjustified and helds that
regards the growth of doubt about the
m is sufficient to meet all demands,
the strength of the Federal Reserve Syste
ow an article in which he
will have in his weekly "Economist" to-morr
of America to feel the effects of
states that it is apparently now the turn
an onslaught of a thunderstorm
the financial emergency, which "resembles
one peak and then another."
ion camp
in a mountain range, when the lightning strikes
certain respects the American
The text of the Conservative elect
"It is true," the article says, "that in
circuined in Canadian
note
in
se
conta
as
in,
increa
The
Baldw
ing.
misgiv
Mr.
festo, issued by
banking position has been arousing
ely taking place, and this hoarding
Oct, 8, to the New York
on,
Lond
from
lation shows that hoarding Is definit
es
advic
steady
A
Press
ty of American banks.
is evidence of public distrust in the stabili
this.
"Times," follows:
stream of bank failures corroborates
and the collapse of security
since my decision to join the National Govtrade
It is barely two months
"Again, it is realized that depressed
Parliapast two years has undermined the value ernment was unanimously endorsed at a meeting of members of
and real estate values during the
allowStill,
way Hall in London. At the time we
banks.
of
ICIngs
ty
at
liquidi
the
ed
held
impair
ates
candid
and
ral
ment and
of banking collate
weeks,
us signs, it is probably true to say that expected the co-operation then secured would last for only a few
ing for these somewhat omino
then their home resources was a more but recent events have rendered it necessary, in my view, that the period
streng
to
banks
n
foreig
of
the need
be extended.
"
of this co-operation should
Cogent cause of withdrawals.
Borrowing has been stopped at the
The budget has been balanced.
Uncertain on Gold Position.
class of the community, sacrifices which
every
from
ces
sacrifi
of
States cost
of
question of how much gold tho United
hope and believe, as the result of continuance
Referring to the inevitable
vary and no rigid are heavy but which I
ed the trade
omist" says: "Current estimates
, may be temporary. But we have not yet balanc
d
policy
our
reache
been
is free to lose, the "Econ
has
limit
final
we are not yet earning enough
long before the
oration of account of the nation. In other words,
calculation is possible, for
stringency and a general deteri
to buy overseas. Unless this position can be
It is argued, to pay for what we have
credit restriction, monetary
."
degree
rable
intole
an
to
us from ultimate bankruptcy.
morale would have developed
e System, in- altered nothing will save
l
returns of the Federal Reserv
from no steps to prove the stability of our countr
shrink
must
We
lete
incomp
however, that the published
"most
a
to liabilities, are
ing to currency fluctuating
and save our people from the disaster attach
cluding the current ratio of gold
conz
To
ence at home and abroad.
guide."
while the ratio and falling through lack of confid
national
System's position is that
tive the Government should have a
"The real crux of the Reserve
ing 60% of its plete this work it is impera
necesremain
the
40%,
only
om to use whatever means may be found
freed
it
giving
te
exlast
manda
of gold cover to its notes need be
this
gold or eligible paper, and
careful examination, to effect the end in view.
ce
after
practi
.•nteft must be covered by either
sary,
should
in
and
t
marke
y majority we
ies bought in the open
It is necessary that in place of a small Parliamentar
and other
resolucludes Government securit
bills and also acceptances
ty backed by the
no
consisting of rediscounted Treasury
have a stable government with a large majori
The country must show in
s.
of
elector
ty
majori
great
,
the
'
of
credit instruments based upon trade.
Banks
tion
progress
reduced the Reserve
it will have nothing to do with a party whose
that
r
manne
"Now the depressed state of trade has
ain
,
uncert
mieux
de
forced them, tante
holdings of assets of this last kind and has
OCT. 17 1931.]
FINANCIAL CHRONICLE
could only convert a situation, grave already, into one of chaos and catastrophe.
Some of the problems that lie before us are as wide as the world itself.
Some are peculiar to ourselves. In the international field we have to
consider war debts and reparations, disarmament, the unequal distribution of the world's supply of gold and the mutual financial dependence
of the countries of the world. These questions may well tax the statesmanship of the nations.
At home the paramount question is that of the adverse balance of trade,
redress of which is essential to secure our financial stability. This can
be accomplished only by reducing imports and by increasing exports, or
by a combination of both. I am prepared to examine any method which
can effect what is required.
I recognize that the situation is altered by the devaluation of the pound,
but in my view the effect of that devaluation can be no valid substitute
for a tariff carefully designed and adjusted to meet the present situation.
I shall, therefore, continue to impress upon the electors that in my view
a tariff Is the quickest and most effective weapon, not only to reduce excessive imports but to enable us to induce other countries to lower their
tariff walls.
The position of agriculture is one which in my judgment is so desperate
as to call for immediate far-reaching measures of relief. To this
end
the first step should be assistance to the cereal farmers, and we have in
no way changed our view that the best form of assistance is by means
of the quota and a guaranteed price for wheat. The farmers
must be
secured against dumping, which has brought so many branches of their
industry to ruin. The production of food at home should be increased
and the drain of men from the land should be stopped.
And to this end we should make imperial treaties which may be of enormous value to us as a nation. We shall require such a free hand as will
enable us to impose prohibitions, quotas or duties as may be most effective in the circumstances.
The problem of the Empire is to secure the economic unity for which
we have so long striven. I hope the reasons which led to the suspension
of the Ottawa conference have been ovtrcome and that it will
be possible for the Canadian Government to renew its invitation. We shall
then have a unique opportunity before us in the fact that it will fall to
a
Nationalist Government to accept that invitation.
The ideal of imperial economic unity is widespread to-day and I am
confident that the foundation of such unity will be well and truly laid,
with such a general assent of our people as would have seemed impossible
but a few short years ago.
The Nationalist Government has, with our help, accomplished the
first part of its work. We are passing through stern and difficult times.
Our task will be impossible without the support of the nation. For that
support I appeal with confidence, and in the winning of that support
I believe a great part will be played by those I am proud to lead.
2527
of workless in these protected countries are still increasing much more
rapidaly than ours."
Labor Party's Platform.
The platform on which the Labor party is going to fight for Parliament
seats was issued to-night at Arthur Henderson's headquarters. It demands immediate consultations between the 'United States and signatories to the Young Plan for devising a method of cancellation of war
debts and reparations.
It declares for an immediate international monetary conference and
condemns all proposals that England return to the gold standard. It reiterates; the determination of the Labor party, if returned to power, to take
over control of banking and foreign and domestic investments.
The text of the Labor party's manifesto signed by Arthur
Henderson parliamentary leader; J. R. Clynes andiWilliam
Graham all former members of the Labor cabinet, as
given in Canadian Press advices from London Oct. 9,
published in the New York "Herald Tribune" follows:
"A decisive opportunity has been given to the nation to reconstruct-the
foundations of its life. The capitalist system has broken down even in
those countries where its authority was thought to be most secure. The
Labor government was sacrificed to the clamor of bankers and financiers.
The policy of the national Government has proved to be a disastrous
failure and, having failed completely in its original object, it seeks from
the electorate a mandate for the impossible task of rebuilding capitalism
Socialism Called Only Solution.
"The Labor party seeks from the electorate a majority on theThasis
of a coherent and definite program. It reaffirms its conviction that Socialism provides the only solution for the evils resulting from unregulated
competition and the domination of the vested interests. It presses for
extension of the publicly owned industries and services operated solely
in the interests of the people. It will work for the substitution of coordinated planning for the anarchy of individual enterprise.
"Labor insists that we must plan our civilization or perish. The Labor
party recognizes that the present situation calls for bold and rapid action.
The decay of the capitalist civilization brooks no delay. Measures of
Socialist reconstruction must be pressed forward.
"The Labor party is convinced in the light of experience, particularly
since 1925, that the country's banking and credit system can no longer
be left in private hands. It must be brought directly under national ownership and control. The Labor party is further convinced of the need to
form a national investment board with statutory powers for the control of
domestic and foreign investments. It would seek powers from the new
Parliament to effect this transformation.
Inflation, Deflation Condemned.
"Aiming at a monetary policy which will stabilize prices, the
Labor
party condemns either currency inflating or a new and disastrous
attempt
at delation, to force sterling back to the old gold parity. It will
take a
vigorous initiative in calling an international conference to
arrive at a
concerted monetary policy. It will seek thereby to make the
resources of
civilization syllable for the peoples who to-day, in the new world
as in the
old, are starving in the midst of plenty.
"The Labor party has never failed to insist upon the intimate
relation
between war debts and reparations, and the economic depression.
It believes general acceptance of President Hoover's moratorium on war
debts
permits reconsideration of the whole question. It seeks immediate
reopening of negotiations between the signatories of the Young Plan
and
the United States with a view to attaining conditions in which inter-Allied
war debts and reparations may be canceled.
leader supporting the National Government.
"The Labor party has no confidence in any attempt to bolster up bank2. Insistence upon free trade by the Liberal Federation which is
sup. rupt capitalism by a system of tariffs which in
the circumstances produced
porting the National Government.
by our departure from the gold standard have no relevance to economic
3. A blast from David Llioyd George damning both groups.
need
would
and
permanently injure our shippping and export trades and
4. A plea from another group of Liberals, not yet definitely labelled,
cancel our need for greater efficiency in industrial organization.
that their candidates not oppose National Government candidates,
because by so doing they would jeopardize the chances of crushing the
Labor
Industrial Planning Urged.
party.
"The Labor party urges definite planning of industry and trade
so as
5. The Labor party campaign platform which says capitalism has
to produce the highest standard of life for the nation. As a first step it
broken down.
proposes
to
reorganize
most
the
important
basic
industries—p
ower,
trans6. A manifesto of the Independent Labor party, which has been repudiport, iron and steel—as public services owned and controlled in the national
ated by the regular Labor party, declaring the final struggle of
capitalism interest with such regulation of prices as will enable
British industry to
has begun.
compete effectively in the markets of the world. Wherever necessary
In part the cablegram also said:
imports boards will be created to regulate the purchases of foodstuffs,
raw materials and manufactured goods.
One Point of Unity.
"Any special assistance to industry must be conditional upon the acOut of the daily welter of appeals, manifestos, proclamations
and key- ceptance of the necessary measure of public ownership
note speeches, there emerges the fact that all factions present
or control. Labor
a harmonious, will insist upon the adoption of efficient
methods of production so as to
united front on one point—all wish Mahatma Gandhi
could persuade the secure good conditions of employment for the
Hindus and Moslems of India to quit quarreling.
worker. The consumer
must be protected by effective regulation of prices.
Mr. Baldwin in a tariff speech at Birmingham
to-night said an election
"Labor, in power, will remove the unjustified restrictions upon
was necessary because the present
trades
government could not perform its union activity
introduced by the Tory government in 1927. The tragic
task of rehabilitation without the support
of a big majority in the House position of the coal
industry reveals complete inability of private ownerof Commons and that a majority of 50
was not enough.
ship to organize it as a national asset and the Labor party will proceed
Mr. Lloyd George, who is still- too ill
at
to address his constituents, sent the first opportunity
them a message denouncing the election.
with unification of the industry under public ownership
and control.
"The election itself is the most wanton
and unpatriotic into which
this country has ever been plunged,"
Would Cut Armed Forces.
said Mr. Lloyd George. "In the
midst of a grave financial emergency the
"The Labor party has always been in the van of the movement for
Tory Party managers have forced
upon the nation a political conflict.
international peace. It will seek at the forthcoming disarmament con"What possible justification can they plead?
The Parliament which ference to put forward proposals for drastic and far-reaching reductions
now has been dissolved was only halfway
through its existence. It had by international agreement in the numbers and equipment of all armed
withheld no support from the recently-formed
administration, but on forces and all expenditure thereon. Labor insists that without this policy
the contrary adopted with adequate majorities
every proposal submitted of disarmament there cannot be either peace or security. Labor will.
for the restoration of the national position.
as in the past, lend its full support to the use of the valuable machinery of
the League of Nations in every phase of international activity.
Sees Distracting Influence.
"With a view to scientific reorganization in agriculture the Labor party
"There was no reason to suppose that any further
measure
that
the holds that land must be publicly owned and controlled and much more
Government found necessary would be rejected by
Parliament. The elec- fully utilized for food production and the provision of employment
under
toral conflict, on the other hand, can only distract the
Government from a comprehensive plan for development.
the task of coping with the financial and industrial
situation, provoking
"If returned to power Labor will leave no stone unturned to bring the
and intensifying differences and divisions in the nation
at a time when Indian Round Table Conference to a successful issue.
the co-operation of all classes and sections is so essential to
redeem our
"The party pledges itself to reverse immediately the harsh policy of the
prosperity.
National government in reducing unemployment benefits. Labor accepts
"No new mandate was needed to deal with the currency
question. Our a balanced budget as the first condition of sound national finance, but
abandonment of the gold standard had already given answer
to the muddle condemns the economy act as an unjustified means of attaining
that end.
of 1925.
"The Labor party offers to the people of Great Britain planned reconstruc"As to tariffs, our difficulty is that there are already too many
in the tion, national and international, instead of the chaos and anarchy
which
world, and we shall not reduce them by starting a new tariff
war. Be- are the parents of disaster. It recognizes the gravity of the issue,
and is
sides, the experience of Germany, France and Italy shows that
tariffs prepared to meet it by bold and drastic remedies."
cannot protect currency from depreciation or even complete collapse,
Manifestos previously had been issued in behalf of the National
governand, regarding unemployment, two of the greatest Industrial countries
ment by Prime Minister J. Ramsey MacDonald and Stanley
Baldwin
in the world—except Britain—are worse off than we are and the numbers Conservative party leader.
Manifesto of British Labor Party—Opposed to:England's Return to Gold Standard—Holds Decay of
Capitalist Civilization Brooks No Dealy—Socialist
Reconstruction Measures Must Be Pushed.
In a London cablegram Oct.9 the correspondent of the
New York "Times" pointed out that the high but conflicting spots of that day's developments in Great Britain's
muddled electoral campaign which was undertaken to
present a "united front" to the world were:
1. A speech demanding protection by Stanley Baldwin, Conservative
2528
FINANCIAL CHRONICLE
[VOL. 133.
The formation of the new American credit institution after President
who
Hoover's plan alarmed many French business men and small bankers
feared it meant inflation in the United States.
The noted journalist, Pertinax, in the "Echo de Paris," said to-day
that a "regulated inflation" would be beneficial.
Temps"
"America owes less abroad than foreigners owe here," "Le
doubt her
said. "She is a creditor even for circulating capital. Without
Foreigners
part.
most
the
for
frozen
are
short-term credits placed abroad
them, but
possessing assets in the United States have been withdrawing
without
America's large stock of gold makes it possible to meet the situation
stability of the dollar."
the
ng
compromisi
comof
risk
the
Rothermere
Lord
"The pound was pegged at too high a rate,"
mented prior to sailing for home on the Empress of Britain. "This was
economically unsound and sooner or later it was bound to fall."
Been Too Low—Rise to
and French Bank Rate Had
The publisher declared that the world depression was not yet over
or a Bid for Gold—New
Measure
e
was
Protectiv
he
said
a
Not
He
England.
said it would last for another 12 or 18 months in
new
the
believed
France Will Not Draw
of
he
that
nk
remarked
ings—Ba
York Earmark
glad the British dole had been cut and
elections this
National Government would be returned to power in the
Gold on That Account—The French Money
month.
dian mills
Hoarders.
He declared no projected reorganization of the Anglo-Cana
rs
was contemplated and added that no American newsprint manufacture
Paris Oct. 12 a wireless message to the New York
From
had been in touch with him while he was in Quebec.
Lord Rothermere, in Canada, Says Pound Sterling
Was Too High—Doubts Resumption at Old Rate.
Lord Rothermere, British newspaper publisher, is reported as stating at Quebec on Oct. 14 that he did not believe
England would ever return to the pound sterling at the old
rate of exchange. The Quebec advices to the New York
"Times" from which we quote, further said:
"Times" said:
J. F. Darling, Midland Bank,London, Director Urges
Bi-Metallism—Says Its Adoption Would Add to
Purchasing Power.
From the "Wall Street Journal" of Oct. 14, we take the
following (United Press) from London:
at a profit until
The capitalist system cannot be made to resume working
Ford Darling, a
the price of commodities is raised, in the opinion of John
five."
director of the Midland Bank, one of England s "big
power to return
Adoption of hi-metalism. he said, would cause purchasing
The result would
and create an increased demand for other commidoties.
ability of
be an increase in the price of those commodities and a consequent
sellers to make a profit.
"is the most
"This question of raising the price of commodities," he said,
producing comimportant question before the world to-day. People are
modities at or sometimes below cost nowadays.
to do is to stimu"The supply exceeds the means to purchase. The thing
way of doing
late that means to purchase, and there is not more effective
money."
this than by restoring and stabilizing the value of silver as
an ounce," he
"My idea is that silver should be stabilized at around $1
countries
said. "This would enable us to give China and other silver-using
you have to
a silver coin which it is practicable to carry around. To-day
in China,
drag tremendous weights if you want to convey real money
because the coins you have are worth so little.
is well
That
gold.
of
ounce
one
"Let 20 ounces of sliver equal in value
within the production ratio which is now about 13-1 and that production
ratio for many centuries has only averaged 14-1. In order to combat fear
of over-production of silver stabilized ar $1 an ounce. the silver producing
countries could levy a tax of say 50 cents on their production of new silver.
"Stabilization could be arranged by international conference. Failing
the United States, I think Canada, as one of the four great silver-producing
took
countries of the world, ought to call such a conference. But before it
place, there should be some understanding arrived at between Canada and
Peru.
the other three large silver producers: the United States, Mexico and
could
on the question of taxation of the metal. The nations of the world
banks
central
then be summoned to the conference with the idea that
gold
accept
they
as
value
fixed
a
at
silver
everywhere should agree to accept
to-day.
The raising of its discount rate by the Bank of France from 2% to 235% is
to discourage
not ascribed by any competent observers to a wish of the bank
of the franc. It is
borrowing, or regarded as a defensive measure in favor
ground
that
so low a
the
explained by the Bank of France authorities on
was not justified in
rate as that which has ruled for several months past
view of the present troubled condition ofthe markets. The same authorities
idle bee
point out that the French banks have kept considerabl balances
to the margin
cause the present risk of employing them is out of proportion
it
is also
and
grant,
might
they
of profit which could be made on credits
the example of
pointed out that the Bank of France's action merely follows
the Federal Reserve.
It is absolutely denied that the bank had any purpose of stimulating the
gold movement from New York. Regarding the increase of 467 million
it
francs in the bank's gold reserve as shown in the weekly statement should
banks,
be pointed out that this reflected importations of private French
no intention
which have entire liberty of action. The Bank of France has
New
York.
at
The
account
of bringing to Paris gold now earmarked for its
gold thus designated figures in the reserve reported in the French bank's
been withdrawn
statement, but on the other hand an equal quantity has
from the Bank of France by European issuing banks. Therefore the total
from the exresulting
gold reserve has been increased only by imports
change operations from private French banks.
The outstanding feature of the bank return is the abnormally large
week.
Increase of 3,340.000.000 francs in the Bank's circulation for the
month..
The magnitude of this increase is only partly attributable to normal
notes
of
bank
hoarding
as
recognized
end requirements. Its cause is plainly
by a portion of the public. The collapse of sterling, the almost general
German
monetary disorder which resulted and the fears regarding the
situation have plainly caused great anxiety in the public mind.
are
which
banks,
French
large
the
No question whatever exists regarding
s,
extremely sound and could meet the most formidable run. Nevertheles
it is considered unfortunate from the viewpoint of possible business recovery,
most
the
that
that a portion of the public should be in such a state of mind
impossible rumors are credited.
French Gold Reserve Nears $2,400,000,000—Importations from United States Expected to Continue
Through This Week.
Paris cablegram Oct. 12 to the New York "Times" had
A
Paris Cool to Plan of President Hoover on Debts— the following to say:
French Think Basis of Capacity to Pay Would Do
The uninterrupted stream of gold flowing into the vaults of the Bank of
France brought that institution's reserve to-day up to nearly $2.400,000,000,
Least to Restore Confidence.
It was learned from an official source to-night. The importation of gold
From its Paris correspondent the New York "Times" from
the United States has been steadily growing in volume and is con10:
Oct.
on
following
reported the
sidered certain to continue during the present week.
would seek
Dispatches from Washington stating that President Hoover
in a new examination of the
a solution of the interalled debt question
to-day. Not much
debtors' capacity to pay were read here with interest
that readjustment
importance, however, is attached to the report,as it is felt
of all possible solutions
of debts on that basis is not only the most difficult
creation of confidence
but is one which would contribute the least to the
and a state of financial security.
richer Germany bethe
that
Ten years of experience in trying to assure
convinced the
came the more France would receive in reparations have
been imagined in
French people that of all the absurdities which have
In the
dealing with the reparations problem that was the most absurd.
people to
same way they are convinced that it is absurd for the French
made with the
suggest that there can be any revision of the debt settlement
such disUnited States or any discrimination between debtors. While
an
crimination might be attempted or at least might be threatened as
the opjust
instrument of political pressure, the result, it is felt, would be
posite of those desired.
in this way
Instead of creating a stable situation, creditors who acted
that confusion in security
would be contributing to the completion of just
of every country, creditor or debtor,
and mistrust which it is to the interest
to remove.
neither an extension of the
The French attitude, therefore, remains that
t founded on such impondermoratorium nor any revisions in the arrangemen
can have the effect of restoring the
able conditions as "capacity to pay"
are being sought. They believe that
confidence and financial calm which
in governmental debts can accomplish this
only an all-round reduction
object.
in the French program remain all-around
The second and third planks
reinforcement of the Kellogg pact.
reduction in war budgets and
"The gold market in Paris is free," said a Bank of France official.
"Anybody who wishes to buy gold can do so, but on the other hand, the
Bank of France is obliged to buy all the gold offered it at the statutory price
fixed by former Premier Poincare when he stabilized the franc on a gold
basis."
This gold is always ready to move to any other financial center where it
can be atracted by purcchase at its present fixed rate, it was explained.
But the present situation is that world financiers are not inclined to remove
gold from France. A large amount of gold is being stored in the private
vaults of Paris branches of several large American banks.
Paris Sees "Confidence Crisis" Which Must Be
Surmounted.
Among the Paris items Oct. 10 to the New York "Times"
we find the following:
All important financial circles consider that the gravity of the economic
by the universal "crise de confiance" and
that, in order to cure the economic crisis, confidence must first be restored
and panicky sentiment allayed. Welcome will be given here to anything
which can contribute to this purpose. Laval will certainly discuss with
Hoover the possible means of co-operating to meet the economic crisis:
indeed, it is probable that this is the only subject which can be discussed
at the Washington conference without restrictions.
One remark often made when international action for relief is discussed
here is that in order for foreign assistance to benefit the country which
receives it, that country must have confidence in itself. Care must also
be taken that countries which lend to other hard-pressed nations do so
in such a way that the resultant decrease in their own free resources does
not alarm opinion or shake confidence at home.
crisis in itself has been doubled
Twice As Strong
French Press Hold Dollar As Sound—"
Situation in
Temps"—
"Le
Says
As the Franc"
Ambassador Dawes Calls Hoover Proposal Basis for
United States Explained.
Paris
from
Confidence—Framed to Operate on Safe Business
cablegram
Press
The following Associated
s, He Asserts.
Principle
"Times":
York
New
the
from
is
Oct. 11
from the
gold
g
withdrawin
toward
Charles G. Dawes regards President Hoover's
or
lean
Ambassad
may
who
The French people
Temps" to-night
n for improved business activity and a
United States were assured by the financial expert "Le
foundatio
a
as
plan
as
twice
and
sterling
that the dollar is seven times as strong as the pound
e.
In a statement issued at London on
confidenc
of
revival
strong as the franc.
The causes of banking difficulties in the United States, "Le Temps" Oct. 7 on the program the Ambassador is reported in a
expert pointed out, differ widely from those which pulled England off the
cablegram to the New York "Times" as saying:
gold standard and from the difficulties in Germany.
OcT. 17 1931.]
FINANCIAL CHRONICLE
It is practical, concrete and specific. It has been matured with wise consideration and after general consultation. The plan is a practical one,
so
framed that its operations will be conducted under safe business principles,
conducive to neither inflation nor unsound practices.
It comes at this oppotune time when under the natural laws reaction in
the mass attitude from the extreme pessimism of the past two years is due.
The psychological effects on business may be temporary, when their
cause proves unfounded, but consummation of the President's plan, with
its consequent massing of the reserve strength of our enormously strong
but
scattered banking system, will give an enduring basis for a justified revival
of confidence.
Sir Josiah Stamp Urges Price Stability—Criticizes
Working of the Gold Standard.
Sir Josiah Stamp, one of the directors of the Bank of
England, during a radio talk in London Oct. 12 asserted the
corrective motions of the gold standard had been jammed by
the flow of gold to France and the United States, where
"it has not been allowed, for reasons doubtless good in those
countries, to have its natural effect on prices, which could
have increased their imports and lowered their exports."
The cablegram continued:
"The nations together are giving the gold standard an impossible
job to
perform," he said. "Our purpose must be to manitain some standard
internationally which will go on working and producing price stability,
despite folly, ignorance and sectional disadvantages, for the general good.'
2529
It will be remembered that large accumulations of dollars
and pounds
sterling held by the French Govermuent and Bank of France
were amassed
between 1926 and 1928, before the franc was legally stabilized.
In order to
prevent it recovering further, Bank of France, in accord
with the French
Government under Premier Poincare, constantly sold francs
abroad, buying
dollars and sterling, which were reloaned on short terms
and, according to
the French financier, Raymond Philippe, were in part
responsible for the
frenzy of speculation which came to a climax in 1929.
To prevent the franc rising higher in value than 25 to
the dollar, the
Bank of France bought foreign currency to the extent
of 26,000,000,000
francs or more than $1,000,000,000, issuing notes against this
amount.
Finance Minister Flandin of France Says Recent
Shipments of Gold to That Country Have Been
Misinterpreted.
Recent shipments of American gold to France and recent
foreign exchange operations here have been "inexactly interpreted" in some quarters, Finance Minister Pierre
Etienne Flandin said on Oct. 14, according to Associated
Press cablegrams from Paris; as given in the New York
"Times" the cablegram went on to say:
A section of the French press recently has reported rumors that the
American Government had resorted to inflation.
M. Flandin ascribed the interpretation to failure to realize that Paris
was becoming more and more an intermediate exchange market
among
nations since the suspension of the gold standard by Great Britain
and
other countries.
"Observing in Paris exceptionally large sales of variousforeign currencies,
"
he said, "conclusions have been drawn as to the orientation of
financial
opinion in France, whereas it often is only a question of offers coming
from
these countries. That has been the case during the past few days.
Holdings
In dollars first have been transformed into francs and then into
various other
currencies immediately afterward. This is further proved
by the rise of
these currencies in comparison with the franc."
He also denied what he said was a "report from an American
source"
which "attributed to the Bank of France Intentions that the
institution
certainly never had with regard to its short-term holdings
in the United
States."
Arrival in United States of Charles Farnier and Robert
Lacour-Gayet of Bank of France—Confer in New
York with Governor Harrison of New York Federal
Reserve Bank—Also to Meet in Washington with
Federal Reserve Board Members.
Charles Farnier, Vice-Governor of the Bank of France
and Lacour-Gayet of the economic division of that institution, arrived in New York on Oct. 13 on the steamer Europa,
to lay the financial groundwork for the visit of Premier
"Le Matin" of Paris Explains Gold Flow—Stresses
Pierre Laval of France, said the New York "Journal of
Fiscal and Political Fears.
Commerce" of Oct. 14,from which we also take the following
The following Paris cablegram Oct. 14 is from the
Messrs. Fernier and Gayet, on their arrival, formally stated that
New
they
would confer with Governor Harrison of the Federal Reserve Bank
of York "Times":
New York and later with the members of the Federal Reserve Board
In
Washington. Financial problems of mutual concern to both
countries
were to be the subject of these discussions, they added.
Several reasons are given in a leading editorial in
yesterday's "Le Matin"
for the flow of the world's gold to three European
countries—first to France
and then in lesser quantities to Holland and Switzerland
.
"The reasons for the movement of gold toward
these three countries are
Three Main Problems.
numerous,""Le Matin" says. "Among the
principal causes are the money
Three main groups of problems are expected to be taken up at the
forth- markets'apprehensions, the universal financial uncertainty
, and the political
coming discussions. First, war debts and reparations;secondly, the present
fears which urge holders of capital to transfer their
holdings to peaceful
and future relationship of the short-term money markets of the world,
and. countries, as well as their desire to convert their
wealth
thirdly, the problem of currency stabilization for countries off the gold basis.
into money of
proved stability.
Among the financial proalems to be taken up by M. Laval, a new settle"The exportation of gold from the United States to
France continues
ment of the war debts and reparations problems is expected to take a leading
without interruption and Thursday's weekly statement
of the Bank of
role, according to informed financial observers here. Agreement upon
the France undoubtedly will show a gold reserve in excess of
basic economic aspects of this problem, through analysis of balance
82,100,000,000."
of
payments, budgetary and banking statistics, will be sought through
collaboration of French and American experts as a preliminary to the specific Paul Claude! French
Ambassador to Washington Reconversations. As M. Laval is Lcheduled to arrive here on
Oct. 22, eignt
turns to U. S. After Brief Visit Abroad.
days remain for the financial exports to lay the groundwork on the problem.
Paul Claudel, French Ambassador at Washington, reTo Consider Balances.
Bankers here believe that the inter-relations of the major short term turned on the French liner Paris a week ago; a
statement
money markets of tne world would constitute an important subject of
the issued by him said:
discussion of the French and American financial representatives. The
"I am coming back to America after a very short
visit to France. I
heavy withdrawal of foreign balances through exports and earmarkings of
had to consult with the foreign affairs department and to make
gold continued yesterday, but this movement is expected to be checked in
final arrangements about Marshall Petain's visit on the occasion
of the Yorktown
main part whenever the Bank of France decides to maintain its
remaining celebration. Marshall Petain left Toulon on Oct. 2
with 15 members of
balances intact in this market, as it has the largest balances here.
the mission abroad a French cruiser and will arrive at Yorktown
A third subject of discussion will be ways and means of stabilizing
on the
cur- evening of Oct. 15.
rencies which have gone off the gold basis, and the provision of methods
"When I was in Paris M. Pierre Laval received
and accepted the inof restoring gold redemption after their stabilization. It is generally
vitation of President Hoover to visit him in Washington.
As I understand
expected that the United States and France will take the lead in any general
it, he will leave France on Oct. 16 on board the Ile De
movement toward stabilization, and the evolution of a joint policy at
France and will
the arrive in Washington on the 23d by way of New
York. I have no informaearliest passible moment is expected to be sought.
tion about matters which will be discussed In the forthcomin
Messrs. Farnier and Lacour-Gayet conferred on Oct. 14 but I have not doubt that in the present conditon of the g conversation,
world this exwith Governor Harrison and other officials of the Federal change of views will be conducive to good results."
Reserve Bank, The New York "Times" had the following
Premier Laval of France Sails for United States to Conto say in the matter:
fer with President Hoover—Text of Speech Before
No announcement was made concerning
the meeting, other than the
explanation that "problems of mutual
Departure from France.
interest to France and the United
States" were discussed.
Premier Pierre Laval of France, who sailed from Paris
yesterday (Oct. 16) on the Ile de France, and who is coming
Visit to U. S. of Representatives of Bank of
France to the country on the invitation
of President Hoover, deStirs Paris Rumors—Repatriation of French
ShortTerm Loans Seen in Visit of Messrs. Farnier and livered an international message over the radio from Paris
on Oct. 15. In this Premier Laval said: "we will not be
Lacour-Gayet.
able to rearrange the affatis of the world in four days in
From the New York "Times" we quote the following
from Washington. We will simply exchange ideas. I shall simply
Paris, Oct. 15:
tell President Hoover what my country thinks, hopes and
Great interest has attached in Paris to the visit of Charles
Fernier and may
Robert Lacour-Gayet of the Bank of France to New York
do." The text of the Premier's radio message as
publication here of a report that in New York their visit was because of the given
in a cablegram to the New York "Times" follows:
attributed to a
desire to arrange before the visit of Premier Laval for the
repatriation of the
It is in response to the invitation of a man and of a country with whom
remainder of the Bank of France's short-term loans in the
United States.
and with which we are closely united by friendly and traditional ties that
This interpretation of the visit of the two French bankers has
I
been dis- shall absent myself from France for three weeks.
missed DS fantastic in most circies. In others it has been taken
entirely
A severe crisis disturbs the world. Governments have exerted
seriously, and the argument has been put forward that such
themselves
action shows in the employment of measures which, until to-day, have
proved
the prudence and foresight of the Bank of France and the French
Govern- to overcome a situation which steadily becomes worse. The inadequate
ment, which, having lost 20% of the value of the pounds which
countries of
they held, Central Europe, with Germany and England, have been
hardest hit.
do not intend to run the same risk with dollars.
France, generally speaking, has escaped. She owes
her privileged position
Thus Camille Aymard in La Mute writes, "It must be recognized
that to her industry and her thrift.
the apprehensions of the Bank of France and the Minister of Finance are
In our time, one cannot conceive of isolation as a sufficient
justified. The news which reached us this morning from New York indicates
precaution
or preventive remedy. The Interests of the nations are so
closely interthat the most vigilant attention is necessary if we wish to safeguard the related and interwoven that
none may be completely free or
nation."
our
of
Interests
sheltered from
the dangers which threaten another.
2530
FINANCIAL CHRONICLE
[VOL. 133.
the proposed statement of the President which the Secretary had read
to Mr. Edge over the transatlantic telephone and which informed M. Laval
that this paragraph was but an incident in a statement of the President
concerning banking conditions In the United States, and a plan by which.
if' necessary, the larger banks of the country could assist the smaller ones.
Ambassador Edge reported that he had informed M. Laval that it
was the President's intention to discuss this plan at a meeting in the White
House on the evening of Oct. 6, and that the Secretary had already notified
the French Charge d'Affaires in Washington of this one reference in the
in
statement to foreign affairs. The French Charge had been notified
order to prevent any misunderstanding. Ambassador Edge added that
and
M. Laval had stated that he was quite satisfied with the paragraph
Laval
that he appreciated very much the advance notification. M.
comfor
him
our problems.
upon
call
they
should
confidence in edited that he would inform the press,
Profligate production, monetary troubles and excess of
informed of it
trouble ment, regarding the President's plan, that he had been
his visit to
speculation have engendered unemployment and misery. This
civilization. previously and that matters he intended to discuss during
Is profound because it finds its causes in a too rapid progress of
correctional Washington were not affected by the statement.
Nobody knows the right or appropriate remedy. A severe
and disciplinary period is indicated.
four days
We will not be able to rearrange the affairs of the world in
Report of Program for
tell Presi- Premier Laval of France Denies
In Washington. We will simply exchange ideas. I shall simply
He Has Made No
Says
States—
Visit to United
dent Hoover what my country thinks, hopes and may do.
to help.
for Parleys With President
s
Subject
on
ion
The French Government has already shown its willingness
Declarat
Chamber.
On my return I shall give a complete report to the French associate
Hoover.
will
Our Parliament will decide how and to what extent France
on
consolidati of world
The following from Paris, Oct. 10 is from the New York
herself with the United States in an effort for the
France on the other hand has its traditions. She knows when it is necessary to proceed from other than selfish motives.
We responded last July to President Hoover's proposition. Recently,
in conversations in Paris, London and Berlin, while safeguarding our essential interests, we have taken our part in the international co-operation which
now is more necessary than ever.
coThe voyage which I am about to undertake, with a view to still closer
operation between France and the United States, has given rise to great
hopes. Let us keep our illusions to ourselves.
between
If personal conversations and a frank exchange of opinions
congovernmental heads seems the surest method of restoring economic
solutions of
ditions, nevertheless it is not fair to expect from them definite
peace and general welfare.
In its Paris cablegram Oct. 15 the "Times" said:
Professor Charles
The French Premier is taidng with him in his suite
Bank of France;
Hist. the well-known economist and financial expert of the
of Paris; Jean
Albert Buisson, President of the Tribunal of Commerce
Rueff, financial
Jacques Bizet, Assistant Director of the Treasury, Jacques
of his personal
attache of the French Embassy at London; Andre Boissard
disarmament quesstaff; Louis Aubert, who Is a specialist on the naval
tion, and Commandant Dupre.
Marriner, counsellor
Traveling also with the Premier will be Theodore
Secertary
of the American Embassy at Paris, and Robert Thomson Pell,
to take charge
to Ambassador Edge, who has been asked by Premier Laval
women, of whom
of press relations. Twenty-five newspaper men and
newspapers and news
no less than 17 are French, representing French
agencies will be on board.
Final Session With Cabinet.
by the President
The Premier at a Cabinet meeting to-day, presided over
on the various
of the republic, had a final discussion with his colleagues conversations.
n
Washingto
the
questions which are likely to arise during
yesterday, that
It is understood, however, as the Premier himself said
into full account
while naturally he must in these conversations take
d and set
the French view on all problems as they have been constructe
in
forth in the Cabinet meetings by the permanent officials, and again
it was
the press, he is going without any fixed plan. To him, therefore,
d here.
an agreeable announcement, and one which was greatly appreciate
seeks in
that Pr sident Hoover on his side has no program ready, and
French
the
on
plan
American
no way to impose what may be called an
Premier.
daughter,
The Premier will also be accompanied by his 19-year-old
Mlle. Jose.
The proposed visit of Premier Laval was referred to in our
issue of Oct. 10, page 2349.
Secretary of State Stimson Says Premier Laval:of France
Is Free to Discuss at Washington Whatever Subject
He Desires—Consultive Pact or Security Agreement Not Mentioned.
of
Regarding the forthcoming visit of Premier Laval
a
France to this country Secretary of State Stimson issued
statement on Oct. 14 saying:
of the French
Fear has apparently been expressed in some quarters
visit he will be presented
press that when M. Laval arrives here on his
sort which he
some
of
by the President with a cut and dried proposal
further from our thoughts.
must either accept or reject. Nothing comet be
Laval what he shall
We have no intention of trying to impose upon M.
we are only anxious
discuss during his visit. Be is coming as our guest and
in the topics which
to give him as such the utmost freedom of selection
is that he will feel
he may care to discuss with the President. Our hope
and that the disfree to bring up any and every matter which he desires,
as possible. We
cussion thereon shall be as frank and comprehensive
or any other
France
have no intention of imposing any program upon
that there should
nation, but we feel that it is of the utmost importance
France and the
be a full and friendly interchange of views in order that
other's views.
United States may have the complete information as to each
out our
working
We feel that such information will be most helpful in
future co-operation.
From the "United States Daily" of Oct. 9 we take the
following:
"Times":
Premier Laval, a man who always keels his own counsel, felt obliged
to-day to issue a denial to the versions cabled to Paris of a story published
would
yesterday in the New York "Times" that while in Washington he
seek to examine with President Hoover the world problem of how to restore
budget
war
reduction,
debt
of
form
credit and confidence in its triple
reduction and added security measures. The Premier stated that he had
made no declaration as to the subjects which he would discuss with the
President.
The official denial issued from the Presidency of the Council reads:
An American newspaper has published news according to which Pierre
Laval will propose that all countries reduce by 25% their military budgets
If President Hoover should reduce the war debts. This news is of fantastic
character,
any declaration
The President of the Council has furthermore not madePresident
of the
concerning the conversations which he will have with the
United States.
J. P. Morgan Sees Premier Laval in "Courtesy Call"—
Conference Stirs Curiosity of Paris After America's
Talks with French Financiers.
J. P. Morgan was received by Premier Laval on Oct. 13,
said a Paris cablegram on that date to the New York "Times"
which also had the following to say:
It was explained that the visit was one of courtesy on the occasion of M.
Laval's impending departure for America. Mr. Morgan remained with
the Premier only a few minutes.
Laval
In banking circles it is understood Mr. Morgan explained to M.
the attitude of large American banking interests toward the financial and
plan
a
had
had
Morgan
economic crisis. It was said that reports that Mr.
for the solution of the economic problems faced by the world were without
foundation.
Those close to the Premier said after the conference that M. Laval
which
appreciated this opportunity to confer with Mr. Morgan on subjects
undoubtedly will come up for discussion at the White House.
Associated Press from Paris on Oct. 13 said:
The conference to-day between J. P. Morgan and Premier Laval stirred
with
curiosity here in view of numerous talks Mr. Morgan has had recently
he has
leading French financiers. Since his arrival in Paris last week
the
of
officials
and
France
visited Governor Clement Monet of the Bank of
Ministry of Finance.
-morrow at
M. Laval agreed to-night to deliver a short farewell talk to
most of
the Anglo-American press luncheon, but was expected to reserve
his remarks for an address at Havre before he sails.
Mr.Morgan's visit to Paris was referred to in these columns
Oct. 10, page 2348.
Belgian's Financier and Reparations Expert Sail for
New York.
The "Wall Street Journal" of Oct. 14 carried the following
(United Press) from Cherbourg, France:
Emile Francqui, Belgian financier, and Camille that. Belgian reparations
expert. have sailed for New York on the liner Majestic.
the latter's war relief
Francqui collaborated with President Hoover during
work. It was understood he and Mr. Gutt might participate in reparations
discussions at Washington.
The Belgians said they were going to New York to discuss exploitation of
copper in the Belgian Congo.
broaching the idea of a consultive
If Premier Laval has any intention of
President Hoover on his forthcoming
Denmark Reduces Note Reserve.
pact or a security agreement to
the Secretary of State, Henry L. Stimson,
visit, he has not mentioned It to
United Press advices, Oct. 14,from Copenhagen, Denmark
at the Department of State Oct. 8.
according to information obtained orally
will be considered with an open mind, appeared as follows in the "Wall Street Journal" of Oct. 14:
it
proposed,
is
pact
consultive
If a
to inquiries. This was the position of
A royal proclamation effective Oct. 14 reduces the amount of gold reserve
the Department stated in reply
London Naval Conference, and that is the the National Bank is required to hold from one-half to one-third the note
the United States during the
made to a consultive pact.
circulation.
nearest suggestion that has been
President's Ideas Explained.
from Paris that Premier Laval had Germany Pays Again on Basle Accord-15% on Mark
Questions regarding press reports
States, the Department explained
United
the
to
coming
Deposits Will Require About $20,000,000 in Foreign
not
considered
learned what President Hoover's
orally that when Secretary Stimson
Oct.
e—Interest Cut Proposed—Deutsche Bank
on
Exchang
leaders
al
congression
with
attitude was regarding his discussion
Paris, Walter E. Edge.
in
r
Line up Others in Step.
to
Ambassado
Moves
American
6, he telephoned the
what President Hoover inasking him to show Premier Laval exactly
Oct. 15 a cablegram from Berlin to the New
of
date
given
be
Under
not
would
ideas
tended to say. This was so that the President's
t explained. Am- York "Times" stated:
to Premier Laval in a distorted way, the Departmen
President's message
Another 15% offoreign mark deposits, which had been frozen by the Basle
bassador Edge was also instructed to say that the
al para- agreement, was released to-day. The total of these deposits by July was
was a domestic one relating to domestic affairs. A department
$176,000,000, of which 25% has been paid back in the meantime.
phrase of Ambassador Edge's report follows in full text:
In
The new release will require about $20,000,000 in foreign exchange.
Ambassador Edge's Report.
whether
view ofthe strained status of the Reichsbank, there had been doubt
inhis
followed
had
he
Bruen
Mr. Edge reported to the Department that
from the second instalment of deposits would be released, but Chancellor
structions to the letter, that he had given to M. Laval the quotation
°cr. 17 1931.]
FINANCIAL CHRONICLE
log and Dr. Hans Luther of the bank repeatedly expressed
determination
to adhere strictly to the provisions of the Basle agreement.
Figures available to-day gave details of the large September
export surplus which became known yesterday. The value
of German exports in
September was $9,000,000 above that of August, despite
the fact that
export prices declined in September 5.5%. While the
value of exports increased 4%,the volume advanced 10%, which is far in excess of the
normal
seasonal increase in exports for autumn.
Because of the decline in prices the volume of imports increased slightly,
while their value declined. The persistence of the depression
is reflected
in the decline of imports of raw materials and half-finished
products. The
growth of exports was due chiefly to finished textiles and iron
products.
The Deutsche Bank Diskontogesellschaft, Germany's largest
bank,
made a plea to-day for concerted action by banks to reduce
interest rates.
While this is recognized as a paramount premise for the improvemen
t of
business, the banks heretofore have declared that increased liquidity
requirements and the greater risk connected with credit business, along with
credit deflation, prohibited the lowering of rates.
Reichsbank
Issues New Exchange Ban—Acts to Cut
Heavy Gold Drain.
A Berlin cablegram as follows, Oct. 14, is taken from
the New York "Journal of Commerce":
The Reichsbank has taken new steps to enforce its
foreign exchange
restrictions. It threatens those enterprises which do not turn
over foreign
exchange received by them in their export dealings with
the complete
withdrawal of discount and security advance facilities. It
also threatens
a ban on the purchase of all bills bearing their indorsement
.
The chief cause of the continued unfavorable foreign
exchange situation
of the Reichsbank is stated to be the slight use being
made
under documentary credits of the rights to new replacement by debtors
credits provided under the stillhaltung agreement. German
industry and trade
are generally seeking to avoid incurring new obligations in
terms of foreign
currencies, because of the prevailing restrictions.
We also quote the following from Berlin Oct. 14 to the
New York "Evening Post" (copyright):
An unofficial report that the Reichsbank continued
this week to lose
gold and foreign currency at the rate of about ten millions
of marks, or
about $2,500,000 daily, was accompanied to-day by the
publication of
fresh restrictive measures designed to check the leak.
If the movement continues at this rate, with the loss in
the current week
of around sixty millions of marks, there will have been
a total loss to the
Reichsbank in the last three weeks of about three
hundred and seventy
millions of marks, or more than $90,000,000.
Bankers here are giving Chancellor Bruening full credit
for sincerity
in his statement that Germany will stick to the
gold standard and will
not inflate her currency, but their belief in his
ability to carry out his
program depends upon the Reichsbank's ability
to check the flow of gold
abroad.
The most immediate leaks occurring in the
country have ben stopped.
but there still is one that remains open despite
the Government's best
efforts to plug it. This lies in the fact that
German exporters persist in
keeping their foreign currency abroad, while
importers continue to receive
licenses to buy foreign currency for the purchase
Of goods.
Thus, while the foreign trade balance appears
on paper to be active,
it actually is inclining toward passivity, at any
rate to an extent sufficient
to cause further gold losses to the Reichsbank.
By a recent edict, penitentiary sentences
were threatened to exporters
who keep their foreign currency abroad, but
no Indictments have been
issued yet, and the Reichsbank to-day fashioned
a new weapon to bring
exporters into line.
It issued a circular letter to all banks, warnings
them that henceforth
no firm suspected of withholding foreign currency
from the Reichsbank
will receive any credit from that institution, and that
notes of such firms,
no matter whether they bear the best bank indorsement
s or not, will not
be rediscounted.
The fact that this measure was deemed necessary is
taken as confirmation that the Reichsbank is disturbed over the current
movement of its
gold reserves.
German Discount Corporation—New Unit to
Formed with Capital of Rm. 50,000,000.
2531
These September gains bring the total German
export surplus for the
first nine months of the year up to $457,000,000
. The monthly average
Is about $51,000,000.
As it is to be expected that this average will at
least be maintained
in the remaining throe months of the year, the total
surplus at the end will
be about $610,000,000, or.enough to replace, roughly,
SS% of the foreign
funds which were withdrawn up to the middle of July,
precipitating the
bank crisis which resulted in the Basle freezing agreement.
The huge surplus is due both to an increase in exports—whi
ch advanced.
as compared with August, by nearly $8,000.000 to a total
of about $199,000,000, including reparation deliveries in kind—and the
curtailment of
imports, which declined by $1,500,000 to $107.000,000.
Viewed As Remarkable.
The growth of exports, which receded in August, is regarded
as especially
remarkable, in view of the depression, although September and
October
are regularly the best export months. The decline in imports,
which
reached a record low,is to be explained chiefly by the fact that large supplies
of domestic and agrarian goods were available after the harvest. Besides,
the shrinkage in the purchasing power of the German population as
the
result of wage reductions made the importation of foodstuffs unprofitable.
and the consumption of foreign fruits and vegetables fell off substantially
as compared with last year.
September's export surplus last year was only about $64,000,000.
As the German balance of trade has been favorable since the latter
part of 1929, and will likely remain favorable for the rest of the current
year, the total gain accruing to Germany during the last three years will
be about $1,000,000,000.
Import and export figures for the first nine months are, roughly, as
follows:
Exports (Ina.I
Exports (Incl.
Reparations
Reparations
Imports.
in Kind).
Imports.
in Kind).
January-. $170,000,000 8185,000,000 July
5134.000,000 $197,000,000
February_ 148.000.000
185,000.000 ugust
108,000,000
101,000,000
March___ 144,000,000
208.000.000 September 107,000,000
190,000,000
April
161.000.000
105.000.000
May
143,000,000
188,000.000
June
144.000,000
169,000,000 Totals _31,259,000,000 $1,713,000,000
Fears that the effects of reduced prices in English goods as the result
of the depression of the pound wou d be felt immediately were not substantiated in the September balance. The increased activity of English
Industries will be reflected, it is be leved, only in the October balance.
as German export industries are working with long-term contracts.
It is pointed out also that most German imports go to European countries, while the English export markets are mostly overseas. This' is
also taken as the reason for the great power of resistance of German exports, as the depression principally affected extra-European countries
depending on the profits from raw material exports.
English and German competition in the European field centres around
the coal markets, where the two countries have been bidding against
one another for many years and with England losing some of her best
markets to Germany during the strike of 1926.
But although part of the Danish market has already shifted to English coal, it is pointed out that German mines can underbid the English
for a long time by throwing their extraordinarily large pithead supplies
upon the market.
English Prosperity a Benefit.
Furthermore, there is general hope here that Germany will ultimately
benefit indirectly from any expansion of English industrial activity, as
a prosperous England will be the best customer of Germany.
Despite the September surplus and the obligation of ad exporters to
deliver within three days the foreign exchange acquired to the Reichsbank,
the Central Bank's badly needed reserves for exchange continue to shrink,
and in the past week the net less was about $12,000,000.
Since during the third week of the month another 15% of frozen foreign
mark deposits and accumulated interest on all frozen credits, totaling about
523,000.000, must be paid, Dr. Hans Luther threatened to-day to bar
all credits to these failing to deliver their export proceeds to the Retchsbank.
Their bills will not be discounted and their collaterals will not be accepted.
Dr. Luther also announced that be would not even discount bills bearing, among other signatures, that of the firm which violated exchange
control regulations.
Be
German Banks Curb Deals by Foreigners—Orders to
Sell Local Securities Will Not Be Executed, PlugThe"Wall Street Journal" of Oct.14 reported the following
ging a Leak in Basle Agreement.
from Berlin:
Formation of a discount corporation in Berlin with capital
of Rm. 50,000,000 now is assured. The new institution will have
two principal
objects. The first will be to facilitate rediscounting of
acceptances by the
Reichsbank which demands three signatures. Until the
in July, the larger banks readily lent their signatures to banking crisis
one another to
moot this requirement.
The second object is to revive the short-term money
transactions. The
money market has practically ceased to operate, especially
vances on stock market collateral are frozen; but the banks since all adamounts of funds available for daily and weekly loans. possess large
The discount
corporation probably will use these funds to buy
bankers' acceptances,
and then later find other buyers, thus strengthening the
Reichsbank.
German Export Trade Breaks All
Records—September
Surplus Revealed As $92,000,000, Topping the
High
August Total—Huge Gain for Year
Likely—Figure
Put at $610,000,000, with $1,000,000,000 for
Three
Years—Replaces Withdrawals—English
Competition from Lowered Pound Not Yet Harmful.
From Berlin Oct. 14 a cablegram to the New York "Times"
had the following to say:
Under date of Oct. 8 a Berlin cablegram to the New
York "Times" said:
German banks agreed to-day to execute no more foreign orders to sell
German securities held by foreigners.
This move was in line with suggestions by Germany's foreign creditors
who did not want those holding securities to have preference over others
pledged by the Basle agreement to leave their credits in Germany. The
initiative was taken by the Reichsbank, which was anxious to plug one
of the chief leaks in the "freezing agreement," as it had been observed
that Germans sold their own securities through foreigners, who transferred the proceeds to foreign exchange.
The action is in the form of a gentlemen's agreement, not formally
binding, and will be effective as long as the Exchanges are closed.
Bankers point out that German reserves for foreign exchange must be
kept at any cost in order to preserve the gold standard of German currency and pay off foreign short-term loans as they come due.
Dr. Hans Luther, President of the Reichsbank, took the opportunity
to-day, before a conference of the Association of German Chambers of
Commerce, to declare himself uncompromisingly pledged to the maintenance of stable currency. He emphasized that this was a paramount
necessity for Germany, as the political question was indissolubly bound
up in monetary matters.
The German export surplus for September was more than
Germans Hoarding Cash—Failure of Note Expansion
which sets another all-time high mark, exceeding the record $92.000,000,
August surplus
to Help Prices Ascribed to It.
by more than $9,000,000.
From
the
The figure was mentioned in a committee meeting in the
York "Times" we quote the following
New
Reichstag
to-day and became known through indiscretions as the result of
general from Berlin Oct. 10:
curiosity in view of the slump of the pound, but the Federal
One reason assigned for the absence of any advance in the Reichsbank's
Department refused to reveal before to-morrow the factors Statistical
making up rate Is that the fall of prices continues, notwithstanding the expansion
the surplus.
of credits and circulation. The absence of any effect on prices from the
The development in the balance of trade is viewed in political quarters
present relatively large money circulation is ascribed to hoarding of cash.
with great satisfaction, as it is realized that an export surplus is not
only
The public appears to have resumed this course of action after
the
the most effective but virtually the only force to bring back Germany's British currency crisis, and this
has slackened the pace of circulation
international credit and prosperity.
of money.
2532
FINANCIAL CHRONICLE
Russians Criticise New German Cabinet—"Pravda"
Sees "Bridge to Hitler and Fascism"—lzvestia
Predicts Fascist Control.
An account from Moscow Oct. 11 published in the
New York "Times" stated:
somewhat
The new Bruening Government in Germany is greeted with
"Pravda's'.
unfavorable comment in the Soviet press. The newspaper
Fascism"
Berlin correspondent describes it as a "bridge to Hitler and terms.
and an editorial in "Pravda" takes the same line in guarded sharp InBoth declare that the new Cabinet will inevitably lead to a
tensification of class warfare, and the correspondent concludes: 250.000,
"The German Communist party, whose membership surpasses
is mobilizing and will lead the masses to a decisive struggle."
"Izvestia" takes a more moderate view, saying:
Fascist party will
"The kings of money, steel and coal who control the
extra-parliamentary
maneuver in Parliament rather than attempt an
wider their
power
in
coup and will leave Dr. Bruening's government
own control.
and Adolf Hitler
"'The struggle' between Dr. Bruening's governmantdemocracy against
and Dr. Alfred Hugenberg is not a struggle of bourgeois
Germany,'
lascising
of
Fascism, but a struggle between different methods carrying out with the
in which Dr. Bruening can congratulate himself on
Fascist program without
help of the Social Democrats nine-tenths of the
not an appropriate method
open civil war, which for evident reasons is
of reviving the tottering capitalist economy."
Yet
Unofficial Trading in Stocks at Berlin—No Plan
for Reopening Boerse.
New
Berlin advices, Oct. 10, are taken as follows from the
"Times":
York
of foreign selling
The chief obstacle to reopening the Boerse has been fear
of the proceeds.
and of a drain on home bank reserves owing to transfer
for foreign account.
Banks have now agreed to refuse to sell securities
exchange is to be
Nevertheless, there has been no decision as to when the
reopened.
of prices is forUnofficial trading continues, although publication
record low levels,
bidden. Early in the week stocks and bonds sold at new
announcement, a moderate
but in the middle of the week, after the Hoover
(Oct. 8) resulted
recovery resulted and the Wall Street advance on Thursday
advances of bank
in active trading on Friday (Oct. 9) and in considerable
stocks.
[VOL. 133.
year
inimical to the welfare of the State. In view of the Nazi disorders one
the
ago, this statement was looked upon as a warning to the disgruntled that
fully
be
would
repressive measures comprised in the Emergency Decrees
enforced.
Many times during the session Bruening had to bear the jibe of dictator.
His only answer was to proceed with a survey of the measures to be underno
taken for reforming Germany from within, and his insistence that
well
method of government could be more calculated to bring about the
being of Germany than his own.
Bruening purposed as the chief lines of procedure to restore world confiindebteddence in Germany the funding of the nation's short-term foreign
depresness and stabilization of the mark. To relieve the stress of economic
of
sion throughout the Reich, the Chancellor declared the necessity
reducing imports to the strictest minimum by replacing foreign goods and
cuts
sharp
possible;
agricultural products with domestic output wherever
export
in the cost of production so that Germany could compete in the
in
market and effect a better trade balance, and continued economies
administration.
2'o Organize Economic Board.
an
Important in its implications was the Chancellor's announcement that
subeconomic board would be organized to act in an advisory power on all
to
jects touching Germany economy. This board, it is believed, in its efforts
initiate maximum efficiency throughout the country will exert considerable
influence in the country's affairs.
Judged from the side lines, Chancellor Bruening made a favorable impression with his simple, undramatic address. His chances of gaining the
undecided votes that will either oust him from power or continue his government were generally accredited to have improved after the day's proceedings.
Courageously meeting one of the chief issues of the Nazi malcontents,
Chancellor Bruening announced his intention of continuing his policy of consultative conciliatory negotiations with France, thereby fanning the flame
of the Hitlerites' ire, whose Chauvinistic views hold considerable popular
appeal.
Touching upon the delicate subject of debts, Bruening insisted that some
decision must be reached on this point, declaring that the Hoover moratorium
move was unable to fully overcome the difficulties besetting the country.
To-morrow at noon the Reichstag will again resume its deliberations.
Reorganization of Creditanstalt In Austria Slow—
Not Yet Receiving New Deposits—Status of the
Austrian National Bank.
From Vienna advices, Oct. 9, to the New York "Times"
our
said:
Items regarding the closing of the Boerse appeared in
issues of Sept. 26, page 2007 and Sept. 10, page 2350.
German Gold Drain on Exchange Halts—Gains and
Losses Balance as Foreign Withdrawals and
Liquidations Lessen.
From Berlin Oct. 9, advices to the New York "Times"
stated:
gold on foreign
With the week ending Oct. 7, the Reichsbank's losses of
exchange have virtually stopped.
but theregold,
of
worth
Until Oct. 5 the bank lost another $19,000,000
and the proceeds from
after the withdrawals of foreign mark deposits
the Stock Exchange evidently
the liquidation of foreign time bargains on
since Oct. 5 have balended, as the gains and losses on foreign exchanges
to the United States.
anced. The greater part of the gold went
relieved for the time
As the result of its losses, the Reichsbank is not
bank has paid foreign exbeing. Bill discounts have advanced, as the
with drafts, and the municichanges for the liquidation of foreign deposits
number of drafts for discounting.
pal savings banks have turned in a large
by $22,000,000, the gold
Although the bills in circulation here declined
in financial circles, where it is
coverage is only 30.1%. No alarm is felt
corresponding growth of discounts
pointed out that gold losses and the
provided for by the Basle
do not form an uncontrolled movement but are
The Creditanstalt, in connection with the work of rehabilitation, is endeavoring to lower the cost of management through discharge of a number
of clerks and reduction of salaries. Decisive steps for liquidation of unprofitable industries controlled by the bank have not yet been taken and
new deposits are not received. Rumors which have circulated regarding
fusion of other banks are denied in economic circles.
The course of the Austrian National Bank's accounts has been interesting.
As far back as January, the bank had a note circulation of 982 million
schillings, a cash reserve of 395 millions, foreign exchange in pounds
and dollars amounting to 512 millions and discounted bills of 133 millions. These figures remained almost unchanged until the Creditanstalt'a
troubles in May, except that the note circulation fell to 900 millions and
discounted bills to 69 millions, the lowest level on record. Now, however,
the return as of Sept. 30 shows note circulation to have risen to 1,111
millions, cash reserve to be 304 millions, foreign exchange 87 millions
and discounted bills 688 millions. The last-named figure is the highest
on record. The ratio of reserve cover now amounts to 34%, or 8% above
the regular minimum.
The picture looks considerably more favorable when it is considered
that the national bank has reserved for repayment the 1,900 millions
which it owes to the Bank of England and the Bank for International
Payments, and that it no longer books these items among its holdings of
foreign exchange bills.
agreement.
relatively well off, due to
Furthermore, it is emphasized Germany is
the wall raised by this "freezing" agreement.
reserves for foreign exIn view of the export surplus, the Reichsbank's
not use the depreciation
change would be larger if German debtors did
of the British pound for repaying obligations.
g
German Finance Board Set up to Aid Plans of Bruenin
Reform—Stabilization of Currency, Funding of
Short Term Foreign Loans Purposed—Seek Economy Within, Import Restrictions.
cableThe following advices were contained in a Berlin
":
Commerce
of
"Journal
York
New
the
to
13,
Oct.
gram,
President
is seen to-night in
Support of Chancellor Bruening's program
of the organization of a special Economic
von Hindenberg'a announcement
in putting into execution the Bruening
Board to take an important part
The Board will function under the perreform.
economic
for
measures
which gives rise to the belief that the
sena] direction of the President,
present a united front to the opposition.
President and the Chancellor will
determined accents told the opening
Chancellor Bruening in quiet, but
that the Government would continue its
session of the Reichstag to-day
its frank and open foreign policy and
policy of economic reform, maintain
problem, which Bruening declared
reparations
the
of
seek a settlement
economic conditions.
world
of
t
unsettlemen
was causing the
the appearance of an armed
Speaking before an assembly which bore
entrances to the building, and the
camp with a dozen police posted at all
guarded by more than 500 police,
three surrounding blocks roped off and
absence of his National
the Chancellor bore unflinchingly the insulting
the Communists and the
Socialist foes, the booing and interpellations of
balance.
impassivity of those whose votes are still in the
Repressive Measures Intinuxied.
tactics to
Bruening at one time in his address gave intimation of the firm
that the
be employed to carry out his dictatorship when he calmly asserted
uprisings I
Government had the necessary forces to resist and repress any
The reorganization of the Creditanstalt was referred to
In our issue of July 4, page 37.
Prussian Minister of Finance Resigns.
Under date of Oct. 12 a cablegram from Berlin to the
New York "Times" said:
Hermann Hoepker-Aschoff, for six years Prussian Minister of Finance,
resigned unexpectedly late to-night as the result of a controversy with the
other members of the Prussian Cabinet.
Political circles were inclined to take the resignation of the Minister,
who was one of the bourgeois members of a Cabinet which is led by the
Socialists, as probably indicating the beginning of the disintegration of
the Ministry, which was the target of the Nationalists in a recent plebiscite,
but it was stated in quarters close to the Prussian Government that the
resignation was purely a personal matter without political consequences.
Some "Bootleg Trade"in Foreign Currencies--Austrian
Evasion of Restrictions—Discount on Home Currency 15 to 20%.
On Oct. 9, a Vienna message to the New York "Times"
had the following to say:
While the strong demand for foreign currencies in Austria is strongly
censored by the National Bank. a clandestine trade in such foreign currencies had developed. It appraises the schilling at a price 15 to 20% below
parity. Measures are expected in the way of prohibiting export of schillings
and imposing the obligation to surrender foreign currencies received In
exchange for imported goods.
One cannot properly speak of inflation in Austria, the budget being
balanced for the present by Draconian economy laws; therefore. It is confidently expected that actual depreciation of the currency can be avoided.
Other means are being sought to check speculative attacks against the
schilling. There has been no rise of average prices thus far in Austria.
During September, the average index number was 108, as compared with
114 In July and 115 in January.
OCT. 17 1931.]
FINANCIAL CHRONICLE
Austria Restricts Exchange Traffic—Jugoslavia Takes
Like Action, Making Curb General in Southeastern
Europe—Vienna Measures Drastic—Greece Converts Grain Import Into Monopoly.
The following Vienna cablegram Oct. 8, is from the New
York "Times":
The Austrian Government. following the example
of neighboring countries, to-night framed and put immediately into
effect regulations closely
restricting tffe traffic in exchange.
The Jugoslav Deputy Minister of Finance, M.
Uzimovitch, announced
to-night in Belgrade that the exchange traffic
would be controlled and
restricted by the Jugoslav National Bank, while the
Greek Government,
which not only clapped on exchange restrictions
several weeks ago, but
has kept the Athens Stock Exchange closed,
decided to-day to convert
the grain import business into a monopoly and place
it under the control
of the Greek National Bank.
With the announcement of these measures Southeastern
Europe now
presents a picture of Government control of trade,
finance, industry and
production in some respects almost as complete as in
Soviet Russia,although
administrative interference in what have hitherto been
matters of private
transaction has been dictated not by revolutionary
economic theories but
bY unprecedented economic conditions.
As a result of to-night's regulations the
traffic in exchange is now uniformly restricted throughout Southeastern
Europe, while in Hungary and
Jugoslavia the withdrawal of bank deposits has
also been made subject to
Government control.
The new Jugoslav exchange restrictions
prescribe that foreign currencies only up to the value of $175 and dinar
notes only up to 3,000 dinars
can be taken out of the country.
The new Austrian restrictions, which prescribe
fines up to 500.000
schillings (about 370,000) and imprisonment, with
permanent exclusion
if the offender is a foreigner, are
the most draconic of all. Only $75
worth of schIllings can be taken out of the country
by travelers. All
possessors of foreign currencies or bills must notify the
Austrian National
Bank and exporters must turn over foreign
currency payments they receive.
By these means, it is hoped to hold the schilling rate
until Oct. 16, when
Austria's obligations of $28,000,000 to the Bank of England
and the Bank
for International Settlements fall due. If, by that
time. Austria has
not received a French loan sufficient to meet these
obligations, it is feared
she will find it impossible to stay on the gold standard.
To-night's regulations will put a sudden end to the
busy clandestine
trade in foreign currencies, of which Vienna has been the
centre for Southeastern Europe, with its 70.000,000 inhabitants.
The Department of Commerce at Washington issued the
following announcement on Oct. 9, regarding the control
of exchange by the Austrian Government:
The Austrian Government proposes to control
foreign exchange by the
National Bank, including compulsory sale of foreign
exchange at official
rates, according to a cable from Commercial Attache
Gardner Richardson
of the Department's Vienna office.
Serious import reductions are anticipated as a
result of the decrees.
which Is expected to be placed immediately, Mr.
Richardson states.
It is also proposed to place an embargo on schilling
exports, the cable
stated. Rationing by the bank of foreign exchange
is to continue, with
heavy fines imposed for illegal traffic.
Imported goods are to be classified according to importance
and desirability by a governmental committee, and the Bank must
allocate exchange
in accordance with the committee rules.
2533
The newspaper Eleftheron Vima, however, persists to-day
in saying
that Swiss and French francs and Dutch guilders will be gradually
substituted for dollars as the currency basis.
Spain Authorizes Customs Surcharges Again t
Depreciated Currency.
A Spanish decree has authorized the Minister of Economy
to impost a surcharge on duties on merchandise from those
countries which establish surcharges on Spanish goods because of depreciation of exchange, according to a cablegram
of Oct. 9 from Commercial Attache Charles A. Livengood
at Madrid. The Department likewise says that the Minister
is also authorized to lay a similar impost on merchandise
from those countries which discriminate against Spanish
exports by means of sanitary or other regulations.
Poles Sell Savings of Dollars in Panic—Lines Form at
Banks to Get Rid of $50,000,000 on Report United
States Will Quit Gold Basis—Treasury Ridicules
Rumor—Washington Says Cover Is Not Only
Governed by Law but More Than Acequate for
Currency—Embassy Step Ends Panic— Dollar Again
Sought in Poland.
The following Warsaw cablegram, Oct.9,is taken from the
New York "Times":
A flight from the dollar started here this morning on the heels of alarming
reports from Paris that the United States Government had decided to abandon the gold standard and that an increase hi the issue of dollar notes was
being discussed in Washington. The rate of *change fell from 8.90 to 8.82
zlotys to the dollar.
Long lines of people waiting outside the banks to get rid of dollars, which
were readily bought, reduced the rate. Confidence in the dollar seems to be
shaken in Poland, where for the last thirteen years United States currency
has played the part of metallic gold as coverage for Polish currency. The
Poles, who went through the double inflation of the Polish mark in 1923 and
the zloty in 1925. have used the dollar as subsidiary currency, especially for
long-term contracts and foreign business. The entire populace, even the
humblest peasant, hoarded dollar notes and the amount circulating in
Poland is estimated at $50,000,000 of $60,000,000.
Headlines in several popular newspapers to the effect that dollars were
in imminent danger sufficed to hasten the more nervous holders of dollars
in selling their hoards. The banks are more confident of the dollar and buy
any quantity. The reserve of foreign currency In the Bank of Poland will be
considerably strengthened owing to the flight from the dollar, and
the zloty
certainly will profit from the public's nervousness.
From Washington, Oct. 9, the "Times" reported the
following:
Rumors in Poland that the United States Government would abandon
the gold standard and increase the issue of dollar notes were described at
the Treasury Department to-day as "ridiculous."
The gold standard is fixed by law. The Treasury's monthly circulation
statement contains the following statement:
."Gold certificates are secured dollar for dollar by gold held in the Treasury
Austria Reduces Expenses.
for their redemption:silver certificates
secured dollar for dollar by standAccepting the recommendations of the League of Nations' ard silver dollars held in the Treasuryare
for their redemption: United States
Finance Committee's report on its financial conditions notes are secured by a gold reserve of $156,039,088 held in the Treasury.
,
Austria has taken steps to drastically reduce expenses, This reserve fund may also be used for the redemption of Treasury notes of
1890, which are also secured dollar for dollar by standard silver dollars held
according to a report from Commercial Attache Gardner In the Treasury: these notes are being cancelled
and retired on receipt.
Richardson, of the Commerce Department's Vienna
Reserve's Notes a First Lien.
office.
Departmen
The
t's advices Oct.6 further said:
"Federal Reserve notes are obligations of the United States and a first
Parliament yesterday passed a bill with only eight opposing votes
reducing lien on all the assets of the issuing Federal Reserve Bank. Federal Reserve
expenditures by about $39.000.000, Mr. Richardson's report
notes are secured by the deposit with Federal Reserve agents of a like amount
stated.
This will be done by the reduction of capital expenditures: cutting
gold and such discounted or purchased paper as is eligible under
salaries of gold or of
of Government employees, and temporarily discontinuing new
terms of the Federal Reserve act.
the
Government
and Army appointments.
"Federal Reserve banks must maintain a gold reserve of at least 40%,
New and Increased taxes are expected to produce additional
revenue, including the gold redemption fund which must be deposited with the United
Mr. Richardson's report pointed out.
States Treasurer. against Federal Reserve notes in actual circulation.
There are still no plans for the opening of the Vienna Stock
Lawful money has been deposited with the Treasurer of the United
States
it was stated, and the Austrian National Bank continues theExchange, for retirement of all outstanding Federal Reserve Lank
notes.
rationing
of foreign exchange.
"National bank notes are secured by United States bonds except
where
lawful money has been deposited with the Treasury of the United
States
Hungary Gets Credits—American Banks Extend Loans for their retirement. A 5% fund is also maintained in lawful money with the
Treasurer of the United States for the redemption of national bank
notes
—League to Hold Hearings.
secured by government bonds."
Advices as follows from Budapest, Oct. 14, are taken
from
the New York "Times":
Further Warsaw advices Oct. 12 to the "Times" stated:
A week-end "flight from the dollar," which caused $5,000,000 in American
banknotes to change hands in a scramble occasioned by rumors, was checked
The Budapest bank consortium has been informed from New
York that
to-day and the dollar not only returned to its usual rate of 8.88 to 8.90 zlotys,
part of the short-term dollar credits to Hungarian banks will be
prolonged. but was
even sought, with gold coins dropping to their normal value.
The prolongation of the remainder is now the subject of
negotiations
A communique issued by the commercial attache of the United States
between the interested banks and representatives of the New York
Trust Embassy and
Company, the Irving Trust Company and Lee, Higginson ez Co.
explanations by most of the newspapers ended the panic.
Foreign Minister Ludwig Valko was informed to-day from
The public began selling dollars last Friday, misguided by alarming
Geneva that
reports from Paris and New York, and the Bank of Warsaw alone bought
the finance committee of the League of Nations will hold special
sittings at more
Budapest on Friday. Saturday and Sunday of next week as
than $1,000.000 at 1 cent below par. In addition, the public dumped
requested by
its bonds and all foreign money in a scramble for gold. Russian 5-ruble
the Hungarian Government. It will discuss the report of the five
experts coins,
still plentiful in the parts of Poland which were formerly Russian,
which it sent a week ago to inquire into Hungarian finances and then
make rose to
recommendations for their rehabilitation to the League.
7.60 instead of their real worth of 5 zlotys.
Press comments for the last three days point out that the public is likely
to lose its head at any alarming news from foreign sources.
Greece Holds to Dollar—Swiss Franc Not Substituted,
On the same date (Oct. 12) the following was received
Says Governor of Bank.
from Washington by the "Times":
From Athens, Oct. 14 the New York "Times" reports the
Treasury officials were not alarmed to-day over reports put in
circulation
abroad that the United States was going off the gold standard and
following:
over the
Reports that the Greek National Bank had been authorized to substitute
Swiss francs for American dollars—chosen a few weeks ago as the basis
of Greek currency when the 13rItish pound depreciated—on account of the
alleged financial difficulties of the United States and the fluctuations of
dollar values were emphatically denied to day. The Governor of the Bank
declared the rumors were pure fabrication.
fact that dollars were being sold in considerable volume.
It was stated that the Treasury had enough gold to meet
all the dollar
sales. Officials held that the selling propaganda was an
unjustified movement, and it was attributed chiefly to those who
traded in exchange,
If all of the large foreign balances held in this
country were suddenly
removed the United States would not suffer
seriously, one high official
asserted.
2534
FINANCIAL CHRONICLE
[VOL. 133.
scramble for gold along with
The Bank of Poland has taken part in the
ax other European countries, it was revealed to-day by a report for the first
Reforms in Poland Said to Aid Gold Standard—T
that the gold reserve had risen
Avoid
and
ten days of October. The figures showed
ues
reserves dropped
Adjustments to Give New Reven
$64,600,000, whereas foreign currency
to
0
$900,00
nearly
Budget Deficit Are Prepared—Government Costs $1.900,000.
ing foreign
is
convert
bank
that the
This is regarded as a clear indication
Cut.
total curstrengthen the gold basis, now 41% of the
to
gold
into
y
currenc
The Polish Government, appreciating the absolute neces- rency issue-11% more than the law prescribes.
ed tax
sity of maintaining the gold standard, has prepar
es, thus
revenu
new
e
provid
to
ated
calcul
are
which
s
try—Yogng Reds
reform
issued To "Enlist" Million in Soviet Indus Labor Shortage
avoiding a budgetary deficit, according to a statement
End
to
s
Youth
Sound Call for Rural
newly
in New York on Oct. 10 by Prince Andrew Sapieha,
—Farm Gains Hold Them.
.
nment
Gover
Polish
the
of
lor
Counse
ial
appointed Financ
"Times"
:
added
Duranty in a message to the New York
this
Walter
noting
in
11
The New York "Times" of Oct.
said:
reserves
10,
gold
its
Oct.
ed
w,
increas
from Mosco
He announced that the Bank of Poland had
industries has begun to
in addition, foreign
by more than 100,000 zlotys since August and that,
balances had increased 2,100,000 zlotys.
to maintain a ratio of apThe Bank of Poland, he said, had been able
legal minimum. This, he said,
proximately 48%. which is 8% above the
balance of trade, which in August
together with the continued favorable
zlotys, was a guarantee of the stabilamounted to approximately 42,000,000
ity of Polish currency.
the recent crisis in Europe not
Prince Sapieha pointed out that during
in difficulties and that, on the
one of the Polish banks had found itself
over the financing of industries in
contrary, Polish banks were able to take
had been most active heretofore.
banks
German
the
es
where
Polish provinc
neutralize any adverse condiThus, he said, the Polish banks were able to
ence of the German crisis.
tions which could have developed as a consequ
Government Cuts Expenditures.
tures by 56,000,000
"The Polish Government has reduced its expendi . "The decline in
Sapieha
Prince
said
July,"
with
son
zlotys in compari
the fact that a decline
revenues amounted to only 23,000,000 zlotys despite
months."
iii tax receipts usually occurs during the summer
obtained 100,000,000
He disclosed that during July and August Poland
rm foreign credits, chiefly
long-te
new
of
,000)
$11.000
zlotys (approximately
000 for road building,
for public works. This incluthed a credit of $2,000, for bridge construc$1,500,000
extended by an Italian group, A‘nd a credit of
now in progress for an additional
tion, obtained in London. Negotiations are
al
for the extension of municip
Warsaw
of
city
the
to
000
loan of $2,000.
traction facilities.
consisted of $525,644,496 of
Poland's public debt, as of July 1, 1931
or a total of $572,944,496.
foreign debt and $47,300,000 of internal debt,
y the Polish dollar bonds traded in
Recentl
capita.
per
to
$15.25
ent
equival
recovered more than 25 points
here on the New York Stock Exchange have
weeks ago.
from the lows of the year established several
Gain in Foreign Trade Cited.
of 1931 showed imports
The foreign trade of Poland for the first six months
or a favorable
of 804,900.000 zlotys and exports of 950.200,000 zlotys,Financial Counof the
balance of 145,300,000 zlotys, according to figures
to 187,300,000 zlotys,
selor. The favorable trade balance for 1930 amounted
ng the balance was unwhereas in the three years immediately precedi
favorable.
lates expenditures of 2,851.The Polish Government, he said, contemp
of which 2,241,900.000 is for
000,000 zlotys for the fiscal year 1931-1932,
,000 for service on public
315.100
and
s
pension
for
,000
civil service, 294,900
showing substantial reductions.
items
pension
and
service
civil
the
with
debt,
Soviet
The shortage of labor for the growing
tee of the Communist Youth
cause anxiety here, and the Central Commit
ist Youth organizations
Commun
party to-day issued an urgent appeal to all
gn to send labor from the
to undertake an energetic nation-wide campai
country to factories and construction camps.
in an editorial that the
The newspaper Communist Youth Pravda says
000 to 14,000,000 in the
number of industrial workers rose from 11,000,
year requires 2,000,000
years 1928, 1929 and 1930 but that the current
recruited. The remaining
more, of whom only half have already been
ve farms after the
million must be drawn immediately from the collecti
harvest.
duty" of the ComThe newspaper, therefore, declares that the "prime about 5.000,000.
is
munist Youth organization, the membership of which
ly the collectives. It
is to enlist labor from the country districts, especial
living conditions of
also emphasizes the need for improvement in the
rs" in industry, which
industrial workers and the struggle against "floate
has caused a phenomenal labor turnover.
arrived from the
Thus, in the Maiekeff steel works 3,400 new workers
works for farms. At the
collectives in June and July, but 2,600 left the
and 4,000 left.
Kuznetz construction plant 10,000 arrived in June
to "make bricks withSoviet industrialization throughout is an attempt
of the collective farm
out straw" and, paradoxically enough. the success
a Socialist point of view, is
movement, the importance of which, from
makes the task consecond only to the Bolshevist revolution in 1917,
siderably more difficult.
have something like
to
ng
For the Russian peasants en masse are beginni
n standards but far
a decent life—poor enough, of course, by America a fairly adequate
getting
better than before. What is more, they are
the shortage of manusupply of food and fuel, which compensates for
of the rough clothing refactured goods, and can themselves make most
quired.
e wants that are unFood, housing and clothing are the three primitiv
than in the construction camps,
doubtedly better in the villages at present
labor
shortage, which
the
coal fields and manufacturing districts. Hence
which urgently needs 500,000
significantly, is severest in the building trade,
men.
Committee sounds
To-day's appeal by the Communist Youth Central
00 rural Communist
rather like a sort of"volunteer mobilization" of 1,000.0
Youth members for industrial work.
Two Large Finnish Banks Combine—Expected
Devaluation of Finnish Mark.
ss.
Distre
nt
loyme
A Copenhagen cablegram Oct.9 to the New York "Times"
Poland Moves to Relieve Unemp
loyunemp
said:
an
from
ing
result
In order to relieve distress
ed to-night.
The amalgamation of two large Finnish banks was announc
and growing
ment situation which is described as acute announced They were the Kansallis-Osake-Pankki and the Maakaantain Pankki. It is
15%
steadily more critical, the Polish Government has emergency thought certain that the Finnish mark will soon be devalued about
l
es.
a plan which involves the organization of a specia Commerce to conform to Scandinavian currenci
the
committee, according to a report received in
n Lane at
Closed,
Stock Exchanges in Central Europe Mostly
Department from Commercial Attache Claytoadded:
Extment
Stock
e
Depar
the
Pragu
9
Done—
Oct.
of
Is
date
ess
Busin
Under
but
Some
Warsaw.
s, will be directly conspecifie
measure
cy
emergen
the
change Open.
This committee,
aim is to minimize the effects of uneming from
trolled by the Prime Minister. Its
and official representatives will
From the New York "Times" we take the follow
ployment during the winter. Both private
9:
a
Oct.
Vienn
be included in its membership.
mitmeasure a net-work of sub-com
Under the provisions of the proposed
Poland. Moreover, besides the subtees will cover the entire Republic of
ships, independent organizations
committees located in the various vojevod
ee will be histaPed in the larger
of the central unemployment committ
problems there. The scope of its
industrial centers to cope with special
ee's by-laws.
committ
the
in
rated
incorpo
be
will
activities
the Prime Minister, early
Following the approval of the by-laws by
s, etc. are expected to provide
negotiations with employers, labor agencie
work already initiated will be
work for those in urgent need of it. Relief
fuel and other commodities
food,
funds,
Special
d.
expande
considerably
ions of this measure,to be furnished from
stipulat
the
with
nce
accorda
in
are,
the following sources:
to support special relief work now con(a) National funds designated
through the Vojavodas.
dected by the municipalities
tax payers in lieu of taxes.
(b) Commodities obtained from
by customs authorities, which may be used
(c) Merchandise confiscated
for food distribution.
increases in
the Treasury and derived from the
(d) Funds authorized by
the income tax.
special tax on fees collected by notaries public,
(e) Funds obtained from a
agents.
cary
hypothe
and
rs
executo
donations for the unemployed collected by
(f) Voluntary offerings and
the committees.
have the right
the unemployment committees
tation of
It is further provided that
prices and to effect the transpor
reduced
at
sugar
e
to purchas
freight rates.
d instead of taxes at reduced
collecte
s
product
and
ment
dise
Govern
merchan
the close co-operation of
Other resolutions arrange for
unemployment committees. Such
the
with
ies
institutions and authorit
connected with
te all technical phases
agencies are instructed to facilita
been authorand Public Works has also
Labor
of
r
Ministe
The
work.
Govrelief
unemployed will be given lots on
ized to prepare a plan whereby the
ernment land.
$900,000 in Ten
Poland Piles up Gold—Reserve Rises
Days, or to 41% Coverage.
ing from
From the New York "Times" we take the follow
15:
Oct.
w,
Warsa
es at Budapest and
The suspension of business on the Stock Exchang weeks, has almost
a period of
Vienna, which has now continued during
of the habit of dealing. such
entirely got even the investing public out
are confined to investment stocks,
purchases of shares as are privately made
and transactions in these are
particularly those quoted in dollar values,
still negotiated to a small extent.
European stock exchange still
At Prague. which is the only Central
It is restricted entirely to profunctioning, little business is being done.
fessional speculation.
The Danish Financial Situation—Daily Exchange
Rates Follow Sterling—Bourse Remains Closed.
Following the Danish embargo on gold exports and the
suspension of note redemption, the Danish National Bank
is establishing exchange rates daily with a tendency to follow
sterling, according to a cabled dispatch received in the
Commerce Department from Commercial Attache Charles B.
Spofford at Copenhagen. The Bank's discount rate is now
6%, the cable states. The Department on Oct. 8 further
said:
ng to reports as of Oct. 6.
The Danish Bourse remains closed, accordi
Withdrawals of bank deposits are reported to be causing some anxiety in
er
30
on
ion
Septemb
amounted to 333,500.000
circulat
Danish circles. Note
crowns with gold cover of about 51%. The National Bank is reported
to be utilizing New York credits to increase exchange holdings. (The par
.)
value of the crown is approximately $0.2680
Final budget figures for last year show an actual surplus of over 25,000,000
year anticipates a surplus
e
the
for
current
estimat
revised
crowns and the
The budget for next
of about 4,000,000 crowns, the report states.
an increase in taxes
year anticipates a 20,000,000 crown surplus without
to
due
s,
curtailed expenditures and a
and despite a reduction in revenue
al grants and of an equal sum
saving of 10,000.000 crowns in municip
to the Danish advices.
In the military budget, according
OCT. 17 1931.]
FINANCIAL CHRONICLE
The new finance bill presented to the Danish Parliament makes no reference to a recourse to conversion loans.
The Danish Merchants Guild states that contracts are payable at exchange
rates prevailing at the time of payment and that cancellation is not justified
for either party. Danish customs authorities state that goods bought before
September 20 are dutiable on the basis of exchange value prevailing before
that date but goods subsequently contracted for are to pay a duty at the
new daily rate of exchange.
Danish commodity prices are tending upward due to the necessity of
adjusting values to the depreciation in exchange. AR import trade are
said to be hesitant pending greater stabilization of exchange, Danish
reports indicate.
2535
is now in complete control of all foreign exchange, so much
so that the Government now has practically a monopoly
on foreign trade, according to a cable received in the Department of Commerce from Commercial Attache Lee C. Morse,
Riga. In making this known Oct. 14,the Department added:
The Government has appointed a committee to pass on all requests for
exchange and unless approval is secured exchange cannot be purchased.
This committee, the cable states, has refused importers permission to
purchase exchange for the import of automobiles, perfumes. &c., as being
non-essentials.
Union of South Africa Retains Gold Standard.
Czechoslovakia Seeks New Loan.
Associated Press advices from Cradock (Cape Province,
Czechoslovakia, which received a large loan from France
six months ago, is now seeking another, said a cablegram Union of South Africa) on Oct. 13 stated:
D. F. Malan. Minister of the Interior, announced to-day that the Union
Oct. 12 from Prague o the New York "Times," which
Government will wait until after the British elections before deciding
added:
whether to abandon the gold standard.
Dr. Pospischil, Governor of the Czech National Bank and member of
From the New York "Times" we take the following from
the League of Nations Committee which is Investigating Hungary's finances,
has gone to Paris to negotiate a loan of $20,000,000 from the Bank of Pretoria, South Africa, Oct. 13:
France for the Czech National Bank.
Greeks, Bulgarians and Turks Plan Tobacco Trust—
Yugoslays Not Invited.
The following Belgrade account Oct. 9 is from the New
York "Times":
The Greek press announces that Foreign Minister Michalakopulos has
held several conferences with the object of putting into effect the proposed
Greco-Turkish-Bulgarian tobacco monopoly.•
Bulgaria has not yet expressed an opinion, the newspapers say, but
Greece and Turkey are prepared to form the trust without Bulgaria if
she is unwilling to join.
Yugoslavia, it is stated, will not be asked to join, as she has none of
the so-called "Oriental" tobacco, which comes from eastern Macedonia
and Thrace almost exclusively.
C. W. Malan. Minister of Railways, declared to-day that South Africa
would remain on the gold standard despite this involving serious consequences for her primary producers.
His statement, declaring that the Government was determined on that
stand in the interests of the country, was made in answer to agitation by
farmers favoring the following of Great Britain in going off gold.
Seven leading economists, including Dr. Bruwer, Chairman of the Board
of Trade, and Dr. Holloway, Director of the Census. Issued a statement
to-day defending the retention of the gold standard.
Northern and Southern Rhodesia Reported Suspending Gold Standard.
From its London bureau the "Wall Street Journal" of
Oct. 13 reported the following:
Northern and Southern Rhodesia have suspended the gold standard.
effective Oct. 13. All exports of gold and silver coin are prohibited, except
Bank in Sweden Expands—Stockholm's Enskilda to by written permission from the Government.
We also quote a cablegram as follows from Salisbury
Issue 9,000 Commandite Shares.
A cablegram as follows from Copenhagen, Oct. 15, is (Rhodesia), Oct. 12, to the New York "Times":
The rich gold-producing States of Northern and Southern Rhodesia came
taken from the New York "Times":
off the gold standard to-day and adopted sterling currency. No gold or
On the occasion of its 75th anniversary Stockholm's Brisk'Ida Bank. one silver coin may be exported except sums for travelers not exceeding £5.
of Sweden's largest and oldest banks, to-day held a special meeting of
On behalf of the Southern Rhodesian Treasury it is stated that the bulk
stockholders, who approved the board's proposal to increase the com- of its trade, both In imports and exports, is with Britain, and while the
mandite fund by 9,000,000 kroner. The bank will issue 9.000 5% corn- present rates of exchange would be to the advantage of importers, the
mandite shares, each of 1,000 kroner, distributable to shareholders at the interests of Rhodesia would be beat served by linking with sterling, enratio of one commandite share for each five original shares.
abling the producers of all primary products to obtain the full benefit of
The stockholders also voted to give the bank's employees 15% of their the increase in prices which followed the British abandonment of the gold
annual salaries as gratuities.
standard. The decision, it is stated, may react against trade with the
Union of South Africa, which remains on the gold standard, but other
Copenhagen (Denmark) Stock Exchange Opens After considerations are held to outweigh this disadvantage.
Month's Suspension.
After a month's suspension the Copenhagen Stock Ex- President Hoover Before Pan American Conference in
Washington Repeats Previous Warning Against
change reopened in the afternoon of Oct. 15, said a CopenGovernment Borrowing Except for Productive
hagen cablegram that day to the New York "Times," which
Purposes.
also had the following to say:
There were no signs of a panic, a feeling of confidence prevailing. Bonds • In addressing the Pan American Conference on Oct. 7, in
showed a slight tendency to fall. State bonds decreasing between 2 and 5
points and other issues 3 to 5 points, for a total turnover of 1,250,000 session at Washington, President Hoover pointed out that
kroner [about $275,000 at the present rate of exchange]. Among bank "there is one lesson from this depression . . . and I can
points to 145 and the Handelsbank
stocks the National Bank fell 11
present it no more forcibly than by repeating a statement
15 A to 89, with small turnovers. Industrials generally rose, while shipping
issues improved 3 or 4% on the average. The total turnover in shares was which I made to this conference just four years ago, when we
about 500,000 kroner.
were in the heyday of foreign loans. I stated, in respect to
such loans, that they are helpful in world development,"proFinland Suspends Gold Standard—Bank Rate In- vided always one essential principle dominates the character
creased to 9%.
of these transactions. That is, that no nation as a GovernThe suspension of the gold standard by Finland was an- ment should borrow or no governmentlend and nations should
nounced on Oct. 12, at which time it was also stated that discourage their citizens from borrowing or lending unless
the Bank of Finland had raised its discount rate from 7
this money is to be devoted to productive enterprise." The
to 9%. In reporting the foregoing action a wireless message President further said: "If this principle could be adopted
from Helsingfors (Finland) to the New York "Times" said:
between nations of the world—that is, if nations could do
The decision was taken nutlet dramatic circumstances, the Bank of away with the lending of money for the balancing of budgets,
Finland declaring as recently as yesterday that it could maintain the gold
standard. Governor Ryti of the State Bank, however, telephoned late for purposes of military equipment or war purposes, or even
last night to the World Bank board meeting at Basle for news but appar- that type of public works which does not bring some direct
ently obtained no encouragement because the bank decided this morning
or indirect productive return—a great number of blessings
to abandon gold.
would follow to the entire world." The President's address
Parliament will assemble Oct. 20 to sanction the decision.
In commercial circles it is expected that the suspension will greatly before the Conference follows:
stimulate industries and exports.
Foreign rates of exchange immediately soared about 25%. Dollars were
quoted at 50.25 finmarks to the dollar. Certain quarters are hoping for
inflation of Finnish currency, but it is understood that the State Bank
opposes inflation and is determined to stabilize the currency as soon as
possible with the minimum loss of value.
Finland Converting to Goods Following Suspension of
Gold Standard.
According to Paris advices to the "Wall Street Journal" of
Oct. 15, reports from Finland say that the public is buying
jewelry, land and foreign products following the abandonment of the gold standard.
Latvian Government Takes Over Control of Foreign
Exchange.
In an effort to maintain the stability of the currency unit,
the lat, the Latvian Government through the Bank of Latvia
Gentlemen of the Conference: I am most happy to extend to you the warmest
possible welcome on behalf of the Government and people of the United
States. We are grateful to you for coming to Washington at this time to
discuss the commercial problems of common interest to the nations of
America. You are meeting during a period of widespread economic depression, but this fact emphasizes rather than diminishes the necessity for the
nations of this continent to take counsel with one another.
We recognize that the prosperity of each and every nation contributes to
the prosperity of all. It is important that at conferences such as this the
experience of each and every nation should be placed at the disposal of all in
order that we may profit by our successes as well as learn the lessons of our
failures.
There is one lesson from this depression to which I refer, and I can present
it no more forcibly than by repeating a statement which I made to this conference just four years ago, when we were in the deyday of foreign loans. I
stated, in respect to such loans, that they are helpful in world development.
"provided always one essential principle dominates the character of these
transactions. That Is, that no nation as a government should borrow or no
government lend and nations should discourage their citizensfrom borrowing
or lending unless this money is to be devoted to productive enterprise.
"Out of the wealth and the higher standards of living created from enterprise itself must come the ability to renav the capital to the borrowing
2536
FINANCIAL CHRONICLE
country. Any other course of action creates obligations impossible ofrepayment except by a direct subtraction from the standards of living of the borrowing country and the impoverishment of its people.
In fact. if this principle could be adopted between nations of the world—
that is, if nations would do away with the lending of money for the balancing
of budgets,for purposes of military equipment or war purposes, or even that
type of public works which does not bring some direct or indirect productive
return—a great number of blessings would follow to the entire world.
There could be no question as to the ability to repay: with this increasing
security capital would become steadily cheaper, the dangers to national and
individual independence in attempts of the lender to collect his defaulted
debts would be avoided: there would be definite increase in the standard of
living and the comfort and prosperity of the borrower.
There could be no greater step taken in the prevention of war itself. This
is perhaps a little further toward the millennium than our practical world
has reached, and I do not propose that these are matters that can be regulated by law or treaty. They are matters that can be regulated solely by
the commercial and financial sentiment of each of our countries, and if this
body may be able to develop the firm conviction, develop the understanding
that the financial transactions between nations must be built upon the
primary foundation that money transferred is for reproductive purposes, it
will have contributed to the future of the Western Hemisphere in a degree
seldom open to a conference of this character." That is the statement I
made to you four years ago.
I repeat this to-day, because had it been followed during these past five
years our problems throughout the world would be far different, our difficulties infinitely less.
I have learned with particular interest and gratification that by far the
greater number of those in attendance at this conference are not governmental delegates, but representatives of the commercial and financial establishments of the several American republics. Particularly do we in the
United States hold to the theory that commercial enterprise, except as rare
emergency action, is essentially a private undertaking, and that the sole
function of government is to bring about a condition of affairs favorable to
the beneficial development of private enterprise.
It is the failure to comprehend this conception of the relation between the
function ofgovernment and thefunction of private enterprise thatsometimes
leads the thoughtless to assume the existence of an international indifference
which does not in fact exist.
The larger significance of your meeting is attested by the fact that at
stated intervals the accredited representatives of the governments and of the
commercial organizations of this continent come together with a view to
Interchange of experience and fostering that mutual confidence without
which the development of international commerce is impossible. Your work
possesses a significance far beyond the concrete problems with which you
will have to deal.
Permit me in closing to combine with my welcome the confident expectation that your deliberations will redound to the benefit of all the nations of
this continent.
[Vol,. 133.
Ecuador and to the Central Reserve Bank of Peru, inviting them to send
delegates to a conference and at the same time submitting to them an outline
of the program.
"The invitation was accepted immediately by these institutions and a
basis established for accords, which it was agreed should be reached at the
place of conference. Lima was selected for this as the point of greatest
accessibility for all delegates.
The communique contains transcripts of the invitations to the LatinAmerican banks. An extract from the letters says:
"If it is considered that the foreign finances of our countries are mostly
linked with the United States it is logical and advisable that we look for
the co-operation of the Federal Reserve Board at Washington, the only
institution with the structure, resources, large objectives and adequate
gearing, to fulfill the necessary and inescapable functions of mututal
co-operation between the Americas. We do not doubt that it would
accept the initiation of this policy to help the Central Banks of Latin
America."
The following from Washington Oct. 8 is also taken from
the "Times":
Information has reached the United States Government through private
sources, the identity of which was not disclosed to-day, that the Central
Bank of Bolivia has invited representatives of New York banking interests
and of the Central Banks of Bolivia, Peru, Chile, Colombia and Ecuador
to a conference at Lima,Peru,late this month for the purpose of considering
means of relieving the economic depression in South America.
No official advices on the conference have been received by the United
States Government,it was asserted to-day, but it is understood that experts
from New York banks will attend for the purpose of giving advice. Officials
insist they do not know the identity of the New York experts, but are under
the impression that they have connections with the New York Federal
Reserve Bank. Any knowledge of the conference, however, was denied at
the Federal Reserve Board to-day.
The conference appears to be a revival of moves which have been made
intermittently for months in South America, but heretofore without success,
for some concerted financial action toward relieving the depression. Several
months ago the Chilean Government attempted a similar step by urging a
South American economic conference but made no headway, and that
government has since been overthrown.
When the possibility of some concerted action was under consideration,
with the Chilean situation becoming rapidly acute, the New York Federal
Reserve Bank considered sending W. R. Burgess, its assistant Federal
Reserve agent, to Chile to examine the financial condition of that government and possibly make suggestions as an expert for ameliorating conditions,
but, according to officials, there has been no report made here as to what
steps may have been taken at that time.
Dr. Max Winkler Before Pan American Commercial
Conference Discusses Stabilization of Finances as
Factor in Promotion of Inter-American Commerce.
In his address in Washington on Oct. 8 before the Fourth
Latin-American Central Banks To Confer in Lima With
Representatives of Federal Reserve Board To Pan-American Commercial Conference, on the subject of
Stabilization of Finances as a factor in the promotion of
Consider Financial and Economic Problems.
It was announced in Associated Press accounts from Inter-American Commerce, Dr. Max Winkler said in part:
every increase of $1,000 in American investments in Europe during
Guayaquil (Ecuador) Oct. 5 that the Central Banks of theFor
period 1913-1930, our trade with the Old Continent advanced $72.67:
Ecuador, Colombia,Peru, Bolivia and Chile were negotiating while for every additional $1,000 staked in South and Central America
for a meeting to be held at Lima to consider common economic during that period, our commerce with these countries increased $140.90.
These figures should afford a strong enough inducement to those interproblems. It was added that the banks would be repre- ested
in the continued growth of American foreign commerce, to cultivate
sented by their Presidents.
trade relations with the Central and South American Republics.
Resumption of inter-American commerce on a large scale, or even mainOn Oct. 6 Associated Press advices from Santiago, Chile,
tenance of it, is dependent, however, upon the evidence on the part of our
reported as follows in the matter:
neighbors to honor contractual obligations, to respect the rights and privPrivate sources here said to-day that representatives of the Central Banks
of the five West Coast Republics were expected to meet at Lima, Peru, late
in October to discuss financial problems and credits with experts of the
United States Federal Reserve System.
They indicated that an alliance of the five banks—those of Chile, Peru,
Colombia, Ecuador and Bolivia—with the Federal Reserve System was
regarded as possible, perhaps by the formation of a co-operative organization
to work with it.
It was reported privately that dollar credits to the five countries were
expected to be discussed and that these credits might total 850,000,000.
ileges of creditors, to abandon unsound economic policies, to introduce
order into their financial house, and last, but not least, upon the willingness of creditors to co-operate in a spirit of friendliness and equality.
Such co-operation is prerequisite to the return of confidence on the part
of the American banking and investing public in our southern neighbors,
which return of confidence should greatly facilitate the economic and financial rehabilitation of all the Americas, and bring back to them the
Prosperity to which they are entitled, by virtue of their vast resources and
the industry and energy of their people.
In a cablegram from La Paz, Bolivia, Oct. 8 to the New
York "Times" it was announced that the plan for a conference of Latin-American Central Banks originated in
Bolivia, and the conference will take place soon in Lima,
Peru, it was announced officially on Oct. 7. The cablegram
went on to say:
Argentine Minister Resigns in Dispute.
According to Associated Press advices from Buenos Aires
Oct. 9, annulment of the election of Dr. Honorio Pueyrredon
as Radical Governor of Buenos Aires Province caused a
rupture that day in the Cabinet in which Foreign Minister
Ernesto Bosch tendered his resignation. The account added:
The Central Banks of Colombia, Chile, Ecuador and Peru accepted the
Invitation without reservation, it was asserted.
The idea for a conference to devise means of creating a rediscount system
for reviving inter-American trade originated with the Central Bank of
Bolivia more than a year ago, It was revealed in an interview with the
manager of the Bank. One hope Is that paper now frozen may be taken up
to release funds for the movement of goods.
The manager also revealed that the proposal was taken up with Professor
Edwin Kemmerer, the noted economist, who is financial adviser to many
Latin-American countries, and he approved it as not only advisable but
necessary.
Text of the Communique.
A translation of the bank's communique follows:
"The conference of Central Banks in Latin America, suggested by the
Bank of Bolivia, with representatives of the Federal Reserve Board will meet
in Lima soon.
"The economic crisis has been the cause of deep concern to the Central
Banks, which forsee that the depression may become worse, and for some
time they have been engaged in evolving plans which may tend to lessen it,
at least in part. With this in mind the Central Bank of Bolivia came to the
conclusion that one of the most appropriate measures would be to promote
the co-operation of the Central Banks of America, contemplating a coordinated program as follows:
"First, to direct the policies of these institutions in such a manner as to
adjust them to the new situation created by the world instability.
"Second, to procure the material help of a stronger institution in support
of the South American central banks so that they might enlarge the active
field of their operations.
"With this object in view,the Central Bank of Bolivia, on Aug. 26 of this
year, sent communications to the Central Banks of Chile, Colombia and
Bosch refused to sign the decree of annulment, which charged irregularities in the voting and ordered new elections in the province Nov. 8. It was
reported the Minister of Public Works, Pablo Calatyud, also had resigned.
Several thousand supporters of the Government and of the Radical party
clashed in the street last night and were dispersed.
Bonds of French External Loan of 1924 Drawn for
Redemption.
J. P. Morgan & Co., as fiscal agents, have notified holders
of the Government of the French Republic external loan of
1924 25-year sinking fund 7% gold bonds due Dec. 1 1949
that $4,000,000 principal amount of the bonds have been
drawn by lot for redemption on Dec. 1 at 105 out of moneys
in the sinking fund. Bonds so drawn will be paid upon presentation and surrender, with subsequent coupons attached,
at the office of J. P. Morgan & Co., 23 Wall Street, on and
after Dec. 1, after which date interest on the drawn bonds
will cease.
Bonds of City of Greater Prague Called for Redemption.
Kuhn, Loeb & Co., as fiscal agents, are issuing a notice
to holders of City of Greater Prague 732% mortgage loan
bonds of 1922 that $139,000 principal amount of the dollar
OCT. 17 19311
FINANCIAL CHRONICLE
2537
The moratorium was referred to in our Oct. 10 issue, page
bonds of this loan have been drawn for redemption for the
sinking fund at par and accrued interest on Nov. 1 1931. 2354. A United Press cablegram from Rio de Janeiro,
Such drawn bonds will be paid on and after that date upon Oct. 10 to the New York "Herald Tribune" said:
The relative calm early in the week in financial and business circles was
presentation at the office of the fiscal agents.
issuance of a Government decree announcing
broken Thursday with the
a 60-day moratorium on payments on private bonds, loans and contracts
In foreign currencies falling due up to Dec. 31 1931. The moratorium does
not include the buying and selling of exchange contracts. The measure
was expected because of the inability of the Bank of Brazil to furnish cover
to other banks complying with the last week's decree centralizing exchange
transactions in the Bank of Brazil.
Funds Available for Payment of Dec. 1 Interest on
Mendoza (Argentine) Bonds.
The Province of Mendoza, Argentine Republic, now
has on deposit with the Chatham Phenix National Bank
& Trust Co. the full amount for the payment of interest
Brazil Taxes Dividends—Government Puts 8%
and sinking fund due Dec. 1 1931 on its external 7.50%
Assessment on Returns from Securities.
secured sinking fund gold bonds due June 1 1951, according
(United Press) from Rio de Janeiro, is from
following
The
to a report by A. M. Lamport & Co. In addition thereto,
an amount is held in reserve by the bank sufficient to meet the "Wall Street Journal" of Oct. 8:
An 8% assessment on "dividends, gratifications or any yield from shares
interest and sinking fund requirements due June 1 1932.
from obligations, debentures, or bonds" has been decreed
and upon interest
by the Government.
The decree affects all commercial organizations and individuals "with
headquarters within or outside Brazil, even if bonds were issued abroad."
Infraction of the law makes an organization or individual liable to a fine
equivalent to double the tax and cancellation of permission to operate in
Brazil.
Working Out of Solution in Interest of Holders of
Bonds of Republic of Chile—No Necessity Said
to Exist for Formation of Committee.
The National City Co., Hallgarten & Co., and Kissel,
Kinnicutt & Co. are notifying holders of Republic of Chile Uruguayan Foreign Minister Urges Commercial Union
bonds that no necessity exists at the present time for the
—Would Join with Argentina on Exports.
formation of a formal committee and a request for deThe following cablegram from Montevideo, Oct. 8, is
posits. The bankers announce their intention closely to from the New York "Times":
follow developments and to endeavor to work out a solution
Foreign Minister Blanco of Uruguay has proposed that Argentina join
in the interest of the bondholders. The statement says: Uruguay to present a united front in selling new wool and other products
The President-elect of Chile, recently returned by a large majority,
has announced publicly his intention of resuming payments on the foreign
obligations as promptly as possible, but he has stated that a period of
internal reconstruction will first be necessary. Until definite progress
can be made toward a solution of Chile's problems, the bankers believe
that for the present the organization of a formal committee with request
for the deposit of bonds might be premature and might needlessly involve
the bondholders in expense.
in the export markets. The products of the two countries are identical,
and export buyers usually play one against the other to keep prices down,
so Senor Blanco believes that both Republics would benefit from a union
for commercial purposes.
The Foreign Minister also proposed that Argentina and Brazil appoint
permanent commissions of business men to co-operate with a similar Uruguyan group, to facilitate trade among the three Republics. Argentina
and Uruguay produce many articles that Brazil needs and also imports
extensively from Brazil.
Uruguay has long favored direct action by Governments to encourage
inter-American commerce, and President Terra proposed an inter-American
customs union several years before Chile did. Since the overthrow of the
Ibanez Government in Chile, it postponed indefintely the consideration of
a continental agreement. Uruguay proposes to go ahead with the project
through a regional accord.
Bonds of Republic of Panama Called for Redemption.
The National City Bank of New York, as fiscal agent, is
notifying holders of Republic of Panama 35-year 5% external secured sinking fund gold bonds, series A, due May
15 1963, that $75,000 principal amount of these bonds have
been called for redemption at par on Nov. 15 1931. Pay- Civic Legion in Bolivia Formed as Emergency Reserve
in Answer to Radicals.
ment of the drawn bonds will be made on and after that date
A
La
Paz
(Bolivia)
cablegram Oct. 11 to the New York
at the head office of the bank.
"Times" had the following to say:
A "Civic Legion" of 3.000 bankers, business men, students and workers
Scope of New Brazilian Exchange Regulations Uncer- was formed here to-day to protect property rights.
The step is an answer to a radical demonstration last Sunday.
tain According to Department of Commerce Ad. The organizers paraded through the principal streets after an orderly
meeting. It is non-partisan, but many politicians regard it as an instruvices,
ment to strengthen the present government. It plans to hold its members
Some uncertainty exists in Brazilian banking circles upon In reserve for the protection of the country in any emergency, domestic
the exact scope of the new exchange regulations, according or international.
to cabled information received by the Department of Commerce from Commercial Attache Carlton Jackson at Rio President Machado of Cuba Denies Plan to Seize
Deposits—Answers Rumors as to Private Accounts
Janiero. The Department on Oct. 14 further reported.
The new regulations are included In three articles, the substance of which
—Cuba Considers Paying Bills in Scrip.
is reported by Mr. Jackson as follows:
From Havana, Oct 11, a cablegram to the New York
Article I. Bills and contractual payments maturing up to Dec. 31 in
foreign currencies will be extended 60 days beyond their respective maturity "Times" stated:
dates.
1. This is not applicable to contracts for the purchase and sale of exchange.
2. To avail himself of the terms of Article I the Brazilian debtor must
deposit the equivalent in milreis in the Bank of Brazil or in the bank through
which the draft has been sent, the milrels being calculated for this purpose
at four pence, taking sterling at its par value. The difference in exchange
Is to be liquidated when payment is made.
Article II. The decree is effective upon the date of publication (Oct. 9).
Article III. Previous provisions contrary to the new regulations are
revoked.
Brazilian bankers are somewhat uncertain upon the extent to which the
new regulations supersede Article 45 of Law 2044 of Dec. 31 1908. The
1908 law permits the debtor to liquidate his indebtedness by making a
judicial deposit of mikes at the official rate of exchange, if foreign exchange
is unavailable. This is the case at present and Brazilian bankers are not
surd that Article III is sufficiently comprehensive upon the point.
The new regulations do not appear to provide for any payment of interest
to creditors.
Persistent rumors that the Government proposes to confiscate funds of
private citizens on deposit in local banks as an emergency measure to alleviate the present financial situation of the republic were emphatically
denied to-day by President Machado in a communication addressed to the
President of the Havana Clearing House under date of yesterday and
published to-day.
General Machado said the rumors evidently had been started by enemies
of the Government. He terminated his communication with the words:
"I guarantee to you that such action never will be taken by my government."
Government creditors, for the most part contractors and merchants, are
becoming very impatient regarding payment of their bills. The floating
debt of Cuba is estimated at $16,000,000 and it is steadily increasing, it is
said, since the revenue, amounting to about $3,700,000 a month, has not
covered current expenses, which up to Sept. 30 averaged $5,000.000 a
month.
It is understood that a plan is now under way for the issuance of Treasury
certificates to pay current bills.
Brazil Hails Moratorium on Import Bills—Press is
Favorable, Although One Paper Fears ConseCuba to Keep Consulate Staff—Denies Rumor that
quences at End.
Force in New York Will Be Discharged.
A cablegram from Sao Paulo, Brazil, is quoted as follows
A rumor that the readjustment of the Cuban budget
from the New York "Times":
A decree effecting a moratorium in the payment of private debts in foreign provides for discharging the staff of the Cuban Consulatecurrency became effective to-day and brought out varied press comments General in New York was officially denied here at Havana
In Rio de Janiezo and Sao Paulo.
Dr. Eduardo Usabiaga, Under-Secretary of
Most of the press viewed the decree as the only means of bridging a diffi- on Oct. 15 by
cult situation until the year ends, when improved general conditions State. A cablegram from Havana from which we quote, also
should relieve the exchange market. The "Jornal do Brazil," however,criti- said:
cizes the moratorium as a damming process, likely to cause an avalanche
of exchange transactions when removed.
The moratorium clause, which requires debtors to deposit the milreis
equivalent of foreign bills in local banks at the rate of twelve mikeis to the
dollar, is causing discussion, since the Government does not guarantee
this rate at the expiration of the moratorium. The press points out that
a similar Uruguayan moratorium guarantees the debtors a fixed rate on
removal of the moratorium.
He stated emphatically that the staff would be fully maintained to
take care of the growing needs of what he termed the most important office
in the Cuban Consular Service.
The delay in making public the final plan for the reduction of the expenses of the State Department and the announcement that it would
be necessary to suppress at least thirty Consulates and various legations
throughout the world have led to various misleading reports being circulated
as to the location of the offices to be abolished.- It is stated that this delay
2538
FINANCIAL CHRONICLE
(VOL. 133.
has come about in selecting the Ministers who are to be retained and that
no definite information will be publicly available for several days.
Argentine Bonds Drop—Heavy Selling of National
Mortgage Bank Obligations Cuts Prices.
The reduction in Cuban expenditures through cuts in the
From the New York "Times" we quote the following
various departments was referred to in our issue of Oct. 10,
from Montevideo, Oct. 8:
page 2356.
Colombian Finance Minister Resigns—Had Insisted on
a Moratorium.
Jesus M. Marulanda, resigned on Oct. 9 as Colombia
Minister of Finance according to a Bogota (Colombia) cablegram to the New York "Times" which likewise stated:
His post has been taken over temporarily by the Foreign Minister.
The published text of Senor Marulanda's letter of resignation to President
Olaya Herrera argues that the failure of the Jaramillo-Rubies-LobanoOlano group to obtain a loan in the United States sufficient to carry the
foreign debt service one year necessitated a moratorium on foreign debt
payments to save the Bank of the Republic and the gold standard and
finance the development of the national agriculture and industry through
the establishment of five national credit institutions.
The relignation is the result of the President's decision not to decree a
moratorium.
The Senate is still in session to-night, with the Romanista Liberal bloc
defending the Government against attack by the moratoriumists.
Senor Marulanda's fall pleases "El Tiempo," which says he had no
confidence in the country.
Cuba Gets Loan Extension—Further 30-Day Delay on
$20,000,000 Granted by Chase National.
The following Havana cablegram Oct. 16 is from the New
York "Times":
A 30-day extension has been granted to the Cuban Government by the
Chase National Bank of New York on the $20,000,000 payment due to-day
on the public works short-term loan, according to an announcement this
afternoon by the national debts section of the Department of the Treasury.
It was stated that $16,666.66 had been placed at the disposal of the bank
as the amount of the commission covering the extension.
Several extensions have already been granted since the loan became due,
but in view of the financial situation in Cuba payment of this sum at
the present time is impassible, and the local press to-day expresses the hope
that before the expiration of the extension just given Cuba will be able to
obtain modification of the terms of the loan and readjust all public works
short-term loans, now her most pressing financial problem.
The Exchange in Buenos Aires has been experiencing a heavy selling
movement in National Mortgage Bank bonds this week, the holders unloading at sacrifices which have pushed prices down from 80 cents. Argentine, to 1 peso 50 cents over a range of 15 issues. Eleven of the 38
issues were quoted under 90 this morning, and only one was as high as 92.
Province of Buenos Aires 1922 and 1926 bonds dropped from 73 to 71
on news that the province had suspended payments.
Argentine Province Halts All Salaries—Also Stops
Payment on Other Operating Expenses Pending
Study of Finances.
The following Montevideo cablegram, Oct. 7, is from the
New York "Times":
The financial troubles of the Province of Buenos Aires, Argentina, have
reached a crisis with the announcement of the suspension of payment
of September salaries and operating expenses.
The Treasury of the Province had only a little more than 1,000,000 pesos
(8250,000) of the 5,000,000 pesos, or $1,250,000, required, and after
disbursing this 1,000,000 pesos the Treasury announced it was necessary
to suspend payment of the Province's obligations pending an audit.
The Minister of Finance announced, "The Ministry is working actively to determine the Province's financial situation." During the audit
the federal interventor, representing the Provisional Government, will
try to raise the necessary 4,000,000 pesos by a rediscount operation guaranteed by the bank of the Province, which would be authorized to repay itself
by retaining certain taxes still to be collected.
Tho Minister of Finance must also renew to-day $6,000,000 worth of
Treasury notes issued by the former intervontor. This renewal will cost
around $125,000 in interest. A chartered accountant, not employed by
the Province, has been called in to co-operate in the audit and report to
the Minister his impressions of the present financial practices and make
recommendations regarding the handling of public funds.
The Province's financial troubles are officially ascribed to the heavy
loss by exchange in meeting payments on foreign debts. It lost $7,860,000
in the purchase of sterling and dollars to cover interest and service charges
on London and New York loans.
Brazilian Exchange "Bootlegged."
According to a Sao Paulo (Brazil), cablgram, Oct. 8, to
the New York "Times" the low quotations established by
Bondholders Committee for Protection of Ceara the Bank of Brazil to cover foreign exchange are bringing
(Brazilian) Bonds Issues Notice to Holders of out scores of "bootleggers" in exchange. The cablegram
Undeposited Bonds.
continued:
Charles Kohlmeyer, Vice-President Interstate Trust &
These men arrange transactions between buyers and sellers at higher
Banking Co., New Orleans, Chairman of the Bondholders rates than established by the last week's decree, and many American and
English firms are using this means to obtain pounds and dollars for reCommittee for the protection of holders of the 8% external mitting to
their home offices.
secured sinking fund gold bonds of 1922 of the State of Ceara,
United States of Brazil, is notifying holders of these bonds
that at the close of business Oct. 10, deposit of $1,312,500 of Official Quotations for Securities Fixed in Buenos
Aires.
bonds had been made to the protective committee out of a
Under date of Oct. 14, a cablegram from Montevideo,
total of $1,980,000 outstanding. As prompt and concerted
action seems necessary the committee is requesting holders Uruguay, to the New York Times" stated:
Because of the downward trend of Government securities, the Buenos
of undeposited bonds to make deposit promptly either to Aires
Boise ruled to-day that official quotations could not be altered except
Interstate Trust & Banking Co., New Orleans or Mississippi for lots of 10,000 pesos or more. A heavy selling movement on the part of
Valley Trust Co., St. Louis, depositories. In addition to small investors last week pushed all prices to new low levels for the year.
Mr. Kohlmeyer, the committee is composed of E. J. Buck,
Frank B. Hayne, Paul Peltason, and Emile Sundberry.
Moratorium Law Passed in Uruguay---Payment of
'Commercial Debts in Foreign Monet Banned—
Duties Partly Due in Gold—New Measure Designed
Peso—Artificial
Argentina Ends Plan for Stabilizing
to Reduce Imports—Does Not Aim at United States
Means Found Ineffective and Currency Falls to
As Earlier Act Did.
•
23.30 Cents—Speculators Curbed.
The Uruguayan Chamber of Deputies on Oct. 10 passed
For the third time since Argentina went under the regime a bill already passed by the Senate establishing an obligatory
of a de facto government, the Bank of the Nation has found moratorium on commercial obligations in foreign currency
it impossible to stabilize exchange by artificial arrangements until Dec. 31, after which such obligations will be payable
or agreements, said a cablegram from Montevideo on Oct. 3 at the rate of 20% monthly until the end of May. A
to the New York "Times," which likewise stated:
cablegram from Montevideo, Oct. 10, to the New York
Its gentlemen's agreement with other banks, backed by President
"Times" making this known, also reported as follows:.
Uriburu's command that exchange must cease fluctuating, had to be abandoned yesterday, whereupon the peso immediately broke to 185.8 gold
pesos for $100, making the paper peso worth 23.68 cents, compared with
its par of 42.46.
The gentlemen's agreement had held the quotation unchanged at 180.80,
with the paper peso worth 24.33 cents since Sept. 25, but no business was
done at that figure.
After several conferences of bankers and grain exporters with the manager
of the Bank of the Nation, it was demonstrated that the peso must be
abandoned to the drift of free exchange, as holders of export bills were
selling them in other markets at a better price and depriving the Argentine
market of the benefits of its export trade..
The peso further weakened to-day, closing at 188.8, making the paper
Peso worth 23.30 cents.
Bankers have accepted a suggestion of the Bank of the Nation for muThis
tual appointment of an exchange, fixing the board of five members.
operawill daily establish the rate for the dollar as the basis of all exchange
all
tions in other currencies. This method will have the advantage of
banks operating with one official rate.
for
a
responsible
The Provisional Government believes speculation
large part of the peso's depression and is determined to end It, bringing
Pressure on banks to withdraw credit from firms speculating in exchange.
One firm's credit was cut off yesterday and others were warned.
The "gentlemen's agreement" was referred to in an item
in these columns Oct. 3, page 2189.
The law prohibits foreign-owned corporations operating in Uruguay to
remit dividends or bond interest abroad until Jan. 1, after which they may
remit 25% monthly, subject to proof and approval by the Bank of the
Republic. It specifically prohibits banks demanding deposits against
drafts and other obligations and prohibits interest higher than 6%.
The law was framed to make obligatory the voluntary suspension of
payments authorized by the law of Sept. 7, by which the Government
guaranteed an exchange rate of 25 pence a peso after Jan. 1 for settlement
of foreign obligations which the banks permitted ot run without protest
until that date. The banks immediately demanded that importers deposit
the entire amount of their obligations, which the banks were to hold without
interest until remitted.
Congress charged the banks' action nullified the law's intent and therefore made the moratorium obligatory. It had hoped by the previous
law to accomplish the same purpose without the necessity of declaring a
moratorium.
The Chamber of Deputies also approved, as amended, a Senate law requiring one-fourth of the import duties collected to be paid in gold at
the exchange rate on the day the goods are cleared, with the other threefourths payable in paper pesos.
This is tantamount to an increase of 35% in duties aml applies equally
to imports from all nations, avoiding the discrimination against the United
States which developed from an emergency law passed in August.
That law increased duties 50%, but authorized the President to cut the
increase in favor of countries purchasing Uruguayan products heavily.
OCT. 17 1931.]
FINANCIAL CHRONICLE
2539
It reduced to 25% imports from Britain, France, Germany, Belgium and as Cubans and permitted to vote providing they present certificates from
the State Department. These certificates will be issued without charge.
Italy, making the duty on American goods 25% higher than the others.
All persons born in Cuba shall be registered as voters upon taking oath
The United States Minister, J. Butler Wright, called attention to the
before the census taker that they are Cuban citizens. The bill is expected
the
reciprocal powers granted to the President of the United States by
American tariff law in the face of such situations. When the month's to be rushed through the House and approved by President Machado, thus
trial law expired the Government decided not to renew it and framed the facilitating the census now being taken.
new measure approved this morning.
Among its provisions is one that duties may be doubled against any
country whose tariffs discriminate against Uruguay, thus changing this Virgin Islands Aid Bank's Mortgagers—$30,000 Loans
feature from an offensive to a defensive weapon.
from St. Thomas Municipal Funds Authorized in
With one-fourth of the duties payable in gold at a daily rate, the duties
Institution's Closing.
will automatically increase when the exchange value of the peso declines.
The Government expects this will tend to reduce imports when Uruguayan
date of Oct. 1 a cablegram from St. Thomas to the
Under
exchange is low, which is the ultimate aim of all recent tariff legislation.
New York "Times" stated:
The members of the Colonial Council of St. Thomas and St. John, in
session to-day, passed a resolution introduced by Governor Pearson authorizing loans from the public trust funds of this municipality to mortgagers
of the St. Thomas Savings Bank.
This 84-year-old local organization was compelled to suspend business a
the loss of its reserve through depreciation of its foreign
The liner "Espagne" sailed for Europe from here with 1,500,000 ounces week ago because of
gold, dollar and bond holdings.
of silver for France.
In discussing the resolution, a minority of the Council members attempted to lay the blame for the bank's condition upon the trustees, who,
it was alleged, had no right to invest the depositors' money without their
Mexico Abandons Uniform Time—East Coast States consent. Objections were raised by a majority of the members of the
Use Gulf Schedule—Inland Areas, Central—West- inclusion of any such statement in the resolution, because of fear that the
Government's approval might be withheld.
ern, West Coast.
This loan from the municipal government will amount to $30,000, to
Copyright advices Oct. 7 from Mexico City to the New cover 46 mortgages, and is being given to avoid suffering and distress
among the mortgagers as well as partially to relieve the economic depresYork "Herald Tribune" said:
sion. The loans will be secured by first mortgages on real property and
Mexico, which until Oct. 1 had uniform time throughout the Republic,
the rate of 6% a year.
has adopted Gulf, Central and Western time. The difference between Gulf bear interest at
and Western time is three hours.
The suspension of the bank was referred to in our issue
Gulf time now prevails in the east coast States, Campeche, Chiapas,
Oct. 3, page 2191.
Oaxaca, Tabasco, Tamaulipas, Vera Cruz and Yucatan, and the Territory of
of Quintana Roo. Western time is used only in the northern district of
Lower California. The remainder of the Republic will have central time.
• Thus, Mexico City time is two hours behind Eastern Standard time in the Haitians Take Over Island Government—State DepartUnited States, one hour behind Central standard time, the same as Rocky
ment Puts Accord into Effect Earlier Than Had
Mountain time and one hour ahead of Pacific Coast time.
Expected—Authority Over All Services is
Mexican Silver to France.
Advices as follows from Vera Cruz, Mexico (United Press),
appeared in the Wall Street Journal" of Oct. 13:
Been
Transferred Except Financial Adviser and Police.
The administration of Haitian affairs was turned over
Mexican Paper Peso Drive Gains—Chamber of Cornmerce Supports Move, Favoring Large Notes at largely to the native Government on Oct. 1, when the
First.
accord of Aug. 5, signed by Dana G. Munro, the American
From Mexico City advices Oct. 12 to the New York Minister at Port au Prince, and the Haitian Minister for
Foreign Affairs went into effect. A Washington dispatch
"Times" stated:
Agitation for the issuance of paper money in Mexico was supported Oct. 1 from which we quote went on to say:
to-day by the Chamber of Commerce, which petitioned the Central Banking Commission that such notes be Issued but be restricted to 500-peso
and 1,000-peso denominations. Observers believe the campaign will
succeed.
The Chamber emphasizes that the steady shrinkage of silver coinage is
rapidly throttling business and that the support of paper money is indispensable. It declares that not only are banks and private concerns unwilling to extend credits, but individuals are hoarding the silver supply.
Its plea for paper money in large denominations at first Is based on
a theory that when business is transacted with paper money in large sizes,
leaving the silver in the hands of the small users, the latter will gradually
gain the confidence necessary for the issuance of bank notes in amounts
from 1 peso upward.
Drastic Emergency Measures for Cuba Urged in Presidential Message.
Drastic emergency measures for Cuba are recommended
in the Cuban Presidential message published in Havana on
Oct. 10, according to a cablegram received in the Commerce
Department from Commercial Attache Frederick Todd at
Havana. According to the Department, the emergency
measures would confer upon the Cuban President extraordinary powers in financial and commercial as well as political
matters. The outstanding proposals are as follows:
This agreement provided for native control of the public works, technical
agriculture and undustrial education and the public health services, with
the exception of the sanitation of Port au Prince and Cape Haitien.
The transfer of authority was recommended by the Commission appointed by President Hoover early last year. headed by W. Cameron
Forbes, present Ambassador to Japan, to study conditions in Haiti.
In announcing the change of authority to-day, the State Department
said:
"It represents a complete transfer to Haitian authority of all services,
excepting the office of the Financial Adviser-General Receiver and the
Gatde d'Haiti (the gendarmerie force of Haiti), both of which services
require especially careful attention and safeguards on account of the
obligations assumed by this Government jointly with that of Haiti in
connection with the bond issue made under the provisions of the treaty of
1915, the additional Act of 1917 and the protocol of Oct. 3 1919."
"In the services returned to Haitian authority, speedier Haitianization
has been effected than the recommendations of the Forbes Commission
and even than that at first proposed by the Haitian Government itself.
"In the case of the Garde d'Haiti, it is not practicable to withdraw
American officers immediately because of the necessity for first training
Haitian officers to replace them. This fact was recognized by the Forbes
Commission, which published in its report a table setting forth a suggested schedule for the replacement of the American officers. Since
the Commission's visit the process of training and promoting Haitian
officers has proceeded at an even more rapid rate than that contemplated
in this table, so that there is every indication that trained and experienced Haitian officers will be available to replace all American officers
in the Garde before the expiration of the treaty in May 1936."
After 60 days all guaranty deposits in the Cuban Treasury of insurance
companies and all other companies must be in Cuban securities of money.
Australian Internal Conversion Loan.
The President is empowered to collect 10% on imports in substitution
of the present internal gross sales tax and the consular impost on documents
which began on Aug. 10 1931, for the concampaign,
The
is raised from 2 to 5%.
internal loans of the Commonwealth and State
The President is given control of immigration, regulating all
entrances version of the
to the island.
Governments of Australia, amounting to £556,000,000,
Public works taxation is extended five years to 1950.
closed on the evening of Aug. 31 1931 with total conversions
Two cents a gallon is added to the gasoline tax, match taxes are
doubled,
Albert
public cigar lighters in stores are taxed 835 a year, and the cigarette
impost estimated at 97%, according to a report from Consul
is increased. The luxury tax is changed so that merchants designated collect
M. Doyle at Sydney, made public by the Department of
a 10% premium on the impost for services.
Additional information supplied by the DeThe so-called fixed budget is reduced with the
legislature reducing its Commerce.
own budget by 25%.
partment of Commerce on Oct. 12 follows:
The President is given full power to suppress judges or courts or alter
This includes those who did not signify their intention to convert, the
their decisions within his own discretion.
legislation providing that in such cases consent would be assumed. The
A one cent tax is placed on domestic coffee. Stamp taxes are altered.
amount of securities for which notices of dissent were received is estimated
at approximately £15,000,000.
Actual voluntary conversions were estimated at the close of the campaign
not been received
Cuba to Extend Franchise—Senate Passes Bill Relaxing to be over £450,000,000. although complete returns had
at that time. The succeess of the loan has been generally welcomed
Rules for Registration of Foreign-Born.
throughout the Commonwealth, and the spirit of sacrifice of bondholders
,
4% in the interest
A wireless message from Havana Oct. 1 to the New York throughout the country in accepting a general cut of 223
has been warmly commended. At the Premiers' Conference now being
"Times" stated that the Cuban Senate has passed a bill rate
held in Melbourne the question has been brought up of the possibility of
settling the controversy arising from the recent decision of making a similar conversion at lower rates of interest of Australian securities
have been floated in Groat Britain. No definite course of action
the Census Board that persons born in Cuba of foreign whichhowever,
been announced, as this question presents greater difficulties
has,
parents could not be registered as voters unless they pre- than the conversion of internal loans.
sented certificates of citizenship from the State Department. The question of the treatment to be given to dissenters is also receiving
attention. It has been proposed to allow such dissenters up to Sept. 7
The message adds:
1931 to withdraw their notices of dissent. It is contemplated that a penalty
The new bill provides that all Spaniards residing in Cuba on April 11 of some sort, possibly the imposition of a stamp duty on the interest of
not
inscribed as Spaniards on that date, shall be regarded bonds of dissenters, will be provided.
1809, who were
2540
FINANCIAL CHRONICLE
Measures to Withhold 7,000,000 Cotton Bales Off
Market Until July 31 1932 Taken at New Orleans
Conference Attended by Bankers and Members
of Federal Farm Board—Statement by Chairman
Stone.
Plans to keep at least 7,000,000 bales of cotton off the
market until July 31 1932 to help stabilize the price was
perfected by leading bankers of the South, members of the
Federal Farm Board and officials of the American Cotton
Co-operative Association at a conference at New Orleans
on Oct. 12, the Associated Press accounts further stating:
The plan is based on granting of new credits and extension ot old obligations. Salient features of the program, agreed upon by nearly two score
conferees, include.
Pledges by the banks of the cotton producing States to make or renew
loans to mature not earlier than July 31 1932, to be secured by cotton
totaling 3,500,000 bales.
Action of the Southern banks is contingent upon ratification by the
various State bankers' conventions, and the full membership of the various
conventions will be asked to meet in their States Oct. 20 to endorse to-day's
action.
Chairman Stone of the Farm Board, who attended,said after the meeting
that "the co-operative arrangement . . . makes the outlook most
encouraging."
According to the New Orleans "Times-Picayune" of
Oct. 13, the Federal Farm Board was represented by Mr.
Stone, chairman; Carl Williams, cotton member, and
Stanley Reed, general counsel. From that paper we also
take the following:
Plans for taking a minimum of 7.000,000 bales off the cotton market
until July 311932, with assurance that half of this amount will be carried
another year if southern States agree upon substantial acreage reduction
arrangements were made at a conference Monday in the American Cotton
Co-operative Association offices here.
An agreement for co-operation on the part of bankers of the cotton
growing States, the Federal Farm Board and the American Cotton Cooperative Association with its State association to work out the financial
situation and to take 7,000,000 bales off the market was reached at the
session. The conference was participated in by Farm Board officials,
bankers from the affected States and directors of the American Cotton
Co-operative Association.
The bankers and Farm Board officials, as well as the leaders and directors
of the co-operatives agreed that perhaps the most important phase of the
result ofthe long session consists of the fact that for the first time the bankers
of the South are planning to work unitedly and wholeheartedly with the
Farm Board and the cotton co-operative bodies.
Effective by Oct. 25.
This agreement is expected to become operative by Oct. 25, following
meetings Oct. 20 of the full memberships of the several State bankers'
associations with State and Federal banking officials.
The announcement was made jointly by James C. Stone, Chairman of
the Federal Farm Board; Nathan Adams, President of the First National
Bank of Dallas, Tex., who first submitted the plan to President Hoover
and Chairman Stone in Washington, and E. F. Creekmore, Vice-President
and General Manager of the American Cotton Co-operative Association,
as follows:
A group of bankers from the cotton growing States of the South, the
directors of the American Cotton Co-operative Association, and Chairman Stone and Mr. Williams of the Federal Farm Board have met In conference to discuss means for the relief of the condition of the cotton producer.
Loans to be Provided.
The conference is of the opinion that the interest of the cotton producer
will best be served by an understanding of the following purpose:
"The banks of the cotton producing States will make or renew loans to
mature not earlier than July 31 1932,secured by cotton to the total amount
of at least 3,500,000 bales.
"The banks will report the total baleage to be so held as collateral,
to the Presidents of the several State Bankers' Associations by Oct. 25 1931.
Such Presidents will in turn report the total baleage of their respective
States, to be so used, to Mr. Nathan Adams of Dallas, Tex., the chairman
of the meeting, and Mr. E. F. Creekmore at New Orleans, La., VicePresident and General Manager of the American Cotton Co-operative
Association.
"If, by that date these gentlemen, acting as a committee, have received
satisfactory pledges from the banks of the several States, to finance as
much as an aggregate baleage of not less than 3,500,000 bales by lending,
renewing or otherwise carrying such cotton as collateral for the time indicated, the Federal Farm Board will agree to extend the obligations of the
American Cotton Co-operative Association covering approximately 2,000,000 bales of cotton of the season 1930-31 or earlier years to July 31 1932,
unless such cotton can be sold at a price of more than 12;,6 cents per pound,
based on the near month of the New York Cotton Exchange.
"If the substantial reduction from the acreage of this year. now aimed
at by the several State legislative enactments, becomes effective, the
Federal Farm Board will continue its commitments for an additional year.
"The Federal Farm Board will further agree that, so long as extensions
are granted to the American Cotton Co-operative Association under the
above arrangement, and with the same exception as to price, the Cotton
Stabilization Corp. will maintain its present baleage of cotton, of approximately 1,300,000 bales.
"The bankers present agree to have conventions called of their State
association of bankers to put the plan immediately into effect through the
co-operation of the members of those respective associations, and the
Federal and State banking officials."
These agreements will go into effect upon procedure in accordance
herewith and ratification by the organizations involved.
Adams Named Chairman.
The bankers chose Mr. Adams Chairman of the group that will take
charge of the activities of the several State associations which are scheduled
to meet Oct. 20 to carry the plan into effect as of Oct. 25. The bankers
selected to call the several State meetings are:
Texas, Mr. Adams and R. L. Thornton; Arkansas, Moorhead Wright;
Louisiana, Leroy Ward; Mississippi, J. W. Slaughter; Alabama, N. E.
Henley; Georgia, L. L. Gellestedt; Tennessee, V. J. Alexander and D. W.
Hogan, Oklahoma. Representatives in North and South Carolina will
be named by Mr. Adams forthwith.
"For the first time," said Mr. Stone, "the"bankers as a large working
group are with the Farm Board and the co-operatives. This I believe is
the most significant thing about this day's work for the American people."
Mr. Stone added that the confirmation of this action on cotton by the
Farm Board was assured beyond question. When asked whether wheat
farmers would be heard from now, Mr. Stone laughed and said:
"We hear from them every day."
[VOL. 133.
Great Stocks Held.
Mr. Stone said that the American Cotton Co-operative Association
holds 2,100,000 bales of cotton. The Cotton Stabilization Corporation
1.300,000 bales and the Staple Growers' Association of Greenwood, Miss.,
290,000 bales, and that while the staple growers body was not represented
In this conference their adherence was expected and would be welcomed.
The other 3,500,000 bales figuring in the estimate of the amount to
be held off the market by the banks are either hypothecated at present
for loans that will be renewed or represent what banks are likely to loan
against during the present crop season."
Mr. Adams, author of the plan that has brought the bankers of the
South to the side of the Farm Board and the co-operatives for the first
time,said:
"I went first to President Hoover and Chairman Stone in Washington
and asked for some provision for additional loans on cotton. They told
me what the Farm Board had done and what the co-operatives had done.
Then they declared it was about time the bankers should take some interest
themselves in their affairs.
No More Criticism.
"I have said many uncomplimentary things in the past about the Farm
Board, but after what I learned about they load they have been carrying
and how they have carried it, I found I had no more criticism to make
of the Farm Board, but a great deal to say to my fellow bankers. The
result was this meeting, which many of the conferees doubted would come
to anything but an executive discussion.
"Mr. Stone believes this action will hold 7,000,000 bales off the market
for a year, and half of it another year, if acreage reduction is passed by
enough State Legislatures.
"I believe that it will take still another million bales off the market.
Of course, the commercial banks cannot under the law undertake now
to make a longer extension, but that situation can be dealt with as needed
before the end of next July, so long as the bankers work along with the
Farm Board and the co-operatives.
"I believe the acreage reduction by the States will cut next year's crop
at least 50%."
"From the point of view of the co-operatives," said Mr. Creekmore.
"the greatest benefits coming out of this plan will be due to the fact that
everybody will know that the bankers are working with the Farm Board
and the American Cotton Co-Operative Association and its State cooperatives. I believe that this co-operation once established will continue
in the future for the good of the participants, the cotton world, and the
South.
"The confirmation of to-day's action by the co-operatives is implicitly
guaranteed by the fact that our directors have sat in during this long
session, and by their agreement and votes have helped to bring about
its adoption by the conference."
Carl Williams, cotton member of the Farm Board, left Monday night
for Jackson Miss., to address the Mississippi Legislature to-day at the
unanimous request of its lower house.
$283 in Treasury.
Moorhead Wright of Little Rock, who was Secretary-Treasurer of the
Southern Bankers' Conference on Cotton in October 1914, when the effort
to keep cotton above six cents at the outbreak of the European war was
successful, announced that this body seemed to be the same as the 1914
body and that if that was so, there was $283 in the treasury.
Mr. Adams left New Orleans Monday night for North and South
Carolina. Mr. Stone, who will confer with the directors of the American
Cotton Co-Operative Association this morning, will leave for St. Louis
at 12:30 to-day.
Mr. Moser, Vice-President of the American Co-Operative body, announced Monday night that the proposed meeting in Memphis this week
between the cottonseed crushers' and farmers' representatives has been
postponed until early in November, because of conflict in the engagements of several agricultural commissioners.
According to the "Times-Picayune" the bankers present
at the conference were:
Mr. Adams, Rudols. Hecht, President Hibernia Bank and Trust Co.:
Oliver G. Lucas, President, Canal Bank and Trust Co.; R. B. Clark,
President Federal Land Bank of New Orleans; Thad B. Lampton,President,
Capital National Bank, Jackson, Miss.; Andrew Querbes, President First
National Bank. Shreveport, La.; C. J. Ownby, Dallas Cotton Factors
Corp., Dallas, Tex.; R. Lee Kempner, Vice-President United States National Bank, Galveston, Tex.; T. B. Yarbrough, President First National
Bank, Fort Worth, Tex.; Fred F. Florence. President Republican National
Bank & Trust Co., Dallas, Tex.; F. W. Foote, President First National
Bank, Hattiesburg, Miss.; J. D. O'Keefe. President ,Whitney National
Bank, New Orleans, La.; Oscar Wells, First National Bank. Birmingham,
Ala.: Jesse H. Jones, Chairman National Bank of Commerce, Houston,
Tex.; John W. Slaughter, President First Columbus National Bank, President, Mississippi Bankers' Assn., Columbus, Miss.; F. W. Blalock, Fulton
National Bank, Atlanta, Ga.; L. L. Gellerstedt, Vice-President, Citizens
and Southern National Bank, Atlanta, Ga.; Robert F. Maddox, Chairman
Executive Committee, First National Bank, Atlanta, Ga.; Ben Johnson,
President Commercial National Bank,Shreveport, La.; Eugene Cazedeesus,
President Bank of Baton Rouge, La.; W.E. Henley, President Birmingham
Trust and Savings Co., Birmingham, Ala.; D. W. Hogan, President City
National Bank & Trust Co., Oklahoma City, Okla.; R. L. Thornton,
President Mercantile Bank & Trust Co. of Texas, Dallas, Tex.; V. J.
Alexander, Vice-President American National Bank, Nashville, Tenn.:
E. C. Melvin,President Selma National Bank,Selma, Ala.: Sam R.Lawder,
Vice-President First National Bank, Houston, Tex.: J. W. Evans, Chairman,Port Commission, Houston. Tex.; A. H. Stone, Vice President, Staple
Cotton Co-operative Assn., Greenwood, Miss.; T. W. McCoy, President
Merchants National Bank and Trust Co., Vicksburg, Miss.; Eugene
Dykes, President First National Bank, Aberdeen, Miss.; Moorhead Wright,
Chairman of the Board and Mark Valentine, director of the Union Trust
Co., Little Rock, Ark.,; J. 0. Nicol, President Simmons National Bank,
Pine Bluff, Ark.
Others in attendance, says the "Times-Picayune" were:
U. B. Blalock of Raleigh, N. 0., President of the American Cotton
Co-operative Assn.; Mr. Creekmore, Vice-president and General Manager;
C. 0. Moser, Vice-President and Secretary; H. G. Safford, Vice-President
and Sales Manager; J. K. Moore, General Traffic Manager; D. G. Hill,
Jr., Comptroller; R. 0. McCutchen, Columbia, S. C.; .7. E. Conwell,
Atlanta, Ga.; J. A. Beaty, Montgomery, Ala.; R.E. Kennington, Jackson,
Miss.; Senator Norris C. Williamson, Lake Providence, La., and the following:
C. G. Henry, General Manager, Mid-South Cotton Growers' Assn.,
Memphis; A. E. Hobs, General Manager Oklahoma Cotton Growers'
Assn., Oklahoma City; W. R. Squires, General Manager, Southwest
Irrigated Cotton Growers, El Paso, Tex.; R. J. Murray, General Manager,
Texas Cotton Co-operative Assn., Dallas; J. S. Hathcock. Manager,
OCT. 17 1931.]
FINANCIAL CHRONICLE
South Carolina Cotton Co-operative Assn., Columbia, S. C.: Sam Bass,
Secretary-Treasurer, Louisiana Cotton Co-operative Assn., and W. H.
Jackson, President and General Manager and A. D. Stewart, educational
director of the Mississippi Cotton Co-operative Assn.
Texas Cotton Plan Endorsed for South by Carl Williams
of Federal Farm Board in Communication to
Mississippi House of Representatives.
That control of cotton acreage in the southern States
should be as nearly uniform as possible and that "due consideration" be given to the "dominant position of Texas
in cotton production" were two recommendations telegraphed to the Mississippi House of Representatives Oct. 7,
by Carl Williams, member of the Federal Farm Board.
The "United States Daily" of Oct. 9, from which this is
learned also reported as follows:
In his telegram, made public by the Board Oct. 3, Mr. Williams also
warned against adoption of any acreage control measure so drastic as to
disorganize production or the general business structure in the South or
unduly to encourage expansion of cotton acreage in other countries. The
telegram follows in full text:
Thomas L. Bailey, Speaker House of Representatives, Jackson, Miss.:
Regret impossible to come to Jackson before next Tuesday, but will
gladly confer with you then if still desired. Federal Farm Board clearly
recognizes necessity of reduction in cotton acreage, improvement in character and staple of cotton produced, restoration of soil fertility, and increase in yields per acre in order to reduce production costs. Board further
recognizes that attainment of these objects is the definite responsibility
of'our Southern people themselves. Board exceedingly sympathetic all
efforts this direction and will gladly co-operate to limit of its ability in this
regard, suggesting only that, since any attempt at legislative control
should be as nearly as possible uniform throughout entire cotton belt,
due consideration be given to dominant position of Texas in cotton production and that no plan should be adopted of so drastic a character as to
disorganize Southern production practices and the whole business and
financial structure of the South, or to interfere with foreign markets for
American cotton, or unduly encourage expansion of cotton acreage in foreign
countries. Glad to have your suggestions.
(Signed) CARL WILLIAMS. Member Federal Farm Board.
Texas and Arkansas Pass Cotton Acreage Reduction
Program.
Legislatures of the two largest cotton producing States of
1931—Texas and Arkansas—have agreed on an acreage
reduction program as a market stimulant said Associated
Press accounts from Little Rock Oct. 9,from which we also
quote as follows:
2541
along these lines. We want to see if these agricultural organizations heads
cannot reach some common ground of action as a united front of agriculture."
He also referred to the Federal Farm Board and said that Congress
will neither destroy the Board nor repeal the Agricultural Marketing Act.
He advocated congressional assistance to the Board to aid in the disposition
of wheat and cotton stabilization holdings.
Senator McNary's statement on the President's plan follows in full text:
The $500,000,000 credit fund proposed by President Hoover is commendable statesmanship and can do much to loosen and set afloat the frozen
assets now jamming the channels of business.
In my opinion the plan will succeed just in proportion to the sympathetic
intelligence with whim it is administered. If hardshelled banking methods
are employed, the scheme will be of small benefit to the rural banks and
communities because of sunken values now supporting the bank loans.
The loans, when made, were based upon ample securities, but now by
reason of price deflation, cannot be liquidated without an appalling list
of bank failures and the distressing results that inevitably follow. Patience,
tolerance, and sympathetic understanding of the situation are the decisive
factors involved in the plan, and anything short of this form of administration will be heralded as a plan to finance the financiers with its minimum
benefits.
Criticisms of Board.
Yes, there are strong rumblings against the Federal Farm Board, and
frequent threats of an attempt to repeal the Agricultural Marketing Act.
However, it is my judgment that Congress will not destroy either the
Board or the Act. Legislative efforts will be made to modify the Act by
Including the equalization fee plan or the debenture plan. The workability
of either of these proposals depends upon the discovery of foreign markets
that are not protected by embargoes and dumping prohibitions.
The first thing Congress should do is to lend to the Federal Farm Board
whatever assistance it may possess in an effort to dispose of the accumulated surplus of wheat and cotton. The most tremendous depressant to
the price level of wheat at home and abroad is the stupendous carryover.
If it were in the hands of the individual growers, the menace would not be
so harmful, but when owned by the Federal Government, which can in a
moment place its holdings on the markets, the baneful presence of this
surplus prostrates the price level.
Lynn P. Talley, Former Governor Federal Reserve Bank
of Dallas, Expresses Views on Credit, Exports
and the Position of the Cotton Planters—Not in
Favor of Cotton Planting Restrictions Through
Legislation.
Lynn P. Talley, former Governor of the Federal Reserve
Bank of Dallas, and now Chairman of the Bank of America
N. T. & S. A., California, when expressing his policy with
reference to credit, said, "I do not consider refusal to extend
unsound loans to mean that I favor the curtailment of extension of proper credit."
Concerning the cotton industry, Mr. Talley said that the
planters of the South and particularly Texas had been
affected rather less drastically than many outsiders believe.
"This was due," he said, "not only to the fact that the
planters are producing cotton at low cost, but also because
they have borrowed less money this year than at any time
since 1915, and as a result the burden of financing has been
less onerous." Mr. Talley does not favor drastic legislative
means to restrict the planting of cotton, stating that a fivecent price will in itself constitute a restrictive factor.
Regarding the foreign trade situation, Mr. Talley said:
Meanwhile, Mississippi, the nation's third ranking cotton producer, has
adopted a similar law, conditioned upon concurrence by the House and
Senate in an enforcement amendment. The curtailment program would
restrict acreage in 1932 and 1933 to a third of the present cultivated area.
Adopting the Texas bill in both houses yesterday, the Arkansan Legislature to-day sought reaction to its move to bring about a South-wide conference on uniform legislation to insure the well being of the cotton farmer.
Whatever acreage reduction pip received support of a majority in the
proposed conference, the Arkansas Legislature by its concurrent "unity"
resolution would be obligated to adopt. The resolution proposed that five
legislators represent each cotton-growing State, either by election by
assemblies or appointment by the Governors.
The Louisiana cotton holiday plan advocates had their inning in Arkansas
to-day as the Legislature hastened to end its extraordinary session. Sponsors
in the House were acting under an agreement which gave the cotton holiday plan a special order at opening of the session.
The Senate defeated the bill yesterday but its author, Senator Abington,
We could not expect to demand a favorable export balance and to require
served notice he would move for a reconsideration to-day.
Europe to pay in gold that was taken from Central Banks,thereby depleting
Since both houses passed their own bills embodying the Texas plan, the their currency, and still hope to maintain those nations in a primarily
action of one is all that is needed to send the bill to Gov. Parnell, who solvent status. The extension of credit and the sensible handling of our
said he would sign it.
export business is an essential factor to be considered in world economic
Mississippi's lower House yesterday voted against tabling the Louisiana rehabilitation."
"no cotton in 1932" plan, thus leaving it open for reconsideration there.
Farming Interests Called to Unite on Legislative
Plans—Senator McNary Will Confer With Agricultural Groups to Prepare Program for Submission to Congress—Signifies Approval of Credit
Pool Plan.
To consider and recommend legislation for the coming
session of Congress, nationhl agricultural organizations
such as the National Grange, and organizations of livestock
growers, cotton growers and others will be called into conference within the next two or three weeks by Senator
McNary (Rep.), of Oregon, the Senator stated orally Oct. 12.
The foregoing is taken from the "United States Daily" of
Oct. 13, the account continuing:
Upholds Credit Plan.
Senator MeNary, who is Chairman of the Senate Committee on Agriculture
and Forestry, said that he approved President Hoover's $500,000,000 credit
pool but that its success depends upon intelligent administration.
Seeks Unified Action.
The conference of farm organizations which be will call in his office
will resemble a similar conference which he convened last year, the
Senator said, adding:
"Many ideas have been submitted to me as Chairman of the Senate COMmIttee on Agriculture as to what should be done to strengthen the Agricultural Marketing Act, including proposals for the equalization fee, debentures
and so on. We cannot modify that Act in Congress unless there is unanimity
among the representatives of the farmers. If they do not agree on some
plan, then there may not be any legislation at this session of Congress
E. N. Baty Resigns as Executive Secretary of Chicago
and Cook County Association—To Become Associated With Household Finance Corporation.
E. N. Baty announced on Oct. 14 his resignation as
Executive Secretary of the Chicago and Cook County
Bankers Association. Mr. Baty has served as active head
of the local bankers' organization since June 1922. On
Nov.1 he will take up his new duties in an executive capacity
with the Household Finance Corp.
Chicago Curb Exchange Adopts Measures Reported as
Designed to Protect Investors.
In the Chicago "Journal of Commerce of Oct. 15 it was
stated that the Chicago Curb Exchange has adopted measures
to facilitate the financing of companies generally considered
to be a promotional nature while at the same time protecting
the interest of investors. The account further said:
The Curb has ruled in substance that when a corporation which has
given options on blocks of its treasury stock makes application for listing,
the listing committee will require that certified copies of the option agreement and all assignments of such agreement, together with a list of all
dealers who will participate in the sale of the stock and copies of all circulars and sales material to be used in the sale of the stock be filed with the
committee before the stock may be listed and offered for sale.
President C. G. Troupe, President of the Curb is quoted
in Associated Press advices as saying:
Under present conditions in the securities markets, an
underwriting
of a new stock issue is practically unknown. The Curb
Exchange has
2542
FINANCIAL CHRONICLE
received in the last year a large number of applications in connection
with which investment bankers have secured options for the purchase
of treasury stock and have proposed to distribute this stock against these
options. Our listing committee has felt that this method of distribution
opens up many objectionable possibilities. The additional safeguards
which the committee has thrown around such applications will now, however, make it possible for the Curb Exchange here to accept listing applications from corporations regarded as meritorious but which have been
unable to effect financing arrangements involving an underwriting by an
investment banking institution.
[Vol,. 133.
CLASSIFIED ACCORDING TO NATURE OF CREDIT.
Sept. 30 1931. Aug. 31 1931, Sept. 30 1930.
Imports
Exports
Domestic shipments
Domestic warehouse credits
Dollar exchange
Based on goods stored In or shipped
between forelan enuntrlaq
$173,681,770
257,395,744
27,689,635
162.478,377
36,714,277
$177,944,525
276,048,475
27,554.854
174,529,205
42,987,823
$240,916,033
363,584,154
26,536,496
174,045,782
63.106,849
338.405.275
391.334.987
498.544.843
AVERAGE MARKET QUOTATIONS ON PRIME BANKERS'ACCEPTANCES
SEPT. 15 TO OCT. 15.
Value of Outstanding Bankers' Acceptances Drops
Dealers'
Dealers'
Dealers'
Dealers'
$94,034,771 in September—New Total of 036,- Days—
Buying Rate. Selling Rate.
Days—
Bulling Rate Selling Rate
365,078 Lowest Since 1928—Decrease of $559,000,000
1.550
1.425
120
30
1.270
1.395
Since January 1st.
1.930
1.805
1.270
150
60
1.395
1.930
1.805
1.270
180
1.395
For the first time since August 1928, the volume of bankers' 90
acceptances has fallen below $1,000,000,000, according to
the monthly report of the American Acceptance Council on Kountze Bros. Suspended by New York Stock Exchange
the survey taken as of Sept. 30. Robert H. Bean, Execu—Irving Trust Co. Appointed Receiver in Equity—
Liabilities Placed at $6,934,000,Including 63,846,000
tive Secretary, American Acceptance Council, in his survey
Demand Deposits, and Assets at $7,884,000.
Issued Oct. 15, further reports:
The total for all banks and bankers on the reporting date showed a reducOn Tuesday of this week, Oct. 13, Kountze Brothers,
tion of 594.034.771 for the month of September thus creating a new lot for
with offices at 141 Broadway, this city, one of the oldest
recent years of $996.365,078.
The reduction in bill volume compared with a year ago amounts to $370.- investment banking and brokerage houses in the Wall Street
469.079 but the falling off of acceptance business in 1931 is even more proNew York Stock Exchange.
nounced,as in the nine months since Jan. 1,dollar acceptances have declined district, was suspended by the
Announcement of the suspension was made from the rostrum
1559.000,000 or about 36%•
This extraordinary shrinkage in the amount of the banks commercial of the Exchange a few minutes after the opening of the
credit outstanding is not an unexpected result of the many economic disturbances throughout the world which have btoken down our foreign trade, market by Richard Whitney, President, who stated that
the basis of the most important source of the dollar acceptance business.
the firm had notified the Exchange that they were unable
A drop of over $200.000,000 in import and export trade within a period to meet
their obligations. Subsequently, Kountze Brothers,
of a year will naturally at any time reduce the volume of acceptances but
when there I, added an almost complete cessation of business based on issued the following statement:
foreign transactions, as has occurred in recent months, such a curtailment
in the volume of outstanding acceptances as Li now reported is a reasonable
sequence.
The domestic bill market situation has also contributed to the reduction
in bills, particularly of many interior banks. In normal periods some market can be found for the bills of such banks, but for several months this
distribution nas been curtailed because of the Inability of dealers to find
buyers for other than the acceptances of a limited number of the largest
banks and bankers. The result has been a sharp drop in the acceptance
business in all interior Federal Reserve Districts and it L usually upon
these interior banks that a large part of the annual crop financing depends
during the months of August-November.
Classifying the total of $996,000,000 reported in the current survey
according to the uses to which acceptances are put shows that the reduction
of $94,000,000 was spread over all of the six divisions with the greatest
amount in the group, in the business arising out of credits based on goods
stored in or shipped between foreign countries This total has now declined
$52,000,000 to $338,405,275 against a total of $498,000,000 outstanding
a year ago.
Export credit acceptances went off $18,000.000 to $257,395,744 against
$363,000,000 a year ago while import acceptance credits declined $4,000,000
in the month leaving a total of $173,681,770 against $240,000,000 in 1930.
Domestic warehouse credits which normally should be on the increase at
this time declined $12,000,000 during September bringing the total to
$162,478,377 against $174,000,000 at the end of September, 1930. Dollar
Exchange credit acceptances experienced a drop of$6,000,000 to $36,714,277
compared with 363,000,000 on the corresponding date in 1930. Credits
based on domestic shipments remain at practically the same total as of
August 31.
The volume of acceptance business created by the banks in the New
York Federal Reserve District went off $82,000,000 in the month of
September bringing the outstanding volume down to $780,000,000. The
Boston Federal Reserve District reported $9,000,000 less than on Aug. 31,
Chicago $5,000,000 and San Francisco $2,000.000.
The bill market which had been drifting along with the old prevailing
rates of 1% bid and % ask, went through several rapid changes beginning
with Sept. 22nd when rates were advanced to 1 3. %-1%. Since that
date there have been four additional advances in the rates for bids up to
and including 90 days, but in the bills of longer maturities there have been
six changes since Sept. 22nd.
The rapid readjustment of bill market rates was to a very large extent
the result of the advance in the Federal Reserve bank's rediscount rate,
the first for this year and served to bring about a great change in the
location of bills held, from the accepting banks to the Federal Reserve
banks which are now holding the largest volume of bills on record. At the
close of business Sept. 30th accepting banks were holding of own and other
acceptances, a total of $409,000,000 compared with $606,000.000 at the
end of August. Since Sept. 30th the volume of bills held in the portfolio
of accepting banks and bankers has been further reduced so considerably
taat the total is now in the neighborhood of $325.000,000 every large part
of which are of hills of short maturity thus indicating the possibility of a
further substantial reduction in bank holdings within the next 30 days
unless new buying at the better rate sets in.
The prevailing rates for all maturities as of Oct. 14th are as follows:
Ask,
Bid.
Ask.
Bid.
23%
2j% 1120 _
2g%
25.6%
30
2g% 150
go
334%
3%
254%
3Si %
3%
254% 180
234%
90
Detailed statistics are supplied as follows by Mr. Bean.
TOTAL OF BANKERS' DOLLAR ACCEPTANCES OUTSTANDING FOR
ENTIRE COUNTRY BY FEDERAL RESERVE DISTRICTS.
Federal Reserve District.
I
8.
8
a..
5
6
7
8..
9
19..
11
12
Grand total
Decrease
Sept. 30 1931. Aug. 31 1931. Sept.30 1930.
$81,273,197
780,785,075
17,667,152
19,262,532
3,655,470
7,110,001
50,708.274
1,831,182
2,678,216
600,000
1,555,594
29,238,385
$90,585,027
862,745,592
14,391,556
18,231,178
3,893,567
7,015,513
55,378.644
1,721,974
1,592,637
1,400,000
1,533,413
31.910,748
$121,944,362
1,003,662,813
23,142,056
22.694,938
6,820,676
16.482,943
92,585,937
3,126,930
6,579,535
6,945,779
02,748,188
$996,305,078 $1,090,399,849 $1,366,734,157
370,369,079
94.034.771
The suspension of the firm of Kountze Brothers was brought about in
the main by the extraordinary depreciation in the prices for high-grade
bonds on the Exchange.
The buying of such bonds and their sale to Customers was the principal
business of the firm. The depreciation brought about a cash position
which made it improbable that the current withdrawals could be met, and
the partners felt that their duty to their depositors and creditors compelled
them to consent to the appointment of a receiver, so that the firm's assets
might be conserved for their benefit."
The firm, which maintained no branch offices, was composed of the following members: Charles T. Kountze,
Herman D. Kountze (floor member of the New York Stock
Exchange), Stuart Sidney Furman, William H. Gregory,
Denman Kountze, Palmer D. Kountze and Frank Edgar
Andruss.
Later in the day, Judge William Bondy, in the Federal
District Court appointed the Irving Trust Co. as receiver
in equity for the firm with authority to continue the business,
with the exception of buying securities and accepting deposits. The complaint was filed by Harry H. Alexander,
with a claim of $4,200, through Kellogg, Emery & InnesBrown, attorneys. The petition reveals total liabilities of
$6,934,000,including $3,846,000 in demand deposits, against
assets of $7,884,000. From the account of the failure
appearing in Wednesday's New York "Times," we take the
following:
The firm had been active in the underwriting and distributing of bonds,
particularly municipal issues, and also as a dealer in such securities. In
addition to the business in municipal bonds, it was identified with the
marketing of corporation issues. As part of their banking business Kountze
Brothers acted as coupon-paying agent for many corporations and municipalities.
They participated in the offering in this country in 1930 of $98,250.000
of the German Government international 5 % loan of 1965. In September
of this year they were in the syndicate that marketed the 640,000,000 State
of New York 3 and 4% bond issue and tho 650,000,000 Canadian National
Railways 43 % bond issue.
Stock Commission Business Small.
Kountze Brothers, although members of the Stock Exchange since 1870,
did little stock commission business. . . . The firm was founded more
than sixty years ago in the West, the founders having been identified with
finance in Omaha, Denver and other cities. The present Exchange member
bought his seat in April 1927. The firm maintained no branches.
The suspension was the sixth of a Stock Exchange house this year. It is
the first to attribute its difficulties mainly to the weakness in the bond
market.
Announcement of the Kountze Brothers' embarrassment, although coming as a surprise, caused little excitement in Wall Street. The stock
market declined rather sharply, but brokers assigned the suspension as
only one of several explanations for the moderate selling movement.
Boettcher-Newton & Co. of New York Stock Exchange
Will Margin $4 Stocks.
The following is from the New York "Times" of Oct. 8:
Boettcher-Newton & Co., members of the New York Stock Exchange.
announced yesterday that they will carry certain low-price securities
some of which are selling as low as $4 a share, on a 50% margin basis,
provided that the stocks are purchased in round lots. Heretofore, the
policy of Stock Exchange houses has not been to carry on margin any
stocks selling below $6 a share.
Toronto Standard Stock 8c Mining Exchange Lifts
Minimums on Certain Stocks.
Toronto advices as follows are taken from the "Wall
Street Journal" of Oct. 8:
OCT. 17 19311
FINANCIAL CHRONICLE
2543
hundred issues that sold during the session. The Securities
Clearing Corporation was incorporated June 18 1931, but
did not function as a whole unit until to-day. Previously
the workings of the old cleating house were performed by
Toronto and Montreal Stock Exchanges Lift Restric- the night branch and the distributing department. To-day
tions on Stocks Under $3—Removal of "Pegged" there are being cleared more than 475 issues which embrace
Prices.
approximately 75% of the daily volume of business.
From the Toronto "Globe" of Oct. 14 we take the following:
Stocks selling under $3 a share have been removed from the restricted Two Canadian Stocks Temporarily
Suspended by New
trading list on the Toronto Stock Exchange and on the Montreal Stock
York Curb Exchange.
Exchange.
Official announcement of the decision of the two leading Stock Exchanges
The following is from the New York "Sun" of last night
was made yesterday, in view of the fact that no useful purpose is now
served by retaining these shares at "pegged" prices, imposed in Toronto (Oct. 16):
Standard Stock & Mining Exchange has issued notice that minimums
will be lifted on the following stocks at the opening, Oct. 8: Big Missouri,
Central Manitoba, Howey, Kirkland Lake, Moffatt Hall, Pioneer of
B. C., Siscoe, Sylvanite and Vipond.
Two Canadian stocks were temporarily suspended from trading on the
Curb Exchange as an act of courtesy to the Montreal Stock Exchange, following request to take such action made by the latter. The two stocks
suspended are Montreal Light, Heat & Power and Shawinigan Water &
Toronto Stocks Affected.
Power. The former had been pegged in Montreal at 38 and the latter at
Stocks affected by the ruling of the Toronto Stock Exchange, which also 33 since England abandoned the gold standard, but were quoted lower in
applies to the Toronto Curb market. are:
this market where, under the rules of the Montreal Exchange, traders could
Listed.—B. C. Packers, British Empire Steel second, Canadian Indus- not buy either issue.
tries Alcohol "B," Conduits, General Steel Wares, Massey-Harris, OrangeCrush, Sterling Coal, Alberta-Pacific Grain, Canadian Industrial Alcohol
Chicago Stock Exchange Calls On Members for
"A," Cockshutt Plow, Consolidated Food Products "A," Hamilton United
Theatres, Muirbeads, Orange-Crush second, and St. Lawrence Corp.
Information Regarding Short Position.
Curb.—Carlings, Crown-Dominion, Pelissiers, Cosgraves, Honey Dew
From the Chicago "Journal of Commerce" of Oct. 9
and Waterloo.
we take the following:
$3 Stocks at Montreal.
Members of the Chicago Stock Exchange yesterday were requested by
Stocks on the Montreal Stock Exchange now selling at or below $3, and
open to free trading, are: B. E. Steel, Massey-Harris, Detroit United Rail- the Committee on Business Conduct to furnish, in addition to the regiving the short position of accounts now being submitted, a list
ports
way, Industrial Alcohol and Canadian Industrial Alcohol "B," Alberta
Pacific, Dryden Paper, General Steel Wares, Carriage Factories, Fraser, of all short sales of stocks listed on the Exchange made each day and
Dominion Steel and Coal "B," Canada Power and Paper, Canada Steam- covered on the same day. This additional requirement is effective Imships, Howard Smith, St. Lawrence Corp., National Brick, B. 0. Packers mediately.
and Asbestos.
and Montreal on Sept. 21, the day on which Great Britain abandoned the
gold standard. It was said in market circles that there is practically no
margin business in these issues.
Charles L. Woody Jr., Former Partner in the Defunct
Additional Fixed Trusts Approved by New York Stock
Firm of Woody & Co., Reinstated by New York
Exchange.
Stock Exchange.
In announcing its approval of participation by members
The New York Stock Exchange announced Oct. 8 that the
in two additional fixed trusts the New York Stock Exchange Committee on Admissions had reinstated Charles L. Woody,
in a notice issued Sept. 28 said:
Jr., to membership, according to the New York "Times" of
Acting under Section 2 of Chapter XIV of the rules adopted by the
-Oct.
9. Mr. Woody was floor broker of Woody & Co.,
Uaverning Committee pursuant to the Constitution, the Committee on
Stock List has determined that it has no objection to the participation by who were suspended by the Exchange for insolvency on
member firms in the organization or management of the following invest19 1930.
ment trusts of the fixed or restricted management type, or in the offering June
Mr. Woody will make his office with Coombe. Kerr &
or distribution of their securities:
Corporate Trust Shares, accumulative series (1951).
Pratt at 120 Broadway, this city, it was said.
Corporate Trust Shares, series AA (1951).
The original list approved by the Exchange was published
in our issue of Aug. 29 page 1380; three additional trusts Montreal Stock Exchange Suspends W. H. Magill of
Hamilton, Ont.
since approved were noted in these columns Sept. 26, page
Suspension of W. H. Magill of Hamilton, Ont., from the
2021.
Montreal Stock Exchange was announced Oct. 8, according
Volume of Trading on New York Cocoa Exchange to Montreal advices to the New York "Journal of Comin September and Fiscal Year—Lowest Prices
merce." The dispatch furthermore said:
in History Recorded in September.
Magill did not have an office here, but had accounts in Hamilton. He
Trading volume on the New York Cocoa Exchange traded here through McDougall & Cowans, who failed Monday. Magill's
during September amounted to 2,607 lots, or 34,594 tons, suspension marked the fourth since the beginning of the week.
an increase over August, which had a trading volume of
E. J. Bawlf Co., Ltd., Winnipeg, Man., Suspended
2,530 lots, or 33,902 tons.
from Winnipeg Grain Exchange.
Sept. 30 marked the end of the fiscal year for the ExE. J. Bawlf Co., Ltd., grain and stock brokers, of Winnichange. The trading volume for the year ending Sept.
30 1931 was 26,350 lots compared with 30,245 lots for peg, Man., with branches throughout Western Canada, was
the period ending Sept. 30 1930.
suspended from trading on the Winnipeg Grain Exchange
The month just ended marked the creation of the lowest Oct. 9, according to Associated Press advices from that city,
prices in history. The lowest quotation recorded on the which continued as follows:
Exchange since it opened was made when September cocoa
Notice of the suspension of E. J. Bawlf Co., Ltd., from the Exchange
sold at 3.98e. a pound. As the month ended spot cocoa was posted on the trading floor to-day (Oct. 9). The firm has 15
in the Provinces of Ontario, Manitoba, Saskatchewan and Alberta,
was quoted at 4/c. a pound compared with 5Yic. a pound branches
and holds, it is understood, five or six memberships on the Winnipeg Grain
a year ago. Declines in the value of this commodity during Exchange.
No information was forthcoming as to why this action was taken by the
the past year and during the past month were attributed
mostly to the sentimental influence of other markets and Exchange Council. As far as could be gathered, all the company's trades
have
been cleared, which led traders to believe that cancellation of the
the generally depressed economic structure.
company's registration
Day Clearing Branch of New York Curb Exchange in
Operation.
The Day Branch of the New York Curb Exchange Securities Clearing Corporation officially opened for business on
Oct. 8. Slightly more than 400 members availed themselves
of its facilities, it is stated. The opening of this branch
made for a complete unit of efficiency in clearing securities,
which unit also includes a night branch and distributing department. The number of balances settled the first day
approximated 2,000 items and the market value of these
balances approximated $8,000,000 which were made up by
4:10 P. M. Oct. 9.
It is understood that through the workings of the day
branch there was 90% elimination of labor that would be
otherwise necessary in the settlement of these contracts.
Electric Bond and Share headed an active group of about
50 securities which were the most active of the several
was requested by the company itself.
The firm operates four private wires, one to Chicago, one to Montreal
and one East and West to its various branch offices.
Increase in Interest Rates on Deposits by New York
Clearing House Association.
As a result of action taken on Oct. 15 by the Clearing
House Committee of the New York Clearing House Association, interest rates in effect early this year on deposits
paid by members are again restored. Under the action
this week by the Association, the rate of interest to be paid
by banks, trust companies and private banks, exclusive of
savings banks, has been raised from 5,6% to 1%; the rate
of interest to mutual savings banks is increased from 1%
to 13'%, and to others the rate is raised from 5,6% to 1%;
on certificates of deposit or time deposits, payable on or
after 30 days, but not more than six months from the date
of issue or demand, the rate is moved up from 1% to 15i%.
The rates established the present week are the same as those
which were put into force on Feb. 9 last; a lowering of the
2544
[VOL. 133.
FINANCIAL CHRONICLE
rates occurred on May 19 (as was noted in these columns
May 23, page 3814) following the action of the New York
Federal Reserve Bank in cutting its rediscount rate to 1M%.
During the past week the Reserve Bank has twice increased
its rediscount rate—first from 1M% to 2M%, and then to
3%. The following is this week's announcement of the
Clearing House Committee:
NEW YORK CLEARING HOUSE.
New York, Oct. 15 1931.
Dear Sir—Acting under the provisions of Section 2, Article XI of the
Clearing House Constitution, relating to interest on deposits to be paid
by Clearing House institutions, we beg to advise you that the following
maximum rates have been fixed, effective Friday, Oct. 16 1931:
On certificates of deposit payable within thirty days from date of Issue: and on
certificates of deposit payable within thirty days from demand: on credit balances
payable on demand;and on credit balances payable within thirty days from demand.
Considerable *depreciation is evidenced in many of the bond accounts
of the banks, regardless of whether they are State or national. Of course,
the higher grade bonds carry less depreciation. Bankers have complained
that both the National and State Departments have urged the establishment of secondary reserves and that their compliance with such recommendation has resulted in the necessity of increasing reserves and undivided
profits to meet depreciation. Some bankers were not interested as much
in the marketability of the securities purchased as in the return; hence
their depreciation has been greater than those who have been more careful
relative to security and high market value rather than to the income to
be derived from the bonds.
As a result of the general depreciation on bonds, many inquiries have
been received as to the attitude of the Department respecting the same
and our reply is that each case must be handled individually and the class
of bonds taken into consideration. Where there are securities in default
as to principal, and others on which interest has been past due for a period
of six months or more, the Department must request that the depreciation
be charged off or that sufficient reserve be established to offset the same.
Pennsylvania Acts to Speed Liquidation of Closed
Banks—Depositors of Three Philadelphia Insti1%
%
1%
tutions to Get Initial Dividends of 20%—Liquidating Corporations to Be Formed Throughout
At the rate of 116% on certificates of deposit or time deposits, by their terms,
payable on or after thirty days, but not more than s x months, from the date of
State.
Issue or demand; and without regulation as to rate on such certificates or deposits
payable more than six months from the date of issue or demand.
Steps to bring about the imniediate release of approxiBy order,
mately
$6,750,000 to more than 125,000 depositors of closed
CHARLES S. McCAIN,
CLARENCE E. BACON,
Philadelphia banks, together with plans for the formation
Chairman Clearing House Commutes.
Manager.
of liquidating corporations for suspended bonding instiW. W. Cheney of New York State Joint Banking Corn- tutions throughout Pennsylvania, were announced Wednesmittee Believes Recommendation will be for Legis- day by Dr. William D. Gordon, Secretary of Banking for
lation to Continue as Legal Investments Bonds of the State of Pennsylvania. A communication in the matter
goes on to say:
Railroads Whose Earnings Have Decreased.
Initial dividends of 20% of their deposit liabilities will be paid within
Following a two-day session in New York City of the the next month by the Bankers Trust Co.of Philadelphia, the Aldine Trust
will be made possible
Joint Legislative Committee on Banking and Investment Co.and the Darby Bank & Trust Co. The payments
the co-operation of John A. McCarthy, President of the Real
Trusts, it was announced on Oct. 15 by Senator Nelson W. through
as a private banker
licensed
been
Estate Trust Co. of Philadelphia, who has
Cheney, Chairman, that legislative relief would be pro- for the express purpose of transferring the funds of these closed banks to
vided for trustees and fiduciaries to obviate the danger their depositors. Dividend payments by other closed institutions will
as quickly as cash can be collected.
of their having to dump intrinsically good bonds simply follow
The formulation of legal machinery is also under way to make possible
because these bonds, as a result of the depression, did not the formation of liquidating corporations in the Philadelphia, Wilkesabout a scientific and orderly
now fulfill all the requirements of the State banking law. Barre, Scranton and Pittsburgh areas to bring
liquidation of
and doubtful loans of the real estate and of the other
The New York "Times," in stating this, in its Oct. 16 issue, assets of closedslow
institutions.
"If and when this necessary machinery is set up," Dr. Gordon's statecontinued:
To Banks, Trust Companies and Private Bankers, but
Excluding Mutual Savings Banks.
To
To Mutual
Savings Banks. Others.
Under the law companies whose bonds are on the list of securities which ment said, "plans will be formulated which will enlist as officers and direcare legal investments for trust funds and the like must earn 1% times tors of such corporation men who are outstanding financial leaders in the
respective sections of the State.
the fixed charges.
"The realease of approximately six and three-quarter million dollars to
Many bonds, particularly those of railroads, are not earning that
amount this year. Senator Cheney said, however, that the Committee depositors whose funds have accumulated to date," said the Secretary, "Is
was working toward legislation, to be presented immeidately after the In my opinion an act which should be of great assistance to the depositors
Legislature convenes in January, to leave on the investment lists bonds of these institutions and, in turn, should provide a large purchasing power
of companies which were paying all their fixed charges, their interest, for them at this critical time.
"Furthermore, it should help restore confidence in the banking situation
taxes, &c.
not follow that
"We want to assure trustees and fiduciaries that they are no., running by demonstrating that when an institution is closed it does
the danger of a law suit if they hold such bonds, and that they do not all or a considerable part of the funds necessarily are lost. After the release
with
tempered
sound judgliquidation,
of
this
process
of
money
through the
have to throw them."
Before leaving last evening for his home in Buffalo Senator Cheney ment, from time to time, additional sums will be accumulated, thereby
making possible another distribution at the earliest date possible."
Issued a prepared statement on behalf of the Committee, saying:
"The Committee has been and still is seeking information concerning
the
that
the problem of legal investment. The banking law provides
bonds of those railroads which meet certain requirements as to earnings Rediscount Rate of New York Federal Reserve Bank
and dividends shall be legal investments for trustees and fiduciaries.
During the past year the earnings of railroads have decreased just as
Raised from 23/2% to 33.%—Federal Reserve
earnings of all other industries have decreased. A number of the roads
Banks of Boston and Chicago Also Increase Rates
have had ample earnings for years past and have met all their payments
of interest and principal and it does not seem the part of wisdom to declare
to 33%.
the bonds of such companies no longer legal investments simply because
the railroads are not at this time earning the amounts required in times
The Federal Reserve Bank of New York, which, a week
of prosperity.
"The Chairman believes that the Committee will recommend to the ago, increased its rediscount rate from
to 23/2%, this
Legislature as soon as it convenes in January an amendment to the existing
legal invest- week raised the rate to 33%. The Bank's action last
law Providing that the obligations of railroads which weresuch
inlegal
be
to
continue
ments under the law on Jan. 1 1931 shall
vestments so long as all payments of interest and principal due on the week was referred to in our issue of Oct. 10, page 2362.
obllgations of such railroads are paid, even though the earnings of these The adoption of the 3
rate was announced as follows
railroads may not, during the present depression, equal the existing requirements of the law."
by the Bank:
The two-day session of the Committee Just concluded was held at the
FEDERAL RESERVE BANK OF NEW YORK.
Hotel Roosevelt.
(Circular No. 1062, Oct. 15 1931, superseding Circular No. 1061, dated
Oct. 8 1931.)
Mid-West Manufacturers' Association Protests Against
Rate of Discount.
Short Selling in Messages to President Hoover To All Member Banks in the Second Federal Reserve District:
and Secretary Mellon.
You are advised that, effective from the opening of business Friday,
Oct. 16 1931, until further notice and superseding the existing rate, this
The following from Chicago, Oct 4, is from the New bank
has established a rate of 3%% for all rediscounts and advances.
York "Times":
GEORGE L. HARRISON, Governor.
The newly organized Mid-West Alanufacturers' Association, Inc..
Yesterday (Oct. 16) it was announced that both the Bosformed last week to represent the manufacturing interests of Illinois,
Wisconsin, Indiana, Michigan, Missouri, Iowa, Kansas and Nebraska, ton and Chicago Federal Reserve Banks had likewise inhas sent messages to President Hoover and Secretary Mellon protesting
their rates to 332%. A week ago the Boston bank
against speculative short selling on stock exchanges. Samuel M. Hastings, creased
President, said the Association would attempt to organize stockholders changed its rate from 2 to 23%,effective Oct. 10, and the
to take off the market stocks used in short-selling operations
change to 332% comes on top of last week's increase.
1M%
M%
The Chicago Reserve Bank raises its rate to 33 % from
Method of Handling of Bond Depreciation by State 23'%;the latter rate had been in effect since May 9 1931.
Banks—Illinois to Treat Each Case Individually,
Auditor of Accounts Explains.
New York Federal Reserve Bank Again Advances
Bill Buying Rate.
In determining the method of handling depreciation on
bonds held in the portfolios of Illinois State banks, each
On Oct. 13 the New York Federal Reserve Bank raised
case wil be handled individually and the class of bonds its bill buying rate as follows:
taken into consideration, Oscar Nelson, Auditor of Public
To 2A % from 1 to 76 days
To 2)(% from 76 to 90 days
Accounts, has announced in the monthly bulletin of the
banking department for October, just released for publiLast night (Oct. 16) the New York "Evening Post" said:
cation. We quote from Springfield, Ill., advices, Oct. 9
It was reported to-day that the Reserve Bank had raised its buying rates
1% to 3A for 90-day bills and 3A on those running 120 days.
to the "United States Daily" which gives as follows:
OCT. 17 1931.]
FINANCIAL CHRONICLE
The selling rate for Federal funds followed the market upward with an
advance of 34 of 1% early in the day, quotations being at 23,/ ©334%.
An increase in the bill buying rate of the Reserve Bank
was noted in our issue of Oct. 10, page 2363.
Death of David C. Biggs, Former Governor Federal
Federal Bank of St. Louis.
David C. Biggs,formerly Governor of the Federal Reserve
Bank of St. Louis, and former Treasurer of the International
Shoe Company, died as a result of a heart attack on Sept. 28.
Mr. Biggs was born in Pike County, Mo. on May 2 1866.
From the St. Louis "Globe Democrat" we take the following:
In 1919 he was elected Governor of the Federal Reserve Bank to succeed
former Mayor Rolla Wells. He headed the Bank during a great part of the
post-war period and in his administration the present 54.000,000 Federal
Reserve Bank Building and three branches costing $1,000,000 were constructed.
Upon his retirement from the Bank in 1929 Mr. Biggs was succeeded by
William McChesney Martin, who had been Chairman of the Board and
Federal Reserve agent.
B. A. McKinney Again Governor of Federal Reserve
Bank of Dallas.
The election of B. A. McKinney, First Vice-President of
the First National Bank in Dallas and President of the
Federal Advisory Council, as Governor of the Federal
Reserve Bank of Dallas, was announced on Oct. 3 by Col.
C. C. Walsh, Chairman of the Board. Mr. McKinney
assumed his post on Oct. 5 succeeds Lynn P. Talley, who
has become Chairman of the Board of the Bank of America
National Trust and Savings Association of California, as
noted in our issue of Oct. 3, page 2200. Mr. Talley had
succeeded Mr. McKinney as Governor of the Bank in 1925,
it is pointed out in the Dallas "Morning News."
L. Werner Knoke to Become Assistent Deputy of
Federal Reserve Bank of New York.
The New York Federal Reserve Bank announced on Oct.
14 that L. Werner Knoke, Assistant Secretary of the Irving
Trust Company of New York, will in the near future become
an Assistant Deputy Governor of the Federal Reserve Bank
of New York. Mr. Knoke,it is stated, is an expert in foreign
exchange and bullion and will be connected with the foreign
department of the Reserve Bank.
2545
Court on the validity of taxes imposed by States on chain
stores, and in view of the magnitude of the chain store
business and the bitterness of the competition between the
chains and the individual establishments, the case had commanded attention throughout the country.
Review of the case was asked by Chester H. Jackson on
behalf of the estate of Lafayette A. Jackson, which operates
more than 200 chain stores in Indiana. Chief Justice Hughes
announced the denial of a rehearing without further comment.
The full text of the decision was published in the
"Chronicle" of May 23, page 3784.
North Carolina Chain Store Tax Under Fire—A. & P.
in Appeal to Supreme Court, Asserts Invalidity of
a Law.
Chain stores renewed in the Supreme Court Oct. 15 their
campaign to prevent States from regulating them by taxes,
according to an Associated Press dispatch from Washington
Oct. 15 which further states:
Having failed at the last term of the court by a five-to-four decision to
invalidate the graduated tax imposed by Indiana, they now attack the
North Carolina law, which imposed a straight $50 tax on each store of two
or more operated under one ownership.
As counsel for the Great Atlantic & Pacific Tea Co. John W. Davis
contended that the North Carolina case presented issues not passed on by
the court in the Indiana case. He denounced the North Carolina tax as
discriminating against chain stores, because imposed solely on the basis of
the ownership of two or more stores.
Attorney General Brummitt of North Carolina, in support of the tax,
maintained a State can impose such a license fee for the privilege of engaging
in the business of merchandising and require each place of business to pay
the tax.
The court will shortly hear counsel for Mississippi in an appeal attempting
to set aside a decision of a three-Judge Federal Court holding invalid its
tax aimed to control chain stores by requiring those operating five or more
stores to pay twice as much taxes on their gross income as is imposed on
the gross income of owners operating less than five stores.
Workings of Plan of Operation of National Credit
Corporation Explained by M. N. Buckner, Chairman—Names of Directors—Meeting of Latter
To-day, Oct. 17.
On Oct. 10 Mortimer N. Buckner, Chairman of the Organization Committee of the National Credit Corporation,
suggested by President Hoover, authorized an explanation
of how the plan will work. The Corporation, as indicated
in our issue of Oct. 10 (page 2366) is to have a board of
12 directors, one from each of the Federal Reserve districts.
The business of the Corporation, says Mr. Buckner's statement, "will be to extend to subscribing banks throughout
the country, when necessary, additional credit facilities
and funds on sound assets under prescribed conditions."
Mr. Buckner's statement also says that "the Corporation
will obtain funds with which to make such loans through
subscriptions to its receivable gold notes which will be
authorized up to $1,000,000,000. Every bank throughout
the United States will be asked to subscribe to these notes
to the extent of 2% of its net demand and time deposits."
According to the New York "Times" of Oct. 11, it was
intimated that the first levy would amount to about 20%
of the subscriptions. The "Times" also said:
Subscriptions of $127,834,000 Received to 90-Day
Treasury Bills Offered to Amount of $50,000,000
or Thereabouts — Bids Accepted $51,641,000—
Average Price 23
4%.
Tenders totaling $127,834,000 were received to the $50,000,000, or thereabouts, of 90-day Treasury bills, offered last
week, as noted in our issue of Oct. 10, page 2363. Secretary
Mellon, in announcing the oversubscription on Oct. 13, stated
that the total of bids accepted was $51,641,000. "Except for
three bids aggregating $304,000 at prices averaging about
1%," said Secretary Mellon, "the highest bid made was
99.625, equivalent to an interest rate of 1% on an annual
basis." The lowest bid accepted was 98.313, equivalent to
Inasmuch as the aggregate deposits of the banks of the 400 clearing
2%%. The average price of bills to be issued is 99.404; the house associations throughout the country amount approximately to
Sec2%%.
the full levy of 2% of deposits would provide about
basis
is
about
$43,000,000,000,
average rate on a bank discount
$860,000,000. An initial levy of 20% would start the corporation with
retary Mellon's statement of Oct. 13 follows:
$172,000,000. It was intimated that this amount would probably be
Secretary of the Treasury Mellon announced to-day that the tenders for sufficient for the time being and that there was a possibility that the
00,000,000, or thereabouts, of 90-day Treasury bills dated Oct. 15 1931, next levy would not be required for some time.
and maturing Jan. 13 1932, which were offered on Oct. 8 were opened at
Mr. Buckner's statement of Oct. 9 follows:
the Federal Reserve Banks Oct. 13.
Sufficient progress has now been made by the organization committee
The total amount applied for was $127,834,000. Except for three bide
aggregating $304,000 at prices averaging about 1%, the highest bid made In setting up the national credit to enable us to present for the first time
was 99.625, equivalent to an interest rate of 1% on an annual basis. a pretty clear idea as to how the plan will operate.
The principal features are these:
The lowest bid accepted was 99.313, equivalent to an interest rate of
1. The National Credit Corporation will be organized under the laws
about 2%% on an annual basis. The total of the bids accepted was
will have the usual corporate officers and
$61,641,000. The average price of Treasury bills to be issued is 99.404. of Delaware. This corporation
a board of 12 directors, one from each of the 12 Federal Reserve districts,
The average rate on a bank discount basis is about 2%%.
and an executive committee.
2. The business of the National Credit Corporation will be to extend
when necessary additional
U. S. Supreme Court Upholds Chain Store Verdict— to subscribing banks throughout the country
credit facilities and (or) funds on sound assets under prescribed conditions.
Decision
Holding
Indiana
Refuses to Reconsider
3, The corporation will obtain funds with which to make such loans
Tax Valid Automatically Making Last Decision through subscriptions to its receivable gold notes which will be authorized
up to $1,000,000,000. Every bank throughout the United States will
Final.
be asked to subscribe to these notes to the extent of 2% of its net demand
The United States Supreme Court refused, Oct 12, to and time deposits, up to the legal amount. This should provide at least
by the President of the INited States. Subscriptions
grant a rehearing of its decision handed down May 18 last, the fund requested instalments
as called for by the board of directors of
will be payable in
graduated
taxes
on
in which the Indiana State law imposing
the National Credit Corporation.
chain stores was upheld. The decision of the Court not to
4. In each Federal Reserve district associations of subscribing banks
will be set up under the supervision of the director of the National Credit
rehear the case, definitely ends the matter and makes the Corporation
for that district. Each association of subscribing banks will
May decision final. At that time the Supreme Court by a have its own loan committee to pass on the loans requested by any bank
five-to-four decision upheld the constitutionality of the in the association, and if the loan is approved locally it will recommend
loan to the National Credit Corporation, which upon approval will
Indiana State chain store tax law, imposing a graduated the
make available the desired funds.
scale of license fees measured by the number of chain stores
5. For a subscribing bank to obtain a loan the procedure briefly will
operated within the State. The decision was the first by the be this:
2546
FINANCIAL CHRONICLE
(a) The bank will apply to the loan committee of its association or the
loan committee representative for that locality and present a statement
of its assets.
(b) The loan committee or its representative will decide how much of
the available assets is necessary to secure the loan.
(c) When the loan is approved by the loan committee, the officers or
a designated agent of the local associations are to approve the application
of the loan, execute the note on behalf of the member banks of the association for the amount of the loan and arrange for the funds to be made
available by the National Credit Corporation.
(d) The borrowing bank,of course, will have given its own note negotiable
in form for the amount of the loan in addition to furnishing such security
as has been agreed upon.
(e) On receipt of the documents from the local association the National
Credit Corporation, approving, will place the amount of the loan at the
disposal of the borrowing bank.
6. The plan provides that whenever a loan is granted to a bank, the
other banks in the local association are liable for a certain fixed percentage
of the loan which is the percentage set forth in the local articles of agreement forming the association and which will oe in the proportion that
the bank's subscription bears to the aggregate subscriptions of the other
banks in the association.
7. Thus, the National Credit Corporation will have the following as
security for any loan it makes to a borrowing bank: (1) The note of
the borrowing bank; (2) the security furnished by the borrowing bank;
(3) the note of the association of banks of which the borrowing bank is a
member.
8. It is not contemplated that the borrowings of any banks will be
limited by the amount of the total subscriptions of the banks in the association formed for any locality. Advances will be available in excess of
the aggregate subscriptions of the banks of an association if the banks
give their consent as provided in the articles of the association or by-laws
and each bank becomes liable for its pro rata share of the loan..
9. Interest if earned will be paid on the notes of the National Credit
Corporation when and as ascertained and declared by the board of directors.
The board of directors of the National Credit Corporation will meet
during the coming week. Meanwhile, so as to have uniformity all of
the forms of articles of agreement or associations, subscriptions, &c., are
being prepared and will be submitted to the board for its approval and
ready for distribution. It is expected that all the legal details will have
been worked out by the time the directors meet and that the corporation
will be in a position to function immediately thereafter.
From telegrams received from leading bankers throughout the country
the credit arrangements to be set up by the National Credit Corporation
are regarded as a most effective form of insurar.ce to banks, their depositors,
the stockholders and the public, and they feel should enable the country's
banks to effectively utilize their full resources and credit at all times to
the benefits of their respective communities.
In a statement issued Oct. 12 Mr. Buckner made known
the names of those who will serve as directors of the Corporation. He also announced that the directors will meet
at the New York Federal Reserve Bank to-day (Oct. 17)
to organize. His statement follows:
Following the co-operation with which banks throughout the country
have supported President Hoover's plan for the formation of the National
Credit Corporation, the organization committee is now able to announce
the board of directors.
The board of directors will meet to organize at the Federal Reserve
Bank, New York, Saturday, Oct. 17, this being the first day on which
It will be possible for all the members to reach New York.
Immediately following the organization on Saturday. the associations
in the different districts can be organized and funds made available whereby
subscribing banks may obtain the benefit of the facilities afforded by the
Corporation.
The funds of the Corporation are to be available for the assistance of
banks in any part of the country. The amount of money subscribed by
the banks in each of the groups or associations will not limit the amount
which banks in that particular local asosciation may borrow, under the
rules the separate associations will establish, from the National Credit
Corporation.
The plan will assure that banks in any part of the country with sound
assets may obtain such cash when necessary.
The articles of incorporation of the National Credit Corporation will
be filed at Dover, Del., to-morrow.
The organization plans of the Corporation and its co-operating local
associations will be arranged tentatively during the next few days so
that when the final plans have been approved by the Board of Directors
on next Saturday the operation of the undertaking can be put Into effect.
Directors of the National Credit Corporation.
From
Federal
Reserve
District
No. 1 Daniel G. Wing, Chairman of the Board, the First National
Bank of Boston, Boston.
No. 2 Mortimer N. Buckner, Chairman of the Board, the New York
Trust Co., New York.
No. 3 Livingston E.Jones, President, First National Bank,Philadelphia.
No. 4 Arthur E. Braun, President, Farmers Deposit National Bank,
Pittsburgh, Pa.
No. 5 John M. Miller Jr., President, First & Merchants National
Bank, Richmond, Va.
No. 6 John K. Ottley, President, the First National Bank of Atlanta,
Atlanta, Ga.
No. 7 George M. Reynolds, Chairman Executive Committee, Continental Illinois Bank & Trust Co., Chicago, Ill.
No. 8 Walter W. Smith, President, First National Bank in St. Louis,
St. Louis, Mo.
No. 9 Edward W. Decker, President, Northwestern National Bank,
Minneapolis, Minn.
No. 10 W. S. McLucas, Ohairman of the Board, Commerce Trust Co.,
Kansas City, Mo.
No. 11 Nathan Adams, President, First National Bank in Dallas,
[VOL. 133.
The first meeting of the boardiwill be held at the Federal Reserve Bank,
Saturday, Oct. 17, for purposes of organization.
Pending the meeting several steps should be taken:
1. Appropriate names should be considered of men to serve on the
one or mere loan committees of the local associations to be formed In your
district.
_
2. The banks in youldistiict should be asked to indicate the amount
of their subscriptions to the gold notes of the National Credit Corporation
on the basis of 2% of their net demand and time deposits up to the legal
limit at the last Comptroller's call.
There will be forwarded to you the following forms:
1. Articles of agreement of the local associations.
2. Suggested by-laws to be adopted by the local associations.
3. Subscription blanks to gold notes.
4. Application blanks for loans.
5. Suggested resolutions of the local associations covering the acceptance
of loans and request on National Credit Corporation for advances.
Action along these lines will make it possible promptly after the organization meeting of the board of directors on next Saturday, for the loca
associations and the loan committees thereof to be organized, and fund
be made available to the subscribing banks under the provisions of the plans
White House Tells Reason Hoover Acted on Credit
Pool Plan.—Development of Bad Credit Situation
for Farmers and Business Spurred Bank Program.
An informal but authoritative statement obtained Oct. 9
as to President Hoover's reason for drafting the program
which he submitted to a large group of Senators and Representatives at the White House Tuesday night(Oct.6)showed
that his design was to increase the flow of credit, relieve
banks in distressed regions, and generally restore confidence.
A dispatch from Washington Oct.9to the New York "Times"
in indicating this, further stated:
This explanation was furnished because of the anxiety of the President
that the public should understand the situation. It was pointed out
that the explanation should be given even though credit problems were
difficult for the average man to understand. In the course of what was
said, there was no concealment of a very bad credit situation, which increased the depression and had a direct effect on unemployment. But it
was insisted that the financial stability of the country was excellent.
The President, it was made known was grateful to the press for contributing very materially to the unity of action which was essential to a matter
of this character. It was always difficult to get unity of views among discordant elements, it was said, with the admission that there had been
plenty of difficulty in effecting unity among financial institutions through
which they would be obliged to make some sacrifice for the national good.
As the White House appraised the situation, the conference with Congressional leaders was remarkable in that about forty men of divergent
views were willing to set aside politics and reach complete unity, with
one or two exceptions, in the course of three hours of consultation upon a
major legislative program.
In explanation of the background which furnished the occasion for the
President's emergency program, it was said that among the difficulties
which it sought to remedy was the agricultural credit situation. The
farmers in some sections were unable to get credit even on farms that
are unencumbered. Commodities, therefore, could not be carried over
and were forced upon the market.
Millers also were limited to credit on a day-to-day basis. Manufacturers
likewise were hampered by inability to get credit, and this had a direct effect
upon unemployment. Bankers were finding difficulty in serving their
communities adequately when there had been some unreasoning withdrawal
of deposits.
Some brighter colors were painted into this brief picture when it was said
that the banks of the country had $3,500,000,000 in paper eligible for
rediscounting with the Federal Reserve System. Banks in distress, It is
said, were using their eligible paper with the Federal Reserve banks already.
The purpose of the banking pool organized yesterday in accordance with
the President's program, was to give these banks funds on their ineligible
paper. It was not alone to give them resources to meet any unreasonable
demands, according to the explanation offered, but to give them credit
to reach out to in case they were subjected to pressure.
Mutual Savings Bankers Express Confidence in President Hoover's Plan for $500,000,000 Credit Pool—
Continued Increase in Savings Deposits.
A continued increase in savings deposits was forecast
Oct. 9 by Howard Biddulph, President of the National
Association of Mutual Savings Banks, who also endorsed
President Hoover's banking pool. Mr. Biddulph attended
the winter meeting of the Association's Council of Administration, called to consider current financial problems. Mr.
Biddulph said:
"Mutual savings banks continue to receive increasingrdeposits and a
growing number of accounts. We are especially pleased with the number
of new savers. The present average of deposits proves that incoming
funds are not accumulations of capital, but day to day savings. All of
this money is being usefully and profitably invested and is strong assurance
of our ability to overcome national difficulties."
Referring to the President's proposals, Mr. Biddulph
stated:
"President Hoover's plan for a $500,000,000 emergency fund to aid
aid distressed commercial banks will prove a stabilizing influence greatly
needed at this time. Such a fund will maintain intact a large amount of
assets that might be sacrificed, thereby still further depressing public
markets. The proposal should be put into effect as soon as possible.
Doubtless many commercial banks already closed would now be open had
such assistance been available. By relieving this strain it is reasonable to
Dallas, Tex.
No. 12 Frank B. Anderson, Chairman of the Board, the Bank of Cali- expect that we shall provide a basis for future recovery.
WOW
"The speed with which the country has responded to the President's
fornia, N. A., San Francisco, Calif.
proposal is a fine expression of national confidence. Depressions spring
Copy of Telegram Sent to Directors.
from fear and hesitation, but here we have a demonstration of faith in the
The organization committee of the National Credit Corporation Is country. It is also proof that we have no shortage of capital when such a
announcing to-night the names of the board of directors of which we are large amount can be found so quickly. I believe the President's plan has
opened the way to a restoration of public confidence, which is the first
gratified that you are to be a member.
OCT. 17 1931.]
FINANCIAL CHRONICLE
2547
essential to normal conditions. Another conspicuous factor
is the spirit
of co-operation shown by business, banking and political leaders,
proving
their willingness in this time of need to subordinate
their personal or sectional interests to the welfare of the country."
Chairman of the Harris Trust & Savings Bank, and Frank R.
Elliott, VicePresident; Earle H. Reynolds, President of the People's
Trust & Savings
Bank, and Robert B. Upham, Vice-President; and Governor
James B.
McDougal and Chairman Eugene M. Stevens of the Chicago
Federal Reserve Bank.
The total amount that the Chicago banks will pledge to the general
Gen. Atterbury of Pennsylvania RR. Says President
pool
will not be decided until the meeting next Thursday. If the
Chicago
Hoover's Proposal for $500,000,000 Bank Pool is Association
follows the lead of the New York Clearing House banks
in
First Step in Relieving Credit Situation—Im- pledging amounts equal to 2% of total deposits, the
total amount will
mediate Action Necessary to Enlarge Discount be close to 250,000,000. However, this fund would be greatly increased if
banks outside of Chicago but still in the Chicago Reserve District also
Functions of Federal Reserve System.
pledge
subscriptions along similar lines. The general plan
however, that
At Philadelphia on Oct. 10, Gen. W. W. Atterbury, funds need not be contributed immediately, but only provides,
as they are needed and
called t-.r by the committees.
President of the Pennsylvania RR. issued
the following
statement regarding President Hoover's proposals for
See Early Effeetiveneu.
The belief was expressed by Chicago bankers yesterday that the plan can
mobilizing the nation's banking resources through a $500,be put into effect speedily and that it should do much to prevent further
000,000 institution:
bank failures by enabling banks
"I have peen asked to express my views on the establishment of the
$500,000,000 revolving fund proposed by President Hoover for relieving
the present credit situation.
"This, to my mind, is but the first step, and the country as
a whole
should realize it. The liquidity of our strong financial institutions
to-day
is our real economic line of defense. They have never
been in so sound a
condition.
"To continue this to the fullest possible extent,
immediate action is
necessary to enlarge the discount capacity of the Federal Reserve
System,
and Congress alone can authorize this.
"If,in his judgment, the President believes it wise to call
an extra session
of Congress in order to give the Federal Reserve
System the requisite
additional latitude, the people should rally to his support
to preventsuch
an extra session from becoming an excuse for a rabid
exhibition of party
politics.
Praises Hoover Leadership.
"The President has recently exercised leadership of a
most unquestioned
and courageous character; has displayed these elements
in a most
manner, and in each instance he has found the country solidly admirable
behind him.
"His action in the first moratorium extension met with
almost universal
acclaim. His action in laying cold facts before the American
Legion brought
results creditable both to the President and to the Legion.
"And in his last action in suggesting the $500,000,000 revolving
fund has
met with a degree of approval throughout the country as to
indicate that
the American people are prepared to back him to the fullest
extent in any
sound policy he may inaugurate.
"I firmly believe, therefore, that in the event an extra session
Is called by the President, with the purpose thereof clearly of Congress
Chief Executive would discover a strong public opinion in defined, the
support of his
leadership."
Alfred P. Sloan Jr. of General Motors Co. Approves
President Hoover's Bank Pool Plan.
Alfred P. Sloan Jr., President of General Motors
Corp.,
issued the following statement on Oct. 7:
I am convinced that the plan of the President is
highly constructive.
It will mobilize our financial resources and enable
them
they will do the most good under guidance of those who to be used where
can deal with each
problem with definite knowledge of its necessities.
It should, in a considerable measure,serve to allay the unreasonable and
unjustifiable hysteria
that prevails which only serves to prolong the present
situtation and the
return of economic recovery.
Chicago Clearing House Approves President
Hoover's
Bank Pool Plan—Chicago Banks Expected
to
Pledge $50,000,000.
Approval of President Hoover's plan for the mobilizat
ion
of banking resources through the formation of a
national
institution of at least $500,000,000 (referred to in
our issue
of a week ago, page 2364) has received the support
of the
Chicago Clearing House Association. Representatives
of
the large downtown institutions of Chicago held a
meeting
with the Clearing House Committee of the Chicago
Clearing House Association on Oct. 9 and took preliminary
steps
to set up a regional organization for the Chicago
Federal
Reserve District, according to the Chicago "Tribune
" of
Oct. 10, which further reported as follows:
As a result of the meeting all the Chicago banks that are
the Association will hold a meeting next Tuesday morning to members of
on the plan, complete the district organization, and pledgevote formally
the various
subscriptions that the banks will subscribe to the general pool.
In accordance with the general plan it is assured that these funds will
be used to
lend aid to banks in the Chicago Reserve District, which
includes Illinois,
Iowa, Indiana, Wisconsin and Michigan.
Back Pool Unanimously.
"The Clearing House Committee voted unanimously to
recommend to
the Chicago Clearing House Association that it should support
the bank
pool plan," explained George M. Reynolds, Chairman of the
also Chairman of the Executive Committee of the ContinentalCommittee and
Illinois Bank
& Trust Co. "In accordance with our action we are sending out
to-night a
call for a general meeting of all banks next Tuesday to vote
on the proposal
and to elect a committee to act in this Federal Reserve
District.
"The Clearing House Committee is voicing its hearty approval
of the plan
and believes it should meet with full support by the banks
in the
district. We believe the plan is very constructive and will do Chicago
much to
relieve the banking situation and to re-establish public
confidence in the
banks. Personally, I am convinced that this is a sound and
constructive
measure and that it should be extremely helpful."
Attend Committee Meetings.
The committee meeting also was attended by Arthur Reynolds,
of the Continental Illinois; Melvin A. Traylor, President of Chairman
the
National group, and Harold V. Amberg ; Joseph E. Otis, co-Chairman First
of the
Central Republic Bank & Trust CO., and 0. 0. Haffner,
Vice-President;
Solomon A. Smith, President of the Northern Trust Co.; Albert
W. Harris,
that are embarrassed by non-liquid but
good assets to borrow on such assets, which would include bonds, mortgages
and other collateral that now are not eligible for borrowing from the
Federal Reserve banks. However, the general plan provides that the fund
shall be made available only to solvent banks and those subscribing to the
pool, and, therefore, it cannot be used in returning to depositors the money
that now is tied up in closed banks.
While it is the general plan that banks subscribing to the pool will
receive debentures running for a year and renewable up to three years, still
it is the expectation of Chicago bankers that amendments to the Federal
Reserve Act or the setting up of a Government credit agency similar to
the War Finance Corp. by Congress this winter will relieve the banks from
tieing up any considerable funds in long-term credits.
In its issue of Oct. 14 the Chicago "Journal of Commerce"
announced that the bankers representing the Chicago Federal Reserve District, in conjunction with the Chicago
Clearing House Association, voiced unanimous indorsement,
on Oct. 13, of the $1,000,000,000 bank credit pool plan. From
that paper we also take the following:
The Chicago group went directly into the work of organizing its unit
of the national body through appointment of a committee of leading bankers to serve this territory. It was the recommendation of the meeting
that the out-of-town representatives in attendance propose the formation
of similar committees in their own sections, although all were invited to
become a part of the Chicago unit if this was preferable to the banks they
represented.
Reynolds Leaves for Meeting.
George M. Reynolds, Chairman of the Executive Committee of the Continental Illinois Bank & Trust Co., who presided at the meeting as the
director from the Seventh Federal Reserve District, left for New York
afterward to attend the first board meeting of the National Credit Corp.,
Saturday.
It is anticipated that out of that meeting a form of organization and
uniform by-laws for the regional groups will be suggested and submitted
to the latter as a guide to their formation and operations.
Organization and operation of the Chicago group will be in the hands of
the following committee:
Melvin A. Traylor, President First National Bank of Chicago, Chairman.
James R. Leaven, President Continental Illinois Bank & Trust Co.
Joseph E. Otis, co-Chairman of the Board, Central Republic Bank &
Trust Co.
Howard W. Fenton, President Harris Trust & Savings Bank.
Solomon A. Smith, President Northern Trust Co.
Other Bankers Attend.
Other financial centers of the Chicago Federal Reserve District represented at the meeting and names of those representatives were as follows:
Indianapolis.—Frank D. Stalnaker, Indiana National Bank, and J. P.
Frenzel, Jr., Merchants' National Bank.
Detroit.—Robert 0. Lord, Guardian Detroit Bank; John Ballantyne and
W. W. Mills, People's Wayne County Bank.
Peoria.—F. F. Blossom, Central National Bank & Trust Co.; William E.
Stone, First National Bank, and George Luthy, Commercial Merchants'
National Bank & Trust Co.
Milwaukee.—Arthur Lindsay, Marine National Exchange Bank; J. H.
Puelicher, Marshall and Haley Bank, and Walter Kaster, First Wisconsin
National Bank.
Des Moines.—B. F. Kauffman, Bankers' Trust Co., and W. H. Brenton,
Iowa-Des Moines National Bank & Trust Co.
Springfield.—J. IL Holbrook, Springfield Marine Bank; George
Keyes,
Ridgeley Farmers' State Bank, and Logan Coleman, Illinois National Bank.
Grand Rapids.--Clay Hollister, Old Kent Bank.
Davenport—William Heuer, Union Savings Bank & Trust Co.
"These out-of-town bankers came with questions as to the method of
operations, but with enthusiasm and confidence in the benefits of the
plan," Arthur Reynolds, Chairman of the Board of the Continental Illinois
Bank & Trust Co., said at the close of the meeting.
"When the plan was detailed to them as outlined in telegraphic and
telephone conversations with Washington and New York, their response
to the President's proposal was whole-hearted indorsement.
"Forms of guaranty and similar matters involving the machinery of
operation gave rise to most of the discussion because the information
received on these points has been necessarily vague with the organization
still in formative stages," Mr. Reynolds added.
One Angle Misunderstood.
"One angle of the plan that has been unfortunately misunderstood is
the matter of credit in one area being utilized in another zone. Any
questions on this score were readily answered, however, by explaining that
the bankers of each region must guarantee the loans extended by the pool
In that territory."
This, it was pointed out, was a definite check upon the overextension
of
credit in any particular area. In addition, the distribution of credit
would
In the last analysis rest upon the Board of the National Credit Corp.,
which
is composed of one director from each of the 12 Reserve Districts,
so that
each section of the country would have equal voice in the
administration
of the fund.
In reply to questions regarding this tapping of credit in
one area for
the benefit of another, the question was asked:
"Will the bankers of your area approve excessive loans
for which they
are responsible?" Upon a negative answer, it was
pointed out that the
2548
FINANCIAL CHRONICLE
bankers of every other section would have the same attitude when it was
their money that would first be lost in the event of bad loans.
Urge Change in Commitments.
One modification of the original outline of the pool's operation considered
necessary for its smooth operation is a different statement of the individual
commitments of the banks. The plan proposes 2% of the net deposit
liability, limited, however, to the legal maximum which the bank can loan
to any one account. This legal maximum is 10% of the capital and surplus
for national banks, but is larger in the instance of some State institutions,
so that the latter might contribute a greater proportion to the pool under
these provisions.
It has been suggested that the 10% of capital and surplus, which is
likewise the limit for an unsecured loan submitted to the Reserve banks
for discount, be applied in the case of both National and State banks in
connection with their subscription to the pool.
Pittsburgh Clearing House Approves President Hoover's
Proposals for $500,000,000 Credit Corporation.
At a meeting on Oct. 10, the members of the Pittsburgh
Clearing House Association approved in principle the proposal of President Hoover for the formation of a $500,000,000 credit corporation. In giving the text of the resolution adopted the Pittsburgh "Post-Gazette" said:
While some of the local banks have informally pledged their acquiescence to the plan to participate to the extent of 2% of their deposits,
the
the matter generally has to come before the Boards of Directors of
Individual banks.
regional
All the details have not yet been worked out, such as the
from
organization, which must be perfected to collect the participations
desiring
the Fourth Federal Reserve District and render assistance to those
to avail themselves of the corporation's facilities.
Resolution Adopted.
The Clearing House Association on Saturday had not been advised who
would head the organization in the Fourth District.
at Its
The following resolution was passed by the Association here
meeting:
in principle
Resolved, That the Pittsburgh Clearing House Association approve
as suggested by the
the plan for the organization of a National Credit Corporation,
may, when necessary, procure
President through the operation of which bankswhich
are not legally eligible for
accommodations upon the basis of sound assets,
rediscount at Federal Reserve Banks.
sent to Mortimer N.
was
telegram
After the meeting the following
York,
Buckner, Chairman of the National Organization Committee, New
by J. C. Chaplin, Vice-President of the Pittsburgh Clearing House Association:
principle
At a special meeting of the Pittsburgh Clearing House Association the
Credit Corinvolved in President Hoover's plan for the creation of a S500,000,000
rediscount
for
poration for the discount by subscribers of assets not now eligible
In the Federal Reserve Bank, was promptly approved.
It was pointed out that the plan of the National Credit Corp. provides
that before a bank can secure assistance it must be a subscriber to the
debentures of the corporation.
Banks in Hartford (Conn.) Clearing House Approve
National Credit Corporation.
Member banks of the Hartford Clearing House Association approved in principle, on Oct. 12, the proposed formathe
tion of the National Credit Corp. At the same time
trusof
boards
and
s
directorate
matter was referred to the
which
tees of the several member banks because the amount
the
what
of
excess
in
sum
a
participation would entail was
representatives felt justified in assuming the responsibility.
quote,
The Hartford "Courant" of Oct. 14, from which we
also stated in part:
Committee in Charge.
formation of the
The committee to take up and have charge of the
President of the
Connecticut Association consists of Nathan D. Prince,
of the HartHartford-Connecticut Trust Co.; Robert B. Newell, President
Vice-President of
ford National Bank & Trust Co., and Arthur D. Johnson,
the Proenix State Bank & Trust Co.
Clearing
The Boards of the several banks belonging to the Hartford
in the course
House Association will take action at their regular meetings
of the next week or two.
of ClearIt is expected that all banks in Connecticut, whether members
subscriptions to
ing House Associations or not, will participate in the
capital to the National Credit Corp.
[VOL. 133.
The first meeting of the Board of Directors of the National Credit Corp.
will be held at the offices of the Federal Reserve Bank in New York on
Saturday, Oct. 17, at 11 a. m., to elect officers, and formally approve:
1. Articles of agreement of the local associations.
2. Suggested by-laws to be adopted by the local associations.
3. Subscription blanks to gold notes.
4. Application blanks for loans.
5. Suggested resolutions of the local associations covering acceptances or loans
and request on National Credit Corporation for advances,
and such other details of organization and procedure as should properly
come before it.
Cash advances in each of the Federal Reserve Districts will be arranged
through various loan associations to be organized in each district under
the supervision of the Director representing that district. The number of
loan associations in each district will be determined by the District
Director.
In the First District (with headquarters at Boston), under the direction
of Daniel 0. Wing, Chairman of the Board, the First National Bank of
Boston, local associations already in process of organization are as follows:
One in Maine.
One in New Hampshire.
One in Vermont.
Two in Massachusetts.
One in Eastern Connecticut.
One in Rhode Island.
Banks in the New York Clearing House have formally approved the plan
and agree to subscribe to $150,000,000.
The New York banks will meet promptly to constitute themselves an
association under the provisions of the plan so that the local association
in New York will be prepared to function next week.
The Chicago Clearing House reports its approval of the plan and its
readiness to organize immediately.
John M. Miller, Jr., President of First & Merchants' National Bank,
Richmond, Va., has selected bankers to organize loan associations in North
Carolina, Maryland, District of Columbia, West Virginia, South Carolina
and Virginia.
Similar action is being taken in the other districts.
Savings banks in many parts of the country have indicated a desire to
co-operate with the Credit Corp. Savings banks, if so permitted under
State statutes to subscribe to the gold notes, will be admitted to membership in local associations, along with commercial banks.
Inquiry has been made as to whether banks, 2% of whose deposits would
amount to more than 10% of their capital and surplus, would be expected
to subscribe to the full 2% of their deposits. The answer, of course, is
that no bank will be expected to subscribe more than the legal limit.
Within that limitation, however, President Hoover expects every bank in
the United States to participate in the plan on the basis of 2% of its net
demand and time deposits.
With the support of the plan which is being manifested throughout the
country, and the co-operation given to it by the Clearing Houses, there is
every reason to believe that the National Credit Corp. will be in position
to function early next week. The fact that such a large amount of credit
when and if needed will be so promptly available to banks with sound,
though not immediately liquid, assets is already exerting a reassuring
influence.
Mr. Buckner also issued the following announcement on
Oct. 14:
There is being forwarded to all the clearing houses of the country
to-night:
First: Copies of tile proposed plan for organization and operation of the National
Credit Corporation.
Second: Subscription blanks to the Notes of the Corporation.
The proposed plan seta forth:
First: That In order to enjoy the facilities of the Corporation It is essential that
each bank subscribe to the Notes of the Corporation on the basis of 2% of the net
demand and time deposits of the subscribing bank, not to exceed in any case 10%
of its capital and surplus.
Second: That the subscribing banks will, as may be arranged by the Directors
into one
representing each of the 12 Federal Reserve districts, form themselves
or more voluntary associations to function under articles of agreement to be adopted
by each association.
Third: The plan whereby advances may be obtained from the Corporation by
any of the members of their associations.
Fourth: The limit of the liability of each member-bank in respect not only of its
own obligations under the plan, but also of the obligations which may be incurred
by the group of which it is a member.
Fifth: The conditions under which advances may be made by the Corporation
to any group or association in excess of the aggregate Note subscriptions by the
members of that association.
of the
Attention of all banks is being called to the recent statement
President saying:
interest of all individual
I consider that it is In the national interest, including the
should support this move
banks and depositors, that all the banks of the country
National assurance and in
meat to their full responsibility. It is a movement of
unity of action in an American way to assist business, employment and agriculture.
The Comptroller of the Currency has ruled that National banks may
lawfully invest in the obligations of the Corporation up to their legal
limit, which is 10% of their capital and surplus.
The active co-operation by the banks in the United States, assurances
concerning which have already been given, will enable the Corporation to
achieve its purpose of aiding and assisting banks throughout the country
in utilizing their resources and credit to stabilize financial and economic
conditions. It should be emphasized that the plan of the Corporation will
assist banks with sound assets (even if not immediately liquid) in obtaining cash. The support of the banks of the country is being given to the
plan because of the sound banking principles on which it is being developed.
It is believed that the greatest contribution that can be made to confidence
Is to have the public understand that banks may be assured through the
Credit Corp. of being able to convert sound slow assets into cash when
necessary.
Articles of Incorporation of National Credit Corp.
Filed—Local Loan Associations in Process of
Organization in Boston, Richmond, &c., Federal
Banks
Reserve Districts—Co-operation of Savings
Houses.
Clearing
to
—Notices
for the new NaThe filing of articles of incorporation
announced in the foltional Credit Corp., on Oct. 13, were
date by Mortimer N. Buck- Large Redeposits Seen as Result of New Credit Pool—
lowing statement issued on that
Under-Secretary Mills Says National Corporation
on:
Organizati
the
of
Chairman
ner,
Credit Corp.
National
the
of
Will Do Much Toward Establishing Confidence—
Directors
of
Board
the
The appointment of
the country. All day to-day reports
New York Reserve Bank Raises Rate a Second
was favorably received throughout
localities
numerous
affirmative action in
Time—Outward Movement of Gold Recorded,
have been coming in indicating
promptly.
to put the plan into operation
Under
Del.
Dover,
Money in Circulation Increases and Credit Volume
at
were filed to-day
The Articles of Incorporation
to
country will be expected to subscribe
Rises.
the
in
bank
each
Articles
these
demand
on the basis of 2% of its net
the gold notes of the Corporation
Operations of the National Credit Corporation, recently
and time deposits.
Houses and organized at the instance of President Hoover, were said by
Clearing
500
approximately
There are in the United States
underfacts will indicate the magnitude of the
Ogden L. Mills, Under-Secretary of the Treasury, in an oral
seine 25,000 banks. These
into co-operation with
quickly
institutions
these
of
all
statement, Oct. 15, already to have given indications of
taking to organize
such a corporation.
OCT. 17 1931.]
FINANCIAL CHRONICLE
helpfulness. The "United States Daily" of Oct. 16 from
which we quote, notes that although the Under-Secretary
did not know whether there had been any material return of
money from hoarding places, he believed the corporation
would do much to bring about confidence. "It is the conviction of the Treasury," Mr. Mills said, "that the corporation's activities will result in restoration of sufficient confidence to cause the redeposit of considerable funds in banks."
"The Credit Corporation should perform a real service in
bringing about better times," he said. The following is also
taken from the "Daily":
•
Rediscount Rate Raised.
Mr. Mills' statement was followed later in the day by a Federal Reserve
Board announcement that the Federal Reserve Bank of New lc ork had increased its rediscount rate from 2 M to 3 %. This was the second increase
for that bank in a week.
New Confidence Seen.
It is the conviction of the Treavry that the corporation's activities will
result in restoration of sufficient confidence to cause the redeposit of considerable funds in banks. The Treasury recognizes that there has been
much money hoarded, and if the confidence engendered by the corporation
accomplishes a return of much of this money to the banks it will have been
a result that is held to be of vast importance.
There is no alarm at the Treasury over the outward movement of gold.
This country together with France holds three-fifths or more of
the world
gold stocks and the amount held in this country is deemed to be so large
that the export may continue for some time without reaching a point where
it can be said that the United States has only the amount of gold that it
actually needs.
The outward gold movement is looked upon as the result of operations
of foreign central banks and individuals who are removing their
balances
from this country. In one way,this may be regarded as indicating
a better
feeling in some of the countries abroad, for some time ago there was
an
admitted flight of capital from some of the foreign powers whose stability
was questioned.
Foreign central banks, obviously, desire to build up their metallic reserves
to the highest point within their power. Uncertainty still exists in many
money centers and the banking interests naturally want to have the strongest
protection they can arrange. Much of the gold has gone to France, but
Holland, England and Switzerland have taken some of the recent exports.
Total Foreign Deposits.
The Department of Commerce records show that foreign deposits in
American banks at the end of 1930 amounted to approximately
81.600,000,000, and foreign short-term securities held here aggregated more than
$2,700,000,000. Those figures obviously are much lower now, and
were
much lower even before the outward movement of gold started.
Considering all of the factors involved in the gold movement,
it is the
belief that the current movement of gold is more arbitrary than
is normal,
by which is meant that the movement is not following the
ebb and flow of
commerce to the extent that obtains under normal conditions.
The gold movement and the hoarding of money has served
to tighten the
money rates to a considerable extent as is evident from the
interest rate
which the Treasury was forced to pay on its last refunding issue
of $50,000,000 in Treasury bills. That offering was sold at a discount equivalent
to an
annual interest rats of 2 %•
Prior to the announcement of that offering and since, there has
occurred
an upward movement in the Federal Reserve Bank rediscount
rates. The
Treasury, however, has no comment to make at this time about
the probable
conditions which the Department will meet in its next
large refunding
operation which is scheduled to take place on Dec. 15.
The December
refinancing must take care of something like $995.000,000, with
certain
small bill issues maturing in the meantin.e that will have
to be refunded.
2549
effect by the leading bankers, "will speedily clear away the
fog and mists of uncertainty and doubt, and will restore confidence amoung our people," Charles S. Hamlin, member
of the Federal Reserve Board, declared on Oct. 12, addressing a luncheon tendered the delegates to the fourth Pan
American Commercial Conference by the Carnegie Endowment for International Peace. The New York "Journal of
Commerce" reporting this in a Washington despatch Oct. 12,
continued:
Asserting that a cloud of despondency and depression has settled
down
upon the pepples of the world and confidence, the mainspring of prosperity,
has been rudely shaken, Mr. Hamlin said that the hope and foundation of
peace grows out of the interdependence of nations.
Scores Increased Armaments.
"The weary world demands the removal of every bar to the continuance
of peace and looks to its political leaders to bring this about," he declared.
"The great bar to peace to-day lies in the militaristic spirit calling for everincreasing armaments. The great hope for lasting peace lies in the universal
reduction of armaments, to which end the nations of the world should
pledge themselves.
Members of Cleveland Clearing House Act to Support
National Credit Corporation.
Members of the Cleveland Clearing House Association
voted on Oct. 14 their support to the National Credit Corporation, according to the Cleveland "Plain Dealer" of
Oct. 15, which further said:
The city's leading financial leaders met with Hoyt V. Shulters, President
of the Cleveland Clearing.House Association, and laid the foundation for
organization.
The Association will await further details of the plan before organizing
to carry our the program, it was announced by H. V. Shulters, who said
that Arthur E. Braun of Pittsburgh, director of the National Credit Corporation for this district, has been invited to come to Cleveland to present
the plan to the Cleveland bankers.
At that meeting final decision will be made in determining future policies
and whether the Cleveland group will unite with other Ohio and district
banks or act individually in supplying credit.
Saturday in New York the 12 directors of the National organization will
gather for their first meeting.
Bankers meeting yesterday with Shulters were Joseph R. Nutt, Chairman, the Union Trust, and Treasurer for the Republican National Committee; Harris Creech, President, the Cleveland Trust Co.; W. M. Baldwin, President, Union Trust; Corliss E. Sullivan, Chairman, the Central
United Bank; J. Arthur House, President, Guardian Trust; John B. Dexter, President, Society for Savings, and E. E. Barker, Vice-President of
the Midland Bank.
Appoints Clearing Douse Manager.
Shulters announced the appointment of George A. Stephenson, manager
of the bank relations department of the Federal Reserve Bank of Cleveland, as Secretary, Treasurer and Manager of the Clearing House Association to fill the vacancy caused by the sudden death of C. A. Paine.
Omaha Clearing House Approves in Principle National
Credit Corporation.
Bankers of Omaha, meeting on Oct. 12 at the office of
W. B. Hughes, Secretary of the Omaha Clearing House
Association, sent the following telegram to Mortimer L.
C. E. Rieman of Western National Bank of Baltimore Buckner of New York, Chairman of the Organization Committee of the National Credit Corporation:
to Form Maryland Unit of National Credit Corp.
Omaha Clearing House Association heartily approves in principle
Charles E. Rieman, President of the Western National theThe
formation of the National Credit Corporation. We believe the plan is
Bank of Baltimore, is to organize Maryland bankers to plan constructive and will result in great benefits.
for the operation in that State of the $500,000,000 National
The Omaha"Bee" of Oct. 14,from which we quote,added:
Credit Corp. His appointment as organization manager
Bankers following the meeting said that they would await further action
in Maryland was made on Oct. 14 by John M. Miller, Jr., before forming a local organization to work with the corporation.
President of the First Merchants National Bank of Richmond, Va., who was designated by the central committee in Bankers Predict Wider Credit Body—National
CorNew York as the Fifth Federal Reserve district's represents,
poration Viewed as Temporary Expedient —
tive on the Credit Corporation's directorate. The Baltimore
Congress Expected to Act.
"Sun" in indicating this in its Oct. 15 issue, also said:
Despite the fact that the articles of incorporation of the
Federal Reserve Officer.
National Credit Corporation make possible perpetual
Mr. Reiman is a director of the Federal Reserve Bank of
Richmond and existence of the institution, the feeling in
banking circles
head of Henry Rieman & Sons. brokers. He also is a Vice
-President and
Executive Committee member of the Baltimore Clearing House
and was a was that it would be a temporary expedient, only designed
member of the State Drouth Committee appointed by Governor
Ritchie to handle the situation until such time as authorization
in 1930.
could be obtained from Congress creating another organizaMr. Rieman said his first step would be the organization of a local
unit
of the National Credit Corp. When the Baltimore group has
formulated tion with powers similar to those exercised by the old War
its plans, a conference of representatives of banks throughout the
State Finance Corp. The New York "Times" of Oct. 14, from
will be called, probably here next week, he added. Whether all
banks in
the State should form a single National Credit Corp. unit or, instead, which we quote, further said:
form several units, it to be taken up at the State-wide meeting.
Not Over $10,000,000.
It is estimated that the subscription of Maryland banks to the National
Credit Corp. debentures will not exceed $10,000.000. These subscriptions
are limited by State and Federal banking laws in proportion to the combined
capital and surplus of subscribing banks. The combined capital and surplus
of national banks. State banks and trust companies in Maryland was
approximately $97,000,000 as of June 30.
The consensus was that the new corporation would have very broad
powers to deal with banks and other financial organizations, possibly
including a provision for financing the shipment of commodities to countries with depreciated currencies.
It was remarked, however, that Congress might subsequently authorize
a Federal institution which would handle the credit situation in general,
but would still leave room for the National Credit Corp. to extend certain lines of credit with banks. In this event the corporation
would
be made Permanent.
C. S. Hamlin of Federal Reserve Board Sees Hoover Comptroller of Currency Pole Says National
Banks
Plan for Economic Stabilization Aiding
Confidence
May Lawfully Invest in Obligations of National
—Makes Peace Plea at Pan American Conference.
Credit Corporation.
The plan announced by President Hoover for economic
Endorsement of the National Credit Corp. and
a brief
stabilization in the United States agreed to in principle by outline of how National banks may
participate in the acpolitical leaders of both parties, and now being carried in tivities of the corporation were given
in a statement issued
2550
[VOL. 133.
FINANCIAL CHRONICLE
by John W. Pole, Comptroller of the Treasury, Oct. 13.
Mr. Pole's statement was published as follows in the "United
States Daily":
Numerous inquiries of a technical nature from national banks and
clearing house committees have been directed to this office concerning
their participation in the national corporation which has been proposed
by the President and has been so favorably received by both the bankers
and the public.
This office endorses the proposal.as a highly constructive measure.
Participation by national banks in the pool is in every way proper and
desirable. National banks may lawfully invest in the obligations of the
National Credit Corp. to the extent of 2% of their net deposits, provided
that such 2% shall not exceed in amount the limitation placed upon them
by statute, which is 10% of their unimpaired capital and surplus.
The plan is meritorious and should receive the support of all national
banks.
Bank Credit Strain Reported As Rapidly Abating—
Governor Harrison of New York Federal Reserve
Bank Meets with Bankers.
Conferences between the heads of all the large commercial
banks and Geo.L.Harrison, Governor of the Federal Reserve
Bank, were resumed on Oct. 16, said the New York "Sun"
of last night, the question of liberal credits for interior banks,
details of the functioning of the National Credit Corp. next
week, the international banking situation and various phases
of local banking policy in the light of the higher Federal
Reserve Bank discount rate being among the topics discussed. The paper quoted, also reported as follows:
the Committee on Banking and Currency, of which you are a member, aro
expected to consider the specific measure on this subject when it has been
worked out and presented to the Congress.
"I am anxious to contribute every possible effort to the strengthening of
to
credit and revival of business, but have no intention of giving approval
the
any plan which I believe is calculated to unload frozen securities on
myself of
Federal Reserve Banks, and I shall claim the privilege and avail
the committees
the opportunity to confer with you and your associatea on
during the course of efforts to perfect the contemplated measure."
President Whitney of New York Stock Exchange
Asserts Ban on Short Selling Would Not Halt
Business Depression—Restrictions of Exchange on
Short Selling Incident to Closing of Foreign
Exchanges Last Month—Opposed to "Bear Raiding."
Richard Whitney, President of the New York Stock
Exchange, delivered an address before the Hartford Chamber
of Commerce, Hartford, Conn.; yesterday (Oct. 16). His
subject was "Short Selling" and the address was also broadcast over the nation wide network of the Columbia Broadcasting System at 10:30 p. m. Eastern standard time.
Mr. Whitney presented an explanation of "short selling;"
he asserted that a man who "sells stock short and meets
his obligation to deliver by borrowing does substantially
the same thing as a man who buys stock and pays for it
with borrowed money." "If it is wrong," he said, "for a
man with credit to borrow stock because he is selling it
short, it is just as wrong for a man to borrow money to buy
stock or any other kind of property." "Stock market
prices, as a discerning editorial writer recently expressed it,"
Mr. Whitney noted, "are not prosperity itself, but simply
an index to it. The stock markets reflects business conditions. It is not their cause. It is wrong to say that a
ban on short selling could halt our business depression.
When economic equilibrium in the world's affairs is again
re-established . . . liquidation of securities will stop„
buyers will regain confidence and prices will rise. The
prohibition of short selling would delay and cannot hasten
this process." Mr. Whitney reminded his hearers that the
Stock Exchange has frequently investigated the facts concerning short selling, and he presented statistics to "prove
the truth of my statement that short selling has not been
the cause of declining security prices." A review of the
financial crisis caused when Great Britain suspended gold
payments lost month and the emergency measures taken
at that time by the New York Stock Exchange was contained in Mr. Whitney's address, who also, in his remarks
on "bear raiding," stated that "the Exchange is absolutely
opposed to 'bear raiding' and has used and will continue
to use, all of its power to stop this practice and to discover
and punish 'bear raiders'." In large part Mr. Whitney's
address follows:
The conferences were begun around 11 o'clock. and the presidents or
Chairmen of the largest banks, with the president of the Clearing House
and members of the important Clearing House Committee, attended.
to well
Similar conferences were held all yesterday afternoon, lasting
banks to
after 6 p.m., at which arrangements were made by local clearing
turn over to the National Credit Corp. the $150,000.000 they had Pledged
the Clearing
at the time it was initiated. Following the meetings last night,
House Committee was called into session at 8 p.m. and immediately
of 1%.
34
by
deposits
local
bank
on
paid
advanced the rate of interest
There was an unmistakable air of optimism among bank presidents
attending the meeting to-day, based upon several factors connected with
the present strain upon this market, occasioned by foreign gold within
drawals and currency hoarding, both of which have been instrumental
forcing two successive weekly increases in the Federal Reserve Bank's
discount rate the latest being made yesterday. The opinion was freely
expressed that the backbone of the so-called crisis had been broken.
Developments to which attention was called were:
Currency hoarding is diminishing, as shown by the weekly Federal
Reserve system statement, which revealed a smuch smaller increase in
circulation than was registered a week ago. If the movement now in progress continues, next week will show a nea decrease in currency outstanding.
The orthodox central bank policy of meeting a currency and credit strain
public
is now being placed in effect. It is briefly described as "giving the
plenty of money and credit, but making them pay for it through higher
rates."
New
All deserving interior banks are being taken care of by all the
York clearing banks, now working as a unit under Governor Harrison's
assistaggressive direction. This is partly a stop gap method of rendering
It
ance pending the functioning of the National Credit Corp. next week.
far
Is figured that with to-day's demands New York banks have put up so
Bank.
$150,000,000 and are discounting liberally at the Federal Reserve
The gold outflow is diminishing. Large shipments were made to-day
more
no
to-day
noon
to
up
and
and will continue, but their aggregate is less
gold had been earmarked for the third successive day.
Foreign credits subject to conversion into gold have been nearly exJust what is short selling? Let us imagine a man has become convinced
banks said
hausted except those of the Bank of France and other French
that a certain security is selling at too high a price. He feels that it is cerbe
may
credits
these
of
whole
The
and he wishes to take advantage
to aggregate around $300,000,000 still.
would tain to sell at a lower price in the future
paid out in gold without diminishing supplies here to an extent which
of this situation. To do so, he tells his broker to sell the stock on the Stock
market.
this
cramp
seriously
order is given the broker usually does not
converted into Exchange. At the moment the
No more heavy volume of acceptances remain to be
know whether his customer is making a short sale or is actually selling stock
holdings
bank
central
Foreign
money by local banks or by foreign banks.
through to the floor of the Stock Exwhich at that he possesses. The order is sent
of bills have shrunk to $40,000,000. Local commercial banks,
the same way as any other order. The
now hold but change and is executed in exactly
acceptances,
of
0
$600,000,00
over
held
August
of
end
the
the man who is selling has not possession
which is broker who buys is not aware that
$60,000,000. The Federal Reserve Bank holds $730,000,000,
of the stock. The contract made between the brokers is for delivery of
outstanding.
business day, and the buying broker
about SO% of all the bills now
gold the stock against payment on the next
The gold loss in the last few weeks, since England went off the
the stock to him in accordance with
crises, will demand that the seller deliver
for delivery arrives that a short
standard and various European countries, experiencing monetary
day
the
and about the contract. It is only when
drew upon New York, has been almost $675,000,000 gross
sale differs from a sale of long stock. .The man who has not in his possession
$620,000,000 net.
the stock which he has ordered his broker to sell must obtain it in order
to carry out his contract. This is done in the usual course of business by
short seller borrowing the stock from other persons who possess it.
Senator Robinson of Arkansas Demands "Pool" Safe- the
Stocks can be borrowed just as money can be borrowed. Therefore, the
ng
"Unloadi
Against
Guards—Arkansan Warns
short seller borrows the stock and delivers it on his contract and the short
Federal Frozen Securities on Reserve Banks"— sale is then complete.
You can readily see that a man who thus sells stock short and meets
Asks Speculation Curb.
his obligation to deliver by borrowing does substantially the same thing
pays for it with borrowed money. The short
Answering a letter from Senator Carter Glass of Virginia as a man who buys stock and
of seller, at the time of the sale, has not got the stock in hand to deliver;
regarding President Hoover's proposals for assistance
as long purchaser, at the time of the purchase, has not got the cash in
at Little Rock just
hand to pay for it. In each case, the seller or buyer has sufficient credit
credit, Senator Robinson of Arkansas stated
approve "any plan which I to borrow the stock or money with which to meet his obligation. If it is
on Oct. 12 that he would not
to borrow stock because he is selling it short,
frozen securities on the wrong for a man witha credit
unload
to
calculated
believe is
it is just as wrong for man to borrow money to buy stock or any other kind
Rock
Little
from
dispatch
A
of property.
Federal Reserve Banks."
York "Times" went on
When we borrow money or stock or any other kind of property what we
(Associated Press) given in the New
really do is to obligate ourselves to return the same or equivalent property
at some time in the future. Few people seem to realize that a short sale is
to say:
to the Arkansas Democrat, said he nothing but a contract to deliver stock in the future. The short seller, when
The Virginia Senator, in a letter
the Hoover proposals to
upon
seize
to
seek
might
he has made his sale, is obligated to return the equivalent to the person
feared some interests
country with speculative securities."
"Clutter up the Federal Banks of the
be who loaned him the stock. The loan may be due at a fixed time or it may
should
"it
reply.
in
wrote
Robinson
be payable on demand, but in either case the short seller must at some time
"In this connection," Senator
framed by which it is proposed
he has borrowed and return it to the lender. This is the
stated that if any definite measure has been
submitted to me or buy the stock that
been
not
it
paper'
of short selling that makes it so essential to an open market for
to broaden the base of 'eligible
understanding is that any feature
the
of
extent
the
that
and
published,
securities. Every man who has sold short is, as I have said, a potential
Otherwise
prudently safeguarded so as
legislation dealing with this subject must be
buyer of securities, and this is a source of great stability to a market, bethe
under
or
support
the
cause experience shows that when prices suddenly decline the short sellers
not to encourage speculative transactions with
System.
auspices of the Federal Reserve
stocks in order to discharge their loans. This is especially true
generally recognized purchase
"Your familiarity with this and related subjects is
crisis when other people hesitate to buy and the short sellers repthe business world. in times of
power which prevents the market from becoming
not only by your fellow-legislators but also throughout
Chairman, and resent the purchasing
"The special Committee, of which. I believe, you are the
•
OCT. 17 1931.]
FINANCIAL CHRONICLE
demoralized. The Stock Exchange has recognized this fact for many years
and has always permitted short selling because it was convinced that no
securities market could long continue in business if short selling were forbidden.
In spite of all that has been said about short selling, there can be no doubt
that it is a lawful practice. There are many decisions by our highest
courts upholding it. There is one, however, which is worth quoting, not
only because it is a decision of the Supreme Court of the United Slates,
but also because the opinion was written by one of our most eminent Jurists.
who, with broad vision, has recognized the necessity of upholding the practice of selling for future delivery. I refer to the opinion of Mr. Justice
Holmes in the case of Board of Trade vs. Christie Grain & Stock Co., in
which he said:
• • * "Of course, in a modern market contracts are not confined to
sales for immediate delivery. People will endeavor to forecast the future and
to make agreements according to their prophecy. Speculation of this kind
by competent men is the self-adjustment of society to the probable. Its
value is well known as a means of avoiding or mitigating catastrophes,
equalizing prices and providing for periods of want. It is true that the
success of the strong induces imitation by the weak, and that incompetent
persons bring themselves to ruin by undertaking to speculate in their turn.
But legislatures and courts generally have recognized that the natural
evolutions of a complex society are to be touched only with a very cautious
hand, and that such coarse attempts at a remedy for the waste incident to
every social function as a simple prohibition and laws to stop its being are
harmful and vain. This court has upheld sales of stock for future deliven,
'" • * •
As Justice Holmes so clearly points out, short selling is not only a lawful
practice but it is also the expression of the business judgment of an individual or individuals in selling something where the belief exists that the
prevailing price is too high to be warranted by existing conditions. This
opinion is set off against that of the purchaser, who believes the price is
warranted. Of these fundamentally different views, one is right and the
other is wrong, as may be proved over a period of time. Human judgment
is never infallible and yet he whose Judgment at a particular time is proved
incorrect may find himself at a later period justified in his first opinion.
However, in the interim, where his judgment has been wrong, either as a
purchaser or as a short seller, he should not put the blame for his lack of
business judgment upon the market place that affords him the opportunity
to buy or sell.
For a great many years, the short sale has been a regular feature, not only
of all the leading security markets in the world, but also of practically all
branches of business. Competent and impartial economic students both
here and abroad have long declared that short selling, by restraining inflation and cushioning sharp declines, tends to stabilize the fluctuations of
prices. That this contention is no mere academic theory, recent occurrences in the stock market have very clearly shown, and I shall have occasion in a moment to allude again to this vital service of the short sale.
In addition, we of the Stock Exchange are compelled by daily experience
in our business to realize other and equally necessary reasons for continuing
to permit and approve the practice. For one thing, short sales enable
persons who hold securities at considerable distances from New York City
to liquidate them speedily and safely. Were short selling to be prohibited,
it would mean that no one more than twenty-four hours' mailing distance
from New York could freely sell in our market the stocks which he owns.
Short selling is also regularly employed as a "hedge," not at all for the
purpose of making speculative profits, but for insuring against losses due
to price fluctuations. Probably the most important cases of this sort
occur in our odd-lot business. To forbid such short selling would paralyze
the odd-lot business as we know it to-day. It would compel the charging
of a huge, instead of a small, price differential between 100-share lots
and odd lots of less than 100 shares. This, I would remind you, is no mere
question of financial technique, confined in its influence to Wall Street.
It would immediately affect the realizable value of securities held by
millions of American citizens all over this country.
Any halt or hindrance to short selling would have the effect of driving
from the stock market the most important sources of buying power, and
it could only lead to an excess of sellers and further declines in prices.
Whether the opponents of short selling know this or not, the New York
Stock Exchange knows it. and it is one of the basic reasons for the Stock
Exchange attitude in defense of short selling.
The decline in security prices has not been due to short selling, but has
been due to our unsatisfactory business conditions and to the liquidation
of securities owned outright or held on margin. I am not making this
statement in any doctrinaire fashion, but on the basis of cold fact. I am
basing it not only upon the experience of the New York Stock Exchange
through business depressions for over a century, but also upon our knowledge of the actual forces recently at work in the stock market. I would
remind you that the Stock Exchange has frequently investigated the facts
concerning short selling. In 1914 and again in 1929 and 1930. the Stock
Exchange obtained comprehensive and illuminating statistics concerning
it. In May of this year this work was renewed upon a still more extensive
scale. Ever since May 25 1931 we have obtained, at least weekly, the
number of shares which composed the entire short interest in the market,
and since Sept. 21 those reports have been made daily. These statistics,
to which I am about to refer, prove the truth of my statement that short
selling has not been the cause of dirlining security prices.
On May 25 1931, when our members again began to report their
short
accounts to the Exchange, the total size of the short interest in
the market
amounted to 5,589,000 shares. This aggregate fell
considerably while
stock prices remained relatively unchanged until
the news of the proposed
international debt moratorium was announced,
when the short interest
dropped still further as the excited but temporary
rise in prices ensued.
Through August the short interest increased
somewhat, while prices fluctuated uncertainly. It rose to a new peak of
4.480,000 on Sept. 11, but
on Sept. 18—the last weekly date before the English
sterling crisis struck
the stock market—it had again fallen and stood at
4,241,000 shares.
The subsequent fluctuations in the short interest I shall
recount presently.
For the time being I wish to point out that the
aggregate short interest
in the market, even at its May 25 peak of 5,589,700
shares, constituted
only 2-5 of 1% of the 1,305,516,710 shares listed as of
June 1. An estimate of shares in the "long" account carried by
stockbrokers, puts their
number at approickmately 59,000.000—or about 1054
times the contemporary short interest. All listed shares represent
potential selling power
and shares in "long' accounts of course represent an
actual selling threat
immediately in the market. Shares in the short
interest, on the other
hand, represent the only compulsory buying power
which the market
possesses.
The real cause of declining security prices, as I have said,
was not short
selling but the continued liquidation of stocks held both
outright and on
margin. In order to comprehend the reasons for this
extensive tendency
to liquidate securities we must remember that it arose not in
the stock
market, but quite outside of it, and the stock market has
been its victim
rather than its cause. Institutional investors, because of the
laws which
govern their investments, have frequently been compelled to
sell. The
indentures of some investment trusts and security holding companies
have
similarly been responsible for forced llouldation of their investments.
2551
Many companies with a surplus in the form of securities in their treasuries
have, because of the depression, been compelled to convert these securities
into cash. In every depression which we have ever had, compulsory
liquidation of this sort has been imposed upon the stock market, in order
to keep business going.
There is also another kind of compulsory liquidation of securities In
business depressions, which is due to the fact that the Stock Exchange is the
most available market. Owners of land or real estate, of private business
enterprises, of inventories of goods, or of unlisted securities, often find
that they cannot sell these forms of property, and they are inevitably
forced to obtain funds by selling securities which are listed on the New
York Stock Exchange. Some of the people who thus sell listed stocks in
order to continue to carry less salable property forget that their own sales
have been an important cause of the decline in security pig( es and often
unjustly attribute to short selling the result which they themselves have
been instrumental in bringing about.
A clear proof of the fact that it has been liquidation rather than short
selling which has been responsible for declining security prices, has, as a
matter of fact, been afforded in the security market itself, at least to
those who have eyes to see. The decline in prices has not occurred merely
in stocks, where short selling is permitted, but also in the bond market
where short selling is all but impossitle, because of the difficulty of borrowing for delivery. I can speak feelingly on this subject, because I am in
the bond business myself. Despite the fact that bond prices are usually
steadier than stock prices, probably the greatest and most ridiculous
declines have taken place in bonds rather than in shares. In some cases,
the bonds of certain governments bearing a high rate of interest have sold
at a price below that of bonds carrying a low rate of interest, despite the
fact that both issues were obligations of the same government, were equally
secured, and due at approximately the same date. The bonds of obviously
sound governments have likewise sold far below bonds of other countries
whose financial position has been much more doubtful. Very plainly this
has not been due to short selling, but to liquidation. Indeed,if bonds could
readily be sold short,abnormalities of this sort would have been considerably
reduced.
Other cases could be cited where unlisted stocks, which cannot be sold
short, have shown price fluctuations far greater than the average listed
stock issue. This is not a matter of mere conjecture or assertion, but of
fact. It completely shatters the contention that it is the short seller
who has forced prices down. Nor have these facts been difficult to obtain.
They have been printed on the news tickers throughout the land, and
published in practically all of our newspapers. The principal moral
to be drawn from the evidence in regard to declining security prices is.
therefore, that we must base our opinions on fact and not on conjecture.
With this general background, I can now review the financial crisis
caused when Great Britain suspended gold payments, and the emergency
measures which were taken by the New York Stock Exchange. The
sensational news from London had not been anticipated by most of us.
In fact, the very large American and French credits which had so recently
been extended to Great Britain seemed to preclude the likelihood of any
such action. I need not explain to this audience how severe a shock the
news was, not only to this country, but to the whole world. It is sufficient to recall the fact that every important stock exchange in Europe
save only Paris closed instantly, and that restrictive measures on banking
and trade were very commonly adopted. Such a situation in finance
had not occurred since the crisis created by the outbreak of the World
War, when the New York Stock Exchange and every other important
stock exchange in the world had been compelled to close.
When the Governing Committee of the New York Stock Exchange met
on Monday, Sept. 21. at 9:15 a. m., all the important stock exchanges in
Europe except Paris had already suspended, and Paris had concluded its
Monday session under severe restrictions. In consequence the New
York Stock Exchange remained the only great open market in the world
where securities could be sold. It was obvious to all that a crisis was
at hand, that for the time being a normal market might not exist, and
that emergency measures must be taken. The only real question was.
Just what those emergency measures should be.
The most drastic step would have been to close the Exchange. This
was actually done twice before, for a few days in 1873 and for several
months in 1914. We knew from experience that closing the Exchange
would not hold up security prices, but on the contrary would plunge them
down to levels such as were seen in the "gutter markets" of August 1914.
It would have frozen bank loans and investments, with serious consequences to our whole banking structure. Obviously, this was a step to
be avoided if any other possible alternative could be found. A second
possible emergency measure was the establishment of minimum prices.
which the Stock Exchange had employed with good results when it reopened
in the late fall of 1914. But the present situation was utterly different
from that occasion, for then the problem was how to open the Exchange,
not how to avoid closing it. Such a measure would plainly be useless
and even dangerous when still unspent liquidation might quickly force
prices below the minimum levels and in effect result in a closing of the
whole market under fire. There was left, however, a third expedient
which in all its long history the New York Stock Exchange had never
before tried, and that was a temporary suspension of short selling. This
method in our opinion possessed certain features suited to the current
crisis. Accordingly, by a unanimous vote of the Governing Committee,
short selling was forthwith suspended for that day and until further notice.
Of course, the real point in the crisis produced by the lapse of sterling
was that a further liquidation of securities was inevitable, and the duty of
the New York Stock Exchange was to remain open so that this might be
accomplished in an orderly manner. Additional buying power in the
security market was vitally needed to achieve this result. It was certain
that no buying power great enought to meet the emergency was to be found
except in the short interest, created by those who had previously sold short
and who were committed under their contracts to repurchase. This short
interest of 4,241,000 shares on Sept. 18, was at least mobilized and effective.
In the opinion of the committee, a sudden ban on short selling would be
likely to force covering by those who were short, thus steadying the market
temporarily until the immediate shock of the London news could be dissipated. While this emergency method involved serious drawbacks concerning which I will speak in a monent, in the light of the extraordinary
circumstances surrounding the market, it seemed to be the least dangerous
and most salutary measure to pursue.
The result completely confirmed the decision of the governing committee.
Share prices rallied during Monday, Sept. 21 and Tuesday, Sept. 22. The
volume of trading expanded, and all those who had securities and wished
to sell them, had an ample opportunity to do so. Time was also afforded
the great security markets of Europe, and especially the London Stock
Exchange, to adopt suitable emergency measures and to reopen.
The ban on short selling immediately created a new problem. Within
two hours after short selling was forbidden, the governing committee found
there was a real danger of technical corners and of crazy and dangerous
price advances. At one time there were accumulated orders to buy approximately 8,000 shares of General Motors stock at the market., No stock was
2552
FINANCIAL CHRONICLE
offered for sale within many points of 30X, which was the last preceding
sale and the highest price that the stock reached at any time during this
period. Something had to be done immediately or otherwise the buyers
would have bid frantically for the stock and a rapid and entirely unwarranted advance would have taken place. An example of what I mean
occurred in Reading Co. stock which opened at 48;1 advanced to a
high of 75, and subsequently declined to 62. Similar situations existed in
leading and active share issues such as United States Steel, American Can
and others. In order to avoid such wild fluctuations which would have
disturbed and disorganized the market, the Business Conduct Committee
was authorized to permit a limited amount of short selling. All such short
sales were made, however, under close supervision of the Governors of the
Exchange when it was necessary to prevent violent price changes. These
facts prove that a complete prohibition of short selling could not be enforced for even two hours without creating an unnatural and dangerous
market.
The temporary stabilization of stock prices produced by banning short
sales almost immediately resulted in a flood of most enthusiastic letters from
those who had always condemned short selling. Indeed the Stock Exchange
authorities, if they had lost their sense, might have courted great popularity
by continuing the ban on short selling which would have proved as brief
as it doubtless would have been intense. We knew perfectly well that the
more cheerful appearance in the market was wholly artificial, that it was
not the glow of natural health but the flush of artificial stimulation. Under
this temporarily pleasant surface, the real facts were far from reassuring.
The emergency action of the Exchange had stimulated buying power in the
market by inducing the short interest to cover. The market was therefore
running on its final resources. At the close of business Monday, Sept. 21
the total short interest had decreased by the large amount of 544,000 shares.
By the end of business the following day, Tuesday, Sept. 22, while short
selling was still forbidden, it had fallen a further 535,000 shares. Obviously
this rapid exhaustion of the final available and dependable buying power
In the market could not continue. Buyers of securities were still unwilling to
purchase as much as outright and margin sellers were offering. The inevitable liquidation had been steadied, but it had not been halted. By the
morning of Sept. 23 the Governing Committee was informed that the
London Stock Exchange had reopened. The action of our own market on
Sept. 21 and Sept. 22 seemed to indicate that the shock of crisis had been
absorbed and that normal trading conditions could be resumed. Further
more, the Governing Committee was constantly concerned by the rapid
exhaustion of the short interest, and, for all these reasons, the restriction
on short selling was removed before the opening of the market on Sept. 23.
The action of the market on the first day when short selling was again
permitted was most interesting. Prices advanced; there was real activity,
and most significant of all, the short interest decreased by an additional
233,000 shares.
On Sept. 24 the market suddenly became very weak. This was undoubtedly due to the wild fluctuations in foreign exchange. The Eng.ish
pound varied so rapidly in value that the London Stock Exchange adopted
stringent restrictions on trading. The fall in security prices was once again
blamed on short selling, but the fact that the short interest increased on
Sept. 24 by only 20,000 shares clearly proves that this argument was
unsound.
From Sept. 24 to Oct. 5 we had declining markets. Prices receded tremendously, and the fact that short selling was permitted during this period
brought a great deal of criticism on the Exchange. But short selling did not
cause this decline in prices. The total short position at the close of business
on Oct. 5 was 2,612,000 shares, so that there had been a further decrease
In the short position between Sept. 24 and Oct.5 of 337,000 shares.
What then is the real significance of this unprecedented two days' suspension of short selling which the Stock Exchange imposed? Plainly that
It was an emergency measure, taken in a great crisis. The definite figures
concerning the short interest which I have already quoted to you prove the
enormous significance of the short sale in cushioning falling prices. Without
such a short interest on Sept. 21, the New York Stock Exchange might
have been forced to close Its doors. If the suspension of short selling had
been continued so that the short interest had become exhausted, the same
result might have been inevitable. The New York Stock Exchange provides
a market-place, in which security prices are made by all the buyers and all
the sellers in the country. If the holders of securities insist upon selling them
in the absence of sufficient buying power, prices must decline until buyers
are attracted. This is the law of supply and demand, and there is no escaping it. The attitude taken by the New York Stock Exchange, I feel,
has been in thorough accord with its own announced principles, and with
those fixed economic laws which all business must always obey. The
Stock Exchange in its policy has not yielded to emotional psychology. What
It did was to meet a most grave situation by an appropriate emergency
measure.
During this whole period, no small part of the burden of maintaining the
financial stability of the world fell upon the New York Stock Exchange. I
believe that by staying open and maintaining a market for securities, the
New York Stock Exchange behaved as the greatest organized market in the
greatest creditor nation of the world should behave in a time of crisis.
Nobody can discuss the question of short selling without also considering
the practice which is commonly described as "bear raiding." In the public
mind the two are often linked together and the evils of "bear raiding" are
attributed to short selling. If a person sells stock, not because he believes
the stock is too high, but because he believes that by selling quickly and in
great volume he can force the price to decline, he is abusing the legitimate
practice of short selling. Contrary to what many people believe, the Exchange has always opposed "bear raiding." Its constitution specifically
provides that any member who sells securities for the purpose of demoralizing
the market may be suspended or expelled.
In recent months we have all heard a great deal about "bear raiding."
I would like to ask just what proof there Is—not blind prejudice, not vague
assertions, but actual proof and evidence—that "bear raiding" has taken
place In the stock market. The New York Stock Exchange has for many
actually
months been investigating this whole subject. It may well be that
we have investigated It too much rather than too little. We have parmethod
ticularly looked Into all sales of shares In big blocks—the supposed
of some 50 or
whereby it is alleged that "big operators smash prices." Out
sale,
short
a
was
that
one
only
60 cases of this sort recently, we have found
and It was an order to sell on a scale up in every way a legitimate short sale
with a stabilizing effect on prices, and in no way aimed at, or resulting in,
a demoralization of the market. If we have had no occasion to take definite
action under our rule, despite the many investigations of suspicious looking
cases, it has been because we have found real liquidation rather than "bear
raiding" was reiponsible for declining prices.
One other point on this subject. Our records show that at the close of
the market on Sept. 21,the total short interest of3.697.000 shares comprised
the commitments of 9,369 separate accounts. The analysis of these reports
has failed to disclose any single individual or group of Individuals who
might be said to be dominant factors on the short side of the market. On
the contrary, these accounts were short, on the average, only about 400
shares each, and I do not hesitate to say that the transactions of the vat$
[VOL. 133.
majority of these people could not by any stretch of the imagination be
called "bear raiding."
In conclusion, let me mention we have required that all brokers, before
executing any selling orders, must know whether these are for long or short
account. The purpose of this rule was not, as some believe, to prevent short
selling. It was to make the brokers, who under our constitution are responsible for the way in which they execute orders, realize the nature of the sales
entrusted to them for execution. It also allows the Committee on Business
Conduct to determine Instantly whether any sales seeming to have a
demoralizing effect upon the marker are short sales or actual liquidation.
As I have said, the Exchange is absolutely opposed to "bear raiding".
and has used and will continue to use all of its power to stop this practice
and to discover and punish "bear raiders."
It is of course a fair question to ask, if short selling Is a necessary and
beneficial practice, why there is such vociferous objection to it. We all
recognize, I am sure, that it is a fundamental tendency of human nature.
when severe trials and difficulties arise, to throw logic and reason to the
winds, and to indulge In emotional outbursts. I do not believe that clear
thinking American citizens will commit any such folly and I am sure that
they will not refuse to accept or fall to comprehend the fundamental facts
in regard to short selling or any other important problem.
I only wish that our problems in the Stock Exchange were really as simple
as many believe and that our Governing Committee could halt declining
prices simply by abolishing short sales. If we have refused to take such
action, if we continue to declare that such a step is perilous, it is because we
feel we must speak the truth and do our duty to the whole community.
Stock market prices, as a discerning editorial writer recently expressed it,
are not prosperity itself, but simply an index to It. The stock market
reflects business conditions. It Is not their cause. It Is wrong to say that a
ban on short selling could halt our business depression. When economic
equilibrium in the world's affairs Is again re-established—and make no
mistake, gentlemen, it will be—liquidation of securities will stop, buyers
will regain confidence, and prices will rise. The prohibition of short selling
would delay and cannot hasten this process. Neither our governmental
authorities by means of legislation, nor the New York Stock Exchange by
means ofIts regulations,can by any magic stroke perform economic miracles.
The policies of the New York Stock Exchange have resulted from a
century-old experience with the American security business,from familiarity
with the even longer experience of the older yet similar stock exchanges of
Europe, from close and intimate contacts with the realities of the marketplace,and from an immediate knowledge of the vital facts and circumstances
surrounding its daily problems. It is of course always easy for those without
responsibility to urge hasty actions upon those who are charged with it.
The New York Stock Exchange has been fully aware of its serious responsibilities through the recent critical years. The maintenance of an open
market during this period has required and still requires, not only detailed
knowledge of the facts and judgment founded upon experience, but also
courage to do those things which are right, regardless of how unpopular
they may be for the time being. As long as the New York Stock Exchange
remains responsible in this way, It will not be deflected from maintaining
sound and necessary policies. Knowing the real facts concerning short
selling, the Stock Exchange must continue In the only course which Is
compatible with courage, conscience and faith in the future of this country
Formation of American Bankers' Acceptance Corp.
Sponsored by August Belmont & Co.—Held to
Parallel National Credit Corp.
The plan for the formation of the American Bankers'
Acceptance Corp. which was briefly announced by August
Belmont & Co. last August, and which will have an authorized debenture capital of $50,000,000, is reported as closely
paralleling the organization of the National Credit Corp.
launched upon the suggestion of President Hoover that
American bankers provide a $500,000,000 credit institution
for the rediscounting of banking assets not now eligible for
rediscount at the Federal Reserve Banks. It is announced
that there will be no conflict between the effort put forth
through the New York Clearing'House and bankers upon
the President's proposal and the American Bankers' Acceptance Corp., as the National Credit Corp. is assumed to meet
conditions of the emergency period only, while the function
of the acceptance corporation will be a permanent one and
will be concerned with aiding the thousands of smaller banks
of the Nation. The American Bankers' Acceptance Corp.
is expected to begin operations early in 1932 and will have a
directorate representative of banking and commercial interests in practically every State in the Union. Regarding
it an announcement issued this week said in part:
The American Bankers' Acceptance Corp., which has the sponsorship
of August Belmont & Co. and associates, is based upon an idea which
George 11. Salmon of Pomeroy dr Salmon. Inc., evolved narly four years
ago and on which he has been actively enlisting State and National support.
This idea has been placed before some two thousand bankers throughout
the country, and numerous State and National banking officials have endorsed the plan as a constructive one designed to render permanently a
purpose similar to the one enunciated by President Hoover. The fact
that such widespread endorsement has been given to the Belmont project
and the fact that both State and Government officials have exhibited keen
interest in the plan, leads to the belief that while the two institutions
may differ in their scope and structure, the private agency will in effect.
carry on the work of the temporary institution and thereby serve as a
stabilizing force for permanent use of subscribing member banks, particularly for the smaller and medium size banks.
So far as the American Bankrs' Acceptance Corp. is concerned, it is
not the intention of the corporation to encourage the rediscount privilege
to the extent where it would inflae the credit stluation, but only under
careful and conservative management to provide rediscount facilities where
such facilities are lacking or obviously insufficient at the preent time or
In years to come. To this extent the corporaton will add to the existing
facilities of the smaller banks. The corporation will not at any time
accept deposits of funds.
The total number of commercial banks in the United States is approximately 23,122. Of these 7,277 are operating under National charters
and 15.895 under State charters. Only 5,513 carry deposits of $1,000,000
or over, while the remaining 17,609 carry deposits of less than $1,000,000,
OCT. 17 1931.1
FINANCIAL CHRONICLE
2553
according to George H. Salmon. Of this total number of banks only
about 35% are members of the Federal Reserve System. It is the nonmember bank which is the majority and which particularly requires the
accommodations which the American Bankers' Acceptance Corp. will be
in a position to offer. This corporation has been organized under the
laws of Delaware and will be qualified under the banking laws of the State
of New York and other States in which it will do business.
Charles W. Collins, former Deputy Controller of the Currency, it is
unierstood will become technical advisor and counsel for the American
Bankers Acceptance Corp. Bankers throughout the country will be asked
to become subscribing members of the corporation through the purchase
of 5% 30-year gold debentures. There will be an authorized $50,000,000
of these debentures, an authorized 500.000 shares of no par value class A
common stock and 500,000 shares of no par value class B common stock.
The corporation's rates of discount are to be fixed by the board of directors, which is now being selected. These rates will depend on the bank's
loaning rate and are to be free of any fees or commissions characteristic
of a finance company. The corporation will have a credit department
which will investigate and analyze all credit offerings and will place its
findings before a credit committee for approval before any such offerings
are accepted. The discount rates will vary from State to State and with
changing business conditions. It is contemplated to establish rates at
set differentials above the cost of money to the corporation, thus establishing a definite dependable gross margin of profit. Assuming that paper
originated by the American Bankers' Acceptance Corp. is discounted at
above prevailing rates on prime commercial paper, the corporation
will be able to offer to banks service at customary bank rates.
The major portion of the debentures and stock of the corporation will
be sold to bankers interested in securing the facilities of the American
Bankers' Acceptance Corp. for their own institutions. The corporation
expects to secure substantial lines of credit with major financial institutions
and from time to time as larger sums are needed will offer its notes and
acceptances in the commercial money market. Insurance companies.
industrial institutions, other banks and private investors will constitute
the market for the short-term paper.
The President said he hoped for a change by that time that would lighten
the burden.
Mr. Hoover's Statement.
The text of the President's statement on finances follows:
"I have received the proposals of the high officials of the navy of plans
for reduction of expenditures. They are being considered in the full light
of maintained efficiency of the department. Such studies and revisions are
equally in progress in every other department of the Government.
"The proposals of all the departments will require study and consideration. No conclusions have been reached on any particular proposed
expenditure or economy. Final decision will not be reached until the final
budget is presented to Congress.
"All of the principal officers of the Government are co-operating to bring
about reductions. In times when the income of the people is reduced and
when taxes and loans may stifle economic recoveries there is only one course
of sound fiscal policy: that is to reduce the expenditure of the Government
to the last cent consonant with the obligations of the Government.
Difficulties in the Way.
"There are two great difficulties which confront us in programs of reduced expenditures. The first is the very large proportion of Federal
expenditures that are irreducible. We must meet interest payments on the
statutory redemption of the public debt: we must pay allowances and pensions to veterans and pensions to civil servants, &c.
"Thus over two billion of the Federal budget is in fixed obligations and
such reductions as we can bring about must need be concentrated on less
than one-half of the budget.
"The second difficulty is that the Federal Government must make its
contribution to expand employment so long as the present situation continues.
"I fully realize that while Governmental economy as a whole is strongly
desired by the public, yet every variety of expenditure has its adherents
throughout the country, all of whom are naturally solicitous that their
special project should be continued even In times of national difficulty, and
they are impatient of reductions or deferment or delays of their projects.
"Public opinion in support of drastic economies will need to reach into
Mr. Salmon is quoted as saying:
A comprehensive analysis of the many small and medium size banks these directions. It must extend also to discouragement of special interests
desirous
ofsecuring new expenditures for the special projects. The essential
surrounding each of 250 trade centers is nearing completion by a staff of
able statisticians. A majority of these banks are operating without profit services of the Government must and will be maintained, but these are times
and not infrequently at a loss. It takes very little imagination to see what when with the large deficit facing the country even meritorious projects can,
could happen to these 20,000 banks in the event of heavy or sympathetic must and will be deferred."
withdrawals. It is this class of bank that I believe merits better organization for more effective mobilization and utilization of resources.
It will be the intention of the corporation to encourage the small banks Plan of White Houseto Aid Rail Bonds Reported
to retain their present connections whether with the Federal Reserve Bank
Imminent—Prediction That Announcements on
or with correspondent banks, and it is only in cases where the banks cannot
It and Rate Increase Will Come Within Week—
secure the necessary accommodations and have paper which is suitable
for rediscount acceptable to the American Bankers' Acceptance Corp.,
Limited Increase on Freight Likely—Brotherhoods
that the corporation's facilities will be available.
Said to Be Ready to Accept 10% Wage Cut TempoAccording to Mr. Salmon, total bank loans outstanding
rarily—Possibility of Rediscounting of Railroad
at the end of 1930 amounted to approximately $59,000,Bonds by Reserve Banks.
000,000. Paper eligible for rediscount with the Federal
prediction was made in high Administrative quarters
The
Reserve Bank represents only about 16%, and a very large
part of this paper is concentrated in about 20% of the in Washington on Oct. 15 that announcements of vital imtotal number of banks. The announcement in behalf of portance to the nation's railroads would be forthcoming
from the White House and the Inter-State Commerce ComMr. Salmon goes on to say:
With the realization that branch banking for trade territories within mission "very soon." The New York "Herald Tribune"
State boundaries will undoubtedly be legalized within the next two or reported this in a Washington account Oct. 15 and added:
three
years, a State-National bancorporation plan has been developed
to anticipate the requirements of such legislaiton and the opportunities
It will offer. This plan provides for the formation of bancorporations
in trade areas surrounding trade centers each linked to substantial
institutions in the trade center. It will also be the purpose of the
American
Bankers' Acceptance Corp. to serve the banks joining the State-National
bancorporations and especially during the interval of time between
now
and when branch banking is legalized and these banks become
branches
of the trade center bank. Thereafter, of course, the main bank in the
trade center will be able to take care of their needs and the American
Bankers' Acceptance Corp. will be in position to serve these larger banks.
Mr. Salmon also stated:
We believe that unless an organization of this kind is established and
the small worthy unit banks are taken under the protection of a substantial
institution, as many as 50% of the remaining number of banks may fail
within the next three years. The response already received from
banking
authorities in numerous States and from Washington, justifies our early
belief in their desire for the development of sound organizations which will
help prevent continued bank failures in the respective States.
President Hoover Says All Government Expenditures
Must Be Cut to Last Cent.
President Hoover said yesterday (Oct. 16) that the expenditures of the Government must be reduced to the last
cent consonant with sound operation. In quoting the
President, Associated Press accounts from Washington, as
given in the New York "Sun" of last night, stated:
The President said there had been much discussion of reductions in
the
budget of the navy, but that similar efforts ofsubtraction were being
applied
to all Government departments. He said the naval reductions had been
effected with an effort not to impair efficiency.
As to trimming expenses throughout the Government, he asserted that
no final conclusions had been reached and would not be reached until the
budget was ready for Congress. He added that the public should and must
support the administration in discouraging the demands of special interests
for increased Congressional expenditures.
Worthy Projects to Suffer.
In the face of a large deficit, he asserted, even meritorious projects must
and will be cut off. The President said he realized that the public generally
desired reduced Governmental expenditures, but pointed out that every
appropriation had its special adherents and that these groups must be patient
regarding proper reductions.
Two difficulties exist in obtaining reductions, the President continued,
one of these he named as the large proportion of expenditures that cannot be
reduced, such as Interest on the public debt, reduction of the debt required
by law, allowances to veterans, and pensions to civil servants. Such costs,
he estimated, total nearly $2,000,000,000.
Further, he said, the Government must contribute to projects that will
relieve unemployment. He pointed out that it was difficult now to estimate
for expenditures that would not be made until after July 11932.
It came immediately following a conference at the White House between
President Hoover and Robert P. Lamont, Secretary of Commerce.
While the details of these promised announcements are being carefully
guarded for the moment, it is generally understood in quarters which
usually have the confidence of the Administration that the Inter-State
Commerce Commission will soon grant the carriers limited freight rate
increases and that President Hoover will move simultaneously to relieve
their present financial predicament.
Brotherhoods Ready W Accept Cut.
At the same time, constantly recurring rumors that the Big Four railroad brotherhoods are prepared to accept voluntarily a temporary reduction in wages if the Inter-State Commerce Commission and the Administration do not furnish adequate relief to the hard-hit carriers are beginning to
find impressive, if temporarily anonymous, confirmation.
The date that the anouncements on these problems may be expected has
never been mentioned publicly, but the Administration official who discussed the situation informally at the White House left the impression upon
his auditors that "something" might be looked for by the end of this week
or early next week. It is believed that President Hoover is about ready
with his plan, but prefers to await definite word as to the extent of the rate
decision.
President's Program a Secret.
The President's program, which also still remains a secret to all except
a few Administration advisers, is expected to extend relief in two directions.
According to usually well informed quarters, it probably will endeavor to
release vast frozen credits in railroad bonds now held by banks and insurance companies. At the same time, it is said, it may propose a means of
assisting the carriers in meeting heavy payments on maturing bonds which
will fall due shortly.
u$
The rate decision of the Inter-State Commerce Commission was expected
to be announced to-day. While this prediction, made weeks ago, failed of
fulfillment, indications at the commission's offices pointed to an announcement within a few days. While some important rate increases are looked
for, a belief prevails in Washington that they will not be extended to farm
products, in view of the desperate predicament of the American farmer.
Position of Brotherhoods.
The possibility that the railroad brotherhoods, the organized unions of
railroad workers, would volunteer to accept a wage cut has been gaining
credence in Washington for a week. It was said the brotherhoods would
propose a 10% drop, with the understanding that it was a temporary
experiment and that the existing wage contracts would be returned to their
present levels when the carriers had been restored to financially sound
condition.
The brotherhoods, it was said, will await the decision of the Inter-State
Commerce Commission, however, before making any announcement if at
all. If the commission grants the carriers' request for a flat 15% rate
boost, spokesmen said, the brotherhoods do not believe it will then be
necessary for them to make any wage sacrifices.
The brotherhoods have wage contracts with the railroads. Fairfax
Harrison, President of the Southern Railway Co., pointed out
lea statement in Richmond yesterday, that if the bortherhoods failed to
volunteer
a wage reduction the carriers would have to act unanimously
if they hoped
2554
FINANCIAL CHRONICLE
[VOL. 133.
Mr. Colby related how President Wilson, during the peace negotiations
in Paris, had refused to be drawn into any general conference on the debts,
had rejected a proposal to substitute Germany for the allied nations as the
Mills Sees Confidence Reviving.
debtor, and had stood firm throughout against any suggestion of cancelIn the mean time, Ogden L. Mills, Under Secretary of the Treasury, lation.
declared to-day that the National Credit Corp., which was recently organ"In these discussions," said Mr. Colby, "Mr. Wilson pointed out that
ized as a part of President Hoover's economic rehabilitation program, had America was the only nation which had contracted no war debts, except
begun to freshen confidence throughout the country. It is assumed that to her own people.
the President's plan for relieving frozen railroad bonds and the general
There has been no departure from President Wilson's position by any of
railroad relief plan will be made a part of this program.
his successors, Mr. Colby continued,quoting both former President Coolidge
Treasury officials said that a method of making the bonds available for and President Hoover, but the recent declaration of the moratorium has
rediscount at the Federal Reserve banks had been proposed. This would been hailed in Europe as an abandonment by this country of its position.
be accomplished by setting up clearing houses which would issue paper
"It cannot be denied," Mr. Colby went on, "that the pressure for canin exchange for the bonds at a fixed figure, more closely approximating cellation has become ominous and disquieting, due to the fact that the
their true value than present market quotations. This paper could then President has been surrounded in recent conferences by representatives of
be taken to the Reserve banks for rediscount. Some change in the Federal the banking interests of the country, which constitute the spearhead of the
Reserve laws might be necessary to accomplish this, it was said. The propaganda for debt reduction and eventual cancellation. The attitude of
establishment of a pool has been suggested to help the carriers pay off the banking interests is easily understood and should deceive no one."
maturing obligations.
Behind the attitude ofthe bankers, he charged,was the fact that American
investments in Germany of all sorts are approximately $3,000,000,000.
"These commitments are subsequent in time and subordinate in equity
Rail Employees Return—Rock Island Rehires 300 Shop to Germany's reparation obligations," the speaker said.
"There is, furthermore, a deeply implanted feeling among the business
Men On Five-Day Week.
financial interest of America that the general government exists priShawnee, Okla, advices Oct. 16 to the New York "World- and
marily for their service and profit.
"What, therefore, could be more characteristic or natural than that the
Telegram" said:
The Chicago Rock Island & Pacific By. to-day announced that 300 shop banking interests should naively ask that the European debts owed to
the United States be subordinated to the European debts owed to the
employees will return to work on Oct. 19 on a five-day week schedule.
•
L. D. Richards, division masts?' mechanic, declared that the addition bankers.
"This can be achieved only by the cancellation of Europe's debt to us,
will increase the shop force to 650 men.
with the result that the American taxpayer will have to redeem his own
Liberty bonds and thus pay a great part of Europe's wax costs in addition
to
our own—in a war that was Europe's war and not ours."
Rail Wage Cut Urged by President Harrison of Southern
to break the contracts in the face of a financial emergency. No one carrier.
he said, could successfully renounce its contract.
Ry.—Hints Collective Action on Wages Under
Consideration—Cites Other Sacrifices.
The time has come when railroad wages must be reduced,
Fairfax Harrison, President of the Southern Ry., declared
Oct. 13 at the annual meeting of stockholders held at Richmond, Va. In fairness to the public and stockholders, railroad labor should make the same contribution as have the
officers of Southern Ry. Mr.Harrison asserted. If organized
labor would accept a reduction in wages equivalent to that
taken by the officers, the road would still be in an uncomfortable position but very much better off than it is to-day.
Press dispatches further add:
Asked by a stockholder if the question was taken up collectively by all
railroads if something might not be done, Mr. Harrison said:"Perhaps that
is being done."
Due to existing contracts, he pointed out that the Southern By.could not
reduce wages and that no modification of tbese contracts could be made by
an individual railroad.
The theory of high wages maintaining prosperity may be all right, Mr.
Harrison said, but he could not see how it could be done unless a man's
revenue producing power is maintained.
Questioned as to prospects regarding preferred dividends, Mr. Harrison
said:"I wish that I could make a prediction about that, but I cannot at this
time."
In response to further questioning, he said that the company would not
earn fixed charges for 1931.
Mr. Harrison pointed out that to meet the steady decrease in revenue the
company had decreased maintenance and transportation expenses nearly
10% but that there had been an increase in traffic expenses of 7.3%. He
explained the latter was due to increased endeavors to bring about more
traffic.
"To-day we have cut out everything that we could," he said.
He explained that he had seen several depressions but expenses were in
no case cut as extensively as at present. He further pointed out that the
road had not allowed its tracks or roadbed to go to pieces and that this was
in good condition. However, some rolling stock which had been laid aside
has deteriorated. The road is maintaining its share of thorugh traffic: there
is a falling off in local traffic, he said.
In regard to trucks and buses Mr. Harrison explained that the principal
loss to the road was due to privately owned automobiles and not to the bus.
He declared, however, that the trucks offer serious menace to railroads. If
trucks were regulated by Congress they would take a portion of the road's
business but not as much as at present. The Southern had made a study
of five or six large bus lines and found none of them making money, Mr.
Harrison stated.
Finds Arguments False,
Mr. Colby said that every conceivable argument for cancellation—the arguments of charity and good-will, of America's late entry Into the war—had
been made and had broken down. Cancellation was now being advocated
as a good business policy, and this too, he contended, was fallacious. The
debt payments are relatively too small, he said, to be a large factor in the
present world crisis, brought about by so many huge and confused forces.
If we remitted the debts, he went on, the money we forego would be quickly
swallowed up in the race for armaments and other forms of national waste.
"So much of it as found its way into trade," he continued, "would be
spent, not in the dear market of America, but in the cheaper markets of
Europe, where depreciated currencies and relatively low tariffs enable the
purchaser to buy cheap and to pay with goods which our tariff excludes.
"As to France, it need only be said that she is the most prosperous of the
nations to-day, with a gold reserve greater, relatively to her population,
than that of this country, and with no unemployment problem."
Officers Elected at Annual Convention of Bank
Auditors and Comptrollers.
The seventh annual convention of the National Conference
of Bank Auditors and Comptrollers held in Atlantic City
last week elected the following officers to serve during the
coming year:
President: Ben. E. Young, Comptroller, Commerce Trust Co., Kansas
City, Mo.
Vice-President: Russell F. Thomes, Asst. Vice-President, Central Hanover
Bank & Trust Co., New York City.
Second Vice-President: Frank J. Swain, Asst. Cashier, Hibernia Bank &
Trust Co., New Orleans.
Secretary & Treasurer: Howard C. Steele, Comptroller, Girard Trust Co.,
Philadelphia.
Felix M. Warburg Joins Advisory Council of Bond Club
of New York—President G. Munro Hubbard Announces Committes for 1931-1932.
The appointment of Felix M. Warburg as a member of the
Advisory Council of the Bond Club of New York to take the
place of the late Mortimer L. Schiff has been announced by
G. Munro Hubbard, President of the club. Other members
of the council are Frederic W. Allen, George F. Baker Jr.,
James Brown, J. Herbert Case, Clarence Dillon, Charles E.
Mitchell, J. P. Morgan, Seward Prosser, Charles H. Sabin,
Lloyd W. Smith and Frank A. Vanderlip.
Mr. Hubbard also announced the appointment of the
Debt Cancellation Is Fought by Former Secretary of
State Colby—Remission Useless as Aid in Slump folllowine committees of the Bond Club to serve for the year
and an Unjustified Sacrifice by Us, He Holds.— 1931-32:
Arrangements.—Harry P. Davison, Chairman, Pierpont V. Davis.
He Cites President Wilson's Stand.
William H. Eddy, Prentiss N. Gray, Charles Hayden, Robert A. Lovett,
Remission of the war debts owed to the United States by Sidney A. Mitchell, Alfred Shriver, Lewis L. Strauss, Edward S. Streeter
allied nations was opposed as a useless step from the stand- and James P. Warburg.
Attendance.-0. Everett Bacon. Chairman: Carlton I'. Puller, Leverett
point of remedying the world's economic distress and an F. Hooper, Edward N. Jesup, Dean Mathey, Ronald II. McDonald,
in
a
United
States,
people
of
the
the
by
unjustified sacrifice
Clarkson Potter, Francis T. Ward and John Witter.
T. Tomlinson Jr., Chairman; Harold T. Johnson, and
radio address delivered on Oct. 10 by Bainbridge Colby, J.Publicity.—E.
William Smallwood.
Mr.
Colby
Wilson.
spoke
President
under
State
Secretary of
Auditing.—John P.O. Moran, Chairman; Edwin H. Bigelow and Charles
from station WEAF at 7:15 p.m., and his address was broad- E. Robinson.
H. Long Jr., Chairman; Lindsay Bradford, Henry
Field
cast nationally, said the New York "Times," from which the G. RiterDay.—William
3rd, and Alcert L. Smith.
taken:
is
following account of his speech
"No justification—in economics, morals, or the principles of good international conduct—exists or can be invented for placing upon the heavyladen American taxpayer the additional burden which would necessarily
result from the cancellation or reduction of the European debt," Mr.
Colby declared.
Sees L nexampled Generosity.
Mr. Colby, in beginning, said the United States already had shown unexampled generosity in allowing European nations 62 years to repay the
$11,641,000,000 borrowed here when they were threatened with defeat,
and in reducing the interest from the 5% agreed upon to nominal rates.
Mr. Colby told how and why the loans had been granted and holi they were
provided by money raised through Liberty bonds.
Annual Meeting of Investment Bankers' Association
at White Sulphur Springs, W. Va., Nov. 7-11.
The 20th Annual Convention of the Investment Bankers'
Association of America will be held from Nov. 7 to 11 at
White Sulphur Springs W. Va., according to the program
of the Convention issued at Chicago by the Association.
Meetings will be held on Nov. 7 and 8 of the Board of
Governors and some 25 committees, among them the
OCT. 17 1931.]
FINANCIAL CHRONICLE
Committees on Foreign Securities, Real Estate Securities
and Municipal Securities. Open meetings of all committees
and special forums by committees whose investigations
embrace the more urgent problems of the investment bankng business are provided in the program for the purpose
of allowing all delegates to participate in activities of greatest
interest to their business. The first two sessions of the
Convention will be held on Nov. 9, and one session each
on Nov. 10 and 11.
Four special train movements are provided in the arrangements; from New York, Detroit, Chicago and St.
Louis. Special cars will carry the delegates from Eastern
Canada, Boston, Philadelphia, Baltimore, Pittsburgh,
Cleveland, Toledo and Cincinnati, and will be attached
to special trains. Five days given over to the Convention
this year permit members of the Board of Governors and
Committee Chairmen to travel on these trains carrying the
delegates, an arrangement impossible under the four-day
program last year.
"Bankers and Brokers Committee" of United Hospital
Fund—James Speyer Again Serves as Chairman.
Nearly all the bankers and brokers (about 85) who are
trustees or directors of the 55 hospitals belonging to the
United Hospital Fund, have agreed to serve on the "Bankers and Brokers Committee" of the Fund for this year's
collection. James Speyer is Chairman,and Charles H.Sabin,
Chairman of the Guaranty Trust Co., is Associate Chairman
of the "Bankers and Brokers Committee," and Albert H.
Wiggin is Treasurer of the Fund.
The letter of appeal states that "on accouht of well-known
prevailing conditions and unemployment, the distress and
the demand on our hospitals this winter will doubtless be
greater than ever before," and appeals to "Wall Street" to
do all it can to help alleviate the condition of the unfortunate sick poor in our 55 New York Hospitals.
Last year the "Bankers and Brokers Committee" collected
$104,367, the largest amount obtained by any auxiliary.
As usual, the amount collected will be distributed, without
regard to creed, color or nationality, by a committee composed of the Mayor, the President of the Chamber of Commerce and of the Merchants' Association, Messrs. Henry J.
Fisher, Arthur Curtiss James, Edwin P. Maynard, Gates W.
McGarrah and James Speyer.
The following "Wall Street" men are serving on this
committee:
Cornelius It. Agnew
Charles Froeb
George B. Post
Winthrop W. Aldrich
Robert E. Allen
Nelson I. Aide'
George F. Baker
Stephen Baker
William M.Bernard
Linzee Blagden
George Blumenthal
Hugo Blumenthal
Myron I. Borg, Jr.,
George B. Brewster
Robert S. Brewster
Thatcher M.Brown
Mortimer N.Buckner
George S. Carr
S. W.Childs
Stephen C. Clark
Charles M.Connfelt
George F. Crane
George W.Davison
Edward C. Delafield
Moreau Delano
Harris A. Dunn
William Fahnestock
E. Hayward Ferry
Marshall Field
Henry L. Finch
Albert Forsch
Samuel I,. Fuller
Charles It. Gay
Thornton Gerrlsh
Philip J. Goodhart
Fred H. Greenebaum
Robert J. Hamershlag
Charles Hayden
Theodore Hetzler
G. Beekman Hoppin
William B. Irish
Samuel T. Jones
William M.Kingsley
G. Herman KInnlcutt
W.Thorn Kissel
David H. Lanman
Harold M.Lehman
Adolph Lewisohn
D.Irving Mead
Edwin G. Merrill
DeWitt Millhauser
Richard L. Morris
Vernon Munroe
Grayson M.-P. Murphy
Walter W. Naumburg
Simon Newman
Carl H.Pforzheimer
Lewis E.Pierson
Hermann C. Place
Alonzo Potter
Dernon S. Prentice
C.Tiffany Richardson
H. E. Robinson
George Emlen Roosevelt
Kermit Roosevelt.
Ernst Rosenfeld.
Paul M. Rosenthal.
Arthur W. Roesiter
Louis F. Rothschild.
Arthur Sachs.
Samuel Sachs.
Walter E. Sachs.
Edward W.Sheldon.
E. It. H. Simmons.
Robert L. Smith.
Frank L. /Mitten.
Andrew V. Stout.
C. I. Stralen.
Paul Sturtevant.
Adrian Van Sinderen.
Elisha Walker.
Frederick M. Warburg.
Charles F. Wheaton.
Harrison Williams.
Henderson M.Wolfe.
William Woodward.
2555
Dr. A. H. Giannini, now Chairman of the Board of the
Bank of America, N. A., of this city, has been appointed
Chairman of the executive committee of the Bank of America
National Trust & Savings Association of San Francisco and
will assume his new duties about the middle of the month.
The New York "Evening Post" of Oct. 7,,from which the
above information is obtained, went on to say:
In view of his election to the new position on the Pacific Coast, it is
believed that Dr. Giannini, who is a brother of A. P. °tannin!, founder of
Transamerica Corp. which controls both banks, will sever his connection
with the Bank of America here which is to be merged with the National
City Bank.
The new 48-story Continental Bank Building being erected
at 30 Broad St. will be ready for occupancy May 1 1932,
according to a statement issued by L.J. Horowitz, Chairman
of the board of Thompson-Starrett Co., Inc., the general
contractor for the operation; this, it is stated, will be a
record-breaking achievement in view of the fact that the
architects and engineers began the design of the structure
simultaneously with the start of operations, May 5 last.
The old Johnson Building, so well known to Wall Street
and the downtown financial district, formerly occupied the
site and came into the hands of the wreckers on May 5.
It was completely demolished by July 13 and its razing was
accomplished under difficulties.
The New York State Bank Department has authorized
the Bank of Sicily Trust Co. at 487 Broadway, this city,
to increase its capital stock from $1,500,000 to $1,600,000.
The proposal was ratified by the stockholders on Sept. 30,
and the enlarged capital became effective Oct. 7 1931. We
learn that the increase is represented by 5,000 shares. $20
par value, at 1100, which has been underwritten by Banco
di Sicilia, Palermo, Italy, with which the trust company
is affiliated.
In an account of the removal this week of the First National Bank of New York from its quarters at Broadway
and Wall St., the New York "Times" of Oct. 11 said:
Preparations to remove the offices, vaults and entire personnel of the
First National Bank, the first bank in New York City to receive a charter
under the National Banking Act of 1863,from its old and familiar 10-story
building at Broadway and Wall St., to the newer building of the National
City Bank at 52 Wall St. were begun early this morning.
The move,undertaken over the week-end so that the First National Bank
may be in its new quarters by Tuesday morning, will be made because the
old buidling has been declared unsafe by the Bureau of Buildings, it was
said last night by William H. Brush, Asst. Superintendent of Buildings in
Manhattan.
With Wall St. roped off and closed to traffic between Broadway and
Nassau Streets shortly after nightfall last night, a force of employees and
moving men was recruited to start work early to-day in removing all of the
bank's chattels to new quarters. The exact space to be occupied in the
National City building by the First National, one of New York's timehonored Institutions over which the late George F. Baker served as President
for more than 50 years, could not be determined from officials of the National City Realty Corp.
It was said, however, that the First National Bank probably would
utilize a part of the ground floor, now occupied by the thrift department of
the National City Bank. for its counter transactions, and that offices and
vaults would be placed on the upper floors of the new building.
Mr. Brush said last night that the First National Bank building, an old
brown-stone structure more than 50 years old, had been declared unsafe
the latter part of the week. The building probably will be razed, it is understood, as soon as it has been vacated. Whether a new building will be
constructed on the site could not be determined from First National officials.
The First National Bank,which has a paid-in capital stock of $10,000,000
and a surplus of 8100,000,000 was founded by John Thompson in 1863.
-•___
New York Supreme Court Justice Alfred Frankenthaler
yesterday (Oct. 16) signed an order approving the application of Joseph V. Broderick, State Superintendent of Banks,
providing for the liquidating by the Manufacturers' Trust
ITEMS ABOUT BANKS, TRUST COMPANIES, &c.
Co. of Times Square Trust Co., the International Madison
Arrangements werarepoife—d made this week for the sale Bank & Trust Co., the American Union Bank,and the Bank
of 17,
I Tew°Y7rk—Stock*Exchange membership for $161,000, of Europe Trust Co. It is also stated in the "Worldan increase of $1,000 over the last preceding sale.
Telegram":
The Manufacturers' Trust plans also to take over three banks In Queens
Three New York Cotton Exchange memberships were and Brooklyn. beyond the jurisdiction of the Supreme Court of this county.
reported sold this week, that of Benhard A. Duis to Louis as part of the same plan which Mr. Broderick has approved.
de l'Aigle Munds,for another, for $14,000, that of Chas. A.
The proposed liquidation of the above institutions through
the Manufacturers' Trust Co. was noted in our issue of
Otis toWilliam TThowdell,
$13 500,
membership of
o:iiirto=ie -SiWar fo; Sept. 19, page 1869.
$14,000.
The statement of condition of the Brooklyn Trust Co. as
of Sept. 30 1931, issued Oct. 12, showed a transfer of
The New York Coffee and Sugar Exchange
membership
of Etienne Fossar was reported sold this week to Augustus $3,000 000 from surplus to reserves. Surplus of $12 000,000
E. Ehlcr for $4,800, an increase of $200 over the last pre- was shown, against S15,000 000 on June 30 while reserves
were $8 929 734 against $6 285 427. Undivided profits
ceding sale.
were $3,127 672.against $3,112,162 on June 30, an increase
A Chicago Stock Exchange membership was reported sold of S15.510 in the three-month period. It was explained
this week for $8,000. The last preceding sale was for $7,400. that reserves were increased to cover fluctuations in market
value of securities held by the company. Deposits of
Robert
uramithet7lor
2556
FINANCIAL CHRONICLE
$115,711,020 were shown by the statement, a seasonal
decline of $20,741,740 from the total of $136,452,760 on
June 30. Total resources were $156,008,335 on Sept. 30
against $193,150,465 on June 30.
Announcement was made Oct. 12 that the Ballston Spa
National Bank, Ballston Spa, N. Y., had taken over the
assets and business of the First National Bank of that place,
according to Associated Press advices from that place. This
action was the result of an agreement between the officers
and directors of both Institutions, it was stated.
The Revere Trust Co. of Boston, Mass., and the Highland Trust Co. of Somerville (near Boston), were closed by
Massachusetts State Banking officials on Oct. 13. The
closing of the two banks affects more than 20,000 depositors
and ties up approximately $7,000,000 in commercial and
savings accounts, according to the Boston "Herald" of Oct.
14, which in its account of the failures said in part:
Depletion of the cash reserves through recent heavy withdrawals was
given by Arthur Guy, Bank Commissioner, as the reason for interrupting
the transaction of business. Bank officials were confident yesterdtty
(Oct. 13) that the resources of both institutions would be conserved to a
sufficient extent to avoid any substantial losses to depositors.
Total deposits of the Revere Trust Co. were approximately $600,000
In the commercial department and $900,000 in the savings department.
There were 1,100 commercial accounts and 4,660 savings accounts.
The Highland Trust Co. had $1,300,000 in 2,500 commercial accounts
and $4,100 in 12,000 savings accounts. . . .
[VOL. 133.
credited with having saved the depositors of the Ocean City Title & Trust
Co. from loss when his bank took over the business of that institution.
As aeon as Mr. Mower's death became known to officials of the bank
they started to cheek up, and sent immediately for Mr. Ransom. The
examiner arrived to find a score of depositors lined up for their money,
and advised closing the bank at once to protect it. A slight "run" was
caused by the incident across the street in the Ocean City National Bank,
the only other bank here but officials there declared they were in no
danger, and the "run" was stopped.
According to Clyde W. Struble, Cashier of the First National, if Mr.
Mowrer had any financial worries they were personal and did not involve
the bank, which he declared to be prospering.
Be was a member of the New Jersey Bankers' Association, a Mason, a
member of the Chamber of Commerce, and the Young Hen's Progressive
League. None of the dead banker's associates could explain his act.
The Warren County Trust Co., of Belvidere, N. J., failed
to open on Oct. 9, and its affairs were placed in the hands
of the State Commissioner of Banking for New Jersey, as
reported in Associated Press advices from Belvidere on that
date, from which we quote furthermore as follows:
After a meeting last night the Board of Directors announced that because
of "the shrinkage of deposits occasioned by heavy withdrawals and the
depreciation of securities it was necessary for the bank to close." George
A. Angle is President of the company and George H. Wise its Secretary
and Treasurer.
The First National Bank & Trust Co. of Merchantville,
N. J., and the Merchantville Trust Co. of that place, failed
to open for business on Oct. 10, according to advices by the
Associated Press from that place on the date named. The
say:
Fourteen Atlantic City, N. J., banking institutions with dispatch went on to
banks stating that they had been closed
Notices
were
posted
on
combined resources of $63,000,000 have now been merged because of present banking both
conditions and in order to protect their deposiinto four major organizations. In addition to the Atlantic tors. The notices stated that the officers hoped that with the approval of
City National Bank, which on Sept. 30 last took over the stockholders and proper banking officials a merger of the two institutions
Union National Bank and subsequently the North Side might be effected and business resumed.
Trust Co., forming the first group, the combinations, as
Advices from Westmont, N. J., on Oct. 13, to the New
reported in a dispatch from Atlantic City on Tuesday of
York "Times" stated that the Westmont National Bank,
this week, are as follows:
The Guarantee Trust Co. absorbed four banks, namely the Marine an institution with resources of $496,700 and deposits of
Trust Co., the Neptune Trust Co., the Atlantic Safe Deposit St Trust Co. $463,262, as of June 30 last, had closed its doors on that day.
and the Seaside Trust Co. The original name will be retained. The group
has resources of over $18,000,000.
The Equitable Trust Co., of which Mayor Harry Bacharach is President,
took over the Pacific Avenue National Bank and the Chelsea Safe Deposit
& Trust Co. The combined resources are nearly $8,000,000. The original
designation will also be maintained in this instance.
The Chelsea National Bank, the Second National Bank and the Atlantic
County Trust Co. formed another consolidation. The principal bank will
be known as the Chelsea-Second National Bank & Trust Co. The resources
total approximately $14,500,000.
A dispatch from Atlantic City to the New York "Times"
on Tuesday, after stating that the merger of 14 of Atlantic
City's 16 banks was announced at 2.30 a. m. on that day
after a long conference in the Chalfonte Haddon Hall, at
which representatives of all the city's banks were present,
went on to say:
Announcement was made on Oct. 14 of the consolidation
of two Moorestown, N. J. banks—the Burlington County
Trust Co. and the Moorestown Trust Co. The new organization, which will continue the name of the Burlington
County Trust Co., has total resources of more than $5,700,000; deposits of over $4,500,000; trust funds in excess of
$8,000,000, and trust department resources exceeding
$13,000,000. A dispatch to the New York "Times" from
Moorestown, from which the above information is obtained,
furthermore said:
The joint announcement said that Eldridge R. Johnson, founder and
former President of the Victor Talking Machine Co. had endorsed the new
enterprise and had shown his confidence in it by becoming a heavy stockThe conference and the resultant action was a voluntary move on the holder.
part of the bankers to simplify and strengthen the local banking situation,
"Mr. Johnson feels that the local merger will greatly stabilize conditions
in view of the financial experiences of the other communities in the de- in other communities of this section and aid in subsiding the wave of
pression. Officials of both the Federal and New Jersey State Banking hysteria which has affected many towns," it was added. "The people of
Departments, who attended to-night's conference and a series of similar Moorestown have not been alarmed and have shown implicit confidence
conferences last week, expressed their approval and ratification of the in their institutions.
successful outcome.
The two banks which did not enter the merger are the Boardwalk NaC. H. Markley, Deputy Commissioner of Banking &
tional and the Bankers Trust Co. The Boardwalk National Bank officials,
Insurance
for New Jersey, announced on Thursday, Oct.
although invited to join the consolidation, decided to retain their individuality, because of their location and also because of the fact that theirs 15, that his Department had closed the Toms River Trust
Is the only bank located on the resort's boardwalk.
Co. at Toms River and the Wildwood Trust & Title Co.
The Bankers Trust Co., headed by Senator Emerson L. Richards, will
at
Wildwood at the request of the directors of each bank,
join one of the four major banking groups later. Officials of this bank
decided to postpone this action in view of the fact that Senator Richards according to Trenton, N. J., advices to the New York
has Just returned from Europe and was not able to take part in making the "Times," from which we quote further as follows:
arrangements necessary for the immediate action.
George Smith, President of the Wildwood bank, said the closing was
*5*
"steady seepage of deposits." Anthony Then,
Under the merger plan, ten of the banks involved will act as branches not due to "runs" but to a
President of the Toms River institution, explained the bank's failure
of the major institutions.
was caused by recent large withdrawals of State and municipal funds.
The Wildwood Trust had deposits of $761,141 at the time of the last
The First National Bank of Ocean City, N. J., the oldest bank
statement; the Toms River company deposits of $163,591. The
banking institution in Cape May County, was closed on closing of the two banks made a total of 15 State banks taks,n over by the
since June 30 1930. Since that date,the Department
Banking
Oct. 8 by F. T. Ransom, United States Bank Examiner of also has Department
taken over six national banks.
New York City, as the result of the suicide of its President,
Hiram S. Mowrer. Mr. Mowrer was found dead In the surf
off Morningside Road by a fisherman at 10 a. m. Oct. 8.
He is believed to have dived off a nearby jetty. A dispatch
from Ocean City to the New York "Herald Tribune," from
which we have quoted above, furthermore said, in part:
In the pocket of the banker's coat, which was left on the beach weighted
down by a stone, was found the following note, penciled in his handwriting
upon the back of a circular, but unsigned:
"If this old world does not get back to God it is lost. (I know.) I am
so tired of it all. The spirit was there, but the flesh was weak."
Mr. Mowrer, who was 56 years old, had been a financial power here for
years. He had been connected with the bank he headed for 33 years, having
than 20 years, and
started as a clerk in 1898. He was its Cashier for more
•
its President since 1928.
The bank was said by officials to be in excellent condition and was
closed to avert a run, which began as soon as word of the President's death
began to seep through the community. About a year ago Mr. Mowrer was
At a meeting of the Board of Managers of the Orange
Savings Bank of Orange, N. J., on Oct. 14, the following
changes were made in the personnel of the institution;
Richard I. Williams was appointed President to succeed the
late Charles B. Storrs; Charles Hasler, Cashier of the Orange
National Bank, was made Treasurer, and City Comptroller
Frank G. Coughtry, a member of the directorate for many
years, was chosen a Vice-President. The Newark "News"
of Oct. 15, from which the above information is obtained,
furthermore said in part:
The last Treasurer was the late Edward A. Everitt. Since his death
several years ago the work of that office has been done by Otto F. C.
Brueger, who continues as Assistant to the Treasurer.
Mr. Williams, the new President, was elected to the Board in April
1903, when the assets were $1,471,916.75. They are now $7,453,383.12.
The bank then had three employees. He became Vice-President April
OCT. 17 1931.]
FINANCIAL CHRONICLE
2557
12 1920, when he succeeded the late Horton D. Williams. He is a part
Printed slips bearing the pledges were passed among 5,000 depositors
owner of the Orange Coal Co.
at a mass meeting in Olney Senior High School, presided over by Hubert
Mr. Williams is now the senior member of the Board. . .. The Orange Reimel, General Secretary of the Chamber of Commerce of Northern PhilaSavings Bank is the oldest savings bank in Essex County. Its new building delphia. It was called in an effort to reach a plan that would lead to the
at Main and South Day Sts, will be opened for inspection Nov. 27.
bank's reopening.
Mr. Hasler had been connected with the Orange National Bank more
A telegram from Governor Pinchot expressed his regret at being unable
than 45 years, going there as a boy in 1886. He advanced to Cashier to attend.
through a series of offices, including those of Receiving Teller and As"There is need for courage and common sense," the Governor wired.
sistant Cashier.
"With them we will work out of our troubles. In the meantime hysteria
can only do WI harm. Steadiness is what we need now."
Stockholders of the West Hudson County Trust Co. at
The pledges signed at the meeting will be forwarded to Secretary of
Harrison, N. J., on Oct. 14, approved a recommendation Banking William J. Gordon with other depositors' proposals for reopening
of the directorate that the capital be increased $100,000 to the bank. The pledges read:
"Depositors of all classes waive rights to withdraw funds now on deposit
$200,000 according to the Newark "News" of Oct. 15. with
the Olney Bank & Trust Co. for a period of six months from the
The stock is to be offered at $400 a share it was stated.
date the bank is reopened. We also agree to forego interest due, if any,
on such balances, said interest to be paid from earnings on recommendation
A group of Philadelphia's leading banks on Tuesday, Oct. of the Board of Directors, before the redemption of dividends to stockholders. In consideration of the above plan to reopen the bank I hereunto
13, entered into a co-operative agreement to render assistance set
my signature and seal."
to deserving banking institutions which have recently been
embarrassed by heavy withdrawals and, in particular, to
fortify the position of the Integrity Trust Co., one of the
largest banks which has encountered difficulties. Funds
to meet the total deposit liabilities of the Integrity Trust
Co. amounting to $48,000,000 will be supplied, if necessary,
by the banking group. This action insures the protection
of the Integrity depositors and provides for any other demands which may be made upon the bank. An advisory
committee headed by William P. Gest, Chairman of the
Board of the Fidelity-Philadelphia Trust Co., was appointed
to assist the officers of the Integrity Trust Co. The following statement was issued:
"The Integrity Trust Co. announced this afternoon that a group composed of the leading financial institutions of the city has joined in a plan
to provide the company with any resources which may be required to
assure the safety of its deposits, thus insuring the continuance of its business without any undue sacrifice of its valuable assets.
"The Integrity Trust Co. has requested these financial institutions to
appoint an advisory connnittee to confer from time to time with the
officers of the company in order that it may have the benefit of their
advice and experience. They have agreed to this request and have designated as members of such a committee, William P. Gest, Chairman of
the Board of the Fidelity-Philadelphia Trust Co., Chairman of the advisory
committee; Effingham B. Morris, Chairman of the Board of the Girard
Trust Co.; Joseph Wayne, Jr., President of the Philadelphia National
Bank; Horatio Bates Lloyd a Drexel & Co.; C. S. Newhall, Executive
Vice-President of the Pennsylvania Co. for Insurances on Lives & Granting
Annuities; Howard A. Loeb, Chairman of the Tradesmen's National Bank
& Trust Co. and J. Willison Smith, President of the Real Estate-Land
Title & Trust Co.
"This statement is made in view of the unfounded rumors spread al.out
in regard to even the soundest banking institutions."
This agreement, it was stated in financial circles, was
entered into by the co-operating banks, first, to save the
Integrity from embarrassment caused by recent heavy withdrawals of funds, and second, to halt the circulation of
rumors which have been damaging to the institution. Beyond this, also, the banks acted to clear the air generally,
and to demonstrate forcefully their determination to stand
by other institutions which may be subjected to withdrawals
because of the circulation of damaging rumors.
Action was not taken by the co-operating banks nail
after they had made a careful survey of the banking situatton. The holiday period from Saturday noon until this
morning (Oct. 13) afforded sufficient time for the bankers
to investigate thoroughly and the results of their investigation were so favorable that they decided upon immediate
and vigorous action.
The Board of Directors of the Tradesmen's National Bank
& Trust Co. of Philadelphia has declared the regular quarterly dividend of $3.00 per share, at the rate of 12% per
annum, payable Nov. 2 to stockholders of record at the close
of business Oct. 24 1931.
Following a seepage in deposits during the previous week,
the Coatesville Trust Co., at Coatesville, Pa., closed its doors
on Oct. 13. A dispatch from Coatesville, printed in the
Philadelphia "Ledger" of Oct. 14, reporting the closing, said:
The affairs of the institution were taken over by William D. Gordon, State
Secretary of Banking. Horace B. Spackman, President, declared the bank
Is solvent and said depositors would not lose as a result of the closing.
The trust company was capitalized at $250 000. In its most recent statement total deposits were given as $1,011,000.
The First National Bank Trust Co. of Monessen, Pa.,
closed its doors on Oct. 13, as reported in Associated Press
advices from Monessen, which, continuing, said:
A notice signed by the directors said the move was necessary to protect
depositors following recent heavy withdrawals of deposits.
The bank had total resources of $3,935,882.28 and deposits of $3,176,522.14, according to its statement last June 30.
The Pennsylvania State Banking Department on Oct. 6
announced the closing of the Shrewsbury Savings Institution at Shrewsburg, Pa., near the Maryland State line,
according to a press dispatch from York, Pa., which went
on to say:
The bank was incorporated in 1850 and is one of the oldest financial
institutions in Southern York County. The bank had total resources of
$1,646,000 and deposits of $1,350,000, it was said. A. D. Collins is
President.
According to the New York "Journal of Commerce" of
Oct. 16, the National Bank of Fayette County at Uniontown, Pa. (in the outskirts of Pittsburgh), with deposits
of $9,247,460 was closed on Oct. 15.
The Farmers' & Merchants' Bank of West Newton, Pa.,
was placed in the hands of the Pennsylvania State Banking
Department on Oct. 15, according to an Associated Press
dispatch from West Newton, which stated that the deposits
of the closed bank were approximately $900,000 and its
resources about $1,400,000.
The Tarentum Savings & Trust Co., at Tarentum, Pa.,
was placed in the hands of the Pennsylvania State Banking
Two small banks in the outlying sections of Philadelphia Department on Oct. 15. Associated Press ad-vices from
closed their doors on Oct. 13. They were the Manayunk that place indicating the closing gave the deposits at apTrust Co., with main offices at 4340 Main St. and branches proximately $1,800,000 and the resources as $2,300,000.
at 6062 Ridge Ave. and 5152 Ridge Ave., and the RoxThe Commercial Trust Co. of Harrisburg, Pa., one of
borough Trust Co. at Ridge Ave. and Green Lane. The
Philadelphia "Ledger" of Oct. 14, in reporting the closings, the smaller banks of that city, with resources of $1,606,000
and deposits of $686,000, was reported closed in a Harrisburg
said in part:
Dr. William D. Gordon, State Secretary of Banking, issued the following dispatch by the Associated Press on Oct. 15.
statement regarding the closings in Pennsylvania:
"The total resources of the Manayunk Trust Co. were
$3,681,571.10;
deposits, $1,861,130.09; capital. $250,000; surplus, $350,000,
and undivided Profits, $75,315.71.
"The total resources of the Roxborough Trust Co. were
$2,807,892.12;
deposits, $1,423,293.16; capital, $300.000; surplus, $325.000,
and undivided profits, $9,271." George G. Littlewood is President.
-
Two West Virginia banks, the Central Union Trust Co.
of Wheeling and the Bank of Farmington at Farmington,
were closed on Oct. 9 by the West Virginia State Banking
Department at the request of their directors, according to
Associated Press adviees from Charleston, W. Va., on that
date. The Central Union Trust Co. of Wheeling is capitalized at $500,000, with surplus and undivided profits of
$242,328,and as of June 30 1931 had deposits of $1,521,731.
A dispatch from Wheeling Oct. 9 to the Pittsburgh, Pa.,
"Post Gazette" contained the following:
With reference to the affairs of the Olney Bank & Trust
Co. of Philadelphia, which was closed by the Pennsylvania
Banking Department on Oct. 2, more than 2,000 depositors
of the institution, on the night of Oct. 9, signed pledges
agreeing to waive their rights to withdraw funds on deposit
An amount reported to have been approximately $2,000,000 was delivfor a period of six months if the bank is reopened. The ered
to-day in armored automobiles to Wheeling banks from the Federal
Pittsburgh.
b .
Philadelphia "Ledger" of Oct. 10, from which the above ReserveatPi
machine guns, the trucks arrived here shortly after
Heavily guarded
information is obtained, continuing, said:
the Central Union Trust Co. failed to open its doors upon decision by
its
2558
FINANCIAL CHRONICLE
[Vol,. 133.
According to a dispatch by the Associated Press from
Sebring, Ohio, on Oct. 8, the Citizens Banking Co. of that
place closed its doors for liquidation on that day. The
bank's assets of approximately $1,000,000, were surrendered
A dispatch from Charleston, W. Va., on Oct 13 by the to G. W. Burr, State bank examiner, it was stated.
board of directors. The closing of the bank was the first failure in the
history of Wheeling.
Additional funds were placed in all Wheeling banks as a precautionary
measure, although no signs of excitement appeared here.
Associated Press indicated that three West Virginia banks
has suspended on that date. The institutions named were
the Second National Bank of Morgantown (leaving that
city without a banking institution); the Grafton Bank &
Trust Co.at Grafton, and the Citizens Bank of Weston. The
Morgantown bank was capitalized at $100,000 with surplus
of $250,000 and had deposits of $1,900,000, while the Grafton
bank had a capital of $100,000 and deposits of $784,294,
the dispatch stated.
The Citizens Savings Bank of Upper Sandusky, Ohio,
failed to open on Oct. 8. "Frozen assets" were given as the
reason in Associated Press dispatch from Upper Sandusky,
which furthermore stated.
The conviction of Mal S. Daugherty, former President of
the defunct Ohio State Bank, of Washington Court House,
Ohio, was reversed on Oct. 9 by the 9th District Court of
Appeals, which remanded the case to Common Pleas Court
It is learned from Wilmington, Del., advices on Oct. 14 for retrial. United Press advices from Akron, Ohio, reportto'the "Wall Street Journal" that the Industrial Trust Co. ing this, furthermore said:
of Wilmington has increased its capital stock by $750,000
to $2,000,000, and this amount of cash has been turned over
to the trust company by the purchasers of the new stock,
including P. S. du Pont, Irenee du Pont, Lammot du Pont
and other individuals, and four Wilmington banks.
The National Bank of Petersburg, Va., and the Virginia
National Bank of that city, capitalized, respectively, at
$400,000 and $1,000,000, were consolidated on Sept. 30 under
the title of the First National Bank & Trust Co. The new
organization has a capital of $700,000, surplus and profits of
$150,000, deposits of $5,578,150, and total resources of
$7,624,178. The personnel of the new bank is as follows:
Chas. E. Plummer, President; Benjamin T. Kinsey, First
Vice-President; W. D. Franklin, Second Vice-President and
Cashier; W. E. Poole and W. M. Rucker, Vice-Presidents,
and B. B. Wells and E. H. Beasley, Assistant Cashiers.
Daugherty, brother of former Attorney General Harry M. Daugherty, was
convicted last March of misuse of funds and sentenced to ten years in State
penitentiary and $5,000 fine.
Daugherty had been convicted by a jury on five counts in an indictment
charging abstraction of funds, misapplication of the bank's credit, falsification of records, snaking false statements to bank examiners and embezzlement. Seventeen indictments, in all, were returned against him by the
Fayette County Grand Jury last December. He was tried on one.
Two Youngstown, Ohio, banks—the Dollar Savings &
Trust Co. and the City Trust & Savings Bank—failed on
Oct. 15, and the First National Bank suspended temporarily,
pending its merger with two other national banks in Youngstown, according to the following dispatch from Youngstown
on Thursday to the New York "Times":
Following the failure to-day of the Dollar Savings & Trust Co. and the
City Trust & Savings Bank,with combined resources exceeding $42,090,000.
a committee of merchants distributed 50,000 pamphlets, urging the people
to remain calm and retain confidence in the integrity of Mahoning Valley
institutions.
The Dollar bank was one of the oldest institutions In northeastern
Ohio. An eleventh-hour effort to save the bank by invoking the aid
of the United States Steel Corp., proved fruitless, it is reported.
The First National Bank closed its doors temporarily to-day, announcing
The Bank of Halifax at Halifax, Va., with combined
its assets were in the hands of the Controller of the Currency. Only
capital and surplus of $67,000 and resources of $400,000, that banks
two
remained open, the Mahoning National Bank and the ComDanville
suspended temporarily on Oct. 12, according to
mercial National Bank, and an agreement was reached whereby they
advices on that date to the Richmond "Times-Dispatch." would consolidate with the First National Bank to form one institution.
Leading citizens and industrial and mercantile groups pledged $2,000,000
The advices said in part:
toward the consolidated bank's capital.
The bank did not open its doors this morning and a notice was attached
Heavy withdrawals were made to-day from the Mahoning and Commerto the door stating that it had suspended operations for thirty days. The
cial banks.
officers have been instructed to work out a plan for the resumption of its
The City Trust and Dollar banks are State-controlled institutions, and
operations.
their investments are largely in mortgages and long-time loans. Tho
The belief to-day was that all the depositors are protected, and that they
City Dank controlled branches in Youngstown. Campbell and Girard,
will be paid off and that the closing of the bank was merely a precaution.
wile the Dollar bank operated four branches in Youngstown.
The institution only last week performed useful service at South Boscon,
The Dollar Bank has resources and liabilities of $23,242,809; City
meeting the serious situation there by opening a branch in order to pay off
Bank,
$18,260,493: First National Bank,$22,782,062; Commercial National
the tobacco farmers. To this, in part, was due the closing to-day, it was Bank,
$9,234,659: Mahoning National Bank,$7,925,035. and the Mahoning
said. . . .
Savings & Trust Co., $3,181,042.
It has been doing business since 1886 and B. W. Leigh Is President of
the bank.
Girard, Ohio, near the City
The National Bank of Leesville, S. C., with capital of
$50,000, went into voluntary liquidation on Sept. 30 1931.
The institution was absorbed by the South Carolina State
Bank of Charleston, S. C.
The Trumbull Banking Co. at
of Youngstown, was closed on Oct. 15, according to a dispatch by the Associated Press from Youngstown. G. J.
Jones, President of the company, was reported as saying
that the institution would probably reopen after a conference
with State examiners. The bank's resources as of Sept. 29
were given as $500,746, it was said.
Effective Sept. 30 1931, the First National Bank of Sumter, S. C., capitalized at $100,000, went into voluntary
As of Sept. 28 1931, the First National Bank of Winamac,
liquidation. It was taken over by the South Carolina State
Ind., was placed in voluntary liquidation. The bank, which
Bank of Charleston, S.C.
absorbed by the Union Bank
was capitalized at $50,000, was
Trust Co. of the same place.
&
In South Carolina, announcement was made on Oct. 15
by Albert S. Fant, State Bank Examiner, that three banks
in the southwestern part of the State had failed to open on
that day, according to Associated Press advices from
Columbia, S. C. The closed institutions are the Bank of
Western Carolina of Aiken and its nine branches at North
Augusta, Batesburg, Johnston, Wagener, Salley, Barnwell,
Blackville, Lexington and Ellenton, the Bank of Williston
at Williston and the Bank of Graniteville at Graniteville.
The dispatch went on to say:
Assets of the Bank of Western Carolina and its branches were placed
by Mr. Fant at $3,000,000, the Bank of Williston at $350,000 and the
Bank of Graniteville at $150,000. Mr. Fant said collections In the banks
had been "anything but good" and that he advised last night that they
not open to-day.
Effective Tuesday of this week, Oct. 13, the Potters' National Bank and the Dollar Savings Bank, both of East
Liverpool, Ohio, were to be merged under the title of the
Potters' Bank & Trust Co., according to Associated Press
advices from East Liverpool on Oct. 9, which went on to say:
Richard L. Cawood, head of the Patterson Foundry & Machine Co., will
be President of the merged bank, and H. N. Harker, pottery manufacturer,
will be Chairman of the Executive Committee. The new bank will have
total resources of approximately $4,000 000.
The Citizens National Bank of Delphi, Ind., capitalized at
$75,000, went into voluntary liquidation on Sept. 15 last.
It was succeeded by the Union State Bank of Delphi.
From the Michigan "Investor" of Oct. 10,it is learned that
Douglas McPherson, former Branch Manager for the First
National Bank in Detroit, was sentenced recently to serve
two years in Fort Leavenworth Prison for the theft of $40,928. His alleged accomplice, Leo J. LaFleur, formerly
a teller at the branch, was arrested by police in Brooklyn,
N. Y., the paper mentioned said.
Henry Gund recently became President of the National
Bank of La Crosse, La Crosse, Wis., succeeding George W.
Burton, who resigned the office on account of failing health
and was made Chairman of the board of directors. Mr.
Gund, who has been a director of the institution for about
35 years, was born in La Crosse in 1859. He is also President
of the Gund Brewing Co., an office he has held since 1910.
Walter E. Wolf, former Manager of the coupon department of the Continental Illinois Bank & Trust Co. of Chicago,
J
OCT. 17 1931.]
FINANCIAL CHRONICLE
2559
who embezzled $3,666,929 from the institution, was sentenced and a corresponding increase in the number of shares of
on Oct. 8 by Chief Justice Harry M. Fisher of the Criminal capital stock from 50,000 shares to 250,000 shares.
Court, after a review of the case, to serve from 10 to 100
With the approval of the Missouri State Finance Departyears in prison. A Chicago dispatch to the New York
ment, the Holt County Bank of Mound City, Mo., which was
"Times," from which the above is taken, went on to say:
The judge asserted that Wolf, by leading a life of crime for 12 years, closed by its directors on Aug. 22 last, resumed business on
during which he never was moved to confess his peculations until he learned Oct. 7, as reported in Jefferson City advices printed in the
that auditors were examining his accounts, had forfeited any claim to
St. Louis "Globe-Democrat" of Oct. 8. The dispatch added:
leniency.
He sentenced Wolf on each of 10 indictments, covering $1,047,000 of
the securities which he abstracted from the coupon department of the
bank which he managed and used for disastrous stock and grain speculations. The Court directed that the sentences, of from one to ten years
each, be served consecutively and not concurrently. Wolf is said to be
the greatest single embezzler in American banking history.
Adjustment of its affairs was found satisfactory by Finance Commissioner S. L. Cantley. The institution has total resources of $312,000.
Remaining assets of the de- funct National Bank of Kentucky, of Louisville, are sufficient to make an additional
payment of 13% to creditors, according to advices from that
-4--city,
Oct. 2, to the New York "World-Telegram," which
The Foreman-State National Bank of Chicago, capitalized
added:
on
Aug.
in
voluntary
liquidation
placed
was
$11,000,000,
at
This will make a total of 80% the creditors of the closed bank will
25 1931. The institution has been absorbed by The First have received.
National Bank of Chicago.
The Citizens National Ba-nk of Winchester, Ky., was
placed
in voluntary liquidation on Sept. 20 last. The inThe State Bank of Victoria, Victoria, Ill., was closed on
stitution, which was capitalized at $100,000, was taken
Oct. 13 "for examination and adjustment," according to
County National Bank of Winchester.
advices from Galesburg, Ill., on that date to the New York over by the Clark
"Times."
Abraham M. Baldwin, Chairman of the Board of Directors of the First National Bank of Montgomery, Ala., and
associated with the institution since 1886, died at Doctors'
Hospital, East End Ave. and 87th St., New York, where
he had been receiving treatment. Mr. Baldwin was born
in Montgomery, Ala. on Oct. 29 1860. He was graduated
from Vanderbilt University in Nashville, Tenn., and since
1886 had been an officer in the First National Bank of
Montgomery, an institution which his father, a former
President of the American Medical Association, started in
1871. He was also a director of the First National Bank
of Wetumpka, Ala., and was Chairman of the commission
Following the death of its Cashier, the Malvern State appointed to organize the Federal Reserve Board of Atlanta.
Bank at Malvern, Kan., was closed on Oct. 8 pending ex- He was a member of the Bankers' Club of America and the
amination bY the Kansas State Banking Department, accord- Country Club of Montgomery.
ing to Associated Press advices from Malvern on the date
The Houston National Bank of Dothan, Ala., was closed
named. C. E. Gants, President of the institution, was reported as saying that so far as was known the bank was in Oct.6 "for protection of depositors," according to Associated
Press advices from that place on the date named, which
"good condition."
continuing said:
A notice on the door was signed thy the directors and said Federal
Effective Sept. 26 last, the First National Bank of
examiners had taken over the affairs. The bank was capitalized at $300 000.
Bertrand, Neb., with capital of $25,000, was placed in volun- A recent statement showed deposits aggregating $400,000.
tary liquidation. It was absorbed by the First State Bank
of Bertrand.
The First National Bank of Ukiah, Cal., capitalized at
$100,000, was placed in voluntary liquidation on Sept. 23.
The Ledyard State Bank, Ledyard, Iowa, recently ab- The institution was taken over by the Savings Bank of
sorbed the Farmers' Savings Bank of Ledyard. The en- Mendocino County, Ukiah.
larged institution is capitalized at $25,000, with surplus of
$6,600 and has deposits of $158,000.
THE WEEK ON THE NEW YORK STOCK EXCHANGE.
The New York stock market has been unsettled this week,
The Iowa National Bank of Ottumwa, Iowa, capitalized
at $200,000, went into voluntary liquidation on Aug.20 last. and while the tendency the latter part has been toward
It was succeeded by the Union Bank & Trust Co.of Ottumwa. higher levels, the changes for the week have been comparatively narrow. Considerable irregularity has been apparent
Four Missouri banks were closed by their respective direc- from time to time, and a steady dribble of offerings kept the
tors on Oct. 15, according to advices from St. Louis by the trend downward during the early part of the week. InAssociated Press. They are the First National Bank of dustrial shares, public utilities and specialties have graduBrunswick, the First National Bank of Versailles, the Bank ally moved lower, but railroad shares have held their own
of Dalton at Dalton and the Moscow Mills Savings Bank and made some gains, particularly during the last half of
at Moscow Mills. In the case of the Dalton bank a notice the week. Western Union Telegraph was especially weak
and on Wednesday broke to its lowest in more than 10 years
stated that the closing was temporary, the dispatch said.
as it slipped down ni points to 86. A regrettable event
during the early part of the week was the failure on Tuesday
J. Sheppard Smith, President of the Mississippi Valley morning of
Kountze Brothers, a prominent brokerage house
Trust Co. of St. Louis, Mo., died on Oct. 9 in La Jolla, Cal., doing an extensive underwriting business. One of the really
where he had spent the summer after suffering heart attacks bright spots of the week has been the report of the Amer.
in June. He was 60 years old. Mr. Smith was born in Tel. & Tel. Co., showing a new high record in net earnings
St. Louis and attended St. Louis University. His early for the first nine months of the year. Another outstanding
employment was in the wholesale grocery business. In 1915 event of the week was the further advance on Thursday in
he became a Vice-President of the Mississippi Valley Trust the rediscount rate of the Federal Reserve Bank of New York
to 33%. Call money renewed at 2% on TuesCo. and in 1925 President. He was prominent in the move- from 2
ment to consolidate the State National Bank and the Mer- day morning, continued unchanged at that rate until Friday
chants Laclede National with the Mississippi Valley as the when it advanced to 214%. The weekly statement of the
Mississippi Valley Merchants States Trust Co. Later the Federal Reserve Bank, issued after the close of business on
single name of Mississippi Valley Trust Co. was resumed. Thursday, showed a further decrease of $73,000,000 in
brokers' loans in this district. This brings the total outstanding loans down to $928,000,000, the lowest level since
Stockholders of the St. Louis Union Trust Co., St. Louis, Dec. 28 1921, when the amount was
$898,541,000.
Mo., will vote Nov. 4 next on a proposed reduction of the
Trading was somewhat stronger and the market moderately
par value of the company's shares from $100 to $20 a share, higher during the abbreviated session on Saturday.
Irregu-
Chicago advices by the Associated Press on Oct. 9 reported the closing on that date of two small Chicago banks,
the South West Trust & Savings Bank and the West Side
Atlas National Bank. The latter, which had combined
capital and surplus of $250,000 and deposits of $1,500,000,
was taken over by Federal bank examiners because of
depleted reserves, the dispatch stated, while the South
West Trust & Savings Bank was closed by the State Auditor
for 'Illinois. This bank had combined capital and surplus
of $500,000 and deposits of $2,500,000.
2560
FINA NCT A L CHRONICLE
larity and some realizing was apparent during the first hour,
but the market steadied as the day advanced and closed
slightly higher than the preceding final. Pullman also was
strong and reached a new top on the recovery and General
3
Railway Signal forged ahead 23
Other
4 points to 37%.
noteworthy gains were Western Union Telegraph,3% points
to 983; Ate ison, pref., 33. points to 96; Rock Island, 2%
points to 29%; Norfolk & Western, 2 points to 136; Peoples
Gas, 2% points to 1573.; and American Can, 13' points to
843. Allied Chemical & Dye selling ex-dividend gained
2 points at its highest and United States Steel and Amer.
Tel. & Tel. were up about a point each. On Monday, the
New York Stock Exchange, the Curb Market and commodity
exchanges were all closed in observance of Columbus Day,
which is a legal holiday. Price movements were generally
downward and while the changes were gradual, the downward movement was persistent and the net changes at the
close were discouragingly large. Railroad shares bore the
brunt of the recessions, particularly in the fin 1 hour when
the whole group tumbled sharply downward. The principal
losses were Atchison, 5 points to 112; New York Central,
4 points to 383
4,and Baltimore & Ohio, 4% points to 35%.
Other popular issues showing losses at the close included the
following: Allied Chemical & Dye, 33
4 points; American
Can,33% points; Auburn Auto,83/i points; Baltimore & Ohio,
33% points; Brooklyn-Manhattan Tranist, 33' points; J. I.
Case, 43% points; Standard Gas & Electric, 3 points; Pacific
Tel. & Tel., 6% points; Consolidated Gas, 498 points;
3 points; Houston Oil, 3 points; International
du Pont, 4%
Business Machine, 4% points; Ingersoll-Rand, 53/i points;
Westinghouse, 25 points and Worthington Pump, 23's
points. Trading was quiet and the tone was weak as the
market closed.
Stocks in practically every group extended their declines
on Wednesday, and while liquidation was not as heavy as
on preceding days, there was still a moderate amount in
evidence throughout the day. The feature of the opening
hour was the interest displayed on Woolworth which spurted
ahead more than 3 points on an unusually large turnover.
The gains were cancelled later in the day as renewed selling
in this issue extended to other sections of the list and carried
many pivotal stocks downward from 3 to 6 or more points.
Railroad stocks held fairly well despite the selling, but public
utilities, industrial stocks and specialties moved sharply
downward. Western Union Telegraph was especially noteworthy for its weakness as it broke 53j points to 86, the
lowest level in more than 10 years. Auburn Auto dipped
7 points, J. I. Case slipped back 3 points and American Can
a similar amount. Allied Chemical & Dye was off 2 points
and General Electric was down a point or more. Other
recessions among the popular favorites were American Tel.
& Tel. 33/i points to 130%, Brooklyn Union Gas 2 points
4 points to 54%, Eastman Kodak 6'A
to 91, du Pont 33
points to 101%, Homestake Mining Co. 5 points to 97,
% points
Ingersoll-Rand 43' points to 49, Johns-Manville 27
to 35, Lehigh Valley 4 points to 19, Louisville & Nashville
3 points to 383, Union Pacific 33's points to 111 and Westinghouse 2 points to 44. At the close of the market trading
had simmered down, the tone was heavy and prices were
at their bottom for the day.
The trend of the market was upward during the early
part of the day on Thursday, but a late reaction stopped
the upward swing and there were some recessions before
the close of the market though most of the early gains were
held until the end. Leading industrials recorded gains
ranging from two to five or more points and railroad stocks
were strong all through the session, though the net advances
in the latter group were comparatively small. Among the
stocks showing gains at the end of the day were American
Tobacco, 4 points to 853/3; Auburn Auto, 3 points to 111;
Norfolk & Western, 3 points to 1323; Eastman Kodak,
13' points to 103; and J. I. Case, 13 points to 45. At the
close of the market, the tone was good and while some stocks
lost part of their early gains, the net changes were not particular noteworthy. Stocks turned sharply upward on
Friday and while there was considerable irregularity apparent in the early trading, the market steadied after the
first hour and surged forward under the leadership of the
railroad shares which recorded gains ranging from two to
five or more points. The volume of business was again comparatively low, the total turnover reaching 1,420,773 shares.
The gains in the rails included such popular speculative
favorites as Atchison which jumped 53/
2 points to 11634;
Baltimore & Ohio which improved 23/i points to 393/2;
[VoL. 133.
Chesapeake & Ohio, which advanced 1% points to 323',
Rock Island which forged ahead 25
% points to 285
%; Union
Pacific which moved upward 53. points to 117; New York
Central which surged forward 2% points to 623/i and Norfolk
& Western which closed at 138 with a gain of 53
4 points.
Other noteworthy gains were recorded by such speculative
3 points;
favorites as Air Reduction, 2 points; Coca Cola, 3%
Worthington Pump, 2 points; Westinghouse, 2 po nts;
Eastman Kodak, 5 points, United States Steel, 23 points;
American Can, 23
4 points; J. I. Case Co., 33/i points and
Johns-Manville, 13
% points. At the close the final tone
was strong, trading was fairly active and prices were at
their top for the day.
TRANSACTIONS AT THE NEW YORK STOCK EXCHANGE
DAILY, WEEKLY AND YEARLY.
Week Ended
Oct. 16 1931
State,
Stocks,
Railroad
Number of and Mizell. Municipal dt
For'n Bonds.
Shares.
Bonds.
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Total
826,378
1,249.297
1,636.475
1.375.700
1,420,773
55,814,600 82,688.000
Holiday-Co lumbUS Day.
5.442.000
9.260.000
5,238,000
8.769.000
4.651,000
8.735.000
5,336.000
8.700.000
United
States
Bonds.
Total
Bond
Sates.
81.103.700
89.605,700
4.958.000
2.455.000
2.893,000
2,821,000
19.666,000
16,463.000
16,282.000
16.857,000
6.505.623 341.254.000 323.355.000 314.234.700 378.573_700
Sates at
New York Stock
Exchange.
Jan. Ito Oct. 16.
Week Ended Oct 16.
1930.
1931.
Stooks-No, of shares_
6.508,623
Bonds.
Government bonds_ _ _ $14,234,700
State & foreign bonds_ 23.355.000
Railroad .fg misc. bonds 41.284.000
Total bonds
1931.
1930.
12.006,330
471.528,545
666.167.908
51.404,000
16.872,500
32.970.800
3170.061.900
699.373.100
1,474.843.400
891,039.500
554.767,900
1.564.182,900
$78.873.700 $51,247,300 82,344,278,400 $2,209,990,300
DAILY TRANSACTIONS AT THE BOSTON, PHILADELPHIA AND
BALTIMORE EXCHANGES.
Week Ended
Oct. 16 1931.
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Total
Boston.
Baltimore.
Philadelphia.
Shares. Bond Sales. Shares. Bond Sales.
Shares. Bond Sales
15,021
55,000
HOLIDAY
25,514
7,000
27,592
14,000
18,100
20,815
3,000
6.145
$7,000
21,374
HOLIDAY
37,000
30.573
51,700
a36,559
16,054
a22,889
6,710
94.037
547,000
118.105
294 110
350 000
350.504
$111,754
1,518
84,000
HOLIDAY
787
3.000
1,290
4,600
.754
445
4.794
$11,600
3168.200
6 044
a In addition, sales of warrants were: Wednesday, 10: Thursday, 10.
335100
Prey. wk. revised
COURSE OF BANK CLEARINGS.
Bank clearings this week will again show a decrease as
compared with a year ago. Preliminary figures compiled by
us, based upon telegraphic advices from the chief cities of
the country, indicate that for the week ended to-day (Saturday, Oct. 17), bank exchanges for all the cities of the
United States from which it is possible to obtain weekly
returns will be 33.4% below those for the corresponding
week last year. Our preliminary total stands at $6,572,409,101, against $9,872,228,416 for the same week in 1930.
At this center there is a loss for the five days ended Friday
of 30.8%. Our comparative summary for the week follows:
Clearings-Returns by Telegraph.
Week Ended Oct. 17 19 1.
1931.
1930.
Per
Cent.
New York
C.:Meng()
Philadelphia
Boston
Kansas city
St. Louts
San Francisco
Los Angeles
Pittsburgh
Detroit
Cleveland
Baltimore
New Orleans
$3,417,352,927 85,098.000,000
256,039.182
415.095.016
277,000.000
394.000,000
239,000.000
375,000.000
69,101.184
108.205,475
73.700.000
106.500.000
104.428,000
144.071,500
No longer will re port cleArings.
88,165.849
133.808.971
79.697.130
126.664.807
77,449.795
116.573.022
60.323.663
80.590,240
36.461,809
45.053,867
-34.2
-37.2
-33.6
-25.1
-19.1
Twelve cities, 5 days
Other cities, 5 days
84.778,725.539
698.282.045
87.143.562.928
1.005.037.045
-33.1
-30.5
Total all cities. 5 days
All cities, 1 day
35.477.007,584
1,095,401.517
$8,148,599,973
1.723,628.443
-32.8
-36.5
SR 572 400 ini
30 572 9997 ale
Tnfnl .01 rifirn fnr conak
-30.8
-38.3
-29.7
-36.3
-36.1
-30.8
-27.5
Complete and exact details for the week covered by the
foregoing will appear in our issue of next week. We cannot
furnish them to-day, inasmuch as the week ends to-day
(Saturday) and the Saturday figures will not be available
until noon to-day. Accordingly, in the above the last day
of the week has to be in all cases estimated.
In the elaborate detailed statement, however, which we
present further below, we are able to give final and complete
results for the week previous-the week ended Oct. 10.
For that week there is a decrease of 19.4%, the aggregate of
clearings for the whole country being $8,072,461,269. against
$10,015,686,739 in the same week of 1930. Outside of this
city there is a decrease of 20.6%, the bank clearings at this
OCT. 17 1931.]
FINANCIAL CHRONICLE
center recording a loss of 18.7%. We group the cities now
according to the Federal Reserve Districts in which they
are located, and from this it appears that in the New York
Reserve District, including this city, there is a loss of 18.4%,
in the Boston Reserve District of 8.2%, and in the Philadelphia Reserve District of 12.8%. In the Cleveland Reserve District the totals have been diminished by 20.5%,
in the Richmond Reserve District by 14.6%, and in the
Atlanta Reserve District by 19.7%. The Chicago Reserve
District records a contraction of 32.8%, the St. Louis
Reserve District of 34.0%, and the Minneapolis Reserve
District of 24.7%. In the Kansas City Reserve District
the decrease is 30.4% in the Dallas Reserve District, 10.9%,
and in the San Francisco Reserve District, 21.8%.
In the following we furnish a summary of Federal Reserve
districts:
2561
Week Ended Oct 10.
Clearings at1931.
Inc. or
Dec.
1930.
1929.
$
$
%
$
Seventh Feder al Reserve D strict-Chi cago157,119
Mich.-Adrian..
241.371 -34.9
327,958
798,690
Ann Arbor__ -873,844 -8.6
1,099,932
98.967,309 121.213,506 -18.4 206,766.734
Detroit
4,077,678
5,387.451 -24.3
Grand Rapids_
6,960,553
2,914.186
3.040.805 -4.2
Lansing
3,693.444
1,620,942
2,804,313 -42.2
Ind.-Ft. Wayn
3,509,455
19.811,000 -18.6
16,128,000
Indianapolis._
26,461.000
1,709,743
2,581,284 -33.8
South Bend...
2,950,706
4,050,549
4,926,933 -17.8
Terre Haute.
4,945,107
20.973.992
28,168.977 -25.6
Wis.-MIlwauke
39,627,188
3,476.410 -18.2
2,844,358
Iowa-Ced. Rap
3,300.941
8,712,356 -11.3
7,732.002
Des Moines...
11,112,245
4,289.474
6,243,206 -31.3
Sioux City
7.531.998
1,393,711 -53.3
650.642
Waterloo
1,599,165
1,654.320 -22.3
1.285,925
Ill.-Bloomingt
1.948.495
320,151.782 515,426.550 -37.9 550,766,546
Chicago
1,188,366 -37.8
•
740.556
1,443,291
Decatur
3.571,746 -18.3
2.916,229
4,488,790
Peoria
1,314.264
2,875,833 -54.3
4,150,284
Rockford
2309,258
2,372,083 -11.1
2,209,194
Springfield_
SUMMARY OF BANK CLEARINGS.
1930.
1931.
Inc.or
Dec.
1929.
1928.
Federal Reserve Dist.
$
$
$
%
$
liSt Boston
432,075,953
_12 cities
470,536,009 -8.2
443,030,557
525,411,598
2nd New York.14 "
5,5n,907,392 6,785,387,846 -18.4 8,551,318,082 6,332,375,268
3rd P611adelphial0 "
413,153,632
473,845,943 -12.8
495,720,032
498,366,444
Ath Cleveland__ 8 "
297,95;,481
373,8,5,867 -20.5
379,320,852
378,088.355
595 Richmond 6 "
142,923,691
167,355,914 -14.6
167,887,660
179,012,695
695 Atlanta__ _11 "
117,579,535
146.28.,350 -19.7
183,016,283
191,4,31,214
715 Chicago
20 "
4s',532,695
735,96 ,065 -32.8
883,898,028
941,627,075
BO Bt Louis
7 "
120,389,152
182,253,902 -34.0
227,730,183
220,414,819
918 Minneapolis 7 "
91,811,732
121,866,149 -24.7
178,684,017
154.496,748
1058 Kansas City 10 "
128,831,628
185,026,539 -30.4
250,846,430
217,527,031
11th Dallas
5 "
55,363,588
62,134,145 -10.9
90,123,678
94,542,648
13th Ban Fran 14 "
213,442,690
311,187,960 -21.8
326,381,265
338,506,595
Total
122 cities
Outside N. Y. City
Canada
8,072,461,269 10,015,686,739 -19.4 12,206,821,550 10,046,923,117
2,675,402,675 3,380,014,722 -20.6 3,846,951.534 3,865,431,521
32 cities
364.497.943
439.755.7761 -17.1
533.987.235
494 °an 186
We now add our detailed statement, showing last week's
figures for each city separately, for the four years:
Week Ended Oct. 10.
Clearings at
1931,
1930.
$
First Federal Reserve Dist rid -Boston
767.569
849.239
Me.-Bangor.__
3,799,853
2,857,324
Portland
Mass.-Boston_ _ 385.998.49/ 418,493.818
Fall River__991,291
965.919
Lowell
532,582
441.004
New Bedford
1,042,519
856,818
4,671,827
4.536,901
Springfield...Worcester
3,444,679
3,436,397
13.498,291
12,612,371
Conn.-Hartford
New Haven...
7.089,565
8,130,793
R.I.-Providence
14,413,500
11,783,400
648,523
N. H.-Manche'r
751,282
Total(12 cities)
432,075,953
470,536,099
Inc. or
Dec.
1929.
1928.
8-10.6
--24.8
--7.8
--2.6
--17.2
--17.9
--2.9
--0.4
--6.5
--12.8
--18.3
--13.7
747,132
4,726,698
468,000,000
1,022,960
1,139.963
1,047,701
4,491.353
3,219,221
18,428,842
8,275,842
16,108,500
743,386
740.863
3,714,112
390.000.000
1,287,310
1,205,092
920,252
4,888,541
3.292.455
14,022,568
7,325,040
14,996,500
637,824
-8.2
528.401,598
443.030.557
Second Fede, al Reserve D istrict-New
N. Y.-Albany-6,846.389
6,756,175
1,147,545
Binghamton._ 1,330.401
39,143,810
45,985,280
Buffalo
883,223
Elmira
986.563
Jamestown.- _
1,161.327
832.301
New York_ _ _ _ 5,397,053,594 6,635,762.017
10,094,883
10.530,395
Rochester
5,124,940
5,122,335
Syracuse
4.537.029
5,240.193
Conn.-Stamford
811,453
643.770
N. J.-Montclair
30.790,552
26.667,705
Newark_
41.022,140
41,872,299
Northern N. J.
York
+1.4
5,240,266
5,288,097
-13.8
1,379,884
1.374.275
-14.8
61,811,916
54,728,188
-10.5
766,630
926,914
-28.4
1,220,178
1,526,3 3
-18.7 8,359,870,016 6,181,491,596
-4.2
13,209,003
13,323,210
+0.2
7,084.208
5,523,049
-12.5
4,867,0,9
4,524.131
-20.6
733,374
657,835
-13.4
31,785,749
25.626,246
+2.1
63,349.769
37,385,424
Total (12 cities) 5.534.907.492 6,785,387.846 -18.4 8,551.318,082 6.332,375,268
Third Federal Reserve Dist rict-Ph Bad elphia
510,234
1,237,125 -58.8
4;195,848 -17.8
3.450,176
Bethlehem._ _ _
1.232.887 +18.6
1.521,828
Chester
1,945,103
3,033,612
41.5
Lancaster
391.000.000 447.000,000 -12.5
2,854,865
3.217,990 -11.3
Readiag
3.539.399
5,354,343 -33.4
Scranton
3,853,973 -43.5
2,182,671
Wilkes-Barre_
1,925,849
2,309,669 -16.6
York
N.J.-Trenton..
3.055,000
3,445.000 -11.3
Total (10011169)
413.153,632
473,845,943 -12.8
1,514.005
4.857,145
1,438,929
2,430,377
469.000.000
3.903,217
5,114.402
3,520,345
1.835,549
4,752.475
495,720.042
498.366.444
884.898,028
941,627.075
4,754,114
149.500,000
31,729.377
347.499
39,682.474
315.777
1,400.942
6.026.656
147,400.000
34.828.953
331.998
29.997.723
333,162
1,496,327
182,253,402 -34.0
227,730.183
220,414.819
Ninth Federa 1 Reserve Die trIct-Minn earn:111s6,670,572 -42.6
3,828,449
6.990,868
Minn.-Duluth..
84,802.471 -24.9 109,986,586
Minneapolis_ . 63.662,568
22,897.722 -19.2
28,899,127
18,511.288
St. Paul
2,346,444 -16.4
1,961,516
2.101.303
N. Dak.-Fargo.
1,051.400 -29.2
1.657,487
744,881
S. D.-Aberdee a
864,540 -38.0
535,854
1.220.377
Mont.-Billings.
3,233,000 -20.6
2.567.176
3,641,000
Helena
12.763.798
119,499.515
36.609.739
2,094.099
1.928.522
1,258.344
4,530.000
373,845,867 -20.5
379,320,852
378,086,355
Fifth Federal Reserv. Oiv act-R Ichn ond540,727
1,125,496 -52.f
W.Va.-Hunt'on
3,743.327
4,229,823 -11.5
Va.-Norfolk-32,951,461
44,123.000 -25.4
Richmond
1,842.720
2.492.833 -26.1
B.C.-Charleston
77,810,035
87,109,549 -10.7
Md.-Baltimore_
26.035,421
23.274,732 -7.9
D. C.-Washlon
1,024,973
4.136.880
48,129,000
2.652,649
81,621,523
30,322.63.5
1.033,014
5,243.741
50.310.000
2.300,000
89,740,855
30.385.085
167.355.464 -14.6
167.887,660
179,012,695
Sixth Fed sral Reserve Dist rict-Atlant a3,738.217
Tenn.-Knoxville
2,738,460 +36.5
11,154.120
21.446.685 -48.0
Nashville
34,500,000
42.600.796 -19.0
Ga.- Atlanta..._
1,193.703
2,062,920 -42.0
Augusta
673,544
1.411.943 -52.3
Macon
7.956,337
9,279,389 -14.1
Fla.-Jacksonville
12,112,334
16,634,893 -26.6
Ala.-Birm'gh'm.
1,967,805 -35.5
1,298.146
Mobile
1.245.000
3,179.000 -60.9
Miss.-Jackson_ _
140.012
.
-31.41
Vicksbur
43.595.122
44.757,5931 -2.53
La.-NewOrleans
3.600,000
25.11.8,177
52.294.303
2,333,494
1.924,888
11.007.814
28,439,844
2.992.882
2.359.000
346.164
52.527,717
3.501.077
26,279.142
57.148,616
2.805,812
3.445.031
12.812.936
27.044,507
2,241,820
2,516,000
586.011
53.000.262
183,016.283
191.431.214
Total (6 WO)_
297,454.431
142,923,691
Total(11 cities), 117,579,535
146.283.350 -19.7
154.496.748
178,684.017
384,408
542,915
4,477,454
46,051,565
4.234.274
9,518,103
157,025.527
7.874.237
1,4430,293
a
1.927.654
.
Total (7011169)
Total(10 MI I
91,811,732
121,866,149 -24.7
Tenth Feder I Reserve Di8 trict-Kans as City 304,804 -31.6
314,058
208.547
Neb.-Fremont .
159,496
487.579 -67.3
491,123
Hastings
.
3,155.897
3.398,957 -7.1
3,066.981
Lincoln
31.973,196
41,448,738 -22.9
43.087.264
Omaha
2,359,543
3.460,056 -17.4
3.151,010
Kan.-Topeka._
4,667.602
6,389,519 -27.0
8,184,508
Wichita
Mo.-Kan. City. 80.004,160 121.722,048 -34.3 148.693.900
5,075,574 -31.1
6.921,443
.
3,488.936
St. Joseph...
1,125,328 -14.2
Colo-Colo.Sp 965,586
1,618,665
a
a
a
Denver
a
1,348.665
1,613.936 -16.5
1.999.079
Pueblo
185,026,539 -30.4
217,527,031
250,845,430
Eleventh Fed E ral Reserve District-Dv Has1,967,954
1.614.300 +21.9
Texas-Austin._
38.621,011
Dallas
43,474.549 -11.2
8.243.924
9,709.964 -14.8
Fort Worth.._
3,072,000
3,460,000 -11.2
Galveston.._ _.
3.458,699
3,875,332 -10.8
La.-Shreveport.
2,015,032
58,594.907
15.814.018
6,656.500
7,043,721
2.654.287
60,985.242
16,819,162
7,501.000
6.583.957
90,123,678
94,542.648
Total(5 cities)_
128,831,628
55,363,588
62,134.145 -10.9
Twelfth Fed r al Reserve n istriet- Sao Franci am-40,494,121 -30.1
47,394.249
Wash.-Seattle-. 27,346,890
8.368,000
11.873,000 -29.5
12,477,000
Spokane
969,582
1,506,396 -35.7
1,690,594
Yakima
25.916,728
34.537,144 -24.9
35,254,613
Ore.-Portland- _
13.249,863
17,637,426 -25.0
19,127.120
Utah-S. L. City
4,808,437
6.329,886 -24.0
6,881.306
Calif.-Long Bch
.No loper will report clearin gs
Los Angeles5,144,106 -14.0
5,831.720
4,426,359
Pasadena _ .
7,694.035 +12.0
8,977.088
8,615,316
Sacramento.._
3,955,611
4.984,878 -20.3
5.115,763
San Diego_ _ _ _
San Francisco. 137.999,576 171,508.159 -19.6 173.794.556
•
2,871.098
3,500.830 -18.0
3.568.574
San Jose
1.985,914 -22.9
1,630,223
1.4900.956
Santa Barbara
1.501,407 2,053,765 -26.5
1,760.826
Santa Monte _
1,883,600
1.958,300 -3.8
2,537.100
_
Stockton
243,442.690
311.187,960 -21.8
326,381,265
44.335.487
14.027.000
1.869.608
35,858.467
20,436,437
7,233,569
6,178,277
9,025.291
5.569.643
184.031.000
3.438,572
1.534.147
2,099,991
2.845,100
338.506.595
Grand total (1 2
8,072.451,269 10015686 739 -19.4 12 206821 550 10046 92311T
cities)
Outside N.Y.__ _ 2,675.402,675 3,380,014,722 -20.6 3,846,951,5343,865,431,521
Week Ended Oct. 8.
Clearto s at1931.
Canada
Montreal
Toronto
Winnipeg
Vancouver
Ottawa
Quebec
Halifax
Hamilton
Calzary
St. John
Victoria
London
Edmonton
Regina
Brandon
Lethbridne
Saskatoon
Moose Jaw
Brantford
Fort William_ _
New Westminster
Medicine Hat...
Peterborough
Sherbrooke
Kitchener
Windsor
Prince Albert_ _ _ _
Moncton
Kipston
Chatham
Sarnia
Sudbury
$
122,706,708
109,998.959
53,110.659
16,026,175
7,431,507
5,804,590
3,432,042
5,936,461
6,120,282
2,365.220
2,443.322
3,395,491
4,651,832
4,375,3849
4949339
448,281
2,950.782
777,756
1,237.683
827,172
593.389
330.978
709.553
767.463
1,544.145
2.9244.437
377.005
978,237
814,036
592.103
546,607
602,412
Total(32 citi69)
364.497.943
1930.
/PC. OT
Dec. I
1929.
439.7.55.776 -17.1
a No longer reports weekly clearings. •Estimated.
1928.
$
142,940,237
143,563,382
92,245.024
24,360.280
8.515,368
7.305.364
3,433.007
5.907,355
15,252,264
2.799,291
2,695,236
3,515.382
7.470,521
8,870.303
1.030.581
1,059.401
3,494,869
1,722.240
1.529.201
1,476.280
919.442
608.362
92,984
1.026,290
1,429.184
5,305.492
628.192
954 02
917.986
918,471
815,083
,10_9901.41.50Vq0000C•tol
6.498.000
4,259.915
64.394,982
123.605,231
16.411.500
2,112,287
6.835.432
153,969,208
120,384,152
III
4,228.000
5.019.828
58,020.360
127,830,718
15,286.400
2.218.926
4,959.225
161,757,395
Total (8019168).
Total(7 cities).
494,532,695
HI'I
Fourth Feder at Res,srve I) strle t-Cle% eland
Ohio-Akron.
4,532,000 -45.4
2,503.000
Canton
3,867,834 -52.
1,853,955
54.912,653
Cincinnati
_
55,595,881 -19.5
97,428.945 123,476,451 -21.
Cleveland
10.651,700
Columbus _
14.728,900 -27.7
1,442.203
1,668,107 -13.5
Mansfield
3.653,221
Yourmstown
4,973,800 -26.
Pa.-Pittsburgh - 125,010.799 163,952.001 -23.
310.586
1.120.153
167,227.513
8,587,901
4,315,615
3,234.995
32,957.000
3.095,983
5,361.951
45,690,223
3.054.928
10.397.23.
8,334.285
1.545.036
1.575.582
632,663,452
1,199,172
4,742,533
3,989.807
2.253.130
735,964.065 -32.8
Total(14 citl 8)
1,387,932
4.880.619
1,053,885
2.171.104
467.000,000
3,426.000
6.097,654
3,388.895
1,684,215
4.626,734
$
Eighth Feder t I Reserve District-St.Lo uIs3,832.417 -8.3
3.517.786
Ind.- Evansvill 1
79.500,000 118.400.000 -32.9
Mo.-St. Louis. •
36,376,821 -39.2
22,155.346
Ky.-Louisville. •
286.408 -25.0
214,793
Owensboro...
21.980,316 -35.6
14,164.388
Tenn.-Memphl 3
188,329 -28.5
134,698
-Jacksonvhl 8
1.189,111 -41.4
. 697,136
Quincy
Total(20 cities
Week End. Oct. 10 1931.
1928.
533.987.229
494.080.186
2562
FINANCIAL CHRONICLE
THE CURB EXCHANGE.
Business on the Curb Exchange this week for the most part,
was dull with prices showing moderate losses. Towards the
close there was a better tone and a partial recovery ensued.
Utilities were prominent. Amer.& Foreign Power warrants
fellfrom 83
%to 63-i and recovered to 7
Amer. Gas & Elec.,
corn. sold down from 443/i to 383g, then up to 42, the close
to-day being at 41%. Commonwealth Edison eased off
from 1455
% to 143 and sold finally at 1433, all ex-dividend.
Duke Power lost two points to 87 on few transactions.
Electric Bond & Share,corn. dropped from 20% to 17%,sold
back to 20% and finished to-day at 20%. Shawinigan
Water & Power lost four points to 22, recovered to 25 and
sold finally at 233. Oils were quiet and with only slight
changes. Eureka Pipe Line declined from 223/i to 20, all
ex-dividend. Humble Oil & Refg. receded from 50 to 47k.
N. Y. Transit weakened from 9 to 73/2. Standard Oil
(Indiana) dropped from 213 to 183's, recovered to 203
4
and closed to-day at 20%. Gulf Oil of Pa. sold down from
50 to 443' and sold finally at 463j. Among industrials,
Aluminum Co. of Amer. dropped from 823/i to 74%, ran up
to 83 and closed to-day at 82. General Fireproofing, corn.
8 to 11 but recovered to 13. Glen Alden
sold down from 143/
Coal weakened from 30 to 283'. Insull Utility Investments
was off from 14% to 123, recovered to 133 and closed
to-day at 13. Parker Rust Proof declined from 49 to 44,
and to-day sold up to 48. Safety Car Heating & Light on
few transactions dropped from 38 to 27. Singer Mfg. from
1743', sold down to 1553( and up finally to 164%. A. 0.
Smith Corp., corn. eased off from 68% to 65.
A complete record of Curb Exchange transactions for the
week will be found on page 2588.
DAILY TRANSACTIONS AT THE NEW YORK CURB EXCHANGE.
Week Ended
Oct. 18 1931.
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Total
Sales at
New York Curb
Exchange.
Stocks
(Number
of
Shares).
Bonds (Par Value),
Foreign
Foreign
Domestic. Government. Corporate.
Total.
161,860 32.057,000
$77,000
869,000 $2,203,000
Holiday-C olumbus D ay.
245,905 3,623,000
152,000
235,000 4,010,000
284,511 4,154.000
99,000
211.000 4,484,000
253,341 3,403,000
100,000
131,000 3,634,000
242,504 3,595,000
102,000
144,000 3,841,000
1,168,121 818,832,000
$530,000
Week Ended Oct. 16.
1931.
1930.
1,168,121
2,955,800
Stocks-No.of shares_
Bonds.
516,832,000 $14,721,000
Domestic
885,000
530,000
Foreign Government_ _
790,000
734,000
Foreign corporate
1931.
1930.
91,706,932
123,777.701
3738.887,000
24,288,000
32,112,000
$869,950,000
27,421,000
31,448,000
THE ENGLISH GOLD AND SILVER MARKETS.
We reprint the following from the weekly circular of
Samuel Montagu & Co. of London, written under date of
Sept. 30 1930:
GOLD.
The Bank of England gold reserve against notes amounted to £133.627.921
on the 235 inst., as compared with £135.573,752 on the previous Wednesday.
On the 24th inst. about £250,000 ot South African bar gold, part of that
which arrived last week, was disposed of in the open market at the price
of 103s. 55. per fine ounce. £210,000 was taken for the United States and
E40,000 for the trade. Yesterday about £40.000 ot gold from West Africa
was available and was purchased for the trade at 1058. 3d. per fine ounce.
The shipment which arrived from South Africa this week consisted of
about £826,000 in bar gold and £250,000 in sovereigns, and neither this
-nor the balance of last week's arrival has yet been offered.
During the week the Bank of England has bought £2,339 in bar gold,
according to the daily published movements of gold.
On the 27th inst. it was officially announced that both Norway and
Sweden had decided to suspend the operation of the gold standard in those
countries, whilst a similar decision by the Danish Government was made
Yesterday.
The Southern Rhodesian gold output for the month of August last
amounted to 43.292 ounces. as compared with 44.765 ounces for July 1931
and 46,152 ounces for August 1930.
The following were the United Kingdom imports and exports of gold
registered from mid-day on the 21st inst. to mid-day on the 28th Inst.:
Exports.
Imports.
£2,182,752
£733,489 Netherlands
British South Africa
10,200
36,566 Switzerland
British India
211,000
U.
S.
A
Straits Settlements and
16.620
24,737 France
Dependencies
26,210
53.445 Austria
Brazil
13,990
India
12,322 British
Netherlands
11,497
6,852 Other countries
Other countries
£2,472,269
SILVER.
During the first half of the week under review prices showed wide fluctuations. On the 24th inst. quotations were fixed at 15Md. for cash and
165. for two months delivery, a fall of 5,4d. as compared with the previous
day; this was in spite of the fact that there was a large amount of speculative buying and bear covering, for the demand was more than offset by
sales of silver made on China account by a large holder of the metal. The
following day, however, with a continuance of the heavy demand, and
sellers-doubtless influenced by the weakness of sterling-being almost
entirely absent, prices bounded upward to 193'd. and 19 11-165., rises of
3Md. and 3 11-16d. for the respective deliveries. The advance was too
rapid and weakness was soon apparent, the high prices bringing offers of
silver from America, besides proving attractive to bulls who showed eagerness to realize. It was not altogether unexpected, therefore, that most
of the rise was lost on the 26th inst., when a renewal of selling caused both
prices to be fixed 3Md. lower at 16Md. for cash and 16 9-16d. for two
months' delivery. A comparatively quiet period ensued, the latter prices
remaining unchanged tor three days, a demand tor India being met by China
selling, with speculative activity less pronounced. To-day, however,
following weaker advices from China, quotations were fixed 3-16d. lower
at 16 3-16d. and 16d.
Large as were the price movements on the 25th and 26th inst., they do
not constitute records. It may be recalled that during the wide fluctuations in prices seen in 1920, on June 8 of that year prices fell 6d., whilst
on the 17th of the same month a rise of 4Md. was recorded.
The foilowbag were the United Kingdom imports and exports of silver
registered from mid day on the 21st inst. to mid-day on the 28th inst.:
Exports.
Imports.
U. S. A
£48,905 Belgium
E28,000
Egypt
28,000 British India
13.500
Australia
11,794 Other countries
9,494
Other countries
4,877
£93.576
£50,994
INDIAN CURRENCY RETURNS.
(In Lacs of Rupees)
Sept. 22.
Sept. 15.
Sept.&
Notes in circulation
14623
14848
Silver coin and bullion in India
13254
13224
13199
Silver coin and bullion out of India
aGold coin and bullioa in India
449
-.h.*
itYge
Gold coin and bullion out of India
Securities (Indian Government)
920
- 4
-631
Securi les (British Government)
------The stocks in Shanghai on the 25th inst. consisted of about 68,000,000
ounces in sycee, $173,000,000 and 380 silver bars, as compared with about
69,400,000 ounces in sycee,$173,000,000 and 320 silver bars on the 19th inst.
Statistics for the month of September are appended:
-Bar Silver per oz. s.d.- Bar Gold
Cash Deliv'y. 2 Mos. Deno. per oz. fine.
19 11-16d. 1148. 9d.
Highest price
19Md.
84s, 93d.
Lowest price
12 13-16d.
12M d.
Average price
14.187d.
91s. 2.70d.
14.101d.
Quotations during the week:
Bar Gold
-Bar Silver per oz. std.2 Mos.
per oz. fine.
Cash.
Sept. 24
165.
1038. 5d.
1574d.
19 11-165. 114s. 9d.
Sept. 25
19Md.
16 9-16d.
108s. Id.
Sept. 26
16 M d.
16 9-16d.
10Rs. Id.
Soc.28
16Md.
16 9-16d.
Sept.29
105s. 3d.
16Md.
Sept.30
163-165.
164d.
1055. 3d.
Average
16.958d.
16.781d.
107s. 5.67d.
The silver quo:ations to-day for cash and two months' delivery are
respectively 1-16d. below and the same as those fixed a week ago.
8790,000 318,152,000
Jan. 1 to Oct. 16.
318,152,000 816.140,000
3795,267.000
$728,819,000
Total
Note.-In the above tables we now give the foreign corporate bonds separately.
Formerly they were included with the foreign government bonds.
£867.411
[VOL. 133.
PRICES ON PARIS BOURSE.
Quotations of representative stocks on the Paris Bourse
as received by cable each day of the past week have been
as follows:
Oct. 10 Oct. 12
1931. 1931.
Francs. Francs.
Bank of France
12,000
Bank Nationale de Credit
250
Banque de Paris et Pays Ras
1,380
Banque de Union Parislenne
490
Canadian Pacific
486
Canal de Suez
14,190
Cie Distr d'Electricitie
2,550
Cie General d'Electricitie
2,380
Citroen 11
500
Comptoir Nationale d'Eecompte
1,090
380
Coty, Inc
550
Courrleree
681
Credit Commerciale de France
4850
Credit Fonder de France
1,885
Credit Lyonnais
2,540
Distribution d'Electricitie in Par
2,270
Eaux Lyonnais
Energle Electrique du Nord_
Energie Electrique du Littoral_ HOLI- 1,010
195
French Line
DAY
100
Gales Lafayette
740
Gas be Bon
390
Kuhlmann
880
L'Air Liquid()
1,270
Lyon (P. L. M.)
550
Minas de Courderes
Mines des Lens
1,9
53
1°
0
Nord Ry
1,470
Paris. France
83
Pattie Capital
1,300
Pechiney
88.95
Bastes 3%
128.50
Rentee 5% 1920
100.50
Rentee 4% 1917
102.30
Rentee 5% 1915
103.60
Rentes 6% 1920
1,490
Royal Dutch
2,150
Saint Cobb. C.& C
1.000
Schneider & Cie
500
Societe Andre Citroen
210
Societe General Fonciere
125
Societe Francaise Ford
Societe Lyonnais
2,250
Societe MarseillaLse
700
14,100
Suez
200
TubLze Artificial Silk pre!
Union d'Electricitie
940
Union des Mines
Wagon-Lits
122
Oat. 13
1931.
Francs.
12,000
250
1,390
495
480
14,280
2,585
2,360
504
1,080
380
550
680
4,850
1,880
2,546
2,270
662
1,010
190
100
740
380
690
1,250
550
Oct. 14
1931.
Francs.
12,000
237
1,370
485
471
14.275
2,545
2,420
499
1,060
390
545
687
4,830
1,870
2,510
2,260
670
1,000
200
100
740
390
700
1,280
550
Oct. 15
1931.
Francs.
11,600
1,2
30
45
G
1,9
53
1°
0
1,460
84
1,310
84.30
129.00
101.30
101.40
103.60
1,500
2,180
1,000
500
220
130
2,250
700
14,300
193
930
1,9
52°
10
1,470
81
1,330
84.50
130.10
101.70
101.50
104.60
1,470
2.130
999
510
220
129
2,230
697
14,200
190
920
500
1,870
1,450
82
1,300
83.70
130.20
101.70
101.80
104.50
1,460
2,105
1,000
520
210
130
2,200
698
14,100
184
920
121
117
"Ho
Oct. 16
1931.
Francs.
11,500
1.280
456
470
14,050
2,050
2,260
510
1.010
380
530
680
4.810
1,820
2,520
2,220
648
980
180
100
740
370
670
1,275
472
2-,17711
1:558
380
_
4,730
1,800
2,490
:
2 1_7
.
.
(1
"Ho
94
740
360
640
-jai;
500
1,870
1,420
1:2155
83.20
127.30
101.30
101.30
104.30
1,450
_
-Lie
.2_130_08_
13-,g06.
930
PRICES ON BERLIN STOCK EXCHANGE.
The Berlin Stock Exchange is closed.
ENGLISH FINANCIAL MARKET-PER CABLE.
(See page 2570.)
OCT. 17 1931.]
2563
FINANCIAL CHRONICLE
Auction Sales.-Among other securities, the following,
not actually dealt in at the Stock Exchange, were sold at auction
in New York, Boston, Philadelphia and Buffalo on WednesBank Notes-Changes in Totals of, and in Deposited day of this week:
Bonds, &c.
By Adrian H. Muller & Son, New York:
s per Sh. Shares. Stocks.
Shares. Stocks.
$ per Sh.
We give below tables which show all the monthly changes 5,000
600 National Breweries,Ltd.(Can.)
C. K. Eagle & Co., Inc.,
vot. tr. certificates...65001ot
no par
1414
in National bank notes and in bonds and legal tenders on 10common,
300 Dominion Bridge Co., Ltd.
Oscar Nebel Co., Inc., pude.
$17 lot (Canada), no par
preferred, no par
deposit therefor:
1634
(Commercialandp,Aisceilanzonssews
Amount Bonds
on Deposit to
Secure Maeda
eon for National
Bank Notes.
National Bank Circulation
Afloat onBonds.
Legal
Tenders.
Total.
$
$
$
$
32,861,923
667,098,590
665,271,853
698,133,776
Sept.30 1931
698,260.281
Aug. 31 1931
666,020,536
32,239,745
667.950,100
666.594,576
31,911,240
698,505.816
668,305,100
July 31 1931
665.591.438
697,004,4413
June 30 1931
667.154,800
31,413,008
696,599,126
665,889,688
30.709,438
May 31 1931
667.419,300
666,770.878
31,278.173
698,049.051
Apr. 30 1931
668,503,700
668,682,898
32,566.685
699.249.583
Mar. 31 1931
667.982.300
664,220,805
33,892,703
698,113.508
Feb. 28 1931
667,434,800
664.451,097
31,939,068
Jan. 31 1931
696,390.165
666,204,350
667.078.250
Dec. 31 1930
31.358,445
698,436.695
668.550,850
Nov. 30 1930
668.033.075
31.911,805
669.944,880
669.222.350
Oct. 31 1930
668.017,935
32,137,965
700.155.900
669.128.450
665.853,557
83.414.773
Sept.30 1930
699,268,330
687,819,250
664,838.833
32,984,335
Aug. 30 1930
697,823,168
607,320,950
663.528,038
July 31 1930
33,025.390
696,553,428
666,406,250
32,710,398
698,317,468
June 30 1930
*666.824.760
605.607.070
665.719.485
31.933,193
697,652,678
May 31 1930
667.156,250
665,974.780
31.225,248
April 30 1930
667.650.750
697,200.028
665,107,343
81.066.745
696,174,088
Mar.31 1930
687.251,240
664,928,197
Feb. 28 1930
667.108,740
31.669.648
6913.597,745
604,468.092
32.115.298
667,464,790
696,583.890
Jan. 31 1930
663,823,167
34.118,073
Dec. 31 1929
667.774.650
697,941,241'
37.465.128
664,115.977
Nov. 30 1929
667,635,650
701.581,106
661,822,047
38.506,768
Oct. 31 1929
666,736,100
700,328.815
652,823.930
38,564.685
Sept. 30 1929
691.388,665
667.093.770
649,297.990
38,652.573
687,950.568
666.864.280
Aug. 81 1929
657.764.443
39.707,550
697,471.993
July 31 1929
666.407,040
41,520,872
662.773.570
704.294,442
June 30 1929
606,199.140
663.328.203
39,651.731
702.979.934
May 31 1929
666.233.140
663.364.517
38,720.772
702.085.289
Apr. 80 1929
666.221.390
661.924,472
36,750,627
698,675.099
Mar.31 1929_____ 666,630,890
659,651.580
35.231,759
666.432.090
694,883.339
Feb. 28 1929
662,904.627
35.877,502
667.013,340
698,782.129
Dec. 31 1928
663.931.957
36,248.802
667,508,440
700,180.759
Nov. 30 1928
662.705,675
667,168,440
37.440.779
700,152.451
Oct. 31 1928
660,463,912
698.152.659
667,318,040
37,688.747
Sept.29 1928
660.518.182
666.732,700
38.299,802
Aug. 31 1928
698.817.984
658.463.423
38,926.224
697,389.647
July 31 1928
666.643.200
658.732,988
40.887.664
699,620,652
June 30 1928
665,658.650
667.491,900
661.522.450
39.757,992
701,280,443
May 31 1928
661.127.600
88,814,509
699.942,169
666,196,460
Apr. 30 1928
662.412,992
36,802.227
699,215.219
Mar.011928
666.866.710
661,481.322
Feb. 29 3928
38,250.372
667.011,210
699,731 691
659,332.017
Jan. 31 lea
1397.739 531
666,230,710
38.407.517
Dec. 811927
662.380.082
88,623.507
667,127.710
701,003,589
$2,921,272 Federal Reserve bank notes outstanding Oct. 1 1931, secured by
lawful money, against $3,184,042 on Oct. 1 1930.
•'The total bonds reported held for circulation by the U.S.Measury were 8605,000
tem. due to not having received this amount until July 1 1930.
The following shows the amount of each class of United
States bonds and certificates on deposit to secure Federal
Reserve bank notes and National bank notes Sept. 30 1931:
U. S. Bonds Held Sept. 30 1931 to SecureBonds on Depose
Oct. 1 1931.
2s. U. S. Consols of 1930
2s, U. S. Panama of 1936
26 U. B. Panama of 1938
On Deposit to On Deposit to
Secure
Secw's FedertU
Reserve Bank National Bank
Notes.
Notes.
592,921,050
48,505,860
25,671,680
Total
Held.
350 Art Cinema Corp., cum. pref.;
975 Art Cinema Corp., cool., no
5200 lot
Par
2,000 W intern 1'. Pelham Co.,cool.,
$80 lot
no par
2,121 Agricultural Bond & Credit
Corp., common, no par
$50 lot
2,228 Agricultural Bond & Credit
Corp., class A panic. pref, par
$500101
$25
1,200 Amer. Protein Corp., no par250 lot
26,355 General Mines Corp., of
Bolivia, par $25; $372,000 General Mines Corp. of Bolivia, 7%
bonds, due July 1 1933, with
coupons No. 1 amounting to
$16,117.50 and subs. coupons
$200101
attached
400 National Steel Car Corp., Ltd.
(Canada), no par
6Si
100 Canada Wire& Cable Co., Ltd.,
(Canada), Cl. B corn. no par_ _ _ 111:
75 Consolidated Mining & Smelt.
Co. of Canada, Ltd., par $25___ 4734
68 1-3 Long Beach Trust Co., par
$20
1514
20Sixth Ave.Bancorporation,Inc..
common, no par
5
Bonds.
Per Cent.
$5,000 Newfoundland 63s, due
June 30 1936
24
910.000 Chicago 5s, due Jan. 1 1940 90
$10,000 Detroit 414s, due June 1
1945
86)4
By Wise, Hobbs & Arnold, Boston:
Shares.s.Su
toc
tikustie. Assoc.
. ifas
h0
Shares. Stocks.$
$ Per S5
Per Sh.'
. pref., par
18 Naumkeag Steam Cotton Co
$50
26)8 ex-dly.
50 Gt. Northern Paper Co., par
Engl.
Power Co.,6% pret_ _106,
2413-24% 25 New
$25
i
25 New Engl.Pow.ASS'S 6% 1st pr. 64
50 No. Bost. Ltg. Pron., corn.
4533 ex-div. 14 20-30ths Nat. Serv. Co., pref___ 17
vot. tr. ctfs
By R. L. Day & Co., Boston:
Shares. Stocks.
$ per Sh.
52
35 U.S.Trust Co.,par $25
8 Waterbury(Conn.) Nat. Bank__ _ 85
15 Central Trust Co., Cambridge,
2051
Par $10
334
30 Dwight Mfg. Co., par 325
110 Naumkeag Steam Cotton Co 50
6634-67
3 Ludlow Mfg.Associates
Shares. Stocks.
$perSh.
2 North. RR. of New Hampshire_.108
15 Stollwerk Chocolate Co. 2d pf_si lot
14 special units First People,Trust_ 2
50 II. M.Byllesby, corn
23
20 Mass.Bondl& Ina. Co.nar $25- 46)8
1600 State St.Invest. Corp. cl. B.. 4S,
,
By Barnes & Lofland, Philadelphia:
per Sh.
Shares. Stocks.
500 Bridge Gardens Corp., corn.,
no par; $16,235 note of Bridge
Gardens Corp., dated Nov. 7
1929, payable on demand to
order of Edward M. Solomon,
Inc.,and endorsed by Edward M.
Solomon,Inc.:$31,234.08 note of
Bridge Gardens Corp. dated
Nov. 7 1929, payable on'
demand
to order of Edward M.Solomon,
Inc.,and endorsed by Edward M.
Solomon,Inc
$100lot
$50,000 First Mtge., covering an
unimproved lot on S. E. Corner
Haddon Ave. and Browning
Road, Collingswood, N. J..
150.80x120 ft.; $40.000 First
Mtge., on certain parts of land
in development known as MerchantvilleExtension,Pennsauken
Township,Camden Co., N.J.,on
which there is a balance due of
31001ot
250
Nat. Bank, Darby, Pa_ _200
125F
27
1r,st
10 Corn Exchange Nat. Bank
60
Trust Co.. par $20
Shares. Stocks.
5 Per Sh.
100 Adelphia Bank & Tr. Co..
par 310
9
100 Real Estate-Land Title dc Tr.
Co.. par 510
20
20 Cont.-Equit. Title & Tr. Co.,
Par $5
20)8
10 Cont.-Equit. Title & 'Pr., Co.;
Par $5
20
20 Pa. Co. for Ins. on Lives, &c.,
par $10
43
25 Pa. Co. for Ins. on Lives, &c.,
par $10
423i
20 F.G.Vogt & Sons. Inc., pref... 50Y4
10 Phila., Germantown & Norristown RR
120
80 Phila. Co. for Guaranteeing
Mortgages, par 520
20
10 John B. Stetson Co., common,
no par
15
25 Budd Realty Co.. stk. tr. ctts 3431
Bonds.
Per Cent.
$10.000 Scranton, Montrose &
Binghampton RR., let (is. Oct. 1
1949
$1 lot
By A. J. Wright & Co., Buffalo:
Shares. Stocks.
$ per Sh. Shares. Stocks.
$ per Sh.
10 International limitless Iron, par
500 Porcupine Davidson Gold
$1
Mines, Ltd., pref., 5 shillings__$2 lot
394
100 Premier Gold Mines, par $l__ 45c 10 Como Mines, par $1
10c
592,921.050
48,505,860
25,671,680
DIVIDENDS.
Dividends are grouped in two separate tables. In the
667,098,590 667,098.590 first we bring together all the dividends announced the
Totals
current week. Then we follow with a second table, in
The following shows the amount of National bank notes which we show the dividends previously announced, but
afloat and the amount of legal tender deposits Sept. 1 1931 which have not yet been paid..
The dividends announced this week are:
and Oct. 1 1931 and their increase or decrease during the
month of September:
National Bank Notes-Total AfloatAmount afloat Sept. 11031
Net decrease during September
Amount of bank notes afloat Oct. 1
Legal-Tender NotesAmount on deposit to redeem National bank notes Sept. 1
Net amount of bank notes issued in September
Amount on deposit to redeem National bank notes Oct. 1 1931
3698,260,281
126,505
3698.133,776
332,239,745
622,178
932,861,923
National Banks.-The following information regarding
national banks is from the office of the Comptroller of the
Currency, Treasury Department:
LIQUIDATIONS.
VOLUNTARY
Capital.
5-The Iowa National Bank of Ottumwa, Iowa
$200,000
Effective Aug. 20 1931. Liq. Agent, E. C. Manning,
Ottumwa, Iowa. Succeeded by Union Bank & Trust
Co. of Ottumwa, Iowa.
Oct. 5-The Citizens National Bank of Winchester, Ky
Effective Sept. 30 1931. Liq. Agents, Pt. M. Booboo 100,000
and L. O. Aldridge, Winchester, Ky. Absorbed by
the Clark County National Bank of Winchester, Ky.,
No. 995.
Oct. 6-The First National Bank of Eureka, Ill
Effective Sept. 25 1931. Liq. Agent. Farmers State 25,000
Batik, Eureka Ill. Absorbed by the Farmers State
Bank of Eureka, Ill.
Oct. 8-The National Bank of the Republic of Chicago, Ill_
_11.000,000
Effective July 25 1931. Lie. Agents, Board of Directors of the liquidating bank. Absorbed by Central
Trust Co. of Illinois, Chicago, Ill,, which changed its
title to Central Republic Bank & Trust Co.,
Chicago.
Oct.
Oct. 0-The First National Bank of Sumter, S. C
Effective Sept. 30 1931. Lie. Agent, the South Carolina State Bank, Charleston, S. C. Absorbed by
the
South Carolina State Bank, Charleston, S. C.
Oct. 9-The National Bank of Leesville, S. 0
Effective Sept. 30 1931. Lie. Agent, South Carolina
State Bank, Charleston, S. C. Absorbed by South
Carolina State Bank, Charleston, S. C.
100,000
50.000
Name of Company.
Per
When
Cent. Payable.
Books Cond.
Days Inclusive.
Railroads (Steam).
1)8 Nov. 2 Holders of rec. Oct. 266
Cuba RR.. preferred (quar.)
Kansas City, St. Louis & Chic.. pf.(011.) '134 Nov. 1 *Holders of rec. Oct. 20
*11( Dec. 1 *Holders of rec. Nov. 16
Maine Central, pref. (quar.)
154 Nov.30 Holders of rec. Nov. 13
New Orleans, Texas & Mexico (quar.) _
Pittsburgh Bessemer & Lake Erie, pref.. "$1.50 Dec. 1 *Holders of rec. Nov. 14
*214 Jn 10'32 *Holders of rec. Dec. 19
United N.J. R.R.& Canal(quar.)
Utica Chenango & Susq. Val
Nov. 1 *Holders of rec. Oct. 14
Public Utilities.
Androscoggin Elec., pref. (quar.)
*1% Nov. 1
Atlantic City Electric Co. $6 pt. (ciu.) 41.50 Nov. 2 *Holders of rec. Oct. 10
Brazilian Tr. L.& Pow.. ord. (quar.)
25c. Dec. 1 Holders of rec. Oct. 31
Chic. Rapid Transit, pr. pf. A (mthly.) •65c. Nov. 1 *Holders of rec. Oct. 20
Prior preferred B (monthly)
*130c. Nov. 1 *Holders of rec. Oct. 20
Columbus Ry.Pr.& Light, pt. B (cu.)._ *S1.62 Nov. 2 *Holders of rec. Oct. 15
Community Power & Light, 1st pt. (au.) 4,1% Nov. 2 *Holders of rec. Oct. 21
Dayton Power & Light, pref.(monthly)_ "50c. Nov. 2 *Holders of rec. Oct. 20
1)8 Nov. 2 Holders of rec. Oct. 15
Idaho Power,7% pref.(quar.)
$1.50 Nov. 2 Holders of rec. Oct. 15
$6 preferred ((mar.)
(n)Internat. Hydro Elee.System, el.A(qu n50c. Oct. 15 Holders of rec. Sept. 25
Iowa Electric Co., 7% pref. A (quar.). elm Oct. 1 *Holders of rec. Sept. 15
•1% Oct. 1 *Holders of rec. Sept. 15
% preferred B (guar.)
Halo-Argentine Electric Co.
sh.) Oct. 18 Holders of coupon No.27
r
pesos
pe
Foreign bearer shares(5 paper
*2
Oct. 10 *Holders of rec. Sept.30
Lincoln Tel. & Tel.(quar.)
Marconi International Marine Commun leaden .
.
65 Oct. 29 *Holders of rec. Oct. 9
Am.Top. rats, for and reg. abs
Missouri Power & Lights, SO pf. (qu.)-. 111 50 Oct. 1 *Holders of rec. Sept. 10
*56. Nov. 1 *Holders of rec. Oct. 25
National Gas (monthly)
*56. Nov. 1 *Holders of rec. Oct. 25
Extra
National Power & Light, corn.(quar.)-. *25c. Dec. 1 *Holders of rec. Nov. 7
Nov. 16 *Holders of rec. Oct. 31
(guar.)._
pref.
"3733c
Pacific Gas & Elec.. 6%
*3040 Nov. 16 *Holders of rec. Oct. 31
534% preferred (quar.)
Pacific Power & Light, 7% pf. (au)-.... 1R Nov. 2 Holders of rec. Oct. 17
51.50 Nov. 2 Holders of rec. Oct. 17
$6 preferred (guar.)
Nov. 2 'Holders of rec. Oct. 15
Petaluma & Santa Rasa RR.,corn.(qu.) *1
*3
Nov. 1 *Holders of rec. Oct. 15
Preferred
mut. Suburban Water Co.. pref. (an.). 114 Dec. 1 Holders of rec. Nov. 12a
1% Nov. 2 Holders of rec. Oct. 17
Portland Gas Sr Coke, 7% pf.(qu.) _ _ _
11% Nov. 2 Holders of rec. Oct 17
6% preferred (quar.)
*750. Nov. 1 *Holders of rec. Oct. 20
Princeton (N,.I.) Water Co.(quar.)..
*23c. Nov. 2 *Holders of rec. Oct. 15
Rockland Light & Power (quar.)
2564
Name of Company.
Per
When
Cent. Payable
Books Closed.
Days Inclusive.
Public Utilities (Concluded).
(t)Ban Joaquin Lt. m Power, com.(qu.) '2
Oct. 7 Holders of rec. Sept. 30
*1.54 Nov. 2'Holders of rec. Oct. 15
Texas Power & Light,7% pref.(guar.)
86 preferred (guar.)
*81.50 Nov. 2 "Holders of rec. Oct. 15
Western Union Telegraph (guar.)
*1H Jan.'32
Wisconsin Telephone, pref. (guar.)...
•13
‘
, Oct. 31
Trust Companies.
Kings County (Brooklyn) (guar.)
'20
Nov. 2 *Holders of rec. Oct. 24
Miscellaneous.
Affiliated Investors, Inc., pref.-Divide ndom tted.
Agnew Surpass Shoe Stores, pref.(qu.)_ _
Jan. 2 *Holders of rec. Dec. 15
American Bank Stocks Corp.,(guar.) _ - '734c Oct. 15 *Holders of rec. Oct. 10
American Crayon,6% pref.(guar.)_ _ sui Nov. 1 'Holders of rec. Oct. 20
Amer. European Securities. pref. (qu.)_ 81.50 Nov. 13 Holders of rec. Oct. 31
Amer. Industries. partic.shares (guar.)* 31.45c Oct. 1
Amer. Manufacturing. common-Divide nd pas sed.
American Motors Co., Ltd.Am. dep. rota. for ord. reg. abs
*w10 Nov. 6 *Holders of rec. Oct. 9
American Securities Shares
*6c Oct. 15 *Holders of rec. Oct. 15
Amer. Steam Pump (guar.)
•500 Oct. 1 'Holders of rec. Oct. 1
Art Metal ‘s OCkti(stock dividend)
(a qu.) Nov. 1 *Holders of rec. Oct. 20
Atlantic Macaroni (quar.)
Oct. 15 *Holders of rec. Oct. 15
.gm Nov. 1 *Holders of rec. Oct. 20
Atlantic Steel. 7% pref.(guar.)
Austin Motor Co., Ltd.
Am. dep. rms, for ord. reg. she
*rn100 Nov. 6 'Holders of rec. Oct. 9
Automatic Voting Mach., pr. panic.stk. '500 Nov. 16 'Holders of rec. Nov. 2
*138 Nov. 15 *Holders of rec. Nov. 1
Baumann (Ludwig)& Co., pref.(qu.)
Nov 16 "Holders of rec. Oct. 31
Beacon Mfg., corn. & pf.(guar.)
Benson & Hedges. cony. pref.-Dividen d omit tad.
Berland Shoe stores, Inc.,7% pt.(guar.) .13.4 .Nov. 1 *Holders of rec. Oct. 20
Bigelow Sanford Carpet, pref.(quar.)--- "14 Nov. 1 "Holders of rec. Oct. 20
Blue Ribbon Corp.. Ltd.. corn.(quar.)-50o Nov. 2 Holders of rec. Oct. 15
814c Nov. 2 Holders of rec. Oct. 15
Preferred (guar.)
BOSS Manufacturing. common (quar.)
Nov. 16 Holders of rm. Oct. 31
Brandram lienderson Ltd., com.-Divi dend o
Broadway Dept. Stores, 1st pref.(gear.) *40c Nov. 1 "Holders of rec. Oct. 17
Builders Exch. Bldg., corn.
•12
Oct. 14 *Holders of rec. Oct. 8
six
(special).Buok,
Inc., 7% pref.(quar.)
Nov. 1 *Holders of rec. Oct. 11
Cabot (Godfrey L.) Inc., corn.(No. I). I110 Oct. 31 *Holders of rec. Oct. 15
s18.i Nov. 1 *Holders of rec. Oct. 15
Camps Corp. 64% pref.(guar.)
81,4 Nov. 16 *Holders of rec. Oct. 31
Canadian Converters,common (quar.)
Capital Management Corp.(quar.)
•25o Nov. 3 *Holders of roe. Oct. 21
Chartered Investors. Inc., pref.(qu.)-. *81.25 Dec. 1 *Holders of rec. Nov. 2
Chicago Bank Participating Shares.---* 10.10c Oct. 1
Chic. O lInt.& Franklin Coal, Pf.(alt.)- *I t4 Nov. 2'Holders of rec. Oct. 26
Cities Service, bankers sh.(monthly)_•1 1.585e Nov. 2"Holders of rec. Oct. 15
ti Nov. 1 *Holders of rec. Oct. 26
City Baking. pref.(guar.)
Clark Controller. common.-Dividend p eased.
Coast Foundation, Inc., pref
Mc. Nov.10'Holders of rec. Oct. 10
Collins Co.,(guar.) _
*1
Oct. 15 *Holders of rec. Oct. 6
•18( Nov. 2 *Holders of rec. Oct. 15
Columbus Packing, pref. (guar.)
Consolidated Hotels. pref. A (rillar.)*374c Nov.20 "Holders of roe. Nov. 1
Consolidated Press. Ltd..(guar.)
*50c. Nov. 2 *Holders of rec. Oct. 15
Consolidated Rendering, pref.(qaur.).- *2
Nov. 1 *Holders of rec. Oct. 21
Construction Materials Corp., prof-No action taken.
Continental Can, cont.(guar.)
624c. Nov. 14 Holders of roe. Oct. 31a
Crandall, McKenzie & Henderson,(qu.) ')Sc. Nov. 1 *Holders of rec. Oct. 20
De Meta. Inc., pref.(guar.)
*55c. Nov. 1 'Holders of rec. Oct. 21
Disher qteel Constr., pref. A (guar.)- - - 37,‘c Nov. 1 Holders of rec. Oct. 15
Duff-Norton Mfg., pref.(quar.)
•31.50 Oct. 15
Dunlop's(John)Sons. Inc., 1st of.(qIL) *$1.50 Oct. 1 *Holders of rec. Sept. 24
Eastern'Cneatres,Ltd (7 oronto)(qu.)_
50c Dec. 1 Holders of rec. Oct. 31
Empire Title & Guarantee (guar.)
81 Nov. 2 Holders of roe. Oct. 26
Faultless Rubber (guar.)
62,
4c Jan. 1
Dec. 16.
Federal Drop Forge. com.-Dividend om Med.
Federal Knitting Mills (guar.)
6234 c Nov. 1 Holders of rec. Oct. 15
Fox Film,class A At B.-No act'on taker.
Frank(A. B.) Co.. pref.-Dividend orn1 tted.
Freeport Texas Co.(guar.)
•750 Dee. 1 "Holders of roe. Nov. 15
Fulton Industrial Secur.. pref.(guar.)... *87' c Nov. 1 "Holders of rec. Oct. 15
General ,
1 er:can Corp.. corn.(quar.)
*2c Oct. I "Holders of rec. Sept. 15
General Parts, pref.-Dividend omitted.
Gilmore 011, Ltd.,(guar.)
•300 Oct. 31 *Holders of rec. Oct. 15
Goldsmith's(P.) Sons.(guar.)
"20o Nov. 2 *Holders of rec. Oct. 20
Great Lakes Dredge & Dock,(guar.).25e Nov.14
Nov 5 to Nov. 14.
Great Lakes Engineering Works (guar.). 475o. Nov. 2 *Holders of roe. Oct. 24
Hall(W. F.) Printing Co.. com.(qu.)
•30c Oct. 31 *Holders of rec. Oct. 20
Halle Bros. Co., from.(guar.)
25c Oct. 31
Oct 24 to Oct. 31.
1% Oct. 31
Preferred (guar.)
Oct. 24 to Oct. 31.
Hawaiian Pineapple.-Dividend omitted
Higbee Co.. 1st pref.(mar.)
1% Nov. 1
Oct. 22 to Nov. 1.
second preferred Omar.)
Dec. 1
Nov. 21 to Dec. 1.
2
Hollinger Consolidated Gold Mines
5e. Nov. 4 Holders of roe. Oct. 21
'1% Nov. 1 "Holders of roe. Oct. 24
Horne (Joseph) Co.. pref. (guar.)
Horn' Signal Mfg.. partic. pref. (quar.). '25o. Oct. 15 *Holders of rec. Oct. 5
•118 'Oct. 15 *Holders of rec. Oct. 10
Hutchins Invest. Corp., pref. (quar.)
'750. Oct. 1 *Holders of rec. Sept. 20
m Imperial Sugar, 7% pref.(guar.).
"75e. Oct. 1 'Holders of rec. Sept. 20
V preferred (guar.)
*37I‘c Oct. I
Income Leasehold (guar.)
Jackson & Curtis Scour.Corp.,of.(qu.). *81.50 Nov. 1 *Holders of rec. Oct. 15
Julian & Kokenze, co-n.-Div. omitted.
Klein (D. Emil) Co.. common (quar.)-- •25c. Jan. 2 *Holders of rect. Dec. 21
Nov. 2*Holders of rec. Oct. 21
Preferred (guar.)
Knott Corp.. common.-No action taken
Lerner 9tores Corp..6'4% pref.(guar.)_ 1% Nov. 1 Holders of rec. Oct. 23
Lincoln Printing. common (guar.)
*50c Nov. 2 *Holders of rec. Oct. 24
egv,e Nov. 2 *Holders of roe. Oct. 24
Preferred (quar.)
Lindsay(C. w.)& Co., Ltd., com.(qu.) 25c Dec. I Holders of rec. Nov. 15
% preferred (guar.)
14 Dec. 1 Holders of rec. Nov. 15
Lit Bros
•70c Oct. 10 *Holders of rec. Oct. 8
Loew's Boston Theatres (guar.)
*15c Nov. 2 *Holders of rec. Oct. 24
*14 Nov. 1 *Holders of rec. Oct. 20
Lyon Metal Products, pref.(guar.)
Mabbett & Sons Co., 1st & 2d pref.(qu.) *S1.75 Oct. 1
•30c Nov. 1 *Holders of roe. Oet. 15
M-A-C Plan, Inc.. pref. (guar.)
meintyre-Porcupine Mines(guar.)
MSc Dec. 1 *Holders of rec. Nov. 2
McKinley Land Ar Lumbm, pref.(guar.) "14 Nov. 1 *Holders of rec. Oct. 15
'134 Oct. 15 *Holders of roe. Oct. 8
McNeel Marble. pref. (guar.)
'12340 Oct. 15 *Holders of rec. Oct. 1
Mead Corp.. common (guar.)
.1
Oct. 15 *molders of rec. Oct. 15
Mercantile Irner. Realty. pref.(guar.)
•1% Nov. 2 *Holders of roe. Oct. 21
Merchants Refrigerating. pref.(guar.)
.184 Nov. 1 *Holders of rec. Oct. 20
Metal & Thor"it Corp.(guar.)
25c Nov. 28 Holders of ree. Oct. 31
Mohawk Mining
Morrison Brass. Ltd., 7% pref.-Divide nd oral tted.
Mortgage Corp. of Nova Scotia (guar.).- "14 Nov. 2 *Holders of roe. Oct. 24
25c Nov. 1 Holders of rec. Oct. 15
Muirheads Cafeterias. pref. (quar.)._
14 Dec. 1 Holders of rec. Nov.20
Muskogee Co..6% Pref. (guar.)
itted.
om
-Dividend
Trust
Investment
Mutual
500. Nov. 2 Holders of rec. Oct. 20
Nash Motors Co., corn.(guar.)
Dec. 15 *Holders of roe. Nov.27
National Lead. pref. A (guar.)
Oct. 1
*114
National Lock Co., prof A (guar.)
Preferred B-Dividend passed.
*581‘c Oct. 1 *Holders of rec. Sept. 22
National Oxygen, class A
National Republic invest.Trust pt.(g11.) *25c. Nov. 2 *Holders of reo. Oct. 23
Nat.Short Term Securities, com.A (qU.) 15c. Nov. 2 Holders of rec. Oct. 19
1714c Nov. 2 Holders of rec. Oct. 19
Preferred (guar.)
f1,
84 Nov. 1 *Holders of rec. Oct. 16
Neisner Bros.. pref. (quar.)
Dec. 1 'Holders of rec. Nov. 16
•1%
Newberry (J. J.) Co., pref.(guar.)
*62'%c Nov. 2 *Holders of rec. Oct. 15
New England Equity (guar.)
New River Co..pref.(acct.&mum.divs.)• 81.50 Nov. 2 *Holders of roe. Oct. 17
N.Y.& Foreign Invest., pref.(quar.)._ 1% Oct. 15 Holders of rec. Oct. 13
N.Y.& Honduras Rosario Mining (qu.) 250. Oct. 31 Holders of rec. Oct. 20
100. Nov. 1 Holders of rec. Oct. 20
Noma Electric Corp. (guar.)
•100. Dee. 12"Holders of rec. Nov. 14
Packard Motor Car (guar.)
Parker Pen common-Dividend omitted.
Parker (S. C.)& Co.. class A (quar.)•50e. Nov. 1 *Holders of roe. Oct. 25
Peabody Coal, V>. nref. (guar.)
Nov. 2 *Holders of rec. Oct. 26
*1
Peerless Laundry Service. corn.& pref.- Divide nds omi tted.
Perfection Stove (monthly)
.1834o Oct. 31 *Holders of roe. Oct. 20
Pogue(H.& S.) Co..6% pref. (quar.),_ '14 Nov. 1 *Holders of roe. Oct. 15
FoL. 133.
FINANCIAL CHRONICLE
Name of Company.
Per
When
Cent. Payable.
Books Closed.
Days /notaries.
Miscellaneous (Concluded).
*S1
Prentice (G. E.) Mfg.(guar.)
Oct. 15 Holders of rec. Oct. 1
Process Corp (guar.)
'Sc. Nov. 2 *Holders of rec. Oct. 22
Pull!) an,Inc.(guar.)
*75c. Nov. 16 *Holders of rec. Oct. 24
Railway Equip. & Realty. 1st pref. (q11.) *37.40 Dee. 1 *Holders of roe. Nov. 1
Rayn.ond Concrete Pile. com.-Dividen d omit ed.
475c. Nov. 2'Holders of roe. Oct. 20
Preferred (guar.)
Republic Flow Meters, pref.-Dividend omitte d.
Reserve Invest. Corp.,pref.(quar.),.. *1H Oct. 15 *Holders of rec. Oct. 10
Reserve Resources Corp., pref.(guar.)._ *114 Oct. 15 *Holders of rec. Oct. 10
Rich's, Inc., com.(guar.)
.30e. Nov. 16 *Holders of rec. Nov. 2
4.1% Dec. 30 *Holders of rec. Dec. 15
6',% preferred (guar.)
Riverside Ce- ent, 1st pref.(guar.)
*S1.50 Nov. 1 *Holders of rec. Oct. 15
Russell Motor Car. Ltd.. com.(quar.)
75e. Nov. 2 Holders of roe. Oct. 20
Preferred (quar.)
Nov. 2 Holders of rec. Oct. 20
"1h Nov. 2 *Holders of rec. Oct. 20
St.Lawrence Flour Mills, pref.(guar.)
St. Louis Screw & Bolt. pref.(quar.). *1H Nov. 1 *Holders of rec. Oct. 26
San Jose Pacific Co., Ltd.. corn.& pref.- Divide nd pass ed.
Savannah Sugar Refg.,com.(quar.)...,. *1% Nov. 2 *Holders of rec. Oct. 15
Preferred (guar.)
•114 Nov. 2 *Holders of rec. Oct. 15
Scotten-Dilion Co.(guar.)
*30c. Nov. 14 *Holders of rec. Nov. 6
Extra
*10e. Nov. 14 'Holders of rec. Nov. 6
Seaboard Surety (guar.)
12' c Nov. 18 Holders of rec. Oct. 31
Second Twin Bell Syndicate
*50c. Oct. 12 *Holders of rec. Oct. 10
Securities Corp. General, com.(quar.).... "We. Nov. 2 *Holders of rec. Oct. 20
$7 preferred (guar.)
"S1.75 Nov. 2 *Holders of rec. Oct. 20
$6 preferred (guar.)
*81.50 Nov. 2 *Holders of rec. Oct. 20
Semi Lock dr Hardware. pref. (guar.)- *8714c Oct. 15 *Holders of rec. Sept. 30
Selby Shoe, common (guar.)
*35c. Nov. 1 *Holders of rec. Oct. 20
*14 Nov. 1 "Holders of roe. Oct. 20
Preferred (guar.)
Selfridge Provincial Stores. Ltd.kr,er. den. rile, for ord. shares
Dec. 7 *Holders of rec. Nov. 13
Seneca National Corp., A tr. ctfs.-Divi dend o
Service Stations, Ltd., pf.AtpLA (guar.) 1
Nov. 1 Holders of rec. Oct. 15
Simpson's, Ltd., 6'2% pref.(quar.).... 134 Nov. 2 Holders of rec. Oct. 21a
Sinclair COn801.011. Sw.. pref. (guar.)._ - *2
Nov. 14 *Holders of rec. Oct. 20
Stern (A.)& Co., common (guar.)
400. Nov. 18 Holders of roe. Oct. 30
Stewart Iron Works (guar.)
'134 Oct. 15 "Holders of roe. Oct. 1
tontine Furniture. pref.(guar.)
*Mc ‘ov. 1 *Holders of rec. Oct. 20
Stott Briquette. Inc.. pref. (guar.)
*500. Nov. 1 *Holders of res. Oct. 20
Telephone Invest. Corp.(monthly) - - - *20c. Nov. 1 *Holders of rec. Oct. 20
Toronto Elevators, Ltd., 7% pf.(qu.) - *11‘ 3ct. 15 *Holders of rec. Oct. 1
Traders Finance Corp.(Toronto) pf.(qu.) •18,4 Oct. 1 *Holders of rec. Sept. 15
Preferred B (guar.)
Oct. 1 *Holders of roe. Sept, 15
*2
Triplex Safety GlassAmer. dep. rots. for ord. reg. shares.•27.90 Oct. 16 *Holders of roe. Sept. 24
TwelfthStreet Store of Ills., pref.(qu.)_ '25c Nov. 1 *Holders of rec. Oct. 23
8.3
Twin 8011 011 Syndicate(qu.)
Oct. 12 *Holders of roe. Oct. 10
Virginia-Carolina(Them., prior pt.(qu.)_ '1% Dec. 1 *Holders of rec. Nov. 16
Walton (Chas. B.) & Co., pref.(guar.)-- *2
Nov. 1 *Holders of roe. Oct. 15
Washington Motors Coach, prof.(guar.)
Oct. 1 *Holders of roe. Oct. 1
western steel Products.6"% pref.-Di vidend ornate d.
Weston ((leo.). Ltd.. pref.(guar.)
1% Nov. 2 Holders of ree. Oct. 20
Million a (R. C.) & Co.(guar.)
*174e Nov. 2 *Holders of rec. Oct. 23
xvii-Low Cafeterias, cony. pref. (quar.)_ $1
Nov. 2 Holders of rec. Oct. 2081
Woolworth (F. W.) Co.,(guar.)
•600 Dec. 1 *Holders of rec. Nov. 2
Extra
.. '12 Nov.16 *Holders of rec. Nov. 2
Below we give the dividends announced in previous weeks
and not yet paid. This list does not include dividends announced this week, these being given in the preceding table.
Name of Company.
Railroads (Steam).
Atch. Topeka & Santa Fe, com.
A[Motto Coast 1.1ne HR.. pref
Baltimore & Ohio. ram.(guar.)
Preferred (guar.)
Chesapeake & ohlo preferred (Onnr.)
4-hicagn oreat Western. pref
Cincinnati, Sandusky & Cleveland. pt.,' ..••
nref tan I
Clove.(Inn Chic AR) Louis. Pt
l•
Delaware Lackawanna & western (go.)
Elmira & Williamsport. common
...ogle RR A Hankins 'qua? I
MRhOlana Coal RR.. corn. (guar.)
Nashua & Lowell
New York Central RR.(guar.)
Norfolk & Western, adj. pref.(guar.)__
Northern Pacific, common (guar.)
Readlug Co., common (auar.)
Bt. Loula-San Fran,lsco,8% prof.(qu.)
When
Per
Cent. Payable
Books Closed.
Days Inelastic
214 Deo, 1 Holders of reo. Oct. 30a
'234 Nov. 10 *Holders of rec. Oct. 23
Dee. 1 Holders of rec. Oct. 104
1
1
Dec. I Holders o( rec. Oct. 10a
*3)( Jan 1'32 *Holders of roc Dec. 8
Oct.
20 Holders al roe. Oct. Se
awe
$1.50 Nov. 2 Holders of roe. Oct. 250
•I
ret. •11,,Iden. ut rep Dec. 19
14 Oct. 31 Oct. 8 to Oct. 28
545' Oct 20 Holders of rec. Oct. 3a
*11.15 Nov. 2 *Holders of rec. Oct. 20
248 Jsul5112 Holders of rec Jan, 1
$12.60 Nov. 2 Holders of rec. Oct. 154
Nov. 2'Holders of rec. Oct. 15
*4
Nov. 2 Holders of rec. Oct. 24
1
Nov. 19 Holders of roe. Oct. 1114
1
75e Nov. 2 Holders of roe. Oct. 54
$1
Nov. 12 Holders of rect. Oct. 15a
134 Nos. 2 Ho-dere of roe. Oct. 1.
Public ttttt Wes.
31.25 Nov. 2 Holders of ree. Oat. 15
Alabama Power. $5 pref. (guar.)
8750 Nov. 1 Holders of roe. Oct. 5
Pow. & Lt., cl. A (tin.).Amer. Commonwealths PowerCom . A&13 (go.)(pay.In corn. A stk.)- 12)4 Oct. 20 Holders of rm. Sept.30a
$1.76 Nov. 2 Holders of rec. Oct. 15a
First pref. series A (guar.)
$1.83 Nov. 2 Holders of roe. Oct. 15a
Sti.50 first preferred (guar.)
$1.60 Nov. 2 Holders of roe. Oct. 15a
88 first preferred (guar.)
$1.75 Nov. 2 Holders of reo. Oct. 15a
Second preferred series A (guar.)
520. Nov. 2 Holders of rec. Oct. 124
$8.24 prior preferred (monthly)
52e. Dee. 1 Holders of rec. Nov.134
Sti.24 prior preferred (monthly)
Amer. (las & Electric, pref. (guar.).- $1.50 Nov. 2 Holders of reo. Oct. 8
Amer. Light & Tree., common (guar.)._ 624c Nov. 2 Holders of rec. Oct. Ma
14 Nov. 2 Holders of rec. Oct. 16a
Preferred (quay.)
Amer. Superpower Corp.. 1st pref.(gu.)- $1.50 Jan. 2 Holders of rec. Deo. 10
81.50 Jan. 2 Holders of rec. Deo. 10
Preference (guar.)
yhe, Nov. 2 Holders of tee °et. go
Amer Wet Wks & Elea.. corn. Nu.).Arkansas-Mo. Power. 7% pref. (quar,)_ 13.4 Nov. 2 Holders of rec. Oct. 15
Associated flaa & Elec.. class A (guar.) (bb) Nov. 2 Holders of rec. Sept.30
OM Nov. 2 Holders of rec. Slept.30
$4 CUM, preference (guar.)
Associated Telep. Co., Ltd.. pref. (Cu.)- •3734c Nov. 1 "Holders of roe. Oct. 15
Jan 1'32 *Holders of reo Dee. 17
associated Telep.& Terns.. el. A (qu.). .81
.50e Jan 1'32 *Holders ol reo Dee. 17
Class A (entrap
•511o. Nov. 1 *Holders of rec. Oct. 10
Rancor Hydro Elec.. com. (guar.)
British Columbia Telep.,6% pref.(qu.)_ '11.4 Oct. 31 *Holders of me. Oct. 15
*138 Nov. 2 *Holders of rec. Sept.30
Broad River Power. oref (quer.)
Brooklyn-Manhattan Transit81.50 Jan15'32 Holders of roe. Dee. 1116
Preferred aerie. A (get.)
$1.30 4 1542 Holders of rec. Aprl'32a
Preferred series A (gust.)
Buff Niagara & Fast Pow lst pf.(gU.) M1.25 Nov 2 *Holders of reo Oct. 15
Calgary Power Co..6% pref. (guar.)--- 14 Nov. 2 Holders of reo. Oct. 15
California" ater Service, pref.(guar.)._ 'li.t Nov. 15 *Holders of rec. Oct. 31
canada Northern Power isom (gust)
204) Oct 28 Holders of roe Sept. 30
Central Hudson Oas & Elec., com.(qIL). *20c. Nov. 1 *Holders of roe. Sept. 30
Central Power & Light,6% prof.(guar.) 1% Nov. 2 Holders of rec. Oct. 15
118 Nov. 2 Holders of roe. Oct. 15
7% preferred (guar.)
Central lc S. W,UtIl., $7 pr. lien (qu.)-. $1.75 Nov. 16 Holders of reo. Oct. 31
$1.75 Nov. 16 Holders of Teo. Oct. 31
$7 preferred (guar.)
$1.50 Nov. 16 Holders of roe. Oct. 31
re prior lien (guar.)
Central CI me Pub. Serv., corn. A (guar.) (o) Nov. 1 *Holders of rec. Oct. 9
•154 Nov. 1 *Holders of rec. Oct. 9
Preferred A & B (guar.)
58 1-381 Nov.16 Holders of roe. Oct. 3Ia
Cities Sem.Pow.& Lt.$7 of,
50e. Nov. 18 Holders of roe. Oct. 31a
$8 preferred (monthly)
85 preferred (monthly)
4 1 2-30. Nov. 16 Holders of Me. Oct. 31a
Consumers Power. 7% pref.(quar.).... •134 Jo 2 '32 *Holders of rec. Dec. 15
*1.65 Jo. 2'32 *Holders of rec. Dee. 16
6.6% preferred (guar.)
6% preferred (quar.)
*114 Jo. 212 *Holders of rec. Dec. 15
M1.25 Jo, 2'32 *Holders of reo. Deo. 15
$5 preferred (guar.)
6.6% preferred (monthly)
.550. Nov. 2 *Holders of ree. Oct. 15
6.6% preferred (monthly)
*550. Dee, 1 *Holders of roe. Nov. 18
*55e. In. 212 *Holders of rem Dee. 15
6.6% preferred (monthly)
6% preferred (monthly)
*50o. Nov. 2 *Holders of roe. Oct. 16
6% preferred (monthly)
*50o. Deo. I 'Holders of roe. Nov. 16
6% preferred (monthly)
*50o. Jo. 212 'Holders of rec. Doe. 15
Amer. Cities
OCT. 17 1931.]
Name of Conn:Map
FINANCIAL CHRONICLE
When
POT
Cent. Payable.
Books Closed.
Days Inclusive.
manse Of Ctenpase.
2565
Per
When
Cad. Payable.
Books Cloud.
Dare inclusies.
Public Utilities (Concluded).
Public Utilities (Con:blued).
50c: Nor. 2 Holders of res. Oct. 15
Cleveland Elec. Ilium..6% pref.(guar.) 114 Dec. 1 Holders of rec. Nov.14a Western Power Lt. & Telep. corn. A(1u.)
Columbia Gas & Elec.. corn.
374c Nov.15 Holders of rec. Oct. 204 Western United Corp.. Pref. (gear.).... "lef Nov. 2'Holders of pee. Oet. /7
*62)1e Oct. 31 "Holders of rec. Oct. 20
6% preferred. series A (qua:.)
114 Nov.15 Holders of rec. Oct. 20a York Railways. pref. (War.)
5% preferred (guar.)
1)4 Nov.15 Holders of rec. Oct. 20a
Banks.
Commonwealth Edison Co.(gear.)
Nov. 2 *Holders of tee. Oct. 15
•2
Nov. 2 Holder, of rec. Oct. 22a
Consolidated Gas of N. Y.. 55 of.(gu.). $1.25 Nov. 2 Holders of rec. Petit. 304 Corn Exchange Bank & Trust (guar.).-- $1
Edison Elec. Illum., Breton (quar.)3.40 Nov. 2 Holders of roe. Oct. 10
Trust Companies.
Electric Bond & Share $6 pref. (gust.).. 51.50 Nov. 2 Holders of rec. Oct. 5
3
Dee, 31 Holden of recs. Dee. 31
Federation Bank & Trust (guar.)
$1.25 Nov. 2 !folders of rec Oct. 5
$6 preferred (guar.)
Electric Power & Light Corp., corn.(gu.)
250. Nov. 2 Holders of tea. Oct. 54
Fire fnsurance.
4 Nov. 2 Holders of rec Oct. 54
Allotment refs full paid (glum)
*50e Dec. 10 *Holders of rec. Dee, I
Allotment eertincate,80% pd.(ge.)...
10c Nov. 2 Holden of rec. Oct. 54 North River (guar.)
Second preferred A (guar.)
'1% Nov. 2'Holders of rec. Oct. 5
effiesellanenus.
Empire District Electric, 6% pf. (mtlityi
50e. Nov. 2 Holders of tee. Oct. 15a
Empire traa & Fuel. 8% pref.(monthly). 662 ge Nov. 2 !folders of roe. Oct. 15a
Nov. 1 Holders of rec. Oct. /55
Abraham & Straus. Inc.. pref. (qua:.)..
ISA I-3c Nov. 2 Holders of rec. Oct. 15a
7% preferred (monthly)
Dee. 31 *Holden of ree. Dec. 15
64i, preferred (monthly)
54 1-lie Nov. 2 !folders of rec. Oct. 154 Adam Hoffman Co
Nov. 1 'Holders of ree. Oat. 15
(guar.)
50o. Nov. 2 Holders of rec. Oct. Itta Adams(J. D.) Mfg.. corn.
6% preferred (monthly)
Nov. 1 Holders of rec. Oct. 190
Adams-Millis Corp., corn.(gear.)
Foreign Pow Securities Corp.. pt.(Ga.)- 14 Nov.16 Holders of rec. Oct. 31
Nov. 2 Holders of roe. Oct. 10a
(guar.)._
Gold
Mining
Juneau
Alaska
I
eitolders
25
Nov
Franklin Telegraph
*$1
of roe net IS
Oct. 19 Holders of roe. Sept. 30a
Allegheny Steel. corn. (monthly)
•75c. Nov. 2'Holders of rec. Oct. 15
Greenfield Gas Light-. pref. (guar.)
Nov. /3 Bolden of tee. Oct. 31a
y;
ont
rith
0lty
Common(mo
Hamilton Bridge. 1st pref. "guar.)
14 Nov. 1 llulders of rec. Oct. 15
Dee, 18 Holders of tee. Nov. 30a
Hartford Electric Light. corn (guar.)... •683(c Nov. 2 "Holders of rec. Oct. 15
'It,icier,
re, %joy 13
De%
•1
Preferred (guar.)
*2 c. Nov. 2 *Holders of rec. Oct. 15
Common (extra)
114 Des. 1 Holden of reit Nov.20
Alliance Realty, preferred (gear.)
-Havana Elec. & tittlittet, 14 pref.(gu ) 14 Nov. 16 Holders of rec. Oct. 17
Holders
Nov.
of
roe.
2
$1.50
Oct. fie
$1 25 Nov. 16 Holders of rec. Oct. 17
Allied Chenitcal & Dye. coin (fluar..)
Cumulative preferred (friar.)
25e. Nov. 16 Holden of roe. Oct. 244
APN-Chalmers Mfg. cont.(guar
'15e. Oct. 20 'Holders of roe. Oct. 15
Hawaiian Elec. Co.(monthly)
25e. Oct. 24 Hoidens of rec. Ott. le
Honolulu Gas Co.(monthly)
Alpha Portland(esment(guar.)
.15c. Oct. 20 "Holden of rec. Oct. 15
Aluminum manufactures. Inc.. com.(ln) *50d. Dee. 3 "Holders of rec. Dee. 15
Idaho Power,
Prof.(guar.)
"144 Nov. 2'Holders of roe. Oct. 15
De-. 31 'Holders of roe. Der. 15
'134
Preferred (gust.)..
•$1.50 Nov. 2'Holders of rec. Oct. 15
$6 preferred (guar.)
"75e. Nov. 2'Holders of roe. Oct. 15
Altorfer
Bros.. cony. pref.(guar.)
Illinois Northern titiltries.6% pt.(go.). 1 4 Nov. 2 Holders of rec. Oct. 15
Borders or rec. Oet. 15a
50e. Oct.
Amerada Corp. (guar.)
51.75 Nov. 2 Holders of rec. Oct. 15
Junior bref.($7)(guar.)
Nov,16 Holders of rec. Nov. 26
$1
American Can, Corn.(gnat.)
'Moots Power & Light, 6% prof- (gear) $l Mt Nov 2 Holders of tea Oct. 10
Nov.16 Holders of rec. Nov. 2e
51
Internat. Utilities $7 prior pref. (gear.). •S1.75 Nov. 2 *Holders of rec. Oct. 16
Common (extra)
Nov. 2 Holders of rect. Oct. Ifia
American Coal of Altar. Co..(gnat.).... $1
•87'sr Nov. 2'Holders of roe. oct. 16
$3 511 prior pre!. (guar.)(Nn. ii.
Dee. 1 *Holders of roe. Nov.25
Keystone Tel of Phila.. $3 Pref.
"The Nov. 1 ...Holders of rec. Oct. 23
American Envelope. 7% pref. (qua:.)..
Nov. 2 Holden of roe. Oct. 3
Lone Star Gas, pref. (guar.)
Amer. Found Corp., tat pref. A&B(gu.)
*31.62 Nov. 2 "Holders of rec. Oct. 24
Nov. 2 Holden of tee Oct. 3
First preferred.series D (guar.)•
15,- Nov. I Holders of -es' Oct. 15
Long Isiend Lighting.(asuman .Coar.)
De.. Si Holders of roe. Dee. I8a
Louisiana Power & l.hthi, $A prof (an.). $1.50, Nov. 2 Holders of reo. Oct.•17
Amer. Hawaltan Steams tp (guar.).Nov. 2 Holders of roe (Set. 140
Malone Light, Heat & Pow.. pref.(gL). *31.50 Nov. 2 *Holden of rec. Oct. 15
Amer Home Products (monthly)
Oct. 26 Holden, of ree. Oct. 2a
Michigan Gas & Elec..7% pr. lien (qM.). 144 Nov. 2 Holders of rec. Oct. 15
American tee, common (guar.)
Oct. 26 Holders 01 rec. Oct. 2a
6% preferred (guar.)
156 Nov. 2 Holders of rec. Oct. 15
Preferred (guar.)
Nov. 2 Holders of ree. Ott. 22a
Middle West Utilities, corn.(in stock)._ f2
Amer. Machine & Fdy., cam.(guar.).Nov. 16 Holders of rec. Oct. 15
Oct. 31 'Holders of rec. Oct. 21
American Meter (guar.)
•$1.50 Nov.16 *Holden of rec. Oct. 15
$6 preferred (guar.)
0.
" ice Si 9.-lows
••• rowe 201
American Opthed CO 1st Prof ((guar.).
(en) Nov. 16 Holders of rec. Oct. 15
$0 cony preferred (guar.)
'1)4 (let. 1 "Hoiden of ree. Sept. 30
Am. Rol/Ins Mill 11% pref. (guar.)
Midland Counties Elec. Supply.
$1.25 Nov. 2 Holders of tee. Oct. 15e
Amer. Shipbuilding. Common (Qua:.)
Amer. dep. refs. 'oil Ise
0'024 Oct. 21 *Holders of ree. Sent.25
.134 Nov. 2 *Holders of rec. Oct. 15
p
Preferred (guar.)
Nov. 16 *Holders of rec. Oct. IS
Mid-West States Utilirlee, cl. A
37)4c, Nov. 2 Holders of ree. Oct. 16a
Milwaukee Elec. fly, & I,t .
pf.(qL) 134 Oct. 31 Holden of roe. Oct. 20e Amer.Smelter Ref.. corn.(gear.)
114 Dec. 1 Holders of roe. Nov. 6a
7% preferred (guar.)
6% preferred (seers 19211 (guar.)._ 914 Dee. 1 "Holders of rec. Nov. Ifs
14 Dee. I Holders of rec. Nov. 6a
6% preferred (gust.)
Mohawk & Hudson Power, 1st pref.(qu.) •$1.75 Nov. 1 *Holders of rec. Oct. 15
•14 Nov. 2 *Holders of rec Oct. 13
Montana Power. pref (quer.)
Amer. Thermos Bottle, corn.(guar.).- *15c. Nov. 1 "Holders of roe Ott. 20
Archer-DanIels-Midland Co., pf.(gu).. 154 Nov.d2 Holders of roe. Oct. 21a
37e. Oct. 3 Holders of roe Sept. 30
Montreal Light, Heat & Power (guar.).Associated Dry Goods, cam.(guar.)._
25e. Nov. 2 HoMers of roe. Oct. 16a
1( Oct 20 Holden of roe Sept. 30
Mountain Stew Power. prof iqua?.)
First preferred (guar.)
ov. 'Holders of rec. Oct. 15
Municipal Service Co. pref. (guar.) --- *14
134 Dee. 1 Holders of rec. Nov. 13a
Second preferred (guar.)
14 Dec. 1 Holden of rec. Nov. 13a
e8c. Oct. 3 *Holders of rec. Oct. 18
Mutual Telep.(Hawaii)(monthly)
A-ramp-flue & W. I. s.S tines. Pf.(1111.) 1H Dec. 51 Holders of ree Der. 10
National Electric Power. Mom A (181.)45e Nov. 2 Holders of roc Oct. 9
Atlantic fee Mfg., preferred
*34 Nov. 1 'Holders of rec. Oct. 15
Vim. 2 Holden) of roe cet 17
National Poser & Merit . asrent(gel
SI
154 Nov. 2 Holders of roe. Oct. 204
Nat.Tel.& Tel.,class A (guar.)
Atlas Powder. pref.(guar.)
•88e. Nov. 1 "Holders of rec. Oct, 17
Austin. Nichol" k Co.. prat A (guar.)._
First preferred (guar.)
•114 Nov. 1 *Holders of rec. Oct. 17
75e. Nov. 1 Holders of reo. Oct. 15e
Nevada-Californta Elec., prof. (guar.).- 114 Nov. 2 Holders of rec. Sept. 304 Babcock & Willcox Co., Ltd.
North American Eritrion, pref (guar.)._ $1.50 Dee.
American dep. rcts, ord. registered... "te7
Nov. *Holders of rec. Oct. 9
Holders of tee. Nov. tea
Balaban & )Catz. corn. (guar.)
North Amer. Gas & Elec..class A PALL- •40c. Nov. 1 *Holdere of rec (let. 15
Mo. Dee. 26 "Holden of roe. Dee, 4
North Amer. Light & Pow., corn.(gu.).- f2
Preferred (guar.)
*144 Dee. 26 "Holders of tee. Dee. 4
Nov. 16 Holders of rec. Oct. 20
$6 preferred (guar.)
$1.50 Jan. 2 Holders of rec. Dec. 19
Bancroft(Joseph)& Sons Co., pf.(an.). 144 Oct. 31 Holders of rec. Oct. 15
Northern N V /4 tulles pref. (guar.).. 114 Nov. 1 Holders of reg. (It. 10
Sandhi'Petroleum (monthly)
*50e. 04. 20 *Holden of rec. Sept.30
'Northern Ontario Power, own.(qua:.)..
Bankers Investment Trust of America60e Oct. 26 Holders of roe Sept 30
6% preferred (gum I
Debenture stock (guar.)
*15% Dee. 31 *Holders of roe. Dec. 15
114 Oct 26 Holden of roc Sept 30
North. States Power (Del.), corn. A (ln) 2
Holders of recs. Oct. 15
Beatty Bros., ltd.. pref. A(guar.)
$
Nov. 2 Holders of rec. Sept.30
114
5° Nov.
7% preferred (guar.)
Holders of roe. Oct. 15
Belding-Corticeill. Ltd. corn. (guar.)._
14( Oct. 20 Holders of rec. Sept. 30
Beneficial Industrial Loan,
14 Oct. 20 Holders of rec. Sept. 30
6% preferred (guar.)
' corn. (an.).. 3744e. Oct. 30 Holders of rec. Ott. 15
Ghlo Public Service, 7% pref. (mthly.) fse I-3e Nov. 2 Holden of rec. Oct. lea
Preferred, serles A (guar.)
87340. Oct. 30 Holders of rec. Oct. 15
6% preferred (monthly)
122
Nov. 14 Holders of roe. Oct. lea
50e. Nov. 2 Holders of roe. Oct. 15a Bethlehem Steel, ooto (Marl
14% preferred (monthly)
412-30 Nov. 2 Holders of tee. Oct. 154 Hinman Elec. Co., corn,(guar)
i
re.
. Nov. 'Holders of rec. Oct. 15
Grange & Rockland Elec. Co. (guar.)... "2 Nov. 2'Holders of rec. Oct. 25
$7 preferred (guar.)
*31.75 Nov. 2 "Holders of rec. Oct. 15
;Pacific Lighting common (gear.)
750. Nov.16 Holders of rec. Oct. 20a Bliss(E. W.)CoPacific Northwest Pub Sorel ef2 Jan2'32 Holders of rec. Dec. 21
Corn,(pay,In corn.stock)
7.2% first preferred (guar
!Hoch Bros Tobacco, corn. (anar.)........ "57fee Nov. le *Holders of roe Nov. 10
.1.80 Nov. 1 *Holden' of roc. OM 15
•114 Dee. 31 'Holders of roe. Dee. 34
Pacific Public Service. let pref.(No.1)__ 324c Nov. 2 Holders of rec. Oct. 15
Preferred (guar.).
!Penna. Power Co., 36.60 pref. (mthly.).
55c. Nov.
Holders of roc Oct 20a Bloomingdale Bros.. pref. (guar.)
144 Nov. 2 Holders of rec. Oct. 20a
$6.60 preferred (monthly)
55e. Deo.
Holders of roe. Nov 204 Blue Ridge Corp., cony. pref. (guar.).- (k) Dec. 1 Holders of rec. Nov. 5
sr rue. en isomers of use, Orr 154
$6 preferred (guar.)
$1.50 Dee. I Holders of rec. Nov 20a eon emi co nom mem S (guar.)
[Peoples Gas Light & Coke (guar.)
750 Dee. 1 Holders of rec. Nov. 14a
2
Oct. 17 Holders of rec. Oct. 34 Borden Company, corn.(quer.)
IPhiladelobla Co.. corn.(guar.)
20e. Oct. 31 Holders of roe. Oct. 1
'26e Dee. 1 *Holders of tee Nov. 14
Israel), (E. J.) & Son• (quart
ell
Dee. 1 'Holders of roe Nov 20
Common (extra)
15c. Oct. 31 Holden of rec. Oct. 1
Brennan Packing. et A (guar.)
preterred
$1 50 Nov. 2 Holders of rect. Oct. la
•25e Dee. 1 *Holden or ne Nov 20
Clam 9 (goer
htladelphia Elec. Co.. corn.(guar.).- "45c. Nov. 1 *Holders of rec. Oct. 10
374e Oct. 26 Holders of rec. Oct. 104
Briggs Manufacturing (guar.)
$1.25 Nov. 2 Holders of rec. Oct. 10
Broadway Market Corp.. corn.(guar.).- *20e. Oct. 20 "Holders of rec. Oct. 1
$5 preferred (guar.)
$1.75 Nov. 2 Holders of rec. Oct. la
endla Rapid Transit. preferred
•30e. Oct. 20 "Holders of roe.. ore I
Preferred .
Brown Shoe, pref. (guar.)
Potomac Edison Co.. 7% pref. (guar.).- '144 Nov. 2 *Holders of rec. Oct. 20
134 Nov. 2 Holders of roe. Oct. 20a
6% preferred (guar.)
954 Nov. 2 *Holders of reit Oct. 20
*25e. Nov. 1 "Holden of roe. Nov. 1
Buck Hills Falls Co.(guar.)
•154 Nov. 2 "Holders of tee. Oct. 26
Bunte Bros.. pref. (guar.)
Mower Corp. of Canada, Ltd.,con.(AL) 50c. Nov.20 Holders of rec. Oct. 31
6214e Nov. 2 Hoiden of ree Oct 9e
Public %rein of Colo., 7% pt.(mthly.) 58 1-3e Nov. 2 Holders of rec. Oct. 15a Bush Terminal, common (inar.)
Sac. NoV. 2 Holders of rec. Oct. 15a Byers(A M I ('lo.. pre (guar.)
144 Nov. 2 Holders of roe Ott. 15e
6% preferred (monthly)
41 2-3r Nov. 2 Holders of rec. Oct. 15a Calumet & Arizona kilning
5% preferred (monthly)
$2.50 Oct. 19 Holders of rec. Oct. 34
ne. 11 Homer. Iif re, NO, 30
rub.Sere. Corp. of N. J.,6% pt.(mthly) *600. Oct. 31 *Holders of rec. Oct. la ranade Wire & cable Mang A Muse)._ t
/Public Service of Northern IllinoisCanadian Bronze, Ltd., corn.(guar.)._ 6240 Nov. 1 Holders of rec. Oct. 20
114 Nov. 1 Holders of tee Oct. 20
No par common (guar.)
Nov. 2'Holders of rec. Oct. 15
Preferred (guar.)
*52
.
2
$100 par common (guar.)
Nov. 2 *Holders of rec. Oct. 15
Canadian Car & Fdy. ordinary (gnat.).
44c, Nov.30 Holders of rec. No;. 13
6% preferred (guar.)
sit) Nov. 2'Holders of rec. Oct. 15
750. Nov. 2 Holden of roe. Oct. 16
Canadian Dredge & Dock,corn.
_
•14 Nov. 2 *Holders of rec. Oct. 15
7% preferred (gnat.)
Preferred (guar.)
154 Nov. 2 Holders of rec.(let. 16
'Rhode told Public Sere.te. A (guar.)
Nov. 2 Holders of rec. Oct. 15a Canadian Industries, common (guar.)
*6214c Oet. 31 *Holden of roe. Pent 30
Preferred (guar.)
511e. Nov.
Common (extra)
Holders of rec. Oct. 15a
•25c. Oct. 81 "Holders of tee. Sept.30
(Rockland Light & Power (guar.)
*Holders of rec. Oct. 15
*23o. Nov.
Canadian Pow. & Pap. Invest., pf.(aAL) 621..e Nov lft Holders of rec. Oct. 20
•Beaboard Public Service, 26 prof.(an.).. •$1.50 Dee.
"Holden of rec. Nov. 10
Carnation Co., pref. (guar.)
'154 Jan 212 'Holders of rec. Do'. 21
$3.25 preferred (guar.)
*81 He Dee. 1 "Holders of tee. Nov. 10
Cartier. foe,.
Inc. pref. (guar.)
'81.75 Oct. 31 'Holders of rec. Oct. 15
Southern Calif. Edison Co.. corn.(gu.)_
50c. Nov. 15 Hollers of rec. Oct. 204 Central III.
Corp., pref.(AL). *3714e Nov. 1 'Holders of rec. Oct. 20
Bon.Calif. Gas Corp.,$11.50 p1.
Centrifugal Pipe (guar.)
- $1.625 Nov.30 Holden of rec. Oct. 31
15c. Nov 16 Holden of roe Noe 5
Southern Canada Power. con,. (guar.),...
25e. Nov. 16 Holders of rec. Oct. 31
Century
Oct 31
2
Standard Oar & Mee.. corn. (gear.).... 87H c. Oct. 26 Holders of rec. Sept. 30a Century Ribbon Mille, Inc., pf. PALL_
154 Dec. 1 Holders of rec. Nov.20.
$6 prior preference (guar.)
$1.50 Oct. 20 Holders of reo. Sept. 30e Cerro de Pasco Copper (guar.)
25e. Nov. 2 Holders of rec. Oct. 15a
$7 prior preference (guar.)
$1,75 Oct. 26 Holders of reit Sept. 354 Cherry-Burrell Corp., pref.(guar.)
•1 34 Nov. 1 'Holders of roe. Oct. 15
Stand.Pow & I. em.& eons. 13 (guar) 50c. Dee. 1 Holders of roe. Nov 12
Chicago Yellow Cab (monthly)
25e. Nov. 2 Holders of roe Oat. 204
$7 preferred qua'.)
51.75 Nov. 2 Holders of rec. Oct. 16
Monthly
25e, Dec. 1 Holders of roe. Nov. 20a
Standard Tele- bone Co. $7 pref (AO- •$1 75 Nov. 2 *Holders of rec. Oct. IS
Churngold Corp. (quarterly)
•350. Nov 16 'Hoiden of roe Nov
Suburban Electro: .securitieS
•134 Nov. 1 *Holders of rec. Oct. 15
Cincinnati Advertising Produces (guar .14
.75e Jan 1'32 *Holders of roe Dee 19
'Telluride Power corn. (guar.)
slMe. Oct. 20 *Holders of rec. Sept.30
Dec te Manklera nf con n.0 1
Cineiroati Rubber Mfg. e% pref. (qtr.
'Tennessee He Pow..
1st Pt.(go.). 14 Jan. 2 Holders of rim. Doc. 15
Cities Serviee Co.,rom (monthly.)
i
e Nov. 2 Holders of rec. Oct. 15a
(Pe first preferred (guar.)
Nov.
2 Holders of rec. Oct. I5a
14 Jan. 2 Holders of rec. Dec. 15
60.
Common (payable In common stock)
7% first prefer red (guar.)
Nov. 2 Holden of ere. Oct. 15a
Preferred II (monthly)
141 Jan. 2 Holders of rec. Dec. 15
7.2% first ',referred (guar.)
„. on:
,,lidr
.11
2 144)
.6.3
111541
.
1.80 Jan. 2 Holders of roe. Dee. 15
50o.
,
Nov)
Preferred and pref. BEI (monthly)
.250
()% first preferred (monthly)
ear' tSar,
Cityrrolon Corp re,m (gnu )
50c. Nov. 2 Holders of rec. Oct. 15
6% first preferred imon(hly)
750, Nov. 2 Holders of rec. Oct. 21a
50e. Dec. 1 Holders of rec. Nov.14
Cluett, Peabody & Co. corn. (gnat.)
6% first preferred (monthly)
50e. Jan2'32 Holders of rec. Dec. 15
Colgate-Palmolive-Poet Co.. aom.(Om)- 62140. Oct. 21 Holders of roe. Oct. 64
7.2% first preferred (monthly)
114 re 1'32 Holders of roe. Dee. 104
60r. Nov. 2 Holden of rec. Oct. 15
Preferred (guar.)
7.2% first preferred (monthly)
51 Nov. 2 Holders of rec. Oct. 16a
60c. Dec.
Columbian Carbon (guar.)
Holders
of
rec.
Nov.
14
7.2% first preferred smonthle)
Oct. 31 *Holders of me. Oct. 15
*20c.
60e. Jan2'3 Holders of rec. Dec. 15
Community Finance Service, cons
Toledo Edison co.. 7% pt,(monthly)._ 68 1-3r Nov.
"90. Oct. 31 "Holders of rec. Oct 15
Preferred A (guar.)
Holders of roc. Oct. 15a
6% preferred (monthly)
31 *Floelers of rec. Oct. 15
Oct.
'7%c
50c
(gnat)
Nov
Preferred A
Holders otter. Oct. 150
5% preferred (monthly)
41 2-3e Nov.
Holders of rec. Oct. 15a Community State Corp.. 'grew A (oliar.) •1240 Dee. 31 *Holders of roe Dee. 23
United Light & Power. corn. A &A (art,
"100. Nov. 1 *Holders of rec. Oct. 3
Management
(an.).
Corp.
Invest.
Conn.
25e.
Nov.
Holders
of
rec.
Oct.
15a
•1e4 Nov. 1 *Holders of roe.
Un. Lt. & Ry.(Del.) 7% pf.(mthle.).*5 8 1-3e. Nov. *Holders
Preferred(guar.)
of rec. Oct. 15
6.30% prior pref. (monthly)
,10
•53e. Nov. *Holders of rec. Oct. 15
115
4
445a
Consol Chem. Indredries. class A (gu.). •37,4e Nov. 1 *Holders of rec. Oct.
6% prior pref. (monthly)
14 Nov
.
. 2 HIlcdolddeersrs ft Te
(go.).
te:
:
pf.
Corp.,
pr.
Consolidated
'50e. Nov.
*Holders
of
rec.
Oct. 15
Meted Ohio Utilities,6% Pr. Prof. PAO '114 Nov.
154
(gear.)
of
*Holders of rec. Oct. 10
it.S. Electric Power. Prof.(guar.)
20o. Nov. 2 Holders of rec. Oct. 15
Consolidated Industries. Ltd. (guar.)
•14 Nov.
*Holders of rec. Oct. 3
Utica Gas & Elee.. $6 pref. Wear.)
Consolidated Laundrlee. pref. (guar.).* $1.875 Nov. 2 *Bolden of roe (let. 15
.
$1.50 Nov. 'Holders of roe. Oct. 20
11P7eet Penn Elec. Co.. 7% prof.
"144 Nov. I *Holders of rec. Oct. 14
14( Nov.16 Holders of rec. Oct. 20a Coon (W.B.) Co., pref. (guar.)
6% preferred (guar.)
144 Nov.16 Holders of roe. Oct. 20a Corporation Secure. Co.(Chic.). pi.(On) (1) Nov. 2 *Holders of rec. Oct. 10
West Penn. Power
7% pref.(guar.) let Nov.
3
Nov. 2 Holders of roe. Oct. 20
Holders of rec. Oct. 54 Cudahy Packing, 8% Preferred
6% preferred (guar.)
Co..
34 Nov. 2 Holders of roe Oct. 20
14 Nov.
7% preferred
Holders of roe. Oct. 64
2.g
Name of Company.
[VOL. 133.
FINANCIAL CHRONICLE
2566
Per
When
Cent. Payable
Boob Closed.
Days Inclusive.
Name of Company.
-
Miscellaneous (Continued).
Corn Products Refining. corn.(quar.)% Oct. 20 Holders of rec. Oct. 3a
*6214e Nov. 1 *Holders of rec. Oct. 15
Cuneo Press, corn.(guar.)
Preferred (guar.)
•134 Dee, 15 *Holders of ree. Deo. 1
Curtis Publishing. corn.(monthly)
33 1-3c Nov. 2 Holders of rec. Oct. 20a
Preferred) (guar
$1.75 Jan. 1 Holders of rec. Dec. 196
Davidson Co.. pref. (quay.)
•134 Dee. 31 *Holders of reo. Doe. 20
Preferred (guar.)
*HO Jan 1'32 *Holders of roe. Dee. 20
Dennison Manufacturing, pref.(quar.)
134 Nov. 1 Holders of res. Oct. 20
Debenture stook (guar.)
2 Nov. 1 Holders of roe. Oct. 20
Dr.Pepper Co..common (guar.)
30o Dec. 1 Holders of reo. Nov 15
Dome Mines,Ltd.(guar.)
25e. Oct. 20 Holders of roe. Sept.30a
Dominion Bridge. corn. (Misr.)
750 Nov. 14 Holders of roc Oat. 15
Dominion Tar & Chemical, pref.(guar.) 154 Nov. 1 Holders of reo. Oct. 5
Douglas Aircraft, Inc
60o Oct. 20 Holders of reo. Sept.10a
Dupont(E.1.) de Nemours Co.
Debenture stock (guar.)
134 Oct. 24 Holders of ree. Oct. 10a
25o. Nov. 2 Holders of reo. Sept.50
Eastern Dairies, Ltd.,com.(guar.)
75o. Jan 1'32 Holders of reo. July 1
Eastern Food Corp., class A (quar.)75c. Ap 1'32
Class A (guar.)
750. lly 1'32
Class A (guar.)
Eastern Utilitiee Investing$1.75 Nov. 2 Holders of reo. Sept.30
Participating preferred (guar.)
$1.50 Dec. 1 Holders of reo. Oct. 30
$8 preferred (guar.)
$1.75 Dec.1 Holders of reo. Oct. 30
$7 preferred (guar.)
$1.25 Jan2'32 Holders of reo. Nov.30
$5 prior preferred (guar.)
250 Nov. 2 Holders of reo. Oct. 15a
Eaton Axle & Spring. corn.(guar.)
Edison Bros. Storm, common (quar.)__. 1234o Oct. 20 Holders of roe. Sept.30
$1.25 Jan 1'32 Holders of ree. Dec. 19
Electric Controller dr Mfg.(guar.)
Electric Securities Corp.$6 pf. (guar.)-- *$1.25 Nov. 2 *Holders of rect. Oct. 15
$1.25 Nov. 2 Holders of reo. Oct. 15a
$5 preferred (guar.)
Nov. 2 Holders of reo. Oct. 15
$1
Eureka Pipe Line (quar)
*60e. Nov. 15 *Holders of roe. Nov. 5
Ewa Plantation (guar.)
250. Oct. 31 Holders of rec. Oct. 15a
Exchange Buffet(guar.)
*134 Nov. 1 *Holders of rec. Oct. 20
Faber, Coe & Gregg. pref.(guar.)
*134 Febl'32 *Hold,of reo. Jan. 20'32
Preferred (guar.)
*25o. Nov. 2 *Holders of reo. Oct. 20
Fair (The) corn. (quar.)
•134 Nov. 2 *Holders of reo. Oct. 20
Preferred (guar.)
Federal Elec. Co. inc., $8 pr. cif.(gu.)- $1.50 Nov. 1 Holders of rec. Oct. 15
$1.75 Nov. 1 Holders of roe. Oct. 15
$7 cum. preferred (quay.)
1% Nov. 1 Holders of reo. Oct. 15
7% preferred (guar.)
250. Oct. 20 Holders of reo. Oct. 50
Firestone Tire dr Rubber (guar.)
*600. Oct. 81 *Holders of reo. Oct. 15
Ford Hotels Co.. Inc
*134 Nov.16 *Holders of roe. Oct. 31
Foreign Power Securities,6% pf.(MO
25o. Nov.14 Holders of reo. Oct. 31
Foundation Co. of Canada. emn.(WO
•20e. Nov. 2 *Holders of reo. Oct. 26
Fuller Brush. class A (quay.)
Fuller (Geo. A.) Co.of Canada, pf.(qu.) *134 Nov. 1 *Holders of rec. Oct. 15
•8734o Dec. 1 'Holders of reo. Nov.15
Galland Mercantile Laundry (fulir.)
•13( Nov. 1 *Holders or rec. Oct. 20
Gardner Denver Co.. pref.(guar.)
Nov. 2 Holders of rec. Oct. 16a
General Cigar Co., Inc., cons.(guar.).- $1
134 Dec. 1 Holders of reo. Nov. 21a
Preferred (guar.)
400. Oct. 24 Holders of reo. Oct. 26
General Electric, corn. (guar.)
150. Oct. 24 Holders of rec. Oct. 2a
Special stock (guar.)
75o. Nov. 2 Holders of reo. Oct. 15a
General Foods,common (Oiler.)
750. Nov. 1 Holders of ree. Oct. 15a
General Mills. common (guar.)
$1.25 Nov. 2 Holders of reo. Oct. 50
General Motors, $5 pref. (guar.)
General Outdoor Adver.. pref. (guar.)._ *134 Nov. 15 *Holders of reo. Nov. 5
506. Nov. 2 Holders of res. Oct. 15
General Stockyards. common (quar.)__
250. Nov. 2 Holders of rec. Oct. 15
Common (extra)
$1.50 Nov. 2 Holders of reo. Oct. 15
$6 preferred (quar.)
•75o. Oct. 31 *Holders of rec. Oct. 20
General Tire & Rubber, corn.(guar.)
*31.50 Nov. 2 *Holders of rec. Oct. 15
Georgian, Inc., $6 pref. (quar.)
•65o. Jan1'32 *Holders of ree. Dec. 19
Gibson Art Co., common (Guar.)
$1.25 Nov. 2 Holders of ree. Oct. la
Gillette Safety Razor, pref.(quar.)
Gimbel Bros.. prof.(guar.)
134 Nov. 1 Holders of rec. Oct. 15a
62)4 o Nov. 2 Holders of rel. Oct. 106
Gold Dust Corp., common (guar.)
750. Nov. 1 Holders of reo. Oct. la
Goodyear Tire & Rubber. corn.(quar.)
134 Nov. 2 Holders of reo. Oct. 90
Gotham Bilk Hosiery, pref. (guar.).Granby Cons'd Min.Smelt dr Pow.(gm) 250. Nov. 2 Holders of reo. Oct. 16a
Grand (F.& W.) 5-10-25c. Ste.. pf.(Qu.) 154 Nov. 1 Holders of reo. Oct. 196
Granite-HI-Metallic Consol. Mining*30o. Dec. 15 *Holders of reo. Doe. 1
Corn.(No. 1)
•200. Dee. 31 *Holders of reo. Dec. 15
Grant Lunch Corp., 8% prof. (quar.)
•134 Nov. 1 *Holders of reo. Oct. 20
Omen Watch,preferred (guar.)
Handley Page Ltd.Oct. 21 *Holders of reo. Oct. 1
*ra5
Am. dep. rots, for partlo. PI reg
134 Oct 20 Holders of reo. Oot. 100
Harbnon-Walker Refrao.. Pref.(quar.)
Nov.80 *Holders of toe. Nov.14
Hart, Schaffner & Marx, oom.(qual.).. *11
134 Nov.14 Holders of rec. Nov. 2a
Hercules Powder. pref.(guar.)
Hershey Chocolate, common (quar.)--.. •$1.25 Nov.15 *Holders of res. Oct. 25
•$1 Nov.15 *Holders of reo. Oct. 25
Preferred (guar.)
Janr32 *Holders of roe. Dee. 20
*2
Hewitt Bros. Soap. pref.(guar.)
Hibbard,Spencer,Bartlett & Co.(mihlY) 20c. Oct. 30 Holders of res. Oct. 23
200. Nov.27 Holders of reo. Nov.20
Monthly
20e. Dec. 24 Holders of reo. Dec. 18
Monthly
50o. Doe, 1 Holders of res. Nov. 146
Hires (Charles E.) Co.. cons. A (quar.)
65e. Oct. 26 Holders of res. Oct. 20a
Homestake Mining (monthly)
62340 Nov. 1 Holders of reo. Oct.410
Horn & Hardart(N.Y.). ann.(guaz.)
•750. Deo. 26 *Holders of reo. Dec. 11
HosIdne Mfg.(guar.)
'154 Dec. 31 *Holders of roe. Dec. 20
Howes Bros.. 7% preferred (guar.)
oni Des. 31 'Holders of reo Doe. 20
61. preferred (quar)
60e. Nov. dl Holders of rec. Oct. 15
Humberstone Shoe,com.(guar.)
•750. Nov. 1 *Holders of rec. Oct. 21
(quar.)
Illinois Pacific Coast Co.. pref.
Imperial Chemical Industries*wl% Deo. 7 *Holders of reo. Oct. 14
Amer. dep. rots, for ord. reg. she
Imperial Sugar $7 pref.-See note m.
25c. Nov. 14 Holders of reo. Oct. 23
Indiana Pipe Line (quar.)
•25e. Dec. 1 *Holders of rec. Nov. 1
Industrial & Power Securities (guar.)
Janl'32 *Holders of reo. Dee. 25
International Celluootton, corn. (quar.) 0$1
0134 Jan112 *Holders of rec. Dec. 25
First preferred (guar.)
International Cigar Mashy., corn.(gu.). 6234c Nov. 2 Holders of reo. Oct. 22
Internat. Nickel of Canada. pref.(gu.)- 134 Nov. 2 Holders of rec. Oct. 36
International Printing Ink, pref.(guar.). 134 Nov. 1 Holders of ree. Oct. 13a
International Shoe, Prof.(monthly).. 50o. Nov. 1 Holders of reo. Oct. 15
•500. Doe. 1 *Holders of res. Nov. 15
Preferred (monthly)
Ivanhoe Foods,Inc..$3.50 prof.(guar.)- *873lc Jrua'32 *Holders of res. Dec. 15
•150. Nov. 1 *Holders of rec. Oct. 15
Jantzen Knitting, corn.(guar.)
•134 Dec. 1 *Holders of rec. Nov. 25
Preferred (quar.)
91 Oct. 23 *Holders of reo. Oct. 2
Jersey Mtge. & Title Guar
Kalamazoo Vegetable Parehment(Gu.)-. •150. Dec. 31 •Boulors of reo. Deo. 21
250. Oct. 28 Holders of rec. Oct. 106
corn.
Kaufmann Dept. Storer
25o. Nov. 2 Holders of rec. Oct. 15a
Kayser (Julius) & Co. ((mar.)
J'n 1'32 *Holders of rec. Dec. 20
•750.
corn.
(quar.)
Co..
Kemper-Thomas
*134 Dec. 1 *Holders of rec. Nov. 20
Preferred (guar.)
'3734c Nov.20 *Holders of roe. Oct. 31
Knudson Creamery. el. A & B
25e. Nov. 2 Holders of roe. Oct. 9a
Kress (S. 11.) & Co.. Wm.(quar.)
r50o. Nov. 2 Holders of reo. Oct. 9a
Common (extra)
Nov. 2 *Holders of reo. Oct. 9
*15o.
(guar.)
Special preferred
25o. Dec. 1 Holders of reo. Nov. 10a
Kroger Grocery & Baking, corn.(guar.). *134
Nov. 2 *Holders of roe. Oct. 20
(guar.)
preferred
Second
134 Jan2'32 Holders of roe. Dec. 19
6% first preferred (guar.)
151 Febl'32 Holders of reo. Jan. 20
7% second preferred (Oiler.)
50e. Dec. 15 Holders of rec. Deo. 1
Lake Shore Mines (guar.)
500. Dec. 15 Holders of reo. Dee, 1
Extra
75o. Nov. 15 Holders of Mo. Nov. 5
Landis Machine, cons. (guar.)
*134 Dee. 15 *Holders of roe. Dec. 5
Preferred (guar.)
134 Nov. 1 Holders of reo. Oct. 15
prof.
(guar).
Inc.,
7%
Bryant,
Lane
'1(4 Nov. 2 *Holders of rec. Oct. 21
Lawbeck Corp., pref.(guar.)
•134 Nov. 1 *Holders of reo. Oct. 20
Lazarus(F. dv R.) hc Co.. pref.(quar.)
•40o. Nov. 16 *Holders of rec. Nov. 5
Ledoourt Realty, COm.(guar.)
*Holders of roe. Dee. 15
Limestone Products),7% Prel.(quar.)._ *62 34e Janl 12 *Holds. of reelvfar 15'32
'62340 Aprl'32
7% Preferred (guar.)
Nov. 15 to Nov. 30
1
Dec.
40o.
Link-Belt Co., common (guar.)
154 Jan2'32 Holders of roe. Dec. 15
614% preferred (guar.)
50o. Nov. 1 Holders of re0. Oct. 20a
1.1(Bild Carbonic Corp. (guar.)
Lock joint Pipe CO., corn.(monthly).- •670. Oct. 31 *Holders of roe. Oct. 31
*670. Nov.30 *Holders of reo. Nov.30
Commoo (monthly)
•67o. Doe. 31 *Holders or rec. Dec. 81
Common (monthly)
Doe. $1 *Holders of rec. Des, 31
*2
Prefered (guar.)
Loose-Wiles Biscuit, common (quiz.).... 65e, Nov. 1 Holders of rec. Oct. 19a
10o, Nov. 1 Holders of rec. Oct. 19a
Common (extra)
Nov. 2 Holders of reo. Oct. 170
Lord& Taylor, 2nd. pref.(quar.)
2
Per
When
Cent. Payable.
-
Books Closed,
Days Inclusive.
Miscellaneous (Continued).
Lucky Tiger Combination Gold Min.
Common
•3o. Oct. 20 *Holders of Teo. Oat. 10
Common
'Sc, an2032 *Holders of reo. Jan. 10
Common
*80. Ap20'32 *Holders of reo. Apr. 10
Lunkenheimer Co.. pref. (quar.)
*I% Jan 1.32 *Holders of reo. Dec. 22
MacKinnon Steel, prof.(guar.)
151 Nov. 2 Holders of roe. Oct. 15
Macy(R. H.) & Co., corn.(guar.)
760. Nov. 16 Holders of rec. Oct. 234
Magnin (I.) & Co..6% pref.(guar.)._
Nov. 15 *Holders of reo. Nov415
Managed Investments (stock div.)
*a% Nov. 2 *Holders of reo. Oct. 10
Manufact. Dist. Co.(guar.)
•250. Oct. 20 *Holders of reo. Oct. 10
Marathon Razor Blade. Ina.(monthly). •334e. Nov.15 *Holders 01 reo. Nov. 1
Monthly
Sloe, 16 *Holders of ree Dee. 1
Massachusetts Investors Trust (qu.)
29e. Oct. 20 Holders of reo. Oct. 8
Maytag Company, 1st pref.(guar.)._ $1.50 Nov. 2 Holders of reo. Oct. 16a
Preference (guar.)
75c. Nov. 2 Holders of reo. Oct. 113a
McCall Corporation (guar.)
62 o,c Nov. 2 Holders of rec. Oct. 200
McCrory Stores. pref. (quay.)
134 Nov. 2 Holders of rec. Oct. 20a
Melville Shoe Corp., corn.(quay.)
50c. Nov. 1 Holders of reo. Oct. 16a
First preferred (quay.)
'134 Nov. 1 *Holders of reo. Oct. 16
Second preferred (guar.)
7550* Nov. 1 *Holders of reo. Oct. 16
Merck Corporation. pref. (guar.)
an2'32 Holders of reo. Doe, 17
2
Metropolitan IndustriesAllotment certificates (quay.)
*75o. Nov. 1 *Holders of reo. Oct. 20
Mexican Petroleum, pref.(guar.)
2
Oct. 20 Holders of rec. Sept. 30a
Meyer-Blanke Co.. common (guar.)._ •15c. Nov. lb *Holders of reo. Nov. 5
Miokelberry's Food ProductCommon (Payable in corn. dock)......
'
1234 Nov 16 *Holders of reo. Nov. 2
Minnesota Valley Can, pref.(quar.)
01% Nov. 1 *Holders of me.Oct. 20
Preferred ((Mar.)
194 Febl'32 Hold, of reo. Jan.20'32
Miss. Valley Utilities Investment$6 prior lien, Prof.(quay.)
$1.50 Nov. 2 Holders of reo. Oct. 15
Modine Mfg., corn. (quar.)
*50o. Nov. 1 *Holders of rec. Oen. 20
Munsingwear Corp., corn. (quar.)
50e. Dec. 1 Holders of res. Nov.166
National Carbon, pref. (guar.)
Nov. 2 Holders of reo. Oct. 20
2
National Casket, corn
*$2
Nov.14 *Holders of rec. Oct. 29
National Dairy Products, corn.(quar,)... 65e. Jan. 2 Holders of reo. Dee, act
PreferredA & B (quar.)
154 Jan. 2 Holders of rec. Dec. 3
Nat. Distillers Products corn. (truer,).. 50c Nov. 2 Holders of rec. Oct. 154
National Lead, Prof.B (guar.)
134 Nov. 2 Holders of reo. Oct. 186
National Refining corn. (guar.)
'12340 Nov. 15 *Holders of rec. Nov. 1
National Tea, preferred (guar.)
13%0. Nov. 1 Holders of ree. Oct. 14
•134 Dec. 1 *Holders of reo. Nov.20
Neiman-Marcus Co.. pref. (quiz.)
Nekrner Bros., Inc., pref. (quar.)
Nov. 1 *Holders of reo. Oct. 15
Neptune Meter. preferred(guar.)
2
Nov.16 Holders of reo. Nov. 10
Nettleton (A. E.) Co.. pref. (guar.).
*1% Nov. 1
New A mstrdam Casualty(guar.)
*50c. Nov. 2 *Holders of rec. Oct. 19
Now England Grain Prod.Febl'32 *Hold, of rect. Jan. 14'32
Corn.(1-100 share in Prof. A Mock)
•$1.75 Jan2a32 *Holders of roe. Dee. 20
$7 Preferred ((rear.)
•31.50 la 15'32 *Hold, of fee. Jan. 2'39
Preferred A (guar.)
500. Nov. 10 Holders of reo. Oct. 20a
N.J. Zino (quar.)
New York Merchandise, Inc., corn.(gu.) 250. Nov. 2 Holders of reo. Oct. 20
131 Nov. 2 Holders of reo. Oct. 20
Preferred (quay.)
N. Y. Utilities, pref. (guar.)
*131 Nov. 2 *Holders of reo. Oct. 10
Newberry (J.J.)R1ty. Co.614% pf.(gu.) •1% Nov. 1 *Holders of reo. Oct. 16
•13.i Nov. 1 *Holders of reo. Oct. 16
8% preferred (guar.)
060e Nov.15 Holders of roe. Nov. 1
Nineteen Hundred Corp., oleos A kW
Northern Warren Corp., Prof.(guar.)._ *760. Dec. 1 Holders of roe. Nov.
Northwest Engineering, corn.(guar.)... •260. Nov. 1 Holders of reo. Oct. 15
Onomea Sugar Co.(monthly)
•200. Oct. 20 Holders of rec. Oct. 10
ran.'32
Ontario Tobacco Plantations. pref. (au.) 1
50o. Nov. 16 Holders of reo. Oct. 30a
Oppenhelm,Collins & Co.,Ine.,00m.(qua
Nov. 2 Holders of reo. Oct. 20a
Outlet Company,corn.(guar.)
$1
First preferred (quay.)
1% Nov. 2 Holders of reo. Oct. 20.
1% Nov. 2 Holders of reo. Oct. 20
Second preferred (guar.)
Pacific Finance Corp. of Cal.(Del.)•200. Nov. 1 *Holders of rec. Oct. 15
Preferred A (guar.)
•113%o Nov. 1 *Holders of rec. Oct. 15
Preferred C (guar.)
•17%o Nov. 1 *Holders of rec. Oct. 15
Preferred D (guar.)
•Iyi
Package Machinery. 1st pref.(guar.)
Nov. 2 *Holders of reo. Oct. 20
40o. Oct. 20 Holders of roe. Sept.30a
Pan-Am.Pet.&Tran.com.&corn (gu.)_
•1,4 Doe. 31 *Holders of roe. Deo. 80
Peabody Engineering. Prof. (guar.).
$1
Nov.16 Holders of reo. Nov. 5
Penmans Ltd., cons.(quar.)
1% Nov. 2 Holders of reo. Oct. 21
Preferred (guar.)
Pennsylvania Bankshares & Bee. pf.(au.) •62)4o Deo. 1 *Holders of Mo. Nov. 15
Nov. 2 *Holders of reo. Oct. 15
Pennsylvania Industries. Inc. pref.(en.) s1
•40e. Oct. 31 *Holders of reo. Sept.18
Philippe(L.) Inc., class A (quar.)
Phillips Jones Corp., pref.(guar.)
1% Nov. 2 Holders of rem Oct. 20a
Phoenix Finance Corp.,Prof.(quar.)
*50e. n10'32 *Holders of roe. Dee. 31
Pittsburgh Plate Glass (quar.)
0250. Dec. 31 *Holders of reo. Dec. 10
Pittsburgh United Corp., pref.(quar.).- 134 Nov. 2 Holders of reo. Oct. 10a
Planters Realty. pref.(monthly)
58 1-30. Nov. 1 Holders of reo. Oct. 25
Plymouth Cordage (quay.)
*134 Oct. 20 *Holders of roe. Sept. 30
Port Huron Sulphite & Paper
15e. Nov. 1 Holders of rec. Oct. 15
Procter & Gamble Co.. corn.(quar.)-60o. Nov.14 Holders of rec. Oct. 24.
Prudence Co., Inc., pref.,series of 1926- 3% Nov. 2 Holders or rec. Oct. 10
Public Utility Investing. pref. (guar.)
•$1.25 Nov. 2 *Holders of reo. Sept.30
Quaker Oats, pref. (quay.)
•1% Nov.30 *Holders of reo. Nov. 2
Randall Co..class A (quay.)
•50o. Nov. 1 *Holders of reo. Oct. 25
Reed(C.A.) Co.,class A (smar.)
50o. Nov. 1 Holders of reo. Oct. 21
Class B
12Ao Nov. 1 Holders of reo. Oct. 21
Republic Service, pref. (guar.)
*$1.50 Nov. 2 *Holders of rec. Oct. 15
Revere Copper hc Brass, pref.(quar.)
is' Nov. 2 Holders of reo. Oct. 10a
•500. Nov. 1 *Holders of reo. Oct. 15
Rich Ice Cream (guar.)
Roos Bros.(quay.)
•10o. Nov. 1 *Holden of reo. Oct. 15
.1
,
Rose's 5-10-25c. Stores, Pref. (quay.).... 1% Nov. 1 *Holders of reo. Oct. 20
Ruud Manufacturing .0/12131011 (quar.).. •50e Nov 1 *Holders of roe. Oot. 20
Ryerson (Joseph T.)& Son,Inc.(Guar.) *80o. Nov. 1 'Holders of reo. Oct. 19
250. Doe. 21 Dee. 11 to Deo. 21
St. Joseph Lead Co.(guar.)
250. Nov. 2 Holders of reo. Oct. 15a
Salt Creek Producers Assn. (quay.)
San Francisco Rem,Loan Assn.(guar.). •87%c Doe. 31 *Holders of rec. Dee. 15
Quarterly
•87)4c Mar.31 *Hold,of reo. Mar.15'32
'134 Nov.16 *Holders of reo. Nov. 2
Savage Arms, 2nd pref.(guar.)
Schumacher Wall Board, pref.(qua?.)... •50o. Nov. 15 *Holders of reo. Nov. 5
131 Nov. 1 Holders of rec. Oct. 16
Scott Paper. pref. A (guar.)
1% Nov. 1 Holders of reo. Oct. 16
6% preferred B (guar.)
62140/ Nov. 2 Holders of reo. Oct. 90
Soars. Roebuck & Co. (guar.)
760. Nov. 1 Holders of rec. Oct. 15
Seeman Brothers,Inc., corn.(guar.)_ _
*250. Nov. 2 *Holders of reo. Oct. 16
Beton Leather (guar.)
87%c Nov. 1 Holders of reo. Oct. 16a
Sharp & Dolma.Inc.. pref. A (Quar.)
Des. 20 *Holders of reo Sept. 30
Sheaffer 1W. A.) Pen Co., pref. (guar.) *2
*1% Nov. 1 *Holders of rec. Oct.419
Silver (Isaac) & Bros., pref.(quay.)
Nov.dl Holders of rec. Oct. 15
Simpson (Robt.) CO.. Prof
3
Solvay Amer. Investment, pref. (guar.). 1% Nov. 16 Holders of reo. Oct. 150
Spitzer Properties Inc.,6% pref.(qu.) *3714o 00.626 *Holders of reo. Sept.30
Squibb(E.R.)& Sons, corn.(guar.)._ •25o. Nov. 1 *Holders of roe. Oct. 15
$31.50 Nov. 1 *Holders of reo. Oct. 15
First preferred (quar.)
•50o. Doe. 31 *Holders of rec. Dee, 20
Standard Steel-Spring (guar.)
Stanley Works, preferred (guar.)
'3754c Nov.16 *Holders of reo. Nov. 7
Steel Co.of Canada,corn.& pref. OW-- 43%e Nov. 2 Holders of rec. Oct. 7
*43%e Deo, 31 *Holders of reo. Dee. 16
Stlx, Baer & Fuller. prof.(quay.)
Superior Port). Cement, ol. A (mthly). •27)4e Nov. 1 *Holders of reo. Oct. 23
25e. Nov. 2 Holders of rec. Oct. 15a
SweetsCo.of America inner.)
31 Nov. 14 Holders of reo. Oct. 16
Swift International (extra)
15e. Nov. 2 Oct. 18 to Nov. 1
Tech-Hughes Gold Mines, Ltd
Extra
Sc. Nov. 2 Oct. 18 to Nov. 1
Telautograph Corp. (quay.)
35o. Nov. 2 Holders of reo. Oct. 15a
Thatcher Mfg., cony. Prof. ((Mar.)._
90o. Nov.15 Holders of ree. Nov. 5a
Thompson Products. Inc., pref.(qua?.). •1y4 Dec. I *Holders of reo. Nov. 20
Tide Water 011. pref. (guar.)
111 Nov.16 Holder, of reo. Oct. 17a
Tobacco Products Corp., claw A (quar.) 20o. Nov.16 Holders of rec. Oct. 26a
Tung Sol Lamp Works,corn.(quar.)
*25o. Nov. 1 *Holders of me. Oct. 20
1.750. Nov. 1 *Holders of reo. Oct. 20
Preferred (quar.)
Union 011 Associates (quar.)
*500. Nov. 10 *Holders of ree. Oct. 17
Union 011 Co.(quar.)
500. Nov. 10 Holders of roe. Oct. 17a
500. Doe. 1 Holders of rec. Nov.16a
United Biscuit of Amer., corn.(guar.)._
131 Nov. 1 Holders of rec. Oct. 16a
Preferred (guar.)
United Cigar Stores of Amer.. prof.(q11.) 1;4 Nov. 2 Holders of rec. Oct. as
United Linen Supply, class B (quar.)_ 441.50 Oct. 20 *Holders of IVO. Oct. 1
United Piece Dye Works,corn.(guar.)._
500. Nov. 1 Holders of reo. Oet. 186
1% Jan1'32 Holders of ree. Dee. 190
Preferred (quay.)
Name of Company.
2567
FINANCIAL CHRONICLE
OCT. 17 19311
When
Per
Cent. Payable.
Books Closed.
Days Inclusive.
The New York "Times" publishes regularly each week
returns of a number of banks and trust companies which are
not members of the New York Clearing House. The Public
National Bank & Trust Co. and Manufacturers Trust Co.,
having been admitted to membership in the New York
Clearing House Association on Dec. 11 1930, now report
weekly to the Association and the returns of these two banks
are therefore no longer shown below. The following are
the figures for the week ending Oct. 10:
Miscellaneous (Concluded).
50c. Oct. 31 Holders of rec. Sept. 303
United Profit-Sharing Corp., pref
25e. Nov. 2 Holders of rec. Oct. 20
United Verde Extension Mining (guar.).
Co.—
& British International
10e. Nov. 2 Holders of roe. Oct. 15
Common A (guar.)
75e. Nov. 2 Holders of rec. Oct. 15
$3 preferred lunar.)
Nov. 1 Holders of rec. Oct. 131
11.50
0.8. dr Foreign Secure., lot pref. (gil.)- 60e Oct. 2( Holders or rec Sept 300
corn.(qu
Cloned Stares Pipe &
'32 Holders of roc Dee 3I3
1n2O
50c
(guar.)
Common
be
@FedFRASER