Full text of Commercial and Financial Chronicle : October 17, 1946, Vol. 164, No. 4534, Section 1

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

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ESTABLISHED 1839

Final Edition

.Volume 164

New

Number 4534

in

•'

'■

'

ii

Mi

•

1

2 Sections-Section

Price 60 Cents

W

*

'

,

York, N. Y., Thursday, October 17, 1946

a

Copy

mi

m

How Stable Is The

Industrial Relations

Currency Black

'.

Frustrated and Perverted
Correspondent of the
"Chronicle"

from

of

hears

existence

such

One

given

writer

the-

concerns

the

price of dollar
currency
i n
black

the

in

market

Czechoslova¬

kia, where the
official rate is

Herbert M. Bratter

korunas

90

dollar.

there

was

A

•

_

advised

(Continued

on

lieve

that

society

by

f

r u

ic

But

treating
symptoms we

see

1927. Pictures taken at

page

Oct.

8

curity

dinner

New

of

Dealers

E. P. Schmidt

Dr.

lude ourselves

into

we

Se¬

York

Association

ap-

feather-bedding,
nothing, boycotts,

doing

enforce

local

United

States

laws

on page

address

by

the
all

—

1954)

Dr.

;

problems

■

Split-Up
f

.

of

to

be

far less formi-

dable than

people

most

Well

Washington, D.

Econ¬

in stimulating higher equivalent

1945

of

settlement

rapidly.
than

almost

many

on

pending,

will

be

had the country seen so
large strikes. The time lost
during the first half of

before

L. O. Hooper

was

time

lost in any previous year—

•

Prospectus

on

great

as

the

as

*'

(Continued

to

226,791,418

on page

1956)

shares

compared with 86,050,139 shares outstanding Jan. 1, 1946.
Are

we

permanently trending away from the long-established
(Continued

C., Sept.

on

page

1967)

-

State and

K

Havana Litho. Co.*

twice

1946

be

increased

better

dared hope

from them

capitalization of 185 com¬
completion of all the share subdivisions
and'

far

up

one

The great snags
relations. Never,

in human

were

had by noting that the

panies

payroll,

retail sales boomed to record-

It also means, so far as the number
of share units is concerned, an inflation of capi¬
may

any

breaking levels.

ownership.

inflation

/;

Employment,

incomes held

and

and

this

Prof. S. H. Slichter

contracts went

1, at least 185 companies have an¬
This means that there
has been a marked trend toward smaller shares,
for a share of stock is nothing but a fraction of

of

of

termin, ated

Since Jan.

measure

civilian

make

goods and the

nounced stock split-ups.

A

most

plants had
their equip¬
ment ready to

28, 1946.

Aerovox Corp.* ;

The

'

ion

feared.

(3) wider distribution has been accom¬
plished, but to a lesser extent than in 1920's;
(4) thinness of markets has not been thereby al¬
leviated; (5) we are following the British trend to¬
ward the low-priced share.
;

announced

Schmidt

of Business

Conference

omists,

of

Government

(Continued
♦An

of great stresses and strains.
ft 6 i rieering '
and business

prices;

talization.

defiance

increases,

wage

at

Vacuum Concrete

and

against mass picketing and vio¬
lence, demands for 50 to 100%

1950, 1951 and 1952.

Iiear on pages

its former potency

should not de¬

to

14 months after V-J

of the nation

one

Analyst adduces detailed statistics showing the extent of 1945 and 1946
split-ups, with the subsequent market performance of the split shares.
He concludes that (1) the "split-up craze" became
a bull market absurdity;
(2) through 1946 it lost

disturb¬

failure

contents

;

before the end

when

for

state

.vv:l'.v-6

,

By LUCIEN O. HOOPER

causes

ances.

the economic

The past year has been

The Stock

of the system¬

pay

detailed index of

For

What is

Day?

proved

symptoms

and the

favorable produc-

more

c o n v e r s

deal both with

the

adjustment; and (4)

wage

f:

must

we

strictionism

'?

(3) equitable

so

stration

that

is threatened.

dis-

_

index

be interrupted by recession be¬

may

too high and second round of wage in¬
Concludes serious recession may be avoided
are

our

is

with

that

page

Holds boom

capital.

prices and costs

tion conditions.

;

thinking
are effecting any cures.
a
friend
Strikes, internecine labor squab¬
1947)
bles, absenteeism, high labor turn¬
over,
reduced labor effort, re-

newspaperman

con¬

be-

Some

unity, disor¬
ganization and

account

failure and

in an extreme crisis may treat the symptoms but
quickly turns to the causes of the malady.
;
v

and

T*er

as

The physician
he also

sick

airport

cause

installs labor saving equipment and thus keep
Criticizes labor leaders as making unionism an end

Attacks Federal labor intervention

in dinnertable

conversations.

dustrial

of Federal and State laws has "ended in chaos."
apathy of public to monopolistic labor organizations.

Decries

about Europe.

One

(1) insta¬

as:

by: (1) curtailing credit in durable goods; (2) price reductions;

found

travels

one

labor troubles

tends overlapping

not be in great volume, there

its

present full employment to inordinate demand ]
for non-durable goods.
Contends this cannot last and & stable
economy will require larger output of durable goods and more in¬

creases

in itself.

is always a little of it to be

our

University

Economist ascribes

•

down prices.

(by Cable) — While
market trading in dollars

as

By SUMNER H. SLICHTER
Lamont University Professor, Harvard

/

.

unless management

VIENNA

may

of

Dr. Schmidt diagnoses causes

within countries.

black

V.'.S;'.. ./v V

bility of dollar; (2) coercive collective bargaining; (3) theory that
unions must raise purchasing power; and (4) communist influence
in the labor movement.
Holds unions do not raise "real wages,"

from day to day,
to country, and

country

.

i

throughout Central Europe. Dol¬

■'

'

Chamber of Commerce of USA

}

Correspondent reports black mar-'
ket trading in dollars is prevalent
lar price varies

By EMERSON P. SCHMIDT*

Director, Economic Research Department,

•

1 Special

i

;

c

rj By HERBERT M. BRATTER

Municipal

GULF, MOBILE
& OHIO RR.

Bonds

COMMON STOCK

request

Analysis

on

request

•:

Hirsch & Co.
Successors

to

HIRSCH, LILIENTHAL A
Members

York

New

Stock

CO.

R. H. Johnson & Go.
Established

Exchange

INVESTMENT

and other Exchanges

25 Broad Si., New York 4, N. Y.
HAnover

2-0600

Chicago
I

Teletype NT 1-210

Cleveland

Geneva

London

(Representative)

SECURITIES

64 Wail Street, New
BOSTON

Troy

Bond Department

THE NATIONAL CITY BANK HART SMITH &

1927

OF NEW YORK

PHILADELPHIA

Buffalo
Syracuse
Washington, D. C.
Scranton
Wilkes-Barre
New Haven
Woonsocket

Pittsburgh
Springfield

BOND

Dept. Teletype: NY 1-708

Conv.

Preferred

bull, holden & c2
Members

telephone- rector 2-6300




N. Y.

REctar

Security Dealers Ass'n.

Philadelphia

2-3600

Telephone'

*Prospectus

Company

INCORPORATED

45 Nassau Street

New York 5
Teletype N. Y. 1-676
Enterprise

/

6016

on

Exchange

Broadway, New York 5,
Bell

HAnover 2-0980

Teletype NY 1-305
Montreal

N. Y.

2-8600
Teletype NY 1-635
REctor

NATIONAL BANK
OF

THE

CITY OF NEW YORK

New

Brokerage

England

and Dealers

Hardy&Co.
Members New York Stock Exchange
Members New York Curb Exchange

St.

Tel. DIgby 4-7800

New York 4
Tele. NY 1-733

' 1

Public Service Co.
Values

r

available upon request

for Banks, Brokers

30 Broad

;

"

Toronto

r

Reynolds & Co.
Telephone:

Bond

ST., N. Y.

Appraisal of

request

Members New York Stock
120

New York

Service
\

*Twin Coach Company
Conv. Preferred

&

"

Solar Aircraft Company

MARKETS

Gearhart

THE CHASE

Dealers Assn.

Co. Com.

^Detroit Harvester

90c

BROKERS

Alloys, Inc.

Conv. Preferred

SECONDARY

Tel.

WILLIAM

BeU

Bond

Acme Aluminum

FINANCE

•

MEMBERS NEW YORK STOCK EXCHANGE

52

Dallas

CORPORATE

14 Wall St., New York 5.N.Y.

New York Security

Albany

Baltimore

CO.

Members

York S

ira haupt & co.
Exchange
Exchanges

Members New York Stock
and other Principal

Broadway
New York 6

111

REctor

£-3100

10 Post Office Sq.
Boston 9

Hancock 37S0

Tele. NY 1-2708
Direct

Private

Wire to Boston

THE COMMERCIAL & FINANCIAL

Trading Market* in: ~

CHRONICLE

Thursday, October 17, 1946

Common Stocks foi Life lnsurance Companies

Standard G & E Com

Rockwell-

Drug Products*
Alabama Mills

Manufacturing Co

Airways* $

Taca

Higgins, Inc*
'

Bojught-—Sold-r-Q uoted'

Prospectus

*With

p
'

Analysis,
SECURITIES CORP.
Established 1920
Security Dealers Assn.
Nfat'l Ass'n of Securities Dealers, Inc.
40 Bxohange PI., NVY. 5 HA 2-3773

Steiner, Rouse & Co.

Members N. Y.

BELL TELETYPE

Request

on

Members New York Stock

NY 1-423

25 Broad

Exchange

St., New York 4, N. Y.'

HAnover 2-0700

^

NY 1-1557

New Orleans, La.-Birmingham, Ala.

Direct wire* to

,/v

branch offices

oar

KINGAN & CO.

Bought

Sold

—

American Gas &

Preferred

&

Common

Power, k
Birmingham Electric *

Quoted

—■

Umpire Distv EletiQ * V
Northern Indiana P.S. B
Scrantoi* Elec^ Com.

South:Carolina

MaiioniliSellts

Stock Exchange
N;"Yt5»
A;

Members Baltimore

120 Broadway,

■

Elec^Cfef

vs

2-4230

WOrth

Members New Yo+k Stock Exchange

tpeiWT 1-1227

Monetary Inflation

»

50

Broadway WHitehall 4-8120

*

'

New York 4,

Re vie wing a

Electric
Common

t

Ferries|
:

Rogers Peet
&

Common

Preferred

Savoy Plata
19S6
Stock

5:1

3/6s,

:

,

Ex

N. Y.-

letter in which Thomas Jefferson denies right of one

gjpneratiqiF Tosaddle its ^ebtSsUiron^
asserts ^experience demonstrates great■'•* national debts extinguish
themselves and are passed on in form only. Points eut that through
decaying process of m onetary ii? fl atian, una voidable accompaniment
of deficit spending, payment of national debt is being exacted from
thepresent generation which day!by day is discovering truth for
itself in market place. Supports Mr. Jefferson's thesis human nature
being^what it is,YonstitutionaI restramts aIone canprevent immoderate borrowing and consequent disaster.

Preferred

&

'

Members New York. Curb Exchange

r:)

Belf System Teletype NY I-1D1B

r

By WILLIAM CHAMBERLAIN

•■'-hi*-VV'•

>

•

-.v-

Vanderhoef & Robinson
Curb Exchangem

Members New York

York b

31 Nassau Street, New

COrtlandt 7-4070

Telephone

Teletype NY 1-1548

Bell System

Byrndun Corporation
Stock

Common

A. S.

'

•

American Overseas

Campbell
Stock

Common

r

Haytian Corp,

?

Airlines
:

i

Punta fllegre Sugar

Wells

Struthers

stock

Common

Bought^-Sold^—Quoted

"

■'
-

-•>

.1-

\

,

i

.

,-/• \i[

£

•

{i

"•

Quotation* Uppn Request %

;

.*■

tyC PONNELL & Co.
New York 5

WHitehall 3-1223

Telephone:
:

Bell

:

,

NY 1-1843

Teletype

.

FA It It

:

•

20 Pine Street,

■

;

,

120

.

,,-v' ■': Memberi',
New York Stock Exchange
;<*!
New York Curb Exchange

New

BROADWAY, NEW YORK S

120

TeK

Members

ST.,

blocks

large

:

.

Over-the-Counter Stocks and Bonds.

Common

Circular

Members N. Y, Security

lEctor 2-7630

priced speculation—

Manufacturer

For

of

Stock

(

Banks, Brokers & Dealer*

SCRANTON ELECTRIC

,,

:'S

Eastern Racing Association

Phonograph Records
Common

.

.'

Common & Preferred

:

COMPANY

International Ocean Telegraph Co.

Common

.

-

25 Broad St.,

Stock

.

Pacific & Atlantic

.

BOUGHT

Trading Markets

—

SOLD

—

QUOTED

Tele. NY 1-2908




Telegraph Co.

Empire & Bay States Teleg. Co.
bought

Troster, Currie & Summers
Member New

York Security Dealers

Association

J-G-White 6 Company

Telephone HAnover 2-2400
Pnvau

Vires

to

Teletype 1-376-377-378

Buffalo—Cleveland—Detroit—Pittsburgh—St. Louis

incorporated

^

74 Trinity Place, New'Ydrk 6, N. Y.

Exchange

New York 4, N. Y.

HAnover 2-4771

Teletype NY 1-2361

Southern & Atlantic Tele. Co.

Simons, Linbnra & Co.
York

*

Western Union Leased
Line Stocks

j

•Prospectus on Request

New

*.

-

Currently selling around 2%

Members

,

120 Broadway, N. Y. 5, N. Y.

N. Y. 5

Keynote
Recordings, Inc.

.

Request

Ifembers New York Security Dealers Attn

Dealers Assn.

Hanover 2-4850
Teletypes—NY 1-1126 & 1127 '

A low

on

C. E. de Willers & Co.

SremewiCompan^
Bell

YORK

Publications

of
♦

57 Wall St.,

NEW

Macfadden

Department
maintained for the accumulation

placement - of

Coffee & Sugar Exchange

WALL

Attractive for Retail

"Special Situations"

or

CO.

Stock Exchange
Exch. Assoc. Member

TEL. HANOVER 2-9512

Our

Is

York

&

York

York Cuib

New

REctor 2-7815

New

37 WALL

STREET

2-9300

Tele. NY 1-1815

sold

-

quoted

Arnhold and S. Bleichroedei

NEW YORK 5

ESTABLISHED 1890
Tel. HAnover

-

INC

30

Broad St.

WHitehall

3-9200

New York
Teletype NY

1-5]

■Volume 164;

Number 4534

THE COMMERCIAL & FINANCIAL
CHRONICLE

Slilli®1N DE *1Wlim
Articles

and

News

How Stable Is the American Economy?
—Sumner H. Slichter

Significance of the Stock
Industrial

P.

Schmidt

and

Hollon

Smith

—William

,

Modern

vs.

——_—r—..—Cover

Chamberlain

Television

and

Boom

Bust—Can

—Barnie
The

-.1926

Winkelman

F.

of the

Status

Cycle

—1927

Waters

L.

Distribution—Allen
the

stockholders, particularly in simplification of ac¬
Sees further need for clarifications and lays down
principal qualification of a good report as one understandable by
simple layman.
Holds better reports improve relations between
counting data.

,

.

1927

Mont

Du

B.

corporations with their shareholders and public.

Averted?

Be

1928

—

——

Governmental

W.

Buyers' Market—A.

a

many* affili¬
ated
agencies
rthat

"Pigs

is

Current

S.

Garland

Pigs"—Jo

j-~--—-1931

Bingham-

to

Threatens

UFE

Affiliate

Unionism—^Edmour

*

*

—

L„

L.

in

Waters

and

re¬

vate

darkness

same

REAL

ESTATE

SECURITIES

from

in¬

an

GOLDWATER, FRANK & OGDEN
39

Broadway, New York, N. Y.

HAnover 2-8970

statement, for; the informa¬

tion of

analogy is somewhat the
in the

case

same as

Teletype NY 1-1203

Member

stockholders. The

common

somewhat

York Security

New

of

Dealers Assn.

National Assn. of Security

of personal income tax

Dealers, Inc.

returns. The net taxable, income

po¬

of

Pri¬

businesses, however, have

Germany—--—1939
SEC Proposes Broader "Red Herring" Use_——'——1932
J. Arthur Warner Sees Collusion of Underwriters and

may vary as much as twi¬

come

vari¬

to

Federal employees.

as

Specialists in

mimeographed but must

light and

lithe
sition

♦

*

poses

agencies
of control, are

1933
—1939

Truman Ends Meat Price Controls

Meat and Politics—B. Carroll Heece——

they

ous

-——1938

Preparing for World War III————

Telephone: WHitehall 4-6551

governmental

a variety of forms.
profit and loss statement of a
corporation for income tax pur¬

govern¬

port

193"-'

Obsolete Securities Dept.

be prepared in

regulated

ment

buy

we

A

by

Germain——.-———-U.1935

Economics of Tomorrow's Business—Erwin H. Schell

different

are,

- -

junk

WALL STREET, NEW YORK

meet

cannot be

in

typing.

-because

to Push

National Body

With

copies

Corporations*

—____1933;
Sound National Labor Policy Is Needed—Ira Mosher
1:
-1933
Regulating Canadian Security Markets—C. P. McTague—--1931
The Road to Dictatorship—C. Donald Dallas—
1935.
_______

_ _

of

one

S.' Securities—J. Van Galen-.1932

Green

tions

of

associates

cur

the

see

people like you!

agencies and to meet the needs of
other
interested
parties.
They

ade¬

an

from

get

we

they

Financial state¬

to

quate number

Issues—Joseph J. O'Connell, Jr,_-i-x+*cr-—1931
Living Costs vs. Stock Prices—Jack Toppell——
—Tn1932

when
from

corporations are tailorparticular obliga¬

made

make

Tax

Objectives of AFL—William

ments of

rapher cannot
—>-——-1931

——

Dutch to Liquidate Their U.

special handicap.

stenog¬

a

—that

sc^

to

sent

Unsettled Investment Banking Problems
—Charles

DEEP ARE

THE HOOTS

99

employees have often facetiously remarked that
everything they write should be mimeographed. Copies have to be

Capital Market—Marcus Nadler—_____1928

Zelomek-—___—_1923
"Profitless Prosperity"—A. M. Sakolski——_——-—-—1929
The World Bank and Its Securities—J. W. Beyen—,„1931
The Free Enterprise System—Harold G. Moultom———-1930
Returning to

required

now

reports made to

'1926

——

Corporation Reports—L.

and

———Cover

Monetary Inflation

multiplicity of reports

AND COMPANY

of business corporations and confusion
resulting from varieties of
forms and material presented. Notes trend toward
improvement in

Companies

_

»LicHTtnsTfin

..... Djrect01v Bureau of Business Research
University of Kansas

Prof. Waters calls attention to

Perverted

____

Common Stocks for Life Insurance

;■* —B.

^.,.^,1;;.,

Cover

_

Currency Black Markets—Herbert M. Bratter

National Debts

,v

Split-Up—Lucien O. Hooper—Cover

Relations-Frustrated

Ju—Emerson

Corporation Reports
By L. L, WATERS

"

'

_________

_____

Modern

Page

a

1927

individual is quite different

an

(Continued

a

on page

OXFORD PAPER

I960)

Swiss Resume Trading With

'<

^

r\,

J

;

*

'

->

'

I

:'■!

^

"f

"l'*

'

''

hA y*

i

President,

Stocks

Insurance

and

—

w_w*,.rr _ _

Du

Mont

Laboratories, Inc.

.

points out advantages of telecasting as a new
advertising medium. Holds it has many advantages aver sound re¬
cording and Is well adapted to sponsored public service programs^;
since it supplies the all-important element of action and has extreme
flexibility. Describes intrastore use of television in attracting cus¬
tomers.
factor in distribution.
\

Regular Features
Bank

Allen B.

Television promoter

^

f

CARLSON
Common &% Preferred

.

--—1940
Sees Railroad Retirement Act Taxpayers' Bureau-—
1943
Only a Few of the Younger Men of the Larger NYSE Firms
Favor Permissive Incorporation
—-—1988
c

STROMBERG

By ALLEN B. DU MONT*

Russia's Attitude Toward American Business—.—

>x

«

Television and Disfsibution

Corporations to Get Investors' Dollars-,
—
_193&
Claris Adams.Lays Inflation to Cheap Money1933
Marriner Eceles Comments on Economic Outlook——1933
SEC Permits Dealer-Broker Limited Registration——
1938

—*.—1940

Bought—Sold—Quoted

J. F.

Reilly & Co., inc.

I New York

Chicago

,

Bookshelf----—u--—-----—Jl—1978

Man's

Business

The delightfully simple commercialism of our Colonial forebears
immediately appreciated wjien visiting Williamsburg, restored
<*>capital and
metropolis of
Townspeople came in to buy for
the
immediate needs.; And that was
Virginia >
Colony. Then
adequate distribution for the time
-

"Canadian ' Securities*'
t----——-1946*'
Dealer-Broke^ Investment Recommendationsi——
_l__1934

NSTA Note

f

is

Einzig———————1929
————Ji-1944

End of Britain's Silver Coinage—Paul

Mutual Funds.

———--r193o..

—

Calendar-——-————-————-1981
-—-—.—----1923
Our Reporter on Governments-—.———
^^—-——-——1948
Our Reporter's Report
— .—1987
Prospective Security Offerings-.—
£
—
1986
Public Utility Securities--—
——
19ol
New Security Issues

Observationsr—A. Wilfred May—-

the

butcher,

the"

----------1933

in*

—--—.—1949
-198»
Tomorrow's Markets (Walter Whyte Says)—-—-*—1978
Salesman's Corner—————
Securities Now in Registrations*w,

Securities

front

their
That

The COMMERCIAL

and
1

WILLIAM

DANA

SEIBERT,

Subscriptions

Other

Monthly

Thursday (general news and adissue) and every Monday (comlete statistical issue — market quqtation
ecords, corporation news, bank clearings,
:

and

Other

135

6. ,La Salle

Canada,

$29.00

per

rate

-

Copyright 1946 by William B. Dana
Company
Reentered as second-class matter Fcbrury

25,

1942,

at

the

post office

at

New

TITLE COMPANY

CERTIFICATES
Bond & Mtge. Guar. Co.

Lawyers Mortgage Co.

Lawyers Title & Guar. Co.
N. Y. Title &

Mtge. Co.

Prudence Co.

|>

Members New York Stock Exchange

j 15 Broad St, N.Y. 5
IP
Bell Teletype

WHitehall 4-6330
NY 1-2033




the

simple

Coloniak shop' must

(Continued

on page

Hi Rio a
170

1976)

to

Allen B. Du Mont

sby.

was

their

sales

promotion.

address-

before

Record

—

Broadway
Bell

Conference

Distribution, Boston,
14,1946.
-■
" ■-

Mass.,

We

are

interested in offerings

Haytian Corporation

'

.

Punta

High Grade Public Utility and Industrial

Commodore Hotel

.

^Fidelity Electric Co.

PREFERRED STOCKS

Class A Common Stock

in

Susquehanna Mills

Spencer Trask & Co.

25

New

York Stock

Broad Street,
Tel.:

Exchange

New York 4

HAnover

2-4300

Members

New

Boston

Albany

Curb

Exchange

Tel.: Andover 4690

:

Glens Falls

York

135 S. La Salle St., Chicago 3

Teletype—NY 1-5

Stromberg-Carlson
Philip Carey Mfg.
Whiting Corp.

-

v

-

DUNNE & CO.
Members New York Security Dealers Assn.

Worcester

WHitehall 3-0272—Teletype NY 1-956
*

Private

.

1

*Public National Bank

HorRqse b Drqster

.

Established 1914

Teletype CO 120

Direct Wire Service
New

*

Harrison 2075

,

York—Chicago-—St. Louis

Kansas City—Los

Angeles

Boston

All Issues

*

Board of Trade Bids.

Peletype NY 1-832. 834

to

Publications, Ine.

J. P. Stevens & Co., Inc.

Assn.

CHICAGO 4

Wt're

MacFadden

Bought—Sold—Quoted

Security Dealers

request

on

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

'■

Schenectady

»Prospectus

STRAUSS BROS.
Broadway

Alegre Sugar

Lea Fabrics

of

Morithiy,

Central Soya
H. H. Robertson

32

2-0300

1-84

U. S. Sugar

(Foreign- postage extra.)

NEW YORK 4

Teletype NY

on

Oct.

year.,

Members

Y.

WOrth

System

Eastern Sugar Assoc.

made in New York funds.

N.

IN(

by, Mr. Du Mont

the Boston

exchange, remittances for for¬
eign subscriptions and advertisements must

Members

to.

&

Members New York Security Dealers Assn.

of

DIgby 4-8640

Newburger, Loeb & Co.

>•...

"*An

display¬

St., Chl-

,Mi

*.

The machine

Thus

the

Products

than

S.

jigo. 3,.. 111., (Telephone:. State ,,0613);
J
Irapers' Gardens, London, E. C., England,

'/o Edwards & Smith.

more

of
in

Note—On account of the fluctuations
the

far

locally.

distribution.

Laclede-Christy Clay

candlestick maker

produce

of

National Shirt Shops

the

Publications

Earnings

$25.00 per year.

be

city news, etc.)

Offices!

U.

States,

'(
Bank and Quotation Record—Monthly,
$25.00 per year.. (Foreign postage extra.)

ertising

tate

of

Other

Thursday, October 17, 1946

.Every

United

in

the

butcher,

win¬

wares

That

Countries, $33.00 per year.

Publisher

President

i'

the

has introduced mass produc¬
which in turn calls for mass

Sign

Thiokol Corp.

simple and

be sold

tion

TRADING MARKETS

all that.

as

and

as

age

•.<

their "I

pas*s er

Dominion

'

WILLIAM D. RIGGS, Business Manager
j

ed

March

of

Possessions,
Territories
and Members
Pan-American Union, $26.00 per year;,

York 8, N; Y.

REctor 2-9570 to 9576

IERBERT D. SEIBERT, Editor &

Act

Subscription.1 RatesI

{

(TLLIAM B. DANA COMPANY, Publishers
Park Place, New

Y.„ under ; the

>

Reg. U. S. Patent Office

25

dows

.a;'

:;.,v

N.

was

can

advertising.;.

3, 1879.

'FINANCIAL CHRONICLE

r:' >

v;

York,

It

today,

usually

of

•

But

baker

shops.
was

Store
M

;

maker

displayed
quaint
signs

place.

practical

*

candle-

Stick

r—:

.'Published Twice Weekly

and

the baker and

—

Real Estate Securities—

there

and

—

Railroad Securities

•

74

'

& Trust Co.

Analysis

Telephone:
BOwling Green 9-7400

Teletypes:
NY 1-375 & NY 1-2751

Request<

C.E. Unterberg&Co.
Members. N.

Trinity Place, New York 6, N. Y.

upon

61

Y.

Security Dealers ARs'n

Broadway, New York 6, N. Y»

Telephone BOwling

Green

Teletype NY 1-1666

9-3563

jf'1. ,:.ct' if"'

'JATWftim; $'iff:;.?
THE COMMERCIAL &

1928

W4KD & Co.

Cycle Be Averted ?
:

ACTUAL MARKEIS

By BARNIE

anced concentration of

depression of the 1890's, the panic

or

whether

A

Cinecolor

of

Chicago R. I. & Pac.

The younger mind is not easily
dismayed. It is apt to dismiss pre¬
.

monitions of disaster

in

in

minds
v e s

t

of

business

Hartford-Empire Co.*

"Hardening

B.

in-

F. Winkelman

to

Bear

in

atomic

Be

Interest

Good

Rates

Reason

Now

—

for

It's

Little

Psychological Factor

a

for Old-School Investors."

Certainly the older

An

analysis by the stock marcontinued on page 1949)

generation which experienced the

The Status oi the Capital Market

.

Lanova*

By MARCUS NADLER*
Professor of Banking and Finance, New York University

Majestic Radio & Tel.
Mastic Asphalt

Dr. Nadler analyzes influences affecting capital markets and con¬
cludes if stabilizing readjustments are successful there will be a

Michigan Chemical

large and active volume of

Missouri Pac.

..v..

"I Guess

securities, both domestic and for¬

new

Old Pfd.

international and domestic affairs may
ness or technical and
managerial skill.

N.Y. New Hav. & Hart

The topic

assigned to

This includes the

v

Returning to

Warns, however, the wage-price spiral and unsettled

prosperity.

Moxie

our

financial sound¬

market

market

always

Richardson Co.

the

and

business

activity,

Tenn. Products

which,

in face of

tion

one may go

which

on

farther and

the

death knell" of sellers' markets in

expansion beginning in 1948.

of

economy

the

business, and

business picture may be more even.
Which of these two developments
will take place, I don't know. But

Upson Corp.*
U. S. Air Conditioning

are

either

a

the economic
and

political
all

situation

United DriM Tool "B"

over

States

ed
Or.

Aspinook Corp.*

Marcus Nadler
•

•

Textron Wrnts. & Pfd.

We

can

have

a

*An

address

the

29th

at

the

National

pro¬

the security mar¬

more

York

by Dr.

Association

of

Administrators,

City, Sept. 27, 1946.

Cent. States Elec., Com.

Republic Natural Gas Co.
*Staley (A. E.) Mfg. Co.

Art Metals Construction

Derby Gas & Elec.

Stromberg Carlson Pfd.

Carey (Philip) Mfg.

United Printers & Pub.

Crowell-Collier Pub.

New England P. S. Com.

year

stantial business

have to take place.
W
I am optimistic in the sense of

period
oeginning in
it

clear

at

that I

am

both

pessimistic
and optimistic.
I am pessi¬

Se¬

New

mistic

Bought
V-

Southeastern Corp.

-

Sold

-

Quoted

*Research item available

t Prospectus Upon Request
Circular upon

:

115

of

some

the

within

W.

prices

founded.
A.

fears

un¬

;

utterly

are

lot

A

the

of

talk

un¬

that

Zelomck

sprang

sev- /

I

wild

by the drastic decline in

security

be

bust"

about

up

situation

"boom

a

sheer

was

and
non¬

pessimistic in

am

the

of

sense

year

believing that there

be a period of about a

during which a rather sub-

Exchange and Other Principal Exchanges

Broadway, New York

also optimistic in believing

am

leashed

some

will then

Members N. Y. Stock

I

that

re-

to

next

ac¬

Securities Decline Unfounded
;

placement

time

year

recession.

ex¬

inventory
boom

5

to

tivity after the coming temporary

a

reached

3

a

of high level business

sense.

request

on

Goodbody & Co.

Southwest Natural Gas

period

the

in
of

eral months.

Spec. Part.

Standard Gas Elec.

in

readjustment will

expecting at least

peak
the present

the

Puget S'nd P. & L. Com.

advertising.

greater differences of opinion about business prospects for

even

pecting

American Hardware

year

Holds buyers' markets will necessi¬

three to five

of

Nadler

Convention

Predicts "final "

1947, with renewed 3-5

i There are'opposing Views'dbout business prospects in 1947,>: There

sense

American Gas & Pow.

effective

scarce

1948. I want to

1952)

on page

Annual

curities

of

period

a

tate

make
-

acrossroads,

■*

either

the

or

.

to¬

stands

day

on

(Continued

Economi¬
cally speak¬
ing, the Unit¬

rests;

is bound to have

one

kets.

r

Alabama Mills*

States

found effect

the

world.

Vacuum Concrete V :

United

items being

some

Emphasizes present increase in

competition with business failures already rising.

say,

outlook for

*

over-supply of others.

bust, with far-reaching

undermine the very founda¬

may

the

Buyers' Market

Economist, International Statistical Bureau, Inc.

economic and social consequences,

under

a

Economist cites unbalance in markets,

trading in old securities.

boom and

is

influence

of

Taylor-Wharton*,

or

Gilt-Edge, Mr. Bentley."

By A. W. ZELOMEK*

is "The Status of the Capital Market."

me

issues

new

nullify

The capital^

Purolator Prod.*

•Bulletin

He Doesn't Think It's

Holds institutional investors will play more important role
than individuals, and th&t there exist economic
prerequisites for
eign.

Mohawk Rubber*

Pfd.

of

Market

More than

j

and

men.

place

streamlined,

of radar and rocket. A recent

Used

the

o r s

old-fash¬

as
no

who knows his way around reads:

caused

doubts

has

headline by a financial columnist

issues,

hew

that

modern,

age

of>

have

Gt. Amer. Industries

the

the

flotation

Douglas Shoe* V
Expreso Aereo

Higgins Inc.
Jack & Heintz

in

an c e

District TheatresT;

stuff

ioned

stock prices,
sales-resist-

Diebold Inc.

recent

more

<

series

a

declines

the

1920's, is shak¬
ing its head dubiously and moving
cautiously, ^

hardening,

rates,

and

heartaches of the

interest

of

'

1907

of

our

prosperity can
be
prolonged
indefinitely.

Barcalo Mfg. Co.*

Old

depression.

historic

the

crash,

Pfd.

Automatic Instrument

..

dependent

Recently many articles have been written on the question of
whether the present boom in securities and industry is headed for

Amer. Window Glass*

•

are

profits and savings will "cut the ground

under" manufacturer, bringing on

Art Metal Const.

Pfd.

longer

no

enduring spiral of prices and wages will b§ punctured by realization
of drastic reduction in real purchasing power. - Asserts that unbal¬

Air Cargo

Old

:

Mr. Winkelman declares public's dreams of an

interest rate,

on

ACTIVE ISSUES

&

BUSINESS BUZZ

F. WINKELMAN

Holding business and stock market booms

IN 250

Com.

Thursday, October 17, 1946

Boom and Bust—Can the

1ST. If 16

r

FINANCIAL CHRONICLE

*A

105 West Adams St., Chicago

Telephone BArclay 7-0100

Teletype NY 1-672

speech by Mr. Zelomek be¬

fore American Marketing Associa¬

tion, Boston, Mass., Oct. 15, 1946.

request

Certainly
bust"

after the last
say

in

we are

situation, just

that,

we

a

"boom and

as

we

were

But when

war.

we

must be very careful

about defining "boom" and defin-

(Continued

1944)

page

on

ACTIVE MARKETS
*Hoving

•

*The FR Corporation
EST.

^District Theatres

1926

Members N. Y. Security Dealers Assn.

120 BROADWAY, N.Y. 5
REctor 2-8700.

^Princess Vogue Shops

*Metal Forming Corp.

*Loew Drug Co., Inc.

Ylartf'd

6111

Members

Buff. 6024

>

52

New

York

Wall Street

Aeronca




V Great American
Industries

Aircraft

Security Dealers

*Prospectus

Association

'

■

on

Established

Members

Teletype NY 1-2425

N.

REctor
"

Y.

request

Dealers

Assn.

I

Broadway,

*

V

fi.

Dlgby 4-2870

Broadway

"

Bell System

•

SIEGEL & CO.'

1908

Security

2-4500-—120

v'

Glenmore Distilleries

J.K.Rice,Jr.&Co.

New York », N. Y,

Bos.2100

Tel. HAnover 2-8080

Di-Noc Co.

LeRoi Company

FIRST COLONY CORPORATION

& Los Angeles

Corp.
Records

Haile Mines

r

*Prospectus Available

Direct Wires To

ENTERPRISE PHONES

'^Capital

^Stratford Pen

N.Y. 1-1286-1287-1288
Chicago, Phila.

*Hungerford Plastics

Teletype N. Y. 1-714

TeWvit.

VT

I -104?

V

1929

w

Cotton Exchange Booklet

//

Facts, of interest regarding the
*T

Characterizing

our

■■f

BY A M. SAKOLSKI *

/

prosperity

f

I

•MW'V.

ton, and the futures marKet

to anomalous situation in which both
wages

and prices

rising

are

-

produc-

capacity

of material resources

■'! with
•

tive

:

almost

-

unlim-

d

sumer

•

mandand pur-

•

«chasing
•

What

pow--

;

running
riot; and with
the
tional

•

of

•

down

income

It

A. M. Sakolski

This is admitted

cause

|

Einzig

sees

of silver.

.

*

economy

veritable

a

spree.

"•

never

and Social

it

is indulging in
Recklessness

Coinage

little opposition to British

return to

to abandon coinage

move

bimetallism

managed

a

con¬

currency system
cur¬

country.

No

sentimental

considerations,

should desist from

ci

enables it

s

m

was

;

raised;
in
fact,
most

United
use

confined

themselves

to

an

to repav

explanation,

strong, certainly vocal.

together

its

adnerents

died,

the

meantime

of

with

sketchy

background,
without

com¬

menting

on

it

(Continued

of

sion.

Parliament

amount

of

and

to

are

take

the

time.

some

will

•would

go

so

far

as

few

to

people

the

urge

government that, for the sake of

•i«

7 Consol.

Lane

Cotton

Standard

in

International

protestations of Sir Hugh Dalton,

6s,

'*

page

on

1948)

....

I

•.

Direct Private Wire Service

iff COAST - TO

International Power

Securities

/v.7K-6'/2s, 1955
International Power

Securities

New York

-

COASTlS

52

Statistical data

7

•

•

Chicago

-

St Louis

-

Kansas City

-

Bell Teletype NV 1-395 "
Yock
Montreal 7 Toronto

Los Angeles

Curb and Unlisted

Members New York Security Dealers ASs'n
32

&

Broadway

NEW

Corp.

YORK

Securities

Board of Trade Bldg.

v

CHICAGO

4

4

DIgby 4-8640
'
Harrison 2075
Teletype NY 1-832-834 777 7 Teletype CG 129

S/S

Pfd.

MICHAEL HEANEY, Mgr.
WALTER

Whit# A Company
ST. LOUIS

T. I. FEIBLEMAN & CO.
Members New Orleans Stock Exchange
New York 4, N. V.
II Broad St.
Bo. 9-4432

'

Carondelet

KANSAS CITY

Joseph McManus & Co.

LOS ANGELES

39 Broadway
Digby 4-3122

Albert Pick

7

;y7777V71 Dravo Corp.* §£77fl7

:

-

*

Air

New York 6
Teletype NY 1-1610

Products, Inc. Com. & uhP.\
♦

7; ^American Insulator 7 r
&

American Maize Prod. Co.

Common

Baker

;

r

•

*

%

•

Common

Raulang
7

••

:

7

Bought

—

Sold

—

Investment'

Securities 7

on

New York 5, N.Y.
' Telephone~
Teletype
WHitehaU 4-2422 / V >
NY 1-2613

;

*

-

„\V

*

/

•

•

Prospectus on request

FREDERIC H. HATCH S CO., INC.
PETER BARKEN

.

77

; * /-

Prospectus
'.

-V-Branch Office

St;, Jersey City, N. J.

Broadway, New York 4, N. Y.

Tel. WHitehaU 4-6430

"

w

*-




*

Tele. NY 1-2500

-

m

•

;

•'

7*

!

;

jf
it

-

7'

on

1

j
i

request'

1

-.

*

*

>

.7

.

*, 7

83 Watt

]

MEMBERS Ni

Reynolds & Co. !
Exchange

,

Broadway. New York 5, N. Y.

'

Members

Established

^

■

32

'••

Request

i-T

62 William St. V

•;

Quoted>
i,

Memorandum

7:

•*'

,

♦Universal Winding Co. Com.
v

*
.

'•

I

;f;

>

Beverage

Preferred-

"'.■•••

^Raytheon Manufacturing Co.
$2.40 Conv. Preferred

7
:

*

"'ri

i

.

.

•

7

request / -

Brokers, & Dealers,.

113 Hudson

York Curb Exchange

Chicago Stock Exchange

<

American

■

New

Members

7

Bldg.

KANE, Asst. Mgr.

Baumr Bernhelmar Co.

Plodger & Company, Inc.

i"New Orleans 12, La.

Bell Tel.—NY-1 -498

7

In

!

-

HAnover 2-0980

WILLIAM ST., N. Y. 5

V„.

STRAUSS BROS.

Sulphur

Mills

&

Preferred

i.

tv;-

HART SMITH & CO.
New

■!'

Common

Z if

Hydrc-Electric
1944

-

Pfd.

Fruit

Com.

.

Issues 7

.

Pap. Co. 5X/£S, 1961 f

,7

^

1

'

•

nne

upon

4y2s, 1967 7/-:

.

;77 v'7' 7S, 1952 & 1957' '

newcomers

their, place

But

(Continued

Jonas & Naumburg

with

,undoubtedly be rather unpopular
.for

&

"

■. appearance,

..'•that

Lake

Com.

Many people will, doubtless, re¬
gret the
passing of the silver
coins, with their dignified worn

suave,

Paper 5s, 1965

Investment Trust

Aldred

Galveston Houston

v

Jefferson

discus¬

7

*

■.

'

arc

1943)

page

Abitibi Pr. &

during his recent visit here, that the international program aiming

active share in

on

Canadian Bank Stocks

77'

-7

-

Incidence of British Socialism

Likewise, the earnest, if

Others have real-

by copper-nickel alloy coins,
measure
will
pass
through
of

or

controversies.

?the silver coins and their replace¬
Houses

age,

Co.

Sun Life Assurance.;

and sell, and to set the

Many of

however,

old

Minnesota & Ontario Paper

if, not

was

an

in any sense.
And the chances are that when
Mr. Dalton will introduce his bill

minimum

Britain,

'7;':-77;;",7,7''•••

the

too old to take

v

providing for the withdrawal

in

of Can.

Noranda Mines,

Redvers

4

..

monetization of silver. During the
movement

Brown Company

Consol. Pap. Corp., Ltd.

society, all foreign trade must be in the hands of the state,

.

1

Co., Ltd.

Yellowknife

difficulty must be realized; namely that in a com¬

?7

middle- Thirties

Giant

Moscow-controlled

control.

country likely to stage a demon¬
stration against the complete de¬
and

of

words

recent

having to

dollars.

early

fact

Abitibi Pr. & Paper

prices at which business is done through agencies under full state

the bimetallists in this

are

and its official

the

55r

Molotov and Vishinsky

which has full power to decide what to buy

debt to the

a

the

bare

the

The basic

it

registering

both

:

c=

Opie, "Let it be said frankly
that if all countries were organized internally like Russia, none of
the British-American financial and trade proposals in the interna¬
tional sphere would make much sense."
,
' -

action which

without

States

much-needed

Nor

newspapers

the

09

"capitalistic plot."

munist

voice of criti-

:

a

In

interest in this €>

ment

had

proposition and terming

institution tied up with relief operations with the
countries, *
'
J

ENGLAND.—The British Government's decision to
minting of silver token money aroused very little

Einzig

nations

21

Irrespective of the domestic reasons for
policy, it surely effectively blocks the world's cooper¬
expanding world trade on a multilateral basis: renders
an effective World Trade
Organization impossible; and paralyzes the
International Fund and Bank workings. .It is impossible to see how
the Fund can possibly work, if Russia is going to remain aloof there¬
from, with the entire Russian area eliminated, and with the

protecting value of

Paul

of

such autarchic

^

,

a

experts

ative plans for

system under which the volume of

a

India's silver hoard.
the

-The

Danube.

exhaustive

arrangement with Sweden.

and credit depends on changes in amount of metallic reserve.
Sees benefit to government in obtaining silver used in
coins, and
holds Britain no longer has any interest in
LONDON,

the

Council summarily scuttled the constructive work of the

the line of Messrs.

rency

discontinue

the

group, by vetoing the carefully considered

By PAUL EINZIG

Says Britain is committed to

and will

of

•

Points out it signifies end in England of

troversy.

of

be put

can

two

Again, Mr. Feonov at Lake Success, following
at the Paris Conference,
vigorously objected to joint action to effect free navigation of the
threatens to become a mania. Not
Danube; And in Paris last Friday Mr. Molotov, although outvoted
alone are sound
economic con11-5, during the completion of the Rumanian treaty, maintained to
by politi(Continued on page 1962)
the bitter end his opposition to free navigation in, and international
access to, the Danube
and the Danubian valley markets.
This all
reflects Russia's continuing policy of extreme economic nationalism,
modified only by special bilateral agreements, as her recent trade

even

.

this

midst

that every sector of the

End of Britain's Silver
%

the

of

on-the-spot (not merely docu¬
mentary) investigation in the Continental coun¬
tries, consuming two-and-one-half months; on
A. Wilfred May
the basis of which they unanimously agreed on
7.
a report and earnest recommendation to establish
a
permanent European Economic Commission^ But to their great
surprise and consternation,, the Soviet representative on Economic

"Profitless Prosperity."

as:

seems

national

beyond all previous forecasts, the
nation is in a precarious condi¬
tion. 7- ■ 7:7 77;S'S 77 7
;,7:77|7777:;*

Dr.

of

,

The.primary

na- i

for

reasons

in

chaos

plenty?

dollar

value

•

the

are

apparent

er

com¬

or

behavior

■made

Distrust,; disturbances and
even despair is becoming increas¬
ingly evident, '■)
7':7.v7f;'-

e-

"History
Cotton," "History of the Ex¬
change," the purpose, function,
operation, etc., of the future con¬

line by opposing such constructive .measures as
initiating a commission to reconstruct the Euro¬
pean devastated areas, and freeing the navigation

fied.

ited;with con-.i

the

the

Woods and the International Trade organizations,
she
has again manifested her strict autarchic

satis¬

seems

na¬

Futures"

forth

of

Big Powers—com¬
munist Russia and socialist England. In addition
to Moscow's negative attitude toward the Bretton

of the population, no

time;

fundamental conflict between

a

York] Cotton

Exchange.

the

lessness, confusion, distortion and
uncertainty abounds. No element
segment of
society, - no - economic "class even
under
the
unprecedented
high
standard of living and abundance

*in peace

is

Cotton
sets

the

Bearing

New

tract system.: The booklet is being
socialism—and the objective quest for distributed
through Ferd P. LorOne-World, trade.
7\;7 v7f'7'7'7v:: 77 7'lV<v7"7j;; don, Assistant to the President of
This is already being strikingly revealed in the

cal guardians of our destiny. Rest¬

gainfully employed uripre-:

brochure

planning—be it in either the form of

munism

<S>-

-precedent t ed

.

tional

Exchange.
"The

Exchange,

National Planning Versus World Trade

difficulty obstructing the United Nations' economic goals
is inherent in the increasing domestic planning of member nations.
For there

the

caption

/ A basic

The present economic situation is indeed paradoxical! " 77' '777
Operating under the greatest manpower shortage the nation has

the number of

by

15y A. WILFRED MAY=

profits are declining. This profitless prosperity, he
contends, is doomed to collapse and warns, unless the trend is
:
offset by greater productivity and lower unit costs
through in- \
creased man-hour output, shutdowns will occur and new
capital ;
; will cease to flow into industry.
Sees danger of business depres* j
sion, with large unemployment and nationalization of industry. [

experienced;
with

are

contained ip a pew .booklet issued

while business

'(

New.Yprk;CottojiIJExchange,cot-

fv

paradoxical, Dr. Sakolski points

as

ever

,

Y. SECURITY

Street, New York

N. Y.-

DEALERS ASSOCIATION

"

r BeU

'/;/-v7.

•
*

'

Teletype NY-1-897

4K20

New

Telephone

York

Stock

REctor

Bell Teletype:

2-8600

NY 1-635

^

'
-

-4
,

¥2% Swiss ResumeiiSli The World Bank
And Its Securities

BALTIMORE

Trading withGermany

Bayway Terminal

By special wireless to

Davis Coal & Coke

the "Chronicle"

By HON. J. W.

~'* >' -r

•

new

Stock

Exchanges and other leading exchanges

American zone,

ST., BALTIMORE 2

S. CALVERT

6

Dutch financial expert, appealing for confidence of investors in
Bank, describes its functions and prospects. Holds

the World

'393
REctor 2-3327

similar
Army,

with

corresponds

tion

Sec¬

our

reconverted

successfuly

has

mal

stantial

coal and
doesn't

sub¬

prospective earning power.
common

into this agreement

come

formerly, got

at alL -Whereas we

PHILADELPHIA

In

position,

basic

Eastern

approxi¬

at

of indicated book value
and at less than net working capital

mately

Corporation

available

Circular

request

upon

further

address

"to encourage the
development of productive facili¬
ties and resources in less devel¬

Articles put it,

—■

fulfill

cannot
the

task

oped countries." It is one of the
most imaginative ventures in the
field of internatiorfal cooperation
that the world has ever seen and

tremen¬

dous

for

has

it

been created

it

unless

(channeled
national
banl^.

jus¬

tify

preliminarily

and

the

con¬

,{i nvesting

American

public. This is.
first time

is

the

J. W. Beyen

Corporation

Memos

on

Request

BUCKLEY BROTHERS
Members
;

/

Philadelphia

York',

New

and

Los Angeles Stock Exchanges
.■_• Also Member of t

v/

.

its

on

■; But great also is the responsi¬
bility of those who .are trusted
with the savings of the public. It

fidence of the,

with " German v firms
conclusion of contracts

built

great
hopes, are
achievements.

can

win

and through the

with

only

the economy

those savings that
of the world can be
is only

restored and developed. It

restoration and develop¬
of the world
savings can come into
being and that existing savings

by the

ment of the economy

real

that

.

% PRICED ABOUT Sy2

•

Bank

in my

sponsibility. It has been founded
to foster the reconstruction of the
war-stricken
world and, as its

British Miljthat a repre¬
itary Government in British zon^. sentative
of
the, International
Perhaps as bizonal merger is per?- Bank publicly meets the repre¬
fected,
system will be further sentatives of a very important
centralized,
,, ' section of the investors on their
On paper, procedure is clear, buit invitation and is giyen the oppor¬
whether OMGUS has the staff to tunity of discussing with them the
perform this contractual function objects/structure and plans of the
normally pertaining X to
private Bank.
K
The Bank carries a great reenterprise will be watched with

South Carolina Electric & Gas
Merchants Distilling

*

Interna¬

the

tional

dollars

by OMGUS in

be

it

call

which

American

of

zone

'

-V-

to

under the OMGUSp
will be in terms

All trade

will

50%

share.

per

me

Swiss agreement

but final

1940, despite tremendous improve¬

ment

will allow 8>

involved."

are

Reconstruction and Development—

you

correspond

third less than original offering price
in

The International Bank for

-

through " Swiss
Swiss ;firms- may

stock

approximately- one-

at

available

.

nor¬

Outlook

indicates

served

current quotations,

At

to

operation.

time

peace

industries

for

two bulk commodities,
steel," he said, "but coal

significance of this occa¬

right to stress the special

I think it is

sion.

articles,

tent

Anglo silverware,

with

-

included ;

hydraulics,

of

transmission

for, the

Is

leading manufacturer of
and valves'

couplings,- fittings

that

zones,

and

Russian

with

trade

-v

French

Appliance Company
a

trial

such as glassware,
porcelain,
optical
American
area
will be largely photographic and chemical" goods,
one way for present.
"Tradition¬ textiles, and hops, and maybe
some
Swiss
exports
to; Anglb
ally Swiss trade with • Germany
American area where re-exports
like

tube

^ill aid it through coordination,

structure aid.

Indus¬

We badly need coal.

tons.

Bank

;

its obligations, and concludes

confidence in

international lending is again restored, World •
cooperation, and con-v

that when private

application of atomic energy
is being studied here but is not
this at least makes possible some foreseeable. - What we : expect to
resumptions of Swiss trade with get from the Anglo American area
those parts of Germany, but un¬ is a varied list of high-labor-con¬

1

will be taken to

basis for investors'

Professor

retary of Commerce, advised the
"Chronicle's" representative that

Company,

•

agreement

British

in

errors

ures

Germany, and re-^

garding

BOSTON

The Parker

;paat'international lending will be avoided and right meas¬
secure soundness of bank's advances and
guarantees. Cites large capital resources of the institution as a

>

with 150,000 metric tons of German
Paul coal monthly, now European coal
Keller, whose official Swiss posi¬ organization allots us token 3,000

Bell Teletype BA
New York Telephone

Union of South Africa/

International Bank for Reconstruction and Development

•

'

STEIN BROS. & BOYCE

BEYEN* V#

Executive Director for Holland and

Swiss Agreement with OMGUS will ' i
restore some trade with Germany, but mainly on one-way basis.
Switzerland is sharing general coal famine.
Trade will be financed ;j
by American dollars channeled through Swiss National Bank* j
Swiss in up hurry to Joint Bretion Woods institutions.
j
BERNE, SWITZERLAND, Oct. 16.—Commenting on last week's
Swiss agreement with OMGUS regarding trade procedures with the
Correspondent reports

Noxzema Chemical

Members New York & Baltimore

Thursday, October 17, 194(?

FINANCIAL CHRONICLE

THE COMMERCIAL &

/

1930

economic

timately

development

accumulation of savings

the

and

the

of

aspects

two

are

value. U1--

real

their

retain

can

same

„

,

*

du

1

Pont, Homsey Co.
STREET

31 MILK
BOSTON

V

!

\

Exchange

,1420 Walnut Street, Philadelphia 2
New York

MASS.

9,

Curb

New1 York

Los Angeles

-

Pittsburgh, Pa.
Hagerstown, Md.
N. Y. Telephone—-WHitehall 3-7253
i:-'Private Wire System between ,
?
Philadelphia, New York and Los Angeles

interest,.
Examination

-

HANcock 8200
N. Y.

Teletype BS 424

Telephone CAnal 6-8100

Swiss-British

*

* *

\

phenomenon:
the formation
capital or in the other words

of 1 a js t week'p
agreements which

by Mr. Beyen be¬

; *An address
fore the Savings

-/j

Bank Associa¬

tion

Can.,

of New York, Quebec,

Oct.

(Continued on page'. 1946)

of
the

the last in¬
stance the Bank and the trustees
of the investing public are con(Continued on page 1973)' V

creation of wealth.,In

15, 1946.

SPARTANBURG

New

England Markets
"'«• *'

.

,

Retail New England

Coverage

•-■•.X.
Bank

Insurance

•;,

,

■

.

Stocks

v

v

.

.

.

for

Inactive Securities

;

'
.

'

-

77 Franklin

Exchange

Street, Boston 10, Mass.

Tel.

Portland

Stock

Liberty

Properties

;
.

H. M.

Byllesby & Company

Telephone
Springfield

1892)

(Established

Stock Exchange BIdg. Phila. 2
Teletype

RIttenhouse 6-3717

PH 73

':

A. M. LAW & COMPANY

PHILADELPHIA OFFICE

:

Teletype SPBG 17

:

.

DES MOINES

SPOKANE, WASH.
TRADING

MARKETS

Grinnell Corp.

INCORPORATED

We invite

offerings

or

of

*

& Paper Co.

Quotes call TWX Sp-43 on
Exchange

A.M.,

from

& CO.

1606 Walnut St., Philadelphia 3
PEnnypacker 5-8200

PH 30

v

EQUITABLE
DES

BUILDING

MOINES

Phone 4-7159

Private
'

9,

IOWA

-

■*

Phone

COrtlandt

to

N.Y. C.

of

Brokers

-

Peyton

,v;'.

7-1202

CORPORATION

Bell Tele. DM 184

r

\

t i

Underwriters

Branches at

.

••

g

)'•: '

'x

SALT LAKE CITY

American

Girdler

Ass'nf

Turf

Consider II.

Murphy Chair Company
Winn &

BROKERS and DEALERS

Lovett

UTAH

MININC

Mills, Inc.

|

BOUGHT—SOLD—QUOTED

STOCKS

%.

request

on

greatest country

has

been

™I BANKERS BOND £°!
Incorporated
1st

Floor, Kentucky Home Life BIdg,
LOUISVILLE 2, KENTUCKY

Long Distance 238-9

Bell Tele. LS




MOHAWK VALLEY

Members Salt Lake Stock Exchange

INVESTING COMPANY

BROKERS

INC.

Stock Exchange Building
Salt Lake City, Utah

Teletype SU 67

■

Phone 8-8172

238 Genesee

St.

Tel. 4-3195-6-7

scribed

Tele. U.T 16

as

a

conference of

nitions of

properly

socialistic ( or

Many
be de¬

semi-

and

it

Address by Dr.

Oct. 16,

1946.

of

-s

V

free

seems

this type.
starting

Communism,
enterprise

of

defi-^

Socialism^

respectively

desirable to preface the

the evolution

the

'

•

with

discussion with a brief

and

Moulton before
The Pennsylvania Water Works
Association, Atlantic City, N. J.,
*

Utica 2, N. Y.

as

association/ has beeil
a privilege a^well
pleasure to participate in $

the sec¬
in the world

foundations.

may

responsi^

great

realities.

building its power,, on

1898

W.H. CHILD, INC.

great
and
af¬

conceived; It is

Instead

they appear as concrete
For more than 25 years

countries

these

hopes,

bility of citizenship. It is in this
setting and in this spirit that the
Golden Anniversary program of
this

\

a

communistic
Established

Moulton

'

,

ond

Circular

Grocery

j

Col. H. G.

ac¬

.Whereas

our

fairs, as well as a new

o r

generation ago So¬
cialism and Communism were re¬
garded as abstract theories,., today
.

or

developments bring;,;a new
challenging interest in public

control 1 i n g

Utica & Mohawk
Cotton

fears

stimulating,

economic

these great

For all of us, whatever our

row.

;

overnment

tivities.
tor

Willett

Corporation

of the

In the view of many

fraught with omin¬
ous portent. To others they offer
promise of a better world tomor¬

of

directing,

UTICA. N.Y.

American Air Filter

-v

government ! has

changes seem

should play

Kellogg, Idaho and Yakima, Wn.

TRADING MARKETS
"

enterprise, the
been
enormously expanded.
of

free

of

al home
role

concep-

o n s

Even / in i the
world, the tradition¬

states. :

Anglo-Saxon

role which

Building, Spokane

in

LOUISVILLE

socialistic

•

new

(

•

:

emergence

^ v

Spokane

Dealers

'

•

and

the

seen

Exchange '

Members Standard Stock

'

a.

countries have

STANDARD SECURITIES

IBOENNING

Bonds

y

political o r - ;
ganization o f
society. AH -

Common Stocks

Municipal

as :

of confusion; The upheavals which
world during recent decades have

the

economic

other hours.

Iowa

d 1

u n

affected

Floor

to 11:30
Sp-82 at1

10:45

Time:

Std.

Pac.

prof o

of Orders

For Immediate Execution

Proposes

age

the

throughout

occurred

have

SECURITIES

Southern Advance Bag

ah

We continue to live in

NORTHWEST MINING

WHEELOCK & CUMMINS

stability.

of our! economic -system: (1)* larger national income; f
(2) wider distribution of that income; (3) rewards based on work; (4) more economic security; (5) development of individual; and
(6) opportunity of all to earn.

goals

i

■

i:- \

difficult to attain and preserve

fr which it is

SPARTANBURG, S. C.
L. D. 81

Institution

we are

^'planned economy." Holds factors responsible for change were: r
(1) extraordinary economic power of few enterprisers; (2) ill |
effects of business • cycles; and (3) breakdown of international >
commerce and finance.
Says we now have a hybrid system, under <

./or revised memo

2340

Providence

Asserting

"

F.L. PUTNAM 4 CO.. INC.
Members Boston

Send

MOULTON*

President, The Brookings

in an age of confusion, Dr. Moulton traces free
enterprise through the centuries, and the recent trend toward f /

AND

Building,*

Agriculture and Chemistry.

v

•

Concrete, Lime, Limestone

Industrials—Utilities

7

•

1

Textile Securities

'

:•/

•

■;

By DR. II. G.

Products

»

•

and

the Free Enterprise System

Southern
f,

Sand,. Gravel, Central-Mix

Secondary Distributions
X---'

WARNER COMPANY

•

summary

of the economic

political system which wa^
of this generation*

heritage

When

and

for

what reasons

(Continued on page 1970)

did

U

*

i

>

-i

V

j,

*

...

•

,

•

v.

t

,

K*

.

'

'.

.

.<

.

•

*"*■.

*.

'

By CHARLES

,

Writer pictures communistic
ditibns

Partner, Alex. Brown & Sons, Baltimore

;

^

Likens

holding there is opportunity within framework of Fed-,
Laws, to achieve great improvements in machinery

regarding disseminating information to investors

let

his

as

tem of

Points

hours

though I realize that

was

room

significant in

He

Eee

eee

this

on

sia

as

newly selected
state :: publicly his

to

a

under

Fourth

■

-

views

that,

course

since your last

the

same

in

been

well's
mal

Chairman

the

have

policy

what

ed and' ttre

thinks

not

or

is

but

says

the evidence,

on:

good

a

tured

i

"So, at the moment; I deem it
suggest policies

the

on

the

Investment

Group

Bankers

c o m m

Man.

Congress and they, in turn to
the American people.

of

America, New York City,♦Oct. 15, 1946.
;

{ Continued oh page 1978)

1

Current Tax Issues
*

By JOSEPH

J.fO'CONNELL, JR. *

General Counsel of the Treasury Department

Treasury tax official holds war taxation levels must be retained.'
Says certain features of present, tax system should be continued,
particularly withholding features and discusses the stockholder in
strengthening of high level of' income
objective of a tax policy. Analyzesproposed changes in corporate income, excise and estate levies, and
concludes that changes in our tax structure wilf he influenced
by
conception that taxes should regulate fluctuations in business and
employment Cautions tax revision should be made in public in-

is

L
*

y

*

,

'

!*

'

'

\

1

-

*

,

,1

,

"

„

,

,

4

<

4.\\

}

or

six

tfols

Many of

years.

; that

were

matter of wartime

the

imposed

been

eliminated.

controls

have

been

needs

of

the

a

necessity have

already
the

con-

as

Other

fective for

transition

re¬

have al¬

ready taken important steps
w a r

t i

m

the end? of hostilities, the
one

away

eV; structure.

$fithin less than six months
profits tax,

In

come.

we

after

excess-

of the first of the

structure

itself,, has left

war,

which r. will

Act of 1945, which

enue

was

ap¬

proved in November of. last year,
also

.repealed -the

tax,

and

enon,

the

-

capital

same

time

Corporations

use

the

income

taxes

on

were

reduced by substantial amounts.

^_It would be
that

the

a

essential

transition

from

war

expenditure

•„

*An address by Mr. O'Connell

before the State Bar of




;

budget

levels,

and

;

•;

i

far

we,

,

*■.,

■

.

.

....-v",:'

pre-war

will? require

a-

tax

the second

developed; during

certain

war

system which

features
are

in

permanent

our

the
tax

highly desirable

and should be continued

the

as

part of

structure-, of

the

system. Our system of current
payment,

wages

and salaries and quar¬

estimates

on

other

and

payment

income, is

(Continued

and obvious

Plan

new
there is

in

for
his
such

on

example,

number- of

"exploita-r

a

time

over

40, when the

Yprk has just put
departmental' workers on a

its

permanent
vides for

page

1974)

tion

payment of

special claim

no

seem a

to

a

reason¬

$20,000,000 serial
debentures due from Sept. 1, 1947
to 1953; while in addition the
(debentures due 1971 carry a sink¬

ing fund, moderate in amount

but this would not affect

essary

cash earnings and

also

are

a

policy than at present. Eventually
some allowance for plant amorti¬
zation, for a, gradual writedown
to original cost, might prove nec¬

on

However, the com¬
has outstanding $16,500,000
botes y due next ; September and
there

allowable - "fair re¬
capital set-up, there
to be no special bar
more
generous
dividend
and

seem

not be very

probably would

burdensome. Assum¬

ing that hs much

75c could be

as

paid at ?ome lat^r.date, the yield
"

un¬

(Continued

:

page

on

Common Stock

;

■

'

-

-

'

-

•

a

"

r
'
■

For the twelve months

earnings

were

Dividends

are

" $2.02

ending Jply 31, 194(5
per

share.

common

paid at the rate of $L20

'

year.

•-

•

Proximate

■

per

.

Market 20-21

d. A. Saxton & Co., Inc.
70 Pine Street, New
WHitehall 4-4970

York 5, N. Y.
Teletype NY 1-009

'

; ;

Lincoln Building 5V2S,
Poli New

1963, Stamped

England 5s, 1983

I Portland Electric Power 6s, 1950
vl I'SK'y:'**

Gilbert J. Postley & Co.
29 BROADWAT. NEW i YORK «, N.

•

'

seven-day week with

an?veight-hour

day. This, isr in
sharp contrast to the 5-day week
of. seven-hour days which was the
RussianVorkirig week in 1940. In
view cof: the existing situation in
this country and the current labor
talk for an even shorter
work

week, there seems to be some
versaT of position. '
Another significant change
Russian
is

ing:3

attitude

pointed

under

the

in

2.
^

;;

?

1

?

(When Distributed)
r "
BOUGHT

•*:

1—

SOLD

]
—

' '

■

.••? ?.... .y.Vr-?
QUOTED

... — r

acknowledgements to Ellis Parker
•.•

•

Harcourt,

1946.

'-

South Carolina Electric1 & Gas Common
•

J. ®

1. With

V

Southwestern Public Serv. Common

by the follow-

up

v

Carolina Power & Light Common

y'

-

.

Bi'tlp'*.

Birmingham Electric Common

k

re-

new

s

"The

Brace
v

&

Co.,

New

York,

•

■

Economist"

(London),

Aug.

(Continued

3,

Paine, Webber, Jackson & Cms
ESTABLISHED

on page

1942):

Black Hills Power & Light Co,

new
a

such

policy,

turn,"
would

difficult to fore¬

1946, p. 167.
on

available for dividends

year," but

amount
might be
deferred
pending retirement of the short-

guess.

five-day,c 37 l/z
hour
Soviet Plan.: pro¬

week,? the

other

in

worked

New

of

earnings in
operating
hand,

the

the

when

industry averages

fraction

a

State

at

hours

United ;States

only

next

pany

economy—

"laissez-faire'^ and

the

about 75c

0.79

parent company's earnings

rea¬

iton" would be great.;

of
im-

was

JKiSt'ching^

admittedly Marxian

as

figures

0.87

course

the temptation to use such terms

.

one

were

diminishing concern
welfare and

a

Plan

tax

involving the withholding of tax

tax
-

.

above

ari-

an

of

lower

worker's

t For

yield much greater than that of

terly

California,

Coronado, Cal., Sept. 28, 1946.'

r"

••

.

nual

will result in

individual, income

to

an

on

outlays for national de-.

Mr.

the economy, and
working harder, pro¬
ducing more, that—were it not in

for

Interest

necessaryitemsof-government

on

V

evidence

who

Five-Year:

stress

fense, aids to veterans,; and other

tax

mistake to think

heritage

a

greatly increased public debt,

place,

tax. At

and individuals

in

the pre-war years. In

stock

that .wartime; phenom¬

the automobile

us

many years to come.

,'S.'

vpr measures, to, be enacted by
Congress, was removed. The Rev¬

be

the years

to

goes,

against

revolution.

the

numerous

place

before11940. In' the first place, the

the field of taxation

fromthe

such

the

.

tax

time to

some

■? ; "■,
:
consists merely of eliminat¬
ing those measures that were
adopted during the .war. We can¬
not return, at least as far as the

On

may

Columbia's dividend policy.

if is still possible to differen¬

Soviet

peace

but

rebel

Farm

of

italist labor policy; Bui in the

<$>——.

relaxed,

quire that they still remain ef¬

For

of

of

an

tiate between communist and cap¬

h

ing of the huge

It#is

which."
?

sons
,j

x

The first year 6f peace just concluded has witnessed the unwind¬
war machine that we developed in the course of five

^

•

animals

25%

treasuries

earnings for the calendar year
be somewhat higher than the
pro
forma figures for the
12
months ended May 31, due to. tax
savings. Hence, it is Surmised that
the parent company might have

not

indicated the following
share on the com¬

through the window looked "from
pig to man, and from man\to p;g,
and from pig to man again; it
was impossible to say which was

terest and not in interest of
any narrow group.

'

animals

great that when the

so

the 1V2% notes are
Also, it is customary to

about

companies.

per

prieibrs.^ And the? transformation

the fax equation.
Places
and employment as main

the

stock:

able

the

Jones, the owner, is chased off,
and the animals take over, with
the pigs in charge.
It becomes
clear then,' that leadership: ih-r
volves responsibility; responsibil¬
ity requires authority'authority
begets power; and power takes
possessions The pigs =; move? into
the farmhobse. Now, no longer i
part of the working class,1 they
usurp proprietorship and wield the
whip.
The betrayal is complete
when the pig-proprietors throw.a
party for neighboring man-pro-

"I know that, pay colleagues are
of the importance of mak-

aware

had

earnings

rate of 75c would:

Bingham

is

Comes

last

1941

the
Jo

when

Manor

forma

If there

unity.

order

the.

i.

commu¬

nist

renewed.

declared recently, was ac¬
companied by the statement that
future dividend
policy
yet been determined.

unless

year

retain

one,

cast

a

i st

established

stock—the

common

I

ultimate

The

the

Associ¬

the

$2,450,000. Thus
will
annually

a
share for
the next 25 years, and there
may
a
sizable drain on cash next

may

1942

deent,

p m

co m m u n

responsible to

are

o

distortion of

impressed with Mr.? Caf- statutes passed by the Congress
frey's closing remarks and I would and that we do not rriake the law
like to read them' to
you, even" but Yather that weafe-agents to
enforce it. We

1

and

was

ation of

be

changes

to

' ??\,
Calendar year 1945—0.97 term. notes.: '. •y '
i
1944
0.92 ?y Based on the present situation
with respect to rates, deprecia¬
1943
0.93

estab¬

v e

purport to bind my col¬
Charles S. Garland
Mr, Caffrey as leagues.- However, I dp believe
its: Chairman; that the country has a right to
'Vi''
In light of these
changes in the know that we are very conscious
top personnel of the Commission, of our obligation to administer

*

require about 20-30c

minor

12 months ended May 31,1946 $1.15

na-

lishment,

which

York

retirements

S1/^, and
earnings

pointed satire

has elected

New

jumps

bond

presented
in
the
recent
prospectus on the new debenture

but

inappropriate T to

address toy Mr.Garland

ment

Far m"2

C ommission

:

and

Pro

i-

n

refunded

were

Or¬

"A

been

huge
natural
gas 1 dis¬
tributing system remains prac¬
tically
intact,
although
some

mon

what

majority of the Commis¬

a

sion decides

appoint¬

is

George

the

have

its

<"

the

Five-

Year Plan.

Commission

meeting here
■in' May, t wo
;he#;/:Commissioners

to Commission- policy in

as

the future. I have been elected by
the votes of my associates and the

to

sues

»

.

'

"

sold

farm

a

o

1946,
happening in the labor policy

Chairman

f

-

integration pro¬
properties, Dayton Power & Light and Cin¬
Electric, have been<*>
——
public, its bond is¬ til 1957, when the annual require¬

eventually be
required to complete the integra¬
tion program. The
company this
year has paid three 10c dividends

"The Economist" of
Aug, 3,

said

k

o

i

farm

of Soviet Rus-

w

stick

Niagara Hudson

vs.

cinnati Gas &

tradi¬

thing happens that is indicated

attended that dinner.

for

-

Utility Securities

Its two electric

gram..

sys¬

on.

in this

many

i~

«

fashionable

o

a

system

."Mister Orwell has

spects. You
n

lengthened

are

under

by way of conclusion,
and I quote: "It has almost become

re¬

1931

Columbia Gas

Russia's

to

with standard output.

up
out

And

which

the

j'«

Because of the fact that they are both
utility holding companies
and at almost
.the same price level, Columbia Gas (currently around
9/2) and Niagara Hudson (currently 9)
naturally invite comparison.
Columbia's price range this year has
bee© 14—8V2; Niagara's 15—8ya.
Columbia Gas has now
virtually completed its

has been reversed.

ministrators

An

\

•.

take

tional roles of carrot and

Securities Ad-'**

many

pigs

rationing and paying less

keeping

Several .weeks ago Chairman Caffrey, of the SEC, made a speech
at a dinner in New York in honor of the National Association of

before

*

i

is

than minimum wage to those not

;

{- *

i

Public

proprietorship.

situation

workers'

knowledgement of propriety of the profit motive.

I

U

con-

farmer

and output reduced under

well as relief
from the credit restrictions on securities dealings.
Urges problem
in adjusting employer-employee relations in securities industry be
given prompt consideration and holds economic machinery has been
halted by Federal wage policy.
Concludes future of country de¬
pends upon resurgence of system of free enterprise and a iirm ac-

!

4

Fourth Five-Year Plan in which

need of revision of rules

sees

to

which

and exercise

over

^

eral Securities

% and techniques of capital markets,

under

forced

GARLAND*

S.

President, Investment Bankers Association

■

«-

JO BINGHAM

By

~

'•

YPigs is Pigs'!1

Banking Problems

*

^

1

•

Unsettled Investment

Mr. Garland

.

THE COMMERCIAL & FINANCIAL CHRONICLE

yolume 164 ' Number 4534
..v.;

>

'.V

#

p

/»iU ,M o f.JU*.; v.':.m v*i

,c

1939)

*

1879

•

1932

THE COMMERCIAL & FINANCIAL

CHRQNICLE

Thursday, October 17,-4946

•T*"-

Living Costs

Dutch to Liquidate
Their U. S. Securities

Stock Prices

versus

By JACK TOPPELL

■

Manager, Investment Research Department, Luckhurst & Co., Inc.

Citing the net decline in stocks in the face of higher commodity

'

v

prices since V-J Day, analyst holds that consequently the current
buyer of shares can secure participation in the rising price level
"at a discount." "
1940

Bureau

of

banker

down

statistics.

Labor

Finance Minister Leiftinck, on re¬
to Amsreed from

boy

America,

been

torted

World War

I, yet the inflationary
potential throughout the commer¬

dis¬

in

prices

the

to

black

business¬

these

enjoys freer
at

ficial

levels.

Jack Toppell

The black market is worst of

xll

the money supply

and

controls

whole

.the

to

completely free

set into motion the vast inflation

with

potential mentioned earlier.

the

process

Presi¬

impetus

that

period

started

by the

levels

to

recede

over

to

A few

arid other
the

an ex¬

high

prices

successive

wage-

iri the

country^Q

by Christmas.- Only the most gulfor 7;food

of

price increases going on

su-

restrictions

„

entirely possible

entering into

are

tended

government

pible .look
prices

we

looking for¬

complete' elimination

a

of

It is therefore

to

decontrol,

of

'.(excepting possibly rent and
;gar)

i.e., money supply remaining fair¬

ly constant, the prices increasing

-most businessmen are

ward

reversing itself,

manufac¬

many

giving

speech

times larger

the process now

V/ The OPA is gradually being ex¬

dents

artificially held back. With

since the outbreak of the war and

To World Series tickets.

of

the result'of

are

prewar

than

more

the intermediate term.

figures culled from Bu¬

of Labor* statistics point

reau;

ever

of the current

Oct. 11.— The
Minister
of
Finance, Professor
Pieter
Lieftinck, returned this
week from a voyage to USA and
Canada. In 'a press conference he
told the journalists there was lit¬
tle chance to float,a loan in New
York

for

the moment.

up

contentiori

our

of /

.

.

rapid increase in the money sup¬

were

the gamut from automobiles

now

.

ply during the war when prices

essentials—food,

shelter,' and clothing,' although it

tinguished, with

costs

AMSTERDAM,

facilities

equity prices.

Inflated
a

in the three basic

lines

not

proved

of¬

does

results
to im¬

operating
carry through

higher

could

trading than it

tured

reflected

earnings and dividends,
and
with
an
ample, supply of
credit there is;' no treason' why

market

runs

be

creased

w.hich in cer-,
tain

must

inflationary
in in¬

the

later

or

inequitable, relation

in

imports

brief strike, climaxing strained
relationship between Treasury
and Stock Exchange.

years

sooner

increased

Amsterdam brokers go on

1947.

of

factors

one re¬

for

need

greater than it

ago, and the very
inflation, which means
higher prices for goods, has tended
to keep stocks at depressed levels.
It
would
seem,
therefore, v that
fear

make it almost

sorts

26

was

as

impossible to
purchase items
unless

is far

cial world

much &s OPA

ceiling

such liquidation is necessi¬
tated by restriction of Interna¬
tional Bank's facilities, and the

<$>-

knows,

has

tration

The

loan

the C International

use

James J. Caffrey, Chairman of
the Securities and Exchange Com¬
mission, has submitted for
public discussion tentative proposals for
relaxing
the
<$>
—
application of
the

Securities

Act

of

1933

In submitting the proposals
itemized herein, Chairman Caf¬

to the dissem¬

ination of in¬

formation

registra ti
statem

frey emphasized that they are
as a basis of discus¬

in

e n

intended
sion

t

s

Hence,

ward your

In/a

addressed

various
sons

t

interestthe

problem,
Caffrey
for

o

per¬

in

to
Caffrey

communications

Chronicle,

New York 8,

Park

25

N. Y.

,

PL,

■

considered

but

trading in American securi¬

nance

ties

on

the Amsterdam Stock Ex¬

parties.

invited to for¬
and sug¬

are

Editor, Commercial & Finan¬

cial

Mr.
asks

written comment,
12, on detailed pro¬
posals which were prepared by
the
Commission's
corporate fi¬

The

Commission

comment

Address your

..

J.

James

possibility for
voluntary liquidation at the New
York Stock Exchange is now open,

A.

S.

you

the

interested

gestions regarding this importo Editor, Commercial & FinanIdentity of correspondents will
be withheld on request.
// :

letter,
11,

dated Oct.

ed

U.

other

fective date.

needed

in

between

and

on

before the ef¬

Bank

being restricted and the
import for 1947 being
larger than in 1946 the Treasury
is
obliged to take recourse to
liquidation of Dutch investments

of

j

^statements' filing date and effective date. Would broaden

"red herring
prospectus," combining it with final prospectus.
Specific proposals itemized.

says

been cut in half based on
picture, as everyone from the

This

Chairman Caffrey submits to interested
parties specific proposals
for
extending practical dissemination of information between regis*

^'Algemeen Handelsblad"

turn

has officially

dollar

our

to the school¬

:

i V

Proposes Broader
"Red Herring" Use

GALEN

van

Financial Editor,.;f. /

■

/

Since

es

By J.

SEC

before Nov.

division

under

tion of Edward H.

the

direc¬

Cashion, chief

the

National

curities

lished

/

Association

Administrators

in full in the

of

Se¬

(pub¬

"Chronicle"

of Oct.

3), the proposals envisage
of the "red herring"
technique. Used be¬
ing problem which these pro¬ fore the effective date, the "red
would otherwise/buy American posals are designed to meet is on herring"
would
contain
more
securities offered for sale and by the one hand, to accomplish a complete
information,
and
it
this way the Treasury would not broader practical dissemination of could subsequently become part
get the dollars it needs for the information contained in a reg¬ of the final prospectus.
payment of imports. The Dutch istration statement, between the / A red herring prospectus is de-i
owner who has his American se¬
filing and the effective dates; and fined as a circular describing a
curities- certified as Dutch owner¬ at the same time, not to have such security in the method in -which
ship by the Netherlands Bank is dissemination of information used a prospectus conforming to Sec¬
obliged to sell these securities at as an attempt to sell the securi¬ tion 10 describes a security, but
New York a month after the cer¬ ties during that period in a man¬ clearly and unmistakably marked
tification. The proceeds are to be ner in violation of the Act.,
to indicate that it is informative
r
transferred
to: / the
Netherlands / Following the theme recently only and is not intended to solicit
Bank. The seller gets the counter- expressed by Mr. Caffrey before
(Continued on page !953)
>
value 60% in "free" guilders and

change/is

still prohibited.
The
minister justified /this action by
arguing that the Dutch public

counsel.
The

wider

double-edged long-stand¬

use

prospectus

.

'Our dollar is

therefore

going to

ibuy less in terms of future price
us

vidual

The domestic price level

tlevels.

'October

1946- ix

.Percentage
,

Pood

r

v

iJkkjL

v

*71.2

^21.5%

or

with

the fa¬

resulting there¬

Total Cost of -—Dow-Jones Averages-—■

.

Living

146.4

Ind.

.Rails

u,

129.3/

".159.7'

*74,

57.8

143.7

^

//

163.12"

45.'

5

11%

Utilities

33/

.

34.

-

*5%

in relation to

our

national income.

Food prices since V-J Day have
risen approximately 22 %t official

.

blocked* account.

on

The Minister added th&t he

of

the

was

Sees Collusion of Underwriters and

opinion that the interests
Exchange

and of Amsterdam

as

hind the general interest.

The brokers

J. Arthur Warner tells

New York' Security Dealers Association
there has been abuse of registered broker-dealers' privilege to act

/

| about these words of the Minister
Backlog of orders for

and

hundreds of items instead of
being

any

5%.drop.

satisfied have resulted in merely
an

increased deferred demand.

refused

Thursday' to

security. They went

and there is now an open

between

the

quote

Minister

V

strike

on

conflict
the

and

In addressing the meeing of the New York Security Dealers
Association at the Hotel Waldorf Astoria on Oct. 8, J. Arthur War.

As

our
living costs rise and Stock Exchange. For some, time
simultaneously shrink purchasing there has been a growing tension
hand, stock prices as measured by power, it is paradoxical that the and this strike is the climax.
the Dow-Jones Averages show a goods included in our cost-of-liv¬
The brokers have one powerful

(figures / and

unofficial

figures

ner, President^
of J.
Arthur to the

;

potential buyer of the se¬
curity that he may offer, insofar
I n c.,
N e w as that security is priced to the
York City, public.
Mr. Warner then expressed the
stated that in
hisopinion the opinion that the matter of under¬
primary cause writing and pricing of a security
of the decline resolves itself in many cases into
in securities a form of conspiracy between the>
values over underwriter and the corporation*
the
last
few The
corporation,
its
cupidity
months has aroused by the existence of an ex¬
been the ple¬ tremely favorable capital market*

/(black market) 40%. On the other

ing indices: food, clothing, appli-

j ances, etc., all these

are produced

by companies in whom these

Fot Banks, Brokers and

Corporate Investors,
TRADING MARKETS IN

investors can secure
at

"discount"

a

the rise

in

participation
a

in price of

sense

these

facturing equitieshas
pace

same

that

manu¬

not

kept

with the rise in the cost of

living.

£

they

against the Treasury: if

maintain

their

non-cooperation

attitude

of

refuse

to

and

give their assistance for the regis¬
tration of all securities

(45 to 50

million) the Minister will not be
able to effectuate this

registration.

This would interfere with

one

the fiscal information about

Securities

i
SPECIALTY CORP. 1

AND
Growing

Company

Credit Business.

in

Installment

10 Offices

through¬

out Northeastern States

Inquiries Invited

quarter ending

own¬

brokers

resumed

trade

President of the Stock

Carel

Committee,-

F.

as

Overhoff,

retire if the strike

went on.

7/31/40.
r'
$52,160.13
earnings
indicated
for

Founded 1920

Increased

2nd

quarter

Total

Current

Assets

Total Current Liabilities

$1,165,945.40
$297,661.55

NO BONDS—-NO PREFERRED

120

Broadway, New York 5

Information

on

Request

BArclay 7-5660

Teletype: NY 1-583

G

S. Weinberg & Co.
Members N.Y. Security Dealers Ass'n

We render

a

brokerage service

Greenfield, Lax & Co.

King William Street

INCORPORATED

Banks and Dealers

London, E. C.

4




•

40

the matter

60 Wall

Street, New York 5

Telephone: WHitefaoli 3-78*0

Y

*

has, in many cases, formed or ex¬
panded for the sole purpose of se¬
curing other people's money for
the benefit of the officers and

of the corporation tar
security resolves it¬ the exclusion of the public inter¬
self in many cases into a form of est,. except that if the business
conspiracy between the under¬ happens to prosper, the/stock¬
holders will become the incidental
writer and corporation."
promoters

and pricing a

He stated that a reservoir of in¬

beneficiaries,

of the country, and to

the price structure

of the securi¬

ties markets if these funds "could
be denied the dubious

/•

/'

-

"As

the hands

privilege of

.

i

■

we

fore, may be without the requisite

qualifications that should be in¬
cumbent upon him

both in his re¬

and sponsibility to the investing fra¬
in some cases, disgraceful public ternity, and to The public, and
offerings from the standpoint of then together, these two, the cor¬
investing

in new unproven,

the value received "for the dollar

invested."

'

present Securities

Acts, any

firm with a broker-dealer

Telephone ha 2-9290
Teletypes—NY l-292«
NY l-2?23

of

"underwriting

the

of Securities Dealers, Inc.

Exchange Place, New York 5

Warner

new

Continuing he said that, under

Member National Association

,8

Arthur

economy

in ail Unlisted Securities for

London Representative:

J.

of

know," he stated, "the
of the public, and that it would be corporation then finds a registered
broker-dealer who, as I said be¬
to the considerable benefit of the

Common Stock Available Around $4.00
Detailed

Phone

thora

security offer¬
ings and that

vestment money was in

.

Dividend 10c. per share
paid 8/31/46 -/

the

Exchange

amounted to™-,.

Corporation /

of

ership of the securities. Today the

threatened to

Company Reports:
Net Profit after taxes 1st

New York Hanseatic

Warner & Co.,

the main aims of the registration:

UNITED UTILITIES

/

weapon

/

underwriters, and "underwriters and corporations should not
be permitted to wander unbridled ^ in our midst and they should
not be permitted to pursue the public dollar like a pickpocket v |
pursuing his prey."
as

excited

were very

Corporations

To Get Investors'Dollars

interna-

an

tiorial financial centre lagged be¬

\

•Percentage represents loss incurred. '

This "inverse".ratio points up
"backwardness" bf stock groups

40%

of the Amsterdam Stock

Clothing

140.9

(V-J Day)

commodities

indi¬

and

from.

.

(1935-1939=100)

prices

vorable inferences

still far below that existing in

August 1945

stock

between

tration may elect to act as

or

spire to foist upon unwary buyers
a

security at the highest possible

regis¬ price consistent with the market's
the security;
an un¬ ability to absorb

derwriter, regardless of his quali¬

' CF2 fications

poration and the underwriter, con¬

moral responsibility

and at

a

price, as I have said be-

(Continued on page 1936)

.

•

■

'Volume 164

THE COMMERCIAL & FINANCIAL

Number 4534

CHRONICLE

Lays Inflation to
Claris Adams, President of Amer¬
Life Convention, contends
Treasury policy of keeping rates
low to hold down public debt
interest payments is fallacious,
and talis for refunding of a portion of dangerous preponderant
short-term obligations by issues
on
a
more
favorable basis to

ican

:

holders.
In

his

presidential

address to

the American Life Convention at

Chicago, 111., on Oct. 7, Claris Adr
President of the Ohio State

ams,

'

Life Insurance

Company,

-

■

at-J
the

tacked
.

cheap V money

of the

policy
T

re a

sury.

fallacious

as

asserted

and:

that "we

can¬

not

-

whip

in¬

flation

with

cheap

money

because
v

infla-

tion

cheap
and

is

money
:

cheap money I
is
inflation."
Regarding the

'
.

.

.

.

Clans Adams

relation of

cheap money to the present in¬
flation, Mr. Adams said: ^
^
"The magnitude of war financ¬
ing and the methods employed to
accomplish it inevitably resulted
in

inflation. £ It

is not my pur¬

argue whether it was
avoidable in whole or in part; It

to

pose

Sound National Labor

is

not

There are contrib¬
which temporarily
aggravate - inflationary :«.• effects.
There
may
be
supplementary
uting

Policy Is Needed




intent to oversimplify

my

the problem. :
causes

which

remedies

will

reduce

the

virulence of certain symptoms.

It

controversy, however,
that the heart of the inflationary
is

beyond

problem is the fiscal policy of the
government.
A monetary pro¬
gram which is soundly conceived,
intelligently integrated and firmly
maintained may not be the com-

jplete solution, but without such a
can be no solution.
strikes at life insur¬

there

program

"Inflation

BRITISH SECURITIES
United

Kingdom 4s, 1960-90

policyholders and benefici¬
aries with double force.
They are
ance

ground
stone

between the upper mill
high commodity prices

of

and the

nether mill stone

investment returns.
of interest

of low

The earnings

Goodbody & Co.

the savings of pol¬

on

integral part of
the life insurance process which

Members N. Y. Stock Exchange and Other Principal Exchanges
115 BROADWAY
NEW YORK 6, N. Y.

plays an important role in deter¬
mining policy costs.
The cheap
money program
of the govern¬
ment, therefore, which has hfelped
to keep
prices up and interest
rates
down, has borne heavily
upon :: .the
institution.
Policy¬

Telephone BArclay 7-0100

icyholders is

an

holders must pay more
insurance.

It

takes

for their

more

a

income

given income.
will

The

on page

on

.

,

,

Common Stock

-

Investment Dealers and Banks
are invited to write for copy

same

purchase only 65 to

(Continued

a

STANDARD SCREW

insur¬

■

with

have prepared,

We

special memorandum

to provide their beneficiaries

ance

Teletype NY 1-672

\

1979)

■

Bought—Sold—Quoted

120

\

Milclicll s-Coiiipaiuj

,

.Members Baltimore Stock Exchange

BROADWAY

•

Tel. WOrth 2-4230

•

<

NEW YORK

CITY

Bell Teletype NY 1-1227

STATE AND MUNICIPAL BONDS
Common & Preferred

CORPORATE BONDS

(RICHMOND CEDAR WORKS)
LOCAL STOCKS

H. D. Knox & Co., Inc.
Members N.

Y.

Security Dealers Ass'n

11 Broadway, N. T. 4
Tel.

111

Broadway, New York 6, N. Y.

BArclay 7-0570

NY 1-1026

DIgby 4-1388

Tele. NT 1-84

27 State St., Boston 9

The

Robinson-Humphrey Company
Established 1894

TeL Capitol 8950
Tele. BS 169

Established 1026

RHODES-HAVERTY BLDG.
Teletype AT 288

■.

ATLANTA

1,

GEORGIA

Long Distance 108

''

/Z"

•

z/Z/''"Z/;ZZ/1'' ■■•?>/:... /a/Z//Z/'/ZZZ

•„■

-?;^-v-.:'■'*■'/*'"s/.s;";:.'■■,'",i>:^:■■■:,"■"'J"' .'■ ■';■■;>jV'v

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v:j:, -w

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:<f; {.y-xyr .1""f:*;-' Z/Zz''/'' /// '; ,"'

Inc., 41,Broad Street, New York 4;
: •- V: -v -■/ A //Z ' ./
Also available are circulars on
Tennessee Products and Wellman
N. Y.

Dealer-Broker Investment

Engineering,

Recommendations and Literature

!■ ;•/

National Terminals Corporation

Z:

to send

Also

available

Sheller Manufacturing Corp. —
Recent report—Mercier, McDowell

dealers

only—Adams & Co., 231 South La
Salle Street, Chicago 4, 111. ^
^

/

/

Asplnook Corporation—Circular
-—Ward & "Co.,- 120 Broadway]
New York 5, N. Y. ;A - /./a/. <

firms mentioned will he pleased
interested parties the following literature: ./- ?

&

.New/England

memoranda

are

Co.

Public

including a Pierce, Fenner & Beane, 70 Pine
miles and a Street, New York 5, N'. YZ!/
monthly opinion on the stock
Business and Financial Digest-*market—John H. Lewis & Co., 14
including a discussion of Hamilton
Wall Street, New York 5, N/Y.
Bulletin,

Aviation

ford Empire;

Manufacturing Company and the

Basic

covering' both

Analyses,

favorable and unfavorable aspects
<

of the
able

East

Street, Milwaukee 2, Wis.

analysis—du

Co.,

31

on
common
stock
with reference to possibilities for

appreciation and increased income
return—Boenning
&
Co.,; 1606
Walnut ; Street,
Philadelphia 3,

& .Co.,

Inc.,

Street,

'Z-'/V..:

•

-

*

:

•

Standard Screw—Special memo-

'O/. \;

randum

Fred B. Prophet Company—De¬

70

-

'

and

i

Saxton

A.

Pa/

Homsey
Boston 9r

Pont,

Ala¬

Co.—Card; memorandum

Buda.

.

—G.

Milk
Z■

•

tailed

'

225

tive

Mass.

Puro-

lator Products; Upson Corp.;

Mason

Co.,

are

for

investment

banks—Mitchell

&

dealers

Co.,' 120

Broadway, New York 5, N. Y.

.

memorandum—De

Young
Tornga,' Grand Rapid*
Bank Building, Grand

Larson &

National.

Pine

Universal Zonolite Insulation

Analysis

Caswell

—

& ,Co.,

—

120

Street, New York 5, ;NV Y./l Rapids 2, Mich.,;
Salle Street, Chicago
»
Capital Gains and Losses for
3, 111/ -/-/z; /^r
and
work¬
AmericanN Water. Works; 1946 —.Explanation
Central
Public
Also available is a circular oh
Utility
S^s
Public National Bank & Trust
a
sheets—H. Hent£ & Co., 60 Beaver
Atchison, Topeka & Sante Fe;
of *52 and Consolidated Electric
Chicago Hardware Foundry Co. ,"'
Co.—Analysis—C. E. Unterberg
■
Baldwin Locomotive; Chase Na¬ Street, New Yofk 5, N. Y.
and Gas Pfd. —' Comprehensive &
Co., 61 Broadway, New York 6,
tional Bank; Cities Service; Com¬
Warner
study and analysis in brochure
Co.—Revised
memo- •'
Comparative Condensed State¬
monwealth
Edison;
Commonform—Fred/ W. Fairman & Co.,
random—H. M. Byllesby & Co.,
'
wealth & Southern; Consolidated ments of the Dominion of Can¬ 208 South La ;Salle
Stock Exchange Building, PhilaStreet, Chi¬
Rockwell Manufacturing Co.—
ada and Provinces—Twelfth an¬
Edison of New York; Crane Com¬
cago 4, 111. i
11
delphia 2, Pa.
Z'Z^Z> a./s/-V',A'A
nual edition—A. E. Ames & Co.,
Analysis—^Steiner, Rouse & Co.;
25
Broad Street, New York 4.
pany; Detroit Edison; E. L du Pont Inc., 2" Wall Street, New York 5,'
Chef ford Master
Analytical
Yuba Consolidated Gold Fields
N.Y.de Nemours;
Goodyear Tire & NZY/"?I1^

Power
<

companies studied. Avail¬
analyses of American
&
Light; American To-

&

Glass;

Window

bama Mills.

situation in the Paper Industry—
Loewi

Don & Steel; Barcalo; Haloid;

on

De¬
:

Co.—Report

•Parker Appliance Co.—Descrip-

Landva Corp.; Mo¬

hawk Rubber; and Taylor Whayta

American

Buhl Building,

Southern Advance Bag &. Paper

Service

Appraisal of values — Ira
Haupt & Co., Ill Broadway, New
Ybrk 6rN. Y. '
1
"
,-t-

——-

forecast of airline seat

Dolphyn,

troit 26, Mich.

W. L. Douglas Shoe Co.; Hart¬

on

.

South

B

La

bacco;

■.

""""r

•

"l

'

-

Peltason, Tenenbaum
Co., Landreth Building, St. Louis

report.

International Harvester;

Rubber;

Marine Midland;

Paramount Pic¬

York

New

Banks-Com¬

City

—

2, Mo.

t

,

1

■

Southern

Pepsi-Cola; "

.

Pacific;

parison apd- analysis of 19 New
York Cfty banks for the third
Columbia
Gas
&
Electricquarter of 1946—Laird, Bissfell &
Study of the situation—Edward
Meeds, 120 Broadway, New York A. Purcell &
Co., 50 BroadwayL
.

New

of

Oil

Standard

Jersey;

New York 4; N. Yv ":

United Aircraft; United Air Lines;

Corp.—Merrill Lynch,

and United

CARTER H. CORBREY & CO.
Member, National Association
of Securities Dealers r

—

,\

Pacific Coast

Comr
of -29

Stocks—Comparison

■':i Columbia ~ Gas & r Electric Corii.
—Analysis — L. F. Rothschild &
Co., 120 Broadway, New York 5,

stocks giving factors for

Z'Z '■///

■

Twelve

Attractive

/

'

—

Memorandum

interesting

MARKET

DISTRIBUTION
LOS ANGELES 14

Stocks

on

at

n; y.

S^SpringSt.

—

Decker

issues

appearing
present
levels—

State 6502

Michigan 4181

CG 99

LA 255

available

is

South

231
cago

Salle

La

4, ill.

Street,
\

•

/ Also available
Hydraulic
Press

Chi¬

r ■

on

Elec¬

Jefferson

J.

Snap-On Tools Corp., Com.
Cribben & Sexton Inc., Com.

Woodward Govenor Co., Com.
'Prospectus Available on Request.

Aircraft

<

Paul H.Davis & Co.
Established 1916
Members Principal Stock Exchanges

Chicago Board of Trade

10 So. La Salle St., Chicago 3
Teletype CG 405

Indianapolis, Ind.
Eockford, 111.
Cleveland, Ohio

—

—Detailed

Analysis

Co/

Reilly & Co., Inc., 40 Ex¬
change Place, New York 5, N. Y.
Also available are the following:
American Forging & Socket Co.;
American

Phenolic

&

John

Co.;

Doe

Doing the

FINANCIAL

Also

Stamp¬

on

}

Plans Prepared—Conference Invited
-

GuentherLaw

Incorporated

131 Cedar Street
-i

New York 6» N.Y.

Telephone COrtlandt 7'?C60

memoranda

Merchants Distilling Corp.

v

,

Greyhound Corporation—Circu¬

ing Co.; Executives Tell Us That;
General Industries Co.; General

Salle Street,

Machinery

on

Street;

Corp.;

Losses

Panel

McBeg

Corp.;

Co.;

Bull

a

Plastics

Silver

f

A

Thk

Pinanciai,

Chronicle) "

U.. S, Sugar -<Corp.;

Virginia Dare

Analysis

-r

~r-

offices

at

118 r South / Beverly

■■i

Analysis—R.

Materials

Memorandum

South

/

'

;

Products

Co.,

Salle

La

Co.:

•

&

Go./ 208

Street,

market

-

on

'j

Also available is;

a

circular

on

Queen Anne Candy Co.

1

Z;A/Z/Z AAA

a great number of people are more'than interested
in the security market.
Some may be said to be

wise,

other¬

most

.but

clear

all

.

The securities

is

market

a

keystone; and
a

barometer in

economy.

whether

-

uSj

.the

.,

or

•into that

directly
: indirectly

there
or

that

capital »was

small investor) had beeome anx¬
ious, worried and disturbed about

capitalis¬

af f ects

evidence

taking the view that we were
going forward into a new era of
prosperity. Since /May last we
have
had
a
steadily declining
market,
evidence ■ that
capital
(and included in capital is the

interested.

some

not

new

we

"era,

coming
whether if

were

or

it would be deferred for

we were

the

time to come.

Rising prices/
increasing costs, the release of
controls, strikes arid disturbances
and inepitude of leadership have

basic

producer, -in¬
dustry,
labo.r

all tended to make

and/die labor

Chicago union.'/"

'

.

/

interesting situ¬

on

Brailsford

ation,

Broad¬

way,1 New York 4/N. Y.

days

lives of all of

Corp.; War.

32

Z In these

tic

Johrfson- &

H.

Steel

Indiana

/ Preferred;

Barken,

/

in what goes

any

64 Wall Street, New York 5r N.Y.

American, Insulator—Memorani

dum—Peter

MCTAGUE> K,

®y ^

What goes .on

Vinco Corp.;

Store

Chicago Corp. and The

Gulf, Mobile & Ohio Railroad-

Market;

Creek Precisioii
V of America;

Carlson

The

C.

and

P.'McTague

of

^

capital .wary

frightened and less confident

the

immediate

future. Politi¬

/ In/the; later days of the vwai^

cians may: express opinions', about

years we had" a bull market both
here and! in the United States;

with, greatconvic¬
really wants #
sound appraisal of Vhat people are

our-.-

economy

tion, but if

anyone

McTague thinking, let hint look to the capWaterloo tal security market which/repre¬
RotarytClub, 'K,itphener,:Ont.; Octi sents the sum total Of rather cross(Continued on page 1979)
/
7, 1946. — "
./•■/ ••■!■ !
rv *An address by Mr.

Publications

MacFadden

—

Boston Chicago Philadelphia San Francisco

'Argo Oil

Corp^r-Descriptive cir¬ cular—C. E. de Willqrs,& Co/
cular—Seligman, Lubetkin & Con ]Broadway, New Yqrk 5, N. Y.

Cir¬

l^Q
!'/

before, the /Kitchener

-

*

SINCE 19061

Fred.W. FairmanGo.

Primary Markets

1

^

^

Unditwriteti?—Dealers—Distributors Z/ / Z

^

/

,a/ /

Maryland Casualty Company

Central Public

$2.10 Cumulative Prior Preferred*

t

Utility

■'•//

Common Stock //Z

''

'

our

new

Brochure

■■■

*■

/

.

'■

Industrial

•

■.;•*!

z" 1 '■

•

v' '

Railroad / Municipal

r

/

•

;/•

..

Public Utility

BONDS and STOCKS

$1.05 Convertible Preferred*

5^'s of '52
Write'for

*

Prospectus

on

—

V

y

Request

■'

■

-

'

"

analyzing

these

Bonds,

,

ST.
CHICAGO 4, ILLINOIS

208 SOUTH LA SALLE

Telephone Randolph 4068
Direct Private Wire to New York
Bell

System CG 637




-

BEVERLY CHILLS^ CALIF./Raymond H; Sigesmund is engag¬
ing in the securities business from

.

memoranda

are

Muter-Co/ ^v;' ^

Soya- Corp.
-

Chicago 4, 111.:

available

Also

Aircraft

Kellett
in

^

*

wise

4 I"-

Albert Frank

are

lar—Hicks & Price, 231 South La

Stromberg

Branches

available

South Carolina Electric & Gas

and

Letter;
Drico In¬

Corp.; General

*

,

dustrial Corp.; Eastern Engineer¬

Corp.;

ADVERTISING

-

Market

Impossible;

•

Corp.—Memorandum-

Brothers, 1420 W&lnuf
Street, Philadelphia 2, Pa.
j

Industries, Inc.; The Cross

Wall

Its

^

Asserting securities market is keystone and barometer of a capitalistic economy, Canadian official points to recent stock market break
as evidence
capital has become wary and less confident of future. :
Foresees higher wages and material costs and continuation of bnsi*
nesS concentration together with higher interest and dividend rates
to attract investors^
Holds trading regulations are bound to stay
and price manipulations should be stamped out, hut states, if exchanges and security dealers accomplish! successful self-regala-^
tion, drastic control will not be necessary,
,
.
< .

^

Buckley

ing Co.; Common Sense; Consoli¬
dated

&

Kaiser

Building,y-San -Frdni

Russ

Eastern

calo Manufacturing Co.; Buda Co.;

Shearing

—

Cisco' 4, Calif.

Bar¬

Corp.;

analysis

—

Corp.; Golden Crown Mining Co.;
Gruen Watch Co.; Highlights of

All

A-:

Chairman, Ontario Securities Commission

/

F.

Commercial

In

Corp.

•//A:^:v:;zvZ:^^/'':/;

: \

Millpr Manufacturing,, Co. V

//ZZ *ZZZ/:Z;Z Z/ZZ //

Aeronca

Wells-Gardner & Co., Com.

Tel. Franklin 8622

vr

Regulating Canadian
Security Markets

are

Doernbecher Manufacturing Co.

;

Serrick

*

memorandum

tric, Co,

*

■

Sigesmund Opens Office
'(Special to

Sills, Minton & Co., Inc., 209 South
La Salle Streets
*

*

-

analyses of
Manufacturing
Co.;3 Long Bell Lumber Co., and

special

a

Manufacturing Co.—DeiAnalysis—Comstock & Col,

tailed

Walston, Hoffman & Goodwin, 265
Montgomery Street/ San ~Francisco 4, Calif.:
*
*
' •'
I
Also

\

and

.

650

135 La Salle St.

r!fllif AZ/;/A//:ZaA

,

ZZ'/ZSZ f'

v:

"Why You Ought to Buy Them'

UNDERWRITERS ^

CHICAGO 3

Company

securities in
today's markets—Stone & Web¬
Connecticut Railway & Lightf*
ster Securities
Corp./99 Broad ing Co. — Circular — Adams
&
Street, New York 4,. N. Y.
| Peck, 63 Wall
Street, New York 6,

For

SECONDARY

iUcy/ua/i

aiucieb

ui

running In the Chronicle^*
write to Mark Merit, In care o
Schenley ; Distillers; Corporation
350 Fifth Avenue, New York 1

quick evaluation of

Wholesale Distributors
MKMI* West

Utility

operating public utility company
common

—Brocnuie
jeen

/

Public
mon

>f.

;

—Summary and analysis—ShtK
man, Agnew & Co., 300 Mont¬
gomery Street, San Francisco 4,

Schenley Distillers Corporation

o

,

1

tures; Pennsylvania R ai 1 r 0 a d ;

;

•;

Z;./;/'/Z/'/Zt

.

It is understood that the

/.

: '• '/-■/ "'7',y.

1946

--Late memorandum .for

J,

-

-

THE COMMERCIAL & EINANCIAL-CHRONICLE ~

1934

SILLS, MINTON & COMPANY
INCORPORATED

H. M.
*

1

;

209 SO. LA SALLE ST.. CHICAGO 4, ILL
Direct Private Wire

Incorporated

135 So, La Salle

Members Chicago Stock Exchange

Telephone Dearborn 1421

Byllesby and Company

^

/;. Telephone, State 8711

-

-

-

Street, Chicago 3

.

Z

Teletype CG 273

Teletype CG 804
to J.

G. WHITE & CO.,

New York

New York

*

Philadelphia

Pittsburgh

-

"

Minneapolis

Volume 164

Number 4534

;

x

-

/

THE COMMERCIAL & FINANCIAL CHRONICLE

'

1935

ris, Upham & Co. gave the union
authority to call a strike against
the firm, if necessary to
press de¬
By C. DONALD DALLAS *

V

;

mands

The

President, Revere Copper and Brass Co,

;

that

Business

executive, asserting

dislocations

before have restrictions and

never

v?

At.

President.

/

,/

,.

meeting of the New Orieans Security Traders'AssQciatibri

a

Oct. 10 Joseph P.

on

v

Minetree, of Steiner, Rouse & Co. was elected
/;
• V/:'
•
v,{
were Jackson A. Hawley, Equitable Se¬

' :/.
Other officers chosen

-

,

since

members

:

contract,

a

union

takes

the

position
Exchange
lining up solidly in

the

are

Stock

their

hampered industry, points out strikes and unreaj-;& sonable demands of labor, supported by one-sided collective
bargaining and arbitrary control of wages and working conditions,
/ are forerunners of dictatorship. Cites Italy's turn to Fascism and

position to the union's ef-'
to organize
the brokerage*
industry, the union will meet fige

// contends last 25 years show totalitarianism in

section

so

forts

•

new orleans security traders. association

for

*

and

look upon the

will

brokerage industry—that is, that'

Europe developed
extreme positions

where?labor unions and left wingers assumed
against public interest.
j
*

♦

with fire

connected

with

the

Ex-:

.change—as an indivisible whole.;
Consequently, it is inclined to look*
upon
the Exchange's efforts to

curities

Corporation, Vice-President; Mccreary B. Wheeler, Wheeler
compel
the .union members to
& Woolfolk, Inc., Secretary ^Treasurer; and Erroll E. Buckner, Na¬ /!.'• The, third annual meeting of The Magnesium Association has
cross .its own picket lines in the*
tional Bank of Commerce in New Orleans arfd Jr W? Kingsbury, been, impressive and optimistic.' But defying management, scientific
Kingsbury & Alvis, National Committeemen. William Perry Brown,
of Newman, Brown & Co. and R. J. Glas,of Glas & Crane were

appointed Alternate* Committeemen.)

-

^

t

-

•

v

-

v;

r-

.

.

neering skills, never been,

|

h^m IV and sales abR- strictions'

.

ity-

sessions,-

On Oct. 9, the Bond Traders Club of Seattle elected the' following

?■
new

IpFg which
>'JH

Pacific Northwest * Company, Vice-President;

W. l. Stein, Bramhall
Stein, Treasurer; and F. Kenneth Easter; F. K. Easter & Co.,
Secretary.
//;;
■ //;;-:
-"/////v'///5:-v;^>-////

new

Dec. 31, 1947.

*

hjhh

new

officers;

c. Donald Delias

/

still;

terms:

one year

that

there

has
y,

~

Dana F. Baxter,

-

not
is

a standprobably

«■

The following members were elected to the Board of
for

enter-

free- and

Vice-President^ Carl H. Doerge, Wm. J. Mericka & Company.
Secretary: Alan E. Laffexty, Hornblower & Weeks.
Treasurer; Clemens E. Gunn, Gunn, Carey & Company.

.

re-

prjge

elected rapidly being brought-to

President; Jay L.;.Quigley, Quigley & Company.
-

I

combat,

„

Governors

-

re-

ham-

i

The

automobile

industry

as

event they are thrown around the
Exchange by the striking employof

ees
,

i

-

~

■

>

(Continued

.

f

:'

~:/

1977)

on page

TRADING MARKETS

un-

til! it

can t produce cars; the buiiding industry until ,-it can't construct homes; the shipping industry until the "American Marchant

Chicago, Rock Island
& Pacific Ry.
Preferred

&

Common

trade; the electrical, steel, copper,
the

Missouri-Pacific R. R.

and zinc industries to

point where

they can't
to industry.

sup-

Preferred

Millions of investors in the
stock market have recently registered their concensus of opinion
that industry can't function unr

these

der

circumstances.

KITCHEN & CO
135 South La Sallo Street

Chicago 3, III.

They

have warned both politicians and

TeK STAte 4950

/'An address by Mr. Dallas be- labor leaders that free enterprise
fore Third Annual Meeting of the cannot operate successfully while
Magnesium
Association,
New it is half free and half slave.
York City, Oct. 4, 1946. '
;
(Continued on page 1958)

Tele. CG.

,

Active

Trading Market in

National

'

,

~/;\'■ IT'/-:

Terminals

boston security traders association
■

an*

has

been organized and restricted

Hayden, Miller & Co.; Robert L. Erb, Greene,
Gillls & Co.; and John A; Kruse,*
•••..

as

•=

Erb & Co.; Roderick A» Gillis, Wood,
Otis & Co.
" *
>v/:

member firms

some

duty / of Marine-cannot compete in world

that
^

dislocations

and

UHHS/rfer to the fact ply materials

1

The Cleveland Security Traders Association on Sept. 25

tHe following

is

time when the

a

pering
industry have been
great as they are today. * /

ifjKT'B/ leadership to c.oal, lead

"will serve until
:/:/■./////■:

\

and

it

industrial

'*-/.//

cleveland security traders association

St-. recog-

nize

^s^^B.;the

Wm. P; Harper: and: Son

officers took officii* immediately and

TOW

we

/

•£-/ Donald A.'v Meyer.^Foster :and :Marshall, wak/e!pcted National

(. ^.,;fThe

j

EMMS

&

Committeeman with/Hugh R.; Schlicting,
&r Co., Inc., 'Alternate;

are

forces at work

officers;

jordah ;&/Cto!^any;;B^

1

repre-

sented at these

bond traders club of seattle

|

engi-<s>

brains,

:

Association at their annual, meet¬
ing held Oct. 1 elected' Sumner R. Wolley of Coffin & Burr, Inc.,
The Boston Securities Traders

Corporation

President.
Hubert N, Bernard, Jr., Schirmer, Atherton & Co.,. was elected

:. •'

Common Stock

:

Vice-President; Arthur E. Engdahl, Goldman, Sachs & Co., Treasurer.;
Harold A. Madary, Geyer & Co.,

>/

Named to. the board of/governors for a two-year term were:

-

/

Incv Recording Secretary/ and T.

Circular

on

Request

v •

Hoope^Kimball,, Inc.y,- Corresponding .Secretary.

Edmund Williams,

Dayton

P.

Haigney, Dayton .Haigney &. Co.; Anton E. Homsey, du Pont,
Homsey Co., and Alex, W. Moore, J, Arthur. Warner & Co. *
1

Mr. Wolley, the new

President who will also serve

ADAMS St CO

national

as a

231

committeeman, haa appointed the.following National Committeemen:

SOUTH UA SALLE STREET

f

^Wilfred N. Day, Chas, A. Day & Co.; Dayton P. Haigney, Dayton

CHICAGO 4, ILLINOIS

TELETYPE CG

361

PHONE

STATE 0101

Haigney & Co.; Joseph Gannon, May & Gannon, and Frank Lynch;
Hunnewell & Co.

security

traders association of los angeles
Security Traders Asso¬

Aeronca Aircraft

The Committee of Nominations of. the

-

*

1946, and have submitted the

ciation of Los Angeles met on Oct. 7,

following names

as

nominees for th[e offices indicated:

Piresideiit—Lawrence

/

»"

/

P.

Wedeen

S,- Pulliam,

BIcOmber, Revel Miller & Co*

1

&

Co.,

D.

Diehl,

*

Shane

>

Wm,

Staats

Co.,

*

/*

>

/

Secretary—John R. James, Jr4 Geyer & Co., William A; Miller,

IBoard

Xivingstone

Walter

Bingham,

&

.

Miller Manufacturing Co.

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

,

of Governors—Joseph L.

Zimmerman,

Ryons,;Pacific Ca, William, J,

Hurry;

Corporation

Mastic Asphalt Co.
*

& Co.

Ben Coal

Long-Bell Lumber Company

Charles L.

Holton, Holton, Hull & Co.

ijTairman

Hydraulic Press Mfg. Co.

Old

R.

Corp.

Manufacturing Co.

Howard Industries, Inc.

*

A.

Vice-president—Thomas J. Euper, Nelson, Douglass & Co., Wm.
Bunyan, Edgerton, Wykoff &'Co.;
Treasurer—Robert

Decker

Trailmobile

Charles R. Livingstone,

& Co.; Nicholas P. Kirwan, Dean Witter & Co.; Don¬

Company

*Detailed analysis available on

request.

ald E, Summerell, Wagenseller & Durst; Oliver B. Scott, Maxwell,

/Marshall ^ Co.
«

ter & Co.;

PUBLIC UTILITY COMMON STOCKS

'

.

Committeeman—Stephen C, Turner, Turner, Poindex-

National

♦Arkansas Western Gas Company

James D. Cockburn, Crowell Weedon & Co.

Annual

election will be

at the Los Angeles

1

Central Illinois Electric

&

Gas

v

Iowa Public

JEFFERSON ELECTRIC.
;

MISSOURI

POWER

v

Dearborn 1501

Teletype CG 955

•

.

*

"

•

?

Lake Superior District Power
Company
Missouri Utilities Company

Macfadden Publications

51

/

\

Indiana, Inc.

PUBLIC SERVICE Common

INDIANA

So.' La Salle St.
,

Service Company

♦Otter Tail Power Company
Public Service Co. of

CHICAGO SOUTH SHORE & SOUTH BEND
NORTHERN

Company

231

Company

Empire District Electric Company
♦Gulf Public Service

ARKANSAS

chicago 4

"•'Black; Hills Power & Light Company ♦Central Ai'izona Light & Power Company

held Tuesday evening, Oct. 29, 1946,

Athletic Club..

COMSTOCK & Co.

5

Gisholt Machine

All Wisconsin Issues

♦Sioux City Gas & Electric
Company
Southwestern Public Service Company
Texas Public Service Company
*Prospectus available

DOYLE, O'CONNOR & CO
INGQRPORATED

135 south

Dearborn 61«'

Member—Chicago Stock Exchange

A-CAXXYN^COMEANY

la salle street




~

request.

105

Incorporated

chicago 3. illinois
Tetopbone:

upon

'

Teletype: Cl.

•<»-

Chicago

New York

Boston

Milwaukee

So.

La Salle

Central 0780
Offices In Wisconsin

Eau Claire

Minneapolis

Omaha

St., Chicago 3, 111.

CG 262

-

Fond du Lac

Madison

-

-

La Crosse

Wausau

i

V

'i

1936

;

''"ilt A M^i

.l

■

Says Underwriters and
Corps. Combine to

Michigan Brevities
U.

out¬

voted to call all of firm's

directors have

Radiator's

S

President and
witft me N. Y.
for $1,500,000 at not more than 3 V2%

standing 5% debentures as of Nov. 1, W. J. Peoples,
Chairman, cnnounted. Arrangements were also made

five-year loan

Trust Co., for a
interest.

*

,

•

•

..•••.

•

...

1

'V

'

,

'

-

*

*

'

.

•'

•

,

,

'

•

planned soon.

modern building is
"'V

A;

dent, announced: ;
.y/V

^

for $310,from its wholly owned

3,100 shares of stock
000 cash

Call Us On Any

suggest

Michigan-Wisconsin
The firm told the
SEC it plans to use the cash to
pay part of thecost of planning

MICHIGAN
UNLISTEDS

designing

and

■Michi¬

pipeline from Texas to

Wm.C.Roney&Co.
Exchange

Members New York Stock

'A

-

•

.

&' Co. have purchased

V. Sattley

Phone

::.\v

Charles A. Parcells & Co.

purchased an issue of $1,000,000 St. Paul, Minn., lVz% and
1.70% refunding bonds to mature
from 1947 to 1966.

'

;

Members Detroit Stock Exchange

''

.

of

First

639 Penobscot

Telephone

DE 206

Electromaster, Inc.

#

furnished on request

moved

to

& Co., Detroit

quarters at 2166

new

Penobscot Building,

Detroit.
lie

*

#
'

.»*'"v-,

v

'

1'v?

x

Detroit bank clearings

Mercier, McDowell
Stock

-■

,

: »•

•

last week

jumped 18.4% to a tbtal of $286,454,000.

& Dolphyn
Detroit

has

member,

Exchange

-

Report furnished on request

Members

Contract

Shareholders: of
Investment

Contract

Co.

and

&

Mortgage

Co. will vote

on

Oct.

29, to merge into Detroit Mort¬

Directors of
both
O. K.'d the

Co.

gage

firms have already

Prophet
Company

Vawter,

Geo. H.

consolidation.

Fred B,

President of Contract & Invest¬
will

ment
and

head

Walter

the

new

Gehrke,

firm

head

of

Mortgage Contract will become
■

Circular

on

chairman of the board.

Request. 5

Capital

and
a

$2,500,-

surplus

will

total

000, a company spokesman said.
Fruehauf Trailer Company has
sold

eYoung, Larson & Tornga
GRAND RAPIDS, MICH.
GR 84

Phone 98261

$9,000,000

fund

of

debentures,

2%%

sinking

August,

due

1966, to Equitable Life Assurance
Society of United States. Proceeds
will go for working capital.

*

New

>

*

'

•

Railroad

Haven

requested

court

authority*

year

a

with

of

the

the

purchase of fifteen
Diesel-electric

motives.

3.7%

This

third

largest

the
tion

New

motives in

banks.

and

' Loans

is

loco-;

already

owner

to

INDUSTRIAL BROWNHOIST

their freight service ;

between New Haven, Conn, and

increased

May brook, N. Y. Judge Carroll
C. Hincks, U. S. District judge,

24.6% compared to

a

declined

from

$236,674,986

16.7%

a

decline

reduction

$283,846,392

has set the hearing on this peti¬

year

.;'

This'

ago.

compared

of

tion for Oct. 18.

to

12.1% by

\

City hanks.

formed

»

*

*

■■♦' '

■

*:

Eagle Lock Company of
Terryville, Conn., and its parent
company,
Bowser,
Inc.,
have
The

with
New

*

a

national consumer mer¬

organization to s be
Industries, Inc.
This new company will take over
sales and distributing facilities of
The Eagle Lock Company which
covers the forty-eight states, and
abroad through Bowser, International, Inc. In addition to sales of
their own products, 4V\atr ittiII «/»♦*
they will act
as merchandising agent for other
manufacturers who want an estab¬
lished
concern
with worldwide
chandising

Governor Baldwin recently approved immediate issuance by the
Old Lyme-Saybrook Bridge

known

1

Com-'

mission of $6,000,000 bonds to fi-.

Eagle

as

tr

,

bonds
Oct.

were

awarded to the group

f99 V2 and, are

15 on a bid of

Proceeds from the sale will be

provide part of the funds
payment of $19,800,000 of the
company's first mortgage 3^2%

used to
for

due

bonds,
have

Nov.

on

1,

principal

Oct.

1962, which

1,

called for redemption

been

1946, at 105%

of the

with

amount, together

accrued interest.

?

and
Iron
Range Railway Co., all of the cap¬
Missabe

Duluth,

ital

stock

United

of which

is owned

Steel Corp., is the

States

largest carrier of iron ore
It

States.

United

and

operates about

ranges

Min¬

Wisconsin, connecting

the Messabi and

Vermilion iron ore

in northern Minnesota and
ore docks at Duluth and

with its

at

create
slock
ized

a

plan qf

This

tion.;

a

recapitaliza¬

will

set-up

new,

$4 convertible preferred

and

presently

the author¬

increase

common

stock

200,000

outstanding

shares to 500,000 shares.

Holders of the

the

from

s

7% preferred

voluntarily exchange their
convertible

may

Minn., and through

Superior, Wis.

;

Royal Norwegian Govern¬
purchase of United

to the

for the

ment

all

and common on the
basis of 1% shares of new pre¬
ferred and 1% shares of com¬
mon for each share of 7% pre¬
ferred held.
The $4 convertible

under

preferred

preferred

be

will

convertible

into three shares of common

at

property- procured

surplus

credit

these

agreements

purchased prior to Jan¬
uary
1, 1948. Payment will , be
made in U. S. dollars in 25 equal
annual
installments beginning
must

be

1952,

1,

July

thereafter
up

time.

any

abroad,

property

surplus

States

Brig. Gen. Donald H. Connolly,
Acting Foreign Liquidation Com¬
missioner* announced on Septi 1.
The announcement says:
"Both contracts stipulate that

stock for the new $4

and

continuing

July 1 of each year

on

to and including July 1, 1976.
agreements, which

"Both credit

in the

542 miles of road situated in

nesota

by

proved

the

For

eight

months

ended

31, 1946, United Illuminat¬
ing Company showed gross oper¬
ating revenue of $10,235,150 com¬
pared with $10,022,529 for the
Aug.

period

corresponding
Net

before» taxes

against
Income

was

respectively.

$3,397,726
and

excess

profits taxes

$1,300,500 against

were

while

net income

last year.
$3,476,401

was

$1,477,600,
$2,175,901

were

negotiated at the FLC Paris
provide for , interest
at

office,

2%% per annum payable annual¬

ly, beginning on July 1, 1947. Dr.
G.
Ridder,
Treasurer
General,

Finance,

of

Ministry

signed the

agreement for the Netherlands
Government, and Erik Brofoss,
Minister of Finance* signed for
the

Royal

ment."

Norwegian

Govern¬

.

L. A. DARLING CO.

TiFra-Brothers j

RESISTANCE WELDER

Members New York

Fifty "fifth Year of Dealing in

and Boston Stock

Exchanges

THE C. H. DUTTON CO.

i

i 5

'1'

Associate Members New York

Connecticut Securities

Curb

Exchange
•J}:

Primary

Primary Markets in

Information

Markets—Statistical Information

Hartford and

Moreland & Co.
MEMBER

DETROIT STOCK

Connecticut Securities

CHAS.W. SCR ANTON & CO.

Hartford 7-3191

EXCHANGE

Members New York

PENOBSCOT BUILDING

1051

New York:

City

—




Lansing

Stock Exchange

New Haven 6-0171

BOwling Green 9-2211

DETROIT 26"
Bay

'l

the additional loco¬

use

discounts in the Hartford group

of U. S. Government obligations

connecting carriers with ore docks

Markets

;

of

It is their inten-

country.

4.4% for twenty of the leading
York

road

Diesel-electric motive power in

of

decrease

a

for

additional

This

ago.

decline

a

compared

000

& Co. headed nance construction of the bridge1
investment bankers across
the
Connecticut
River
that made a public offering Oct. authorized by the Legislature. The
tirill twaK*1K1
La nffa»*a/7 4La '
16,
subject to Interstate Com¬ issue will probably be offered the
merce
Commission approval, of early part of November.
$19,200,000 Duluth, Missabe and
*
*
Iron Range Railway first mort¬
M.
H.
Rhodes,
Inc., world's
gage'serial bonds, maturing $1,lqrgest makers of timing devices,1 biarkets for distribution of their
200,000 each Oct. 1 from 1947 to
reported sales in excess of. 50,000, products,
1962! inclusive, and bearing inter¬
parking meters: since V-J Day,'
n
,t
1
' *
est as follows: 1947, 1.15%; 1948,
which compares with total output
U. S. Credit to IN ether lands
1.35%; 1949, 1.50%; 1950, 1.65%; of
33,000 meters in the ten-year And
Norway to Buy
1951, 1.75%; 1952,;l 1.85%; 1953,
period preceding the war;
1.95%; 1954, 2.05%; 1955, 2.15%;
Surplus Property
1956, 2!25%; 1957, 2.30%; 1958,
The XL S. has extended a credit
Stockholders of United States
2.35%; 1959, 2.40%; 1960, 2.45%;
line of $20,000,000 to the Nether¬
Finishing Company recently ap¬
1961, 2.50%; 1962, 2.50%.; The
lands Government and $10,000,000

Two Harbors,

A"

has

advance in the New York
group. Hartford hanks' holdings

being re-offer.ed at 100% and ac¬
crued interest for all maturities,

'/

*

*

#

Exchange

Bnhl BIdg., Detroit 26
Cadillac 5752
Tele. DE 507

Common Stock

purposes,

«

Chas. E. Bailey
Stock

'
Manufacturing Corp.
Shelter

#

r.*

\

V '

$429,607,116 against

ic'CliO

Central

at

program

City Bank of

construction

The

:

"

-

$5,000,0QO

These funds will be

York.
for

to

arranged

needed,

primarily the completion of a new
30,000 k.w. unit at New Haven.

.

Michigan College. '

;

;

National

used

of

group

a

Proceeds will be used for

building

v

as

New

Morgan Stanley

have purchased an issue of
$1,150,000 State Board of Educa¬
tion, 13/4%, 2% and 2*4% dormi¬
tory revenue bonds. : The issue
will be offered as serial and term
bonds.

Prospectus

Crouse &

Curtis and

the

5%

Range Bonds

ron

Co.,

Teletype

,

Webber,

Paine,

Co.,

&

Jackson

Building

v.'

has

company

the

to spend approximately $6,500,-

a

Michigan Corporation
associates,
McDonald-

&

Moore

DETROIT 26, MICH.

Randolph 5625

its

and

Michigan Markets

where

Morgan Stanley Offers
Duluth, Missabe &

"

year.

The

1946,

represents

Editor, Commer¬
cial
and
Financial Chronicle,
25 Park PL, New York 8, N. Y.

which

last

year

borrow,

$446,727,938

dressed to the

underwriting group

a

respectively."

share for the eight

period were $1.75 against
$1.54 for the corresponding period

against
$2.47 for

or

per

months'

share

a

•"

■■ - •

■

ford totaled

requested.
,'
Communications should be ad¬

First of Michigan Corp. was a
member of an

Established 1919

permitted

ner

#

#

♦

loss of $649,382 or

a

$3.30

$1,920,126"

Earnings

As of Sept, 30, 1946, deposits
in commercial hanks in Hart¬

pursue

comments will he omitted

against

11,

midst

our

expressed above, or on any |
related phases of
the subject
under discussion.
If published,
the names of those submitting

Park, Mich.,
street improvement bonds.
The
issue, the city's only obligation
outstanding,
matures
serially,
Nov. 1, 1947-1951.. $80,000 City of Hazel

Cherry 6700

DE 167

H.

the

fiscal year ended July
Royal Typewriter Co.
showed net profit of $590,347 or
30c a share on the common stock,
compared with $1,467,962 or $1.12
per share for the preceding twelve

.

DETROIT 26, MICH.

Teletype

:

McDonald-Moore & Co. and

BUILDING ,;,

812 BUHL

*

for

corresponding period

For

31,

the public dollar like a
pickpocket pursuing his prey.";
The "Chronicle" invites com¬
ments on the views of Mr. War¬

to
'.V'--

in

they should not be

and

gan.
„,V.-

unbridled

wander

of

permitted to imonths.

tions, should not be

1,216-mile ;

a

Manufacturing

from

and corpora¬

underwriters

these

account

earnings of $485,857

subject
some earnest thought most of us
will come to the conclution that

Pipeline Co.

income

deficit

the

think that if we give this

subsidiary,

Arms

..

The

ago.

I

controls,

further

any

*

1946, showed

specifically controlled, or con¬
at all by our administratvie bodies," he continued.
"However," Mr. Warner con¬
cluded, "as reluctant as I am to

plication
of American
Light
and
Traction
Co. to
acquire

Algonac, Mich., has

in

builders,

Fire

current liabilities of $706,738, leaving net working capital
On August 12, 1945, current assets totaled $15,315,-

a

trolled

approved an ap¬

Patent

879, current liabilities $7,033,621, and net working capital $8,252,253.
Equity per share on Aug. 11, 1946 was $55.81 compared to $60.89
on Aug.
12 last year.
f
<$>

thirty-two weeks ended Aug.

not

*

*

*

The SEC has

motorboat

Corp.,

Chris-Craft

of;Colt's

Aug. 11, 1946 showed total current assets of $8,470,911

S™7,764,123.

legal one; this irresponsi¬
bility on the part of the under¬
writer is as of today one that is

;:v;

sheet

on

a*

(Continued from page 1932)

pose, a

'

balance

Company

fore, that gets the most for the
corporation and the underwriter.
"This conspiracy is today, I sup¬

Lewis, President, announced that the Industrial National
Bank
of Detroit has f expanded
"
" _
~~~
with a new branch, in suburban purchased a new plant at CarutnDetroit at Melvindale, Mich.
A ersville, Mo., J. S. Smith, Presi¬
E. W.

Thursday, October 17, .1946

Connecticut Brevities
The

Get Investors' Dollars
A

ryr

I A i -A' 'V5V» •'' •'*; 'H'TV'
FINANCIAL^CHRONICLE

•

THE COMMERCIAL &

New

—
...

Muskegon

Bell

System Teletype: HF 365

London

2-4301.

Hartford 7-2669

New York Canal 6-3662

Teletype NH 194

Wa*erbury 3-3166
Danbury 5600

v'J.'1.!.

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4534

164

Economics of Tomorrow's Business
-

In Charge of Business and Engineering Administration,

influences, "economics

utives in present

and

tions

>

in tomorrow's business,"

are

situation to abandon theorizing

urges exec¬

of

production.

than

wasting

his

v

more

time,

becomes

inventories

he is allowing

themselves

his

of

attention

i t

o u s

con¬

front him. Hu¬

and

corre¬

in¬
pol¬

sponding

Buildings

guard

nomics in tomorrow's business.
Again, the industrial adminis¬
permits himself to en¬
gage in inevitably vacuous specu¬
lation about the probability of an¬
other world war, is doing a dis¬
service to his responsibilities for
he is indulging in fear-thinking
trator who

at a time when courage

vital

are

to

and action

present-day

accom¬

equipment

hands of

land

with

it.

be of too radical and

thing

unpredictable
justify any attempt in

the direction of plans of policies
at this time.

*

Economic information is valu¬

;

able in
ations

pointing to unusual situ¬
which may be capitalized

upon.

The large and unquestion¬
economic

able

in

described
any

trends

the

which

are

publications

of

reliable bank or trade journal
ones of greatest practical

the

are

importance to the manufacturer.
management in

Top

in¬

every

dustry should properly capitalize
this breathing
*

war

between the

space

and returning competition to

activate practical programs to as¬

pression,
to

consultant was asked
compress a two months survey

into

a

telegram to the president

a

>' -of the company., He wired him:
"Hang up the malacca put the
in

spats

mothballs

and

>

:

interpret

we

When

"business"

^
demand

exceeds

supply,

manufacturers beat the bushes for

materials, supplies and merchan¬
dise.
is

The

well managed

company

currently ^putting tremendous
and persuasion into the

•power

•procurement* function.
agement is

selling

Its

man¬

dol¬

company

lars where the competition is ex¬

traordinary keen, for payment is
in

much

needed

materials,
plies and equipment.
i
■

are rising competent financial executives beat the
balances

working capital. Cash

and

portfolios

Government

may

they will melt
normal
...

peace

purchased at

appear
away

new

re-established.

bond

ample but

rapidly when

time

inventories

price levels

And

when

"Abstract of

Schell

before

goods
some¬

rows

in

Best results

incorpo¬

27,

1937.: It

March

on

in

fee

the

brewery and
plant in Kansas City. Net sales
for

the

June

months

seven

30,

1946,

$2,027,890,
$3,735,518

as

ended

amounted

' compared

in

the

taxes

months'

period

for

excess

the

x

totaled

against $205,867
fiscal year.
as

Crown

year

Net profit

after Federal income and

profits

with

fiscal

ended Nov. 30, 1945.

to

seven

which

in the

stock
of

on

100%

were

to

stock

common

Here the
of

of

one

in

a

and to wait for the

deceptive

times

seller's

demand

a

be,

is

that

market

where

supply.

a

ness

for

each

the

on

10

cents

*

stock,

common

1946.

5,

This

last, and

Dec.

another.

and

beat

the

amount of

Economic

bushes

sometimes

there

are

be beaten

just
as

on

as

on

the

It

will include: Joseph

refrigerators,

pre¬

1946,

a

amounted

use

"Hang

up

six months ended June 30,
946, sales totaled $3,738,782, while
net
profits
after
taxes,
etc.,

Institute.

amounted

With h. l. Robbins & Co

3

to $304,862, which was
equal after preferred dividends to

$1.58 per

Nov.

paid

to

1, next, there will be
stockholders

common

Oct.

record

share.

common

dividend

21,

of

25

1946,
cents

of

quarterly

a

■

(Special to

of

the

for

company

that
the

month of

ed

September, 1946, amount¬
$1,160,660, against $1,007,-

to

598

in the

month last

same

the

year

to

Sept.

30,

year.

1946,

$14,515,110, compared
$11,863,030 for the 12 months
ended Sept.
30, 1945.

In

will

1945,

of

JO

cents

We

Tom L.

board,
pany

Evans, Chairman of the

announced

that

the

com¬

had completed "a successful

year"

on Sept. 30, 1946, with net
earnings more than double the
previous fiscal year,

On

Oct.

of St.

3,

*

Chase

Joseph paid

dividend

on

the

a

Candy Co.
100% stock

common

stock

to

holders of record Sept. 30.
Prior to this distribution, there

may

the

one

Convertible Pfd.

the

declared,

payable

Nov.

15,

to holders of record Nov.

stract
nomic

Association, Atlantic City, N-. J.,

theorizing
conditions

& Common Stocks

I-

1946,

M".

V

VV;;,7>

1, 1946.

•

/•

Unfilled orders

1946,

were

of

cess

as

of Sept. 30,

reported to be in

$10,500,000,

ex-

V

on

'

\

*

'• 7

* —'7

—»

7'7';vm

v-7

" r 1

«

..•vj.

A

i

Metropolitan St. Louis

compared

'ui

COMPANY

o-V

718

Locust

| Saint Louis

Edison Brothers Stores, Inc., St.
Louis, reports that its sales for

"

Street

1, Mo.

Central 8250

,

L. D. 208

St. L. 499

/f

the month of

September, 1946, to¬
taled
$5,387,638, as against $4,190,584
in
the
corresponding
month

last year, an increase of
28.6%, while for the nine months

ended Sept. 30, 1946,
ed
to

with

*CHEFF0RD MASTER

they amount¬

$47,512,706, as compared
$38,501,996 for the same pe¬

riod in

DAN RIVER MILLS

1945,

Sales

for

1946,

were

an increase of 23.4%.
the month of August,

* Analysis

:

.

on

Request

$5,418,992.

Peltasonjenenbaum Co.
v landreth

"

Dazey Corp. Com.

;

R. E.

Funsten Co.

Hilton

Hotel

V

Taca Airways
'•

Southern

>tf;
Union Gas

Berkshire

Fine

Stix & Co.

Spinning

Barker Dome Oil & Gas

.

Delhi Oil
of

general
Put

L. D. 240

•

#;'

Nutrine Candy

side

building; c:

st. louis 2, m0.

Teletype—SL486

Dazey Corp. Conv. Pfd.

say:

(stop)

*'*:*? i

-

t

!:-lV,V •*•/« K

with $8,500,000 on June 30, last.

MARKETS

bushes to

malacca

interested in

are

per

was

$2.25 cumulative no
preferred stock has also been

par

L. Robbins

Co., Inc.$ 390 Main Street.

share,

per

'

ab¬

'

INVESTMENT

Universal

Match

'

.y-.

SECURITIES

509 OLIVE

STREET

-

eco¬

the

business forecasts
in
mothballs
and beat the bushes for
equip¬

ment, supplies and merchandise,
for ample working capital for ef¬
fective floor space and for mark¬

edly lower unit operating costs."

/TIGHTER COMPANY1
Landreth Building
Bell Teletype
SL 456

St.

Louis

2,

Mo.

St. Louis 1,Mo.

Members 8t

Garfield 0225

L.D. 123

t

Chronicle)

bring total distribu¬
total

a

Financial

II. Wolf is with H.

this issue to $1 per share.

on

The

jj
WORCESTER, MASS.—William

ever. ~:

we

the meeting
D. McGold-

to

the

To paraphrase the telegrams for

today's

^ng

Candy Co.,

*

ninghara,
former
First
Deputy
Comptroller, New York; John S.
$2,608,695, Linen, First Vice-President, Chase
while net profits after taxes, etc., National Bank, Stephen B. Sweeny
were
$242,428, equal after pre- ey, Director, Institute of State and
ferred dividends to $1.31 per com- local
government, University of
mon
share, of which there were Pennsylvania, and Mabel Walker,
172,912 y2 shares outstanding. For executive
director of the Tax

and

further announced

was

sales

data,

other, but

many

9?^

Dun & Bradstreet; Joseph M. Cim>

which

April 25

on

partially ; points
the
way;
to
changes in emphasis. Sometimes
we

*

Clinton

for the three months ended Sept.

15, 1945.

vary somewhat from one individ¬
to

OI

rick, former city comptroller for
New York; Frederick L. Bird,

compares ; with

;

same

of

^00?'

utors of commercial

share

per

consistently successful busi¬
expends the

Fiscal

firm

™

there

human perspiration per minute at
all times although the rate
may
ual

of

demand, there will ultimately

A

the

*£ *U

Hussmann-Ligonier
Co.,St.
Louis, manufacturers and distrib-

The directors have declared

dividend of

for

truth is that they are just scarce.
The soundest principle of supply
and

..

Division to the Chase

On

*

always creates the ilusion that
our products are good, when the

is

.

last

ferred share.

turn Of the tide.

A

,

.

stockholders

on

faced

Model

-

of

and Ronald E.
Gregg) ExeCutive Secreary of the
Industries, Inc., St. Louis, on Sept.: Municipal League of
Toledo, will
26, approved the sale of that com- have for his
subject, "With New
pany's National Candy Company Revenue Sources"
•
>
m1

The

paid. The usual quar¬
dividend of 56 V4 cents per

buy,

a

and

<piLa'i V
ils£us®»
Fiscal Legislation,"

1

share

competing

are

on

Program,

terly

It is easy to plead inabil¬

are

year.

initial dividend.

an

Committee

15, May 15
Latter was

25,

peace time business, that
marketing the product, is elim¬

These

15, this

Arnold

on

15 cents each

Aug.

on

Branch, National
Agency, will speak on
a Building
Boom";
Frye, Chairman of the

"In the Face; of

with

difficulties

serve

made

Service

Housing

share

normal

ity to

distribution, and

Public

5 cents per share paid on April

;>y.

When customers

inated.

stock

and Feb.

the basis of four shares

For

of

Rising Costs"; Frank W. Her¬
ring, Director of the Land and

holders

which payments of

sales totaled

chief

of

unit

practical and evolutional: im-

the

become

to

Government, New Jersey,
topic will be "In the Face

whose

being ob¬
the

lower

are

imagination

opportunity

15,

of Local

on

stock,
payable on

common

of record
Nov. I.
This is equivalent to-25
cents per share on the common
stock
outstanding prior to the

their preferred stock into common

of

for

will

Nov.

Tuesday session and speakers will
include: Walter R. Darby, Director

cents

declared

been

221,139,

Drug Co., Kansas City,

agement is needed in the making

,

has

increased

12 %

which

old-time foretneh and employees
no less than top
technical man¬

ments.

share

of

tions

future postwar demand.

and

dividend

next, to holders of record Dec.

where every stage in

experience

cash

will become payable on Dec. 16,

productive process is put under
suspicion of obsolescence in the
light of changes in current and

the

address by Mr.
the American Gas




of

search

A

no

Consumer

costs.

500,000 shares.

30,

more

tained

are

an

Oct. 10, 1946.

rated

Port of New York Authority will
preside at the session and the

recently in¬

was

200,000 shares to

.

growing necessity of unbalanced
Tr

was

company

.,

When prices

bushes for

.

sup¬

^

authorized

ulative convertible preferred stock

policies have

industrialists.

The advice is equally sound to¬

day if
broadly.

The

owns

increase working

*f., \

capital.

of

purchase

The

the

in

Finally when war surpluses bf
all sorts are lessening, executives
everywhere go down the hedge¬

the

beat

bushes for business."

program and to

from

creased

Among the five subjects to be
is "Maintaining Stabil¬
ity in Municipal Finance." Carl
H. Chatters, Comptroller of the
discussed

has just reported that its net sales

than customer good¬
will as an objective when eternity
lies just around the corner.

permanent,

profitable longterm
growth for his establish¬
ment.
During the pre-war de¬

sure

to

its last legs but is rest¬

on

maintenance

nature to

used

then outstanding.
Payment wifl
ing on its hip-joints awaiting be made at the Commerce Trust
Co., redemption agent, in Kansas
complete dissolution.
When an
automobile gives up the ghost, City, at $25 per share plus ac¬
its dying wheeze may be pathetic crued dividends of 43% cents per
but if traveling at high velocity share. Preferred stockholders have
its death-struggles may take: the until Nov. 10, the privilege of ex¬
whole family along to a happier ercising their option to convert

longer

plishment. If another war comes,
changes in company policy will
a

be

par

has called .for redemption as of
Nov. 15, 1946, all of the 7% cum¬

which is

consumers

to

the

stock

common

of

are

for

shares.

20,000

the

cannot

now

per

$5.75

per

progressive
enterprises
whose
Dr. Erwin H. Schell
plants look just the same from
icy
are
the
the outside.
products of
*
"
When consumer capital goods
historical, psychological and so¬
ciological influences no less than continue to wear out, without
economic
pressures.
To
design hope of immediate replacement,
business
plans chiefly on eco¬ manufacturers beat the bushes for
nomic analysis is no less silly than ways and means to safeguard cus¬
to try to build automobiles with tomer
good-will.
They are
one wheel.
Yet there are eco¬ searching for methods to safe¬
dustrial

$25

pay

properly whittled. We would all
be surprised to see the extraor¬
dinary changes that are taking
place Within: the walls of some

behavior

man

exceed
clothing, keen

or

at

share for the

group

company

be
ouilt, but effective space in exist¬
ing structures may often be mul¬
tiplied when technical brains are

problem s;
which

'

•

beat the bushes for

men

buildings.

and

practical

food

of

business

the

from

reserves.

public

(off $181,909 balance of note held
j by Schroder Trust Co., New York;
to finance a proposed expansion

unexpectedly depleted

financial

those

to be diverted

neces s

writers

the

to

of $1

exclusive of
20,000 warrants held by under¬

common, through
underwriters headed
by Stern Brothers & Co., Kansas
City.
The net proceeds to the

find

on Government at the
Bellevue-Stratford Hotel, Phila¬
delphia.

outstanding,

shares

Anniversary of National

Conference

(in¬
150,000

per

more

may

When housing shortages

d/; thought

a n

even

the 50th

stock

common

stock

share for the preferred and

—

widespread, concerns

for

remaining

were

a

is

The

fered

r

The manufacturer who today allows himself to indulge solely in
abstract economic considerations as a basis for business policy deci¬
sions

at $4.75 per share.

company

cluding 34,827 preferred shares
being sold for account of 34 sell¬
ing stockholders) are to be of¬

bushes for equipment, supplies and merchandise. Sees prospective
need of more working capital and for markedly lower unit operating
costs in

the

and all of the preferred stock

Instead, he advocates beating the

forecasting.

cease

stock

general condi¬

on

Will Meet
.The National
Municipal League
on Nov.
11, 12, and 13 will hold

41,327 shares of $25 par value 5% cumulative participating preferred
and 40,000 shares of: $1 par value common stock, of which
20,000 common shares are to be offered to officers and key employees

Management expert, asserting despite psychological and sociologi¬
cal

Municipal

The George Muehlebach Brewing Co. on Sept. 25, filed a regis¬
tration
with
the Securities' and
Exchange Commission covering

'v'lFMassachusetts Institute of Technology
:

Hst'l

Missouri Brevities.»

By ERWIN II. SCHELL*'"".

; v.

1937

Louis Btoc*

Exchange i

&

V V

THE COMMERCIAL & FINANCIAL

1938

'

f + * .i V

Broker Ltd.
was

cense

,We hear that: ,<r:
80

-

^-ft;;';ft'■Wf

•

the

Port

of New York

amortization

an

as

the parcel leased from the Association.
Governor Clinton will

$20
as

have

Hotel

St.
of

bonds

first

Building

Chanin

sufficient

•

exhaust

ap¬

proximately $177,000 available for
sinking purposes out of earnings
for the year ended July 31, 1946;.
Additional sinking fund earnings
amounted
to
$213,355 but this

am

an

optimist but X do not like the
of

Says Union Must Pay
An arbitration

William

General

of

board Consisting
E.

Knudsen,

former General Motors executive;

General

Robert' E.

Chair¬
man of Sears,
Roebuck, and Major
Robert
N.
Campbell on Oct. 8
Wood,

It looks to

things are going at

way

if the

me as

old game

same

"power§>

•

studied the disaster of Hiroshima

politics"
is
again being

R. Leedy,

and Nagasaki, I
of

there

played

with "a

—and

believe that some
cities will become

great

our

death traps in the

next war. Un¬
for
of men's

vengeance.

less there is a decided change

Unless the

the better in the working

tions

except in

vestment

request

will

to

I

the Paris-Peace "Conference.

the case of in¬
shares which
he can handle as a dealer. Mr.
Leeby stated that when acting as
a
broker his commissions would
be comparable to those, of New
York Stock and Curb Exchange
firms and that his mark-ups on
investment 'company issues would
be. limited to the discounts set
forth
in
the
prospectuses. Mr.

tions

4%
approximately

$175,000 available in the bond re¬
fund.
" ' '/-V;;
tenders

•

•

mortgage

tirement

I

Oct. 21.

on

will .request

George

•

Securities

the

will be rela¬

war

tively inexpensive.

doing business as
Lawrence R. Leeby & Co., from
Washington, D. C., on the condi¬
tion that he act only as a broker
in
all over-the-counter transac¬
rence

retirement.

exhaust

to.

$60,000

8

being laid,/Calls frig cities death traps and counsels dispersion

an^ decentralization of industries. Says atomic

'?'■

|

on

dealer-broker registration of Law¬

distribute^

approximately

tenders

'

';1 -VK

$1000 first mortgage bond principal distribution of 6% on
additional interest on Nov. 1, its first fixed and income 3s-6s

available for bond

Oct.

On

per

and

a

and
Exchange Commission restored the

against

payment against the first mortgage held by 80 Broad. Street

ft ft

By ROGER W. BABSON

:

Paris Peace Conference, Mr. Babson asserts unless
real spiritual awakening develops, groundwork for World War 111

is

permitted to act as broker in
over-the-counter transactions, but
limited in his business as dealer
to investment trust shares.

Street will make an interest distribution of 4% ($26
per $650 bond) on Nov. 1, and have $104,000 available for sinking
fund purposes; $53,000 of this amountTiaving been received from the
of

\

Commenting

whose li¬
revoked in 1943, will

be

Broad

Maritime Association

Preparing for World War III

Registrat'n

Leeby,

R.

Lawrence

Thursday, October 17, 1946

CHRONICLE

SEC Permits Dealer?

Real Estate Securities

'v£'K:

vfA5§S

5.

v?

support¬

minds, young people should make
plans now to move their homes
rule out and business to small communi¬

the

ing

company

na¬

ferees

Con¬

selfish
tives

city.

an

be

to

-

world

a

The best situations should;
self-contained
communities
under 25,000 and
the seacoast. y
report of the Civilian Com¬

with populations

-

located away from

goodness
movement

25 miles from any large

over

get

behindy
honest

ties

mo¬

and

for

In

a

mission

gov¬

President Truman on

to

tests, it
less
a
real was clearly stated that "distance
Leeby'S registration afc a dealerfinancially re¬
amount will be used in part to
spiritual awakening develops—the is the best defense" against attack
sponsible for time lost during any broker Was revoked by the Com¬
groundwork Jor World War HI is by A-bombs; > Our present ? setup
defray reorganization expenses.
-future strikes at the R; R. Don¬ mission on June 26, 1943 on the
of
production
concentrated in
being laid at Paris,
v.* 50 Broadway Corp. will make a
nelley & Sons Company, printing ground that he had sold numer¬
-ft/
^:■ v-";v^■ huge centers of population makes
ous oil royalties to two customers
concern, according to Chicago ad¬
us
as
vulnerable as a "sittingBig Cities Death Traps
exceedingly
high
mark-ups
vices from the Associated Press, at
:
(Cointinued on page 1945)
v
After talking to men who have
over contemporaneous
wholesale
which continued:
costs and that he had -violated the
The arbitration, agreed to in ad¬
obligations of a dealer, "with the
vance
by both
resulted
the

found

International

Pressmen's

Printing

ernment—un¬

Roger W. Babson

results of the Bikini

the

Union

,

•

parties,

from

six

a

one-half

and

strike in the

agent,"

high fiduciary duties of an

weeks

The

of 1945.

summer

profits. He was

secret

taking

in

principal issue then, a company
expelled from the National Asso¬
spokesman said, was the union
ciation Of Securities Dealers, Inc.
shop. This was not submitted to
On Aug. 14, 1942 fof selling secur¬
arbitration, which disposed of nine

REAL ESTATE

other issues.

SECURITIES

.

ities

-

at

-

:

Rules of-Fair

Originally, the spokesman said,
were 28 outstanding issues,
Practice.
which

of

(Special

agreed

were

SOLD

Under the award the union

QUOTED

Cotton Crop Report
A United States cotton crop

filiate] / Was ordered to accept fi¬ of 'the ^Bureau
of the

Members New York Stock Exchange
Members New York Curb Exchange

as

of Oct. 1.

or

4.9 % less than the Sept,

Bell

on

$4.50

an

to refusal to work."

1 fore¬

production
since 1921

with 9,015,000 bales

and compares

(Special

.

Financial

to The

Johnson

Clayton Securities Corp., 82
onshire Street.
(Special to The. Financial

(Special

to

The

Financial

Chronicle)

WORCESTER, MASS.
C.

Trading Markets:

California & New York

O'Connell

has

—

become

average
<

yield

Lint

computed at 235.6

pounds and the 10-year av¬

251.0

Main

erage

.

243.2 pounds.

Chronicle)

1

.

(Special to The Financial

Chronicle)

—

has

been

added

Commodore Hotel, Inc.

to The Financial

ILL.

CHICAGO,

Salle

Street.

Chronicle)

*?

—

Street.

(Special to The Financial

CHICAGO,

ILL.

—

Chronicle)

Ralph

W.

been added to the
staff of Paul H. Davis & Co., 10
has

Hay den

South La Salle Street,
(Special

to

The

Financial Chronicle)

> t-

CINCINNATI, OHIO—Martin S.
Harman has joined the staff of

Browning & Co., Carew

Tower..

.

to The

(Special

" f

.

to

State- Street.'"

Real Estate Issues

*

T.

with Mason, Moran

now

Nelson,

'

Mario D.

the
staff of P. de Rensis & Co., 10
Bianchi

is

(Special

with

.

BOSTON, MASS.

-

Chronicle)

ILL.;— Harry

John L
Crowley has become
connected
withRiter & Co., 134 South La

(Special to The Financial Chronicle)
BOSTON, MASS.—Rudolph F.
Whitelegg has become associated
with
F.
L. Putnam
& Co., 77

Philip pounds is the smallest since 1941.
Franklin Street.
con¬ The 1945 lint yield per acre was

nected with Hanrahan & Co., 332

Street

of 12,553,000 bales.

per acre,

•v

Co., 135 South La Salle

&

-

Merrill
Lynch, Pierce, Fenner & Beane,
10 Post Office Square.
'
connected

Scott

Dev¬

BOSTON, MASS.—G. Glen Pot¬
ter and Joseph P. Walker, Jr. have
become

~

with

Co., 29 . South La

(Special to The Financial

CHICAGO,

Chronic*.**

BOSTON, MASS.—Gustave- H.
is now affiliated with

r

Chronicle)

Financial

The

become affiliated

added. to

produced, in 1945 and the 10-year

Teletype NY f-953

Joins Hanrahan & Co.

Firm

cast., The indicated

less than for any year

"due

presses

L.

James

—

to

has

the Voss,^ Blair &
Co., 11 Marietta Salle Street.

been

Street, N. W.

This is 447,000 bales

measure

a

the union at the rate of

Dlgby 4-495Q

40 EXCHANGE PL., N.Y.

information

responsibility" payment by

hour for time lost

s.

on

reported by farmers and ginners

The Board fixed "as

SHASKAN & CO.

of

Agricultural

of

breach Economics based

agreement."

of that

has

staff of Courts &

bales is forecast this
yeartby the Crop ^Reporting Board

"...

nancial responsibility "for

ATLANTA,. GA. *

strom

8,724^000

[an

American Federation of Labor af¬

'

/

Starnes

As of October 1
.

Salle

v? CHICAGO, ILL.—Jack C. Berg-

Chronicle)

Financial

(Special to The

prior to arbitration. Herbert
P.
Zimmerman, ~ company Presi¬
dent, said the 18 consisted of
"minor points," such as time for
changing clothes.

upon

BOUGHT

Moseley & Co., 135 South La

•

— Charles
Street, after serving in the U. S.
McCarley & Navy.

ASHEVILLE, N. C.
T.-. Rawls, jr. is with

Co., Vanderbilt Hotel.

there

eighteen

Chronicle)

(Special to The Financial

unfair prices, under the

Asso cia tion's

"

Financial Chronicle)

CINCINNATI, OHIO — Edward
B. Back is with Slayton & Co.,

Inc. He was formerly with W. UL
(Special to The Financial Chronicle^
*
CHARLOTTE, N. C.—Joseph H. Fox & Co. •
Woodruff, Jr. has been added to
(Special to The Financial Chronicle)
the staff of Louis G. Rogers & Co.,
CLEVELAND, OHIO—Robert B.
Johnson Building.
*
.i/..'
Wick
has
joined the staff of
McDonald
&
Co., Union Com¬
'

,

Fred F. French Investing Pfd. ftftftij

v.

Tudor

J. S. Strauss & Co.
155

City—all units

,

Waldorf-Astoria Hotel

Montgomery St., San Francisco 4

;

:

(Special

EXbrook 8515

Tele. flF 61 & 62

to The

Financial

Chronicle)

Morrell F.
Davis &
Co.,-10 South La Salle Street.
ILL.

CHICAGO,

—

merce

Building.

Trimble is with Paul H.

Seligman, Lubetkin & Co.
Incorporated
—SPECIALISTS

IN

Members New
—

41

Broad Street,

York Security

...V'

.

;-1

Dealers Association

New York 4

,

"

HAnover 2-2100

ESTATE

REAL

'Special

to The

-CHICAGO,
McGuire

and

have become

(Special to

% COLUMBUS, OHIO—Robert R.
Osmun

Financial Chronicle)

ILL. — Stuart B.
Charles J. Spletter

;

Financial Chronicle)

The

wright

is
&

Building.

connected with F. S. ;;

y

Sweney,
CartHuntington Bank
>
t

with

Co.,
v

,

(Continued on page 1975)

SECURITIES
,

Knickerbocker Hotel Co.
Hotel

1

Sherman

Lott

W.

5/57

Hotels

Neville Island Glass Company, Inc.

S.

FOR

Units

Co.

ftftft

;

-

Prospectus upon request'

•'>/'/

•

HELP WANTED

•

POSITIONS WANTED

100 North La Salle St. Bldg,

Bought

."t

Transportation Bldg.
Land

Voting

Trust

Trust

Ct.'s.

So. La

Salle St.,

Tel. Central 4424

Sold

Quoted

—

OTHER CLASSIFIED ADS

Amott, Baker & Co.
Incorporated

FIRST LA SALLE CO.
11

—

(Cgo.)

Units

Chicago 3, III.
Tele. CG 660




150
;

Broadway

Tel. BArclay 7-4880

BOSTON

New York 7, N.Y.

Teletype NY 1 -588
PHILADELPHIA

UTICA

SEE INSIDE BACK COVER

:

/

i-U

.

.

..

which

each

'■

.•

(Continued from page 1931) •
Payment
by
results—the
socalled progressive piece-rate sys¬
tem—under

"

:

'

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4534

,

''

/N

..........

iVolume 164

■

■■

..•

•

•

.

•.

■■ v- •'■,v

Tinman Ends Meal Price Controls

r

■

•

.

Meat and Politics

increase

in

output
above i the
standard
notm is paid
according to a scale
of * progressive
rates—is
to
be
made-

even

than

more

hitherto.

An

comprehensive
even
higher

proportion of the national wages
bill is to consist of bonuses and an
fver smaller proportion of fixed
wages
and
salaries.
The
antiegalitarian
tendency
of
wages

policy is

even

it

in

was

marked than

more

previous

Plans.

Five-Year

,

This would certainly indicate
that the national minimum
guar-,
.

^nteed
time

of

wage

worker

effective

as

the

drive

war¬

considered

incentive

and was out of

present

Soviet

not

was
an

device,

keeping with the

for

efficiency and
greater production. At a
time
when the annual, wage is
being
groomed by U. S. laborites for
candidacy as labor's next achieve¬
ment, this too looks
and

right shoe
wrong foot.

if the left

as

each

were

the

on

Further suggestion of a "laissezfaire" wolf in Russian caracul is
the new Plan's abolition of the ra¬

tioning system. Since this obvi¬
ously cannot be done on the basis
of adequate
production, and^ an.
abundance of consumer goods, the
only way to interpret it is in re-»
gard to wage, rather than food or
price policy. It is the corollary to
the piece-rate pay
system

Higher production per manhour is to be stimulated not
only

a%

by the positive promise of, more
premiums ^aind bonuses for,those
Who produce

but also

more

negative threat of less than
imum

by the
min¬

a

for those who fail to
produce enoughr
wage

.

f. Comrade
is

seem

bribed

to

it' - would

worker,
be barbed

to

well

as

as

produce. Nationalized
a, bigger stick and

industry holds

no longer guarantees
imum carrot

even

min¬

a

-'jln contrast, there

is now in this
such preferential legal
protection
for
unionized
action
and
such
official
sanction
of

country

higher and higher wage rates that,
With a continuing price control
policy, the traditional roles of the
carrot

and

reversed.

the

The

stick

have

carrot,

been

which

in¬

dustry had to offer, has already
been

squeezed

almost

to

the

point of total dehydration; and for
all practical
purposes, the stick
has been given into the hands of

labor.

Undoubtedly it has already been

;?

pointed out many times that the
chase of U. S. "commies" after the
tall Of Soviet Tabor causes them
to follow a past rather than the
present Russian regime. For, while
unionized labor here is

currently
at
the
"animals-chase-off-Mr.
Jones" stage; the workers under

•

f
)

VI* '•
\

illWInhlr" M

\

*

up to

to

new

have

Soviet plan seem almost
come to
the "watching-

the-party" stage.
curious

cycle,

clearly

as

It

is

indeed

indicates.

and

"Animal

Farm"

doesn't

change.as quickly
or

re¬

seem

to

social theory

as

military science. It

after all

was

•'

X-

*

*

'

s

,

l,-

;

"J}\

'

i

OUR new group ofand "Basic Analyses" covers
24 unfavorable aspects of
both favorable

4

"

•

-;.-y

-

Georgia you'll find friendly, native-born workers,a mild
climate,

raw

materials for many industries

•..

each

company . . . its present position, earnings,
operating results for recent years and other valu¬

rich,

able data. "Basic

expanding markets

are

ctoseby,

produced

•:

the

Amer. Power & Lt. vi C'monw'th & Sou.

Write Industrial

Development^ Division, GEORGIA

Paramount Piot.

Amer. Tobacco

POWER

Pennsylvania R.R,

Consol. Ed. (N.Y.)

Amer. Water Wks.

Crane Company

Atch., Top. & S. F.

Detroit Edison

Pepsi-Cola

•

'
,

COMPANY/ Atlanta/ Georgia

Baldwin Loco.

A

;•

Southern Pacific
Stand. Oil

Goodyear T. & R.

United Aircraft

Cities Service

realistic

EJI. duPont '

Chase National vac

amendments to the constitution of
,

Analyses" available:

.

the nature of the beast which ulti¬

mately

24|Important Securities

,f-r

a

as

alization of any ideal is the human
It

;«*'

that

the greatest impediment to the

element.

-

on

1...employing

100 workers. In the! excellent small towns Of
'

the

''

mr%IV

Int'l Harvester

;

.

^

C'monw'th Edison

Marine Midland

.

'

;
*

(N. J.),

United Air Lines
United Corp.

~

VAnimal Farm,"-and which modi¬
fied

the

tent,

"All

animals

equal," by adding, "But
more

ful

at

equal than others."

the

more

window,

watching

their

equal comrades found it im¬

possible to tell which
which

was

pig and

was

man, at least—witness¬

ing sight of their leaders walking
upright
hard

on

to

two

tell

feet—it

which

had

which.
4. ibid.

was

in

making sound
indicate copies of the
to receive.
They will
out cost or
obligation.

are

However, if the lower animals

-

*

Investors will find these

are

some

PLANT the Future in

'

up-to-date analyses help¬
investment decisions. Just
"Basic Analyses" you wish
be mailed promptly with¬
Address Department "F2/2

Merrill Lynch, Pierce, Fenner & Beane
V;'v

Underwriters and Distributors of Investment SecuritiesBrokers in Securities and Commodities

copied

70 PINE STREET

:

r

Uptown Office: 730
>•

1'

'

•

i:.'.

-

'•




.

.

\

,

not

NEW YORK 5, N. Y,
fifth avenue

.193(1

••

3940

It will be

By

E.

A.

VAN

This Week

assets

City banks more or less
fulfilled expectations.
Indicated earnings for the most part were
below those of the 1945 third quarter, though there are a few
excep¬
tions.
The following tabulation gives the
figures for a group of
a

in

S

-Indicated Earnings
3rd Quarter
Quarter
Bank-

y

:-

Book Value

Asked Price

1945

1946

9-30-1945

9-30-1946

$0.64

$0.58

$29.85

$31.25

29

9.36

6.06

431.69

444.20

395

0.64

47.28

Bankers

Trust

0.74

Central

Hanover

1.50

Chase

Trust-

&

National

1.50

106.46

114.13

40.69

42.18

38%

46.66

41.24

46%

1.06

54.05

0.40

25.42

0.54

Exchange

•

1.24

1.37

30.06

23.50

Guaranty Trust.
Irving Trust
^Manufacturers

5.40

v-

:

22.12

1.34

0.75
2.03

__

:

,

*Based on

2.000,000

tBased

400,000 shares in

on

shares

in

"
r

•,

1945

1945

;*v';

•'

41%;J'-''

103.98

49.00'

96
;

51.24

A

765.16

769.64

40%

.

730

,,

.

"

City,
S.

U.

Public

Trust

show

National
increased

At current market

selling at an aver¬
age ratio to book values of .93 and

currently selling at substantial

discounts from book values.
have

banks

an

reported nine

months operating profits for

1946 compared with 1945, as shown below:
Net

♦Chemical Bank

&

Trust

fNation

City

1946

2.65

2.27
15.03

3.51

3.98

Not

2.09

2.25

0.73

Trust

Bank

'

r

'

?
s'H

1945

14.06

Guaranty Trust
Manufacturers

>-

Net Sec. Profits

Operating

1945

-

1.65

0.58

National

each at

1946

14.06

stock

Trust

5.83

Not

1946,

3.51

and

U.

S.

Trust

Bank

of

New

York

at

*30, 1946, compared with Sept. 30, 1945;

0.62
reported

2.82

2.87

5.83

5.60

K

;

V '

*

Equitable Securities &

of

9-30-45

9-30-46

^ 9-30-45

9-30-46

385,152

513,962

442,125

928,575

875,305

72,114

.79,117

221,816

162,207

327,238

263,196

(Central

(Chase

429,362 :-

Hanover-

(Chemical B.

Oontinen.

&

919,835
37,018

B. & T.

Acquire Hardware Co.

National
New

City

S.

1,496,509

1,296,145

1,513,227

1,318,149

2,765,350

2,388,788

4,059,492

576,996

1,215,316
223,637

74,980

152,832

-

543,731

621,594

557,552

ed

644,364

1,005,203

681,806

2,992,027

2,606,637 I

245,031;:

624,858

1,025,088

903,332

521,057

1,299,070

1,225,543

953,726

211,307

110,899

153,341

23,964

23,514

2,519,678

1,827,047
1,784,384
3,860,870 ' " 3,972,908
v
654,729 ':*?
604,185

2,620,127

432,361

366,082

>

288,604

294,523

416,918

'■455,775

96,526

132,967

137,801

'

$5,636,704

93,660

;

industrial

trading

South, was establish¬
Birmingham in 1882.. It
specializes in the wholesale dis-

483,757

;

known

185,116

1,768,219

.

•

149,517

763,106

198,074

•

best

firms in the

2,006,523
762,464

1,017,799

Totals

138,385
;

agreement for the

the

Moore Handley
Company of Birmingjham, Ala.
The Moore Handley
'
Company, one of the oldest and

•

62,599

Trust-

Trust

1

an

of

•Hardware

104,755

,

395,051

—

purchase

.."716,219

-

228,365 S

T:

entered into

1,059,805

67,599

Peterson, First Vice-

President of the Equitable Securi¬
ties, Corporation has announced

3,867,389

735,656
183,405

•

854,414

•

U.

721,519
810,428

43,842

National—

York

Public

983,448

.V54.915

126,183

E. Norman

—Earning Assets—

1,011,856

343,640

-

45,515

>;

_

Trust—,-

"Manufacturers

1,087,026
!:

" "

65,247

Natiqnal.__

Irving

-

y

■

-

Exchange

•

First

:

450,106

338.099

T.

Nat._

(Guaranty Trust

,499,779

417,876

National—

(Commercial

<Cora

:

$5,935,126 $15,198,208 $13,346,696 $22,410,606 $20,848,437

in

tribution

of hardware with a
marketing territory covering most
of the south.

,

||

While the purchase price

NEW

Quarter 1946

19 New York

disclosed, the terms it was
stated, made it one of the most
important financial transactions

change was contemplated
in the present management or per¬
sonnel
of
the
Moope
Handley
Company. 1
'

JERSEY

Members

New

York

&

J. S. Rippel & Co.

Exchange

Established

Telephone:
Bell
L

A. Qibbe.

1-1248-49

Toomey, Sr., is engaging in the

securities business from offices at

174 East Second Street.
past

18 Clinton St., Newark 2, N. J.

BArclay 7-3500

Teletype—NY

1891

MOORESTOWN, N. J. —James

E.

180 BROADWAY, NEW YORK 6, N. Y.

Mr.

Sown

Toomey

In the

conducted

his

and

Incorporated by Royal Charter 1727

WHOLESALE MARKETS IN

f
HEAD

BANK and INSURANCE STOCKS

f6 Pest Office Square

CHICAGO 4
231

HUbbard 06 so

S. CaSalle Street

franklin 7935

CG-/OJ

production company
operating since 1935.

largely responsible for
the 'dirty work' connected with
exploration and development in
the Austrian oil fields at and ad¬

when production was
starting as a result of our four
years'work.

PRIVATE

/

49

Wall Street

West Sixth Street

MIchigan-2637

LA-ioS6

bent

were

the

under

TELEPHONES TO:
«




Providence, Enterprise 7008

formulated

a

London

all
to .be

and

Moscow

these rights
returned to

are

citing Potsdam,
are
claiming the Nazi-licensed
companies as reparations, so we
are at present holding the bag.
"When

the

Russians

their

Austria

property

such Russian

Smithfield, E. C. 1

Charing Cross, S. W. /

SAN FRANCISCO 4

Puss

TOTAL

Building

• utttft 6997

to

came

exempt from

action, the Russians
carried

off

5,000,000

of

SP-S7J

United

are

This

There has been

tional district;

with

interference

Russian

'

Williams

Deacon's

Bank,

provisions

States

Obligations

with

call

a

of

Banks

of the Banking

$13,963,381.6T

Government

direct

and

14,451,777.61
of

political
Cash

States
with

I.••■,■■
2,555,889.93

other

institutions,

in¬

reserve
balances,
cash items in process

and
of

and

subdivisions.—.

balances

banking
cluding

6,991,400.5k

premises

owned,

furniture

none;

and

tures

^

.

collection

Banking

and

/

,

fix*

'

vaults—

1.0®

Other : assets

;96,6112?

TOTAL ASSETS

$38,059,062,041

'

'•.

LIABILITIES

'

,

•

Demand deposits

of indlvidand • i
^
corporations
—$19,933,242.02
Time deposits of Individuals,
t
partnerships, and corporauals,

.

:

partnerships,

tions

5,705,074.87

—

Deposits

of

United

States

;

Government

Deposits

2,290,332.15

of

Deposits

of

tions

States

5,666,948.02

.

banking institu-

:

officers*

463,145.32

"

—

Other deposits

(certified and

1,134,955.12

checks, etc.)

DEPOSITS

Other

and

subdivisions

political

$35,193,697.61

liabilities

249,622.05

TOTAL LIABILITIES

(not

Y

.

\

including
subordinated '.V,
'
obligations shown below) $35,443,319.65
CAPITAL ACCOUNTS

Capitalt

—

Undivided

:,A

,

profits

750,000.00

865,742.38

—

CAPITAL

TOTAL

''•

$1,000,000.00

'

-

fund

Surplus

AC¬

COUNTS

$2,615,742.33

-

There

has been quite
the

Russians

properties both con¬
trol
officers
and
guards.
Our
fields and refineries are run by
While

the Russians.
may

our

Austrian

visit the fields. and

institution's
stock

common

of INDIA. LIMITED
Bankers

to

the

Burma,

Fund

Pledged

assets

curities

(and

loaned)

Trusteeships and Executorships
also

undertaken

se-

,

(book

U.

Government

S.

tions,

direct

and

assets

i

guaran-

——

Other

t

obliga-

teed, pledged to secure deposits
and
other liabili-

I;

,

1

1

value);

/;

,

•,

-.

-'

/

' ' :

-

•.

;

•

"

•

-

$4,363,862.45

-

pledged : to
secure
deposits and other
liabilities (including notes
and

•

bills

redlscounted

securities

and

sold

,

,

'

under

■

•

repurchase

.

agreement)—,
1,430,019.52
Assets pledged to qualify for
exercise
of
fiduciary
or r- ;;
corporate powers, and for
purposes other than to se:Vv;kv.'
cure
liabilities
159,620.6®
$5,953,502.62

—

Secured and preferred liabilities:

by pledged

secured

Deposits
assets

to

pursuant

re¬

law

$5,689,014.62'

pledge of assets

TOTAL

I,

—

WILLIAM

best

the
of

but

not

of

that

£2,200,000

conducts every description
banking and exchange business

Bank

of

MEMORANDA

above-named

£2,000,000

of

value

par

secured by

Bishopsgate,
London, E. C.

India,

consists

,

provisions

Office:. 26,

in

total

.

,

quirements of law__——Deposits
preferred
under

Government in

.Kenya Colony and Uganda
Head

capital

with

$1,000,000.00.

TOTAL

NATIONAL BANK

ACCOUNTS— $38,059,062.04

CAPITAL

tThis

no

Subscribed Capital-.—£4,000,000

Ltd.

the

D.

my

—

PIKE,

institution,

above

knowledge

of

3,352,795.13
$9,041,809.75

Secretary of the
hereby
certify

statement

is

true

D.

Correct—Attest:
C.

PERCY

J.

B.

PIKE.
f

KORELL

W.

to'the

and belief.

WILLIAM
'

Glyn Mills & Co.

4, New York,
September 30,

,

on

„

the

our

Reserve

!

York

accordance

theSuperintendent

ties

Paid-Up Capital

Portland, Enterprise 7008

in

guaranteed

,

The

New

business

obligations,

the Austrian
Socony-Vacuum

in the Russian zone
applies to all
three companies in wheih we are
interested, with the exception of
the head offices, which are in
District I of Vienna, the interna¬

Associated Banks:

'* .V'.-.,:>•

V

ASSETS

all

the

-

Austria.

ASSETS

;

TOTAL LIABILITIES AND

Ceylon, Kenya
Colony and Aden and Zanzibar

£115,681,681

of

to

Americans

of

was

"Practically

Branches

/

ing $384.46 overdrafts)

the like.

have at

;

Loans and discounts (includ¬

schillings worth of American and
British oil rigs, meters, pipes and

of

" '

\

Law of the State of New, York.

Booty Com¬
what
equipment

.decided

nonetheless

'•

•

War

Britishers

and

by

pursuant

should be taken to the USSR and,

although

close

made

us.

But the Russians,

\

f

''

declarations,
supposed

Broadway,
published

expropriating

on

and

law

officers

WIRE

-

pro¬

cancelling the rights the
Austrian law had given us. Then
the Nazis gave concessions to per¬
sons of
their own choice:
Now,

new

64 Neu) Bond Street, W. 1

LOS ANGELES 14

mining law

remain with the company
had done the work of de¬

interests

Burlington Gardens, W. 1

SYSTEM CONNECTING: NEW
YORK, BOSTON, CHICAGO,
CLEVELAND, PHILADELPHIA, LOS ANGELES, SAN FRANCISCO
- -

jHartford, Enterprise 6011

50
the

1946,

velopment.
And we had covered
a large area in our work.
But the
our

see

Company

Hitler took

just

Nazis

And

they

as

CONDITION OF

ii': :J- ■'"7*

«

NY 1-2875

4t2

Vj

at

were

which

OF

to

technical

Underwriters Trust

''

refin¬

crude
been

throughout Scotland

Bishopsgate, E. C. 2

8 West

INCORPORATED

BOSTON 9

a

our

LONDON OFFICES:

.3

SEVER & CO.
„

OFFICE—Edinburgh

Branches

:

WHITEHALL 3-0782

Oil,

investment in
these three properties as totaling
$100,000,000," said Mr. Rudinger.
"Our

REPORT

Shell

Socony-Vac¬
50% interest

a

much

of

they dispose of the oil

of

company.
"We figure

refineries the story

Royal Bank of Scotland

67

the

"But in the old fields and at the

N. Y. Phone—REctor 2-4383

5:

(3)

how

producing

with

similarly has

different.

NEW YORK

oil

just

us

regardless

economic considerations.

or

(1) the Vac¬

head offices.

investment business.

MArket 3-3430

Manager Trading Department!

company;
uum

company

James E. Toomey Opens

i

Request

Stock

no

SECURITIES

Laird, Bissell & Meeds

along

assets

City Banks
on

company,

mand
was

not

that

Comparison and Analysis.

Circular

crude

a

tell

produce,

,

concluded in the south this year.
Mr. Peterson's announcement said

3rd

in

should

II

—-Governments-?—

9-30-46

Trust—

sians

a

vided that the exploration rights

that Equitable Securities and the
Union Securities Corporation have

356.889

York

New

has

Austrian

Union Securities

?

9-30-45

©k.

terest

over

tlncludes City Bank Farmers Trust.

Loans and Discounts

©ankers

Co.

jacent to Zistersdorf.

3.98

<000,000, as against $2,301,000,000 for the comparative date in 1945.'
^ 7
The following table shows loans and discounts, government hold¬
ings and total earning assets of the seventeen loanks as reported Sept.

IBk. of Manhattan

programs and we have no
voice in these matters.
The Rus¬

refinery and
distribution organization here; (2)
Socony-Vacuum "has a 50% in¬

We

15.13

reported

Since June 26, 1946 commercial and agricultural loans of New
York City member banks have shown an unbroken weekly rise, in¬
creasing from $2,865,000,000 to $3,539,000,000 on Oct. 9, a new peak.
'On the last week of the third quarter of 1946 the total was $3,433,-

TABLE

tion

'

5.60

V*2,000,000 shares 1945; 2,500,000 shares

Oil

uum

are

4.8%, and the lowest yield

is

interests in Austria:

has

,

York

34ew

may not.
The Russians in control
fix the production and distribu¬

According to Mr. Rud¬
inger, Socony-Vacuum has three

of

2.85

4.30

Not reported

v

First

*

dividend
yield
Highest yield stocks

average

4.1%.

Total Net
1945

1946

are

y

/

ing

seventeen

Stocks of all banks except

over
producCharges Soviet

unpaid.

Rudinger has been with the

prices select¬

ed bank stocks look attractive for

<

y

control

"liberated" Austria's oil.

USSR's attitude toward American
business in this part of the world.

in Austrian Mineral

long term investment. $| The above

few

taxes

•,'?

AUSTRIA—'The following short
account, as related ta
the
Chronicle
correspondent in Vienna by Hugo P. Rudinger, Aus¬
trian
manager
of the
Socony-«>
Vacuum oil company, reflects the
refineries, cur American officers

/

(dividends of Chemical and Continental.

A

leaving bills and

Mr.

gains in book values over a year ago have been
^achieved by all banks, when allowances are made for the 25% stock
are

illegally exercising exclusive

States.

earning; assets.

•

Substantial

Chemical, Corn and First National

is

now

tion and distribution of

company since 1924. He is about to
leave for a short visit to the United

and

* ;

•

in

banks, it will be noticed,
against the trend. For

National

2,500,000 in 1946.
in 1946.

and 500,000

^Reported earnings; adjusted for capital changes.
§ Includes City Bank Farmers Trust.

.

57.03

46.22 ^

91.68

1.35

9.77
and

-f

:

•; .;■( 42.80

i.87
•'

8.08

—

54.06

•

17%

22,60

,

0.69

1.25
Trust

315

;

increase

5%

Continental, First Na¬
tional, Guaranty Trust and Na¬
tional City show a drop in loans
and discounts; Continental, Corn
Exchange, National City and U. S.
Trust " report
moderately higher
government holdings; while Corn
Exchange, Manufacturers Trust,

1,675

355.15

r.

USSR

agricultural

example:

56

1,352.74

344.79

0.33

1.09

New

55.55

indicated

A few

19 y2 ,..."
"

and

the past twelve months

over

have moved

41

23.56

1,320.46

6.26

—

56.55
,

52.73

0.33
Trust

.

increase

an

American Business

Socony Vacuum executive charges the Nazis and Russians sue*
cessively have spoilated his company's Austrian properties. Claims

City

"loans and discounts."

103 y2

0.76

'

S.

the

44 '4

0.78

1.24

"(•Continental Bank & Trust
•Corn

y4

48.57

1.19

Bank

^■Commercial

10-11-1946

0.93

National.

""Chemical

i

show

York

$1,132,000,000
equivalent
to
nearly 50%, and a decline in loans
to brokers, etc., of $1,300,000,000
or more than 50%.
Thus, it seems
evident that qualitatively, from
an earnings standpoint, the seven¬
teen banks have gained more than

comparison of book values.

i

New

of {

■

table

the

commercial

loans

Thursday, October 17, 1946

|

discounts, it is signifi¬

banks

member

Third quarter statements of New York

leading institutions, including

that

'

Russia's Attitude Toward

7% lower.
and

cant

'

seventeen

ap¬

lower and total earning
With regard to

12%

are

DEUSEN-

Bank Stocks

—

are

higher,

5%

while
holdings of government securities

loans

v

i';•;;

,■■>

observed that aggre¬

proximately

Bank and Insurance Stocks

.

*,

THE COMMERCIAL & FINANCIAL CHRONICLE

gate loans and discounts

U.

.v:

•

V.

C.

MAGNUS

TAMNEY

"1

[Director!

j

Volume

Number 4534

164

THE COMMERCIAL & FINANCIAL CHRONICLE

•

,
,

Often

fit.

have

we

idea where

no

the oil is sent.
"The

Daniel Reeves & Co.

,

oil from

crude

our

New NY

erties is invoiced to the Russians.

the

It is
of

determine

the

products

The

refineries.

our

Russians

refined products
produced and where
they are to be shipped. Like the
crude oil, the refined products are
to

are

■

with

same

what

be

billed to the Russians.

"Since early this year the Rus¬

have

not
and

petroleum

for

products deliveries from
erties.

They

our prop¬

Exchange

BEVERLY
Daniel

HILLS, CALIF. —
Reeves & Co., has been

formed with

offices at 271

Beverly Drive.
new

firm

are

the

South

Thomas

New

F.

son

are

PAUL,

MINN.—John H.
Anderson has rejoined Harold E.
Wood & Co.,

First National Bank
Mr. Anderson has re¬

Building.
Reeves,, cently been in business in Mexico

York

Stock

Cerny, Jr. Mr. Cerny and

Mr. Jawetz

ST.

Partners of the
Daniel

Exchange; Charles T. Jawetz, and

paid their

oil

and

money

i

member of

sians have been short of Austrian
invoices

Jokn Anderson Rejoins
Firm Harold E. Wood « Co.

prop¬

partners in Raw-

Lizars & Co. of Chicago.

Richard

Prior thereto

officer

of

Charles

Co. of Chicago
Wood

K.

he

was

an

Morris

&

I.

Moxley,

a

yesterday at the

age of 50.

Sept.

19,

Mr.

sided

at

1896,
700

Born

Moxley

Ocean

re¬

Avenue,

Mr.

Moxley

employee of
the

old

a

member

a

Exchange
moved

indoors.

member

of

the

He

in

B. P.
Mr.

Moxley is survived by his

was

an

brother, Nelson J. Moxley, also

brokerage firm

on

member

as

a

outdoor

boy

Curb

Market
on

their business in Broad Street. He

of

Exchange,
S.

B.

the

and

Edwards

New

two
and

Torresson.

deposits

like
blocked

money,

circumvented

;be

in

the

manner

described.

just

But even if we
'get all our blocked /.funds un¬
blocked, only ten weeks' funds are
oh hand in our accounts.
■;;,, ;
,

"The Russians have established
here

Mineral

a

Oil

Administra¬

tion.

Theoretically, they should
'pay for the crude and. refined
products they buy and in turn
collect from those to whom they
sell the products.
However, while
as described they are not paying
their bills, their policy toward
their customers is quite different.

In allocating oil and oil products
to the various Austrian zones the
Russians demand pay in advance!
•'Also, in fixing the price of the

products

sold, they add a hand¬
profit of about

so

and unearned

some

one-sixth.-

'

.

'

"Another thing: the Russians
collect the Austrian mineral-oil
tax without

paying it

to the

over

Austrian Government.

•'A"When the Russians
products to the Austrian Govern¬
ment, they prevent the use of oldestablished distributing companies
such

as

ours,

in the Russian zone,

in Vienna

as well. They in¬
sist, rather, that the former Ger¬

and

man—and

now

Soviet-controlled

companies—be used, although their
pump and other distribution facili¬
ties

How will you answer

utterly inadequate. ' So
peasant carts coming into
gasoline, a few

are

you see

THESE QUESTIONS ?.

town to haul away

barrels

at

utors are

time.

a

■■

distrib¬

!Our

being frozen out.

the Russians have
a new distribution com¬
which has not yet started to
operate.
It probably will try to
get into distribution in the Amer¬
ican, British and French zones of

"Latterly,

set

up

pany

Austria.

There

is

doubt

no

Russia's desire to freeze

us

EXACTLY HOW would you or your partner answer
these realistic questions todays if you nad to:
i.

a.

effect.

of

industries

into

went

The list includes

all oil-

producing and refining companies.
However,
before
the- law was
passed, namely, on Sept. 7, the
Austrian
Government
officially
the

assured

Allied

Council

that

with

regard
to
properties
of
United Nations nationals the exe¬
cution

of

the law

would

be

sus¬

pended until compensation could
be provided.
This, in Austria's
present circumstances, is an even¬
tuality not visible and therefore
are

we

not worried about nation¬

alization.

,

■;>OtM

„■

Will your heirs receive full value for your
terest in the business when
you die?

out.

"On Sept. 17, 1946, an Austrian
law for the nationalization of a
number

Who will receive your
partner's interest in the bus¬
iness when he dies, and how will this affect you?

of

;:;j;

in¬

•Some

day-— perhaps when least expected — these
questions will demand an immediate answer.
Today

you can answer

them in

a

safe, orderly and

businesslike way,
through a partnership agreement
drawn by a
competent attorney and made effective

by adequate life insurance.
An

experienced Massachusetts Mutual representative
gladly give you helpful information regarding
Partnership Life Insurance,

will

"As

compared with our $100,000,000 investment in Austria, the
British

estimate

their oil

invest¬

ments in Austria to total between

$100,000,000 and $150,000,000."
"

'

1

"'"■■WHEBW1"*1

•-

''

''

.*«r

Cooley & Co. Adds
Wm.
D.

Lyon,

have

One of the soundest decisions that business
partners can make
is the decision to insure the most valuable and most
perishable

Lyon & F.

HARTFORD,
Jr,

CONN.—Will:

and

become

Frank

Mi

associated

v

Cooley & Co., 100 Pearl Str
members of the New York St
Exchange.
was

with

Mr. Miller
&

Mr.
B. J.
was

Lyon

in

the

\

Van Ingen &
with R. F. Gri

Company.




asset

of

their

profits possible.

organization

—

a

Ath¬

O. Elks.

have

we

also

Club, Columbus Council of
Knights of Columbus and the

banks.

the

Curb

letic
the

That
generally,
was
as part of Austria's
monetary switchover from reichsmarks to schillings and as part of
;the government's effort to avoid
inflation.
By the device of the
Russians, that purpose tends to
deposit

on

was

Downtown

schillings, forcing us
the Austrian financial authorities

to unblock funds which

the

on

22,000,to ask

now owe us

©00

of

Feb. 26, 1919, some
years/before
the exchange

two

Brooklyn, at the time of his death.

and of Harold E. when the stock traders carried

&

became

member
of the New York Curb
Exchange
for many years,
died suddenly

City and has served in the armed
forces.

Richard Moxley Dead

'

1941

•

the brainpower that makes

York

sisters,
Mrs.

a

Curb

Mrs.
Irene

T

/'

vS'/i& v •'

y

v-'.V'.

:.

,'■';

■

i'

':

vVA'V'yA AAA

;V•

,;.V

'"I
"'

'■'

'••.,' : ',•■"■

y
%yy
yjyi-'i-';-'l'^V»V

?'■''.'i'"';

''1'',v

;.

A:1'■

'

i,

Aw,V;s'

v.".

-I,

A :W'-::'!i;,-V\r-;:

•;•:■' :v:.v^.y;
X ''

-,.

1942

THE COMMERCIAL & FINANCIAL CHRONICLE

the holders, to accept a t'most lib¬

years' fixed charges. That Nickel

eral"

Plate

.exchange:'Offer.V7;,^7h7^V-A'V70'

.To

large extent-the

a

is

not

than

ties', and .particularly the preferred
stock, has been due to the contin-r

{
t

•

There has been some press comment"recently,, and a cdmment by
of the large financial statistical agencies, on the subject of the

more

uation of what most railroad an¬
one

stock from

alysts agree -is

a

.

the

tar too •conserya-l

have

the

erratic.. There

Nickel

Plate

on

38%.

common

in

note

to

their

sympathy

$1.00

holders of Nickel Plate securities

Common & Preferred

that

is

Pere

stock .-in

Interstate Bakeries |
Common & Preferred

clined 37%

the' performance

of

Holders

of

Pere

&

marketwise

Preferred

Ohio

have

but,

fared

still,
a

half

months than have the recalcitrant
holders of the New York, Chicago
&
St.
Louis securities.
On
the

Cons. "A"

erations such

other

Chicago Railways

better

extreme, "ft is notable that
Marquette prior prefer¬

tion

stock

ence

has

stable

more

been

than

the

the Ches¬

7:7:/
York

New

;

MEMBERS
Stock

rfAA

•

-

.

7.

and^ other
leading Security and Commodity ExChs..

120

Exchange

Broadway, New York 5, N. Y.

231 So. LaSalle St.,

Chicago 4, 111.

Presumably - applying the
reasoning as that applied to
the sharp decline in Nickel Plate
same

securities,
Pere

this

action

better

of

Marquette prior preference
indicate

would

that

it

had

regular dividends

been

Chesapeake & Ohio stock." Actu¬

Armstrong Rubber Co.
Magazine Repeating Razor Co.
Universal Match Corp.

!

viously get

proposed merger. On a financial

as

the drop in Nickel Plate securities

TRADING MARKETS—

Dixie Home Stores

basis* the

does not support

well the

that the

tention

traced

the implied
declines

con¬

can

cent

be

directly to the failure of

support from the

some

stack

roads

net

to

case

C Tennessee Gas & Trans.

was

five

72 WALL STREET
.

Railroad Bonds and Slocks

NEW YORK 5

[Telephone

>'% Art-

Teletype

HA 2-6622

NY

1-1499

pflugfelder, bamptgn & rust
Membere

Specialists in
v

RAILROAD

'

61

New

York Stock Exchange

New York 6

Broadway
*•*

Telephone—DIgby 4-4933

Ben Teletype—NY 1-310

Marquette prior preference stock
amounted
to, $19.10, which was
not

far

below

than

half

Street

New York 4,

the

Nickel

Plate

unbiased eye
there seems to be little question
but
that
the
divergent market
action of Nickel Plate preferred
and Pere Marquette prior
prefer-^
erice (the latter has acted better
than. Chesapeake & Ohio com
mon) is not due so much to the
fact 'ithat the merger of Nickel
Plate;

To

r with

thie

Chesapeake & Ohio
as to the fact that
Plate
preferred has

was

^dropped

the

Nickel

continued

to

has

been

be

4enied its divi
connection

some

be¬

terms and the withholding of

Denver & Rio Grande Western Railroad Co.
St. Louis-Sari Francisco

i/

.

t'

i

Railway Company

nj

**

C

1

-s.'" '

(•'* V >'

^

'

j

^

S

•

H^^Complcte arbitrage proposition

C1'-'

J}' <

y

^"'n

t

.:'K

request

on

When issued profits discounted

WestiM. Trust Clfs.
Halsey, Stuart & Co. Inc. and
of

the award Oct. 15

won

f

•

•' .-' V

provide for approximately 80 %

standard-guage
railroad
equip¬
cost approximately $3;-

ment: to

430,600; six Diesel road
200 steel sheathed > box

600 coal

switcher^;
cars;

aud

cars,

-

—-j,

Oran W. Morrissey Opens!

Fletcher

Mr,

-

Trust

Morrissey

was

I

_

'

Trading Markets in—

Adams & Peck

v

Tele. NY 1-724

-

'

■

•

'

•

' t

;

^Prospectus

on

.

:

•

'

-Hartford

—'

National Association'

Buffalo," Niagara &
(a sub-holding company) ;
has been merged into an
operat¬
ing unit, Buffalo Niagara Electric.
But in order to effect this
merger
and retain its full

equity interest,

Niagara

Hudson

substantial

bank

had

to

loan

(now $40,-

incur

a

*000,000). The. SEC wanted• it to
dispose of the -western company

C'Bennie")

by

November 1

this

year, possibly because the overf¬
all system is considered
too large
a n d

insufficiently
integrated.
However, -..the; company. recently
.

applied for: a .petition to merge
all operating units with
the im¬
plication that: tb£folding :con£
pany would, later be dissolved
.

(presumably some

but

this

did, hot - reflect
some spe¬

charges imposed by Commisrsion regulations. 'One Wall Street
analyst a few: months ago estimated

,

future

earning i power at
substantially higher figure, but

a

is

already

paying -at
dividend, and
may
decide on a "permanent'*
rate before; Niagara has cleared
least

up

moderate

a

all

its

problems.

This

Dealers, inc. y

balancing

Columbia's current
dividend and good dividend pros-:

pects against Niagara's larger po-*
tential earnings coupled with pos-f
sib!e integration delays.
\
I

ja

formerly

•

'

"

I

;A;.;vr

Buckley Bros. Open Branch
In Beverly Hills, Calif, pv
BEVERLY

Buckley
new

;<

HILLS,

Brothers

.branch

Beverly Drive.
new

office

CALIF.
has- opened

request

52 wa'l street

n. y. c.

HANOVER

,

5

HAnovpr •.38-S072 r" Tel^.lNYT-lgSO

2-1355

|

a

Managers of the

are" Austin

Eugene Ellery, Jr.

<

;

Exchange

'

'

t

NEW YORK 5

ONE WALL STREET

f

.—

office of 321: South

Specializing in Railroad Securities

TEL.
-

factor

doubtless tends to explain the fact
the two stocks sell around
the
same
level—the market is

that

Members New York Stock

.

of Securities

con¬

by

.

1. h. rothchild &co.
Member o)




formerly

trolled

BOND BROKERAGE SERVICE

Common
;

inte¬

Eastern

Mclaughlin, reuss & co. :

NATIONAL SKYWAYS

New York 5

-.—

substantial

system

/

v

*

UNITED PUBLIC UTILITIES

-Philadelphia

to

/Partner in Cochrah, Morrissey &

GETCHELL MINE

Boston

Building

in > the securities business.

LONG ISLAND AIRLINES*

BOwling Green 9-8120

its

:....

Circular upon request

Wall Street,

made
"

gration problems much work still
remains to be done. The
western
half of the
system,

Columbia

Inc.

Yantis & Co.,

Co.

Common Stock

63

has
with

Western Maryland it is difficult to make any
foref
1%% equipment trust cast without knowing how mucli
certificates, Series K, and imme¬ can be obtained. per share fop
diately;: re-offered them, subject "Bennie" or for the new con¬

the

Ry. & Ltg. Co.
V

company
progress

$2,740,000

engage

120 BROADWAY, NEW YORK 5, N. Y.

Telephone KEctor .2-7340

;

w

Turning
to
Niagara
Hudson
Power, we note that while the

Railway

rissey & Company with offices in

t-v:P'
EST. 1896 - "V
Members New York Stock Exchange

.

.

cial

Morrissey has formed O. W. Mor¬

SUTRO BROS. & CO.
.

a

of

necessary
to : "discount" : the
anticipated result marketwise.
I

savings,* and it is :after

1NDIANAPOLS, IND.—OranW.

"

it

Own In vestment Company

...

Connecticut

stock

a

the_ full benefits of current tax

Halsey, Stseart Offers

—,

N. Y.

for

-

be

caliber; but of course the
possible delay in the adoption of
a
permanent dividend rate makes

earned

When Issued securities

Telephone BOwling Green 9-6400 7
Teletype NY 1-1063
^
t7

return

-generous

-

seem

idends is,

GUARANTEED RAILROAD. STOCKS-BONDS

Broad

Nickel

of

preferred, but it is doubtful
if M946 earnings will run much

of the cost of the following new

Gulf, Mobile and Ohio Railroad Company
25

those

Plate

to

SECURITIES

mil/fix

would

.

The certificates are being issued

Selected Situations at all Times

price

fo Interstate Commerce Commis¬ solidated company when part or
at prices to yield all of the stock is liquidated. If
from'1.10% to 2.00%, according to the company gets a reasonable
"break"
the
maturity. The certificates, which market
eventual
mature
$274,000 annually from share earnings might prove some¬
Nov. 15, 1947 to 1956, inclusive, what higher than those of Colum¬
are being issued under the Phila¬
bian Gas,; and its dividend-paying:
delphia
plan.
Associated with ability
commehsurately larger:
Halsey, Stuart & Co. Inc. in the However, since it might take fronji
one 'to three
offering are: Otis & Co.: Putnam
years, at a guess, • tc*
& Co.; Julien Collins & Co.; First clear up all remaining questions
Michigan Corp.; Alfred O'Gara & wi th! the SEC and the New York:
may
be
h
Co.; The First Cleveland Corpor¬ Commission, there
ation, Thomas & Co. and F. S. fairly long wait for dividends.

f

-

current:

sion /approval,

sm.

Van Tuyl & Abbe

.

associates

than

more

Berkshire Fine Spinning

j

preferred «;■ amounted
to
$22.42 a share and this year the
earnings will amount to at least
$14.50. The 1935 earnings on Pere

re¬

capital

working

equivalent

pretty

up

same—in each

v

I

the

nearly 8%, which would

-

Plate

tween the Rejection of the merger

Pere

(Continued from pa'ge 1931) "
on

'this

en¬

dends. As to whether or not there

ally, that is not the

just

more

the

on

treated too liberally in the merger
Marquette bonds of the same maA
proposal, at the expense of the turity even though the latter ob¬
case

far

preferred 'than on
Marquette stock.

Plate

senior

is

•

operating com¬
div¬
pany stock would be sold through
obviously, impossible to
rights or otherwise, to retire th&
those
of
Pere
Marquette,
has say. Considering the financial po¬
bank loan and preferred
stocks,
done by far the better job in elim
sition, current earnings, and earb-r
including moderate arrears).; ; A ?
inating debt and reducing charges. ings prospects of the Nickel Plate,
Space' is not here available t6
That the Nickel Plate credit is however, it is generally consid¬
better is obvious from the fact ered that establishment of a reg¬ make a study;bf -future pro forma
that its 3%s, 1980 sell at the same ular $6.00 rate at least can not be earnings. In the 12 months endedJune 30, about $ 1 per share was
price as the higher coupon Pere much longer delayed.

1946.

;

of

Nickel Plate, whose charges have
never
been
so
burdensome
as

apeake & Ohio common, declining
only 8% from the level of Oct. 30,

Ernst&Co.

policies

would > far
have;1 supported
resump¬

Nickel

measurably

even

the mergers, sound

as

managerial

the Pere

5s, 1927

the

Chesapeake & Ohio.
Purely on a statistical basis, if
there had been no outside consid¬

better

no

during the last eleven and

better marke'.wise than

common

& Ohio,!

titled
to
dividends " than ,is thej
Pere Marquette prior preference^
Las; year's earnings on the Nickel

showing.

York, Chicago & St. Louis
preferred oven without giving^ any
consideration to the prospect of
either
being
merged
into
the

sagacious enough to
accept the terms offered them by

Chesapeake

that

New

Marquette

common were

Marion Power Shovel

at

Erie;

earnings, basis the Nickel

more

acted

'

the

wondered

be

"of

It is

Lake

Chesapeake

preferred

policies the Pere Marquette prior
preference
stock
should
have

Nickel

the

January

disbursement

share in mid-April.
to

of

:On

.

Plate

with two such divergent dividend

about in line with

or

Plate securities.

•

hardly

Marquette common
same
period de¬

the

a

last

paid

other

one

dividend

a

was

share

a

and

for

preferred

to put it charitably,

been,

.$3.00

What all of the commentators fail

Arden Farms

Plate

Nickel

Oct. .30, 1945, the: Nickel Plate
preferred had dropped 36%. and

$5,000,000 to purchasd

Wheeling' &

five dividend policy. At the same,
•time; that the management of the

unfavorable market results to stockholders of New "York, Chicago
Pere ^Marquette
& St. Louis of their* refusal to accept the merger terms offered by affiliated
has
Chesapeake & Ohio about a year ago. The,statistical agency pointed -found it feasible to continue the
out that while Chesapeake & Ohio common had declined only 12% prior preference stock, on a regu4
since the plan was abandoned on lar $1,25 quarterly basis dividends

strapped for cash is

obvious from the fact that it has
asked. .I.C.C.
permission to .use

poor mar+

ket action ,of Nickel Plate securi-i

;

Thursday, October 17; 1946

v

,

";:, ■' as/,:■

>'7 *77/7"'77-

-

TELETYPE NY 1-2158

Philadelphia Telephone — Lombard 9008

Fox

anc|
A":;

I

Sr

1943

See Railroad Retirement
Act

Is

Taxpayers' Burden

W. C. Everett,

of Winsiow,' Ariz., writes {'Chronicle," Act is Utopian
dream legislating indirect wage increase, exploiting users of railroad
transportation and the general taxpayer; - <
Since the general election of Nov.

'

.;

.

;v ;

;

•

,

7, 1944, I can't help but think

that possibly the United States is getting set for a dose* of the "South
Sea Bubble?,."..7
v-

J ,; At

that

states

election

submitted

is

six ;>? western

to

the

voters

income

gross

—the

tax

of

voters' turned

down

The $60 at 60 is a
plan—
citizen reaching age 60 was
to receive from the state $60 per
month to be spent promptly.
variation of the Townsend

-

every

~

;

to get.

The Chinese

the same amount of silver.
cost of the people

That Act has

of the U. S. A. billions so far. And

-

^(Railroad/ Retirement Act is" fi¬ hardly anybody knows about it.

tax

come
v

$300

on

the employees up to

month earnings'4,sweetened by 3% interest'on the funds,
paid by the Federal Government.)
per

.

And Boards of Directors

busy

are

getting approval from their stockJ
holders for putting into effect,
.

_

tenance of the value of silver at

-

The people

;

of the United States
have-gone Insane over whatygov*
ernment

cam

is!

Government

do.

neighbor,with
only
our
neighbor's abilttyi backed 'by a
bayonet—but because we call him
government we grant him omnis¬
our.

it.

hasn't

he

cience—but

is

He

just another two legged man.
A long time ago man got it into
his head that he was God.,
2242

silver

case,

Until

then

the coins

materially

sity for importing fresh silver for

the

nominal

value

the

a

relatively high level through de¬
for monetary purposes.
It

for,,

true, India has vast hoards of
But India is

breaking away from the British
Empire—the new government of

there is

no

new

small

Nor do the economic arguments
in favor of bimetallism carry
any

sion

They were
a matter of opinion so
long as the
volume of currency and credit in
Britain; depended on the amount
of its gold reserve.
Many people

metallic

value.

part

they

the

token

Congress
of

retain

how-:

to

message

on •

the

constitu¬

a

Central Bank and the

of

the

present

reor¬

mone¬

given in the New York

as

"Journal

of

Commerce,"

further

said:

the

"Under

his

plan

the

country

would have national currency

printed:

on

the gold standard, but the change
would be

accomplished gradually

and the Central Bank would have
a

Evidently "coins
with $ single metal for over metallic value.
made of cheap metals, and con¬
a hundred years, and since 1914—
apart from the brief interlude of taining metals produced in the
1925-1931—it
managed
entirely Empire, wpuld do just as well.
•

100%

gold

reserve.

,

'

'According

pension plans for, the officials of
5 their various
companies.
Now let's look at the reality of B.C.
They lived in a pleasant
the Retirement Act.
valley, got tired of sweating to
withput a metallic basis. \
It is difficult to foresee bow
The pension plans of the rail
earn their bread and decided they
If there is one thing certain in much silver .the
government will
roads under the
rate
structure might as well walk into Heaven
this world of economie pncertain~ obtain through, the operation. • It
prior, to 1937 was 'getting to be a j so proceeded to build theittselves
ties, it is that, having adopted -..a, depends : on the response; of the
heavy burden due to the young | a tower by which to do so.
Apscientifically managed monetary Rritish public, .Quite possibly a
'•employees
becoming
old — the parently HE didn't like this type
system, this country will " never large percentage of the old coins
same thing the Fraternal 4 Insure
j of thinking, so came confusion of return to a system under which with high silver content, and a
jance Companies ran into earlier
tongues, building of the Tower
the volume of its currency and smaller percentage
of. the new
-but under* the Act the railroads; could not be continued, and the
credit depends on changes in the coins, with lower silver contents,
now pay
into the fund less than people were scattered and driven
amount
of
its metallic reserve.
will-disappear in hoards. Even so.
half.
out of their Valley.
'
/'
Britain will never be either mono- every little helps, and in any case
; The employees receive a gov¬
Today too many of us think
metallist or bimetallist.
' the re^prin will obviate the neces¬
ernment annuity for which they we can legislate ourselves into

•

a

account,

should still
fair percentage of their

a

a

proposing

ganization

moneys

ever,

sent

Press)

Trujillo

tional amendment for the creation

In such circumstances it may well
be considered absurd, that some
of

day

(Associated

that President

their

1931

are

a

coinage.

tary system. The Associated Press

of

Since

paper on which

would make for credit expansion
and would make the system more

managed,

retain

„

8

that

intrinsic value of the. pound notes
has been Jess than that of the

the monetary, metals
welcome change as it

V Britain

to

advices

Oct.

argue
token

.

.

*

It is learned from Ciudad Tru-

disappeared.;t

moneys

much

and less popular

jillo

amount, have full intrinsic

that

felt then that the inclusion of sil¬

elastic.

the

\

Nobody kcould' possibly
it
isnecessary for

conviction in Britain.

public is
austerity
harsher
than

For Dominican Republic

above

Thus

token

the

Central Bank Proposed

bullion

rose

value,
was ,1 maintained.
Since,
however, the silver content was
materially reduced, and the new
coins, after a' few years' wear,,
showed only the clear evidence
of their inferior quality, that illu¬

nomic interests.

among
would ;be;a

the

coins

that i the
silver
coins,
though not legal tender beyond a

for. Britain to shape her policies
with an eye on major Indian eco¬

ver

while

these

nominal "value.

illusion

therefore

need

of

their

of

—and

short

a

value

the point

on

of

British

having to grow accustomed to

that followed the first World War'

is

The

measures,

of

was

mand

requirement

coinage.

used to putting up with

only slightly higher
than their metallic value; in fact,
during the short-lived silver boom

main¬

Conference that is held in London

farmer has to produce more wheat

V States passed the Social Security
and the Railroad Retirement Acts.

nanced by a 3V2% payroll tax on
the companies andMk % -gross in-r

the

Pandit Nehru did not send repre¬
sentatives to the Imperial Trade

of China and India.-

pjBut the Congress of the United

•>

silver, and
the silver output of the British
Empire is negligible. ' No British
no

silver.

the people of the fortyeight States for the benefit of the
six or seven silver States, and in¬
cidentally upsetting the economy

by

about 2 to 1.

.
*

..

to

any

declined in importance even as a
token money during the inter-war
period, when the silver content of
the coins was drastically reduced.

in

ute upon

3%—and

it

this country.
Britain produces

In

is dead

"wrong things" is for instance the
Silver Purchase Act, levying irib-»

a

amendment
providing for $60 at 60, financed by
a

of

record

bimetallism

governments in
finance on long term futures?.-- ;.
An
example ■: of
one
of
the

Constitutional

t

!

the

that

interest is attached

-v < !v

-

.

ized
'

„

Editor, Commercial and Financial Chronicle:

'find of Britain's Silver- Coinage

(Continued from page 1929)

to

the

proposed.

,

plan

the

aged by

Bank

would

commission, made
chosen

from

up

v

"President

,V'

Trujillo

that

the

economic
*

\

.

said in his

monetary

form would increase the
national

man¬

of members.

various

fields.

message

be

autonomous monetary

an

allowing

resources,

re¬

yield of

the refunding of the external

for

debt,

estimated to be 8,000,000 pesos

by

.

the beginning of next year."

-

r

pay less than half.
f■.'; The generbl* tax-payer makes
up the difference through Federal

Heaven,

'

,

^

Yours
W.

•

truly, w

^

EVERETT.

C.

taxation.

This is not

t The railroads like the Act be¬
cause • they ' have"" ditchedi more
than half the cost cf their pen¬

sions; the employees because they
-are getting a lot for a little and
-have taken the pension out of the
•hands of
the : companies
who

Handicapped ;; Week,"
proclaimed by President Truman
to start on Oct? 6, Federal agencies announced plans for a coor¬

^sometimes used it

dinated program to be
in collaboration with

an Offering Circular. Tha offer of these Bonds is made only
by means of the
Offering Circular, which should be read prior to any purchase of these*IBonds* ? •

Urge* Jobs For Handicapped

1

club in the

as a

of strikes, or stopped pay¬
ment at their will; the politicians
-because of the jobs the adminis¬
•case

tration of the Act required, there¬

by building up a greater political
machine with its accompanying

"

the

eve

th4

"Employ

of

Physically

*

{••

•

*

1

*

*

-

-

*

bring to the notice of the Amer¬
the importance of re¬
ducing the $3,000,000,000 annual
cost of maintaining the physically

^

fighting

incurred in combat."

,

:

•could only get back what was put
;into the Fund less costs of adminr

dstration. We'd actually have more
if we had no pension Act then.
"The costs of the administration, of
-the Act

are

very

great both to the

^government and to the railroads—
Regardless of the statements that
costs

are

in

the

V^hat

some

till

U.S.A.

they

are

65,

costly job!
Another point is, where is the
stable government that
will see
-that the worker isn't robbed by
manipulation of his money.
The
present pensions have been great¬
a

^

blood

handicapped

and
-

ment

enormous

,

today upon its promise to replace
sometime in the future. And what




V'

;

*

.

pj

„

4

1

'

,

'

First MoHgage Serial Bonds

'1951

1.15%

1948

1.35%

1.65%

1950

l.?d%:

;

1955

L

,

^^

'

^

$.15%

$.05%

1958

'

M.lfifla '

1959

$.45%

%1.95%.591
1961 .$$.50%
03 7
196$' ' $.50%

1953

1

1954

,

.

6195$ %58.1
591
1960

-

1949" 1.50%

The issue and sale of these Bonds

$.S5% -

are

subject to authorization by the

Interstate Commerce Commission.

who

tributed materially to
of

our

war

the forgotten

efforts
men

the,

flesh,. and

'

Price 100% and Accrued Interest

con-,

1

'

the success

must

and

Fot all Maturities

be

not

women

of"
:KV

the

*

V'.-..-

•'*';*:•••••

"

»

.j- »v

,

postwar world,"

.

v;

»

,'v*

*

v

,

m

•«*.

;*

Copies of the Offering Circular are obtainable from only such of, the
undersigned as may legally offer these Bonds in compliance

In New York Governor Thomas

E. Dewey asked the people of the

with the securities laws

of the respective States. '

.

l

:

State to join in the national cam¬

paign to
find

encourage

employers to

employment for

National

govern¬
amounts to spend

f

The Labor

.

workers

Bote,

the

•

who paid for pur safety with;

their

American

gives

«._

declared ihat "The disabled vet¬
erans

granted a few months ago,
sind the end isn't yet. Our govern¬

This

^

«

1947

Administrator
of,Retraining and Employment, Maj.
Gen: Graves B;- Erskine, U.S.M.C.,

handicapped.

rently.

4

»

-

194-7 to 1902, inclusive, and bearing interest as follows:

Department's

cally

ment- (politicians)
receives the
pension funds, issues its bonds
<IOU) and uses the money cur¬

%£"'r

whose injuries were

men,

ly reduced in purchasing power
iby the I8V2C per hour wage in¬
crease

\ ''

% '

of the nation's bravest

negligible. Keeping track

of the earnings of all the workers

••

Dated October 1, 19pi. Due $1,200,000 each October 1 from

shops and offices are many physi¬
cally handicapped persons, among

/general taxpayer.

/

j

Railway Company

handicapped by finding jobs for
them. James Forrestal, Secretary

Of railroad transportation and the
If everybody came under a pen¬
sion Act we ought to see that we

1

ican people

them

w

*

i""*

to

legislated indirect
.-Wage increase exploiting the users
a

'

DuluthfMissabe and Iron Range

patronage. •
Regardless of the propaganda of the Navy, according to a dis¬
-around, this Act is nothing but a patch to-the New .York "Times",
fUtopian dream for the long view, from. Washington, told of the
3iuman nature being what it is. If Navy's I employment
of
handi¬
an injustice should
be corrected capped persons which "extends
why do it in this roundabout way ? throughout the year, around the
•'Why. not correct ipstead, What is -clock." He said, "In its'; yards,;

rwrong?
*
-><The Act is

*5

c

States

V

.

$19,200,000

\
/

x

worked "out
the

*5.

•

.

On

stated:

only

Charles

Chairman

"Veterans

of

G.
the

Committee,

handicapped
capably

in

workers

more

normal

,

are more

productive than;

employees."

\

BLYTH & CO., INC.

HARRIMAN RIPLEY & CO.
Incorporated

KIDDER, PEABODY & CO*

SALOMON BROS. & HUTZLER
October 16,

1946.

"

;r

THE FIRST BOSTON CORPORATION

1

than

90% of all jobs, but that disabled
workers

MORGAN STANLEY & CO.

;

physi-:

"Surveys show that not

can

perform

the

f;

,

1

SMITH, BARNEY & CO.

J,

*

'

\
1944

I

I■'!

' -' 1 ■'v:

li >'

!

VT!V,"

'■

I.A if |lIIT..:I ;■ ■

"v-uj

-

THE COMMERCIAL & FINANCIAL CHRONICLE

-

Thursday, October 17, 1946

Support the;
RED CROSS!

(Continued from
ing "bust."
the

use

What I

when I

mean

Sellers'

phrase

is that this first
postwar business cycle is one of

high

inven:ory

1928)

page

1.

markets

changing.

already

are

Some items

are

still

scarce but over-supplies
of others are beginning to ap-

quite

demand,
large
and rising prices, |l pear; I'I: l|
by a sharp down¬ 2. Many manufacturers have been
ward
readjustment
before
the
slow to realize this change. They
economy levels off for its longer
have
kept on producing the
term
postwar period.
In other
v

money supply,
to be followed

thing and there already

wrong

words, I
similar

I

am using "bust" as being
to 1920-21, although less

extreme, and bearing

I Mi Itlll i%'

relation

no

whatsoever to the great depres¬
sion between 1929 and 1932.

There is not time enough to do
than give you a general in¬
dication of why I believe develop¬

has been

tality in
3.

*

First

that

intelligent
of tight
already begun to
more competitive

A PROSPECTUS ON

REQUEST FROM

YOUR INVESTMENT DEALER

with

OR

first

DisTRiBUfoRS Group, Incorporated
63 Wall Street

•

come

The

early next year?

reason

for this

,

inventory replacement
boom.
Production is at a high
level and prices have shot upward.
Inventories have already begun to
gain. Retail stocks are going up,
consumers are showing price re¬
sistance, and retailers' commit¬
ments are too large.
k
If production and ; prices were
maintained throughout 1947 at the
levels they will reach by the end
of this year, inventories would be
overwhelming by the end of next
year. It seems to me to be simple
logic that production or prices, or
both, will have to decline some
clines

Shares

at

generally will come
1947, when there

recession in

sharp

a

.

5.

Advertising has already experienced

r;;

readjustment from

a

time

an

time in 1947.

be

wholesale prices and total pro¬
duction.
L
;
"t

conditions.

Since

war¬

early

this year, big advertisers have
scrutinized
their
budgets, in
many
cases reducing them at
% least
temporarily, and quite
frequently
revamping
their
longer-term' policies
for the

postwar period.

.

BOND SERIES

sellers,, even
supply, have
look ahead to
conditions.

time in

will

r

inventory picture. This
postwar business cycle < is

mainly

New York J,N.Y.

markets
some

is keyed in

the

areas

4. The final death knell of sellers*

outlined above.

of all why do I believe
peak in business activity

a

will

as

mor¬

fields.

More

in

more

ments will be

rise in business

a

some

;

,

;,m

6. By not later than the first half
of

1948, the, first postwar busi¬
decline should

ness

have been

completed and marketing peoi pie will begin a 3 to 5 year

period during which the scope
marketing services will ex¬
pand to new high volume. .Il

*

of

.

I estimate those de¬
20

between

and

30%.

Marketing People

Should

Begin

Now to Build for the Future ;
an important busi¬
readjustment, but not as
The
intelligent
businessman
as in 1921 and nothing like
knows quite well that no one can
the one that began in 1929.
predict future developments ex¬

That would be
ness

drastic

Priced at Ma ket

Prospectus upon request from
your investment denier or

a

Why do 1 believe there will be
period of high level

3 to 5 year

actly

as

when

we

they

will

occur.

Even

business forecasters

suc¬

business activity after next year's

readjustment?

NATIONAL SECURITIES &

ceed

is most difficult to decide exactly
when certain developments will

The

RESEARCH CORPORATION

harder

briefly. My

120 BROADWAY

made many

New York 5, N. Y.

outlook.

belief J is

this

for

reason

somewhat

summarize

to

own organization has
studies of the business

continued

have

These

we

long period of time so that
have had a chance to check

our

results

over a

as

much

as

possible by

in

being generally right, it

begin to appear. There seems to
be no exception to the rule that
the only way to be ready when
the

time

comes

is

to

ahead of time..'

>

By this I do not

get

ready

:y,

mean

to imply

that marketing people have noth¬

approaching our conclusions from ing to do from now until some
all possible directions, and by dis¬
period that may be 12 to 18 months
cussing
our
conclusions
with ahead of us. On the contrary,
qualified people of all shades of there is an immediate service to

III <1

opinion.
Let

me.

just

be

briefly

say

that

certain forces were generated by
the war, chief of which were an
increase in the money supply and

performed,: a most important
for which marketing' re¬
should
provide sa l most

one, one

search

valuable help.

That is the prob¬
I, I
/

lem of pricing.

accumulation of demands. In
What is happening at the mo¬
practical terms this will, at the ment is that many
producers are
proper time, translate itself into
pricing themselves out of their
high level activity in two basic in¬ markets. I know the difficulties
dustries—automobiles and build¬
they encounter. Wage rates keep
ing. A third basic industry—tex¬
going up and the same thing is
tiles and apparel—will operate at
true of many raw materials. Nev¬
a unit volume substantially above
ertheless, an increasing number
the prewar level. Finally, capital
of manufacturers is finding out
investment will bear a relation to that the large volume of accumu¬
an

,

business
Prospectus from your Investment Dealer or

that of

of the thirties—an

HUGH W. LONG & CO.
STREET,

CHICAGO

look

Massachusetts

CftUton
one

;

|r

r

y
v

'

be obtained

local investment dealer

by

111
or
■

Die

SO

Keystone Company
of Boston

Congress /Street, Boston, ?, Mass.




/.

-

NEW

point of view, I

would say this:

■

^

f

yy--r'[-p

seems

/*

where it ex¬

prices ad¬
^ilxi l|;'il:;
as

most important to me,

a

YORK

6l Broadway

-

DEVONSHIRE

&

any

210 West Seventh Street

rest

of

the

prices, or who rebel against
paying them, and who will wait
until they can get the item they
want at a reasonable price before
they make their

.^1^

Prospectus*

may

ANGELES

>

second

ited

These two

be obtained

from authorized dealers, or

boston

120 South LaSallc Street

price.

phase includes all
demand that ac¬
period,
but consists of a group of people
who cannot afford to pay unjim-,
the

1

COMPANY

,

first phase

cumulated during the war

group.

LOS

phases of demand.

■The

STREET

CHICAGO

two

is what might
be called the frantic fringe and
consists of a group that will come
in and buy a given commodity at

l rust ui

different management

should understand that there are

The

of which is managed independently of the

VANCE, SANDERS
your

from your

of either of these investment funds, each
other

from

It

m

Write for prospectus relating to the shares

1011

map

even

,

Investors

/

Kj'und,
111'"* | III!

iistodian

Prospectus

vance.

particularly during this interim
period of the next
12 to 18
Sellers' Markets Now Changing
months,
that marketing people
To summarize the business out¬

NEW YORK 5, N Y

10V ANGtUS

lated demand,

that ists, shrinks rapidly

additional stim¬

ulating prospect.

I*C0*>0*AUD

48 WALL

much closer to

activity

the twenties than to

CHICAGO 3,

ILLINOIS

:

v

present to a greater or lesser de¬
.,

SELECTED INVESTMENTS COMPANY
135 South La Sails Street

purchases.

phases of demand are

gree

need for
automobiles and re¬

for many items. The

homes,

new

frigerators has been widely pub¬
licized.'There is also an accumvlated

demand for

such items ra

Volume

men's

164

clothing

and many staple
items, ...v j.■
-:\v, ./
In all of these items'
there is
a
frantic- fringe and there * is "a
good solid backlog of replacement
The

will

- <•

•

as

well

by high prices for tising agency. I think personally
automobiles, refrigerators, sheets this is an example of the tail wagand men's suits. Sooner or later
it ging the dog. Advertising, accord;will be
exhausted, manufacturers ing to my logic at least, should be
will have to
get costs down, re- a function of marketing rather
tailers will have to
liquidate high- than the reverse. It is the task of
priced inventories and wholesale marketing research to determine
prices will have to adjust them- the acceptability of the given item
selves to a saner relation
with and to estimate the size and chardisposable income.
'
~
acter .of the population group that
Not until that time comes will will be its chief consumer.
For
as

and "distributors

the greatest efficiency, I believe
you should complete the job and
tell the manufacturer how the

begin

to tap the solid
backlog of sound
replacement demand that under-

lies the favorable
prospects for
3

,}£ 5 year period beginning

item should be promoted., /

a

in

Advertising is also a marketing
in
an
111
au
entirely • different

"

;■

ictor
laClOr

.w..:7:7.V7'

It
an

to

seems

that this raises

me

for

ago,

years

Just

example,

how great is this
frantic would have
fringe of demand for individual mated the mark'et

items at the moment?' How
long
will it last and how soon
will it
be exhausted?
Anything that mar¬

allowed for the pow

well

as

as

ready.

sale

of

have

factors

both

been

vitally important in helping de-

termineto/sheeting"yardage® tsed
-

what

price level will the
solid
backlog of replacement de¬

per

•*

*

^

ji

household.

It seems worthwhile to

mand be made effective?
To what

empha-

^^nt"Cwiu^indiWduai ^models ffuu^ol'm id"ertising^ogram
be
Change4 and

iSSySSt

proved.

fluence the acceptance of a com-^
modity in which you may be ini-

This question is even more imsince manufacturers and
an

Forecasting

I

°

my

organization

has

leads me
to
visualize
a
longer-term postwar period about
as follows:

u

search

be 30: tQ 35% above
prewar.
? If I 'am
reasonably correctin
these estimates it means that con¬

high.

At

same

time,

,

X don't

r

7.

,

business

°f n° "j**1t
cies having a

sharply and there
u

vived with

*

Old

be

re¬

more

even

greater intensity.
Mail
order
companies, - chain
stores, department stores and in¬
dependent specialty stores will all

compete

actively

for

the

u

t

re;e;a£

.

staff trained
tr

»

I believe

quite

a

we

now

can

draw

come.

con¬

tailer

have

' That

I

natural

number of

gas

wells, all

us

that much

one

month

in

George C. Reynard Dead

make

that
the

the

are

plain

George; C. Reynard, formerly in

present location of

ductive capacity.

interior

cities

move

and

ter, Charleston, S. C., of which he
was

set

War

I

with

was

several

securities firms in New York and

small

to

manager. 'Reynard after

World

and my

there

was

up

branch manager for A. Mi

a

1

Kidder & Co.v
","1

"•

v

\

Maryland Railway Company

T'-"

-

d

Ji1/-

-0'

\

' *'

~

:'

'

'V4'

*

- '

";V

-

.

•

'

/'

; -v:

rv

tndorsemeny

•£5"lT\

VN'-v' I'f 5

1/ ■.

lm^xr
.

to

' '

v'

y

* • ''/Ar ^

$3,430,600.
do

MATURITIES AND YIELDS

as

Marketing

a

marketing

!

1947

1.10%

1.50%

1954

1.90%

1948

1.25

1.60

1955

1.95

1949

1.40

1.70

1956

2.00

1.80
fvC V

,S '

"

'

1

y ,U~ %J V,'V /('

re¬

Zti

s

' i%

2

'

*'7' " r 1

'

V

*

'

V

~

• t

r

-

a

. , -n

subject to authorization by the Interstate Commerce Commission. The Offering
Circular may be obtained in any State-in which this announcenuntis^irculaiedfrdnf only suck if'the ' \
•
*
undersigned and other dealers as may lawfully offer these^echritiei in such State.

Issuance and sale of these

.

Certificates

marketing factor. ; I
points particularly that
to suggest for your

are

a

halsey, stuart &. co. iNC.

many

juli en collins &

putnam & co.

otis &. co.
'•j.? (INCORPORATED)

cases

"...

first of michigan corporation

•

research

based

on

the

Alfred o'Cara '&co.*
| thomas- & company

first-cLeveland Corporation
:

interviews

v

F. s. yantis &.
incorporated

with

-

-

potential
consumers.
Furthermore, the retail store
;can, in many cases, be made
a -laboratory
for- market research.

-

;

practical
viewpoint: to„ certain prob;lems that may be particularly
^needed/ Furthermore,-the fdct

0 'V

"V

•

-

'
'

•

0:-£vt'

'• *-

;

>

i,;vvV-

......

TobedatedNoveHjbcr!5.l946.PrinctpaJand^enii-annua1cHvidehds(MaylSandNovembPr!5)payahfpiTi7>Hf'>>'vrf>, ,
Maryland.-Definitive Certificates, with dividend warrantyattached, in.the denominat: n
as to principal. Not.redeemable prior to maturity* These Certificates are offered;when, aa and if rec -:.
i by us. U
is expectcdthayCertificatesdjvtemporary cfr definitive form will be ready for delivery at the ftice :'»f T sldry,
rt *
& Co. Inc., 55 Wall St., New York 5, N. Y. on or about November 29. 1946. Thb inf •rnatinn rontnine Mr ref-''•or-been carefully compiled from sources Considered reliableand, whitemotguaranteed ds to completeness or accuracy.

t

t<y v {

•'

2. The retailer ^brings a

/

:

ccnsrany

1

.

♦

'

Certificates are to be issued under an Agreement to be dated as of November 15,1946
which will provide for the issuance of $2,740,000 principal amount of Certificates to be
secured by new standard-gauge railroad equipment, estimated to cost approximately

fore¬

•

advertising " re¬
ceived
a
big boost.- Emphasis
shifted from the selling, of .mer¬
chandise to promotion of an insti¬
tutional type. You are
already ac¬
quainted with the evidence that.

p

annually $274,000 on each November 15, 1947 to 1956, inclusive

To be guaranteed unconditionally as to principal arid dividends by
by Western Maryland Railway Company 1

;

it

as

'

—

•

.

-

;

:

.

^

-'

."

October 16,. 1946,-i !'r/',''

we

•

"v

' f.

-v

'

,

' '

believe it to be correct as of this

"

'''

'^

.

date.
\ '■-[ .7 ' »,

••

■

\

v *

'•"*•*.

•

(PHILADELPHIA PLAN)
To be due

New

pro¬

our

To be sure the

their businesses.

in

York City,"died at the Hotel Sum-<

That is why I

advised my clients

business

brokerage

about

worried

so

me

the

statistics

should like

magazine




bombs

\%% Equipment Trust Certificates, Series K

the retail ex; / ecutive can he. made; anMn; strument of market research.
For some types ;of .problems
;; 'his viewpoint is, in my opin¬
ion, more • trustworthy than

the civilian market. Radio

are mow

as

two

il.In

rates, however, made adver¬
tising attractive even for those
manufacturers who had nothing to

these wartime conditions

'These

„i

*

Western

consideration.•.;;:v

tax

;

fight less than

effective results.

I feel that some

together with the. scarcity of some
types of goods, has limited the
importance of newspaper
adver¬
tising during the war years. High

end

write me about other
places they
should
stress
the
ready availability of large food
supplies
from
adjacent -farms,
plentiful
spring water ; supply,

$2,740,000

search people have not fully re¬
alized the importance of the re¬

is, that newspaper advertising will
again come - back into ' its own.
Wartime shortages of
newsprint,

sell in

-

If people

Selection Most Important

other form of outlet.

'*•

that will be valid for

few years to

Concrete Suggestion

'

Factor

con¬

one

L

the last war!

filling stations,
'*'"•••

-

.

enooest-

The Retailer

sumers' dollars.

clusion

1500

half dollars. It cost

to

drug stores, variety stores or ai-

the two professions but a joint
cooperativeness in the interest of

au

mortality.

rivalries will

of

grandchildren- to

organization. What I
gg
not a competition between

high

;

business

a

have

inS

e

.

'

might take only about 1500
A-bombs to wipe out our!
stand-by elpctriq power,: easily
on war!
Com¬
mined nearby-coal veins, and the

and it immediately becomes pos-

myself should engage
_

marketing

work .of t.he

^

him.

upon

These
believe

manufacturers and distributors in
many fields has already increased
of

a

in the proper package, however,

has gone.

will be organized. The number
of

competitive

have

but from the manu¬
viewpoint it is only half

casters like

rate

up

War II.

mail order business^ or to regular
!ine retailers. Put the same sheet

unusual, he may find himself too
high or too low during a much
more important long-term period,
even though your work has been

will

a

munity for all who are sincere
about protecting themselves
against an A-bomb war.
I am
leaving here this week to call

the

of

handling that limit its sale to

at any
This is

apctue
space used for selling will be at
uscii
iur
selling win ue ai
least one-third above the
prewar
level. New forms of distribution

.

of

in determin¬

completely accurate as far

be

He points out

the desirable features of his com¬

commodity

not be too easy for
manufacturers
to sell individual
items because
competition will be intense. Floor

will

been

have

these

of

of the "Democrat."

with the air raid efforts of World

the job. If the present moment is

the

it

It

i f

have a capacity to carry
volume pare that figure

important,

that total sales will be

the

a

succeeed

can

facturers'

ditions generally will be favorable
same sense

Marketing Factor

ing an accurate price
given moment of time.

2. The wholesale
price levels will

in

hold

Most

helpful.; One of the most
constructive; was from a good
friend in Oswego, Kansas, Editor

satisfactory A-bomb, she surely ia
at a "trading" disadvantage.

a

.

people,

ters.

most

able to manufacture atomic weap¬
ons.
Until Russia can turn out a

recognized than the first two, I

given price his position is
impaired
if
that
price
proves
either too high or too low. I shall
assume
that your type of re-

physical volume of goods
•v.
moving to consumers will be
J; 50 to 60% above prewar.

marketing

; In answer to my pleas to decen¬
tralize I have received many let¬

any

gaging in the perilous task of
dusiiic&s ilu ctaaiuifi.
business forecasting. When a manat

1. The

you

as a

ufacturer introduces

done

to

of

of marketing research without en¬

Affecting

Marketing

water, -fuel, .food,
etc., should be very handy.

the final peace treaties concerning
the Dardanelles, etc., until she is

may again mention sheets. An unpackaged sheet involves problems

Possibly my viewpoint is preju- most any
diced, but I doubt very much tnat
you can do a wholly effective job

mate can be made ahead of
time.

Research

attacks

due to her desire to

are

advertising,

which I believe is generally less

Y

during a rather seriperiod of business readjustment, unless some reliable esti¬

dus

Postwar Conditions

the

sible to sell it in

terested.

answer to it

.

to

That means

war.

to

access

,.

'

distributors will have to find

off in the next

Daily and nightly raids in the immediate vicinity! This is
profit of 1000 planes were made. Each exactly, the H type of .opportunity
margins and the cost of dis¬ plane load ran from 3-8 tons of that I have in mind when I- say
TNT bombs.
tribution.
Yet, many European
"Decentralize before it is too late."
cities
were
only partially de¬
3. It may in some cases have a
stroyed.
If A-bombs should cost There must be many such attrac¬
direct bearing on the chan¬
one million dollars each, the total
tive spots in America that would
nels of distribution through
bomb
cost for
some
enemy
to
which a commodity can be
appeal to men of vision and cour-!
wipe out most of the productive
sold.
I should like to hear; front
capacity of the United States age.
As an example of the last point, would be only about a billion and such localities.,/ ;*
\V
1
>

contrasted with

double beds.

These

this question, if
you do Answer it,
another one will be
At

as

duck"

so

2. It may in some cases
direct
influence
on

you

adver-

the

stimulate

to

twin beds

go

of demand.

and

service to the
economy as a whole.
By the time you people answer

of

case

almost

1." It may in some cases
direct impact on the

'

(b)

the

in

would

*£>*•••! ■;0fi'-v;V'

(a) to stimulate the consumption of longer length sheets

tremendous

a

of

particular interest to marketing
research people. The importance
of packaging is generally recog¬
nized but all too seldom analyzed.

had «ot

J

distribution

the

far as to
say that packaging should also be
a
function of marketing and of

tising

keting people can do to bring
light on the question will be in¬
valuable to individual manufac¬
turers,

As
I

had taken on a marresearch job for a cotiton
mill producing bed sheeting id or
20

in

j

that

(Continued from page 1938)

,

keting

the field of market
research.

World War III

an

for

time.,

commodity, particularly a enemy.
new one
in its early stages.
Atom War Inexpensive
The retailer, after all, is the
man who sells the goods.
He
Let no one be fooled into think¬
can do a
great deal to make ing that other nations will not
be
well
your estimates right or wrong, soon
stocked
with
and the least you should do A-bombs.
Russia is reported to
v is
to find out what his atti¬ be holding her first "tests"
in
tude will be.
April. It is my own view that the
obstructionist and delaying tactics
Packaging as a Marketing Factor of Russia at the Paris Conference

If you

sense.

important immediate question
comes
legitimately within

which

with

trained to discern profit
possibilities, is an important

an
extended period of
Transportations will be cut

cient

eye

—•

,

indi¬

regards

chosen should be self-suffi¬

area

Preparing for

preju¬

own

#

:

producers

his

any

>

items than for others. But its size T Marketing is sometimes thought
is being reduced by rising food of as the function of the advert
costs

human,

is

retailer

has

commodities

vidual

factor

Advertising as a Marketing
Factor
^ : ^

current boom

the
he

dices,, that he

frantic

fringe has
going, and
keep it going longer for some

kept the

that
that

being reversed. Newspapers;will
remain, for a long time to come,
the most important medium of,
contact1 between retail distributors and ultimate consumers.

textile

demand.

CHRONICLE

THE COMMERCIAL & FINANCIAL

Number 4534

..

J945 Y

THE COMMERCIAL & FINANCIAL CHRONICLE

Thursday, October 17,

1946

bids fair to set

a new competitive
type of 'aircrafh^vv-,

mark for this

Another

Canadian Securities

is the announcement

cance

intention

By WILLIAM HcKAT

British
An exaggerated

swing in either direction produces its

own

long-heralded devel¬
constructive signifi-r

of

opment

the

of

to

extend

of
the

,

Pacific Great Eastern Railway to

cor¬

rection. The bull market in securities on both sides of the border hav¬

Hudson

On Economic Outlook

o| the

Government

Columbia

FederalReserveComments

Hope in the heart of the

ing been pushed beyond a logical- peak was ripe for the recent rude
adjustment. This in turn induced a degree of pessimism which was
justified by the facts. It is becoming increasingly clear that
only a modicum of strong capable management is required in order
to set the economic machine on*>
:

Peace River country offers many
inducements to those in search of

and to cut the mesh of strangling
restrictions
the
transformation

oil.

but has not done

taining

hitherto almost to¬
tally unexploited, has known; de¬
posits of r high-grade coal & and
geologists, also believe that the

sible in addition to give full rein
to the forces of free enterprise

(Continued from page 1933)

Peace

If it were pos-

upward course.

an

would be

Canadian Securities

to

large

degree

v

and

wisely

administered,

This

have in some cases
;

.

Northern

em¬

Nearly 11 million veter¬

(a)

ans

have been demobilized and

absorbed into

employment at

rapid rate.
(b)

.

A

civilian

.

high

very

/

,

employment

during the:

5d. million.

was

;

,:

During the past week Canadian
were again a dead
market but there was fair activity

.

(c)P The shift from

■•'it'A;

internals.

in

war

,,

to

war

development of a young
country. The scope for expansion

ered

has. prevailed In recent months.

able.

As in this country there are

however many bright

now

MARKETS maintained in
all classes of Canadidiv p

external and internal J;//

":bonds^
orders

Stock
"

//

executed

-

(for dealers/ banks andinstitutions) on the Mon-

*

treal and Toronto Stock
{

Exchanges,

net

at

or

New York Prices.

Toronto arid Montreal

.

/'"'''/ Z''V' >//;/'"/':

V.y.' > /'?//////:/;//'

•

Dominion Securities
40 Exchange Place

/ /

;|||

New York 5, N. Y.

Bell System Teletype NY

1-702-3

confidence

nal bonds does not

within

the

from

adverse

•u

outside

influences;
Dominion

itself

morepver there are also indica¬
tions of a favorably constructive
which
should ; gradually
dissipate the prevailing atmos¬
phere of doubt and caution/ On
the political front there is now in¬
creasing confidence in the ability

the

Federal

Government

to

Coihe to terms with the provinces
on postwar tax policy, agreement
which

stalemated by the
breakdown of the Dominion/Pro¬

on

was

exports

have

established

peace-time, record.

new

The

a

re¬

cent increase here in the

price of
newsprint will also prove highly

■

■

"

—i—R——in

;

■

■ ■■

■

-

(Continued from page 1930)
includes

well

British
as

zone

of

Austria

Germany, reveals Ian?

fact

is / as

writer
that

Americans

there

American idealsitic efforts to
store

re¬

worldwide

multilateral

offers

turers

unique opportunities for
industrial development within the
Dominion.

Now the movement of

industry towards Canada is in full
swing and industrial firms of in¬
repute both in this
country and in Britain are taking
advantage
of; the
exceptional
promise of expansion in a new in¬
dustrial empire.
1

ternational

(f)

started

on

a

program

reduction.
have

increase, but at

continued

a

of

such securities.

much slower

~

deposits has

come

has been reversed

:

>

(h) / The; expansion of "total

;

to

a

halt and

and

interest

although no longer <declining,- have remained low.

rates,

,

Unfavorable factors are:

»•

Stock prices have

also increased;

sharply but the recent decline
in- security-markets provides a"

/

healthy correction to a specu/

overextension.

lative

s

.

„

(f) Production in vital areas
i has been held back by disruptions due- to strikes last winter"
■

;

/

and spring. /There has also been
Withholding of good^ because of v
price uncertainties. • /W » - r ( c /
(g); These disruptions of pro-. /

with

combined

duction

the

/ large shifts in jobs and

the gen¬
spirit "of relaxation after

eral

the

held

have

war

down

pro¬

ductivity.
2. On balance,

however, the rec¬
Most /important, ttief /
returning veteran has been ab¬
sorbed/into a going, economy. ItL
ord is fair.

would have been very

much bet¬

had

this/ been done without
any inflation but it was better to:
have done it with; some inflation
ter

than not*at all.

to

-

.

/
-

.

Liquid asset holdings

Pirate than during the war. More
savings bonds have been bought
f than sold
by the public/
:
(g) " Government security
prices have shown great stability
notwithstanding
a
sharp
break in the stock market, and
: a reduction in bank
holdings of

forced

are

in zonal clearing ar¬
rangements with other zones and
nearby countries.
Switzerland! is
heavily involved in numerous bjllateral trade agreements. As seen
here, this is not by preference
but
necessity.
While
watching

Outlook

l./Now/the Weed is to realize;

/

that

we

/

cannot sustain prosperity

by keeping up the inflation proc¬
ess. Inflation can only end in col¬

To sustain prosperity, we
place it on a stable basis.
The decline in the stock market
lapse.
must

and some levelling

/

real
the hope,

off : in

estate

prices encourages
may b.e able to squeeze
out the speculative; factors in thee /Z
economy, correct the distortionsi
that/ exist
in
some
lines, apd
maintain production and employ¬
ment at high levels. Z /We can- succeed in the period
<

that

we

(a) -tWarfime
controls
of ahead- (I) if productivity pei*
prices, swages, and-; production worker can. be raised-rthis: is most
were
prematurely ? abandoned important, (2) if large; scale in¬
or relaxed.
The excess-profits dustrial disputes and further gen¬
tax, was abolished at the time era wage increases can be avoid- /•
we
needed it most to support ed, and (3) if business groups are
willing to refrain from further
economic stabilization. '
price increases, or even to lower
(b) The working week was
cut at. a time wher/ Increased prices, ahd rely upon volume operations for profits, -z
/
/
%
production was the basic solu^/ High
income and employment
tion to the inflatioh problem.; •
require
demand
sufficient
to
(c) The upward spiral of risbuy what the people can produce.
g ing wages and prices has gone
During the 30's demand was woe¬
•/too far. An upward adjustment
fully inadequate. This basic in¬
in basic wage rates was neces¬
adequacy may well develop again
sary after the war, but. in many when the
backlog demands have,
•cases it came too soon and in
worn off, unless we have policies
some cases it went too far. The
and programs to fcfrestall it. But
V cost
; of
living has gone ; up this is not our most immediate
/
sharply. Real incomes for many concern. We are still in a posi¬
groups have greatly / declined. tion—and will be. for, some time—
Since V-J Day, the price rise
where private demand is basical-r
//
;

.

Switzerland m u s t live.
Swiss officials feel they must get
London

long evident
foreign manufac¬

•

engage

In

been

have

individuals

.

pointed out; by >• this
Germany; .namely,

along with all countries.

has

v

from

rent

it

we

of.debt

.

,

guage strikingly
similar to the
sterling clearing agreements
"Chronicle" has published. , The

to

■

:>->r

—

Swiss Resume Trading
With Germany
as

billion; the budget is
being brought into balance/and

■

industry and will amply compen¬
sate the exchange loss resulting
from, the change in the Canadian
dollar parity.
Canada

CANADIAN STOCKS

>v

in¬
important
~r
' y

annual rate

an

40

■■■.;/;:•

-iV-j-.

wartime quarter and
twice
the. highest

billion dollars to
of,

-

than

peaks of 1929 and 1940.
Federal expenditures
have; been' cut from* over 100
•

prices are also
of what likely fu-/
ture farm incomes can sustain.
Farm real estate

/

/ well ahead

close to 170 bilis . higher

'(e)

any

trade,

As

CORPORATION

suggest

prices of urban real estate,
which are, now in many areas
twice - prewar
figures.,

which

prewar

to

beneficial to the Dominion paper

PROVINCIAL

MUNICIPAL

restored

in activity or an
change in priee-level.

.

Dominion

sufficiently

crease

•

previously erected to insulate the

dian

GOVERNMENT

any

more

an upward movement in
stocks but the outlook for exter¬

Dominion

concerning economic management
here should pave the way towards
the breaking down of the barriers

be

soon

vincial Conference last June.
In
the field of foregin trade the last
official figures show that Cana¬

CANADIAN BONDS

than

unex¬

any

now

dollars

permit

of

,

of

absence

is

ments

lion

:

pected* unfavorable > development
it is likely that confidence will

nature

'

The annual rate of income pay¬

which

sentiment

The political swing in this coun¬
try can not fail to have its reper¬
cussions in Canada and greater

Within.. V the ?

Direct Private Wires to Buffalo,

spots

bearish

the

In

the horizon. "

on

.

a

the

of

been

rapidly, ^and output is
close to; capacity; in most lines.
: (d).Incomes of practically all
groups; :• in
the / economy./ are
above, record peacetime levels.

part of their previous
losses, "and there was less evidence

is competent ~ to
deal with the
manifold opportunities now avail¬

stocks

bonds

fluence of the' rally in New York
and the rise in newsprint recov¬

in Canada is so enormous that no
central bureaucratic management

has

made

Stocks under the in¬

proper

production

peace

external bonds

advanced to
This is true

ivover

stands at 58 million.. The

now

highest figure
.

a

level of
has been

employment

reached.. Civilian

pire, making way for a further in¬
flux of .foreign capital and immi¬
grants.

restraint have gone far to kill the
initiative which is essential in the

untenable levels,

/

.'

*

nevertheless the general effect of
over-centralization and constant

/

/ of

Favorable factors are:

in opening up a further section of

fabulous

/

vast

Thus another stage is reached

Canada's

the

Canadian controls have been cap¬

ably

area,

,

•'/;/: ///:./;*

complete.

Although

district.

River

fertile

not

well in main¬

so

stable economy.

a

trade

discussions in

cur¬

•

Swiss viewpoint is not directly
represented but, "Chronicle" ex¬
pects; to present shortly an a^u-thoritative exposition thereof, /;
Asked

comment

to

on

Bretton

Woods, Professor Keller said: "We
see in it no direct profit to Switz¬
erland, although there? are indi¬
rect benefits through
hoped-for
trade expansion
generally.
We
are

we

for international
are

Fund

or

in

solidarity tjut
to join the

hurry

no

Smaller

Bank.

creditor

.

1

Canadian

the

A. E. AMES & CO.
.

INCORPORATED

v

TWO WALL STREET

i

NEW YORK 5, N. Y.

RECTOR 2-7231

•

NY-1-1043

domestic

meantime

industry in

likewise continues

to

forge ahead.
The Dominion's
youthful
aviation
industry
is
making giant strides, and benefit¬
ing from experience here and in
Britain, the Canadians claim they
now
have the finest long-range
high altitude commercial aricraft

countries may net see things

like

watch

the United States^ We shall

the trend, and have to choose
'
-\9-JU

.

,

•

S,

.

.

'

A .J.

.

the
,-X

•

,

:

/ the entire

right moment, but there has been
no

.W

Concerning

o o

d

the

s

/

organizations;

Bank

This advance in

war.

living costs has eaten

decision here yet regarding the

Bretton

has amounted to more than 1/3

^ of / that which. occurred during
info the
buying pdwer of fixed' income
groups/ and others who have

j lagged

for Inter¬

Pi creases. '

.

behind / in
wage
inThe rising living cost

'

national

:.

Settlement

va n

d

| the

j ustments
cesses are

danger

is

and ' speculative : ex- , /
avoided. The immediate ;
that

demand: in most

lines is in excess of
/

What f are

main

the

and/ unfavorable

-

;

supply.

,

favorable |i
id this? /

factors

P among
in the world. This new
aircraft, a
picture?
*
'
' "J
World Bank; to judge by indica¬ : / porkers
and now there is //• 2.* The basic reason for/ believ¬
hybrid developed from a Douglas
/
again danger of a period of
commercial transport and fitted tions from- abroad it may not be
ing thateemploymenfc and incomes ^
wide-spread industrial unrest. A
with British Rolls-Royce
engines, possible to have both." ~ ' -r "*Vi
may be maintained is that there
;
has /

created

/ unrest

ly. sufficient to sustain a' high ;:
level of employment if' malad-*

.

-

second round of wage- increases

-is "k threatehed

•

early

next

year

still is ah unprecedented

demand,

for investment and- consumption^ /•;
^unless .there. is a reduction or domestic arid foreign. To give a /;
'/-"at least ho' further increase' in
few illustratiOhs:; / /
i -h
//the / cost / of '/ living. "Higher
■f;//;
(a) There is a huge backlog^
; / wages /would
call ' for/ higher
prices in ? many/cases»and thus % demand/ fori/housing,> especially.
in/ the,low-cost brackets. .This •;/
•/; add/to: inflation. Where profits
demand' has been accumqlatedi
permit prices should be lowered
'

f-

TAYLOR, DEALE
& COMPANY
64 Wall

Street, New York 5

WHitehall

3-1874

Canadian Bonds

i.

-

*

i

Over direct private wires to Toronto and
Montreal
we

are

market

able

with

furnish

to
a

fast

and

Bond

investors

comprehensive

in

-

this

service.

Vi

'■

->

Inquiries Invited

v

CANADIAN

Wood, Gundy & Co. P

SECURITIES
Government
Provincial

,

Incorporated
Municipal

^

14 Wall




Toronto

Montreal

,

:

Street, New York 5

Corporate
'

Winnipeg

Vancouver;

because
the volume of resi- !
increased.
dential construction during theVf
-(d) /Prices in somO areas (conwar and / durjng the 1930'sA.was /
struetion in particular, but also
for
mo s tfarm v. products) i j. Exceptionally vlow; and .because:
have : risen to a. point where
/the average income,and, number
of families has increased great-'
they are out af line with what
rather than wages

people
.

London, England

can" or

"

,

\/

are

■'* willing

pay, even at-present high
of income. >
/-•
•..

(e)

' Ify building • costs can be
reduced/from their present un-

.

.

Prices hf capital. assets

'

ly.

to

levels
.

tenable levels,
by improving
/the flow. of. materials, and by

•

Volume

Number 4534

164

THE COMMERCIAL & FINANCIAL CHRONICLE

"

increasing

the

efficiency ' of

'The

general level of profits,
taxes,, is relatively high,
although in.', many lines they

'

workers,

i

the volume - of* resi¬
construction
ought x to

dential

:iv

continue

-

high

very

years.

*

.

for

many

after

-v

,

v.

may

ffy (b) Automobile production is
just beginning on a-, large- scale.

(b)

ord

level

duction
•

of

for

ex-

years.'

accumulation
Inventories

always risen sharply in
upswing; and naturally did-

any

in. recent months when civil¬

so

ian,^ production, increased ^on*

A

vast'scale..

When

a

inventories

high

level

of

annual

billion

current

dollars

decreased"

increase in

income, together .with

Federal

expenditures,

.will

make

possible

are

now

conditions1

for

reducing

requirements

market

trading

stock

on

for

or

relaxing

supply. Credit should be provided
for productive purposes, but not

payments, after taxes

,

over¬

shoot the mark, the smaller the

a year

nearly 150 billion dollars

~

we

now

readjustment that will later be

are

necessary,

as

compared with about; 90 bilIiomin l941or l40ibilliion;dur>--

mainly

how long it would take to cor¬

power

a

The less

depend

margin

cumulation.

Income

war.

would

present'

5

consumer

during the

turn, would upset
calculations; and all longterm commitments, thereby pre¬
cipitating a recession, the severity
on

which

ulated

-

this,, in

plus

point where it is im¬
portant to prevent excessive ac¬

also

For

business

of: which

close to

but

w

will bring about a budgetary sur¬
.

real

of

rate

and

the national

an.

increase

to

been

lately' have

an

result of greater

as a

productivity..:: Such

—

wages—than to have further wage
and
price increases that, would
finally result in public resistance.

Revenues, without ■ increasing
rates, by increasing the na¬

tional income

prices down and increase

productivity

It is desirable to increase

by the large
volume of liquid assets accum-

:

;

by

income

\

■

(c) Demand is supported not
only

•

;

at

to hold

con¬

justments. Only by keeping prices
down and maintaining, the buying

inventories

rising

tax

present

Speaking of the general credit
situation, there is no reason under

durable

goods.

ditions.

under

rect

rise sharply they are almost cer¬
tain to "become excessive. Total

consumer

Taxes should not be fur¬

tax reductions later on.

similar situation; seems to pre¬
vail in the case of many other
1

ditures;

ther reduced

tax

have

automobile. pro¬
several

Inventory

should be watched.

The backlog, demand for' auto^
mobiles is huge,, and; at reason¬
able prices, should permit a rec¬

-

be kept- below* earlier

•

$ pectations by rising costs.

.

(/ r
'

1947

:

durable

credit

restraints

goods in

consumer

the

fof speculation. Nor is there jus¬
tification for increasing interest

and

malad¬

of wages and. savings

have

we

higher

a

living.

\

have

on

short

distortions

ments "of

all- the

*

materials,

manpower, raw

of

supply, coupled with

money

a vast

log of needs and wants.

back¬

The

in¬

standing: at the end; of 194L. ;
v (d). Replacement -needs- for
plant and equipment, as well as
expenditures for. capital expan-

tangibles, still
needed,
include
certaip. areas prices rates which would greatly com¬ self-restraint; enlightened self-in¬
have: gone tocv high and down¬ plicate the government's problem
terest, the .will and wisdom to
ward adjustments are needed. of managing the* public debt' and translate the tangibles jnto a last¬
The; levelling, of£ in real estate increase the cost of carrying it, ing higher standard of living.
prices* is a healthy sign but without the offsetting advantage
construction costs-also need ¥to of ^preventing inflation.
At best, government price or
be reduced', Ptice^ of f arin real
estate and of many farm prod¬ credit .controls can
only be a.
(Continued from first page)
ucts are also excessively high. stopgap,
and fiscal policy

sioh

,are

As

this

t

will

(c); In

ing. the wartime peak. - Liquid
assets held by individuals are at

.

.

180 :~billiori

three

dollars*

or.

almost

times,, the :amount

out¬

•

the

on

still

.

large.. How. long;

continue

general

will

long,

fodd: and

clothing

are rising it is impossible
to maintain stability in wages.

out-

Foreign
demand
for
American goods is great,, and- is
supported by-an ample amount

Credit Developments

whelmingly* vital need

we- are

tionary fqrces that were operat¬
ing earlier in the year have? been

;

moderated: considerably, v;

labor

about 5, billion dollars and may

.

be

.

expected

for

yi

some

are

.

cilities
•

Still unused credit fathe

public

-

«

©r* about; four times the prewar
level. Government demand will

2
-

thus continue to" be

sustain-

a

3.

While these

forces,
are

are

naturally,

currency,

always remain in
/

basic sustaining

still very strong, they
fickle
friends*

nevertheless

Even though you

most

are

anx¬

ious, to buy a house or to add to
your equipment, you may decide

Black-market

prices of dollars

not only from day to day and

vary

country to country, but even with¬
in

given

a

in

more

dollar bill brings

a

Prague

Bratislava.
The

than

in,

v

,

black

Obout

the

not

be

accepted

will

cepted,

be

if you

so

consider the

flrice: is exorbitant and- the
look: unstable.

securities

•

with pin¬

marred

Once

great discount, for fear that it is
"marked

money."

bills: torn

ing,

are

Dirty bills, or

with

or

corner

a

holdings, of long-term

Government securities.*

For
this", and
other
reasons
peculiar to the black market one

strikes

and

shutdowns.

that in

We

-

•

often buy good

rency

Jn

at

American

substantial

a

Hungary $100 American ■ bills

have been known to sell for $67,
the* writer learns here.

;

Gold

s

:

Coin Availability
Black Market

Contributes to

Czechoslokavia.

By importing cigarettes and sell¬

ing. them, the Russians were able
to clean up pretty well the float¬
ing supply of American bills, thus

temporarily depressing the price
of cigarettes and* raising the price

all

of American currency.

our

Dollar

into

the

currency

sale

by

civilian
well

as

black

-

finds

its way
through
military and:

market

American

personnel currently^, as
sale by European nationals

of various countries.

More, work .and- more good# are
cures for inflation. That

market

ternational boundaries.

is

vlho. only , .way in which labor

ample, dollar bill9 have been in
black-market circles? in Hungary
all
through
the
late
inflation,

knows

,

Why, meanwhile,
ancescannot

ex¬

new Swiss balcome
under treas¬

ury's general license
is
//

not understood

Some

ninety-four-

here.-^.

h
of
gold with¬
contemplation
Washington's view¬
point the present gold coin avail¬
ability here and consequent un-

here,

easing

:;

drawals

is

under

from

; licensed

export

cbritributofry
markets

considered

are

to

currency

elsewhere

in

*

ury

and:

from

Director of the
Division of Monetary

Treasury

Research is

with an

now

visiting Germany

Army mission seeking to
,

$151

,

in

;

out¬

commercial

loans

inflationary

and.

and

real

amounting to about 2.5 billion

cline of about 2 billion

in some areas. Pipe lines are
get"ting filled and supplies are com¬

ernment securities.

dollars
This

prices downed-the level at the
.end: of. the. war, or about--20%

i

,

^

,

below U their

high

points

last

sober

'

and

-

..appraisal

of

,

-

I;
i
1
■

exaggerate

both

;

..'i

time

v»

.

stock-

be

cny

:

the;

:

price

considered

event, credit

market

..

any

as an

offering of these securities for salet

or as an

offer to buy,

or as

of such securities. The offer is made only by means of the Prospectus.

.

October 16,1946

NEW ISSUE

Gov¬

on.

continued

$5,275,000

•

to'

Northwestern Public Service

rise

deposits.
This
con¬
expansion in privately

(A Delaware Corporation)

deposits has remained a
■.: ma j or inflation \ faptor.;r It, was;
due
largely to private credit
expansion," a continued Federal
deficit and retirement of
securities- held

%;vestors.
:

.

•

•

Dated October

S;

U.

size

the

-

Due October 1,197$"

1946

*:.

of the

deficit'is

•

Price 101. 625% and accrued interest

s-

over;

This decline, has operated as a
powerful deflationary force," al¬
though it was more than offset
in

ir

Bonds, 3% Series due 1973

(5) It should be noted,, how-

; ever, that the period of drastic
i decline in the
budget and in
S

First Mortgage

by nonbank in-

the total economy

by

tionary forces.

Copies of the Prospectus

infla-

has been declining since
early in the year" following the

y

Some

,

may

be obtainedfrom either of the underwriters

only in States in which such underwriter is qualified to act as

J:

in securities and in which such

Prospectus

may

dealer

legally be distributed.

Conclusion \:Jf:ffy^yy

points

from the

stand out clearly
foregoing considerations.

is ata relatively low level. Because
of
this
prudent
credit

The situation calls for

policy, forced

ment.

a

budgetary

The First Boston Corporation

surplus and continued debt retire¬

-

t

offer to buy,

purposes,

V raising of margin requirements,

.

an

held

which

<

•

for

In

of

downward*

of

deposits and 4.5 billion in

tinued

movement

and:

magnitude
change cannot

alarming.

tendency to

every

;

upward

the

iyyt

a

circumstances to be construed

de¬
se¬

no

solicitation

demand.

a

stock market has

:

prospects

lessening of inflationary
psychology, it contributes to
balance- in the economy. As the

>

:

a

in

by

largely

a

offset

ber, lOf this,. 3.3. billion was* in

r
spring. To the extent that this
*readjustment
reflects
m or e
•

loans,

This is under

March" 1.

by 7.8 billion from the end of
February to the end of Septem¬

are

values by 150%,. has now experienced
a
decline
bringing

reporting,

since

has ' been

considerable part

Government

desirable de¬

(a) The stock market, after a
four-year rise which increased

v

increase

(4)* As distinct from the de¬
deposits
held by others than the. US,

'

-

weekly

banks

cline in total deposits,

still'
acute needs for other adjustments;
i

at

curity

ing into the market in increasing
'volume.: Buyers* -wary of rising
prices, have begun to show some

velopments,; but there

,

estate

credit

consumer

in

are

selling has been

praetieallyr norr-existenti■&£■■■'yi




black!
i ■

Europe,

Harold "Glasser,

in¬

no

For

Swiss

counterproposals
of
11, dealing with procedure
deblocking Swiss dollar assets.

The black-

the basic

trader

the

"

Reduced total (Treas-;
promote German exports.
privatedeposits the
only Way to safeguard the which, incidentally, travelers say
billion at the end
purchasing pow'ec of all- wages, and may be-starting over again, if the
With Goldman, Sachs Co.
j of February. to"$ 143'billion at savings.
Further wage increases rising prices in; Hungary are a
CHICAGO, ILL. —Kent Maythe end' of September.
for the same amount of work and ;clue;
z :>y%0y.;y
nard, formerly Lieutenant in th®
(c) Brought te an end the
Recently1 .the writer; * was - in* Army of the United States, is now
decline in long-term security- output would serve% pnly to in¬
formed
by
American
travelers associated with Goldman, Sachs
tensify the upward pressure on
yields.
from Bucharest that the American
& Co. as a registered representa¬
Increased .wages that re¬ mission there does not
(3) Notwithstanding the debt prices.
require its tive in the sales department of
retirement program, however, sult, in increased prices are. selfemployees arid officers to sell 1 their Chicago office,. 208 South
I there, has been a large increase
»
:
defeating.
It will: be far better their pay; at the fictitious "offi¬ La Salle Street.
-

Fortunately, it appears that in¬
flationary pressures are lessening

Those

cur¬

discount.

Sept.

keep the gains from the pay
increases it has received.
It is

(b)

can

usual premium in

can

member

restraint.

miss¬

eschewed.

Oruis Schmidt's impending visit
to Bernis believed connected with

and

know

ten¬

increase

needs remain-

"

will

at all, or if ac¬
taken only at a

actually hap¬
The'reason* ascribed was
the arrival of a large shipment of
Hungarian cigarettes on Russian
account. Cigarettes are at an; un*

oust of work.

the

of banks to

their

maladjustments become excessive,
a slump will result even
'though
people
have
funds * and
many

'

types
paper

In general,

otherwise

or

v7;:
choosy

of American

travelers report, money

holes

say,

denominations,

it will buy.

currency

is

market

condition

in

Thus,

country.

Czechoslovakia

.

nottodo
-

Rou¬

n

-

ing force.

3

•

long

£ timer-possibly 30 to 85 billion

Moderated'

(a):

dency

,

a

.

It has:

much as 5 billion.(f) The'Federal budget will
continue to be large for

not

manian

pened.

.

next three years by the* Interna-;
tional Bank may amount to as
„

marketable

have been retired from March 1

sharp rise in the black-

dollar to 150.. This

interdependent
economy a strike in one key in¬
to Get. 1, by drawing on the
dustry J paralyzes others —strikes
Treasury's, large* cash balance.
even/ by
a
comparatively few
This has been a
.wholesomejn- workers in plants that supply
fhience in the credit picture.
others can throw marfy thousands

Export-Import

Bank
(including unused- por¬
tions of loans extended) amount
to 2.5-billion dollars., In addition. loans arranged' over the

-

fundamentally
front, on

industrial

a

market rate from 120 korunas per

management," on in¬
creasing output by increasing ef¬
ficiency, eliminating bottlenecks

*

of

of

the

on

ly be

(1)
B u dge t expenditures
dropped sharply and tax re¬
and restrictive rules and practices,
ceipts stayed up. As a result the
including: those in the construc¬
deficit has about disappeared.*
tion industry, arid by avoiding
(;2)
17.5 billion dollars of

high

Dollar and gold
foreign countries
approximately 22
billion

dollars.

;

continue

years*

resources

»

to

now

stable economic

depends

progress

The net export baLance is now at an annual rate of

a

last week that there would short¬

is. for

and more, goods—for
productivity. Whether

to have

V of- funds.

.•

now

work

increased

In the- field of credit, the infla¬

Currency Black Marts

-

can
deal only with the money'side of
the inflation problem. The over¬
more

look.
(e)

,

as

prices

depend

economic

dollar

does

,

,

_

.

„,

Such

and

tangible ele¬
prosperity—

sustained

but that
sell dol¬
lar currency to dealers who come
to the mission and pay .in Lei.
exchange,

*

-

.

of

rate

the regular practice is to

can

standard

'

-

cial"

Continued

efforts

be made- to reduce public

should

expen¬

.!

Lazard Freres & Co.

*

1948

Draft Suspended Till

The 2s due March 15,

time

its

canceled

"Our

heavy enough to more than meet
all
requirements, and, although

machinery is to remain in¬

tact, it is recognized that perma¬
nent

"suspension
of
inductions
become possible if the pres¬

may

volume

ent

cated that

the Navy has

enlisted

000

con¬

need
To its already 512,-

the draft.

of

enlistments

of

Draft officials have indi¬

tinues.

and

men

no

15,000 volunteers are being
added monthly and a substantial
backlog of applicants is available.

:"V; The Army has made it clear, the
"Wall
Street
Journal"
reports,
its draft calls

renew

if

recruiting fails to keep up with
military needs.
,
/:*-'•
;
,

to

The

ing

Financial

on

the

light

LOUIS,
MO.—D.
James
Frain and Joseph J. Warnick, Jr.,
added

to

the

staff

of

Ai G. Edwards & Sons, 409 North
Eighth Street, members of the
New York and St. Louis Stock

Exchange.

Barber With Hayden, Miller
(Special

to

The

Financial

volume. %

with

has

become

R.

associated

Hayden, Miller & Co., Un¬

of the Cleveland Stock Exchange.
the

Mr,

past

securities

Prices

.

limits,

markets

have

been

have

recent trad¬

again

stable,

with

the past.

.

.

elimination

This

.

of

the

was

doubt

no

speculative

due

holders

in

no

of

government

small

quite fully cleaned out of the market
sharp recession.

the last

.

,

to

measure

to have been

seem

issues,
as a

the

who

result of

.

Barber

was

in

charge of the Cleveland office of
Pelz & Co.

no

conditions.

nomic

«

unexpected changes in

v

ALSO

technical position of the market continues to
improve, as
move from weak to
strong hands, with shifts in holdings
at the present time
seemingly more important than new money in¬

...

sold

Dec.

.

,

to be

so

the banks with the largest sellers being the New

sold by

will

banks.

,

.

.
Notes were disposed of by nearly
with the New York City banks the

Observations

.

..

Country Banks and New York City

largest sellers.

.

seem

made by the

all of the commercial banks

whole, have not been too active, aside from
switching and the elimination of
partially exempt obligations
Some of the portfolio
managers, it is indicated, are willing to wait
TO watch the market, because it is their opinion that purchases
as a

.

The 2%s

.

The next largest purchases were made in the 2s due

.

York City member

(Continued from page 1929)
free and expanded world trade* can progress side-by-side with
Britain's local socialism, seems open to serious challenge. We wish

at

we

those savings banks that do not
much concerned with the
marketability feature of

.

The 2s due Dec. 15, 1947, and the 2-Ms due March 15, 1948/51,

;

are

.

15, 1948/50 with the Chicago banks the most important buyer.
1951/53 were next in importance as the
Country Banks did the largest buying. ... • $

were

.

by Country and Reserve City Banks.

The 2V4S due Dec. 15,

.

.

.

.

New York City and

AWAITING BARGAINS

be made later at
prices that will be more favorable than those
presently prevailing.
Whether these institutions will be sellers of
bank eligible taxable
issues, as shiftings in portfolio by commercial
banks get under
way is open to considerable differences of
opinion,
since many of the
savings banks feel that it is desirable to hold the
eligible issues for marketability purposes.

.

due 1958/63 were bought by all of the banks with the largest com¬

securities

Savings banks,

banks,

other institutions, whereas the 2s due March

Among the partially exempt issues, the largest buying was done
in the 2%s due 1956/59, as the New York City, Reserve City, Country
and non-member banks acquired this security.
Next were the
2%s due 1955/60 bought heavily by the New York City member

institutions.

The

non-

were

mitments1 .being

eco¬

by

on

and

sold by the Chicago, Reserve City, and Country
banks and acquired by the New York City and non-member in¬
stitutions. ...
V
15, 1948/50

banks and

.

.

his

share

could

optimism that the American-Anglo credit line
the world," and that

would stimulate "multilateral trade throughout

will continue. * But Britain's
trade account (with the Britisher
perhaps finding abroad what' he can't get at home) is being made
effective only through the imposition of maximum frugality, selfInsurance companies according to
reports, have beeri doing some denial, and all manifestations of "austerity," at home. As time goes
buying as well as disposing of partially exempt obligations to the on, with the need of stringent domestic rationing and self-sacriiice
larger city commercial banks, with institutions in
Philadelphia and to preserve free international exchange continuing, will excisions of
Britain's

eligible issues, and have
been, and will continue to dispose of
them, when they have an
opportunity to acquire restricted, bonds,
that they consider attractive.

currently increasing exports

great drive to balance her external

...

Chicago indicated as the principal buyers of these bonds.
The
buying by the insurance companies has not been vigorous and has
been done largely by the smaller
institutions..
.

The big five life insurance companies
the

EQUIPMENT

sidelines looking

more

things

over,

.

.

.

to be largely on

seem

but not inclined to do much

than that for the present....

However,'

self-sacrifice for world benefit be

chosen?

Exchequer also significantly stated
that there is no present intention of varying the relationship of
sterling to the dollar—unless there should be a chronic and persistent
unemployment. But this evidently means that if—not inconceivably
—unemployment should eventuate, or at other times of stress, uni¬
lateral palliative measures wiU be taken/ ^
And with her inclusively planned domestic economy, it is im¬
The British Chancellor of the

some of these companies were buyers last week in a
fairly sizable way of the bonds of one of the telephone
companies
that yielded them 2.74%.
This is a much more realistic yield basis possible to see how Britain can internationally subject herself to the
exigencies of free trading and finance. Her Socialist government
for corporate obligations than has been
prevailing; and will no doubt
will buy and sell abroad largely through government agencies and
attract more institutional
buying in the future at those levels.
Nevertheless, the spread between highest grade corporate secur¬ through controlled syndicates of private firms. In endeavoring to im¬
plement her domestic economic planning, she will find it necessary
ities and government obligations is still not
sufficiently large enough
to control her imports in relation to her regulated production. In
;to detract much buying from Treasury issues.».
keeping its imports within its ability to pay, the Labor Government
will undoubtedly use direct controls—such policies being accentuated
NEW BANK FAVORITE
.

CERTIFICATES

The 2s of June 1949/51 were taken

.

.

and

.

Now that the government
markets are more largely con¬
cerned with institutions and to a smaller
extent with individuals,
it is believed that fluctuations will
be much less violent than in
the past, assuming that there are

.

TRUST

.

.

The l%s due 1948 were sold only by the Reserve City

.

.

City

and bought by the

investors took to the sidelines evi¬
dently to await developments.
Despite the uncertainties that
caused further declines in the
equity market, there was no discern¬
ible effect on government
obligations, such as have taken place in
.

institutions.

York

turned

fluctua¬

as

On the other hand, there

ion Commerce Building, members

In

.

tions confined to narrow

Chronicle)

S CLEVELAND, OHIO—Elton
Barber

government

,.

Chicago banks, the Country Banks
member institutions as Reserve City banks sold....

Chronicle)

ST.

been

New

ollowing the mild flurry that carried prices out of

ranges,

dull

.

have

member

By JOHN T. CHIPPENDALE, JR.
I

vestments.

Two With A. G. Edwards
(Special

on

60,000 offi¬

cers,

that it would

Reporter

Voluntary en¬

listments it is stated have proven

draft

non-member banks.

15,000

for

call

in November.

men

1950/52 were sold by the Country banks and
bought by the Central Reserve City Banks, Reserve City Banks and
The 2s due September and December 1949/51
were sold
by the New York City member banks, and Reserve CityBanks, but bought by the Chicago banks, Country Banks and non-

47

The Army announced on Oct. 11
that all drafting would cease Oct.
15
until 1947, and at the same

.

.

.

.

Offerings Wanted

•

#

Immediate

firm bids

on

practically all issues^

Commercial

banks

continue

to

shift

obligations,

although

amount of transactions have

not been large. ... There is still
1956-59 and the 2V2s due Sept. 15,

2V4s due

1967/72,

.

.

Weekly List

exempts still go

furnished

upon

on in some

Af ter acquiring

.

tions

request.

now

seem

to be

.

quarters.

...

more

stitutions.

Semi-Annual

Valuation and Appraisal

Complete dollar appraisal
30 and

December 31.

.

.

There will no doubt be some clues in the not distant future as
financing policy, despite opinions that, there have been no decisions
reached yet by the
monetary authorities.
What will be done, from
all indications, is not going to increase debt charges or
change the
rate pattern.
The inflation psychology is not as important now
as in the
past, and this most likely means that for the time being
there will not be long-term
high coupon financing to retire bank-held

to

.

.

.

.,

r

•/.<"

or Special
Appraisal
:

;

experience and facil¬

ities at your

disposal.

-

%%

,

-

,

^

r

^

„

.

1 i

[

f

,

'

'

•

i.

-

.

•-/"

'

'

.

During this period, the position
bank eligible bond, the 2%s due
.

PHILADELPHIA

non-member

institutions, with the country banks' holdings
unchanged, as the New York City member banks accounted for
practically all of the increase in bank holdings in this bond.

June 2s.

PEnnypacker 5-7330

;

.

The

NEW YORK CITY
REctor 2-6528-29

banks

/

private wires—

Philadelphia,

New

York

2s

.

.

were

Teletype—PHLA 296 & 297




controls!

,

,

the completion of the pres¬
will con¬
of funded debt;
22,023 shares of 7% cumulative
preferred stock, $100 par value,
17,829 shares of $100 par 6% cum¬
ulative, preferred stock and 300,-

upon

Northwestern P. S.

ent

First Boston Corp.
Boston

First

Freres

awarded

&

Corp.

Co. jointly

to

the bankers

at. com¬

petitive bidding Oct. 15 on a

high

/V-/ ,
Poceeds from the sale of the
securities together with necessary
bid of 100.649.

general
on

due 1951/53

were

non-member

also

bought by all of the commercial

institutions

as the
New York City and
City banks led in the amount of this issue that was taken
by these institutions.
.The lV2s due 1950 were sold by the New
.

.

York

City member banks and bought by the Chicago banks, Reserve
City, Country and Non-Member banks.
:. The 2s due Sept. 15,
1950/52 were bought by the Chicago and New York City banks, nonmember

The

Lazard

financing program

sist

or

:

funds of the company
applied to the redemption
about Nov.
15,
1946, at

105% and accrued interest

except

relatively unrestricted

international trading could be kept going only by means of
continually disguised subsidizing (with the United States repeatedly
"shelling out the chips"). How much more difficult will unrestricted
world trade
be under our above-indicated * impending autarchic

of $5,275,000

000
par

shares

of

■'

Northwestern
Co.

supplies
central

east
gas

stock, $3

common

value.

<<

r.

Public

electric
South

Service

service

Dakota

in
and

service to several cities in Ne¬
and South Dakota, serv¬

braska

ing an agricultural area whose
population totals approximately
122,000. The company had total
operating revenues of $3,947,000
for the year ended Aug. 31, 1946,
of which approximately 69% was
derived

from electric service and

.

.

,

For the record between-World War I

policies

will be

Reserve
on

Two

.

.

acquired by all the banks, with the
country banks the largest buyers of the December 2s and the
New York City institutions the most important
purchasers of the

9

optimism.

unfortunately shows that even with

.

The 2%s due 1956/58 were sold by Reserve City

The 2s due 1952/54

•

,

II

'

about

incorporated

and

and
of¬
fered to the public Oct. 16 $5,275,longest
Sept. 15, 1967/72, showed a decrease by the country banks and non- 000 Northwestern Public Service
Co. 3% first mortgage bonds, due
member banks, with an increase in the
holdings of Central Reserve
City banks,* all of which were reported among the New York City 1973, at 101%, The bonds were

between March 31 and June 30.
of these banks in the

member banks

STROUD & COMPANY

warrant for future

Bonds Offered by
»

While it is believed that there will be considerable
shifting in
holdings by the commercial banks, in the future, it is interesting to
note the changes that tooki place in the
holdings of these institutions

and

«,

*

.

SWITCHING

Monthly

,

,

historical experience in international trade as heretofore
conducted "freely" by capitalistically acting nations, surely gives no

.

securities.

Our

rather than as a

idealistic furtherance of

The

inclined toward the 2%s due Sept. 15,

The 2%s due 1955/60 and the 2%s due 1960/65 were also
among
the issues that have been taken on
by the larger City commercial in¬

each June

operations as an

of gaining

capacity.

of the ZHs due 1956/59, these "institu¬

some

means

>

1956/59 because of the more favorable tax-free yield..,.

issued

by its exclusive emphasis on using foreign trading
instrument to raise the national standard of living,

private profits. It will certainly not embark on the
international trade as an aim, feeling that
from the smaller out-of-town commercial banks.
The New York
any sales abroad in excess of imports will only reduce the country s
City banks have been quiet although purchases of the partially
standard of living below the level which is justified by its productive
mand for the

Gladly

the
de¬

a

.

banks, but sold by the Reserve City and Country banks.

.

,.

of $5,-

276,000
of
4%
first mortgage
bonds, series A, due Aug. 1, 1970,
presently, outstanding.
The new
bonds are redeemable on or be¬
Sept. 30, 1947, at 104% and
thereafter at prices decreasing to

fore

the principal

amount.
the

Capitalization of

31% from the sale of gas.

Compton V.-P. of Corn Ex.
Joseph H. Compton, manager of
Greenpoint Branch of the
Corn Exchange Bank Trust Com¬

the

has
president.
pany,

company

been

elected

a

vice

/

(Volume 164

Number 4534

jgg

COMMERCIAL & FINANCIAL CHRONICLE

Boom and Bust—Can the

Cycle Be Averted?

'

(Continued from
ket technician for

kerage firm

leading bro¬

a

assures

real

1928)

page

that prior

us

estate

will

upward,

move

with profit to all who own or deal
in
them, commodities too will

rise, wages will go up, and every¬
body will be happy. There seems
to be no reason why the sun of
In those days
United States had never been able prosperity should not shine for¬
ever and a day. '
to finance simultaneously a busi¬
to

the

Federal

interest rate

Reserve

Act

the

those able to buy will

even

hesitate

to

do

and eventually

so,

fear freezes the

really prophetic.
the banks of the

stock

a

market

In fact the strongest bull argu¬

boom.

there

is the remedy?

is

that

none

the

Recently

rhythm

Probably
do

can

away

of

industry —
cycle entirely.
started to rise businessmen would ways that business is expanding,
But the fluctuations of the cycle
rush the banks for loans, and soon, and that employment is high. And can
be tempered somewhat. To
if perchance the trend of securi¬
as
the saying went,
the banks
the extent that men and women
ties is downward or hesitant, one
would get "loaned up."
Interest
spend wisely and save prudently,
can always point to a record high
charges would rise. Thereupon,
insofar as social pressures keep
for retail trade, or steel produc¬
businessmen who owned
stocks
down wild price
rises, and, what
tion or electrical consumption.
and
bonds
would
begin selling
is the
"Whenever

them

industrial

raise

to

—

production

cash

results

alyst—were
diction.

this

economic

an

an¬

contra¬

Business

would expand;
going into it. But
the stock market would go down
money was coming out of it.
That
explained why . the stock
market was regarded as such an
more

money was

—

able

forecaster

business

of

sago. The market
cline long before

years

started to de¬
industrial out¬

put had reached the piping hot,
which

is

to

stage. And
sion

it also

the

in

the topping off

say,

so

that at the first

to pass

came

sign of the ten¬

old

market,

money

timers of stock speculation became
uneasy, on the

puncture

dreams

states

—

theory that when

interest rates go up, stocks come
down.

be mustered is al¬

that

ban

can

very

To

their

for

business operations.
The

ment that can

prices

of

an

and

all these roseate
enduring spiral of
of

expanding
business and full production, let
us examine exactly what happens
at such a time. One has only to
consult his own budget and to
multiply that budget by the sixty
million persons who are gain¬
fully employed. In a boom prices
wages,

the

of American

essence

prosperity and progress, to the
extent that technological advances
and the resourcefulness of indus¬
try

American

—

know-how,

in¬

slightly, in

genuity

duce

The Production Centre
.

^

.u

' j.

•'» :

t-.V-./sV

;

erating. To do so is to adopt a
current cliche, which, like most

commer¬

rises, no savings are available for
the purchase of other items. If
ing willing, -support both a busi¬ we have planned the
purchase of
cial banks can, central banks be¬

the

stock market boom at

time

same

as

—

the 20's.

;

Strangely
London

enough,

the

staid

;

Economist, which asks

a

the London market 'and
British business, arrives at a sim¬

ity

Of

ilar

conclusion.

make

for

it

quite

Which

would

unanimous

except

striking

fact, to-wit, that
back in the late 1920's a great
many eminent financiers, econo¬
a

ent

mists, college professors and

difficulties

is

production,

as

columnists, commentators and in¬
dividual manufacturers

reit¬

are

diagnoses of boom and depression
the still remembered "new era"

—

automobile, a refrigerator, a
happened in washing machine, a radio, we find

similar question about the stabil¬

an

of the twenties and "overproduc¬
that we do not have the money to tion" and "technocracy" of the
thirties
fall wide of the mark.
buy them. We may have to give
To prescribe production for the
up the thought of owning one or
ills of the inflationary spiral —
more of them. Or the
higher cost
of food and shelter may make it soaring costs, shortage of mater¬
ials, strike^etc.^ is to- say noth¬
impossible to buy any of them.
If we are lucky enough to be ing at all. It is to suggest robust
able to -keep- intact our little nest health as a cure for a person
egg, and it was large enough to racked with disease, or to advo¬
—

all

cover

the

had in mind,

little

gadgets

we

the increase in the

cate full steam ahead for a ma¬
chine that has broken down.

price of a new car, a new refrig¬
So,
too,
each
manufacturer,
erator, etc., may put them out of who, like the Ford Motor Com¬
reach.
arguments. To quote only from
pany, may be producing at a net
the dean of forecasters Clarence
Such is the effect of a rise in loss, feels that if only he were
Wi Barron:
prices — a net decline in pur¬ granted a price increase, all would
ket statisticians

advanced

mar¬

similar

our

"You cannot have poor busi¬
ness
in
this country
with
cheap money, capital accum¬

chasing power. There is a sudden
shortage of the oil that lubricates
the

industrial

ulation and

the

economic

men

and

women

machinery
mechanism

and

—

deli¬

is

fully employed at the high¬ cately balanced and adjusted. For
est wages ever known. Be¬ a time installment buying may
fore you can have any set¬ postpone the hour of crisis —back you have got to have a substituting one group of custo¬
shock
to
confidence,
con¬ mers for those who will not go
traction
of
credits,
higher into debt tp acquire consumers'
money rates, loss of crops, goods.
or
something in the nature
Lbck of buying power makes
of

disaster

a

where

in

which

sight.

is

But

about business cycles?

no¬

what

I have

been laughing for mere than
two years so hard over those

/business cycle fellows that I

itself felt eventually at

heart of the

organism
centres

ford

.

.

in

a

go

damental

than

giving

bust, is the formidable problem
our economy.
Many factors and

rampant abuses of

in

and

to

that

prophet of that New

.

result

is

arrived

at, a hundred
little signs have apprized banker
and broker of the
impending re¬

trader and investor has his
little barometer. One salaried

the

at all times

Federal

.

Reserve

Act the United States has

1

absolutely

an

unlimited

supply
v
of credit, smashing all the
£ cycle theories. The United
States- is

/only

a

in

a

new

era,

and

student of the Federal
System, the greatest
ever seen, will

one

ployee
he
and
in

on

Money Supply

upon

the

unlimited

supply of money under the Fed¬
eral Reserve System is really a
form of wishful thinking. It says
in effect that

a

boom

should last

indefinitely: prices of stocks and




of in¬

decide

average

to

sell

pocketbook,

the

few

number

investors to

stocks

sell

The

psychology is that HIS DEFENSE IS DOWN BECAUSE HE
WANTS TO SHOW YOU THAT HE
CAN FIGURE TOO. You never
flatter anyone by trying to tell them
every little item in your story.
The chances are you
only bore them.
The

same

holds true for letters

and too verbose

is what top

majority of written data that
this field
to

write

comes

written reports—too technical

emanate

men

from

would say about the

investment firms;

now

and

what should

be eliminated.

hamstrung when it

Under the Securities Acts

comes to

The full disclosure bug-a-boo is

down to actual

cases.

Nobody

can

a

company's affairs,

a

law and it is administered
by men

even

a

doing

a

,real selling job

lot of nonsense when it

disclose all the facts about

its president himself.

But

we

have such

(most of them lawyers) who

wouldn't know what it takes to sell
securities because they HAVE
NEVER HAD ANY PRACTICAL EXPERIENCE
IN THE BUSINESS.

However, it is possible to eliminate
reports, and then follow

a

great deal of information in

by personal interview; leaving this im¬
portant step to be the point of full disclosure (or as much disclosure
as

is

up

possible). Some firms write

so

FOR THE, SALESMAN TO TELL,

much THERE IS LITTLE LEFT

fn any other business this kind

of mail procedure would not be tolerated
BECAUSE IT IS ANTI-

CLIMACTIC AND INEFFECTIVE.

Why not try out this indirect selling technique
and

see

ively

for yourself how it works?

you

can

once

in

a

while

If you can learn to use it effect¬

will agree that it is another formidable method of selling

be very productive of results.

~

Denraan Tire & Rubber

to

this

forecast

a

Company

5% Cum. Conv. Pfd. Stock

more

Common Stock

addition

is

a

wider

too

would

cushioning of
a

bear

a

Prospectus

on

request

Herrick,Waddell

&

Co., Inc.

55 LIBERTY STREET. NEW TOKK 5. N. T.

mar¬

.

holdings, and what is equally im¬
portant preclude many others
from buying stocks. All

this, thus
far, has concerned itself only with
the ability to
buy. Once doubts

boom

that put

spec¬

few, that raise the cost of liv¬

ing and depreciate the value of
the dollar, by the simple mechan¬
ical process above

Over-the-Counter Quotation Services
For 33 Years

indicated,

he

their

of

strike

the

at

■

heart

of

our

pros¬

perity. They cut the ground under
the

manufacturer

who

must

sell

his product, because they pick the

pockets
chasers.

his

of

These

prospective
excesses

pur¬

cannot

NATIONAL QUOTATION

last anymore than a drunken orgy
can

go on

after.

'"

by the sad morning
.: vv

;

BUREAU, Inc.

Established 1913

46 Front Street, New York 4V N. Y.

indefinitely. Both must

be followed

In

however, it is extremely difficult to know just how much

this business is

by mail.

or

advertising

ulative profits into the pockets of

may

i'.y ££'/■

of

action—and

excesses

find that he cannot
living room suite
had confidently counted on,
deducing a similar shortage

the

a figure ABOVE
YOUR OWN. There is an
advantage in this method that direct selling never can
bring about.
You are making it
possible for your customer TO SELL HIMSELF.

But it should be clear that the

new

Of course, this same lack of
purchasing power makes itself felt
most quickly on the
Exchanges.
Rising costs cause an increasing

Emphasis

ket

may

afford the

In

the normal shocks of

em¬

owns.

Emphasis

art

effortless, and highly productive

own

the world has

r

ive

Hardening money rates is
of these; probably every

Reserve

understand."

that it is the most

medium of

bull market

a

favorable.

more

seem

versal.

reserve

It has been claimed
by those who have mastered the

direct selling

understanding of the currents of
business and finance — and more
immediate and effective correct¬

However, long before this final

country; under the Federal
Reserve Act; you have got
under

OF THE CUSTOMER
WENT TO WORK, AND HE SOLD
In certain
cases, this very able salesman related that their
customers actually took hold of the ideas
that were suggested and
appropriated them, so that they
eventually thought that they had
originated the ideas themselves.

HIMSELF.

extent the outlook

there has been and

100%

*

SUFFICIENT HINTS AS TO THE
PROPOSITION
SO
THAT
THE

THEIR

have been at work in the

is over,

"Now you can't have any ex¬
haustion
of
credit
in
this

OF

Whether there is any other an¬
tidote for the sins and antics of
boom than the pains and miseries

weight reduction."
£

GIVE THEIR CUSTOMERS

ATTRACTIVENESS
MIND

that

is

Another

isolated

relief.

past decade to restrain the

Detroit, Toledo, Hart¬
slow-down

his diffi¬

who buy his product •— and the
cure lies in something more fun¬

—

causes

of

causes

produc¬
tion, everybody knows the boom

Bra wrote:

DID

those who work for him and those

of

^tl^flj^oduciion

The

far deeper and affect
everyone —
those who supply
him
with
parts
and materials,

forces

and when lack of orders

.

culties

of

very

Americar^jfndus trial

—

of

the

be well.

cannot make an effective
r

up their products, or tried to over em¬
ideas which they have found to be
very success¬
their products do the
job; BUT THEY

possibly he will estimate

boom.

a

The Decline in Purchasing Power

and

a

new

/Instead, they always let

and

However, this is not to assert
merely that the remedy for pres¬

and

phasize certain
ful.

an

However, his conclusion in that
All this means that as the prices
such fears have no proper of essentials and luxuries go up,
basis today with the Federal Re¬
the actual purchasing power of
serve System functioning properly
the community goes down. Fur¬
and with central banking a fine ther as the
cost
of necessaries

ness

had the opportunity of
interviewing the chairman
of the board of a
very successful merchandising company—and we
learned something about
salesmanship from him. During the course
qf .the conversation he talked about indirect
selling. He told us how
his firm had never
puffed
we

salesmanship. Certainly it could be used more often with
daring — can pro¬ telling effect in the
securities business. Instead of
overwriting, and
increasing flow of con¬
sumers' goods at lower and lower ove'rtalking, some things should be left to the mind of
your prospect,
prices, to that extent, we .level so that he can go to work and figure things out. For
instance, it is
off the peaks and valleys of boom
possible to give a hint of the future
by presenting only a few facts
and bust.
Our ability to produce
—THEN LET YOUR
CUSTOMER GO ON FROM THERE.
go up faster than wages' — that underlies our
high standard of
is text-book doctrine — and even
As an example, let us take
living, and engineering skills that
the case of a company that is en¬
the newest of the apostles of a
enable us to produce cheaply, ad¬
gaged in a certain line of business which is
New Era would hardly .assert the
expanding rapidly. Let us
vances in /science that facilitate
assume that this year its
sales are X dollars and its
contrary. Further
a
substantial
profits likewise.
production, advances in medicine,
Instead of going into a
minority derives its income, in that reduces sickness and disease,
long dissertation why you think earnings for
whole or part, from interest pay¬ contribute
to our prosperity. Each next year will reach a certain
figure—why not toss in one or two
ments, from annuities, from pen¬ of these in a broad sense adds to
factors that are indicated for the
coming year, AND LET YOUR
sions, and other/sources that do the value and purchasing power
CUSTOMER FIGURE IT OUT? He will do it
not
expand,
or
increase only of the American dollar.
without your help, and

jail

practised art. That

By JOHN DUTTON

spending urge.

The Rhythm of Industry
What

with

Securities Salesman's Corner

to the continuance of the

as

was

^

and

ness

arise

boom,

Chicago

•

;

~

>

"•/'

-

San Francisco

vThursday* 0ctobefc 17, 1940

Frank t)uhhe;. Dunne

.<

Shelly Pierce, Journal of Commerce, New York; Arnold J. Wechsler, GoldFrank & Ogden; Frank Koller. F, H. Keller & Co., Inc.; Charles Hyland
F. H: Holler & Co., Inc.

Co., Inc.; Philip L,
Albert C. Hugo, A. M. Kidder & Co.
, ;

& Co.; Charles H. Dowd, Hudson &

Chr^et, Carret, Gammons & Co.;

Harry G. Fairman, Fa'.rman & Co., Los

Co., Los Angeles; Irv. Greene, Greene and
Co.; Jules Golden, Greene and Co.

water.

Ralph Tyiier, Peabody, Tyner & Co., Mt. Vernon, N.

Angeles; Harold C. Frankel, Fairman &
Co.; C. E. Unterberg, C. E. Unterberg ■&

I

& Abbe; Vincent

Y.;' Dick Abbe, Van Tuyl

Fitzgerald, Fitzgerald & Company; F. J. Rabe, F, J. Rabe

& Co.

Wm

p

p

*

'i'

1 'i

•

>'

'•'!

' ,
* j
,
»
;
A S. L. Feibleman, T. J. Feibleman & Co.; Abe Strauss, Strauss Bros.; Alvin W
Seligman, Seligman, Lubetkin & Co.; Fr&nk Ginberg, Strauss Bros.

Louis

w

H. R.

Amott, Amott, Baker & Co.. Inc.; Tracy R. Engle, Buckley Bros,;

Willett, C. E. Unterberg & Co.; Col. Oliver J.




"Meyer

Troster; Troster, Currie & Summers.

Lebehtfial,

Lebenthal &. Co+ Allen; MaeDuffie, Guest Speaker;' Dick
Co.: Bill Summers, Troster, Currie & Summers.

Barnes, A. My Kidder &

f

1:

Flbrldge Smith, Stryker & Brown; Z. Salkay, Earl Hooped arid Tom Kran,
Gearhart & Company.y\
y;'; ';V_■ ■:• J\-;y V;-:■ ;'rT;;>'v:1 ■:

all of

Voluihe 164

•

-Number 4i>34

THE'COMMERCIAL & FINANCIAL CHRONICLE

Kb.

!>

,

,<?

!

John 3". O'K&ne, John
':0xKUite, Jn &- Co.:; Ed. EnTight • - fowme& Co.fChiilek
Kearns, Reams & Williams; Jarrres Carrie,-JrTroster, Curtie & Sumrrtei's. - ■

;

'■

»

-

»♦*

::

.

jcwhn H.

'^tevensGiv Lilian- Klein *

Ward & Co.

•

Herbert iMefndell .and Tom
•

*

F

\

-

%

•

1

Doyle, -all of
^

*

—

Philip C.

"Sydney..Holtzman, J. F, Reilhy & Co., Inc.; . J. A. Warner, Reams & Williams.

I&eid Rarikih, R. H. Johhseii & Co.; Herb Singer,

LiiCkhurst <5r'Co., Hie.," *

Kulimah,

John Jv O'Kdne, Jr. & Cb.£ XX H.v Stehadedker, ^eia.-Vorfc

-

H. D.

Knox, H-. D. Knox & Co..

;

a-■'"!■■

,r'^:n|

"

Irv.

Maxfield, Gfeorge Arthur, Ivan Pouschine

<2qhu & Torrey*

.

T\ **

and' Harold Brown,^
:* 7
' H ••'
.

of

p. Raymond Kenney, C. E. de W.illers & Company; John R. Stein, Straiisk tiros.
]&ellyA Car,I Ms Loeb^Rhoades & Co.; Maurice Hart, New York Hanseatit Corp.
Alfred L. -^weH;-C. -E. !de Willers & Company.
.

Ed.

'X'"'

<

i

Page Mason, Allen & Co.; Joe
Frank McCall, J. F. Reilly &
Co.,




Corby, -Allen <& Co.; Arthur Vafe, Hourwich & Co
InC.^ ■>., ■■■
* :ri r

'••»•

C.j

Jules Bean, LvJckhurst & Co.; 'Gerald Kane, Luckhurst & Co.; Charles
Ogden,
GoUwater, Trhnk & Ogden; H. D. Casper, John. J. O'Kane, Jr. & Co.; Tom Green*
"berg, C. E. Unterberg & Co.
Vfc'
1
r;"••

K'- a %

H&t*. 'sqi'ln&rW ■■■*£**; '>v;. ;,i>/o

3^Q;y*Pf>W-.rAjOT

>
h

»-D'

.irtVWtyfctnW'' «ttk:i '*r-«

■

i^^«p^!pir\r■oi'^;!.

jt.»m*:jttcb*..*irr"

THE

.

1952

rr^nrtirnnni

i1 n

ii'^ri^crft^T*n~HHM im

COMMERCIAL & FINANCIAL "CHRONICLE

.

**«**»«#

^Thursday, October 17, 1946

Octoberi8th

At WaldorfAstoria%n
r:<•

'

u

I

;'

* *>*

si

Ted

Young.

Aa/, &

Yownp,

Company; Saul Golkin, Young,

■

Marguerite I.

Golkin; George Frings, Fitzgerald &

Executive

Hanns E. Kuehner, Joyce, Kuehner & Co.; Edwin Jefferson, Lee D.
Sherman, L. D. Sherman & Co.; Leo Goldwater, Goldwater, Frank &
Ogden.
-

O'Keefe,

■

of
the New York Security
Dealers Association.

Aal & Golkin.

i

Secretary

.

for Recon¬
Development * is

International

The Status of the

Capital Market

must be

business

(Continued from page 1928)

^

greater than it
before the war. If, in the fu¬

was

The

amount

to

ninety billion dollars,

ical volume of

in it.

business, the actual

much more aggra¬
quantity of units produced in the
vated scale and with much more
future is bound to be substantial¬
serious
consequences.
On the
except

a

on

to ly higher than in the past.
2. We all know that commodity
at

hand, if we are able
stabilize
prices
and wages

tother
i

4

,

*

,

about their present level; if the
productivity of labor increases,
then I visualize the business pat¬
tern somewhat as follows: good
business for the next six to nine

prices will be substantially higher
that what they were

in the thir¬
ties. They probably will be higher
than they were in the twenties.

|

The cost of production, the cost

months; a recession with dif- of doing business will be subficult readjustments: but the read¬ stantially higher than before. All
'
justment will not last long. Then, this will make it imperative to
if productivity of labor increases; S have a larger amount of work¬
if prices again come down to a ing capital. To some extent, cor¬
level where the average individ¬ porations will endeavor to obtain
ual can buy the commodities he this capital through the sales of
wants, we shall have a prolonged
period of good business.

%The disturbed international sit-

stocks

I

not

am

uation

also

exercises

able influence

ket.

the

In

on

a

consider¬

the capital mar¬

first

the fear

place,

psychology has an effect on the
•market. That, in turn, has an ef¬
fect

on

the volume of

Furthermore,
national

so

long

situation

new

as

issues.

the inter¬

remains

dis¬

turbed;

so long as the economic
political outlook throughout
bthe world remains uncertain, the

and

offered in
this country will be limited; the
^exportation of capital in the form
volume of foreign loans

of direct investment will be very

hsmall; and many manufacturers
may not adopt the same policy
of expansion as they otherwise
would.
All this
combined has
influence

an

on

the

capital

market.

By nature, I am an optimist.
Being an optimist, therefore, I be¬
lieve that a pattern of business
will be the more steady one.
We
will have

not

a

recession sometime in

distant

but that,
d gradually things will work them¬
selves out; so that we will be able
to maintain our system of private

/enterprise and
Under

to

see

opinion,

my

of mergers,> vertically, as well, as
horizontally.' In spite; pf; [ the lip
rendered by

service

some

of the

in Washington towards
man; in spite of the

agencies

small

the

belief

that

must

we

do

some-*

those

future,

a land of free men.
circumstances
the

^capital market will be
the following influences:

under

of

conversion

against the small and
medium-sizfcd concern.
The
unions
in

become

into

concerns

has increased

tremendously. Very
great efforts will be made to cut

the

of

cost

production

the introduction

of

through
machin¬

new

and equipment, and through

ery

the reduction in the

cost of

dis¬

tribution.

means

that

All

this

a

stronger

smaller

position

than
the
All this indicates a

ones.

tremendous

movement

horizontal

as

well

towards

vertical

as

integration.
During the period of, integra¬
tion, the volume of securities of¬
fered will be considerable. If this

movement

of
integration takes
place—it is in full swing at the
present time in certain- industries
—

then

it

favorable
market

is

and

volume of

bound

effect
that

new

on

to
the

will

have

a

capital

lead

issues.

to

a

they stocks

or

bonds.

■

■I.V Furthermore, the need of work¬
ing capital by corporations will
be greater than before. If we are
to have steady-and moderately full
employment in the United States,
the
actual
physical volume of




con¬

privately

Companies, which have
been built up by families during
one or two generations, held by a
few
members
of
a
family or
by a few stockholders are grad¬
ually being converted into pub¬
lic companies • with stocks, com¬
mon
as
well as preferred, and
bonds being offered to the public.

in

yield.

First, we
the high income
reason:

we

duce

smart,

are

the

we

income

know there
taxes; and
will not re¬
the

until

taxes

possible

establish

to

forced to buy more

insurance. In
wealth, be¬
of the high income taxes,

be made to utilize the inventions

the Western domocracies and the

cause

which have been invented during

undoubtedly, preferred to enter the equity mar¬
ket and to try their luck at the
you will see an increasing amount
of foreign securities being offered capital gains since straight in¬
come
from
securities interests
to the American public.

the war,

with the result that new
will come along and

industries

the

that

offered

public will be

all kinds of; securities.

the

protection of the Securities Ex¬
change Commission, and I may
tell you that I belong to that very
small group of people who actu¬
ally read prospectuses. I, for one,
come

few

with

contact

in

You remember

was

vestors.
the

York

New

even

did

in

a

market

price,

better

of mine,

friend

the

than

and

and-so

individual

the

former stu¬

buy fifty shares of soand double your

stock,

investors

small

volume

in¬

in¬

the per¬

placement in
derived from
will

rel¬

be

of

prospectus

in

which

crease.

stated

As I

those

out

moment.'

;

There

conclusion is based

on

In my

sion

will

be

all

kinds

of is¬

of utilizing

purpose

new

inven¬

tions.

Some will materialize, and
people will make money, most of
them, you know the answer better
than

have

I

do.

to

the employe

•>

'

Forthcoming Foreign Loans
The volume of foreign loans of¬

fered in the United
favorable
sume

conditions

substantial

States under
can

also

amounts.

will

which

the

right

to

give
retire

an

at

the 64 or 65 is economically very
war,
a
great many Americans sound; socially, highly desirable.
bought Government Bonds, Se¬ The result is that corporation
ries E, F, G Bonds. Some bought after corporation is establishing
following

marketable

reasons:

bonds.

During

All

of

them pension funds to which the

had

and

corpo¬

employees contribute,

and the funds will have to be in¬

never

bought securities, are today
of the best security that
is available in the United States.

The

holders

in

prefer

the

capital

market.

There

is, however, this question:
large insurance companies

stocks.

to buy bonds, preferred
They do not enter the

will branch equity field to any large extent as
and will buy a general rule. Since the amount of
other securities, but note, most of funds at the disposal of the in¬
these
people are inexperienced dividual decreases, and he can¬
investors. Most of these people not invest as much as before.
Undoubtedly,

some

out into other fields

have

only

one

and,

experience

with Government Bonds;
and human nature, being what it

From what

source

will the capital

as¬

To¬

day, tud Board of Directors of the

that is,

come

to

That

is

economic

capital?
problem

is, and you know human nature
better than I
do, undoubtedly,

Let him read the prospec¬

tus..

very

humble opinion, h pen¬

fund,

number

offered to the public for the

to

The

sion funds. *

/

.

vested

sues

have

insurance.

.

find, therefore, quite a large
of people, who before

it?

read

him Will

more

volume of life insurance written,

We

people

to

dear

take

but

many

high cost of living
capital," the in¬
endeavoring to protect

dividual

ration

how

\

moment ago, be¬

and low return on

mation. The information is there,

Very few.

a

the

of

cause

excellent
experience with
their
Government's
obligations.

the issuer has to divulge all infor¬

*t ;.4ino
middle

•

*,

emanating from
3. There
has
been
a
strong
the
so-called
institutional
in¬ movement and a sound one all
vestors.
Let's analyze this for a over the country to establish pen¬

This

a

great and' iri^ att
probability will continue to**in¬

investment

seek

"Forget it. If you read the pros¬
pectus, you won't buy the stock."
P.
S. I did not buy the stock.
What is the result? You gentle¬
men cannot rely on the fact that
is

written is very

compared with therefore, is bound to be
capital that will great.
,

First, I stated that a number of
individual investors will increase.

there

great and will continue to

grow for these reasons:
1. The volume of life insurance

as

money?" I said, "Why don't you
send me the prospectus?" He said,

-

very

2. We have a brand new

individual

of

supply of funds, or of cap¬
at the disposal of institu¬
tional investors is bound to be

class in the United States.

humble opinion,

my

vestors will increase, but

atively

that.

dent, wanted to do me a kindness.
He called me up and said, /'Why
don't you

In

number

centage of capital
the capital market

hardly

and

in

doubled

it

some

offered,

offered

it

when

A

few weeks ago

The

ital,

one

institutional

and

individuals

them little.

groups,

question
two

into

divide

can

.

This

be?

curities

acting. Every day a new se¬
was

ket.

in

a

market

how. the

therefore, conclude that,
follow the pattern of
business of boom and bust, which,
in my opinion, would be a catastrophy of the first order, that we
can expect in the not distant fu¬
ture quite an active security mar¬
we

Who will the buyers of the se¬

people who read the prospectus.
What is the result? I will just give
you an instance:
i

of

people

then,

bloc,

I may,

familiar with

fully

am

Slavic

unless

Protection of the SEC

ware.

concerns, or

bonds

3Y4%

are

if

addition,

panies.

ment; and this, in turn, will lead
the issuance of securities, be

to

movement afoot to

be

should

But, in this case, we
adopt the principle of
caveat emptor—let the buyer be¬

a

family

sold

States at

United

this

sound and solid relations between

owned concerns, into public com¬

there is

Australia

of

the govern¬

ago

^

equipment, more modern equip¬

/

4. It is quite evident to me that

weeks

refunding issues will take dangers of inflation have dispelled.
place, if
economic
and
polit¬ The cost of living is high. A great
ical
conditions throughout
the many individuals, because of the
world stabilize themselves, if a decline in money rates, ,the in¬
miracle
should happen,
and it crease in the cost of living were

vert

into

the percentage of capital
emanating from individual
investors cannot be very great for
But

funds

Other

1. We, undoubtedly, will enter
a period of economic expan¬
sion. A large number of manufac¬
turers will want new plants and

■./<>

gentlemen to consider.

will

was

The cost of production

scope.

the

publicly

efforts

Undoubtedly,

(d)

curity

nation-wide

will

have seen evidence

we

few

ment

curities,

are

have

Reconstruction

for

revival of foreign financing.

a

A

privately

,

actually

of

corporations will, un¬
doubtedly, lead to the issuance
of a considerable amount of se¬

thing to maintain the small man,
economic and social developments

Already,

owned

have

bigger economic units will be in

Capital Market Influences

-'the

bound

in

glad to say it, is
a
great movement

Bank

Development

promise
them
indepen¬
a yacht in the near fu¬
ture. That is something for you

.

owned

I

3. This country,
and

'

in the early

offer se¬
curities to the American public.

(c)

This

bonds.

or

'

securities

buy, other

the Interna¬

redeem
in

or

dence and

tional

There may be a desire to
obtain * additional
capital,
and
there may be others.
•

to

order

sell

to

which

and

(b)* There may be a tax purpose

■

Government, obligations

part of next year,

cash.

rise,
fol¬ the
peak reached in the past in
lowed by an increase in wages,
1929, we shall be in the midst of
followed by an increase in prices,
serious unemployment. The phys¬
%e will repeat the pattern of 1920,
continue | to

people

their

the

move¬

(a) To become more liquid; to
convert earning power into actual

■

prices

meeting. Without any question, in
near
future, whether in the

these

fall of this year or

this

behind

motive

ment is:

If a spiral between wages and
ture, the national income of the
^prices sets in; if the productivity
United States 1 should again
of
labor is
not increased, and

Bank

and

struction

which has to be solved

somehow

people who will
spend sleepless nights on how to
induce these new investors to in¬
vest in a new type of securities;
what
is worse, how to induce
there

will

be

.

or

provide
an

equity

other.

Capital Market and
Business Activity

/i,*

The capital market exercises a
tremendous

on

business

wmm*\awmtwfaiVk uimti.hfr

v

19S3

THE COMMERCIAL & FINANCIAL CHRONICLE

Volume 164 ■' Number 4534
(W*
"

activity. When the volume of

ill| expenditures

securities offered is

also

are

consider¬

When this takes place the
demand
for
raw
material
and

::W

capital,investment of

cor¬

be adjusted to avoid

can

booms;; and depressions I doiiT
knpw.7Maybe*if' the business 4ex4

able.

III!

How

new

-large, capital porations

ecutives

were

to make better

use

labor is substantial.
People are of the new statistical data that
employed in the construction of have become available, thSt some
factories and in the production of sort of coordination could take
equipment. The projects on which place,v the - problem
could
be
they work, however, do not pro¬ solved. ^ But there is; one phase
duce goods available to the con¬ in
the; economic 7, field
which
sume*. Once, however, the capital in my opinion, can be regulated,

\^§j;4

expenditures,; have

been

made,
once the factories are
completed,
jonce. the machinery and
equips
ment has. been
installed, then the
people who worked on those proj¬
ects are discharged; and if no new
products emerge, then the people
tare unemployed just at a time when
the supply of consumers' goods

I

which you " gentlemen from
all over the country, can at least

and

influence—and

to

endeavor

that

is, 'public works.■

accumulated demand

The

for

bust The present boom will cpme

tionln

to an end, particularly

piex;form,u;/7;7;:ft^^

in. the soft
goods in the not. too distant fu¬
tures There Will'bd'a businessireadjustment. It should not be very
difficult

Then

we

should

enter

period of good -business activity.
If this isthe-case, thP capital mar¬
a

ket

will be active, the volume of

to

concise, and less com-

more,

to

The
ftto ..'>«*■.

.Use^of Summaries"/
proposal regarding sum¬

This

before the - effectiye
shall not constitute an at¬

that;will *;be Offered in

ment in the United-States is tre¬

mendous^ and

continue

will

to

increase/ Finally; if you look at
the United States from the purely

economic point of view; you must
public works/by the Federal Gov¬
reach the conclusion- that we are
ernment, States and municipalities
as sound as can be.
We have a
is
Very "- great, ; The
question,
unmatched
"Wouldn't it .be wiser for Federal, productive - capacity
increases. That is one of the rea¬
and unrivaled in the world. We
State and municipal governments
sons
for the periods of booms
have demonstrated our technical
to make now all their plans for
and depressions, the sharp
and managerial know-how during
swings enlargements
and/« construction;
in the business cycle. This is not
and when the private demand for the;$1$^
of
merely theory. Look at the sit¬
capital goods decreases, as it, un¬ skilled "labor// Ouri corporations
uation today, v We; know, at the
doubtedly ' Will, then for ft these are in as strong a position, finan¬
present time, many corporations
governmental agencies to set in
are
endeavoring to enlarge their motion the expenditures of huge cially speaking,' as they ever
plant ^facilities, to buy new ma- amounts of
capital, thus creating were. We have all the economic
ichinery and equipment;; Capital a riew demand for raw materials prerequisites to be
truly a pros¬
outlay for private account is very and labor in order to counteract
perous country. But the moment
great, but some day these capital the decline of business activity?"
you; forget the ' hard, economic
outlays
will
have
been
com¬
This is one phase of the capital

herring
v

■

the business

pattern of boom and

ported to be the World

inadequacies

-

The

1932)

page

offer to

an

sell.

proposals relate to the use herrings into the hands of dealers,
herring prospectuses* and particularly those who might be
summaries. /-•
asked to join the selling
group;

of

red

Would

Use

Expand

of

and these underwriters would also
be expected to have an adequate

"Red

The Commission's Memorandum
4

'

Herring" Prospectus

The complete text of the Com¬
mission's memorandum and de¬

The proposal dealing with red
herring
prospectuses
contem¬
plates the adoption of two rules.

tailed proposals follows:
As you well

know, the effectu¬

ation of

"full and fair disclosure
of the character of
securities sold

'In interstate

through

.

the

.

commerce and

.

mails,"

pursuant

to

the

Securities Act of 1933, con¬
templates not only that adequate

and

accurate information be filed
with the Commission in accord¬
ance
with
the
registration re¬

quirements, but also that
formation
ments

the

state¬

prospective

of .the

waiting

Such

the in¬

registration

reach

chasers
1

in

securities

cooling

or

dissemination

must

complished, of course,
fostering the solicitation

pur¬

during
period.
be

ac¬

without
of offers

to

buy the securities during this
period.

Attached

.

hereto

^proposals which

have

been

signed with the idea of
ing

this

certain

are

de¬

encourag¬

dissemination.

It

was

realized that if underwriters and
-

dealers

to be

are

encouraged to

circulate red herring
prospectuses
other forms of information

©r

they

must

tion
an

know
will

that

not

in

the

dissemina¬

itself

constitute

attempt to dispose of the

curities

in

violation

of

the

'and that it is not likely to

se¬

Act,

delay

One

would

herring

declare

prospectus

that

a

the effective date which contains

reasonably accurate, and
com¬
plete information and" bears a
specific legend limiting the use
of the prospectus to informative
purposes only will not constitute
an attempt or offer to dispose of
a security nop the solicitation of
an offer to buy it.
We have tried
to set up a standard of what
would constitute reasonably ac¬
curate and .complete information.
We

believe

that

in most

cases

a

red

herring prospectus would be
reasonably accurate and complete
if it is prepared on the basis of
the

information

contained

registration statement

in the

amend¬

as

ed to correct the material inaccur¬

acies and inadequacies mentioned
in

the

staff's first letter of

The second rule

relating, to red
herring prospectuses would pro¬
vide (a) that the final prospectus
may
consist of a red herring
is

attached

to

and

made

part of a "document" containing
such additional

information

is

as

to correct

inaccuracies
and to supplement inadequacies in
the red herring and (b) that any
person
to whom a red herring
prospectus was sent or given prior
necessary

acceleration of the effective date
/

to the effective date need be sent

of the

given only the "document" if
both are sent or given, by the same
person.
To support, and to help
further
the
purposes
of these
rules, the Commission, pursuant
to its power under Section 8 (a)
or

registration statement.

attempt
tforth in

has

been

made

An

to

set

clear unmistakable lan¬

guage that certain definite things
may

be

done

which

themselves constitute
'•to- dispose

of

a

solicitation of

Standards

followed, will

an

in

not

attempt

security

or

the

offer to buy it.

an

set

are

will

up

assure

which,

issuers,

if

dissemination

will

not

Act, would refuse accelera¬

believed
not

tried

quate
ers

that

underwriters

pre¬

sent acceleration of the effective
•date of the registration statement.

had

to

accomplish an ade¬
dissemination. Underwrit¬

would be expected to get red

*A red

herring prospectus may
generally characterized as a
circular describing a security in
be

the method in which

a

contemplated
would

that

also

the

continue

its policy/ enunciated in Securi¬
ties Act Release No. 3061, of re¬

fusing acceleration where mate¬
rially inaccurate or inadequate
herrings had been circulated

red

until

corrective

been

communicated

information
to

the

had
per¬

receiving the red herring.
However, if the procedures here
suggested
were
adopted,
this
sons

prospectus

sion

«ise-

dealers

to

make1, continual

of the procedures provided..




fers to buy or to make
sell. : •
.\v7r;;/ •

A.*

t

4

v* 5

.v

w-rl

'

offer to

an

'V.

V

<»;

v

'Asi*

v

•'•••

]

a/certain

stated

JJ2^

period' of

without

misgivings

emphasize the

or

a

about

informa-

allowed

!

have

be filed

to

with

and

would

get

no

the

other

for

discussion.

If

it

and

it

is

subsequently
.

Securities

a fair summaryof
material information

the

Commission's

first

comment, . does not
stress or emphasize the favor- ■,
able facts or aspects as against
the

unfavorable, and does not
recommendation or

v. contain any

be rescinded,

can

the

with

most

cited in

found that it does not accomplish
its purpose, or that it is misused,

it

filed

Exchange

/' letter * of

is

■

adopted

to

in the registration statement as
amended to cure all deficiencies

■it

information before they purchase,
we
felt the rule should be ad¬
vanced

or

offer

2, It contains

,

who

vestors

used.

summary
a

an

security until/such registration
statement becomes effective,'V

would prob¬
large number of in¬

the

ably reach

of

Commission on
(d a t e).: No offer to sell can be
made and no offer to buy can
( be accepted until after the ef:
fective date of the registration
ustatement./ You are requested
not to attempt to purchase the

the

Since

is

it

offer to sell

an

solicitation

ment

to

before

page

buy any security. It is a sum¬
mary
of a registration state¬

•/

However, the pro¬
posed rule would set up a stand¬
ard
which
scrupulous
persons
could follow, and the summary
Commission

first

"This is not

the

author.

would

<

of every such
summary contains the follow¬
ing statement printed in red
ink in type as large as that used
i generally in the body thereof:

certain latitude of in¬

judgment

J0; ,^7; asused m Section 2

(3) of the Act, provided that:

the summary proposal. We know
that an unscrupulous person could
slant

In
^ SrHnn ?
nf

Q.wh

1. The

We cannot say that we are en¬

tirely

diJ"

L?

;

These proposals

do not reprerecession from the rigorous enforcement of the statutory
policy to prevent the offering and
sale of securities before the regis¬

opinion

concerning the merits
security.,
*
1'.

of the

sent any

.

.

_

.

,

exact copies of such summary

filed with the office

are

of the Commission with which
the

able methods for dissemination of

The red herring prospectuses dis¬
tributed would probably reflect

information

given to

the

+ir\ne

should

longer be

no

information

in

a

problem.

acorrected

registration statement since it is

unlikely that they vrould be cir¬
culated until after receipt of the
staff's first letter of comment.

"Red Herring" as Part of Final

to

encourage
the printing
of red herrings.
Under

rule

the

red

herring

and

one

.

hand, and
t

Qrfainct

tions

nromotllro

CqIuo

be

necessary

(b)

information

ma7be

thev

asked

ment

,

themselves to buy.

IIS

/

7;

Copies
are

set

of

the
to

'

use

with

respect

to

of summaries is intended

supplement the
red
herring

with

dealing
prospectuses
one

and not to be a substitute for it.
It seems probable that summaries

might

serve a

herrings

function which red
not

"solicitation of

large investors!. In. addition/some
investors

may-' prefer

informa-

an

offer to.

tain transactions.
..

..

„

.

..

(a) A

red herring prospectus

sent

or given to any. person/be
fore the effective date of a regisi-

such

"red

prospectus" and

together contain

,

herring prospectus" was sent or.
given prior to the effective date
of the registration statement in

accordance with Rule 131 need be
j serd or given oniy the "document"
referred to in paragraph :(a) yof
this Rule provided

(1) that such
prospectus" and sueh
"document" together contain all
to dispose of" or a "solicitation |
the information required -fey
of an offer to buy" as used in Sec¬
Section 10 of the Act, (2) that;
tion 2 (3) of the Act/ provided
such "red herring prospectus" 4s
that:
incorporated by reference in such
1, Such "red herring prospectus" "document," and (3) that such
is prepared on the basis of the "red
herring prospectus" was sept
information
contained in the or
given b,y the person sending or
registration statement as amend- giving such "document," or his
ed to cure all deficiencies cited
principal;
'
*
*•.
.i: '

tration statement shall not in it¬
self constitute

an

"attempt

or

of-

"red herring

.

in the Commission's first letter

accomplish,

since it is likely that summaries

in

_

;

may

inadequacies

rulesj all the information required 'by
forth below:
'ISection 10 of the Act. - ^u'e !^-7D®7n't;'on ,0,^ | (b) Any person to whom a "red

buy" in Section 2 (3), for cer¬

proposal

is necessary to cor-

such "document

i

j

proposed

the

and

The

as

I ^h 'Ted herring

The Detailed Proposals

/n.

red

reference.

qnd

/>nv»

herring prospectus" provided that

furnished

who had been
herring would be
given- in addition; by the person
who /furnished the red herring,
the "document" containing the in¬
formation necessary to correct in¬
accuracies and to supplement in¬
adequacies in the red herring, and
incorporating the red herring by

.

'

rect inaccuracies and. to supple-

commit

to

met when a person
a

nitnonn/i^Kr.

ment" containing such additional

of the Act would be

5

840—Form

-

in, and. madevpart of a "docu-

«

QhnniH

"document." The
requirements of Sec¬

tion

n

content of a prospectus com¬
against premature sales on
other, can supplement each
prised in part of a "red herring
other. Together they should make
prospectus."
*
4
the period before the effective
(a) A prospectus may consist
date of the registration statement
ofv
ured
herring prospectus"
one
in
which
prospective pur-, which .g attached
t0j ir.?orJorated^'

one or two page

prospectus

Rule
nf

r*n

person.

any

the

this

could

attaching it to the

the

on

stric{/ enforcement bf the prohibit Proposed

made part of the final prospectus

by

statement becomes effec¬

Properly administered, suit¬

+i^«f+erf^^rv,

Prospectus
The proposed rule, which would
permit a red herring to be part of
the final prospectus, is intended
use

tration
tive.

of comment.
page of every such "red
herring
prospectus'" contains
the following, statement print¬
ed in red ink in type as large as

(The

2. Each
:

.that used

generally in the body

thereof:

^

'/;
"This is hot an Offer to sell
or the solicitation: ©f an
offer

ments

by

"Chronicle" invites com¬
the proposals advanced,

on

Letters should be
Commercial
Financial Chronicle, 25 Dark

the

SEC.

addressed
and

to

Editor,

Place, New York 8, N. Y.

Identity

ol ther correspondent will, If re¬

quested, not be' revealed.)

K

VV-.V-/'* V ■>:*

registration

of the informa¬

summary

S

only; arid (3)

time before it is used.

conforming to
Section
10
de¬ would be circulated more gener¬
/Further, practical considerations- scribes a security but clearly and
ally among the members of the
;have
been
introduced
marked to
indi¬
which unmistakably
investing: public/ Red herrings
cate that it is informative only
•should • encourage
underwriters
and is not intended to solicit of¬ frequently get Only to dealers and"
and

the

registration statement vfos
filed at least <—- days befofe
any such summary is sent .or

where it

un¬

derwriters and their counsel that
the

of the

tion of the effective date

is

Commisison

com¬

ment.

which

It

red

before

used

supply of red herring prospectuses
available for persons interested in
learning about the security.

before

(b) A

copies are filed, with the Commis-1

the

offers to buy or make

Cpmmisj-

statement becomes effective.

or

formative purposes

must be

SEC Proposes Broader uFed Herring" USA

filed

are

aspects
as
tion contained in a registration
against the unfavorable, and does
not contain any recommendation statement, which summary is sent
or given to any person before th,e
or opinion concerning the merits
effective date of the registration
of the sceurity; (2) it bears a specific legend limiting its use to in.-?
^to

dependent

(Continued from

prospectus"

statement was filed at least 48
hours

what it must contain—that there

over.

You

sion with which the registration

inaccuracies y cited
in
the
staff's first letter of comment,
does not stress or emphasize the

facts

Exchange

(date).

with the office of the

and

favorable

and

on

3. Five exact copies of such "red

pleted; and if no new projects expenditures, which, in my opin¬ facts, and you turn to the rela¬ ti on contained in a summary more
5are available, * then
.obviously we ion, can be coordinated to the tionship of capital -to labor, Gov¬ easily than the information con¬
tained in a prospectus. We know,
will enter a period of
declining business cycle*
ernment to capital and labor, then
business activity with
too/that the very nature of a sum¬
increasing
you wonder whether Americans mary makes it impossible to es¬
Summary
•unemployment; and unemploy¬
tablish qn absolute standard of
ment is the greatest curse to the
To sum up then; we may avoid are really as smart as they are re¬
system of private enterprise.

Commission

.

correct the material

the

of

qre requested not to attempt to

ficant information in the registra¬
tion < statement as amended to

.

date

-purchase
the
security
until
such registration statement has
become effective."-^

security proyided: (1) it contains
a fair summary of the most signi¬

markets Willincrease

effective

Securities

the
--

mary -■ used

steadily. The
supply of capital • seeking invest¬

foreign,

the

registration statement filed with

maries contemplates the adoption
of a rule declaring that a sum¬
date

No offer
ho offer

buy can be accepted until

after

tempt or offer to dispose of or the
solicitation of an offer to buy a

hew securities/domestic as well as

buy any security.

to sell can be made and

•

v:'iv.

-••

••

THE COMMERCIAL & FINANCIAL CHRONICLE

1954

ierred

t
(Continued from first naceV
page)
these may be the symptoms of an
almost lethal disease. In small vol¬
ume these
symptoms may be pres¬

government
government

and}
and}

of
of

unions
unions

moting peace, frequently are prpr

o^, unrest. This re¬

found

causes

sults

from.coercive

of

to.
to

change wage rates, instead of pro¬

"Purchasing Power" Enthroned:

P, The third major
trial relations

collective

the

of indus¬
ment we cannot be too critical if
idea—
the labor leader merely cashes in
must{ raise

cause

chaos is

to

simply as symptomatic
type of thinking which
dominates
the
Washington bu¬
reaus. So long as this type of eco¬
nomics, misinformation and ad¬
vice-proceeds from our govern¬

Industrial Relations—Frustrated and Perverted
mnntinn^ fmm first

Thursday,. October 17,1940

an

the idea that unions
society; when they be¬
on
it. Until a basic correction is
come general the
V,1
patient may die, bargaining, probably from, mini? purchasing power.
made in Washington and in the
raura
wage legislation and wage
Unless the trend is reversed.
g It appears obvious that if "A"
«
We may be on the road of other standards fixed under the. Walsh- had: more dollars he could buy thinking of other thought-leaders
on
this problem, are we likely
"busted" civilizations—for some Healey Act (private production on more of the product of "B." If the
to bring order out of industrial
government account), and the Dar farmer received a higher price
old as well as new reasons. "
1
"
*
vis-Bacon Act (private construc¬ he could buy more of the products chaos?
*■
Human Reconversion
tion, for government account).
>
of the urban workers and if the
Even if.economists, to a man,
;
this
naive
i For some people civilization is
One of the most sacred features worker received/higher wages he rejected
purchasing
ent in any

,

.

always "coming to an end." After of a free society, rightly or wrong¬ could buy more agricultural prod¬
the first World War, H. G. Wells ly, is the established system of ucts. This reasoning from the par¬
and others wrote books
predicting differential incomes and wages. ticular to the general, backed by
the downfall of western culture These differentials grow in part pressure group politics and eco¬
hnd civilization; Most Americans out of "the marginal productivity nomies, is the bane of pur society.
"We must maintain purchasing
Ignored these books. But these of different workers in the several
Writers were correct for miliionfe labor markets in every commun¬ power," is on the lips of: every
Of individuals in Germany, Russia*, ity. In other words, the law of labor leader, of every politician
Italy and many other countries. ; supply and demand' establishes a seeking* popularity ;; the.. literary
Perhaps we are merely suffering certain
wage v pattern -ft; for < file left; intellectuals including par¬
reconversion pains. At any, rate clerks, stenographers and- secre- sons, teachers, writers and com-

iu

diagnosing the issues and' pre¬ taries; similarly a wage pattern
scribing remedies we should not becomes established for all other
classes- of <■ worker a* jn, the • comhope — but let it not be a blihd, munity. / ■
;
' t
•. '*
v - *'*
Since under coercive collective
self-deluding hope.
I What follows is intended to em¬
bargaining, wage rates are de¬
phasize certain neglected factors termined by power, labor leader¬
in industrial relations, and' does ship, strikes and threats of strikes,
pot pretend to cover other impor¬ it is inevitable that these normal
tant aspects. Certainly management wage relationships become further
overlook this possibility. Wo may

Jiaa made mistakes

and the

best

disturbed.

This

stimulates

envy

mentators have -taken
tie
-

]

cry.

Even

some

?■

some

^

business

a

first

and

greatest

single

.caiise of labor troubles probably
is the
instability of the dollar.

-Rapidly

falling

rising prices
hot only cause sharp
differencial
'shifts in employment, but also re¬
or

distribute income and wealth and
•set

serious

up

between

tensions

and groups
in society.
Whether prices are falling or ris¬

persons

ing, the real income of
sons

or

some

per¬

against others
is sharply altered; this sets in rhogroups

as

tion forces and actions to counter¬
act the worsening of position^, IxS-

businessmen;

.

ive

have

insofar

as

unrest

we

will

and

their

associations

rest

is

stuff.

Some

in

a

Not

But

chiefly

at

workers

the

the

was fre^

increases

camd

of other
far as they

expense

except in

so

the

economic

field

r

Now- that unionism haV Invaded
sectors of the economy; labotf

all

leaders have the

unhappy .experi¬
having widespread wagd

of

ence

increases

promptly offset by
corresponding;: price in¬

closely
creases.

So the

Walter

that

out

he

P.

Reuther

cried

was

Insofar,

union

as

demands

courage "management,

cal-

en?

instalj

tq

labor

the

politicians

in

-

this-

;

able ^distribution OP the hationfc: hi

to

'

the

which
l

v

o we

would ^ re-

r-i

-

n co m e

dormant
and

in
the

in

corporate
vaults

of

coffers
private

firmeStorsJ* (Italics supplied).
That

every

one's

income

?

is

!

ful that the thesis that unions

raise wages in

can

general is tenable

in

f
a

cbst' te others and that wages; are
■or

J. • >=. HI

Despite demonstrable group
gains in specific spots, it is doubt¬

either in terms of good reasoning
or on the
record. Every increase

■groupspwrehasingpower'^fy
■

respect.

With all this intellectual backing,
the aggressive labor leader who

Income,

lease

^osfc^xas-xwelh tosx-purchasing

gioup gain that is not accom¬
by increased group pro¬
ductivity is someone else's; loss.
Every coercive advance of the
wage rate above the. free market
rate
means
unemployment • for
somebody. It is only by narrowly
focusing one-sided attention on
particular instances where some

panied

so
obvious that we
right -to expect^moret
'analysis^^ But- perhaps
a money-exchange economy is "too
workers have monopolistically
complicated for v popular econo?*
gained unearned income, without
mists to Understand.
The: circuit flow of income,: the looking at the other side of the
importance of relative price's, the expense to the rest of the com¬
interrelations between supply and munity,; that a,, contribution- of
labor monopoly to workers' welldemand, between production, con¬
can
even
be
plausibly
sumption and investment have al¬ being

power,

are

have;a

balanced:

been emphasized by econ¬
omists, until Keynesian "aggregate
ways

ment privately admifrthatx to

a

,

-

.

reasoned.

'

,

vi

As for tho record, from I34Ct to

•

1930, a period when we had little
unionism, wage rates increased
seven-fold while prices rose about

20%. It was the competitive bid¬

ding by employers for scarce labor
which raised wages and not labor

unions.^

*

-

Wages constitute some 70% of
costs and labor gets about
70%
of all Incomes;, the bal¬
ance
going to farmers, and the
recipients of interest, pensions,
dividends and the. like,. 'Clearly
there is very little room for in¬
creasing the share going to labor
by redistributing income, forcibly
>

all

or

otherwise.
IV

'

Unionism

End; in

an

Itself?;1

Do labor leaders deny the fore¬

going?

Given the facts, probably

few of them would; Why then do

they act as though wage« rates
rise by large proportions with-

can

in::very:|^^ short periods.without:
price effects? Why are they will¬
ing to tie up thex entire national
economy,
jeopardise the safety*

*

.

>

.




{

gre^ tout ipf greater productivity,

;

post-V-J Day offens¬

initial step in a long; t$tmprae*!>
ess of effecting a more equit¬

people who profess to be,

thfs cause of un¬

concerned.

q,uent.

.

the new.version of Keynesiau eco¬
demand!' analysis^ took- over*
:;
bright nomics. This is why, before as
: It was the vulgarization bf
Key¬
take a hand to make {correction, prospect with 15 million workers well as after V-J
Day, the govern¬ nesian economics in America, a
each according to his or its own in unions, and a possible 20 mil¬ ment bureaus
put their force be¬ mistake
most
emphatically * not
lights;
'
1.
lions, by 1950;
hind a vigorous wage lifting pro¬ made by Sir Win.
Beveridge in his
If the national government abol¬
Now let us look at governmental gram. In July, 1945 the OWMR in "Full
Employment in a Free Soished all its labor
legislation, in- wage manipulation. Suppose the its third report stated, "The Amer¬ ciet2/,"3 which is to: a consider¬
eluding the-National Labor Re;- government
fixes
a
minimum ican people are in the pleasant able, but immeasurable, degree
latioris Act, wage and price con¬
wage of 60 cents per hour. Even predicament of having to learn responsible for the postwar plight
trol laws, the mediation and con¬
if it results in upward adjust¬ to live 50% better than they have of the American
economy;
ciliation services, and then con¬
ments for only two or three mil¬ •ever lived before.": (p> 57); The
Even Karl
Marx
rejected the
centrated successfully all " its ef¬ lion
workers, it makes the rate of labor leaders took this as a sig¬ naive purchasing power theory of
fort on one Constitutional
man¬
the most
common
or
unskilled nal, to go after a 50% wage in¬
depression-prosperity cycles. De¬
date to Congress to "Coin,
money, worker encroach in every com¬ crease and, this, is why they re¬
pression comes when purchasing.
regulate the value thereof" (Art.
munity upon that of the next class gard the increases of the first power: is at ah all-time peak (say
% Sec; 8), it would do more to re¬ of worker. A wave-like move¬ postwar-; year a^ only the, "first
1929) and recovery takes ; place
store industrial peace than
any¬ ment
may
be
set
in
motion installment."; They say so.
when purchasing power has been
thing else it could do. Instead of through such
manipulation and
The same office at about the squeezed to the minimum
(say
dealing with this fundamental is¬ there is no end of it.
Possibly the same time prepared the now fa¬ late in 1921 or 1933). This simple
sue we persist in
dealing with the next Congress will revise upward
fact should give pause to every
mous. "Facts Relating to
WageSymptoms.
the
legal
minimum wage rate Price Policy" (OWMR-502-mim- exponent of the purchasing power
During the 1920's union mem¬ from 40 to 60 or 75 cents
per hour, eo.), which was
designed to prove theory of prosperity, Economic
bership slowly declined — the and it will be
applauded as a great that wages could be lifted by 24% fluctuations proceed from many
"purchasing power of the dollar humanitarian move! The constant
without price effects. The docu¬ complicated factors and each ebb
was virtually stabilized.
By and interferences with the normal op¬
ment
"leaked ; out" - and
was and flow is more or less unique.
.large, the worker felt that the erations of the free labor market
widely quoted last autumn by The "deficiency" of purchasing
•free market was giving him a
both by unions and by govern¬
labor leaders and left wing press. power is more effect than cause
.reasonably fair deal.
ment must, if this analysis is valid,
The document was so vulnerable in terms of mitigating these fluc¬
j
The drive for higher
increase strikes, unrest and make
wages even
and fallacious that Robert Nathan tuations.
'
■
-before we reach full
employment our economic system work pro¬ and his associates thought it nec¬
Unless we can
dethrone the
is, of course, itself a factor in the gressively worse.
\
essary to suppress it. But the dam¬ naive purchasing power theory, it
Instability of the dollar.
The free market in both goods age was done.
is not likely that we will make
Until the value of the
and labor throughout the entire
currency
The Department of Commerce, much headway in solving, the in¬
•is reasonably stable from
planet is in process of disintegra¬ which is
year tp
paid to provide business dustrial relations problems.: In¬
year, all other efforts to solve the tion. We have gone much further
and others with authentic facts deed, to look upon strikes and
labor problem are
likely to fail; down "the road- to serfdom" than prepared a somewhat similar doc¬ labor union demands as merely
•price control of goods and services is commonly, realized. Market in¬ ument (Oct. 25,: 194$)
showing problems in industrial relations is
'as now enacted and administered terference in
Europe for half a that wages in the motor vehicle to - take/; unpardonahlyr; narrow
is worse than useless for this
pur¬ century and. for nearly two dec¬ industry could be raised by 25% view.{
*
•
pose. It deals only with the symp¬ ades in the United States furnish
in two stages without price effects!
■Can Unions Raise. Wages?
toms of instability and
ignores the no evidence that any basic prob¬ This document too was "inadvert¬
Implicit in the theories criticized
causes.1
lems. are. solved by such interfere
ently" released- and a few days in the foregoing is. the notion that
;
In a democracy it must become ences. Does history not show that
after/the settlement of the Gen- Tabor unions are great engines
the responsibility of the citizen to there is no substitute for the dis- era! -- •
Motors strike the Secretary
for raising wages. Experience of
prevent
problems reaching the cipline of the free market? If so of Commerce admitted, it to be
'unions is that they do raise wages:
is our. problem not one of re-sell¬ in
•crisis stage.'
error
and apologized for
iti
ing the free or freer market tp, the I The^ several price increases
n
2 Fellowship, June,
1946, p, 46.
American people?
3Sec<. "Can Government Guarantee Full
granted the. motor manufacturers
Wage Manipulation and
The United States government since then and under only-an, ,18c Employment?" Chamber of Commerce cf.
Industrial Unrest
-the USA, 1946. "If trade unions under full
is fostering a strong labor move- an hour increase prove the
fallacy •employment press wage claims unreason¬
In addition, the efforts .of both
ably, maintenance of a stable price level
ment in Japan. People who ignore of the diagnosis. Again the dam
'w.ili become impossible; wage determination
1 "Price Control or Decontrol," Cham¬
history are destined to repeat the age was done,
wiil perforce become -a • function of the
ber of Commerce of the USA, 1946.
mistakes of their predecessors;
These three documents? are re-, state,".
■■
:w

diyiduals

this.experience

economy

saving equipment and in¬
perity. These frequently speak of ; culated to offset the decline in
ventions, unions of course arq
the importance of
"maintaining f take-heme pay and purchasing
partly responsible for economic
demandv" It looks so obvipus and
power suffered with, thd war's
progress and rising living standmakes such good press release
;';endi::iThi^;^R;r:e-a'eh:I.ed •th&

-

labor

.

"Lafeor,anticipatingthetrend,
launched

—

more

real

.

and

demands 30, 50 or 100% increase
Craft, plant-wide and especially in wages appears like a great pub¬
industry-wide collective bargain¬ lic benefactor and a benefactor of
because
he
helps
to,
ing, when based on coercion and, business,
force, inevitably upset normal dif¬ "maintain markets." A new key
ferentials. If the steel workers win to enduring prosperity has been
the labor movement is
a pay hike in your town, this is found
likely to set in motion efforts on the device for implementing it —
the part of other unions to pull deficit
spending by government
their rates up toward the steel having become obsolete through
rate or to maintain the prior dif¬ the proliferation, of our money
ferential ol their rate above the supply ? and; the' hugeness! of / the
steel rate. The more of this type national debt.
of collective bargaining we have
The Keynesians in the" govern¬

the

,

; ^
$0; long as unionism was con¬
fined i to limited sectors of the

creases.

.

*

The

least

•

often
■

•

stripped of the worst features of
the, original bill, used the phrase

Keynesians in the United States,

There¬

and;

union leaders, are
get it out of the textbooks, out
hpw fighting each other's wage
writers, politicians
increases—although they talk as
and
other
self-seeking '{ leaders.
though they are fighting prife in¬
The
Employment Act of 1946,

organizations give

undoubtedly vulgarizing Keynesian economics, have dpne< much, to
rationalize the purely selfish moftvation of the labor leaders and

fying

plants.

many

members-^-at

wages,^

'

to

voice to this naive theory of pros¬

Whitney in justi¬

and unrest. Mr.

practice in

wages,

getting tired of
having every wage increase offset
"purchasing power".six times- in by * a \ price increase. But MrL
two-pages.,
>
/
Reuther was up against the hard
The pseudorKeynesiam. content facts of
economic • arithmetic. Id
of the. coming wage- theory was
economics there are no miracles-^
up the bat- admirably set forth by Walter P.
everything has tq. be paid for—by
Reuther in; these words: /
; ^
somebody.
; •

national paralysis of our
fore, the following analysis should economy through ; the : railroad;
not be interpreted as placing all strike in May, 194$, said that rail¬
the fault outside of management road labor standards; were being
policies- and practices..
> *
impaired by the encroachment of
:
wage
rates in other industries.
That, he said, must not be toler¬
The Instability of the Dollar
ated.

personnel policies'are not yet. in

years

their

of the heads of

,

*

theory,-it would take

power

-for
money

and

gain

of

life,

even

their

ends?

the

people to

Partly

because

the labor movement may have
its. original authentic

reason

lost
for

being and- has become an. end {in

iteelf-^for
This

.is

troubled

leaderschieflyj

the

the

fourth, reason

industrial relations.

for
"

?;

•,

Anyone familiar with the origin

of

specific unions, especially back

in the 187G's or

coming

;

1880's, cannot help

the

to

conclusion, that

unionism was largely an

movement

growing

authentic

out

of

the

daily experiences of the, workers
themselves.
at the- hands

pecially

Arbitrary

treatment

of management (es¬

the foremen

and

straw

.

bosses),: unduly long hours, dia-

WKWtfiM,
'

'

:

>\>V

i'>

.Volume -164

p

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4534

1955

J. r;>X'.Vv^7/: 'i[; (fa#:

criminatory treatment etc.,'

.*ftU tpo eommon.4

were

.: s- •

;

consumer

'to/ believe

came

this meant

that port parents voluntarily

a

price increase. A top
official said to the writer,

wise.

is

Thus

-

the

or

cles, in -the

other¬

a

"criminatory

treatment—although

this in itself does not
prove that
there is no present a u t h e n t.i c

for

reason

unionism.

Unionism

grows by leaps and bounds.
M. this .growth is
voluntary

against raising therprjee of cars?
We all

agreed that was the
next; morning

an¬

swer.'*-The

sue

support; and coercion.
t

•

vThe > competition

CIO^

among
unions for

society, and likely to get
way

worse.

them

opens

to

the

ipharge of "having sold out to the
bosses."

•

count

and

leads

to

office, the union leaders leave no
Stone unturned to keep themselves
In office and to make their offices
more important. They hire the
best publicity experts, researchers,

and

they

have their own legal
specialize inproinoting the Cause/The government
'Tenders thenr endless free service

firms

and

which

at

-their

times

own

unions

some

men on

have

the government

health programs for their workers,
the union leaders generally either
indifferent
or
hostile
to

-were;

them; the programs were labeled
^paternalism." Today the unions
are
demanding "health and wel¬
fare funds" and usually insist on

exclusive; union

administration.

This opens the opportunity to
inake every worker beholden to
"the union leaders for his health

facilities; it is part of the program of union entrenchment.
%
A regular private business
thrives on acceptance of its prod¬
Unionism

uct.

thrives

what

on

keeps the members paying their
"dues.
The
absence of trouble,

-grievances And "causes'*' is' rxot
conducive to; uriioh solidarity J al¬
though

$his

unions

many

narrow

are

above

motivation; If griey-

don't exist, the union .leadr

;jances

Ters can always stir them up. One
of i the fop CIO officers, in de^scribing the great, difficulty in
f unionizing the workers in a small

/,:£athdli^^
f-in Pennsylvania,' in the midst of
;
his explanation said to the writer,.
ffOf course, if there is no trouble,,
; we
stir it up."- Employers fre-quently blame labor trouble on
"outside agitators; but here was- a
./top CIO official boasting y-of its
| -truth. •y. .//v. V:
■:
!#:,•
1
-{ When the UAW-CIO made "its
-"•demand for

a

30%

wage

increase

;&£6n General Motors in 1945, the
^union

leadership

"loss of

.

the increase.

in

the

U.

S.

Treasury

engineered the plot to
Germany to the USSR
exceedingly devious
tactics
were
in process of having

deliver

by

goals realized when sud¬
denly Secretary Byrnes in Sept.
1946, cried out for a unified Ger¬
many
to save the Germans for

CIO

observed

the

public support, because the
especially, -"Industrial Relations in

a

at

lace's

address at

Madison Square

Garden on Sept. 12 before one of

der that labor is restless, turns to

the

other

economic

untried

systems,
sell its soul for

and is willing to
a

of pottage.. Little wonder

mess

that

it

Sciences and Professions"

States

CIO

The

liver

"Herbert

—

jFloover, then still President,

/was

gtill opposed to any Social Se¬
curity program. The help to, what
he called, 'people in honest dis¬
tress,' had to come from a few
charitable

old

ladies

extra moth-eaten

some

who

had

clothes to

give away and a few crumbs of
bread to. spare." (Page 4.)*
Correction
ladies

were

—r-That

a

few old

the only source of aid

to people in distress is so absurd

ganizations, including Community
Chests, provided help; This-is so
well known that no further argu¬
ment needs to be advanced.
CIO

The

States-—Speaking of

unemployment compensation: "In
most States, he (the unemployed
worker)
can
expect
anywhere
from $8 to $15 a week, for a
period of 16 weeks in any one year
—and he

ing

can

get that after wait¬

anywhere

weeks for it."

from one
(Page 10.)

to

six

and

—

was

members.

literature. is

stantial

leader

up,

the

of

labor

members

demand

our

tragic for the survival
freedom, our efficiency and

indeed

for

could

all this

as

national

survival,
amused, viewing
much Opera Bouffe;

our

stand
so

instead it may yet spell

CIO.

decision

Every

of

organizations is thus im
by communist ideology
and strategy.

action,"

so

the

Communists

y

are

not interested

in better working conditions and
;

wages. They do
able
industrial

not want peace*
relations.

They

thrive on dissen sion, chaos and
industrial stagnation. They spon¬
sor' extreme
union
demands
(a

Un-

good test of communist influence)

grand Finale/ <:
s
The people of Europe and Asia
in process of post-r-war reconstruc¬
tion, taking a look at America
since V-J Day, are saying "that

thereby putting the ordinary labor

is not for us."

strategy and tactics in consider¬

unions.

If

are

our

assumed

to

be

here to stay, how can management
divert the attention of the uiiiori
leaders

away

from strategy

and

tactics designed to "keep the pot

boiling" for the purpose of mem¬
bership
solidarity
and
self-en¬
trenchment, to problems of effi¬
ciency, cooperation and mutual
aid? This is another $64 question.
The proponents of the Wagner
Act argued that if only manage¬
ment would recognize the prin¬
ciple of; collective 'bargaining and
cease
opposing unionism, indus¬

leader on the spot, they

engineer

and prolong strikes and use every
opportunity to stir up trouble.
One who' has not studied their

able detail in the last year can¬
not

have

the

require
al¬

be

Demands

of

30,

50

and

even

100% wage increases are frequent.
One of the oldest "mature" unions,
the Typographical union, is mak¬

ing

the

dozen

/

in

demands

following

a

cities at present:

or more

1. Three

•

vacation

weeks'

at

doubletime rates of pay.

-

2. Workweek

hours

to

reduced

35

five days of 7 hours
Hourly rate increased
from $1.53 to $3.00.
3. Overtime pay at the rate of
$6 an hour — namely, at

:v*.

or

each.

:

.

V
c

double pay.

4. All holiday work to be paid
for at triple pay — namely,
$9 an hour,
5. Weekly

.

pay

raised from $57

to $105 for day shift and from
-

.

$63.22 to $115.50 for night
shift.rV -Ik. ;-;
..

6. Sick leave to

:

days with
7. Contract

be 30 working

pay.

4;

last

to

"

for

30

days
only —that is, it caii be re-

_

opened as to wage rates on
30 days' notice, and if a new
rate is not agreed on in, 30
days, the; entire agreement
can
be ? terminated
by the

.1

,

!
7

,

union..

S.uch

•

extreme

have

demands

hitherto been unknown in Americon

industrial history.19

4?The break-even point of many
American businesses has already
been driven to a dangerous high
in terms of

of

fluenced

control the local situation." Were

this not

portion,

relations

,

these

announces, M'Our
demand
redress,"
or,

etc., and the national leaders "can't

we

probably an "inno¬

"opportunist."

voting strength in the top layers

blandly

members

"Our

poured

Afie^-the members are

properly" Worked

of

was

or an

The communists control a sub*-

Correction
At the present
time,. 2T States (over 50%) pay a
maximum ol /$20
week or
more; 11 States pay $10; 3 States
trial ipeace
pay $16 and 10 States pay $15.
■
would| come.
What
Today, 33 States pay for a dura¬ misguided; students of industrial
tion of at least 20 weeks; 1 State relations .these proponents turned
pays for 17 weeks; 12 States pay but to be! ~
* * "
for 16 weeks and 2 States pay for
V
14 weeks. Today, no State has a
'r; -Communists in - the, Labor
waiting period longer than; t\yo
Movement
—

Wallace

the voting
in volume, labor leaders de¬ strength in the top layers of the
rousihg ; - speeches" to; their PAC arid About one-third tof ; the
this

forth

Needs A Friend®

gets

intellectuals

leadership

stirred up?

Another question needing in¬
vestigation is: Can wage increases
wrung from management, under
pain of striking the plant, bring
any contentment to the workers?.

two

"fronts" 9 on which the
are at present relying
chiefly — "The Independent Citi¬
zens
Committee
of
the
Arts,

labor

industrial

ways

Communists

As

Case No. 1—When A Worker

supreme

comprehension of
importance of th.eir
role today in the troubles in in¬
dustrial relations. SoTong as they
continue in this strong position,
any

is mostly folly to talk of im¬
proving industrial relations; a few
amendments to the Wagner Act,
however, urgent such amendment
is, would do little to solve the
it

an

inevitable recession.

Summary Prescription
.

Is there then

solution to the

no

problem?

Perhaps not. The de¬
cadence has gone far. The trouble
arises from no single source and
certainly
there
is
no
single

remedy,11,.

;.*//"!■

■

One of the most amazing things
the post-V-J Day strife is

about

the

extreme public apathy. The
people of the great city of New
York have had their safety and

healthy threatened repeatedly by
an

elevator

strike,

a.

strike,

a

boat

tug

subway,

threatened

strike, a number of transit and
railroad strikes, truck operators'
strikes,
and
maritime
strikes.
Pittsburgh has had three electric
strikes in

power

about half of .a

Yet few seem much con¬
cerned. Perhaps real and wide¬
spread tragedy will have to pre¬
cede any genuine public move¬
ment to encourage the necessary
legislative and other corrective

year.

action,

r

•

<

,

For years we

have heard about
the "right" to strike, and almost
nothing about the public's "right"
not to be struck against. No one
should be made to work against
his will;

but if he wants to • stop
he any right to ask
be kept,on the pay¬

Communists
carry
a
weight greatly out of proportion

work,

that his

name

to

roll

he

problem.
their
Is

number.

There Any Limit to Labor
Leaders' Demands?

has

so

can

return

when

he

gets ready to do so? The "right"
to strike should be re-examined

in terms of today's typical per-*
the argument, for sonnel : policies of typical * env*
higher, wages is the rise in the ployers, of responsibilities apd of
cost of living. Yet, it should be
privileges.
emphasized
that
factory
wage ? When great industrial combines
rates, for example,- have risen were believed : to threaten the
over
weeks,; with ;e;great/majority/of
90% since 1929, while the welfare of our people, we«prq-r
Communist J influence
in * the
States having only ond week. V - u
cost of living index is only about
ceeded under the anti-trust laws
world of ideas and in the labor
Thb"'UIO;States;^Speaki^& movement is a significant fifth 17%' above J929.. In "the middle to break them up. When the hold^
1930's
the
Administration's
su¬
oId;age;a£sistance:^^
ing company movement in-the
disturbing element. •».* O
>■
that few people-;|&v^.Ee.cgi^^n&r^ {
By- widespread and irresponsi¬ preme objective was to restore public utility field showed itself
than $40 a .month.
Very fewv.re-i ble labeling of every reform and the general price levels of the to involve much financial manipr
ceive even that little." (Pagell.) - New
1926
being
specifically
>j. Deal
measure
with
the 1920's,
10 This
demand
by
the
131-year old
V Correction—This program is ad-, epithet "Communist" the Ameri¬ mentioned.^Today when the gen¬ Typographical union and the behaviour of
ministered on / a "needs", basis.
eral price level is only moderately two
other
"mature,"
well-established
can people have become
danger,Many of the recipients haye spme ously immune to the fear of above; thatfigure while basic unions, Whitney's Railway Trainmen and
Johnston's Locomotive Engineers on May
other income; children may supCommunist. infiltration. Although v/age rates have nearly doubled 23-25, 1946, did much to disabuse tho
since then, the labor leader still
the
Communists
in
the. United
public- mind of the notion th9,t our labor
-5 Much of the
University research and
argues that the cost of living is troubles under the New Deal and. since
fiddling, with industrial- relations-; -com¬ States number only a few thousr
overtaking wage rates! Can labor V-J Day, were due to the unseasoned
pletely ignores this aspect of the problems
and, their fellow-travelers, "in¬
character of the union movement and Im¬
of industrial relations
and is the victim
leaders ever be satisfied?
Does mature labor leaders.
nocent" supporters and
"oppor¬
of - the "social
lag,": a term so. dear to
..

Currently,

,

'

•

;

•

-

-

.

these

same-

researchers.

the

work

his

associates

being done
at

the

by

One

exception

is

E.

W. .Bakk,e and;
Labor, and Manage '

Center,,,

pecially

Yale
University.
See „ es
his;-, "'Mutual Survival: The Goal

fUrban Transportation," -by Emerson P.
'Schmidt, 1937, University of Minnesota

of

;let-of-the-Month




into the homes, the schools and
to the desks of writers, comment
tators and preachers. Little won¬

representation!.

vJPress,

Minneapolis.

the; USSR to gain its ends in
Europe and Asia. Secretary Wal¬

of

that

mediate aim is the weakening of
our. economic machine to enable

ture:

constitute
almost

picked

and

hands of the USSR and their im¬

cent"

sample

the nature of the union movement

their

Freedom ?

have tp rest on falsehood and mis¬

ment
See

.

Departs

random from recent union litera¬

following

The
small

.

;.;s

the

intended to promote the com¬
munist cause among us> although

payrolls.
The
unions
unionize
that it heeds little correction.
*fpublic"; employees, so thatpri*
Every State, every city, every
vate groups ana public employees
county, many townships, plus in¬
promote each others aims.
numerable private charitable' or¬
\tfhen em p 1 o y e r s provided

■V,""','.!

on

Communists

and

The

Relations

support from neo-s
frustrated, spir-^
itually-=homeless movie actors and
writers. A good case should not

travel—even

y* t Because of these emoluments of

i'.

in

The

T

1

influence

ment of Labor is

Day by day, week in and week
beyond this narrow focus, we are
pot likely to emerge out of the out, year after year, this type of
campaign
literature
is
poured
fog of industrial warfare.5
This reliance on trouble to keep forth by the millions of copies

foreign travel.

..51

munist

Case No. 2r-.The Road To

in the tortuous field of industrial

from the daily grind of work¬

ings at the bench, at -the wharf or
Wrestling with a truck's steer-?
Jng wheel. It pays handsomely hi
-btollars^ provides an expense ac¬

•>

workers than 8.

Labor

gagged and fenced in. Com¬

were

workers
unemployment

pay : the
.The writer said, "Dut: you knew, mu,st
taxes." (Page 12.)
could not sue the OPA?"
Correction—At legst. 28 States
The CIO official said, "Of course
we
knew it, •but' it brought the cover ,: employers
with t fewer

Labor • leaders have gaiped/.$
Unique recognition in our society,
the ' union: movement going? also
Their everyword * is news; ; their
explains much that ts in the labbr
views are sought, they sit on pub¬
press, leaflets and other union ma¬
lic boards and they are invited
terial. • The labor press has never
to address public meetings. Union
been noted for its reliability but
pffice-holding is a prize./to / be in recent years its handling of
fought by any :and all means, and tacts, r events and its enemies,
to be coveted at all hazards, Of¬
(real or imagined) leaves much
fice-holding relieves the union to be desired.
man

^.'Hc

"Under the

more

u

National

in¬
fluenced, if not dictated, for;;a
time by Communists and their
sympathizers on its payroll. Dur¬
ing this. period the employers

and

Compensation
employers who

to win and hold adher¬

Immediately

■•:

The

States—"According to
relations. Labor leaders are al¬
ents for your union is to promise ways on the spot in their own the War Production Board, four
workers can
how produce the' freedom, if not for free enters
or
deliver more than has been
unions; the competition between same amount; of
goods that re¬ prise. An ex-Secretary of Com¬
promised or delivered f by somq dual unions makes; the problem
quired the labor of five before the merce was a devout follower of
Competing union.
.•
.' much worse,; Employers and the
fellow traveler "fronts." Perhaps
war." (page 12.)
^^Withihchaany if not most unions,: public become the innocent vic¬
both locally and nationally, the tims of this sparring tor position
Correction rr-. A check by the a half dozen communists or fel¬
officers of the union are constantly and
War Production Board fails to low travelers gained membership
prestige, yet much of the dis¬
gniped at and criticized by would- cussion of industrial unrest is disclose 'any- evidence that this in Congress.
be officers^
The American Communists have
the. mext couched merely in terms of "labor- statement is true and, even more
flection. Any moderation in der; management relations," in the important, the WPB declares it as their ultimate aim the delivery
never made the statement,
of
the
United
mands preached by union officers. narrowest sense. Until we
States
into
the
see
One

,

—

bureaus
Even

unions.

Board had its policies greatly

Unemployment

threatening/ to program, only
prices. employ eight pr

press

AFL, and other
sur¬
public back to our side, didn't it?"
vival, for membership and- for
This struggle for survival and
recognition is
bitter, costly to fqr growth explains a great deal

•

States

labor

among

you

'

..union"

-

CIO

Massachusetts,

the OPA if it raised car

but

gmch ptittactics and an4 induced
is^oerced government
y

;

The

the

UAW union official issued a blast

Pari through the

no

Connecticut,
Washington.

government

the

businessmen they have a
number of angels.8
:.V.'

proof of "inadequacy." Fur¬
substantial /; degree, " the CIO
thermore, in 1946, the average
I original basis of unionism has "We had to move fast, so we called
.:iWs^pRcare(j *-? subsistence w^ge?, a meeting. Someone^ suggested, payment exceeded $40 per month
.:
Jong bours, seven-cloy week, di$T Why not threaten to sue the OPA in- Alaska, California, Colorado,

/a'-Tq

in

and

amount received

hundred

people

in

thousands, including
the highest offices of

,

ynions and Mariagev%ent." 1946
G CIO

tunist" supporters run into many

Political Action
No.

the

land.

They

exceedingly
active in literary and artistic ch>
:

1946.-

\

see:

publication/

examination of the scope, tac¬
of
this infiltration

motivation

"Communist Infiltration in the United
of
Commerce
of the

StatesChamber
USA,

1945/

mute

1946,

and

information
9 The

7 GIO

an

and

are

Committe Pamph-

10,

8 For

tics

to

cited

other

Win

the

one

the

sources

additional

of

therein.
being

"National

Peace." '

)

■

Com¬

11 For

some

further

diagnosis

.

and sug¬

not iepeated here, see Cou\mer*~
and
Financial Chronicle, March 21,

gestions,
cial

The

1946,

gaining,
dress

by

Economics of Collective Bar¬
Emerson P. Schmidt', an ad¬
at Harvard University Law

delivered

Schoo).

March

15.

(Continued

1946.

on page

1956)

1956

THE COMMERCIAL & FINANCIAL
CHRONICLE

terferences

Industrial Relations-

sentence upon

i§

(5)

production,
end

individuals
the

wit

bines

is

and

in itself

to

becoming

the

to

treatment

to

eral

of

have

,

strong, and rightly
and

State

in busi¬
other groups. The

some

can

so,

tolerate

never

later

sOtfte

will

we

such

popular

or

be

driven

of

be

union

cried

"Fascism."

It Was the

toward

us

in

same

Italy". It Is later

and

that.only

Will

save

of

a reversal of
: " w '**• ■

us.

labor

mistake

grave,

policy

to

reduce

the

it

make

St&te

-

concentra¬

inoperative

which

has

its

on

in

any'

books

a

16W

guaranteeing "workmen the
or hot to belong
to a labor union. ;Such law
pre¬
sumably -would
contain
other

right to belong

fe&tUres

spelling out the rights
responsibilities;of both man-

©nd

.flf©ifientand labor.
"

?he argument'

foilows:

vZ -'

~

(I) Federal

>-

intervention;

has

we

should

have

fdfthrightness

the

honesty and

to call it what it is.

(2) Much of the trouble-comes

-

ffom

the

Ufiion

powerful

international

officers;: who

dictators.

The:

virtual

are

state

local

and

l&bor leaders

are
becoming a little
tired of being pushed around and

bjifig superseded by "outsiders."
Widespread

secessions/ are; the
best evidence of this, so far as
the general observer is concerned.

(3) Human
their

best

relations

when

are

decisions

at
are

itifide

by the people who have
live with those decisions. The

td

National, Labor
Cbfigtituted

an

Relations

attempt to

iffipbse,; from the top,
Ideal
Wide

had

community,

basis,
no

roots

,

in

a

nation-

a

of life which

way

natural

each

upon

on

-

Act

super-

and

the- life

authentic

of

that

com¬

(4) Many
laws
the

as

States

Minnesota

Murray

have

passed

above.

suggested

Under

when

his

waved

hand,

signal¬

^

the

present

local

among

government

(includ¬
federal agencies that

many

'

even

workers
Waited

did
the

not

respond

required

but

cooling

off

cific town and it leads to

a strike,
leaders, management and

the three layers of public officials

—local, state and federal—all may
stand in

will

a

state of confusion. Who

first?

move

through

what

What

layer

action

of

ment should be taken?

govern¬
Is there a

conflict

state

between

the

and

federal

mediation services? Does
the state labor law apply or does
the national labor law
apply? Are
the local ordinances against ob¬

structing traffic,/creating a nuis¬
ance, mass picketing, etc., etc.,
applicable? Should they be en¬
forced

or should the
mayor wait
what the national Depart¬
ment of Labor will do, or the Na¬

to

see

do,

or

what the President of the

United States will
As

seen

do?

by some, we must make

choice:

Turn the

to

matter

turn

or

back

everything

Washington. Few would

say

that

the

right to dominate this field,

Washington has

earned

although certain questions of in¬

of the desperate anarchical situa¬

USA

tion of the middle 1930's and

is

13 The

has

supported

14 In

the

by

a

ica,"

1946,

"Industrial

Chamber' of

especially

Relations

Commerce

section

on

of

in
the

Amer¬

USA,

"Monopolistic

Practices."




of

Commerce

of

the consideration of

Sweden

reliance

and

Great

the

State

Britain,

foreign trade

on

natural

because
12 See:

Chamber

urged

laws.

heavy

strongly

billion.

$168.6

prices, for
to have ap¬

Food

the time being, appear

proximately reached their maxi¬
mum, and a decline in the total
expenditures on food during the
next six months is more thant

such

year

as

manufacturing

was only
greater than in 1939—

6%

has created the foundation of the

less than half the-normaL tise in.

efficiency.

:

v

Considering the many strikes
the unsatisfactory efficiency

the economy
fact that in

is indicated by the

the first half of 1946

about: 57*4 %; of! the ^hct-butput tof
private industry consisted of non¬
durable

consumer

1946

was

at the same rate as 1941

highest

peacetime rate

record. Few businessmen

omists

would

that .such

have

on

or econ¬

dared

predict

ahigh rate of output

could have i been achieved -in the
face of the steel

strike,

the coal

goods

as

com¬

economy was slowly emerg¬
ing from the difficulties of con¬
version, the stock market experi¬
enced a dramatic slump. Through¬

What will

construction industries.

happen when the boom in non-

'

durables subsides?
Sooner

$r

/

/

theire

latel*

is bound

tremendous boom in dur¬

to be

a

able

consumer

goods, ' industrial

capital, and construction; The
cumulated needs

enormous—

are

non¬

far greater than is generally reaK
during the first ized. Thus far little
progress baS
quarter of 1946, 54.7%; and during
been made in' catching up/with
he second quarter, 53.1 %,
this backlog of demand. In fact;
At the same: time that the pro¬
by the middle of 1946, the physical
durable

goods;

^

duction

and

buying of non-dur¬ output of
booming, the goods < of

able goods has been

proportion of output and expendi¬
tures going into durable consumer
goods, '/ industrial
capital,
and

durable manufactured
all kinds ; (consumet
'goods and' .industrial equipment)
was/only ui» tolevell Of 1941; /
when! the purchasing power
.

dividual incomes

20% less.

less in the second quarter

than

in the first quarter.

of 1946
A few

non-durable goods will be scarce
until next summer or even next

out the United States and all over

Fall, but

the world

appear

after

taxes

was

Will the boom in dur¬

ables/':^ industrial^ Capital//hhd:
housingf begin v sooh enough and
.

increase'fast enough to prevent aif
economic recession

the boom in /

as

non-durables peters out? In other
words; - will" -there5'' be • a smooth
trdrifcftibh fiMn; th^^
iu'honA/
durables to the boom in

capital,- and. housing? - Z
^^Bbring theremarhder of l946"a|;
.

.

least the transition from the boom'

in-; hon-durables

c

tor the. boom in

durable^: industrial/ capital,! and

hbusing': is^^ /Rkely/Zfo /lproiceed /
smoothly/ There are several; rea¬
sons; for this; belief
...

.

-f

'

•.

v

1/
*••."•••

»

.

•

•"

/
i1-,'

-cl/ The' expansion inT the* eiifput;
of durable goods, capital goods,
and housing is well under way*
Expenditures on these three cate¬

gories

when adjusted 'for sea¬
changes)
rose
from/ an

sonalannual

of

rate

$24.0

billion

in

the first quarter of 1946 to $29.5
billion-in the second quarter, and

$36.0 billion in the third quaKer.
Material shortages may prevent full
execution of these plans, but actual

expenditures will undoubtedly ex¬
ceed the second quarter. Short¬
ages of building materials have
led to

some

decline in the number

of new residences

put
such

of
as

started, but out¬
critical materials,
nails, soil pipe, bath tubs,
many

shortages will dis¬ sinks, and furnaces, was much
Spring.
The case of
larger in August than in July or
foods deserves special notice. Dur¬
June. Hence the actual production
nessman/and banker, "Is there ing the first quarter of 1946 peo¬ of
housing will continue to rise.
anything wrong with the Amer¬ ple were spending about 31.4% of The greatest gains are in the
ican economy? Dare we go ahead their incomes after taxes on food
production and buying of durable
—an annual rate of about $44 bil¬
on the assumption that the United
consumer
goods.
Shipments of
States will remain prosperous?" lion for food at retail. In 1940, radios in
August were 31% above
real
incomes
after
taxes
The London "Economist" voices when
July; of electric ranges, 16%; elec¬
these doubts by suggesting that were considerably less than in tric
irons, 17 %; vacuum cleaners,
"building the structure / of the 1946, people were spending only 11%;
washing machines,,, 13%.
world's economic and financial ar¬ 27.3% of their incomes after taxes Automobile
production was up
rangements on the assumption of on food. In 1941, the percentage 10% above July and moderate
was 26.1;
As durable' goods < be<American stability" might be
further
improvement
is
likely.
come available, the proportion of
"mistake."
W
Purchases / of durable / consumer
incomes after taxes spent on food
Let us face this question which
goods rose from $12.0 billion in
is bound to drop.
Indeed, it is the second quarter to
is raised by the London "Econo¬
$15.0 billion
mist" and which is on the mind likely to go down to the prewar in the third quarter.
proportions and probably below—
of every American business man
2. There is still a large accumu¬
The actual
and ask ourselves "How stable is say possibly to 25%.
lated
demand, for
non-durable
volume of expenditures on food
the American economy?"
will depend, of course, upon the goods which has not been satis¬
fied.
Furthermore, expansion. of
extent to which the boom in dur¬
/ II
employment and payrolls in the
During the last year the United ables, industrial capital, and hous¬ manufacture of durable
goods and
ing raises consumer incomes after
States has been going through a
in construction will tend to sus¬
taxes. If incomes after taxes were
boom based on the production anc
tain the demand for non-durable
to rise from an annual rate of $142
buying of non-durable consumer
and
may
actually bring
billion a year (the rate of the sec¬ goods
goods. It is an unusual kind of a
about an increase in that demand.
boom and could probably occur ond quarter of 1946) to $15-3.2 bil¬
In fact, it is usually characteristic
lion a year (a rise of 10%) and if
only after a prolonged war. The
of business expansions that the
return of 10 million men and wo¬ the proportion soent on food were
to drop to 26.1% (the proportion rising output of durable goods and
men to civilian life and the fact
capital goods induces an expan¬
that the non-military population of 1941),
total expenditures on sion in
the production of non-dur¬
had for four years been limited food would drop from an annual ables.
the

question has
leapt to the mind of every busi¬
same

discipline
on
foreign markets

labor

the

serves

as

demands

must

be

Slate

and

pene¬

trated.
15 The

authority
cause

division

raises

the latter is

between
no
a

serious

problem

local

be¬

creature of the former.

many

by

.

to

about 85%

sumption

of

of its prewar

non-durable

con¬

goods

rate

of $44.0 billion to

$40.8 bil¬

lion. Put in another way, in order

.

durables/

industrial

*

the

IV

'

buying - of
non-durable
goods cannot be counted on to
make possible the present level of
employment
for
many
months
longer.
The maintenance of a
high level of employment must
soon receive more help from the
durable goods, capital goods and

,

a

period. It is necessary to say that
the Minnesota labor law
grew out

law

bad strike

-

over

steel

a

1945. The disturbed conditions af¬ boom. The unusual
importance of
fected
the efficiency of labor/ non-durable consumergoods in

,,

their

Minnesota

Economy?

/; -v

the labor

expenditures on food as
prevailed during the first quarter
of-1946, if the same fraction of o
incomes were spent on food as in
1941, incomes after taxes would
nave to rise to the annual rate of

|/f;

strike, the copper
strike, the elec¬
trical equipment industry strike,
it is virtually impossible to count
housing has * been > abnormally
the railroad : strike,
the: many smalL r; Output vof durable
them all) none of these
;/COnf
govern¬
strikes in farm equipment, and sumer
ments has complete feelings of re¬
[goods, (though • well * above
the hundreds of strikes in the au¬
prewar: in
dollar amounts* / was
sponsibility for effectuating indus¬
tomobile industry.
Equally re¬ only 8.1% of the output of private
trial peace and hone of them has
markable under the circumstances
industry in the first quarter of
complete or final authority over
has been the record of profits. JL946 and 9.1 % in the second
all phases of
quar¬
any particular dis¬
Among 301 manufacturing and ter ; itt comparison: with 1 LI %hin
pute.^
1
"
y 1 •„-^~;.r -i'r--/.•0;
mining companies during the first 1940.- The proportion of consumer
v One! of the
ihost elemental prop¬ half of
4946; -profits were only incomes after taxes spent- on dur¬
ositions in any management nec¬
15.3% below/1945. • When; these able goods was
only 7.7% in the
essary to gain any objective is the
companies are divided into" two first1 quarter bf
;T940/arid'8;5%/in
integration of responsibility. If in
groups,- those
in
industries
in the second quarter in comparison
a publishing venture the
writers, which there were few strikes and with 11.0% in 1940. The
propor¬
the designers, the
typesetters, the ! those ? in industries -which- ;were tion of the total product of
private
proof readers,1 the pressman: and ;
hard;hit/by/strifcesj .--aconspicuous industry going into industrial con¬
iall other necessary groups each
difference appears. The 204 com¬ struction and
equipment was only
«had their own ideas as to .the
pur¬ panies /in industries which were 9.7% in the first half of 1946 in
pose /of the; venture, as. to
the relatively free from/strikes ; in¬ comparison with 15.0% in 1929
methods of attaining the object¬
creased
their
profitsby 25.9 % and 12.5% in 1940. The proportion
ive- and
^thepH &asi no/effective over 1945; 97 companies in indus- of incomes after taxes- spent on
coordination and .managerial con¬ i tries/ in which strikes - were-* nu* residential
construction in the sec¬
trol,;: /the i venturife: would: end /in merous suffered a 70 % drop in ond
quarter of 1946 was only 2.5%
chaos and bankruptcy. Qur han
in comparison with 4.5% in 1929
profits.
! dlrng of labor relations
through this
/
Today, fourteen months after and 3.3% in 1940/
division of responsibility and au¬
v-kV■;-■?>' .:■>vV'
V-J Day, civilian employment is
thority has also : ended in- chaos
III
at record-breaking highs and in¬
and is likely to continue in chaos
The boom in non-durable- con¬
dustrial production; though still
as long as both federal and state
suffering from strikes and from sumer goods will not last indefigovernments ■■have some segment
shortage of raw materials and nitely. In fact the boom already
of responsibility and authority.
parts largely caused by the strikes shows signs of subsiding, for ex¬
When
a
labor
dispute takes of last spring, is about 10% above penditures on non-durables, when
place in a specific plant in a spe¬ 1941 and growing.
And yet, as adjusted for seasonal, were slightly
federal

so

absolute vol- x

same

of

ume

The

—the

•

tothe states

the

ly preserved and fought for
whenever they seem in danger*."

of

a

ing the steel workers to lay down

tools,

;

their incomes after taxes for

Philip

law,

rule of the states is scrupulous¬

national

to maintain the

-

been surprisingly good. Industrial
production during the first half of

as

tional Labor Relations Board will

munity.

the individual home

(Continued from first page)

-

clearly made the problem worse.
It has been a dismal failure and

as

v,

tions of power we amend the
Na.-I
tlonei Labor Relations Act so as
t©

long

In

,4■

chas; been proposed. that, in.
Older

just

so

1940, individuals spent 47.1%

ing

think.

field

a

,

of labor the production record has

the

the entrance of the national gov¬
the

the

natural disciplin¬

act

government, state government and

becoming convinced that

ernment: into

legisla^

pared with only 51.1% in 1940.

necessary, under
divided
authority

growing number of "careful
disinterested students of the prob¬

legislation: was!

of

from

and

is

A

are

get
industries

(6) If government intervention

Fascism?

we

safe

are

in/

below.1*, /

Germany and

than

-We-

must

except

danger of any such departure
from the principles on which
this country was founded

American

States to

job-making

was

Fascism, Who and What

it that drove

never

to public

this

If

our

states

ary force—a force which cannot
operate fully under our present
system as shown in the next point

fifiilly driven a thoroughly democratically-minded President into
tiffing extreme action. His op¬
ponents

in

our

How Stable Is The

about

hold

govern-

of

destroyed,

minor matters

likely.

which in

would

had

movement

can

concern

competition among

.

The

much

as

J

,

the

Paul, Minnesota or Madison,
Wisconsin, if the dispute occurs
in' either of these States. The

going to the causes however) in
May
1946
during the .railway

lem

at

St.

conclusion, whether
not, so far as the-pres¬

Indeed, we came close to doing
something of the sort (without

Strike.

terms which make

on

be

per¬

exist

officials sitting in Washington as
must be to officials
sitting in

and

-

never

centralized

it

to

ent concentrations of labor
power
are concerned.12
'

was

can

enterprise unprofitable

concen-

tf&tions of private power systems
more powerful than itself. Sooner
Of

interest

settled

tion.

some years

government. The individual

Board is just another dis¬
pute. Whether the dispute is pro¬
longed or whether the dispute is

Our traditions against
monopoly
ness

be

for

tions

tilne?

af§

State

a

concern

the national level. A labor dispute
before the National Labor Rela¬

in

and

—

many

well-being. This close

sonal

we

anti-com¬

it

close intimate

a

\

-

"Now, to bring about

the welare of their workers* their
business enterprise and the gen¬

an

detriment

generally,
apply the

including

The people within

have

threatening our national secur¬
destroying 'k efficiency and

first

by obligarchy masquer¬
ading as democracy, it is funda¬
mentally essential that practi¬
cally all authority and control

in the ranks of iabor.uJ

ity*

sovereignty

ment

nearly all groups,

If the modern labor movement

com¬

more

President Roosevelt
ago said:

(Continued from pagi 1955)
passed
the
death
these combines.

we

interstate

corrections

Frustrated and Perverted
Ulatlon,

with

would still require national

merce

Thursday, October 17, 1946

3.

The

goods

prices of most durable
lower .in relation to

are

Volume 164■ Number 4534

'

and in relation to con¬
incomes than the
price of
most non-durable
goods, especial¬
prewar

sumer

THE COMMERCIAL & FINANCIAL CHRONICLE

of

dropping,

penalty overtime is reflected in

new equipment is being
nsialled, shortages of materials
slowly becoming less bother¬
some, and the will-to-wbrk' (never

the drop in average weekly hours
in 'manufacturing
from 44.0 in

ly food products and apparel/
4. A large part of the
demand

Most

for durable
goods, industrial cap¬

the

July,

1945 to 40.0 in- July,
the

of

overtime

are

1946.

was

in

as

bad

the whole

on

the

as

com¬

durable

goods / industry. plaints of a few employers seemed
ital, and housing is very urgent Hence
average
hourly earnings to indicate) is returning to norand will express itself in
the face in
these
industries
rose
only
of formidable obstacles.
/ The analysis of the first round
2.8% between July, 1945 and June,
5.
The
demand for
durable 1946,; in contrast to the rise of of wage increases points to the
goods, industrial capital, and hous¬ 11.2%
in the manufacture of non¬ additional conclusion that a sec¬
ing is financed to a large extent durable
ond roundLs likely: eventually to
goods.
1
•
by credit—to a much larger ex¬
A second fact about the first be deflationary. The first round
tent than is the demand for
nonround of wage increases is that it was based upon bargaining power
durables. The use of credit
adds, came at a time when employers rather than upon changes in the
of course,.- to the ultimate
insta¬ were hindered in keeping down
long-run relationship between the
bility of a boom based upon the labor costs by the
necessity of ab¬ demand for and the supply of dif¬
production and buying of durable
sorbing large numbers of new ferent types of labor. ^- A second
goods,, industrial
capital,, and workers and large numbers of old round of wage increases is likely

bousing, but

sition

from

ables to

it facilitates the tran¬
a
boom in non-dur¬

boom based

a

the out¬

on

What
concede

fSIS

about 1947?
that1 (there

One

is

must

f good

a

chance that. some time between
spring and fall, the boom in dur¬
ables, industrial equipment, and

housing,

though

even

well

ad¬

vanced, will be interrupted by a
recession/' The economy has al¬
ready-developed several weak
spots and some- of these will' be
more serious by
spring. Let us
examine several of them/
K

Apparel

prices

Incomes

-

too

are

and

buying habits.
been-

prices; and

food

high in relation
■

people's

to

long-run
This has already
,

^^tediliTOs iSpoipfc/iqf

weakness/will, gradually become
serious as the urgent
pentdemand for apparel (and even
types, of food) is met.
2, Agricultural prices are far

piore

up

some

above the level which is
justified
by long-run. supply and demand.
At the end of
July,..1946, when
,

Wholesale prices >in general were
24.1% above 1926 and 65.5% above

August,-1939, the prices

of. farm

products

were 57.3%
above 1926
158.8%- above August, 1939.
SoopexLon later the .prices of agri¬
cultural products will
drop sub¬

and

stantially. ; This .•decline^will
when

agricultural

^various

war-torn

output

occur

in

countries

proaches^p0re-wan levels.-J
v

3. f Construction costs

and,
is

the
ap¬

^

are

even worse, uncertain.

no

-

high

There

satisfactory measure" of

the

Increase in the cost of construc¬
tion ©yerpr£%a^ but die rise
on

the

average

in the neighborhood

of 60%.

Material shortages make
duration of any construction
job quite unpredictable.- This in¬
troduces a major
the

uncertainty into

costs.
and

The

demand for housing
industrial
construction
is

enormous; but the demand which
will pay present prices or which

Will
is

accept present uncertainties
a small fraction of the

only

total.
4* A second round of
wage in¬
creases is about to begin.
The
two unions in the

industry

meat-packing

are

ready to press wage
as soon as
hogs and cat¬
begin flowing into market and

demands
tle

the

United

Automobile

Workers

have re-opened the
Chrysler con¬
tract.
Contracts in steel will be
re-opened

during the winter. No
knows how much the
wage
increases in the second
round will

one

be, but they may
10 cents an hour.

be as high

as

Some business

men and econ¬
omists thihk that a second round
of wage, increases will be infla¬
tionary; some think that it will be
,

deflationary;
will be first

some

think

inflationary

that

it

and then

deflationary.

Before
examining
divergent views let us note
briefly several facts about the first
round of
wage increases. One im¬
these

portant fact is that business
ceeded

remarkably well
venting the first round

increases

from

in
of

suc¬

pre¬

wage

1

raising average
earnings. Between July,
June,
1946,
average
hourly earnings in manufacturing

hourly
1945

rose
was

sure

and

4.5%.

This

small

made possible in

increase

large

by the elimination

of

to

go

in

the

main

the

to

peo¬

income

current

the

from

purchase of food and apparel to
the purchase of durables and put
the prices of apparel and food un¬
der early pressure. - It is especially
important promptly to force down
rices

food

before

precipitous

a

drop/occurs,/;/^
2.

and

re¬

tailers

reduce the prices of ap¬
parel before consumer resistence
starts—say by January 1947. This
is a difficult policy to get executed
because no-enterprise is greatly
interested in the effect of its price
policies upon the economy as a
whole.

Both

manufacturers

under

way.

the

among

file, is dropping sharply,
and1 union leaders are becoming
anxious

out

to

credit with

gain

and

rank

file

for

strikes. / If

of

the
them

keeping
a

new

agree¬

can
be
negotiated in the
industry without a strike and
with goodwill on both sides, it
may well be a symbol of progress

steel

in

industrial relations which will

influence

retailers, however, have an inter¬
est
in not
getting caught with

em¬

substan¬

contribute

tially to business confidence.

J/

-

It

VII

clear

seems

1947

will

one

high-cost inventories.

unions and

many

and

ployers

and

who
participated
in /the
years. The ple
3. Confine wage increases dur¬
movements in the labor first
round,
and
the
larg¬ ing the next
year in the main to.
during the last twelve est advances will go as a rule to
workers who received no wage
months are not generally appreci¬
;he people who received the larg¬
increases during the first round or
ated.
About
5
million
people est raises in the. first round. Hence
who received only small advances
withdrew from the labor market, a second round of wage increases
A few exceptions will need to be
but civilian employment increased will
help to magnify the malad¬ made to this
'general stole* in'order
by 4.8 million. This increase oc- justments in the wage structure

involving

ties.
to
ous

be

Of

ones

/

several

the

two

the

year

and

one

uncertain¬

great

the

stability

the

that

critical

a

threats

most

seri¬

inevitable

drop
prices of farm products and
of a second round /
large and numerous strikes. If
are

in the

the possibility
of

the second

danger

be avpided,

can

v

it should be possible by

wise sup¬
despite great drops in em¬ created by the first round, and
tions or industries where they are plementary policies to keep the
ployment
in
shipbuilding,
air¬ •;hus to create a structure
output of durable consumer goods,
of
needed, but in general it is a
plane and automobile industries. costs and prices which will hinder
industrial
capital,
and
housing
sound rule. This also is a diffi¬
In view of the great shifts of em¬
rade between the recipients of
high enough to prevent the econ¬
cult policy to get' executed be¬
ployment/the record of industry the wage raises (or their em¬ cause
the unions which will be omy as a whole from being sub-/
in maintaining labor
efficiency at ployers) and the rest of the com¬
stantially disturbed by the drop
pressing for wage advances' will
the - same
levels * as
in agricultural prices,
munity. These maladjustments in not be interested in the
December,
/.
;
- /
general
1945, must be regarded as good.
the cost and price structures will
The difficulties and uncertain¬
effects of their demands. The un¬
A third important Tact about the do little harm so
ties of 1947, however, should not
long as the boom ions,
however, do have an interest
first round of wage increases is is
strong, but they will show up as (of which some of them are well blind us to the fact that the prob¬
that business was
remarkably suc¬ a serious weakness in the economy aware and which others
do not lem of maintaining stability in its
cessful in raising prices to offset when
demand begins to slacken.
realize) in the long-run competi¬ most difficult form will not occur
rising wages. Between July, 1945
5. Industrial relations are better
tive position of their employers next /spring or-next summer but
and June, 1946, wholesale
prices than they were last spring but and industries.
several years hence.
It will be
Fortunately pres¬
of manufactured goods, rose
5.4%, they, are stUl> bad and; :may; be- sure
/for -higher+wages from the created by the boom in durables*
or
slightly more than the rise in cpme worse. A new round of rank and file is
industrial / capital,
and housing.
considerably les£
hourly, earnings. Between June, large-strikes in the: steel industry*
Plans for meeting the problem >
than a year ago.
Unfortuhately
1946;^d Luiy 27/1946; there^wasLi automobile
should be made far in advance.
industry,- or electrical however, V inter-union
rivalries
further substantial rise rin
prices. equipment, industry would /have rather than the
So enbrmpus are the / needs for
long-run economic
Manufactured goods, for example, far more serious effects upon the
interest of union members still is durable/goods,{ industrial /capital* /
rose
11.2%.; This increase, how¬ economy after the boom in non¬
the dominant influence in shaping and housing, that a boom based on
ever, was very unevenly distrib¬ durable
goods has begun to sub¬ the wage
policies of some unions, these needs is bound to be a large
uted, It was
to

curred

attract

into

workers

occupa¬

,

-

.

greatest in the case
of food products. Metal
and metal
products rose'3.5%, building ma¬
terials

side

3.8%, miscellaneous prod¬

ucts 4.0%.

wage increases.

A

i

•

of

last

when the

Z

before

round of

v.

pervasive uncertainty could be

fourth

rivalryi; is .grow* one and, to-last for several years.
It may be financed ^
./I.
v / ^ - •//;/*
important of all, main¬ tent by the expansion: of' eredit

and inter-union

in&

in full

was

;C,.:'

•

4? Most

-

tain favorable conditions for high/
level

production of durable

con¬

sumer

goods, capital equipment,
hnd housing.. The demand is there

sion, Although the' record bf the ^-far greater * than/ ever in- the
past yearT shows that the compa¬ country's history. If conditions of
nies which 'escaped strikes ate production enable
the automobile
hbib; to make reasonably satisfac¬ industry to make 5 million -cars
tory profits, it also shows that no next: year vand other • makers- of
enterprise cari-be siire ibf -a -satis¬ durable consumer goods and cap¬
factory outlook for profits.; This ital goods to produce in propor¬

factured goods, by and
large, are
higher relative to average hourly

beginning of the first

strikes

many business enterprises to cur¬
tail or postpone plans for expan¬

the

wholesale : price for textile
prod¬
ucts/was >6.5% "above JuneL, To¬
day the prices of finished manu¬

earnings,/thaniLheyl'were

the

last spring

6; The fear of strikes mdy cause

increase occurred in
August rather
than July.

the

did

and

swing.

In textiles, most of the

LDn^Aqgust V31

than

winter

boom in non-durables

fact about* the first
round of wage increases is that it

a

serious impediment to the execu¬

.

tion; of many; business plans.-'

was
very uneven and did not in¬
clude
every
one.
A survey of

summer

more

less

or

tion

and

the

if

housing industry

| cah absorb 4% of individuals'

I comes:

SupposeLhat next Spring

or next
simultane

in-

after taxes (compared with
4,5.% jp,/1929 and 2.5 % in the sec-1
ond quarter of

1946), the country

bnd it may give rise /to burden-*
debts; It may raise construc¬
tion costs to a ^point even further
out/ of' line'' with incomes and
prices. The problem of maintain-.
some

Ing stability: will
acute
years

reach its tfiost
form three, four, • ; or fivp
hence, after the most urgent

accumulated

demand

for durable

Cbhsumer gbods," industrial capita!//
and housing has been met
It
would

be folly to wait until the
begins to subside before
making plans to meet the prob¬

boom

-

-

lems of this second and more dif¬
ficult transition. Success in main¬

6,600; manufacturing
and
nonously, business enterprises cease should be able to weather a sub¬ taining high employment and pro¬
duction at that time will depend
manufacturing enterprises by the increasing
inventories, consumers stantial drop in the prices of farm
IL S, Bureau -of Labor Statistics
revolt against high prices Of ap¬ products without seriousr trouble; upon the? foresight and wisdom
shows
that between V-J Day and

May

1,

1946,

in

parel and food, and a large slide
occurs in the
prices of farm prod¬
ucts.
Suppose that this happens
when employment and payrolls in

manufacturing

21.3% of the workers received no
general increases in wage rates at
all, 15.2% received increases of
less than 10 cents an hour, and

the

durable

goods industries and

in construction are low

the

as

re¬

25.5% received increases of I8V2 sult of strikes in
steel, automotive
cents or more per hour; in nonarts, and other industries. Such a
manufacturing 59.2% received no conj unction of unfavorable events
general increase, 25.2% received would
produce a sharp recession
increases of less than 10 cents

which

an

hour, and only 1.4% received 18%
cents of

would

tinue for

undoubtedly

The
country
would
be
un¬
wise, however, to accept a reces¬

earnings. They indicate,
for
example, little change of rates
in retailing, an
industry in which
the rise in hourly earnings
greatly

sion

exceeded the rise in manufactur¬

fied

ing. Nevertheless, there
doubt

that

failed

millions

can

of

be

no

workers

with

and

far

greater

pur¬

chasing

power in the hands of far
people than ever before, the
countrys ought to be able to go
through the inevitable readjust¬

participate in the first
of wage increases and that

the variation in the increases
considerable. s
:

ment in the prices of agricultural
products and of some finished

was

This analysis of the effects of
the first round of wage increases
points to the conclusion that the

general recession
—particularly if the drop in the
prices of farm commodities comes

price increases required by

about next

ond

round

would

be

of

wage

a

goods without

sec¬

is

demand

higher relative to labor costs

than

a

that

year

ago.

output

Another

is

ucts
can

gaining in

'

turnover

is

after

has

been

met.

But

the

plan to pass through the
drop in the prices of farm prod¬

unless strikes again produce
per¬
vasive material shortages, At
any
rate new employees are

.labor

or summer

It should

penalty

,experience,

spring

country should, not trust to luck.

reason

man-hour

per

a

the boom in durables, industrial
capital, and housing has had time
to develop and before the
urgent

advances

considerably less than

the rise in wages. One reason for
this conclusion is that most
prices
are

and

industrial

goods,

con¬

capital,

housing would sustain a high
for
non-durables>'■ and

demand
food.

It would be

particularly ef¬
preserving good prices
for meat and dairy products.
High
output, of
automobiles,
fective

other

in

consumer

durables, indus¬
trial capital, and housing requires
abundant and well-balanced sup¬
plies of materials and parts. No

I

without

a

recession.

What

it do?

1. Discourage the
now

necessary

industrial peace.

„

more

to

round

sumer

condition, however, is
The unions and
next
year
as
inevitable. employers may not know it,: but
With an unprecedented demand in the durable
goods industries
for durable goods, industrial cap¬
they ' will
be bargaining/ not
ital, and housing still to be satis¬ merely over the terms of their
.

to reflect several important influ¬
on

High production: of durable

single course of action will assure
that this requirement is met. One

VI

riously defective in that they fail
ences

con¬

months.

some

The figures of the
Bureau of Labor Statistics are se¬
more.

likely to improve substantially—




is

rank and

large,

meas-

overtime work and to a small
ex¬
tent by the reduction in second
and third shifts. The elimination

fact

ment

manufacturers

Let

prospect—in

Eagerness for strikes

markets

put of these, other goods.
v

workers who had been away from
their gobs for several

divert

1957

in

use

the purchase

consumer

goods.

of credit

of durable
This would help

labor

own'

contracts, • but

the
prosperity of the country. Another

two
or

million

-

even

would

a

be

especially

automobile

three-million
a

over

year,

car

year,

disaster

national

the year m
which the inevitable drop in agri¬
cultural prices is most likely to
occur.
An output of well above
four
to

during

million

keep

cars

the

will

the

strike

record

able

goods

industries

first

half

third

as

be

of

bad

in

is

1947
as

the

needec

stable.

economy

the

If

dur¬

during the
even

first

one-

half

of

1946, the country may as well
resign itself to a severe recession
before the

end

of

1947.

Particu¬

larly disastrous, of course, would
be another strike in the steel in¬

dustry.
;
Fortunately a turn for the bet¬
in' industrial relations is in

with which

the credit policies of
business and the fiscal policies of
government are managed during
the boom and upon the extent to

which business
new

new

develop

concerns

investment opportunities and
demands for goods through!

technological research and skillful

marketing policies.

MacMillen Joins Standards
Frank

MacMillen,

newspaper

staff of

has

man,

New York:
joined the

the American

Association

Standards

Director of

as

Infor¬

mation, P, G. Agnewj Vice-Prep?,

dent and Secretary of the Associa?.
tion, announced on Oct. 4. Mr.

MacMillen, who- resigned front
the staff of the Hew, York ."Times"..
to take his

present position, pre/

viously

connected for 10

was

with the Associated Press
nancial News

pacity

he

first

in

came

He has written

on

contact

Association^

news

articles

stories and.

the develop¬

standards, not only for

of

ment

Fi¬

Editor, in which Ca¬

with the work of the

feature

years

as

the Associated Press but for the
"Wall Street Journal" and "News¬
week"

magazine,

where he was

Assistant Editor in charge of bus¬
iness

news.

Association
of all

the

Standards

will be

in charge

With
he

publicity for general news¬

.

ter

papers,

radio.

trade
1

the

and

papers,
' "

/

:

-

'

*

>

1958

THE COMMERCIAL

retain

The Road to
cial

Wages have been radically In-,
creased without any increase in
production -and have arbitrarily
raised

costs

to

point

a

where

Price

by the radical left and the labor
unions, took the easier course of
an economy of unbalanced budg¬
ets and government deficits which
naturally
enough,
inflated
the
country's economy and vastly-in¬
creased the already heavy govern¬
ment debt.
By 1920 the cost of
living had risen eight times what
it had been in 1914.

of them may be con¬
ceived to be, are strangling pro¬
duction
and
developing
black
The Wagner

scale.

enormous

an

on

Act, compelling one¬
bargaining has

collective

sided

After

World War I instead pf
living
under
an
economy
of
thrift, the Italian Government, led
;

some

markets

industry

for

,

a

ment regulations, however, neces¬
sary

gov¬

agriculture*; inflation and
regimentation — all
p£
which
which chaos to Italy.

other, govern¬

and

planning

so¬

and

our

control

security without work,

ernment

purchasing pub¬
lic will be compelled to with¬
draw from the market. It will
goon
be found that labor can
price itself out of the market.
large part of

demands for

largely been superseded by arbi¬
Tinder a weak government, labor
trary control of wages and work¬
ing
conditions.
Let
industrial leaders who gained : power were
leadership say now that these those who most encouraged vio¬
causes
will quickly bring about lence and revolution.
There then
depressions and unemployment.
Let industry do what it can to
correct public opinion so that it
will hot be blamed for the effects.

One of the aims of the Confed¬

reach

t

similar

confusion

eration of Labor, forced through
the Chamber of Deputies, insti¬

something

do

and
unless > we
about it, we can

a

tuted

state of
which

that

to

that the government failed

ppwer
to use.

These things strike &t the very
heart of our economic existence,

trade

Board

graded state. What will our tech-

share

advancements

nological
if

lose

we

avail us
democratic way of

our

union

supervision in

the factories and set up a

brought Europe to its present de¬

Directors
in the

has

workers'

^
of the

management

companies.

life?

similar

A

recently

been

objective

by

declared

Lewi?

large unions in the United
States.
'
'
'

Nov, 4,

Labor union leaders and social¬

many

Labpr

of

Secretary

Sehwellenbach warned

on

1945, "I know how impatient the ists in Italy, including'the indi¬
people are when a government vidual
workers,
were
pushed
fails to' suppress strikes,; 'X can-- further and further to the left by
not forget, however, that it was the well-organized and directed
this same impatience with strikes
Communists who, as is now well
which caused the Italian people known, create an opportunity to
to take their first step along the
J usurp power by fostering conTotalitarian Road which led them fusion wherever there is social

to discontent and despair,"

.

unrest.

Mr, Sehwellenbach could have
been more specific. He might
have said that it was the final
exasperation of the Italian people

Unemploy¬

a new high.
Black
markets, lawlessness, violence,
and even murder were rampant in

ment reached

city streets and country side. Italy

ripe for

Dictator,

a

were

at

one

time

i

whole

the

which
first
steered the Italians along the Topeople

the Third International of Soviet

j Russia and officially summoned

The last 25 years

talitarian Road.

the proletariat to revolution.

In

|n Europe have shown that
Fas-[April, 1920, plans for sovietizing
-5—1
<*
T"1
cism has developed where labor all Italy were made.
unions
and
left
wingers■ have
Workers seized factories and
taken extreme positions and have
dispossessed
owners
and
man¬
not recognized their responsibility
agers.
Large estates were taken
to public interest.
over and divided up.
Industry,
Our President, too, recognizes agriculture, and services came to
the" danger^ to our own country^ a virtual standstill. Confusion and
On May 24, 1946, when discussing anarchy reigned.
The need in Italy, as in the
the threatened railway strike, he
warned the nation, "The crisis of United
States
today,
was
for
Pearl Harbor
action by

a

the result of the

was

foreign

The

enemy.

crisis tonight is caused by a group
of

men

who

,

>.

as

within

our

own

country

place their private interests
the

above

welfare

of

the

nation.

The government is challenged
our history.
It must
the challenge or confess its

seldom in

meet

impotence..

;

.

The

warnings of public figures
The lessons of
both ancient and modern history
are plain.
Men want law, order,
are

long overdue.

and production.
If they
■can't get these things in a respon¬
sible, free society, they turn to a
peace,

Dictator to gel them for them.;
•».

y

•

.

-A'"-...

"...

■"*:

!.-•

Take Italy as an example;

w

The

-parallel between the causes and
.acceptance of Fascism in Italy and
the causes and growing ^ accept¬
ance of totalitarian government in
our own country is startling.
•

In

reviewing the sequence of
which brought about the

events

order;
stabilization
of
wages,
costs, and prices; a steady and
continuous production and a bal¬
anced budget. Instead, the Unions,
Socialists

and

Communists

had

taken over,

shut down the plants,
got—by threat of
further violence—more ; pay
for
less work,
a
directive share in
management
and
greatly
in¬
demanded

and

creased government expenditures.
In Italy during those tumultu¬
ous

postwar

tinued

to

years

production

decrease.

Lower

con¬

pro¬

duction along with higher wages

worker

per

made

goods

scarce,

raised costs and prices.

The re¬
sult—a boomerang of unemploy¬
ment and higher cost of living-

hit

the very people who had ex¬

pected to benefit the most.
•

The workers had-forced

price

-

is

what is

true

Nazis.

or

of the

leaders

true of the rank and

even more

file

pf the movement."

There is

spiral similar to the infla¬

Thus

it

came

about

for months at

a

that Italy
time, in a

triumph and disaster of Fascism
in Italy, we can see the process

state of almost continuous indus¬

why which the people of Italy lost
their economic independence and

services

their freedom.
are

Let

us

see

if

we

not in danger of making the

mistakes, of allowing our¬
selves to be propelled along the
same

same

that

"primrose
is

lined

path"—the

with

the

road

wreckage

of government by pressure groups,

decreased

production,




less

work

trial

pre

their

freedom,

disastrous wars; until the sands of
Africa; the waters of the Medi¬

her

their country
was
and occupied by for¬

until

sons;

fought

blood of

the

over

old saying that any¬

eign

armies,

lost.

Like

Mussolini died

Was all this necessary?

confused

justice

appeasing

and preserve
Organized

freedom.
had used

their

A weak,

government
order and

individual
minorities

power, to

coerce

the

has something the matter with his

inevitable sequence.

an

under 21 who isn't

one

that anyone over 31
Socialist has something

and
is

who

Socialist

a

a

the matter with his head.

Call it

experience instead of age and you
have the

explanation.,

Totalitarianism—Fascism, Com¬
munism, Socialism, or what you
will—inevitably results in dicta¬
torship because only through dic¬
tatorship can these theories of
economic regimentation be made
to work.
Dictatorship is the com¬
mon
denominator
of
Fascism,
Communism, and Socialism and is
fatal

to

democratic

the

process

and to human rights.
:

Let

out in

ed

Socialism work¬

1921, and how quickly and vio¬
lently Socialism degenerated into

Fascism,

•

•

this crisis a veryshrewd
political leader sensed an urgent
demand
for
order
by a
con¬

and

whoever

civil
were

did

not

tumult.

Public

paralyzed.'
know

I'ascio di Combattimento.

shirts and other groups

well

And
the

organized

own

Black-

developed

strong-arm

But Mussolini outslugged

squads.

all the sluggers.
Mussolini

achieved power

soon

and

responsibility, renounced his
demagogic realism and stood for
Nationalization, Law and Order.
With the backing of a large part
the people
and his armed

of

Blackshirts, he marched on Rome
and took over the government.
The people of Italy found them¬
under a dictatorship be¬

selves
cause

democratic

a

government

had failed to maintain law, order
and justice.
The dictatorship by
the

proletariat

had

become,

as

always, a dictatorship of the pro¬
letariat.
The

free

was

had

horseback

on

man

to restore order and Rome

come

no more.

factor

Another

which

caused

the Italian counter-revolution was
that

a

committee of leaders of the

Socialist Labor Party had
Russia

found

and

visited

the revolution

Can It Happen Here?

a

of hunger, pestilence

land

gallows "
If revolution
meant reducing Italy to the state
the

and

'';

revolution.

V'. ,.4„\V

...

power

stupid blindness throwing away
our leadership and our power, in
rope.

All over the world we can see

why the people; who

should be

free from

suffering, why democ¬
and a dictatorships
over.
Because the people,
failed

racies
took

misled by

self-seeking politicians,

took • the line of least resistance,
followed

a

desire for more money

this

of

sounds

somewhat

familiar but leaves out the factors

the way

of work and

production.

What Mussolini forgot to men¬
tion to the
one

and

people was that every
thing had to be
by
an
all-powerful

every

controlled

police government to arrive at and

The people

of Italy failed to do

this and paid the piper.
Who- is
to lead the people of America to¬
■ Aiheficans
dor pot
the same price? - •

sothat

day

have- to pay
Guidance

cannot

come,

eery

tainly, from crackpot: social re?
formers who

largely re*
present cop*

so

are

for

our

fusion,

Guidance should come from IP*

just Where the attack pow;>

this country.

is in

\

,

1.

The people of America
that our present economic

our

or:

realize

truth that;
brought

the

.

been

has

confusion

by a battle for power be^
labor union groups and
labor union leaders whose armor
about

tweep

pro-labor legislation.
They dp
raise in wages
not matched by increased produc¬
tion comes out of the pockets of
the consumers in higher prices

is

not know that any

not only decreased

and brings on

buying but depressions.
They do
not know that human rights are.
first lost through "paternal" gov¬
ernments.
Industrial
leadership
must make .these matters clear*. *
We

We ean
dignity.
We

be free again.

can

retain

our

human

cap j

maintain, we can even rajscv

our

standards

ment and themselves into imprac¬

accomplish all this, but only if we
become economically and morally
sound.
We need an enlightened

for

less

work; let their minority

tical

schemes

and

of

inflation.

regimentation
government

The

in turn, decided what the
people should do, where and how
they should work and live, de¬
nied them their freedom,
their
then,

We can.

living.

of

public opinion in America,
Real leadership

j.

;

will not spring

class or any one
will come only from
self-respect, and their individual the
enlightened end
informed
opportunities.
people.
We — you and > I —- ancf
others at gatherings like this have
These are the dangers we face
today
in America. Today the a responsibility beyond our tech¬
Tens of mil¬
trend of the American Goverrn- nological problems.
ment is definitely toward regimen¬ lions of our ancestors migrated
tation of industry, labor and agri¬ from Europe to get the benefit of
culture.
These policies are ini¬ our freedom and opportunity and
in a few short generations they
tiated and developed by those who
believe in planned governmental had outproduced the rest of the
world.
control, who believe government
The future belongs to. man—the
employees should decided what
Americans
should
want,
how common man and the uncommon
of the
much they should pay for goods, man—not to politicians
Mussolini stripe,
Therefore,., let
where and how hard they should
work, and what they should be us rededicate ourselves •. to the
paid for their labor. , These bu¬ proposition "that this nation, un¬
reaucrats are far more interested der God, shall have a new birth of
freedom; and that government of
in* their own ideologies and in
acquiring all the power they can the people, by the people, for the
get "than* in the rights of a free people, shall not perish from the
people.

America

we

have
labor

groups,: violent
strife, price control, a huge na¬
tional; debt; inflation,; and * eco-:
nomic confusion.-: We plowed in

floor under

prices, These panaceas
so the government

work,

installed

an

OPA that put a ceil¬

We passed laws
bargaining to end
strikes. When we found that these
created more strikes we abolished
collective bargaining.
The power

for

collective

of the

government was then used
and prices,

to fix wages

Congress

has

exempted

from

the

one

any

,

It

group.

'.

'

.

Normandie Sold
The
of {the

'>■ V

•

as

Junk ]

Normandie^ once the pride

French; hpe, has h'Bem.spld:

by the .United States :Go vernmeqt

the ship apdbwas
a
troopship
caught fire in 1942, fair

which acquired
converting
when

it

it 7 into

$ldL680, as; junk.
Commission,

-

The Maritime

according to

ington advices to the
Press

the

on

bid

Oct.

Wash¬

Associated

2,' announced that

of Lipsett, Inc.,. of New

labor York, the highest of five, had been
accepted and would: bring", the

anti-monopoly
laws, the Clayton Act, and from
responsibility under the one-sided
Wagner Act.
Further, and still
more
important, government by
unions

from

earth."

'

.

in

ing over prices.

All

labor

and return the country

of industry

groups high-pressure the govern¬

support and votes, now promised
a Welfare State pledging:
(1) A
guaranteed job; (2) An adequate
salary; (3) A comfortable home;
(4) Self-improvement. • fill.

take

indus¬

as

organizations by - it
to freedom
and individual enter¬
prise and democracy.
i
given

knew

didn't

„

well

as

try and thus become a completely
totalitarian state; or, at long last;
to recall
the special privileges

yet in Ihcse critical and. dan¬
times, when we should be
demonstrating^ to the world the
,

gerous

Mussolini, like some other poli¬
ticians with an eye for popular
.

control of labor

believe
leadership and hope to the con¬
turmoil
structive forces of freedoripah4 is due to disputes betweep labor
individual human dignity.
and
management.
They do not

the Italian Socialists ripened crops, killed fattened pigs,
along • without: guc&lfi struggled with an NRA that put a

Russia,

would- get

,

the free industrial life of a nation;

States is

pressure

was

to

alternatives—either

two

That is

reported that "Socialistic Russia

"ghastly failure."

now

the only
nation in the world today* suffi¬
ciently strong and free to give

Today

a

■

this, our government
squarely faced with one of

Because of

is

dustry itself because the first as?
sault oh freedom always is against

The United

They

there

Italian people could not conclude
otherwise than that Italy was in

of becoming Bolshevist.
The overwhelming combination
of
rabble
rousers,
demagogues,
parlor
pinks,
socialists,
labor
union organizers and communists
had wpn out.
The lefists were in

anywhere.

spite .■? of-all we have seen in Eu¬

In

their

Italyr■* The same
bring the same result

causes can

of freedom, to produce-and
create, we are by lawlessness,
Italy in 1919, 1920 and
group
selfishness; and outright
how

us see

political expediency.

sponsible

It happened in

economic field-?

placed in the political fieldi
a disastrous condition.; Labor be-r
comes, as in Europe* a football 9#

and the soil of Greece

with

red

people.
The oppressed ma¬
jority in turn crystallized and re¬
acted violently.
Disaster was the

of

a wage-

tionary rise we are experiencing
today in this country, a \
was,

taken out pf the

lost

had

humiliated and exhausted in

were

had failed to maintain

Fascists

j

of production—

All the factors

•

Italians

and

1,045,832 agricultural workers and
1,267,935 industrial workers on fused and frightened pe opl e
strike.
In proportion to popula¬ whose government had lost ft?
with their vacillating, labor-ap- tion,, thatwould bh equivalent tq authority and their respect.
This man was Mussolini—radi¬
peasing* and vote-grabbing gov¬ about 5,OQO,OOQ workers in thq
ernment
which
after
the
first United States,
cal, socialist, quasi-labor leader,
In October, 1919 at a meeting successful opportunist who switch¬
World War had failed to handle
the strike situations and general of their. Congress, the Socialist ed overnight from Socialism to
Mussolini organized the
unrest for and in the interests of j Labor Party publicly adhered to Fascism.

-

groups.

The inevitable cycle of lawless¬
ness was not completed until the

and their colonies
Hitler in Germany,
a dog's death amid
the ruins of his Empire, And the
Italians are still paying the pen¬
alty.

And

right to use
against ■ other

physical' f or c e

book,V"The Road to Serfdom":
"Everyone who has watched the
growth of these movements in
Italy or in Germany has been
struck by the number of leading
men,
from Mussolini downward
(and not excluding Laval and
Quisling), who began as socialists
as

granted

has

♦.

deferred to State's rights.

were

The following very significant
statement
appears
in - Hayek'?

ended

consent

common

unions the exclusive

terranean

Italian Counter-Revolution

:

In 1919 there

.

into practice—-failed.

was

He

rights in every instance would be

theories—put

Their

saddle.

so-called Utopia.

heart

developed a battle between labor
unions and labor leaders for the

.

the

this

also forgot to mention that human

Dictatorship

for more money,

(Continued from page 1935)

Thursday," Octpber 17,1946

FINANCIAL CHRONICLE
&

government a return
ton of scrap.

of $3.80 a

The vessel's original
(ten AAA

AAA

Volume

Number 4534

164

THE COMMERCIAL & FINANCIAL CHRONICLE

National Debts
(Continued.from page 1926)
Supposing, said

abundance is turning to want; that

II

tinguishment.

city,

a

out against scar¬
black markets, and

against
against inferior quality and high
prices, it loses not a moment in

tion of the gold covenants of the

vants of the dead

our own

the people, cry

Inflation

versos

1959

nation's bonds.

Thus, "all sail and
the writer, then contemplating the
anchor,"
the
country was negotiating additional loans and
One-hundred". and fifty-seven nQ
disaster
which
had ' overtaken
launched ; upon, an irredeemable printing additional money to send
years have passed since Mr. Jef¬
France through the profligacies of
tq foreigners that they may enter
ferson's declaration that there was paper money economy. That fine
its Kings, Louis the 15th and his
phrases and protestations of vir¬ our markets and in competition
need of constitutional restriction
tuous intent Vacqompahied. thesb with our own hard-pressed citi¬
contemporary generation had said
respecting long-time public debt.
to the- money-lenders of Holland,
measures did not alter- their true
zens, buy and remove $20,000,000,He had

'-Give us money that we may eat,
drink, and- be merry iti our day";
and, supposing the money thus re¬

ceived-

to

been

have

divided

among
the- people, and eaten,
drunk and squandered, would the

succeeding generation in France
be obliged to apply the produce
of the earth and of their labor to

repay the loans thus made?
at

all,"

Mr.

said

"Not

Jefferson,

an¬

swering his own question. For the
privilege of living .upon the earth
and tilling its soil, the men of one
generation are not beholden to a
generation preceding them. That
right flows ta each succeeding
generation from a creative power
higher than man. Thus the right
to occupy

of the

the lands of France or

United, States ;by the gen¬

eration

now

comprising those

na¬

reached

from

his

conclusion

where moderation and fiscal wis.*
dom had in the past distinguished
us
above
other peoples'
waste,
profligacy and fiscal folly now
became

viewpoint of abstract
justice, no less, than from,that of
political expediency, and he called
to
his support the fundamental
principles of society to which all
thoughtful persons were then giv¬

a

ment.

natural

a

equity and those natural con¬
cepts of justice, common to all
mankind, make it plain that right
on the part of a living generation
to bind a following generation to

we

tional

fiad

debt

and

our

govern¬

than

less

a,

approximates

toiled nor sacrificed to produce
the goods, will receive a return of

them

sideration to his thesis that
era

:

administration,

tions-not/ come/arid go/as

own, have caused their gov¬
ernments to emit irredeemable
paper

currency in such quanti¬
ties that it is no longer acceptable
in foreign trade

except at heavy

discounts; In short that the

as

circulation

powerless to force

In

this

Mr.

manner

••

Jefferson

developed his argument respect¬
ing the question then uppermost
in his

be

mind, that of provisions to

included; iri the constitution

bf. France respecting long-term
national debts, and in concluding
his letter he begged; his friend,
Mr;

Madison,/ to "tunr this sub¬

ject ih

your

mind, particularly

to the power of
and develop it

as

contracting debts,
with that cogent

tions overlap, and between them
there is* and cart be no- definite
line of demarcation* But over a

a

—

we

have established

either
seems

;

I;
e

Jefferson

by

to have been

*Note

—

Since

Madison
preserved.*
or

this

article

was

written, the writer's attention has
been called to a letter written by
Mr. Jefferson to John Wilson on

t
*

i

Aug. 17, 1813—24 years after the
Madison letter. In this letter Mr.

'

the moral

right and political ex¬
of one generation at¬
tempting to saddle posterity with
Sits debts, said:

pediency

have her constitutions been
thrown that it is said that

over¬
on

an

occasion

a
Frenchman entered a
Paris bookstore to purchase a copy
of the constitution. He was met
with the dry remark that the firm

did not have

a

copy

for sale since

not deal in periodical, liter¬
French Governments have

been

less

no

French
failed

than

numerous

Constitutions.

None have

to

contract long-term na¬
debts; debts which have
wholly repudiated or
"We acknowledge: that our
in great part extinguished through
children are born free; that that
monetary inflation. As a conse¬
freedom is the gift of nature,
quence ner periods of domestic
and not of him who begot them;
tranquility have been short. Yet'
that though under our care dur- despite the past and the melan¬
ing infancy, and therefore of
choly lesson it has taught, her
necessity under a duly,tempered
printing presses hum again.
authority, that care is confided
For more than a century and a
to us to be exercised for the
preservation and good of the quarter our government displayed
tional

.

I
t' v
v

^

;/

.

:

>

»1
'

irredeemable paper currency and
still less tangible deposit entries;

engaged in the

writing of another. So frequently

Jefferson, discussing the same it did
Question, and again denying both ature.

v

now

been either

.

bankers ledgers received by
things destroyed
longer in existence that we
fatuously suppose
our
national
wealth to be greater than before.

schemes de¬

signed to give appearance of value
value in fact does not ex¬
ist.

These schemes take the form

of

Funds; Banks of imposing name
and complicated structure, staffed
by highly paid personnel, selected,

interestingly enough, in large part
from those Americans instrumen¬
tal

in

their

fact is

not

promotion. But the
be obscured that,

to

despite the acknowledged inade¬
quacy
of our own purchasable
wealth

and

production to sustain

our own

heavily inflated circulaiton, the true purpose of these en¬
terprises is to plctc# American
wealth

and

production

back

of

foreign inflations.

m-r?'*

ex¬

no

Its payment con¬
than an empty

more

inexpensive gesture. So
exchange decreases

as

the unit of

in

value the burden of the debt be¬
comes

correspondingly lighter. It
a
government, which
long period meets unpro¬
ductive and noncreative expendi¬
is; because

over

a

tures

beyond its

by the
automatically
finally destroys
the value of its unit of
exchange
revenues

printing of

money,

diminishes

and

that

it

is

burden
future.

impossible

of
.

•

payment

As

'

the

to

pass

far

into

debt

the
the

increases*

without

a
concurrent increase in
the purchasable wealth of the na¬

tion, the value of the unit of

pay¬

ment decreases. This is the

decay¬
of monetary inflation„
Having given it birth the public
debt becomes the helpless victim
of its evil offspring.
-:'/\.y

ing

process

'

B

It is because of the inability o£
governments to saddle the burden
of their debts upon future
gener-}

ations, their efforts resulting only
inflations which rat¬
ably extinguish the debt at thq
expense of their own people, that
gentlemen in high office who sO
confidently suppose their profliA
gate expenditures, while provide
ing benefactions for the living^
in monetary

will become the burden of the

born,

un¬

riding to rude disillu¬
They despoil, not the
unbom as they suppose, but the
living. The victims of their rapa-1
city, of their profligacy, or of
their corruptions or well-intended
stupidities, are to be found among
are

sionment.

their

constituents and within,
generation, and
no

own

their

own

other.

They constitute the very
of a free society/ those
who have acquired through indus¬
try and saved /through sacrifice;
These are the possessors of savings
in the banks; of all. contracts and
obligations payable in dollars, in¬
cluding policies of life insurance,
annuities, and interest-bearing se¬
curities; not \ excluding, those of
bulwark

their

government. They are
who have contributed to

own

the government for social security

A

For fifteen years, of deficit

■

and

debt.

a

stitutes

persons

III.

<

payable at a distant date

piled]

upon deficit our fiscal affairs have-

upon

or

those

to whom

the government or corf
porations have granted pensions.

been conducted upon the unan¬
But these are not the only victims.
nounced, but clearly entertained, The office
worker, the skilled ar¬
assumption; that future genera-;
tisan, the salaried employee and
tions can and will be required to
all officials of government will
pay our debts. Plain proof of this
find
adequate increases of pay
So: confident are we that this ex¬ is.
to be found in the fact that;
lagging behind and often far be¬
cellently engraved paper, so inex¬ during that
period no Congress has
hind the decline in purchasing
pensively produced and so gener-. dared
levy taxation sufficient to: value of the
dollar.
ously distributed by our govern-; meet current annual
expenditure.
There are many who already
ment, constitutes wealth arid an; Fearful of the
living, who vote,
adequate restoration of the waste Congress has
find it possible to calculate with
no fear of the un¬
of war and the prodigalities of:
some
born.
accuracy a portion of their
our rulers that we deem ourselves,
Yet belief that the debt can be indirect. contribution toward ex¬
blest above
all
other
tinguishment of the national debt.
people, passed to
future generations is a
belligerent
and
non-belligerent false
belief. In proof of its falsity Among these are the owners of
alike. As a consequence we grate¬
contracts the interest
1 propose to exhibit the nature of bonds or
rate upon which has been cut,
fully accept the assurance of our man and
of/^
call as witness the expe¬
leaders that,, so wealthy have we<
ten in, half; the annuitant or pen¬
rience Qf mankind. In this mansioner and all persons of fixed in¬
become, that we must now pre¬ ner it
may be readily demonstrat¬
pare ourselves to enjoy a standard
come who are able to consult and,
ed/ that our. generation and woi
of living vastly higher than any
I other must bear the burden oft interpret cost of living indexes or
We have heretofore known.
whose memory goes back to preOur
providing and paynig. for all that
inflation prices. Among these are
leaders, .in turn, exultant at the we consume
and all• that we de¬
miracle they have performed in,
also the holders of life insurance
stroy.
-'■v/;/
increasing the dollar level of the •" Nature has
decreed that man; policies who, having paid the re¬
national revenue, do; not hesitate shall
neither eat, drink, nor wear quired premiums for many years,
to. embark upon new and, enor¬ that to be grown or prepared af¬ often at great sacrifice to them¬
mously. expensive, .adventures in, ter he himself has perished. The selves and their families, now
us

in payment for

and

no

.

greater wisdom/ and restraint in
y- child only; and
his,labors.dur-'
the conduct of its administrative
v'4: ing youth are given as a retriand fiscal affairs. It provided and
bution for the charges of in¬
maintained a sound and stable
fancy. ; As he never was the
monetary system; held its expen¬
property of his father, so when ditures within,
national and international
bounds; and the
adult he is sui juris, entitled
national debt at moderate levels. craft and finance.
himself to. the use of his. own
"

vast

where

.

She is

in

suance, our government unhesitat¬

ingly organizes

business and agriculture a multi¬
lapsed period^M time; let us say of tude of regulatory bureaus. These
50 years, there is a near
complete bureaus swarm with highly paid
change in adult population. Over individuals, who, drawn from pro¬
a much shorter period the
percent duction,, must now be supported
of change is very great. It isr to by it; individuals who in their ig¬
this overlapping of generations norance and zeal neither promote
that much confusion of thought production nor lessen its cost but
respecting- long-term national; debt on- the contrary delay output,
and
long-term
national • policy deaden enterprise and add im¬
must be attributed.
' 1
measurably, to its burdens.

tions.

is

greatly depreci¬

over

Nevertheless the experience of
Although we have but emerged
logic which is. s6 peculiarly yours.
from a great and devastating war,
At
first blush it may be ^-century and a half has proven
in which we have sacrificed both
Mr. Jefferson's "fundamental;
prin¬
laughed at as the dream of a the¬
our manhood and national treas¬
orist, but examination will prove ciple of government" to be both
"solid and salutary."*/ Within that ure with a prodigality heretofore
it to be solid and salutary." V No
further discussion of this "funda¬ period of time France <hasadopted unknown ih thfe history; of ^war¬
mental principle .of government" and discarded numerous constitu¬ fare, so enamoured are we of the

paper

states

ated value because of its over-is¬

moderate/portion of his earn¬

ings

these

of

many instances of little real value
and in others of

hot from- rriahi buPjrortimctiurei
and proof of this can no better be units. Thus the term itself does
of articles of
convenience and
demonstrated than by the fact that not permit of precise; accuracy.
naturd -has':^ rendered^the«diand Each day a-group, of Americans: is pleasure within reach of any per¬
son, willing to. work and save even
born and. another dies; Generastilled by death
obedience from the living;r

prac¬

less devious than those of

no

our

evidenced by
the abundance and cheapness of
desirable things — an abundance
which brought hitherto undreamed

gen¬

foreign states, following

tices

production in field and factory
and the excellence of our business

longer

Discovering that the politicians

of

confined; td fiscal policy,// Not¬
withstanding the marvel of our

■/Xialso;as^ apparent to
as to those giving con¬

from

thje unrequited de¬
scendants/of those, in foreign
lands, who: bought and. consumed
them.

money manipulations of the most
exist; while the impossibility of a
indefensible character, the interest
enforcing claims
charge alone is greater than our
against the living is obvious. So
greatest pre-inflation budget.
it might seem that constitutional
prohibitions against the attempted
exercise of such a right were su¬
But our follies have not been
perfluous. No doubt it did so seem

Jefferson

descendants who neith¬

er

dead generation

in occupancy.

God
our

vate wealth of the entire nation,
Upon this debt,
despite paper

to the framers of both the French

prices

lower, it gives assurance
willing,
fifty
years

that,
hence

na¬

the value, measured in pre-inflation dollars, of the public arid pri¬

the payment of its debts does not

rights of the next succeeding gen¬
eration be derived from those now

less and hence higher

and not

fifteen

contracted

which

al¬

consequence,

hallmark of

Within

years

of

and American Constitutions.

come,

not

As

most inevitable

ing grave consideration. He point¬
ed out with clarity that principles

tions is not derived from the gen¬
erations preceding, nor will the

These rights

000.

worth
of
our
purchasable
goods to. alien lands.
To those
bewildered persons^. to whom it
seems
that severing $20,000,000,000 of goods from our scarce
sup¬
ply will create more scarcity and

character.

the

the work of its

goes

A debt payable in
worthless unit of
exchange is no

,

*

state¬

*

limbs and the fruits of his own
exertions: so far we are ad-

^

vanced, without mind enough, it
seems to take the whole step.
We believe, or we act as if we
believed, that although an iridi-;

.

*'!

v:' yidual
r

i

father

alienate

cannot

the labor of his son, the

m
:

aggre-'

y-

nation, as well
as the standard of living of the
people, measured not in; money
but in things of use and value,
came

to exceed that of all. others.

Within the last quarter of

Impa¬
which

the

labor

of

all

their sons,

the

enterprises, just

just, profitable
which

•-•.-'-or

our

our

or

vices,

personal

or

un-

ruinous, into
passions,

interests

lead us."




may

those

of

can-

fiscal

restraints

insure
affairs

moderation
of

of

gold

citizens

gold

in

states, those

in, power resolved to
them.
The
private

be

rid

of

ownership
prohibited and all
required to turn their
was

and

gold / certificates.- : in¬
public treasury in
ex¬
change; for
irredeemable
paper
to

our

cen¬

tient

ate

the

a

tury all this has changed.
alone

i3 all
■■

result the country prospered;

a

the wealth of the

gate body of fathers may alien-

of their posterity, in the aggrex>i'< gate, and oblige them to pay for
-

As

the

money.

*

These acts

supplemented

by

were

forthwith

direct repudia¬

For

a

to

reason, no less novel and

intriguing

than

that

the

people

possess too much money, our gov¬

ernment
tional

hastens

debt

and

to

create

addi¬

print additional

money to be / expended in part
payment
of
the
people's food,
drink, and clothing bills.
As

method of gaining the ad¬
miration and support of labor and
its leaders it forces increased dol¬
a

lar wages for

decreased hours of
production. But concurrently it so
burdens
industry with taxation
and the support of armies of use¬
less functionaries that labor's real

wage,
determined by what the
dollar will buy* becomes less and
not
-

more

than formerly.

Observing-

that

our

dead are

former

powerless to

collect

from

consume or

profit by the
labors of the living. Therefore all
that a generation eats, drinks, or
must be

wears

or

provided and paid

discover that the government has
declared itself
a
co-beneficiary

while the balance remaining for
the intended beneficiary is fur¬
ther diminished by the depreci¬
ated value of the dollar in wnick

for by- its own members or inher¬
ited from an ancestor. If debts are payment must be accepted.
left unpaid by one generation they /
Lured by pleasant/ voices or
must be paid, if at all, both by
charmed by fine phrases and fair
to members of a generation
succeeding.
All this is beyond
dispute. Very well, say those who

promises many of these supported
their despoilers, quite unconscious

entertain

searched,

and

the

belief

that

future

that

the

hand

not

of

the_ magician

the pocket of an¬

other, but their own^/Mistakenly
"the fact that future generations supposing it to be the rich and the
must collect does not alter the fact unborn who were to pay they have
that the future generations will now discovered in themselves' the
true victim.
Even the working
pay."
/":/:':;
men and women have learned that'
These persons
have failed to
their dollar gains are little more
observe that hand in hand with
the creation of a public debt of than an empty symbol signifying.
/>
the magnitude and character of
(Continued on page 1960)
generations

.

are

to pay our debts,

r

THE COMMERCIAL & FINANCIAL CHRONICLE

1960

nature

outmoded

an

**

» *

»■

Thursday, October 17,1946

fvK-

will

vixen we

versus

Monetary Inflation
(Continued from page 1959)

nothing

more than an altered for¬
In the market place this in¬
creased formula secures them lit¬

mula.
tle

and of many things less
did the smaller dollar wage

more

than

of the pre-inflation day.

They

are

its victims.

learning in the trial room of
that while politicians
can
bring them increased dollar
wages without end, production of
desirable things alone can bring

ourselves

experience

Within

them increased real wages. To all
these the part they are
playing in

hosts

satisfying the public debt is

today to know that these
visitations have not ended.

apparent.

But

well

will

and

all others pay

as

increasingly
though their payments are ob¬
scured to them through indirec¬
pay

tion.

For of this every man may
certain that a rotting dollar

be
rots

the very

fabric of

ciety-.:^-^•
Future
men

free so-

a

^-

-;# '

generations of French¬

did not pay the debts of the

(Continued from page-1927} >
c
his actual ;incqme; ? I In the i version of what {has

itself, and in the end

reason

neither

discover

that

son,

human nature has been

nor

truth, rea¬

front

have

been

country are to be
found examples of unprecedented,
our

own

though for the most part localized
"booms and busts," each carrying
of believers to

despair and
One has but to view the

disaster.
scene

of

of; those

But

which

from

we

ation have paid

have

paid

whole

between

When

the

loans

were

-though

substance

universally destruc¬
tive in character; True, inflation
was
our
lot following the first
world war, but it was an inflation
of
credit
and
not
of
printed
money.

the price of

incredible madness.

our

in

or

We

not

in

among

A

reports

the

States.

fore,

for

may,

profit

29

prepare

the
there¬

made; to

company

statements

our

loss

and
tax

income

pur¬

poses^ all of which deviate from
each other..

form,

filing of detailed
balance sheet and income state¬
ments in many cases* Since anew

people a practice, bf unabridged
dishonesty; a cruel and unjust
form of taxation which, taking ac¬
count neither of ability to pay nor
fortune, collects only from those
possessing a certain type of sav¬
ings. Against these, whether rich
or poor, great or humble, it levies

aspect of thei corporation is
volved,
new

.

different order of pre¬

a

sentation

in¬

of

figures and possible
figures is required.
The

garish price structure,
multiplicity of paper work and
figure juggling arising in this
given birth to the Assignats and representing values which existed
Mandats of the Revolution the only in fevered imaginations, col¬
sphere is obvious.
Certain types
debts perished with their progeny. lapsed.
of industry are required to pre¬
But the calling of the toll. Their
property it merciless¬
A future generation of Germans
loans, drastic remedy though it ly expropriates in payment of a sent a wholly different set of fig¬
fdid- not pay thh debts which sup¬ was, tended to correct the infla¬ debt, no more theirs than that of ures to the specialized agencies
ported the monstrous paper money tion. The inflation from which we all other persons. But this expro¬ which regulate them." Railroads
issues of that unhappy country. now suffer; is not a credit infla¬
priation and the manner of its follow Interstate Commerce Com¬
No more did a future generation tion.
Private loans are few and exercise so
injures all others that mission rules of accounting and

^profligate Bourbon Kings. Having

called the

"Of Austrians and Italians meet the

thora

It is from

inconsiderable.

Immoderately

swollen

public
debts of their countries, and no

future citizen of Hungary will be
called upon to make good the debt
■Of that fallen government. These
^clebts were satisfied out of the

*labora

of, the

generation

which

Created them and it bore the bur¬
den of their

extinguishment alone.

of As

people we labor under a
mental malady. It is of a
neither mysterious nor in¬
a

ifjnass
i

type

frequent in its; outbreaks; Varyring

in the manner of its
^manifestation, it is an ancient af¬
only

fliction

mankind.

of

ple¬

a

printed money and syn-

thetically created bank deposits,
both the bastard progeny of the
national
debt,
that we suffer.
Through the magic of a printed
formula

nothing

and

more

we

have, in our delusion, come to be¬
lieve that the public debt is a na¬
tional asset. Indeed it is so en¬
tered upon our corporate and pri¬
vate balance sheets. In the print¬

iv.

.

of

Upon

us

it

have discovered the
philosopher's stone, while bank¬

ing press

we

have become the cru¬
cibles
of
modern alchemy and
within their pages we consider
ers' ledgers

ourselves

transmuted

have

to

writing fluid into pure

,4ias descended

as a new and mbdNevertheless, despite the earn¬
version of the Great Paper estness of our belief, we shall one
Money Delusion. Under the en- day awaken to the truth as all
.chantment of its spell we live and men must. We shall discover that
Vj>lan in a dreamland of vast and the printing press has created no
^effortless national wealth.
wealth; that the written entries
>'
Our merchants are charmed by upon bankers' ledgers are no more
-;$he dollar increase in their sales; than writing fluid upon ruled pa¬

bankers

by the increase

in

signifying, not the creation of

per,

but;.redistribution of

their deposits;: speculators by the
unprecedented rise in the market
values of their lands and securi¬

wealth,

ties; labor was, for a time» de¬
ceived by its new dollar gains in
wages, and farmers by the high

that the national

foliar ^ prices of their products.

such

wealth

have

left

brought

the easy road to plenty
the country swarms with persons

to

enjoy
their
new
Even the Officials of

prosperity.

■'government, observing with dej light the dollar increase in the
tpublic revenue, deem moderation
«> jeven
less essential than before
sand

lay plans for

new

extrava¬

gances.
•

'Vf'i

has

Mankind

iother

mass

from

suffered

aberrations,

many

rightful in their consequences
^Learned men have been consigned
to the flames for no greater of-

ifense

than

that

and

speaking

men

and

of

the

women

searching out
truth;"-devout

for the crime of

^ab'ding by their religious conyic"fions; children have been hanged

{as witches; peoples have marched
'.and

died,

en

masse

in

search

of

^things tiomore tangible than
•.creations of their fancy. But it is
•Tin economic fields that such

mass

Omental

most

-frequent

disturbances

expression.

find

To

create

v/ealth without toil; to enjoy lux¬

without sacrifice, human na¬
being what it is, this is a
rallying cry which seldom fads
ury

ture

of armies of recruits.

Thus within

debt is a public

itself its own de¬
Our madness will then

struction.

chastening

We

liability, and that in giving birth
to its illegitimate offspring of ir¬
redeemable paper currency, it has

Believing themselves to have dis¬
covered

war-and .waste
shall discover

as

.

us.

report from

cept the Jeffersonian thesis that
under constitutional government

ously to the Commission.
Com¬
panies engaged in the manufac¬
ture of liquor have somewhat the
same experience.
Public utilities

of
contracting long-term debt would
prove both "solid and salutary."
the

upon

power

upon

and, cured of it, we
will marvel at our credulity. But
until the day of awakening gives
be at an end,

release

J.

accounting

E.

Drew, formerly Assistant

Director

of

American

promotion

Gas

Association

in 1939, was

another

legal

and

personnel

devoted exclusively-to annual
interim

reports to State
national regulatory bodies.

and

The

Since

appointed Director of about,

Public Relations for the California

and

SEC Regulations

1934

and

the

As

Secretary of its public

Relations

Council, he created arid

1943.

directed national public relations
campaigns, and supervised prepa¬
ration and distribution of public
relations material for use by the
In

members.

association's

addi¬

make

tion's wealth to the four winds of

Heaven, receiving in return noth¬

General Motors,
General
Foods,

such as
Mills,

General

joining the General Baking; and the other
staff of the ABA in 1942, Mr. firms which, coincidently, seem to
Drew became Deputy Manager in have a penchant for a militaristic
The

reports re¬
quired by the Securities and Ex¬
change Commission at the time
companies are engaged in the flo¬
tation of new securities are by
far the most searching and de¬
tailed of all the statements pre¬
name.

special

pared by corporation personnel.
And, in passing, it might be said
that the statements embodied in

prospectuses prepared in conform¬
ance
with
Securities
and
Ex¬

change requirements are of the
highest caliber from an account¬
ing or financial point of view. If
corporation reporting stopped with
no
more than what has already
lic relations of the banking indus¬ been mentioned, the burden on
try's program for veterans and its companies might be bearable. Yet.

more
substantial than the
there are other claimants to the
nation-wide campaign tb provide details of "irtside
shoddy, output of our own presses.;
business.",' Most
In fruitless effort to conceal the adequate credit for .small business Blue
Sky commissions demand
in the post-war period. Last Feb¬ information,
evidences o£ our existing inflation
too.
A Blue Sky
by false appearance of low prices ruary, Mr. Drew became Assistant commissioner occasionally is sep¬
we will create new inflations, and
Director
of
promotion of the arated from the State Corporation

ing

from

the proceeds subsidize pro¬

ducers.

That

the

true

market

American Gas

Commission and separate disclosal

Association;

has to be made.

value of our securities may not be

reflected

we

will enter the

kets and purchase all offerings at
pegged prices, a practice fraught
with grave danger which our gov¬

ernment,.. justly

condemns

War Replacement
Command

in

others.
We

of

mar¬

to

End

short,
for

continue to

on

Oct. 3 that

as

aster

proclaim that

we

have undone the

L

of John Law; the South Sea bub- eternal verities.

Declaring human

Ground Forces

will

customers, personnel, and in some
bondholders. The stockhold-

cases

ers

as

are obviously en¬
informative; statements*

owners

titled

to

The other groups receive informa¬
tion out of
as

managerial courtesy or

assume

the

and.

Reports
;

ill

to

Stockholders

'

VDurihg the last 20 years therft
has be^tt a substantial change ill
statements

financial

released

to

the public by American corpora¬
tions.
In the decade of the 20's,

corporations
heterogeneous
mixture of bad accounting prac¬
tice
and
terminology, a script

annual

reports

of

usually involved

which

c o

rather

d

u s e

thara

or
clarified, and a poor
Neither accounting prac¬

amused

format.

tice

nf

a

had

terminology

nor

standardized

each

and

beer*

company

developed its own peculiar tech¬
nique of summarizing its opera¬
tion and situation. As a result, re*-

unread, stock unvoted,,
and a generall
lethargy of stockholders prevailed-,.

ports

were

notices unnoticed,

This should not be taken to meaim

that

stockholders

have" &

now

spirited interest in affairs of their
companies, but times and attitudes;
have changed to a certain extent*
A noticeable improvement in cor¬
poration reports is evident by ft
comparison of the current releases
with those of 20 years ago.
The
for

amelioration

the

rather interesting. Mt arose

is

pri¬

marily because of the attacks of
public officials on corporations,
the

and was

of leaders of

answer

business to the accusations.

.The
util¬
believed

shafts directed against public

ities; and railroads

were

by their leaders to be overstated
and inaccurate. As a consequence,

first

the

improvement in annual
by industries as a

reports taken

group occurred among those sub¬
jected to political fire. Better re¬
porting to stockholders i weai ia
more logical medium for combat¬

ing the new onslaughts, because
the

numbers

American

stockholders

of

corporations

had

in

been

greatly enlarged. Many American
corporations came to be directly

by over 100,000 individuals
indirectly owned by* millions
through the media of investment
trusts, life insurance companies,

owned
*nd

The

banks.

and

means

of

mental

attacks

aid

of

all

coping
of

with
to

was

the

effective

only

govern¬
enlist the

owners

of

the

business rather than to rely upon
the
officials
of
the
company
whose

views

and

expressions
effec¬
tively since they were alleged to
be sinful money grabbers; at best.
Many stockholders who had been
very
vocal in condemning big

cbuld

not

be

voiced

very

business and, business-in" general
somewhat shocked when, on

were

reading the new reports ;of their
they came to the sudden
that they themselves
were owners, of corporations.
-

company,

realization

: Corporation officials have com©
to realize that not only should the

stockholders be informed, but also
the

public in general.
The great
governmental agencies
demanding
detailed
statements
left the companies with no more
privacy than a baby anyway, and
release reports to the general

ments.

be abol-j great

Headquar-j

Last, but not least, is the
group, of
stockholders or
*

owners

command's) to

functions, Associated Press Wash-i
ington advices added*

pub¬

the result of programs of

public agencies but the above list
covers
the majority of require¬

of Nov.

wartime, replacement

ished.-

cases, interim reports: tot
the benefit of their stockholders,

legal - persons.
Companies oper¬
ating
in
special
circumstances
other reports to be made to

substance,
the

the

have

,

Army Ground Forces Comman¬

nounced

in the in¬

corporation v of
concerns,; these
men feel obligated or are required
by corporate codes to keep tab on

,

der, General Jacob L. Devers, an¬

will, in

substituteform

Since Secretaries

States have a hand

ex-

many

occasion

establish¬

Bankers Association.'

ters




are

ment of regulation over securities
public relations of the National of most corporations, another Fed¬
of
Manufacturers, eral
agency has been added to the
NAM announced on Oct. 6.
A
long list requiring periodic con¬
graduate of University of Cali¬ fessions of private business.
The
fornia, Mr. Drew began his busi¬ Securities and Exchange Commis¬
ness career with American Trust
sion does not cover all companies
Company, San Francisco. He was but does catch all of the quasiVice-President in charge of pub¬
public corporations. These are the
lic relations and new business and,
companies that the layman knows

meaning of words and thereupon

Mississippi Company

railroads

for

Association

stance, may be observed the dis¬
of the

,

or

Deputy Manager of the American
Bankers Association, has been ap¬
pointed an assistant to Holcombe
Parkes, Vice-President in charge

school command should

ex¬

are

the

of

will

we

than

or,

continu¬

purposes,

which a multitude of re¬
quirements has been placed. The
efforts of a substantial portion of

NAM Names Drew to Post

perience of the past being disre¬
garded. in each successive in¬

centuries, the

other

continue to
tion, he was Secretary of the Ra¬
mockery of reason and un¬
tion Banking Committee. which
derstanding.
We' will promote
scarcity and want in reckless at¬ cooperated with OPA in conduct¬
tempts to stifle the natural forces ing nation-wide ration banking.
which alone can bring us abun¬ He also served as Secretary of
dance.
Believing ourselves the
the County Bank Operations Com¬
modern Midas we will, in our de¬
lusion, continue to scatter the na¬ mission; was in charge of the pub¬
us

practical

group on

fancy for fact. Magic will con¬
tinue to triumph over mathemat¬
ics.
We will alter or deny, the

less than three

all

of

gold.

^ern

lour

time to time

when the day of awakening comes
there will be few unwilling to ac¬

limitations

and personnel are not
from the ardors of

hausted

Property tax requirements of lic relations.
debt; either in
State
and
local
governments
substantial pari,
Improvement
necessitate the

monetary inflation, as
a
government; and ,its

through

operations during the pre¬
ceding year and the current state
of
finances,
if
the companies'

required statements. Corporations^
as a matter of fact, do prepare of
their own volition annual and, in

variance of State

ing income taxes will vary from
those made to Uncle Sam. Like¬
wise, there will be differences

will, in

.

liappeii&i

from

funds

laws, the
reports made to the 28 States hav¬

future gener¬

a

em¬

reasons

from Federal income tax

observing person, that we

ourselves and not

of

income

Because of the

though the operation will be dras¬
tic, we will give legal recognition
to a fact then clearly apparent to
every

multitude

a

actual

bodied in such-items as deprecia¬
tion and capital gains and losses.

In this manner,

and honest basis.

have suffered, the present is the
most ominous. It is international
in scope and

for

Corporation Reports

business, net taxable in¬

a

varies from

come

sound

a

upon

of

case

We will have deceived

dethroned.

only ourselves. The day will then
ble; the Tulip mania; the Assig¬ have:
arrived, .when, all; schemes
nats and Mandats;-the New Era,
and
subterfuges having
failed,
and a host of lesser outbreaks. In
and the peoples' disillusionment
turn
the
French, the English, being
complete, we will of neces¬
Dutch, Germans, Austrians; and
Italians have succumbed, and we sity restate" the value of the dollar
and re-establish it

now

now

Modern

found

National Debts

recognize her existence no longer.
With fine theories we will con¬

so

the final step was warranted to

on

notion

of

what is

in the company*

l stockholders will

be

.

The

provided

a

pub-*

lie—that is, to anyone who wanted
them.;. The consensus of opinion;

of the business who ought, among

have-some

going

increase in

business tycoons

was

that-,

full disclosure to the general pub-?
lie

would

promote

a

sympathetic

understanding of the problems, of

4
••:?
515
?*■—

'--V

»>

■

.

Su&MfaiUwij
>*4t4{^tart^<Wi&UAu

Y
h

o

■■

','J• •'•■»

i

Number 4534

Volume 164

-

":. ■"•"

7 business&ridta healthy relation-*

|?9jlies,

/

and, private enterprise,;!

parties

selected

were

''■'■*

.''

A'

'

**

w.-.wV

v.M. -irKnr*rn'r»y-

certain

amount

of

should have been made
pace

keep

with

the forward
movement of the nation, but the
change
in
corporation
reports

■ig3<;>-

».

-n

Dividends to common/;/
7 7;:
stockholders <if j--.»$:- 8,757,000

detained in

the busi-

tion,

plant

sion

arid

:- /

;-

'•

operating

requirements

5,357,000

^overage1 by annual 1 statements, ing profession arid the printing in¬
Nearlyiail companies which give
i Coi^^
on a policy dustry,:/ The' 386 V reports in 1945 a
simplified version of the finan¬
\ k>f supplying all employees; re- ranged in length from the back of
cial statements also' hrive. a con¬
:
jgardless .of whether or not they a post card to sixty pages, The ventional.
presentation: elsewher.e
•;i jpymed stock,: with copies of the length was, hpid down, in part by
in the report. * The,, most
/
unique
Annual report, The.. purpose was ttie limitations on -paper; since one

:

ments of
'

approach of all is by an' Eastern
before the paper short¬
railroad which in effect presents
policy of publishing a the
/.financial;" statements
four

lations.

'Sources of supply

,

report

Some firms put customers

jiiyhbm^ goods

to

on

-'lists

.

■*

times. pleasantly surprised or re7 lieved to note that the profits
;

rnade

the •'company

in

as ri source of

150

covered

pages.

length-of

average

all

timesv;, each
more

.

progressively

,one:

detailed/

The

first 'one

their

ABC's

have

and

which

supply werje

to conclude that the; prices

ceived for

_

accounted for the increased
devoted to pictures, elabo¬
rate charts, and graphs. The ex¬
tent of adoption of layman's lan¬
guage for financial statements was
surprisingly low. Only 24 out of
the 286 seemed to have broken
way

space

re~

raw materials were not

7 depressed

and,

therefore,

the

for piling up huge profits

-means

Sn the buying corporation. Profits
of business,;, as; a rule, are about

■

\

days

gone

by.

language and
panying manuscript

the

is

this in simple terms than
have performed the. same on the
balance sheet.
The typical line
followed presents the information

the

on

income statement

Our

Our Income:

terms

ucts

finished

f

<

\

amounted

to__$632,769,000
2,424,000

that

characterizes

and

releases.

provide

new

pleasing

a

charts

formats

appearance.

Knowledge

and information must
be packaged attractively for the
that necessitate prop¬

same reasons

display of carrots, breakfast
cereals, and household appliances.

er

1-

.

The

•'

Bureau

search
sas
-

of the

Business

of

lie-

University of Kan¬

recently made

a

«nnualk Statements

survey of the

of

286 of the

*

1938 to

The period of

To package

1945 was chosen in part
material for those

ryears

was

34,651,000

readily available, and

because the period of
^greatest change was presumed to

'

^

during those

Despite

errant;5

sons

of

a;

preachers

118

out

sumed to be

of

the

286

constant

improved,

or

1938.

depreciation

on

money

borrowed

tal

costs

•

Our Profit:
This

2^4

left

a

4




accountant. The scope of the man¬
uscript material has also been

The

Net

a

Good Report

A good corporation report is one
that is pleasing in format, one that
attracts attention and is of a type
that prompts the median stock¬
holder to open, as well as the ana-

the

two

major

financial

state¬

ments in two forms—one simple
and the
other in conformance

uninitiated in the terminology of
accounting can understand, and
the

statements

deduction from the

should

be

in

pages of the booklet.

the

.

on

a

stock account.

common

The interest rates

Graphic illustrations enlarge the
amount of information which the

funded debt and the maturity
dates of funded debts are omitted,

1,669,000

Which

more
-

-

uted

on

each
a

utilization of colored photographs

are

amples of what the

was
as

superb

products

ex¬

of

distnb-

:7:77- 7:7

conversion of the major fi¬

a

statements

Readers' should

into

prose.

be given a sum->

The

sheet was made, and the company
reverted to the system which pre¬

working

it

none

by 176.

over

information

as

cap¬

name;

Tables seldom put
as

successfully

transportation,

cus¬

and

reserves

long-term

know; The use of interim reports
is. also recommended.
Business
conditions

are

currently

so

holders

in the form of the best
financial reports possible is money
well spent. Owners of a company
have a right to information about
their firm, and it ought not to be
concealed by obscure accounting
or

bad form. Lethargic stockhold¬
who ought to be interested

debt were then sub¬
tracted to give something known
as
net
assets
which were ex¬

and aware of their company's ac¬

plained

tivities

heading

called

ownership."
probably
with

the

under

This

has

virtues.
other

subsequent

standable

unique

many

Anyone

is

means

more

statements

form

vices

familfar
would

be

Under¬

commendable

but there is doubt whether any¬

thing

as

unique as the company's

accountant

or

ers

should

be

spurred,

in¬

"shareholder's duced^ cajoled, or otherwise edu¬

companies, but thoroughly / bewildered.

charts, but in certain industries,

particularly

particular

than

presentation of statis¬

tics is made by 110

$ 14,114,000

follows:

ratios. '*
Tabular

to¬

——

Procedure

the

lustrate annual reports has been
another deveolpment of the past

.

of

profit

cents

'

than

nancial

Accounting

Unusual

most unusual accounting
mary of maj or problems confront¬
A serious 5% may
procedure among the 286 compa¬ ing the
company, changes in pol¬
statistics, but even
nies studied was in the 1945 an¬ icy, and information on
this group would probably benefit
any other
nual report of a large Western oil items
which owners, employees,
more by attractive
presentation.
company.
A complete departure or customers of a business should
Utilization of photographs to il¬
from
the
conventional
balance
of all readers.

examine

they do not reveal any operating

ex-

7' 7

lion dollars in assets.

,

The reproductions

621,079,000
_

$1.00 sales, or

84

as

by the Eastman Kodak Company.

7

—.

and

tal of

were

ing reports in 1945

assets, but lumps them together: first

layman's lan¬
guage and away from that of the

Special circumstances warrant the

bad

to.

penses

y

was commend¬

the showing than

; '

8,414,000

—

-whole, the change
that improved

sum

we

,was undue brevity as compared
with
earlier
releases.
On
the
able because there

interest.

ital; the current ratio was com¬
puted and working capital brought
cial statements. Black and white
forward; property and other as¬
photographs were utilized by 86 sets
less depreciation gave the
firms, and colored prints by 18.
company a figure which had no

This brought our to¬

terioration.

.

bond

trade-marks, and copyrights on
its books at many millions of dol¬
lars does not show these items as

the

the company will do, even though

•doubt,

:

a

We paid to our bond¬
holders as interest

(134)» made
no
apparent
'change in presentation.; The re¬
mainder (34) showed marked de¬
Some of the latter, no
endeavored
to
improve
ttheir
reports,
but
unwittingly
adopted poor means. The chief
shortcoming in the third category

after

of attention might acci¬
dentally be devoted to the finan¬

this year was

seemed

Almost half of the compa-

is made of

below average on almost every
basis of evaluation. The outstand¬

Qualifications of

measure

for this purpose. The
amount provided

tnies

:

use

of illustration.

means

with good accounting practice as
How these accounting transitions recommended by the American
are accomplished is somewhat a: Institute
of
Certified
Account¬
mystery. A large rubber company ants. The abbreviated statements
which carries good will patents, should be so worded that
people

pre¬

toward

trials/; No greater
modern

of busi¬

idends are, therefore, not declared
out of surplus, but paid with cash.

The terminology used ap¬
to be showing a definite

trend

ana^.

income to surplus may take
place
Div¬

other

done

corporations, and

after payment of dividends.

Classification of the style of the
attached to
be

i

idends/ahd/coriimbh stock divi-: lyst
and} the accountant. ./Much
dends are paid. The transfer of merit exists for
presentation pf

doubt that readers of

cannot

~ *

was.

come

the reports of the
company in¬
volved are better informed than

cisely.

*:

1
7

profit may be the amount that
remains after preferred stock div¬

pick up
long as he is able to understand.
Whether or not a corporation is
warranted in going to such ex¬
tremes may be
quesitoned, but

any

V

dyna¬
decade. As a generalization, pho¬
vailed before double entry book¬ mic
that
annual
releases
are
tography are • not as effective in
keeping was invented, or to the grossly inadequate. 7 Issuance of
providing
information^ as are system which a man untutoied ;n quarterly statements /should do
14,274,000 sketches, graphic illustrations
and, accounting might develop on his
much to further a company's pro¬
in some cases, caricatures.
The
own. ; The equivalent of the bal¬ gram of
promoting new under¬
function of photographs is prima¬
ance
sheet took the following standing on the
part of its owners
rily to beautify and, to the extent form: Current
assets were listed and clientele. ->,
that they create a favorable im¬
and current liabilities then sub¬
Effective reporting to stock¬
pression on the reader/ a greater
tracted to give net

.

few

over

and

use

have to
be replaced.
Each
year we provide as

pre¬

to show improvement in 1945

,

eventually

effec¬

was

and

plants
equipment gradually wear out from
and

tively discredit offspring of the
clergy in general. The appearance
of

—-

repairs

maintenance,

significant although
•disappointingly
s m a 11.
T h e
♦changes of a few companies stood
•out prominently and distorted the
^showing of the whole, somewhat
fashion that

keep our
functioning

re¬

was

same

to

plants:
efficiently cost

ports of corporations between 1938

In the

mainte¬

and

nance

Simplification of Statements

=and 1945

30,617,000

required
Repairs

years.

The improvement in annual

prod-

our

cartons, jars,
and other containers
cases,

part

Itoe

and
transportation
Any stockholder can
the report and read as

reports of

•

Depreciation is deducted after
bond interest; obsolescence may

doubtedly Wasted effort for 95%

ucts in bottles, cans,

<.

'because: the
■fin

ness

state¬

Presentation of statistics by anti¬
quated charts or graphs is un¬

<

annual statements.

to

last

specialists.

readers of the

'

•

broadened substantially. No long¬

leading corporations in the coun¬
try. i-The objectives sought were,
first, to learn the; extent to which
changes had taken place in annual
reports between 1938 and 1945;
second, to ascertain the number of
companies which were adopting
direct
taxes
to
all or part of the new techniques
help support Fed-for presentation; and last, to as§ eral, state and mu¬
certain what should be the proper
nicipal governments
were
policy of a company in preparing

•

understand

accountants

no

:

•

J - f-:t; 7

what the total volume

can

The

those required by the
Commission and are of interest to

there is

to

company can induce readers to
absorb.
Accounting information
thereby leaving the analyst igno¬ and statistics must be
presented in
er will the remarks
rant of significant items. Amounts
Expenses:
be confined
attractive form or the efforts of
to
Milk and other prod¬
explanation of the financial in sinking funds are deducted those who prepared the material
statements, but will cover such from outstanding bonds, and only will
ucts purchased from
be
dissipated
as
readers
topics as employee relations, price the net indebtedness appears; the glance at the
farmers^ and
war
publication and con¬
materials bought
control, shortages, research, ex¬ sinking fund should be shown as tribute it to the local scrap drive.
pansion plans, and almost every an asset, with the bonds carried To the extent that
from other suppliers
well-chosen
j
other topic which hinges bn the at the outstanding amount.
cost us
Re¬ photographs of aspects of the com¬
^-^-^_J„$375,467,000
welfare of the concern. * v ' *
serves for depreciation j and bad
To process our prod¬
pany's business inform readers or
debts are frequently not deducted cause them to read material
ucts and serve our
which
Use of Charts and Photographs
from the affected assets, but are
customers we em¬
otherwise
would
be
neglected,1
The use of charts has been ex¬ carried among liabilities, thereby pictures should be utilized. Black
ployed 38,000 men
swelling and distorting the rec¬ and white photographs are rec¬
and
women
whose
panding
steadily although
the
ords of the Company.
A recent ommended for the majority of
wages and salaries
percentage is still Joww A^otaUof
:! amounted
to
102,532,000 199 put of the 286 made ho use, of change iri' Interstate Commerce large corporations, i Many con-'
Commission regulations requires cerns will not be
charts and graphs.
warranted in in¬
Out of 87
Operating services and
railroads to deduct depreciation
which used graphic means of pre¬
curring the added expense of col¬
supplies and other
from the depreciable assets. One
ored reproductions.
The manu¬
senting material, 68 were plain
miscellaneous costs
railroad cautioned its stockholders
script for the annual report of a
and of a type dating back a half
of doing business tonot to be alarmed at the apparent
a
corporation ought to be well writ¬
century. Only nineteen firms
f tailed
53,455,000
used modern graphic illustrations. shrinkage of several hundred mil¬ ten/and concern itself with more
Our

$635,193,000

Our Costs and

the

of

many

Modern

photographs and

total

a

us

income of

Certainly few account¬
facile, breezy style

ants have the
current

gave

type.

pears

explaining fi¬

This

considerable busi¬

are

statements

was

sources

third

ments

benefit

were issued by
Chesapeake and1 Ohio Rail¬
lysts" by bizarre terminology and way//
Company,/ National Dairy
practice.
Omission of •signifcant Products
Corporation, and Rertir
piatririal vlsJ a • frirthe^Tsource f-pt ington-Rand v
Incorporated. " Both
difficulty/- Several well-known, the Diamond Match
Company arid
companies reveal only the income the
Eastman / Kodak
Companyfrom operations after deducting
have always had special features
costs of sales, and give no clue as
which made them outstanding. 7

manuscript material

prod¬

our

or

experience,

/

■

*

firms still plagues financial

railroad.

Our income from other

nancial statements are often writ¬
ten by individuals other than ac¬

the

Operating Record in 1945

The sale of

the layman can understand. There
Is ample; evidence to indicate that
"the manuscripts for

countants.

some¬

what in this fashion:

are

accom¬

in

More companies

have

frequently presented in non-tech¬
nical

statement.

come

The balance sheet

and profit and loss statements

-

Moreover

style.

new

this has been restricted to the in¬

Modern reports to stockholders,
employees, customers,. and the
general public are longer than in

:

to the

over

tialf what the layman thinks they
are. Companies cannot repeat too
frequently what their thre state of
affairs happens to be.

economics

ness

/

7,'"''!/' % 77% ?, A'

to the.influence of the accounting
profession. A small minority of

7 .tnodest -rather jthan extortionate. wartime ** complications necessi¬ Who;hrive had- Ihq/equivalent bf h
college education, with some work
Xikewise, sources of supply for tated greater length, but in no in
the, corporation releasing annual
reports were pleased to. note or

affairs.

p

acter -of modern

is

apparently for people who know

reports.- A simple test of the 286
grade school; the second one,is
indicated that :50 % of 'the/ compa¬
for those who have the intellec¬
nies increased; the; length of re¬
tual
attainments" which
are
ports during the war, 25% stayed
the same, and 25%* cut down.' Eh^ toughly^:cp^e^ted:;with;; complex
tion of high school. Stockholders
larged
business
activities
and

v

"^served

the

down

in. order.to improve the gerioral atmosphere for carrying on
business.' Customers were some'-

;

that

The paper., shortage, however, did
hot have the effect* of/cutting

soldLijand
their mailing

is- of

expected /to be a leader in the
presentation has been steadily im1trend, seems to be a definite lag>proying.- This- may be attributed gard. - And the
majority of com¬
in part to the quasi-public char¬
panies in the cinema industry are

age had; the

•

.

conjured

man

: 'readers

'

7 T;"'

,

v

1961

The
Variations in' Forma of Statements
movie, industry, which might be
The general level of accounting

,

company

+**

of the annual report.
7, The practice of issuing interim ,/ No
particular industry seems to
reports continues to expand for be leading the
way in the move¬
the same reasons that prompted
ment toward better reports. Those
changes in the annual reports. of railroads and
public ut lities
Slightly less than 25% of the com¬ are obviously more complete and
panies surveyed issued monthly,; the
accounting
presentation,
is
quarterly, /or semi-anunal stater more standardized than the indus¬

.

expan-

rrjutf tt'

sion.t'-7.:;.;.^k%jV"7

for debt reduc-

ness

to- have run ^head of th;e
secular trend of both the account¬

obviously to promote understandI ing and cordiality in industrial re-

**»!••<y ^-;, .*.-•>^

tom and regulation dictate inclu-

*r

seems

for

i^-ywur/v;

THE COMMERCIAL & FINANCIAL
CHRONICLE

progress

' Publicizing Reports- /;;•;/77
1 j 7 Several special groups of interested

v

to

7 77/;
.

'

!hr-

faltered.

voters,,/ governing

ship V among

w

.'

public

relations

cated

about

the

changes

taking

place. Better reports will improve
relations between the great mess
of

stockholders

and

the manage¬

ment of the company, and will do

much
of

the

to increase

the

knowledge

general public concerning

the role of corporations in modern

economic life.

^lirsaa^iDciGber

THE COMMERCIAL & FINANCIAL CHRONICLE

1962

17; i#*6

4-

-Profitless Prosperity''
(Continued from page 1929)
and principles of'human
welfare and stability widely igcepts

nored, but each of the factors that
contribute to the production and
distribution of human utilities by
which we live and thrive seems,

;

possessed by a spirit of
There apparently

also to be

abandonment.
is

a
feeling:
deluge/".

I

there exists no

planning, no caution,
standing of things to
have

had

have

an

nostrums
v

for

rewards to those two agents.

are

he finds

their products and services,
showing reduced profits on in¬
creased capital investment.
The
automobile industry which may
be taken as a fair example of gen¬
eral Conditions, reports operating
losses in the face of the most in¬
tense demand for its product in

no under¬
come.
We

good

The

fact which we may

*

problem facing the nation is one state of the national economy
condition, and not of theory.
from the point of view of public
account human
confidence in the immediate fu¬
frailties
and
selfish
interest,
ture.
which cause actions to be taken
(Shortages and rising posts rof
which are unreasonable, merely to
.

We must take into

.

Surely, no

Wage-Trice Dilemma

-

The chief factor creatingprofit-;
less

Mr.

prosperity is the wage-price;

fory reconversion

and

effect "tar the

Speed /and the mechanism and

Wilson

adjustment of the machine
provides,: employment.
That is very/, elementary and
very trite, ncr doubt, but so un¬
the

which

spend something like $1,000,000,*
000

an

com¬

have

labor

as;well;rec¬

ognize whether we like'-it or
not. Everything that touches the
element of profit has: an < important -affect on.4 the whole
community, ft is not merely; a
question of social justices Any¬
thing Which makes it more dif^,
ficult to bring together these
elements-has

stated, to cut back and slow down
a
large part of its program to

tcaniohgehduirel

The

and

materials

class gains.
pelled the industry,
situation thus encom¬

obtain temporary or

and-the

demanded

expan-,

siam

■■

first

productiveness of its

World

War.

It

was

in

this

'Of/iecllning /profits from which England is suffering,
spring-bf the ..expansion of em¬
should not be passed over lightly is that a whole'
section of the pop¬
ployment in all countries-of the
world, exceut Russia,-. This is a by/ ^conondsts: b^^oliticians;; It ulation is overpaid for its service,5

automobile indus¬
barometer* of the

of

wages

the

Certainly, 'capital will cease oeriod that many British indus¬
to accumulate under a. private en* trialists
appeared to have lost ?nterprise system that depresses- its centi^b^f6r: technical
/ MvanOes,; |
earnings to a vanishing point, de¬ and: just plodded along while
wifr ;
spite Keynes' theory'to the con- nessing the superior-progress v6f /
rival
trary.
■
trading nations.
As
the
use.

.

competition in the industry
insignificant in effect.
Thus Charles E. Wilson, Presi¬
dent of the General Motors Corp.,
told a New York "Times" reporter
in a recent Detroit interview, the
a

so

stipulated interest on capital,
the
employment never
comes into being.
The element
French /econohiistl, Andre
of profit—I am not speaking of
'Sieg¬
Coilectivism and Dertinins: Profits
the ethics, of it—is the main
fried, stated at the time: "The evil

so

is

ment in

that the costs of pro¬

: are

then

never was there a
better market for cars and never

try

passed

the

history, /for,

warnipgs, and we still
abundance of economic
unsatisfactory
and panaceas. But the

profits down" cannot long endure. such incentive • disappears.
No
Permanentrt,prosperity,vcaru :come better examploof .this can be fur-/
only from a continuation of capi¬ nished than what has happened-to
tal
accumulation
and
improve¬ British
industry following
If*
the

high that there
is not sufficient margin to pay
duction

was

not imply

do

the

"After ] us,

/ tl'v1.' f 'i

;i

welcome

sight

that

of."'

it

>.

v

is

often

/v

-

ij, ?,

menace

has been the cauSU/pf the growth
of

while

the

profits

on

Statism

capital

ere

and/ZipollectiviSm. It correspondingly diminished.
No
hassledkto*necessity of /goverrv- other community today is suffer¬

ment and municipalities operating; ing to such an
extent from this
at, faxholders^ :b^Pjense,_ utilities paralysis.' Certain
compartments
hi "the: national
that/; cpuld v

structure'-

conducted by. private enterprises:
industry in//Great B ritain
readily demons^a^s that! iiatiom/
alization;:•^ is/ mdst^e^il^^^;
^
plished in thosoTiblds of private
enterprise that has become
profitable, as for example, in coal:
mining a:nd;trmispprtStion.?
The

iso¬

are

lated from -the' levelling; influence:
of/economic laWsV The flexibility>■

,

;of retail prices is also eonsidOT-

ably/ hamijered/ Whereas in fhe
;6f/Wages the/part seems ito
be rigidly pegged. The
trade tm-1.

chse

ions nave imposed- their
point ;of
view, and now every increase in
Nationaliza¬ wages,"withthesddal
progress ih-*
lost tion is not the only result of de-? Volved, is considered a -moral
con¬
quest for Labor that must not be

^

But Collectivism

or

;

of/^pareht ;^rosi>eri!^r. / Thb;/5in4
Using the situation in the auto- j
anjfprice/,:/:': " / : *' /
.Profits. bM Volume Production
centiveton the part ofjndustrial;mobile, industry also as a..barom¬
/ Gan we afford to -follow ib®
!/A Labot Is exploiting a condition
It is not argued here that a rate ists to ieduce eoSt Would beJek- British'
eter Robert
R.Wason, Presi-j
exampiet": Are/we beadpd
dent of
the
National
Associa*. of high profit is required for in¬ pected to be ehlWnced whbn prof* for collectivism /and mationalbra4
/
normal ISM ;• elusive/ Manpower:
dustrial expansion and more em¬ its fall off, but whbn the -gains;
tion
rof
Manufacturers,
in
a
tlpn of industry? With a-judicious
reduced
shortages, -arising from; a tempo* recent talk
.costs/ '-fare / ecmstantly pqilcjr/the
interpreted the stock ployment. The margin of profits
/ti^^
still: pe,
threatened by
rary inordinate consumer* demand,
absorption by/wage market V collapse
as
indicat¬ normally tends to "decline WRh in¬
'ieartiers of btheiWise or negatiyed/ iiverted; "Now is %e-time to
accompanied- by a plethora of
ing a general< lack of conf idence creased production volume / and
money, has led to Wage demands' in the immediate future. Investors this declining, margin
can /and by political or other actions over •V^rse a 'trend that ''is; gradually f
that
threaten
to
destroy
the
should be accompanied by higher Which pfoduc^sd%ve\nOjou^tthl/ leading to infhi^riar^aghationt
are beginning to realize, earnings
economic equilibrium/ by which
wages.
The whole philosophy of
on savings will be reduced, strikes
industry
persists
and
thrives. win-increase and-both wages and; manufacture, particularly that re¬
Competition for workers never
prices will be forced up again/ lating to mass production, is based
before has reached its present ln^
The situaticfn, vhe asserted, threat¬ on smaller profit margin per-unit
tensity-^-nbt even in the War ens a decline of employment be* accompanied by larger fot&l profr;
period. The margin between pay¬ cause of
from page 1933)
shortages of materials its. This is the basis of rate making
ments
of skilled and
unskilled
Truly
we Will' find- ohe of the
brightest
and rising costs of operation.
A in public utilities, and it is /the/ hrsenal bf*
'
°
workers is narrowing.
The pro¬
means whereby large merchandis¬
dempbr^cy: Tpe men, p^esM/that^^liustb^^ere^th^re';
new
pattern for depression is
who / Worked /in /the fa^ries 'bt is rinsbnbed fheredn
ductivity of individual workers is
ing concerns can earn a high- re-1
to^!berbic//r
being outlined, Mr. Wason warned,
no longer taken into account. .Yetj,
teacft^;4ae^/.n^ghtsi the /patriotic, /the efficibnt jserribe
•unless prompt and effective cor* turn on capital with a smaller rate
millions are drawing Unemploy
ip production.; The.; gdyerihhent rbhdereid^^
on turnover/when "volume of. sales
rective action is taken.
ZSjreat/ -army of ?
caUed'/fcif-50,000 ida^s^d^pf production in the -mills - in. the
ment and vetefsans' doles, ^trrd Id
• /
A recent study by the National; increase.;/'
■/'•/•■V;'T workers turned "out hundreds of 1 mines and in
the factories of the
spite
of :?• unprecedented
high industrial Conference Board con*
If alt this is Wue, .what M thg
thousands^©! them. The! govern-; 'nation." : :
Wages, workers do not remain On
firms that the auto industry situ¬ -outlookinour own economy? €an
ment asked for more; ship's, and«
their jobs; Thus we have afosenf
W-e
will -rt^nk >
ation is prevailing in many other,; we regulate, and readjust, *cwxhisys>behold the picture,—the sea lanes;
teeism, "feather-bedding,"
liiCr fields. A
things at this convention -and, we
majority of business tem of ^competitive private enter¬
andering rapid ; labor turnover,
of; the world filled' With floating s will b^. influenced, perhaps, \n
concerns report, that, rising wage: prise/and free -economy, 'so as to
and the like, together with a pro¬
/V^sels: manufactured by skilled- 'isbmb!:.
rates,; not offset by increases in continue to progress along/the
|
pensity- and Willingness to. atriko labor
iy6rkmenin'thffi''shipyards-:^
forced lines that have, in ;a period' of a nation:; They asked: fpr mqre/war
; 'productivity
—a mass quitting Of employment
efficiency and^ the genius "repre¬
uniilabor- Costs:^/shayidy^ highei* •few cehturies, made bun nation
material/bf)aiV/kinds//and / the sented
/with/the least provocation.
Li
i.'
ili/.1nn.'i.
than beforethewar.
the richest and most productive
by*our;Workers fnthe %
mills and mines and
A small minority of firms sur¬ oh earth?/ Must We/accept; the
factories and
.1 '. All this means lower profits and
bX/the^hansportaUon lines bf /the ,r;
higher prices.
veyed have been able to step lip i| former N^W JDeal prmciple of; a help and Mp was. extended thchiv
nation.! / ;>0
•individual effort through the use "maturb economy," a theory; df
!/■////Jr/////• ''
If / ttsey ; wanted sldlled Worked
;//]. John B. Small* Civilian Produc*
"T/want to say here ^pu}>libly :thbt
tion Administrator/ slyly—merely of <1) incentive plans arid piece-5 limited growth or a nasCOntdecar at Corpus Christi in order too build
this is an
work systems, *(2) improvement in dence,
and -fortify ^/ourselves an air field bur skilled construe*'
as a side remark—points this out
outstanding representa¬
tive/ convention.. The
in his
September report. - "In¬ machinery equipment and proc-j against 1t. by a policy of stagna¬ tion workers' organizations sup¬
delegates
esses and, (3) better planning and
tion and disruption? Or can we
sitting here in this hall are con¬
creased productivity tof currently
plied them in - full measure/ If.
shop
management,
including by sane economic policies, continue, they wanted more in the ship-- scious of their, deep responsibili¬
employed labor/' he states, "is
to grow and expand in both ma¬
ties. That must be true when thqy
needed now to bring about higher tighter cost control.
yards at ^jrttle/b^r Ipec^le .were:
While no. precise; tabulation of terial power and individual wel¬
that
levels
moved across the/(?bunt]y/ skilled';
of production
and thus
the amount of increase in unit fare?
.there, are /represented in this concombat inflation." But he goes no
workers, at the expense "pLthe; orf»
labor
costs
is
available, some
further. Not a word about how in¬
The -' answer
appears
plain! ganizations to whicH'they;belpng (ybhtibn':rand oh; the, flopr of Hps
manufacturers report over 50%
convehtion by you' who are here
creased productivity is to be at¬
Briefly,
everything should be If they needed men to manufac*
increase in these costs.
Average done within the limits of equity ture the atomic bomb at Pasco 7,100,000 paid up .members In the
tained.
American Federation of
increase falls into the 30% to 40% and
physical possibility and under or at Oak Ridge, Tennessee, when
X-abor.;
;/
There always has been a limit
range it is estimated.
Those who represent! such ! a
a condition of
democratic oppor¬ the officers of the government ap¬
to
the upward curve of rising
The late Lord Stamp, whose tunity to foster the profit incen¬ pealed to us to send the men" we constituency, as that 4n -ai
great
prices. Every new advance in the
general level of prices means a theoretical training and practical tive. This does not mean that en¬ never: faltered. They responded fity such/as this must .be • fully!
conscious of their deep
gave
him -a high trepreneurs and speculators are to in full measure, and all of these j
distortion of the nation's economy. experience
responsi¬
dilemma.

,

"

.

.

•

-

V'|fcr,

//||p^Continued

11_

-

X

«.

>•

*■

-

-

.

,

;

.

•

—

*

i

.

>

-

,

-

.

It

unbalances

the equitable

rela*

tionships of social groups and in*
in

dividuals
nomic
the

strata.

status

of

different

the

eco*

It alters unevenly
individual incomes

and expenditures.

It disrupts

con*

-and it affects
adversely the national fiscal set
up. It requires continues new ad*
justments that -disturb the eco*
nomic equilibrium essential to a
steady progress and a continuous
regime
of
prosperity. ' Modern
tract arrangements

-

:

business

is

Conducted

on

standing among modern British
economists before his untimely

German "blitz/' pointed!
nut the bangers to British econo^
•my from the forces that were then
impairing entrepreneurs' profits.
Lecturing on the economic crisis
in England in 1931, he said:
death in

"The

commitments

r

future
-

.- !

Profit Incentive Essential?

There

is already

dence that business

abundant evi¬
operations are

being slowed down under threatend

labor

saved

single manifestation. Industrial
corporations, the railroads and the
utilities, notwithstanding the ab¬
sence of excess profits taxes and
the seemingly unsatiable demands
a




complete 'Tais*

But it does mean a
modification of restraints, regula¬
tions, regimentation and all the
other handicaps io enterprise -and
risk that have come. out of the
war., or .have resultedifrormpoliti*

sez-faire"

cal

action taken

under

the

false

goods

were

produced in volume' bilities. They want to reflect,the

meet' the require¬ hopes and the aspirations of those
seven million workers.
$hat great" war.
They Want
And then they gave' their lives to legislate/for them. Thfey want

sufficient -to
ments

of

^

workshops/and mills and' to: register "their opipions and
point / bf;/
/ecoThey: suffered' * just. ak
x
did our -brave Soldiers: on: ^thb- nomic, political andvother quesbattlefields of. Europe,.. The fig*! itiops,to cpme before this convene
ures
shoW that f about 1-as %many; ikm^and/fchey^^iWUl endeavpr/tb d0?
J
in

the

factories.
;

so

so. so:

;; tion,
"

tliat .they capi go/back home /
thanks/of /

jand/there Receive
a

gyeat constituency

numbering

oyerH Seven

million Working m^n !
ghd. women. v ; //!- /•../ /
But now the war is over." and
!.
we

are

as

a

facing difficult problems

result of that great conflict;

It 4s very
to

difficult -indeed for us
adjust ourselves to the recon¬
.

version
are

period; through* which War:

passing. We

cause

we

want

governmental

are

to

impatient -be¬
be

free

from

control

and

gov¬

challenge/ one of them to ernmental, regulation and live as
point to a singlp instance where free Americans in a free country
and people with money
from personal consump* paid when business is profitless, our people fail4 4 to. respond to where democracy is the basis of
the call of the government during our government/ Daring the war
and employs" these two and that higher profits inevitably

ple with different capacities for

The

operations.

in

free hand. It does not

long as we have theory that a particular group in gave their^ lives!^ as ;lheihbers of'
in our democracy a belief in an the economic processes, by which the army of production' and aS,
unlimited field of direct tax¬ the community lives and supplies many were maimed serving in-the
ability and so long as we think its wants, should be unduly fav¬ army of production as were killed]
we
can
raid profits by taxa¬ ored at the expense of the other and niaimed on the battlefields of
tion in order to support subsi- groups. It does mean that profits Europe. Aten't we proud of that
dies and remedies in every di¬ should be protected against elimi¬ record? We resent these attacks
nation as well as low wages and that are being made upon us by
rection, so long shall we pro¬
ceed
on
the
downward path. the exploitation - of workers. / It those who hate organized;Tqbor
There does seem to be some does mean that the • public as a and whose hate is fundamental;
truth in that. Why are people whole and not one economic group and regardless of what we do or
in society should benefit from in¬ what we say they Will always
employed, and how do they be¬
creased productivity, and^techno- hate
organizedlabor and ;the
come employed?
It is because
i members of organized labor. But
some
one
brings together peo¬ logical - advances.. A

stock market slump is only

profitless

severe

made

a

return to

,

/

Is the

is

given

.

cease—and

stagnation is the outcome.,

criticism

America that

prospects. When the future pros¬
pect is highly uncertain and cant
not be reasonably calculated, for*
ward

a

be

mean a

It

has

long been an economic
maxim that high wages cannot be

we;

.
I we subjected ourselves to gov-«
result in higher wages under con¬ all of these trying years.
some
produce ditions -of competition. High prof¬ /."When the history of the war is ernmentai domination and gov¬
commodities at a' price which' its and high wages Should go to* written and we are permitted to ernmental control ,-so far as that
will leave a margin above the I gether. v A policy of "costs up* open the pages and look over it was necessary in order to win the

clashes

scheme

of

service

which

in

will

v

*

7*

i

f

-1

- v

V*L7

ViiM

.

THE COMMERCIAL ^ FINANCIAL CHRONICLE
av&r; If is mere repetitioh-whdn I

the

say here today that we made a
solemn pledge to the President of
the 'United
States; •* immediately
lifter Pearl Harbor, that we would
place* the strike weapon behind
th^ doOr* ^hd leavO it^there^ until

workers

average- hourly
in

c

earnings of.

American

90%, yet the wholesale prices
of
products
made
by
those
workers were only 2% higher at
the end of this period than at the
beginning. Startling facts, aren't
Victory was/wort; Over: the i total* they? In some peacetime years
itarian forces of the World. 1 The prices
have/ actually
declined
record shows that we kept that while wages rose* so*, great has.
pledge
ninety>nine ^and • tiine^. been the increased efficiency of
tenths : pereeht; ahd ■ that is a rec* American industry. This meant
#rd of which vwe ~are proud. - We that Workers gained in two ways,subjected ourselves to other con¬ by high wages and lower living
trols willingly and voluntarily in COStS.
order to win the War.
For instance, from 1923 to 1929
i
wages of factory workers rose 8%
Wartime Controls No Longer
while
the
wholesale
prices of
Needed
rose

-

.

.

*

But

the

now

•been about

is

war

goods they made actually declined
by 12%. We are Students of eco¬
nomics enough to,know that there
is but one remedy f of ihflatiOn-/a great evil—and that is full pro¬
duction, And What is needed is

It has

over.

since V-J Day
lahd We; are disturbed* because of
a

year

thd confusddr sittiatiori^ that} ^;has
fteyeloped, the tendency. on the
part of governmenttostiil'

exer-

not

vobjective Will

price control

of

bargaining to the rear and
clothe a governmental agency with
.authority to veto the collective
bargaining
agreements - reached
'hround: the xoiiferenoe tablfe' ; be*-

in

security in every
condition; of life—old age, illness

mined

and

willing

this

must

we

provide

hospitalization,
and nursing facilities and medical
for

care

We
that

have

deal

convention.. We
the

shortage

.

]|ected: *

ahd

been

tryirig:

very.

ienceSi
fairly
jmental control

experw

decent
goverriexercised by
tthe government up to June -30th,
.when the first governmental con¬
trol

act

and

as.

in

the

is

making

the Congress of
ithe United States refused to con¬

tinue the act in its former char¬
acter.

I

not

am

sure

that it

was

ditions that had

con¬

but

come about,

]at least an examination of the
fact itself and the refcord leads us
ito

the conclusion that

better

was

than

the

it at

least

stop breaking down

act

they ( Department
study - shows - what
strong, union organization and in¬
creasing production per man hour
accomplished over the peacetime
being a price control law, I would period from 1917 to 1939. In those
classify it as a profit promoting twenty-two years production per
measure.
Labor has- suffered as man hour rose to 135%. The re¬
'

finally passe^. Instead of this act
iiow in operation, passed
by the
•Congress of the United States,

a

result of it

fering

We believe that

now.

suf¬

are

some

way

the

tinued
other

control
items

believe

when

of

rent

and

some

comparable to
the time has

that,

price

control,

come

along

with

|

wage control, should be lifted by
the
government o£ the United

«States.

!

1

f>

Labor Not

We hear

•*■

some

.

complaints, from
persons and

that

■

measuring,

ru*'

Limiting Production

some-unthinking
dividuals

V ".'

up

labor
is;
to the economic

in¬
not

this industry were enough to at¬
tract the capital and expand pro¬

re¬

ductive

plants

we

capacity,

so

that

power

•

are

^

•

tial Worker had beeri more effijciSnt.
1
' :.
;
«*

The

war

mining industry* tThe development
there

has shown the amazing

remarkable/ "The
of' tonnage per man
has;.increased by leaps and
has

been

production
hour

-try. From 1943 to the war's end
production per man hour in the

bounds. These brave," courageous
men who work in the mines have

•munitions

measured

*

all-out

industry

war

rose

effort

up. to: new heights iii
production. We owe them a debt
of gratitude we can never pay,
and the nation owes it to them as

61%. Our

accomplished

in

less than four years a produc¬
tivity increase which would, nor¬

mally have take fifteen years. The
/cooperation -of labor was funda¬
mental in
mense

gain

and

without "it

won

the

war.

tion

the/Last,-twenty

years.:




war

of

for the

increase ;ih .production
per man hour is shown when we

From 1926 to the end of the

are

have

happy to. know
a
leader and

promisingly fought for the

we

The

of

.look back at

we

they

leaders who stood up and uncom-i

bringing about this im¬

could not have

<;effect

well, and
that

tion.
>

national

a

welfare

crea¬

fund

injured miners of the na¬
v,//,/•;; ■/'' ■ ,./>/
..

un-.

we are

of

toward

which

wil

provide

for

this

we

modern

thinking about
social

security

We centered our ef¬
forts in the State Legislatures and
in the Federal

Congress toward

housing

is

directly

traceable

to

ing construction. We
cooperate in full

are

better

a

thing that makes

one

social

create

in

the

order, that

for

serves

better social order,
is to establish a
feeling of

will

a

it
security

hearts
of

and

minds

of

the

people. If they pass the
feeling secure they
themselves to every

of

life

adjust

change

in

life

in

better

a

they face it with

a

We are

and

that

within

the

to

the

rising

of

sun

life

hope and aspiration and to

the sunset of life with

a

feeling of

security; and

we, th& Revert mil¬
members of the American

lion

Federation of

Labor are

concen¬

trating

our efforts toward
enactment
of
decent,

the

humane,

modern

day social security.

say to

Fight Reactionaries Ih Congress

One* more

point, ahd that is
going to drive hard
unitedly
and
successfully

this; We
and

•

are

against those reactionaries in Con¬
gress and in the State Legisla¬
who

have

joined

together
of enacting legis¬

in

free

a

*.

condition of

a

That

limit the

involuntary
was

ser¬

in¬

Under

the

opera¬

in>

law

and

conditions

the
when

were

the

drawn

that

Danbury

been

into Court
re-established

/We

have

-would* have

America;

a half a
century, and
yet after this great brilliant serv¬

mbved back

ice rendered by

are

lot

a

the( arjny, of

they

In

the

different

attemptihg

are

^

In the State of Nebraska

rep¬
rehensible statute is submitted to
the people for their

approval or

of

a

closed shop agreement. In order

words,

they

try to impose ihvoluntary, servitude oh you by
making U union man Work With
a

non-union

have

against his will.
Well, if they would have sought
expert udvice. and Cofhd to some

purchasing

unbalance between

now

and production,
same

workers

condition

possess

the

the

nation

buying

union

shall

motion

against

power;

After

picture
will, or a

his

it

operator

printing

building mechanic/'
labor belongs to

his

He
at

a non¬

can

will,

give it or with¬
and while they

might orohibit

a closed shop con¬
they cannot, under the or¬
ganic law of the nation, make you

tract

goods,

are they to re¬
the wage level they
were

all,

himself.

'

occupied before they

you,

Welfare
my

Funds

-

friends, > that

more

sided

efficient? Is it to be

a

work

made

Shall

be

against

one¬

affair,-that only Capital of

-the .nation

long

for.

the

dictator¬

form, is abhorent to working
and Women who adequately

men

appraise the Value of the blessings
of freedom and liberty.
These

when

fateful

are

days—days

must choose between the

we

defense

and

carefully

preservation

developed

our

applied

philosophy

persistent preachment of

those who would lead

in

of

and

economic and political

and the

us

into the

idealogical

experi¬

.

We, the officers aind delegates
attendance at this convention,
the guardians of a sacred trust

are

t-^the, preservation of the philos-;
ophy and principles of
ment which

almost

have

our

move-:
out of

evolved

century of human

a

expe-f

;

?

|s little difference, if

There

the

any,;

totalitarianism

of

Communism and the Nazism, and

Fascism of
The
for

the
to

Hitler and Mussolini.

philosophy of each provides
dictatorship and control and
subjugation of the individual

the will of the
the

State.

Neither

Freedoms

Four

Shall
Shall

function

with

non-union

_

the i benefi-1

will.

free

fettered?

or

be the wards of the State
the

State

be

subject to
Shall the

the will of the people?

labor and service of a human be¬

ing be his own priceless posses¬
sion- or shall it be the property
.

Shall

of the State?

embrace

we

philosophy Which provides for
forced labor and involuntary serv¬
Shall

itude?
where
must

aiid

But

They are trying it in California.

we

working

live

in

land

a

and women

men

exercise the right to

give

strike
'withhold their, labor
at will?..
Shall our

or

service

and

unions be free-formed democratic

Unions

or government-dominated,
government-controlled and gov-

ferriment-administered
is

There
answer

doubt

no

will

unions?
to

as

what

these

to

be v made

questions by the delegates in at¬
tendance at this convention.
one

With

voice they will proclaim

deposition

uncomnromising

Communism

or

their
:

to

Totalitarianism in

disguised in any
7,100,000
represent in this

any way open or

whatsoever... The

members

they
will

stand

as

a

bul¬

in

support of this position.
This great army regards democ¬
racy,
freedom and liberty as a
common heritage to be maintained
and preserved at any cost.
They
possess a keen appreciation of the
significance and true meaning of
the immortal words* of/, Patrick
wark

Henry—"Give me liberty of give
me

death."

//:;■ //:;/■;•■;

'

Summing

workers

they are
trying it. They tried it in Florida.
your

be

we

we

shall

or

whether such

picture operator work With

And then if fewer workers pro¬
on

serve

*

ship for the popular will. Nazism,
Fascism and Totalitarianism, in

convention

hold

more

will

women as

itarian /is
substituted
democratic process and

union miner against his will; I'd
like to see you make a motion

produces.
duce

basis.' It

functions. Its existence is threat¬
ened only when and where total¬

form

pressman or a

main down

/

democratie

freedom reigns and democracy

aS

working under a closed
shop agreement work with a non¬

ade¬
quate and necessary in order to
consume the goods which
industry
i

us

miner

during this period

of

and asked

us

"I'd like, to see you make a union

Of; inflation. The market must be
there, it* must be created, and the
way it can be created is through
the payment of wages,
so
that
the

/:'L

•

,

free

great

man

if there is

will have the

com¬

mora

a

a

a. law Was possible of enforce¬
ment We would have told them

as we

we

one

Just

working men and

States

to

of

we

before

/

Our

of

enact
legislation denying us the right
to freely contract with
employers,
interfering with the right of con¬
tract. Why do they do that to
labor? Why doh't they do it with
people of money?

"with which- to buy; the
goods that industry produces, &nd
power

all

work.

our

Against Totalitarianism

pro¬

power

purchasing

plete

matter*/

•

America.

about high
wages and Charging that that is
what is contributing toward in¬
flation.; First of all,
you must
place; in >the hands of : the con¬

an

one,

duction during the war these re¬ where totalitarianism controls ex¬
cept under limitations prescribed
now; compensate
us
by trying to make Us slaves in by a gracious dictator;

Complaining

suming; .public ; the

one,
ahd make them

actionaries

going to fight on

There

ask

as one

,

higher Wages, because we; can- disapproval
in
the
November
hot be made consistently more election
which, if passed, will
efficieht without sharing in that deny organized labor in the State
efficiency. We have not reached of Nebraska the right to negotiate
limit*

to
as

I have referred to these matters
because this convention will con¬

ac¬

for

the'

a3

sider/them

between

that

Hatters

Fight For Higher Wages

people

and vote

rience*

would

the responsibility, there¬

Now w6 are

going

they struck

as

America

principle

States.

of

prevailed

them.

are

we

stay at home.

pealed

fore, for the existing situation is
directly traceable to failure on
the part of Congress to ftieet the
requirements of the situation.
J'
To

and

them to march to the polls

the: Nbrris-La4
Guardia Act would have been re¬

tion

tensive housing program that will

Much of

against us and who have
supported it and voted for it, and
we
are
going to acquaint the
sovereign citizens of America who
belong to our organized move¬

any

To

to

very soon supply homes for all
need

lation

movement rests upon a sound and

vitude.

ex¬

4

to that is this,
a record of

Constructive

look

United

an

r

keeping

and by-paths of
subject members of organizations mentation.

future

near

,

answer

are

we

throughout • the

,

'

to

with

-

will be able to launch

and

they

those who vote against us, a rec¬
ord of those who sponsor
legis¬

feeling

volved in the notorious Gase Bill;
passed by the Congress of the
/
United
States, but fortunately
I hope and trust that the short¬
vetoed by the President of the
age of material will be overcome

we

Louisiana

distress and uncertainty.
They
rnust be accorded an
opportunity

unions

tunity to build the houses and
they will build them in America
in a way that will Challenge our
admiration.

that

way

tivity of free democratic trade

counting on these skilled men to
pea'cetime what they did in
wartime."' Give them the oppor¬
do in

in

■

Well, our

of

for the purpose
lation which would

going to

measure.

nation. K,'d

body, just

any

it

Commonwealths

is

tures

lack of material needed in build-1

and

ment

than if

workers to meet the requirements
of the nation. The shortage of

tried

trying it in Nebraska now,
they are trying it in other

are

the enactment of modern
day so¬
cial security legislation. If there

sunset

sufficient

They

they tried it in Arkansas;

necessary,

•

Must- Establish
I

from

if

under

promotion

masses

Congress failed
was, first, workers doubled
their Weekly -wage -and also re¬ us, too. It refused to pass the
duced their hours by 15%, from Wagner-Ellender-Taft Bill, a bill
47 to 40 hours per week. Conse¬ needed so badly in order to stim¬
ulate and* promote housing. The
quently, more electric power was
delivered / to
more
families
at reactionary' members of Congress,
those reactionaries who belong to
cheaper rates—wages up,, service
all; political parties stood tip, in
down. The number of city fami¬
lies using electric power in their spite of our appeal and the ap¬
Of
building construction
homes rose frOm 9,000,000 to 23,- peals
Contractors who stood with us,
000,000, and the price they paid
and
opposed legislation needed
for current was cut in half..
v
in v; order
to > promote housing.
-Thirdly, returns to investors in

employed
almost three
limiting production. All of times as many workers and were
that is untrue. The productive able to supply the immense de¬
capacity of the individual worker mand. Capital investment rose
hag constantly * increased; As new from 43,000,00tr,000 :to; $14,000,^
means and new methods are de¬
000,000,and employment increased
veloped^ out of the laboratories from 105,000 to 269,000 Workers.
*and the scientific Investigations of
This; is one typical example of the
i
the hation;
add as thesd new dynamic progress that is possible
rlhOthodS arb appliedj: ihdUstry iarfd under the free enterprise systettv
.the worker
have becomef more where production per man hour
and more efficient* Fewer Workers rises and unions see to it that
rare producing more.
workers receive their share of the
\).v
i
;Much Study was, given to x inl- increased ' we a 1th ; prpducedv
/proved mechanism during the war, Everyone" benefited
/Worker^
; and
Out of the !laboratory r
tdstg employers, and the public gener¬
jand
investigations which were ally. ; ;;/■ ;////
: made
we found that the ihdividI wish we had the facts of the

quirements of the nation; that

contribution

,

who

sult

must be found, and with
exception of perhaps - con^

new

.we;

already; We

force

.

ing to enact slave legislation and
impose that upon the workers of
the nation, "within a period of two
years we will reach, full produc¬
tion in this country and we will
apply the remedy.for inflation.
Let me show you just a little
about what has happened dn one
industry. The experience in the
electric power industry is parr
ticularly striking. A recent Labor

,'operation. Then

.then suited for the changed

its

most wonderful way

a

entitled

to

that:

the morale of workers by threaten¬

in

was

shows

reCord

ernment will

was

passed

was

my

My friends, our building trades
oiir people are meeting the issue. Iij
is not because of any question
are
centering their ef¬
forts in that direction; 'ahd I pre¬ of their service or of the shdrtdgd
dict that if^management AVill ctiH; of skilled labor. They have ap¬
operate with labor; if the gov¬ proved an apprenticeship system

passing

•

:

Construction Trades Depart-i

workers

siluatioft" that has «uh-

a

us " to

In

lng lor4homes; Many of them;tafw

The

question of price

have

we

^through

conscious of

houses.

up with the public demand and
the public need. But our
Building

^ntio^vje;1 wjll£^re^ter^^^will
•egainsi * goyerKm^^
tibn/of the/problem of inflation.1
',©ur ecohomic life;, *«
t •,' • Y
oh. the

this

Everyone knows that. Any article accorded a place where they can
that is shq^|. will .call for more, live; back home
in
their
PWn
prices/^ahdqic^afer black' rftarkets^ homeiand in decency: and ih: cqm^
but iull production means a solu-i fort.
;
i

resent*, that,/ we protest
against it; and heret'iri this conf

Therr

in

opinion it will take many, many
years before We are able to catch

ment

are

in¬

deter¬

economic

standard to which

And then

program

with

are

of

wage

are

legislation.

housing

a

will

we

to

With

no,
our

employers,

that

the

"

.

and

answer

ih the Amer¬

development situation.;

every man and woman
in the United
States, for human
life is above material welfare in
*

this hatibii* :

is

to- mobilize-

strength

and in addition

•*—

Federation

creasing emphasis. We

nation

infirmity

efficiency? The

7,000,000 members

ican

the development of housing. The
veterans who same home are cry-*

much*

so

of

iated with- the American Federa¬
tion* of Labor; we must establish

cooperation Of %anagemeiht mak¬ not afford to buy homes, but they
ing it possible for us to apply the want to rent homes and pay their
law of economics and bring about rent, every month* These veterans
production so it will balance with who. jaffered their litres 6n thd
the." law of supply and v demand. battlefields bf Eiiropfe
oUght td be

jtween ehiployets and ehiployees.

control

ciaries of

affil-.;

the workers of :the nation and by

tive

_

the

be

now

organizations

centering upbn full production by

'tlse-cbhtrOl^ovbr ■' Our: ecopomic
•life and to relegate even.ooiiecf-

We*

that

factories, objective

-

mz

American

stand

>

it

up,

we -

of

Federation

steadfast

and

(Continued oh

of

the

Labor

immovable

page

1964)

j

,'•! 'V'.

THE

COMMERCIAL & FINANCIAL

'i1

Thursday, October 17, 1946

CHRONICLE

1964

would have had
therein; and how

their companies

by

Objectives of AFL
(Continued from page

Communism and Totali¬
tarianism. We cherish the bless¬
ings of freedom and democracy.
"We resent the attempts of those

against

who seek to

utilize any

branch of

organized labor for the purpose
of imposing upon our Nation a

1963)

us

of

in defense

against

of

Americanism and

Communism and

Totali¬

tarianism.
Purpose
1

The

of A. F. of L

primary

purpose

of the

orthodox

vestments.

interest in the spiritual and
of those who work
serve is of tremendous im

Our

portance. 'We fully realize that
men
and women do not live by
bread alone. The intangible and
internal and most precious forces
of
human
life
are
enriched

and moral

investments would

with

foreign-conceived ideal- through the establishment of hu
ogy, totally unsuited to our Amer¬ mane standards of living or im
ican way of life.
We call upon
poverished by constant associa
the workers everywhere, who be¬
tion with sweat shops,* slum and
lieve as we of the American Fed¬
degrading
working
conditions.
eration of Labor do on this issue,
Environment plays a very large
to come with us and stand with
part in the promotion of spiritual

form

'

such

moral welfare
and

compare
life insurance in¬

I intend to cover

these

The

the principal
value.
The only guarantee that
the
bonds held will eventually

today as a

have

than

less

to be sound investments is
constant vigilance and revision of

portfolio as economic condi¬
tions change. Imagine what would
have happened to a portfolio of
bonds bought 20 to 25 years ago if
these bonds had been held with¬
out interruption.
' '
,
the

high

The

Bureau

National

and

a

values. For that reason

the

ous

statistical

becoming unsound in¬
vestments.
Granting equal vigi¬
lance over common stocks as over
were

bonds

and

of Eco¬

stocks for

.

•

parent body and

all its

the

enhancement of spiritual
betterment. :'

and

moral

While volumin¬
reports have been

compiled, I understand their work
has
not
progressed to a point
where they can make known their
entire findings.
They have per¬
mitted me to say, however, that
that they be given a hearing. If of the 3,000 bond issues brought
the trial is successful, as I believe out between 1900-1939 which had
it will be,/ then common stocks / par amounts of $5 million or over,

Admitting that
common stocks for many life in¬
surance
companies would be an
experiment, I merely recommend

organized units as educational
eliminate the human or specu¬
We, of the American Federation
agencies and the pursuit of a non¬
of Labor, will gladly cooperate
lative element in the manage¬
partisan
political policy, have
ment of a common stock port¬
served
as
the instrumentalities with the Church and with* civic
folio.
through which the material, social organizations in the promotion of
humane, spiritual and moral val¬
(3) That there is no solution to
and cultural welfare of the masses
ues
and in the advancement of
the problem of year-end eval¬
has been lifted to high and still
civic and community betterment.
uation,
higher levels.
We are Americans first.
We be¬
I
have
gathered some facts
The membership of the Amer¬
lieve a good citizenship is a pre¬
which may lessen the strength of
ican Federation of Labor has ne¬
requisite to good unionism. Count these objections, and I ask you
gotiated wage agreements through on us to fight on for the promo¬
gentlemen to examine them for
collective
bargaining providing
tion of spiritual and moral values,
what they are worth.
for terms and conditions of em¬
for economic, civic and commu¬
In this paper common stocks
ployment and in addition through
its sponsorship of the Fair Labor nity betterment, for better homes will' be discussed largely by ex¬
Standards Act has served in lift¬ and a better homeland and for amining the record to determine
ing the substandard rates of pay an America ' which manifests a the result of investing in common
stocks over a period. Inasmuch as
for thousands of underprivileged
new sense of appreciation of the
common
stocks
are
inevitably
and
unprotected
unorganized
virtue and value of democracy.
workers.
' ■ 4 :.:4/ .-<-./
compared in the minds of life in¬
surance company executives with
the prevailing type of investment

estate.

For Life
Insurance Companies
(Continued from page

•

•

'

in

profits,

the

as

common

well as income, on
Fi¬

sym¬

ing painful memories of the 19291932 debacle to distort the picture.
Of

by




.

stocks fluctu¬
This very

common

course

ate over a wide range.

the

possible

makes

fluctuation

larger income return available on
common
stock
and the greater

profit possibilities.' .
But
common
stocks

.v« ;

not 1

are

price fluctuation as the
accompanying table, which con¬
trasts fluctuations in stock prices

alone in

and

of

prices over a period

bond

will demonstrate.

years,

1917 to

From

1920, bonds de-;

nearly 25%. Stock
declined in the 1919-1921
clined

Thereafter,

47%.

about

prices
cycle
bonds

-

gained almost 37% from 1928 to
1928, and then began a slow de¬
nearly 8% which ended
In the meantime,

cline of
in

1929.

late

stocks had risen over

500%, with

interruptions, steadily from

some

declining stock
1929-1930, bonds rose

real

estate

1921 to 1929. In the

mortgages

during the early

of the building boom.

stocks. Many common

25

to

stocks have

the last
years with consequent losses
their original owners. On the

fallen by

the wayside in

other hand,

most strong compa¬

1932 to 1937,

also suffered a

Jan.

1917-

-

(40 Bonds)

June 1920,

/

97.68
65.78
106.01

Per Cent Change

23.60

—

—

5.92

—

—

31.90

I

6.4

4

32.6

+ 61.0

4-40.23

—

22.55

—

7.8

—

7.72

4

24.7%

+ 36.9

4 26.83

83.46

DOW-JONES
Date

Points Change

—

rapid depreciation

declining over 21%.

of value,

Price
96.25
72.65
99.48
91.76

1937-1930
market, bonds

but in the

break in the stock

DOW-JONES INDUSTRIALS
Date

result

stock portfolio.

suf¬

important principal losses.
•There is a tendency to confound
common stock reasoning by allow¬

21.2

INDUSTRIALS (30 Stocks)

Price

Per Cent Change

Points Change

119.62

tions fulfill no useful purpose that
nally, there is a discussion of the Nov. 1919—
life insurance
63.90
could not be done by government.
problem of year-end valuations of Aug. 1921—
companies. Gradual saturation of
386.10
One way that life insurance com¬ common
stocks, one of the most Sept. 1929...
the available long-term securities
40.60
panies can increase their contri¬ troublesome factors.
July 1932—
is taking place. We know, for in¬
110.53
bution to our American system is
July 1933—
stance, that in the past 15 years
84.58
to
lend their finances and the
Common Stocks vs. Bonds
July 1934—
private long-term debt has de¬
195.59
judgment
of
their investment
Except in those states where Mar. 1937—
creased approximately 20% while
97.46
staffs to the raising of capital for common stocks may legally be Mar. 1938—
assets of the life insurance com158.90
private industry.
Our economy, purchased, life insurance compa¬ Nov, 1938—
panies have doubled. The larger
120.04
subject as it is to change, needs nies restrict their investments to Apr. 1939—
companies have already turned to
157.77
the stabilizing influence of life in¬ bonds, real estate mortgages, and Sept. 1939—
housing construction as a substi¬
110.61
surance assets.
The industry can
preferred stocks. Preferred stocks, May 1940—
tute
investment
medium, but
138.50
only
render
adequate service, however, do not warrant a sepa¬ Nov. 1940—
housing may not be practical for
93.69
however, if our investment offi¬ rate discussion, because the high Apr. 1942—.
many companies particularly the
213.36
cers stay in step with the times.
grade issues more or less follow May 1946—
smaller ones,
>.
Many of you are already resort¬ the bond market trends, and the
To these two main reasons for
As a matter of fact, bond prices
low grade issues follow the stock
declined
considerably ahead of
reappraising
common
stocks, ing to common stocks. Early this
market trends.
Therefore, what
year I conducted a survey by mail
the stock market in 1937. Follow¬
namely, the low interest rate and
of 104 insurance companies with is said about either the bond mar¬
declining
private debt vs. in¬
ing 1938, bonds maintained a fair¬
insurance in force of $100 million ket or the stock market will also
creased assets, we might add a
ly level position until late 1942
and over. I wanted to find out apply to the different categories
third consideration—the social ob¬
when they began; the long term
how •many
companies 4 already of preferred stocks.
rise which
has continued until
ligation of life insurance compa
owned common stocks and in what
Bonds and mortgages represent
nies to the national economy.
recently and which has paralleled
proportion to their portfolios. The definite promises to pay back to the trend of the stock market.
In rec/ent years the sheer size of
results were surprising. Of the 83 the investor a principal amount
The long term record of fluc¬
life companies and other financial
companies which replied, 42 indi¬ of money plus interest. Equities,
institutions has drawn criticism
tuations in common stocks and
cated common stock holdings with
particularly common stocks, rep¬ bonds reveals that common stocks,
from
social reformers who are
percentages ranging from .005% resent ownership in a business.
desirous of placing such funds in
even admitting a
greater ampli¬
to as high as 23%.
It was note¬ Bonds and mortgages are consid¬
the hands of the government. This
tude of price variations, are not
worthy that some of our most im¬ ered sounder holdings than com¬
is not peculiar to the United States
alone in substantial price swings.
portant
and
usually-considered mon stocks because they usually
but coincidentally exists in many
Bond trends, too, are sympathetic
conservative insurance companies
represent a prior claim on the as¬
other countries. It is a trend of the
to both money market conditions
are holders of common stock.
y
sets and earnings of the issuer.
times. Certain European countries
and the general trend of business
Isn't blind acceptance of this be¬
To many observers it is almost
have
already nationalized their
conditions.
Bonds could not be
lief dangerous?
It seems absurd
life
insurance
companies.
This profane to mention common stocks
otherwise because their promise
purchase credit instruments
in the same breath as life insur¬ to
fact should not be overlooked or
to pay is only as good, on the
only for their prior clairp or their
minimized. Private financial en¬ ance. There is perhaps no more
average, as general business con¬
sacred
fiduciary operation per¬ eventual salvage value. The mere ditions will • permit. •'• Bond prices
terprise must prove that its ser¬
existence of this prior claim on
will continue to reflect variations
vices are necessary and produc¬ formed than that of protecting the
assets is no guarantee whatsoever
in general business earnings in the
tive. As long as life insurance beneficiaries of life insurance pol¬
that the principal value will be
icies. The reluctance which some
future.
•
companies continue to invest pre¬
recovered.
Can anyone say that
mium
and
investment
income officials may have for common
/' Most of us will admit that wide
the
purchase of an instrument
largely in so-called riskless in¬ stocks in their life insurance port¬ which
fluctuation is present in all in¬
promises to repay the prin¬
vestments, these companies may folios, however, may be due part¬
vestments, The cyclical nature of
cipal fifteen or more years from
tend to justify the thesis of their ly to the lack of a recent common
today is risk-free? Of course not. our economy makes this inevit¬
icritics who say private institu¬ stock summarization; what results

reinvestment

•

1926)

Plans

common

made
'20s—at the peak market of
Many long, slightly in price. As business con¬
anxious years passed before the ditions became very bad, however,
real estate acquired by foreclos¬ bond values were questioned as
ure
revived to a point where suspiciously as stocks. From 1930
mortgages
could partially bail to 1932 bonds declined about 33%.
Thereafter, bond prices recovered!
themselves out.
Let's
look
now
at common 61% with the stock market from

in

Jan. 1928
Oct. 1929
bonds, a comparison is made here¬
Sept.1930
in between the price fluctuation
June 1932
of bonds and common stocks. Also
Dec. 1936,, j....
suggested
herein are so-called
Apr. 1938-.,,.—,,
which will
Control

over,

pathetically, any reference to the
unfortunate experiences involved

:■

Common Stocks

We will pass

purchase,

long term should

fer any

in common stocks.

(2) That no suitable buy and sell
formula can be devised to

a

%,

reasonable

assuming

prudence in timing the
no
investor
holding

i

tion of the

j;

companies

those

of

stocks

the

spiritual and moral values. Neither
Federation of Labor is
religion nor morality thrives on
prove to be the solution for
were in default of princi"to promote the economic,
social poverty. It is difficult to appeal mayproblems besetting life insur¬ |19.59% interest and that five years
the
I pal or
.and industrial welfare of working to the spiritual or moral sense
ance investment men today.
J before default 5.54% of the demen
and women and to protect
of any individual who, living in
Common stocks, however, will faulted bonds were rated AAA;
them
against injustice and ex¬
a land of plenty, finds his earn¬
not even be given an "audition" 6.98%-AA; 14.24%-A; and 14.40%ploitation. We submit our record ings are insufficient to maintain
by some life insurance men unless Baa. The greatest volume of de¬
of achievements in the realization
himself and family in decency and three main objections are over¬ faults occurred in 1933, but in this
of this objective as evidence of
comfort.
That means when or¬ come:
I
year the percentage was heavily
the sound premise upon which our
ganized labor fights for higher (1) The preconceived belief that weighted with rail bonds.
economic philosophy is based.
wages, old-age security, welfare
; So you see, we cannot afford to
bonds and mortgages are in¬
The mobilization of our eco¬
funds and the
establishment of
herently the only safe' pur¬ have blind faith in bonds. Many
nomic strength into free democra¬
decent humane conditions of em¬
chase
for a life insurance insurance companies have dem¬
tic
unions,
experimentation in
ployment, it is laying the basis for
onstrated equal confidence in real
company.
,
> < / 5
: collective bargaining, the utiliza¬
American

portfolio against fluctuations in
eliminated

which

bond experience.

life insurance com¬

placing more than a very
limited portion of its total assets

The same vigi¬
have protected

1930s.

early

bonds would also have

stock salesman. nomic Research has been conduct¬
Nor am I suggesting a new prod¬ ing over the past 7J/2 years a very
comprehensive study of corporate
uct to supplant the old one. I do
pany

basic industries

the terrific inflalate 1920s

lance which would

pressure common

not advocate a

survived

tion and deflation of the

prove

tages or disadvantages of haying
held common stocks over a period
of years,.
I am not here

nies in the more

salvage value may

ultimate

far

be

phases of the problem factually,
to disregard theoretical and aca¬
demic viewpoints, and to estab¬
lish from the record the advan¬

American Federation
of Labor, seek to create such fa
vorable economic and social con
ditions as will serve to enhance
of

we

investing

55.72

—

47.0

—

4505

4322.20

89V2
4173

/

4111.01

4131Vs

4

98.13

501/5

—

—345.50

4

69.93

—

25.95

—

; ;

63.

+

61.44

+

38.86

24%

+ 37.73

+ 312/s

47.16

29%

27.89

251/5

+

+

44.81

32

4119.67

4127

'

3/10
-

free from it—
diamonds, mink coats are just as
susceptible as government bonds.
We must admit it, recognize it,
and use it to advantage.
Nothing

able.

is

permit us
substantial profits from

Only common stocks
to realize

Let's examine a list
what
would have happened if they had
been held over a long period of
time.
Various results could, of
this

swing.

of 10 common stocks and see

be
obtained depending
the time at which the ex¬
periment is
assumed to have

course,
upon

started.

It

does

not

seem

prac¬

back earlier than the
1930s for such a study since the
economy of the United States is
much more mature at the present
time. The deflation of 1929-1932
carried the stock market back to
lower levels than had existed since
the first World War and washed

tical to

go

conceptions of
which confused
thinking about securities in the

out

new

the

erroneous

eras,

etc.,

late 1920s.

The year

1935 was selected as a
to,begin an

fairly average.year

*f&*mm mmtrnMprnqn

*MtyirD

■V

Volume

►

experience in
stock.

mon

revival,

a

holding of

a

This

was

a

Sears

com¬

a great
of median

year

a

levels, stock prices, and
prospects.
Ten leading
companies were selected for study,

(1)

general

•j

American Can
American Tobacco

19423

,

Corn Products

f

:

*

.

F'

'■

'

from

by hind¬
point. They were
■the leading companies in their re¬
prove a

spective industries in 1935.
The
selection might have been better.
AND

i,i':

{•".

-

,,

AMORTIZED

1"/

*'

'

.

Divs.

"

■

/.

'

V

'

Amortiz.

Cumul.' *$100,000
Excess

Investment

High

Low

$321

$321

$99,679

$125,091

$75,100

2,562

97,438

155,055

108,770

5,027

94,973

157,720

84,448

6,077

93,923

130,150

78,235

7,921

92,079

130,045

91,857

5,965

3,500

3,500

5,344

3,500

5,517

:

1,844

3,500

•

2,017

Vx 3,500

4,526

2,465
.1,050
•:>

3,500

5,487

■

•

•?

9,938

90,062

121,040

81,305

88,075

104,710

69,505

12,951

87,049

93,935

65,755

13,706

86,294

115,550

89,615

14.807

85,193

123,919

83,887

155,438

116,218

*Levelof

shape

4,806

3,50Q

1,306

;

ries

of

•and

unsettled

finally

through
rising cy¬

depression,

a

pre-war

the

a se¬

years,

restricted

war

the record reveals that a
bolder of these 10 common stocks

3'ears,

could have been assured
xeturn

end of the

3

a

his investment.

on

y2 %

At the

10-year period the prin¬

cipal would have been amortized
value

a

lower
the

^ear

of

than

$83,887,

the

which

is

value

of

market

principal at its high in
during the preceding

jyears.

As

a

matter

of

1935 in only four
years,

HT941,

1942,

'Value

these

the

than

the

was

of

final

10

any

10

fact, after
1938, 1940,

low

market

securities

less

amortized princi¬
If these securities

pal of $83,887.

continue to be held and amortized
the rate indicated

®t

above, they

"Will

gradually be reduced to a
principal value which will be
proof against most market fluctu¬
^

ations. If conditions

over

the next

10

years, say, are comparable to
V those since 1935, the holder of
these 10 stocks would be able to

•dispose of the stocks in

any

year

■without

a loss.
At no time during
this period was any
attempt made
to capitalize on rising

prices for

^securities.

The stocks were held
intact throughout the period, much
the way bonds would have been

g Jield.

num, and the duration and
of the existing business

cycle. A

parison

talked

about

between

the

common

com¬

stocks

bonds; we've

seen that care¬
selected common stocks in
the
last
10 years
would
have
yielded a good return.

fully

Now what about

purchases?
we buy?

common

stock

When and how shoulc

A Plan for Common Stock
Buying
If life insurance
companies in

purchasing

;

observes

foresaw

These

a

Admin¬

Labor-Manage¬

Conference in the

as

out

the

committed

Government

collective

of
best

the

industrial

to

means

to

bargaining

peace.

The Norris-LaGuardia Act wa«

designed to curb employer inter¬
ference with self-organization anil
collective
the

bargaining by limiting
of-

injunctions

in

labor

The NLRA extended that

policy

use

disputes.
to prevent intereference with the

practice of collective

blackjack

a

pound

Federal

as

of

name

/'

statutes

two

practice

a

side

80

of the

to

•

work

culties.

50

not fooled

were

faith, sincerely hoping
with

out

ginning of

40

60

table

management

the politico-labor strategy un¬
We had gone to Washing¬

30

150

the

on

ton in good

-

20

'

We

folded.

0%
10

F70

labor* the

be¬

solution to our diffi¬

a

But it

was

not to be.

bargaining.

The purpose of these two statute#
was
to establish an equality of

bargaining

between

power

labor

and management, so that peaceful
settlement of disputes by negotia¬

labor

delegates stood pat on the
absolute right to strike at any

-V

130

40

30

70

time, for any reason, and regard¬

90

20

80

less

70

10

90

public.

50

0

100

treated

important advisory services
were
recommending the purchase
of stocks at the
top of the marke-;

60

.

:

the

of

inconvenience

to

the

Wagner Act was
holy of holies—not to

The
as a

be

*Dow-Jones Industrial Average

touched, criticized, or even
gazed upon without genuflecting

The plan can be started at any

first.

time, the only requirement being
that

the fund

be

invested

sible.

This Federal policy succeeded
only in establishing large labor
organizations and widespread col¬
lective

relationship#.
To the
contrary, the number of dispute#
and strikes has steadily increased.

It

ac¬

not

The

U.

stop

S.

And while the President

piously

strikes.

Conciliation

Service

alone handled

approximately
000
disputes in 1945, compared
with 752 disputes in 1932.
Thera
were approximately. 5,000 strike#
in 1945, compared to 841 in 1982.
The average number of strike#
for this five-year period ending
in 1945

in

was

more

than double the

five years ending

1935.

The loss measured in lost day#

-

in

bargaining

did

average for the

-

,

tion and agreement would be pos¬

The

110

some

prices
would again advance
sharply. I
is usually difficult to see
clearly
during periods of extreme opti¬
mism or pessimism that
changes

-

90

170

market recessions ai;
those particular times. As a mat¬
ter of fact, you
may recall that

in 1930 in the belief that business
would recover and stock

100%

190

business

paraded before us the urgency for

of the making collective bargaining work of production is equally startling,
particular —calling it not only a right but a advancing from approximately Id
can occur in
gooc
time.
For instance, if the fund duty—the government propaganda million in 1932 to over 3S million
times and for the better in bad
were started when the stock mar
mimeographs
were
rolling
out in 1945. The 1946 loss already ha#
times.
ket was at 170, the fund would be supposedly
authentic
economic exceeded 1945's.
There
is
an
old ■ axiom' that invested 60% in bonds and 40% studies designed to force wages
No Equality of Bargaining Power
stocks should be bought when no¬ in common stocks.
As the stock up without any pretense;of col¬
;
There is abundant evidence that
body else wants them and should market rose, stocks would be sold lective bargaining. These studies
be
sold when everybody wants and bonds purchased.
followed the official New Deal management today not only ac¬
them. Actually,
Profits made from this plan
ine that wages could be increased cepts the principle of collective
however, the aver¬
bargaining, but practices it in the
age
person
is
not
;<
sufficiently could be taken out of the fund or without raising prices.
aware of
spirit, as well as to the letter of
forthcoming changes to left to be reinvested., In the illus
£j Well, it is to the credit of the
the law. That this national policy
act promptly
enough to protect his t tration given" it is assumed that men rwho represented you at the
invpstmpnf
Tf cocnritino
has produced industrial chaos in¬
investment. If securities are to be the profits made from the sale of
Conference, that the management
profitably held, they must be common stocks are reinvested in side never faltered on this issue. stead of industrial peace cannot
be blamed on employer resistancebought and sold at the right times.
bonds to yield
2*/2% currently, When it became .evident that the or hostility to collective
This problem of
bargain¬
timing has baf¬
management delegates were de¬
and that the income from this re¬
fled and is still
ing. You'll have to look for mere
puzzling invest¬
termined to keep the wage issue
basic causes.
serve fund is added to the income
ment counselors. To solve
at the collective bargaining table
it, soThe very foundation of this na¬
called "Control Plans" have been from the securities in the
original
where it belonged — the CIO
tional policy was based on equeldeveloped which reduce the fac¬ Stock Investment Fund.
called the General Motors strike.
tor of personal
ity of bargaining power.
Such
judgment in tim¬
This was their ace — the final
equality assumed that equal rights
ing.
ounce
of pressure, to
open the
and
: i
obligations would act as a
Judgment as to the proper time
Conference to the national wage
proper balancing check.
It con¬
to
purchase
and
sell
common
issue—the wages you pay in your
g
templated that labor would be
stocks very often is difficult to ■
Pfftuac Yah flsiRt"! Will
plants out here, the wages paid in
strong enough to resist unfair
apply because of differences of riUwTO
"ail I WISH
all industry. It is history now that
treatment and that management
opinion.
For example,
Michael MacDougall proved to thi^maneuver failed.
suppose
would be able to resist arbitrary
that the investment bo.ard of your
The President threw the Gen¬
the members of the New York
for

the

stock

the

with

cordance

market

at

level

that

worse

.

—

_

Michael MacDougall

life

insurance company were to
meet today to decide whether or
not $1.0 million were to be in¬
vested

in

stocks

common

in

to¬

day's market.

How many of the
would vote in favor of

such

purchase

be held for

would

is, how
would be optimisfic about

considerable length
then an experience com
to that mentioned in the

time,

parable

a

preceding section would

very like¬
ly follow. Over a period of time
the insurance
company would be

able to take out
to

would

a

amortize

principal

so

not

valuations
;

Securities in Fund

•

210

stock

members

and

istration to call
ment

start.

230

1929, ?md again in 1937, optimism
rampant. Very few profes¬

common
stocks
take
the attitude that these stocks wil

of

follows:

was

and

the fear of

popularly called the

.

the peak of the business boom in

sional

was

more

,

We've

and

v,

It

which forced the

strikes

as

For the period from 1935

business,

150, the proportion of

250

755

1,101

a

market

102,941

16,113

3,500

embraces

stock

1935,

Wagner Act.

in an effort to
national policy of
tiori of bonds is increased. : As
boosting wages without regard to
the stock market declines from
production all through industry.
150, v the
proportion
of
stocks
As most of you know." I was
owned is increased and the pro¬
right in the middle of that Laborportion of bonds is decreased as Management Conference from the

11,925

3,500

1945, which

rises above

1,026

4,601

1945

the

stocks is reduced and the propor

1,987
>

4,255

2944

-Market Value

2,241

4,550

ahead last fall.

over¬

the National Labor Relations Act
of

detect the danger of strike shoals

million, here

modern

a

policy. It all started with two
important statutes enacted by the
Congress; the Norris-LaGuardia
Anti-Injunction Act of 1932, and

is at 150, 50% of the fund the President. V Calling the Con¬
is invested in common stocks, and ference under the
guise of seek¬
50% in bonds. The bonds are as¬ ing the answers
tto the nation's
sumed to be those yielding 2y2% industrial
disputes,' the politicians
currently.
As the stock market and the labor leaders used it only

3,500

.1938

,

When

govern¬

radar-scope to

a

present floundering;

our

the need for

and

average

$3,500

JL937-

stocks,

common

be $2.0

to

labor-dominated

ment didn't need

after called the "Stock Investment

'

INDUSTRIAL

Amortized

'

5,741

.1940

LEADING

TEN

ON

Original

Income

Year

$3,821

cle of

VALUE

:

for

1939_»..

:

works*"

Divs.

;

into

1935

-

assumed

it

follows: A

derstand

all

the
A Labor Dominated Government

of money is set aside

sum

for investment in

Excess

Taken

:

in

1S36....

■

certain

due to

is

Our

The plan operates as

to

how

get a lot worse before
it gets better.

it

of this plan, therefore, 150
as the average level of

investment*

see

ive treatment is prescribed soon

taken

amortize the value of the original

Let's

Policy Is Needed

the market.

$3,500

utilized

be

the last 20
For the pur¬

over

is about 150.

was

(Accumulated Figures)

Divs.

Paid

"Vear

r-

the

above

would

sold

poses

COMMON STOCKS

•

\

-to

and

over

year

Sound National Labor

,.

years

Fund."

iDIVlDENDS RECEIVED

.

per

have

ages

the

not selected

were

as

of the Dow-Jones Industrial Aver¬

payments made by the
companies), and (3) that any in¬

Gypsum

sight to

v

per year

insurance company

come

They

common

vested

.

reduces

1965

" v
:. :';
(Continued from page 1933)
The plan described below att¬
binge. Tne world neeuea a cnance
empts to carry out the policy of io
relax; to forget for a moment
juying securities when they are the years of working and fighting.
low
in price and selling
them Then came the dawn — and the
when they have appreciated, The
hangover,
The throbbing hasn't
average price at which the stocks
s^pea yet. And, unless an effec-

of the original in¬
capital (in other words the
would require
total dividends of $3,500 a year
and would appropriate this, income
3%%

plan

possible the question of

insurance company.

average

different companies'

Standard Oil of New Jersey
U. S.

of

each

the

at

stocks would take out dividends of

\

Sears Roebuck

}

$ v\

Refining

General Electric
General Motors

■

v

companies

of

price existing in 1935; (2) that the
life insurance holder of these ten

'

:

invested in

was

as

when to buy, but it leaves the
question of what to buy wide open
for the experience and knowledge
of the investment experts of the

% ;

>

„

shares

common

these

'-^^v

■; Eastman Kodak

■

y

that $10,000

the

namely—

Allied Chemical & Dye

much

Three assumptions were set up:

business

|

1933 and 1934.

years

This

needed.

Roebuck, for instance, omit¬
the two

ted dividend payments in

of

year

following

year

depression, and

CHRONICLE

THE COMMERCIAL & FINANCIAL

Number 4534

164

aHWMMSi

',

substantial yield
the value of the

th.at price fluctuations
entail

of

anxieties

the

portfolio at the

common

stock

end. How¬
ever, the question logically arises
—can

a

develop

life

insurance

company

plan to take advantage

a

©f the fluctuations which occur in
stock prices and still be able to
take out
come?

a

reasonable annual in¬

I think it is

perfectly

pos¬

sible.
In
analyzing
stock
market
trends, it is difficult, to forecast
the amount of-earnings per an¬




many

it;

many

that

the trend of the market and how
many would

be pessimistic? Fur¬

thermore, of the judgments

ren¬

dered by the individual
members,
how many would be based on ex¬

pert

observations and

purely

about

year

oppose

how

and

An
a

on

how

many

the "hunch" system?

example of the operation of
Plan is given below.
system will eliminate the

Control

This

necessity of "timing" the purchase
of

Security Dealers Association that

"you

can't

win"

demonstration at

in

a

and

talk

their dinner

on

Oct. 8.

eral Motors

case

to his

personally

appointed fact-finders. They trot¬
ted
out the
government's same
phoney. statistics — that wages
could be boosted drastically with¬

demands.

You
knows

stocks

and

upon

which

bought,

and

common

here

shares

judgment

are

is

—

equality

power—was

MacDougall

has

been

tracking down the sharpers of the

He

is often called in

as

an

out

first sprung

of

never

ex¬

pert by the police department and

No National Labor

So,

you

see,

also

used

by the army and Mr.

MacDougall made numerous ap-

tiate
may

pearances

in

army camps.

to consider for a
development of our
national labor policy to really un¬

or

negotiations as
the

recent

a

"look

maneuver, like
at the books"

episode with General Motors.
While the law has given tangible
-

protection to the right to strike,
the employer's counter-weapon—
the lockout — is an unfair labor

tradictory.
It is necessary

moment

Unions are free to nego-*
not to negotiate.
They
negotiate in good faith or use

ployer.

Policy

we

.

this plan will depend substantially

.

raising prices — which were
just prior to the La¬ (scales
in their favor, the adminis¬
bor-Management Conference. The trators of NIRA went far
beyond
underworld who cheat at cards, fact-finders based their wage hike
the original purposes of the Act.
decision on these figures.
After
dice, roulette, and other "corne¬
Employers were forced by law to
the
raise
had
already
been
ous" for fifteen years, and gives a
recognize bargaining representa¬
granted, the recent Secretary of
They were,
most
interesting
demonstration Commerce Wallace broke silence tives of employees.
and are, compelled to negotiate in
with cards, dice and other gam¬ with an announcement that the
good faith, and agreements must
bling "gimmicks" used by profes¬ release of these figures had been be written into a contract.
sional gamblers to fleece the un¬ unauthorized and did not repre¬
No ' such
obligations are im¬
sent the views of the Commerce
posed uuon labor.
Unions may
wary.
Department.
;
'
;
even refuse to deal with an
em¬
Mr.

will work

sults which will be obtained from

now,

■

and

bargaining
achieved.
In
seeking to deprive employer# of
advantages
which
tipped
the
dition

do have a na¬
private clubs and during the war
tional labor policy—at least the
successfully over a period of years
served as a member of the navy
in making investments in common
bankrupt remnants of one.
And
stocks profitable. This plan elimi¬ intelligence
department
seeking the grossly inept government ad¬
nates hunch, but it is no substitute to sort out the crooks from the ministration of that policy makes
for investment brains, for the re¬
it all the more confusing and con¬
honest sailors.
His methods were
common

"..v.

the
nation
that this basic con¬

khow,

the

t

(Continued on page 1966)

t

,THE COMMERCIAL &

1966
V* -y

*

people

Policy Is Needed

Sound National Labor

disputes by peaceful
It is the surest step to re¬

the absolute mercy of £ few arro¬

ment of labor

gant labor dictators.

(Continued from page 1965)
and has' practically dis¬
appeared from use.

practice

are heavily
in
compulsory arbitration
disputes.
C,

means.

strain
No Law

Against Labor Monopoly

by either manage¬
collective
agreement
is
The
immunity of labor from ment or labor which so frequently
binding
upon
and ; enforceable
underlies
those
disputes;: which
against the employer. It has been anti-trust law prosecution is one
cause strikes.
It can be done to
treated all too often as a scrap of of the worst examples to which
we
can point with
a chance of permit a maximum of self-regu¬
paper by labor.
lation, a minimum of bureaucratic
Management's desire for guar¬ making the public understand the
government interference., It is not
antees against breach of contract monopolistic position that unions
The

has been held

as

in

:

faith.

good

"

today*

occupy

refusal to bar¬

a

Labor was
left free to verbally attack em¬
ployers, without regard to fair¬
gain

to

tended

anti-labor, f- I

•

were/in¬
the purchasing

laws

anti-trust

The

assure

action

trary

of

would

last

be the

to advocate the curb

you

among

any proper or

legitimate right

public the opportunity of buying or activity of labor. Let me make
goods in a competitive market/It it clear that I am not asking for
ness or truth but employers were
curbs on labor which would mean
restrained in their basic right of is impossible not to recognize that
labor costs—when established on a return to what some people still
free speech—and still are./
describe as "the good old days."
A tribunal was established to an industry-wide basis—have an
Management abuses are just as
provide labor a remedy against industry-wide effect on prices,
much against the public interest
unfair employer practices, but no and therefore a corresponding ef¬
as labor abuses, and what I want
similar tribunal was available to fect on the level of competition.
The Department of Justice, al¬ to see is a balance of power which
employers.
Even access to \ the
will check the excesses of both.
courts
to
enforce old remedies though it has been trying—in a
fashion

has

since 1939

—

never

practically barred.
been able to make an anti-tmst
Examples could be multiplied
case
against a labor union .stick
to indicate the extremes to which
the National Labor Relations Act unless it was a case in which labor
has been twisted.
Many of those combined with management in re¬
of trade.
Although the
rules were obviously unfair. More straint
courts held otherwise, the Depart¬
important, though, they tipped Ihe
ment
of Justice was
convinced
scales so far against employers
that equality of bargaining power, that certain labor union activities
went beyond the protection af¬
so essential to the success of col¬
lective bargaining, was impossible. forded by the Norris-LaGuardia
They
It is clearly obvious that there Act and the Wagner Act.

were
•

is

bargaining

of

equality

no

power between management and
labor as the NLRA is administered.

is equally obvious that until
equality is established, there can
be no guarantee of genuine col¬
lective: bargaining.
It

-

•

;

equal bargaining power is para¬
the: restoration

to

mount

of

2.

to erect tariff walls
particular locality. ];k
Refusal to work and to install

Strikes

around
3.

7

"v

.

:/;'3 V-,/:

•

■

This

accen¬

to

other

extended

and

j

"branches of law.
"<
'

Judicial

'

the

case

a

in

point.
That law was'intended to
^safeguard, not forbid, the issuance
; of injunctions in
labor disputes.

-

declared

change' in
>

-

not

was

purpose

to

respect the power

any

of Federal courts to issue

tions where fraud

or

injunc-

violence

was

You may be familiar
with the Supreme Court's interinvolved.

:

pretation

which

,,

organized

gave

labor absolute freedom from legal
-

restraints.

>•:

-

"So

Th§ Court concluded:

long

as

self-interest
;

the

requiring

as

of

work

more

union acts in its

a

v

.

the licit and the

.

illicit under Section 20

are

job.

a

not to

Agreements

between

enforced

or

em¬

by

would

volved

sive

labor

become

lost

Justice

volved.

The

courts

non-labor

tivities

case

that

groups,

their

immune from

are

despite

the

under

as

ac¬

prose¬

Sherman

Act,

fact that trade and
restrained. /This

the

commerce

were

"

of

end

This

unselfishness of

completely illogical interpretation

particular

of the law to excuse a labor union

which

union activities

the

are

decision

the means."

left

the

for the same sort of

Federal

Government tiself helpless to cope

action

on

monopolistic
which anyone else would

be convicted is a transgression on

"

ivith

which

strikes

threaten

the

national

safety and health.
This
! spring the President was forced to
fall

back

his

on

powers to take

■railroads
,

to.

wartime

seizure

over-the mines and

save

our

entire

eco-

nomic machine from coming to

a

dead stop.
The

law

picketing
through a period
of revolutionary change—from the
point, where there was a grave
/question as to the legality of picketing in any form to its present

regulating

unrestrained
and

status

of

intimidation

citizenry and police.
-

massed
of

the

There: is no

incentive for labor to be anything
but

that

public

if

we

pocftet-

interest—and

book—which

cannot

be

tolerated

hope to have any degree of

competition left in this country.
As

realistic

businessmen,.

you

and I know that the correction of

one of the deficiencies
pointed out here is not
going to automatically end all
strikes- overnight.
It has been a
any

single

which Tve

also has. passed

coercion

the

arbitrary when it is known
actions illegal to other per¬

sons and groups are almost uni¬
versally ignored by law enforcement agencies when a labor union
is guilty.
..

combination of all of these things

through the years that has de¬
stroyed collective bargaining. This
combination of factors has worked
to stack most of the

high cards cn
bargaining
table,. Therefore, our goal of in¬
dustrial
peace
will
never
be
reached through the medium of
collective bargaining' unless our
labor's

national

side

of

labor

the

policy- is

man¬

from

6.

of

'

the

dealing witfi
employees at the plant level when
they are taking orders from the v
big union boss in Washington are
sometimes insurmountable.
f.
,3 To my mind, nothing- is more
damaging to. good labor relations
than industry-wide bargaining. It

.;/;'■/■

,

///:

talk to this point, com¬

me

pulsory arbitration, and its varia¬
tions
mediation boards, /labor
tribunals, • fact-finding
commis¬
sions,. and other new machinery
or procedure..
There is. growing
public support, and at least a
small,, segment
of
management
—-

secret that nationwide

is n.o

bar¬

the CIO.
few men
representing organized labor; to
support, for the creation of some
negotiate a basic agreement for
sort of Federal Labor Court.
The effort to inject
Some visualize such a court as all workers.
the exclusive tribunal for resolv¬ the wage issue into the Laboring questions of legal rights and Management Conference last .fall
liabilities of labor and manage¬ was the first maneuver in' this di¬
Others

ment.

board

a

such

see

court as

a

arbitration to

of

resolve

including the broad
questions which con¬
stantly arise in labor disputes!
Let us consider first where such
all

issues,

economic

might lead.

course

a

War

Labor

-

*

Board

,

was

a

gaining is the goal of
They would like for a

rection.

happens_ iii
will be embracing

If this ever

;

this country, we

of the / corporate
State, denying to management and
rigidities

the

employees alike the determination
of their employment
conditions
and their rate of pay'. Such stand¬
ardization would inevitably mean

the -high - standards ofoccupations so that the low
standards
of
others .could
be

form of labor court.. It became* a

lowering

substitute for voluntary

some

collective
bargaining. Since it seemed'more
partial to. labor, the unions were
willing to by-pass negotiations to
get disputes • before that Board.
The same would result if we had
a labor court-.
If it, showed; par¬

.

raised.* I

think

can

of

nothing

could ; more
completely
eliminate the chance for improv¬

which

relations .between:, employer

ing

and employee.-

:

?

V"'

\
Federal courts to protect the

people from violence or
tion.

'

.

g/Z

rejuve¬

nated and streamlined to give la¬

of disputes.

It

:

a

is

cord.

v

,

Labor

Witness that

Propaganda

segment of the la-

the; subject bor press which parrots the leftof compulsory arbitration that I wing line of what is fast becom-r
want to take this opportunity to ing known as> the "hate press/*
warn both management and labor
The stream of venom and malice*
I feel so

strongly

on

against the competitive enterprise
system and you manages of en¬
terprise, is intended foi^lfeaJy one
putes.
Compulsory arbitration means thing, and that is to stir "lip dis¬
that:'some politically appointed sension, suspicion and strife. •. All
of

the

board

of

any

to settle labor

dis¬

inherent

such medium

can

dangers

decide

where

a

man

work, when he shall work,
and how much he will be paid.
I
shall

employers are profit-mad
to-these purveyors of

slave

are

of

labor

continues

to

ignore the

public welfare by blindly follow¬

ing a few misguided leaders, the
American
public
will
shackle
them
with the slave chains of

drivers

They 'do not want your

complete truth-telling communi-r
cation system between the swivel
chairs and the work benches. Nail
these libelous

falsehoods as quick

Don't give them- a among
your employees. The truth is-the
Other acts.;
tion. Do riot be misled on this is¬ greatest invention / yet to knock
y. Now yoif and ■ I vkpow that any
the/ props out of propaganda* ^
sue by -those who would have you
proposal for atlch
amendments
Money is not the only thing that
believe that such a device might
will be violent!^ opposed, by the
best serve the interests of man¬ talks as far as your employees are
the

.

tion board can give no real assur¬
ance
of the peaceful adjustment

t/

the minimum re¬
quirements necessary to a sound
labor policy. /This program neces¬
sitates amendments to the Wagner
These/

tiality toward employers, no doubt
employers would be as willing as
labor has been to Use it as an

hate;
employees
say that that is involuntary servi¬ to like you;/ One of the greatest
tude1—slavery/
single things you can do to im¬
intimida¬
•./ And if the great rank and lile prove employee relations is a fast^,

manufactured

or

the Clayton Act,
Norris-LaGuardia
Act and

Act and perhaps

long as unions acted in their own
self-interest, and did not combine
with

against

public in¬
damaging; boycotts

against
farm
products;
'

manu¬

every

held

Protection

terest

join

except under point number five—
where the employer was also in¬

cution

the

5.

The significant thing about this
listing is the fact that the Depart¬
of

law

anti-trust,

alties for violation;

facturer-contractor group.

ment

of

labor ■ and
all- other
groups alike;
4. Orderly procedures for the
peaceful settlement of jurisdic¬
tional disputes with suitable pen¬

the exclu¬

supply for the

Enforcement

anti-kickback

price-fixing arrangement).
the
particular unions in¬

Then

speech;

3.

of

refusal

contractors who would not

the

regarding the. wisdom or unwisdom, the Tightness or wrongness,
or

policy that would re¬

receive the same privileges of

free

for manufacturers

union to* work

be distinguished by any judgment

the selfishness

the

bargain in good faith; to refrain
labor practices, and

1

/

"

»

tional labor

ployer and labor groups to fix
prices
on
building materials

(usually

of

interpretation

Norris-LaGuardia Act is

Its

well

as

performance

5..

inequality has been

tuated

'•

another r,

plete

Unfair Judicial Interpretations
/

into/disruptive

detriment of

public interest, I urge a sound na¬

than reasonably necessary to com¬

I1'?:'.' /

up /

the

to

agement,

transfer of work from one group

practiced by labor to¬ the

day.

boil

they
strikes

before

settle /disputes

to

chance-

a

to

as

footing so that they can
give real collective bargaining a
equal

collective bargaining agency.

pre-fabricated materials.
4.
Make
work, including

"violence

the

Let

Federal Labor

a

' vCourt

/

^

The

and management
bargaining table on ;.n

to

ondary boycotts, intimidation and

•

to

Shortcomings of

Policy

from- unfair

in¬

peace

x

To bring labor

against another union which had
been
certified, ias the legitimate

in this country it
is not enough to protect the pub¬
lic interest from monopoly, see-

dustrial

Proposals for

>

Z//V//.:-

With Employees

paradox/ indeed that
while management is going all-/J
quires
out to improve relations withwent after labor unions on such
1; Collective bargaining* agree*
escape from genuine bargaining. ployees
by every1 • conceivable v
counts as these:
ments equally binding on employ¬
The mere creation of new govern¬ means,- some leaders of organized
3 ."'3 :
1. Jurisdictional strikes, partic¬ ers, and unions;
/
ment
machinery, whether it is labor seem to be doing everything
2. Both employers and unions
ularly where one union struck
called a labor court, or an arbitra¬ in their power to promote dis?
to

And while the re-establishment
of

.

Difficulties in Dealing; -

Present

The difficulties, of

voluntarily— that arbi¬

—

favor of
of " labor

1946

Thursday, October 17,

.

FINANCIAL CHRONICLE

labor and the
of "anti-labor" will
be heard to high heaven.

leaders of organized

hysterical

cry

compulsory arbitration.
I do not
believe that this is any exaggera¬

agement today.

When the work¬

ing man gives up the freedom to
work where he likes, when he

as

you

chance

can.

to

concerned.
nel

men

gain credence

Experienced person¬

know that the

majority

industrial strife originates-= ii*
/. I submit, that there is nothing
small issues, most> of them
likes, and to set his own price for
"anti-labor" or unjust in any pro¬
Industrial
his labors, liberty in America is to misunderstandings.
vision that will make collective
leaders must learn to clear u&
dead.'
these
misunderstandings,, to be
bargaining—which is the law of
I oppose such measures because
the land—work better. 71 submit
of my deep personal conviction just as vocal as labor leaders if
there is nothing "anti-labor" or
management's story, is. to be told
thalj most disputes must be solved effectively.
unjust in asking that the law be
Z ;
Voluntarily between management
enforced against labor leaders just
The whole
question of com¬
and labor.
That is why 1 am so
like it is against all other citizens.
munication between employer and
insistent on the corrections neces¬
employee deserves serious study*.
The truth of the matter is that
sary to make collective bargain*The principal
difficulty is that
a
national labor policy based on
ing work. Compulsory arbitration
of

-

.

program
is
not and collective bargaining can no theZ warmest message from the
"anti-labor," in/any part, and it more be mixed than oil and water. front office cools considerably by;:
would go a long way toward pro¬ You can take your choice, but you the time, it has sifted through all
the necessary
steps and to . the 3
tecting the millions of working can't have both.
shop.
Bulletin : boards, printed
men and women from the public
: Good employee relations can be
matter and loudspeakers all' have
resentment
engendered
by the more instrumental in solving our
their proper place in manager
militant arrogance of some labor
labor troubles than all' the courts
ment's arsenal to combat the "hate
leaders who
continue to ignore
and boards and commissions you
management" campaign of tft£ 3
the public interest.
•
can think up.
I've travelled this
leftists.
But even better is: the
There is no longer any doubt country, from
side-to-side and face-to-face, heart-to-heart talk
that the public patience with la¬ from top-to-bottom this year, and
from the "big boss" to his men. ;
bor unions is near the snapping I know that management is im¬
Contrast the class warfare at^
point
because
of the
postwar pressed with the absolute neces¬
titude of labor with the progres-* 7/
strike epidemic. In addition to the sity of having the goodwill of
sive policies which management
irreparable damage to- the na¬ their employees in a successful
leadership is stressing in an effort
tional economy—scarcities, higher enterprise. The management that
to give employees the things they
prices, increased inflation—many thinks workers - can be shoved
wanfand need—job security, good
of our more recent strikes have around in this day and age had
wages, opportunity.
73 struck directly at the safety and better wake up.
The parade has
comfort of John Q. Citizen him¬
NAM's Employment Stabilization
passed him by.
■

this * six-point

v

.

.

self. His

impatience against trans¬
Program
> Z
;
You ment who spend all of your
portation
strikes,
coal
strikes,
Take
NAM's
nationwide em^
working hours and give up a lot
trucking strikes,
utility strikes
stabilization program
This readjustment — or balanc¬ which have endangered or cut off of your, sleeping hours on the ployment
/ ..The pages of the law books and
now-under way. With NAM's own.
his supply
of milk; food, coal, problems of establishing good re¬
the newspapers are filled with ing—of legal rights and obligations
16,Q0a members behind this pro/
is not a dramatic course.
It has transport to and from work, his lations between employers and
gram and the cooperation of the
judicial interpretations and highly but little
public appeal. Yet, it is electric lights, and yes, his beer,
40,000 employers belonging to; the
partial administrative rulings the most important step that can too, is reflected in the public employees, know some of the dif¬
associations of. the* Natiqnal In- ...
ficulties involved. ;;
' ; v/
' ■ '
which have put this country at be taken to facilitate the settle-. opinion polls which show that the




bor and management equal rights

and responsibilities under the law.

[Volume 164

Significance of the Stock Split-Up

examin0 ^ American industry to
toXT' uS- P°llcles with a line
Hut fh»mb 'i1 an effort to level
Production
that

"

Steady jobs and steady

the

can do more to refute

u

even

fhatT' • That'S 111(3 diff<*riskfnlhti
'nvestor makes by
ence

Inof putting it
Job-creating

instead

tends*

CUnty of government

Management and Xabor in Same

Boat

.

.

sv

lal)or must

?nd

DnnV vl
are ln.the same b°at.
v""' yo" forgot it and don't let
forget "• The !UctoIethL Cti, Pepds 0" working
Tbe..management that
f

ccm

c?
emP'oyees in a
S ,of sincerity and honesty is
on! ^ h-1 a ot farther than the
shoulder
rParnes a chip on its
lbhnr net,labor policy, Yen a sou"d national
based on equality at
sniVit

Af

fbfT"® tabIe' quality be-

fere

vi

iaw' and eQuality of

^bor^ni
and
Jaoor

this

All

*nkf of buS1ness net aboutin the
1%%
invested capital

onterori-e,
enterprises

1

Y

-

ceedingly large per share earnings
which might lead to wage de¬
Split-Ups

there

of

something
price of split-up
be true, as so

suggests

least

at

were

sions

„

mands

the

of

prices

Some of the distilling companies,
some of the department stores

(see
box).

the

in

tabulation

smaller

1945

in

shares

criticism

and

sub-divi¬

55

or

asked for the company's products.

addition; to the more than
splits announced
in
1946,

185

has

always

distract public attention from ex¬

at about the same

were

both dates.

on

Statistics of 1946
In

Exchange?

lower-priced

•

have

may

had

this

objective

mind in 1945 and 1946.

in

Both in¬

But

re-

1 am Convinced ithat

management can work

of

Furthermore,

investors, liX The "Ideal" Price Sought
particularly in the closing months % Incidentally,/ management
Not

few

a

of 1945 and the first half of 1946,

to have been driving at an

seems

The
in

market analyst
who

man

Other

the

considerations

Some

split two-for-one early this
when it was selling in the
60s, sold as low as 5 in 1937 and
as
low
as
8
in
1940. Barker

year,

Brothers old stock,

split two-for1946, sold as low as 5% as
recently as 1943.
Coro, Inc., old
stock, split three-for-one this year,
when it was selling around 40, did
not sell above 14 at any time in

stock.

him

to

,

Allied Products old stock, which

is interested

owns

of

some

was

split-ups from the standpoint of

the

look at

us

examples are cited:

,

itself.

let

of dubious merit.

reasons

.

in

now

the

unjustified splits which ap¬
pear to the naked eye to have less
justification.
This year many of
the
splits
have
not
been
in
"growth" companies at all, and it
may be suspected, without calling
any names, that some stocks were
split up wholly for passing market

the 185 stocks dustries have been enjoying very
split this year, at least 58 had large, and, perhaps to a consider¬
stocks.
It
may
been
previously split sometime able extent, non-recurrent earn¬
many
people
seemed to think
ings. Indeed, profits in some cases
early this year, that the aggregate during the past 15 years. Of the
have been "embarrassingly high."
market valuation of almost any stocks split this year, eight were
Fourth, some managements seem
corporation (up to a point) can previously split as recently as
to have desired only to increase
be
increased by splitting up its 1945, five as recently as 1944, and
the market appraisal of the com¬
shares; but I suspect this theory three as recently as 1943. Eleven
pany.
This incentive already has
works a good deal better in a had not been split since 1937, and
been touched upon.
bull market than in a bear mar¬ ten not since 1936. So far as the
Fifth, often directors sincerely
ket. I wonder if a company gains record shows, 116 of the compa¬
wanted to provide a better public
stature in the minds of investors nies had not previously sub-divid¬
market for shares.
This certainly
and
among its customers if
its ed their shares. < On the other
has been a legitimate reason for
stock: sells
top -low
in price. hand, 45 had been split at least
split-ups in the case of companies
Some of these splits have been once before, 17 at least twice pre*'
like International Silver, Ameri¬
viously,
5 at least four times,
slicing the shares pretty thin.
can
Overseas Airlines, Canadian
/
I suspect that we have been go¬ 1 four times, and 2 six times, v >:
Industries, Eastern Airlines, In¬
Of the split-ups announced this
ing through a split-up "craze"
land Steel, and G. C. Murphy.
A
and that this "craze" was one of, year (some not yet fully consum¬
stock can be in a price bracket
the absurdities of the bull market. mated) 92 stocks were split twohigh enough to inhibit the average
for-one, 9 two and a half-forgone,
investor from thinking it is "with¬
Bull Market Delusions
30 three-for-one, 26 four-for-one,
in his means."
•
As every broker knows,- a great 8 fivd-foif-efce, 2 sik-for-oiie, and
many' people
who have been 6 ten-for-one. Ten stocks were
Justified Splits
trading in the stock market for split less than two-for-one, that
Whether a stock split-up is jus¬
the past three or four years have
is,' three-fox-two jor five-forrfour. tified depends upon where
you sit.
assumed that a split-up is bullish
about the future

rklfSPriSers wh° shoulder Uie
on

level

our

substantially

Stock

London

shares.

??,?£ aboutyour employ¬
truth Tu11
profits—that

the
tne

having

London," of course,
favored smaller and

menV'UbrZrSive "hate manage!
Sal, ,hTa'f.n than a" the
in thi paoerW TeliVer get printed
ees
ees

of

higher than the average stock on

i2ttToTCanS EmP£oyment sta-

hi

fhit

habit

stocks sell-for prices

nav

averages

(Continued from first page)

American

curves

Aean

|f967

FINANCIAL CHRONICLE

THE COMMERCIAL &

Number 4534

one

in

the period 1934-44, inclusive. De¬
troit Michigan Stove old stock,

split five-for-four this year, sold
in the pe¬
riod
1938-44 ; and
the\ split-up

above 8 only one year

shares recently have been
around 11.
/./v./ :
.
, .
Of

course, motives

f

.

are not

al¬

but
it
thing to
stock when it is selling

ways

easy :

seems

a

explain

to

rather

split-up

selling

a

strange

for less than $20 a share.
*••

V . •■
Increasing Stockholders' Lists

7,V.;Y.

.:.

.•

v.7-•''

,

In

my tabulation
noted
that numerous

it

r

be

will

companies

whose shares have been split this

stock-*
Of the 185 com¬
panies, at least 20 had less than
Of the 168 split-up shares avail¬
iclDur
and investor hardly can take ex¬
1,000 stockholders, at least 11 had
something for nothing, or that able;around the middle of Sep¬
I. have great hope that the next
ception.
The type referred to is over 1,000 but less than
1,500
the gross market appraisal of the
tember, 121 were priced between the sub-division of shares which shareholders of record, and at
g^e this nation a company would be higher after
10 and 35. Perhaps there will be
least four more had over 1,500 but
merely reflects growth*
/
™"rd 'ab°rt.Pol'oy under which the split than before.
Vi
some interest
in the fact that 8
Some interesting examples may less than 2,500 shareholders.
No
work dta? '
can / Of course/ this is faulty reasbn- of these split-up stocks were sell¬ be cited. Stocks like Monsanto doubt it was the intention of the
ing.
If a company has 100,000 ing under 5,15 between 5 and 9%,
mamgpmtnt
nope
Chemical, International Business managements of most of these
pPnf?5»rH
intelli- shares outstanding, each share of 31 between 10 and 147/s, 42 be¬ Machines, Sears, Roebuck & companies to stimulate a wider
stock represents the ownership of
tween 15 and 19%, 25 between 20
security Af "h
of its workers.
I have
of
shares
Company, Charles Pfizer, G. C. distribution
through
as 1/100,000th
part of the com¬ and
2478," 23 between 25 and 34%, Murphy, Mead, Johnson & Co. and making the stock available at
pany. If the stock is split-up two18 between 35 and 49%, 5 be¬ American
prices. The extent
k nlL
,
to labor itself for-one,' there will be 200,000 tween 50 and- 99"%, and only one would be Can, to mention a few, lowerhave been, or will to which
selling at awkwardly they
be, suc¬
shares outstanding and each share
sellingvat. over 100 (International high levels but for the subdivision cessful remains to be seen.
In
are allowed to will ; represent-• 1/200,000th of Business Machines).
of shares which has taken place
somq Cases there can be little
pubhc too long
ownership. Obviously, 1/101,000th
d0 its utmost
from time to time.
On Jan. 2, doubt but that stock brokers ad¬
Obviously,; the average price of
is
equal to 2/200,000th. ~ {f the
on
the New 1935, Abbott Laboratories sold at vised management that it would
stock sold at 100 before the split, all stocks traded
58%.;
Each January, 1935 share be easier to sell a stock at 10 or
it should sell at 50 after the split. York Stock Exchange, or on the

POlie,ies in the best

Sitorests n's

interests of th
the public, as that will
b6 to the. best interests of labor
and management.
•
,,.■*

bought stocks "to/get the split."
Apparently it was assumed either
that the stockholder was getting

"ideal" price

somewhere between
split-up shares.

10 and 35 for the

are

of little

importance. There is one
type of split to which the analyst

year

had relatively small

holders, lists.

bargaining

th?1 industrial
.,W1H Pian
rSta,ndably for the

Sritv

TeSizp^h1 iab°r leadership will
dangers
sLhLd°nnl, a!nbltl0rts and £bortalfPnn?„ Pohcies

.

,

Tvr

or

discriminatlon1against anyYtm

who

wants to join a union and
labor must regard itself as an in-

Ar!2 m which itbusiness enterPart / the. operates and

prise

support to management hi
the intelligent ,handling of wage
rates and maintenance of
produc¬
give

tion efficiency; if

We

are

to

lnZ?°Untr7 Sack on the

get

hfgh

t*}° Production ?nd prosperity.
It took cooperation to make this

now
equals nine present shares, 15 than at 20 or 30, and manage¬
would
which are selling at around 73. If ment took the advice.
.
\
appreciably higher but
there had been no split-ups and if
There;
Was •■/ much / historical
these
split-ups. - Split-ups
It may be argued, of course, for
the stock without the split-up had precedent for hoping that splitthat more people will buy a $50 have resulted in more shares, and
behaved exactly as the stock has ups would be followed by growstock than a $100 stock and that a lower priced shares. To some ex¬
behaved with splits-ups, the cur¬
two-for-one
split .increases the tent it might be argued that the
in/this
stockholders' lists; but most
rent price would be around $657
of
precedent material comes
potential number of shareholders investment community's demand a share.
from
a
period in which stock
for more and more stocks has
b,y making the stock available to
Bayuk Cigars- on Jan. 2, 1936 market methods were much less
more pocketbooks.
The theory is been gratified through sUb-divid- sold at 65%.
Each early 1936 hampered by regulations than at
that more people will own it if ing former ; shares into smaller
share is equal to eight present present. Furthermore, it is drawn
it sells at 50 than at 100, and that Units.
The new stock recently from a period in which margin
' \ f
'14
',*1
't\ * ;'s;J shares.
;

That is just ""kindergarten"
ematics.
,
.

^

in

goinfin tzi0* al- nations aud it's
ff +hfnl Neither management nor
it there. ^cooperation to keep
can

afford to stint

eration when

we

on

the process of

will

'

'[

•

i

i'. ». .•

,

up

Obviously, 'this is ; easier
accomplish in a bull market

to

in

than

market—and

bear

a

we

recently have been in a bull mar¬
ket. 'Whether we like it or not, split-

been psychologically
bullish; but, it is equally true that,
whether we like it or not; split-*
have

ups,

hps

Wm. Mee to Be Partner

.

The objectives of

managements

in ordering ^plit-ups have been
variednumerous; ■ but every
one
some

of

City, mem¬

-

pertained

has

in

to the price of the cor¬

poration's stock;
If they have
changed essential values back of
the v company's
shares,
these
changes have been incidental and
incentives

fraction of own¬

The

shares

a

share of stock. /•/;

may

several

/

to

split-up

catalogued under

be

The first is to

headings.

how¬ capitalize
approximate of Abbott

f It ijj interesting to-know,

that

ever,,

the

at

growth—as ih* the case
Laboratories, and .Mon¬

lows-of the

This is the most

santo Chemical.

•

partnership 6n Nov.

1.

Mr!

M^was^ formerly ; a partner in
y,Cruttenden & Co - Chicago. $ '

176

around
for the

22, which would bo
1936 stock. //

Heyden Chemical early in 1943
sold at 75.- It has since been split

ten-for-one; the

h£s ;been

stock lately

new

around

selling

28 Y2,
for

which would be equal to 280
the old.

i

•-

;

s.

Dickson & Co., Inc.,

their, shares

.was

higher than on

;2, _1946f and that only 73 of
the companies were selling at a
Jan.

lower appraisal

(three were ap¬

''justified"
tion/

obtain;

split

a

wider

a

seek to

may

distribution

of

shares, which objectives General

Montgomery

Motors,;

Ward

and

equivalent of $177 a share:

at the

recapitaliza¬

of

type

Second,

points from the year's high),

38

making the June, 1944 stock sell

Another type of

split/ somewhat

unique in character/has been
of

.

International

chines.

Business

that
Ma¬

Allowing for the' small

,

dividends,

stock

year-end

■;

become associated. with;4he-firm
as

..Vice-President

originations
sales.

The

located

in

9

in .charge-of

a nd

institutional

firm's main
the

office

is

Wilder' Building

Charlotte, N. C.-.The New York
office

is

at 30 Broad Street.




/

actly like

At

nounces that, Edgar J. Loftus has

,

study of stock distribution follow¬
ing A period of splil^ups* A few
facts drawn from it will be of in¬

Index

■must

•

be

the

1946, stood at.191.66.

the- close

same

-at

on

Sept;

stood1 at

'recognized,

10th
167.30.

-

the
It

therefore,

the

1920's

method,

w

through/ the
and /, which,.

American' Airlines

to

the

objective

apparently at¬

tempted to Attain this
lateral

~

split-up

desire

year.

to

obtain

that the split-up stocks did rela¬

wider

tively-.better in -the first phase of

course,-

the -market

accomplish "hew financing

the

market,

the

Oct.

big

table,

11

correction
as

a

whole.

than

Most of

prices, shown in

were

did.

the

higher than the

Sept. 10 quotations, although the

distribution

may"be

necessity

of

of:

Col¬

shares,

a

of

the - intention to

distributing

or

the

large

compound interest, each

equal to
present shares. " Since

early 1925 share now is
about 8.914
the

stock

is

selling

than $1,916 for

means

the

stock

Jan.

3, 1935.1. B. M. has expanded

more

sold

at 118 on

of earn¬
leased on a

through the reinvestment
ings

in

machinery

blocks of stock known to be held

royalty basis.

in family estates.

other good way

Third, management may wish to

around 215,

this

which

Motors increased its list 103% in
a

National Biscuit

year;

There has been no
of capitalizing the

company's tremendous growth.

th£

in

first-yean following the seven for
one

split in 1922 almost doubled

its list of owners.- Packard's 192£

split was followed by an increase
in

share

owners

from

lantic

22,000

to

At¬
Refining split its stock four1

the 59,000 in less than

compounding of which works ex¬

close Jan. 2,

an¬

priced / rather
than very lowpriced shares.
•
?
•Back in May, 1930, I made a

Schenley Distillers sold at 40%
1944.
Each June, 1944 terest, even 16 years later. Mont¬
share, because of split^ups. now is gomery.Ward increased its share-v
holders* list from 4.800 to 51,250
equal to 2 6/7 present shares. The
in 27 months. Following a 10 fo?
split-up stock recently has been
one
split up in 1920, General
selling around 62 (off more than

DowrJonesY Industrials,

R.

the behavior of medium-

concerns

in June,

proximately •; unchanged). -The. Bears, Roebuck & Co. attained in

Of R. S. Dickson & Co.

was permitted.
Inciden¬
tal# e^good deal of the evidence

trading

"

ear# September mar^
Stock .Exchanges- and other ex¬ ket collapse (abotft Sept. Z10th),
the market appraisal of. 109 of the
changes, will;/admit William R'
companies; which .had; split-up
. JMee to

bers of the New York ahd Chicago

them

way

ership, or to the real worth of a

trinsic value of

J?' Jf'./CIucas & Company 70
Street, New York

sold

Management

mathematically bul¬
They add no things to the iri'- probably .relatively unimportant.

are not

lish.

In E. W. Cfucas & Co.

.„v

i

,

The Objectives of

in

price.

coop¬

upon

marked

be

,•

acquisition the

'

know-that the

ffte of our country J hangs
r
'•••».,
«r'

1

New York Curb Exchange,

have been

.

shares

tabor

math-

for one in 1928;

following

this

stockholders

a

year.

in the first year

recapitalization

increased 124%

in the second

year

and"

137%% more.

United Gas

Improvement, after a

five for

split under somewhat

one

abnormal conditions late in

1929,

increased its ownership from 28,004 in August

to 41,668 only two

months later and to

68,500 by the

end of the following February.

(Continued on page 1968)

•:

17,-194fi

Thursday, October

FINANCIAL CHRONICLE

THE COMMERCIAL &
:'H:

Significance of the Stock Split-Up
with

tinued

'(Continued from page 1967)

,

moderately less

ulated

em¬

There

will

be

increase

some

in

but the 25%, 50% and
will be rare, and
usually accomplished only:, with split: ; the
the
aid
of
investment banking officially*
"V
■'
100%

increases

stock
,•
*

.

house salesmen who had

stocks

com¬

*

"

has

sult

incentive.

"'

I' i•.

*

'

•

..

gradually

that

their

lost

The

in

potency

stimulating higher prices.

by the sub-divided

low-priced

too

splits

followed

shares

no

in the number of

equivalent

holders

from

which

This trend

they originated.

large

con-

As

of

Eversharp

General

increases

been a

Lane

the British type.

for 1

8-21

Schenley

for 1

9-18

Sears

for 2

12-27

2

for 1

,

11-27

■■■

3

for 1

for 1

for 1 -v:;

12-19

Savers

\

fori

3

_

,

,

R.)

>

following tabulation presents some of the main facts about 185 stock split-ups
announced since Jan. 1, 1946.
Unless otherwise indicated, the splits refer only to
common stocks.
The "date of meeting" refers to the stockholders' meeting at which iuthe capital changes recommended by the directors were, or may be, approved.'!
Usually the split is made effective (and the new split-up shares traded) about a

2

6-14

for 1

12-20

fori

9-10

2
2

fori

2-28

2

for 1

4-27

—

4

for 1

4-lt

& Mfg.,

Plywood

S.

U.

3-29

delay.

In

•

This procedure

has been reduced to terms of the new.
footnote.
1, *
.

is indicated in each case by a

(Textron) the shareholders recently disapproved the proposed sub¬

>/

,

division of shares.
The

as

the old stock (still traded)

instances, indicated in the tabulation, the split is not yet effective.

some

pne case

market, the approximate

price of the stock is given together with the price equivalent of the new
of Jan. 2, 1946. To obtain this price equivalent, the actual price of the old
stock at the beginning of 1946 has been divided by tlie rate of split. In instances
where the new stock is not yet traded, for the purpose'of uniformity, the price of
stock

In some cases, however, especially
other governmental body approval is necessary, there may be a longer

or

The "remarks" also

current

month after the formal stockholders' approval.

where ICC

shares have behaved in the

To indicate how the split-up

4-12

for 1

points out previous splits, if any.
giving light on the split-up.
*

show other interesting data

12-27

.

before and after the split, and

.The

11-14

for 1

2% for 1

United Mer.

3-17

for 1

2

Obviously, the opportunity for error in" such an ambitious tabulation,
different sources, is considerable, although effort has been
*
'i
'k
\ - £
■ „
1

.;•

from

tabulation

shows

the

stock

common

capitalization

the

of

bothU

company

I

10-

for 1

Bros., Inc.—.

12-17

for 1

2

.

Inc.

Louisville & Nashville

8-15

for 1

We-°tinghouse Elec.__

12-18

for 1

Loew's,

_

Taylor

4

Roi

2-15

4-10

for 3

5
Instrument-,
5
2
Textron;. Inc.,—2

8-17

3' V for 1

1

for 1

Sterling Drug

11-23

2

Bryant

8-29

for 1

Distillers

Squibb.(E.

7-10

Standard Oil of Ohio

3-12

4

Finance.,

Co.

5-

for 1

—--

Roebuck

Seeman

9-13

for 1

Stores

3

______

for 1

•

Glass—

Plate

3

Le

This

may'continue.

trend easily

Safeway

Pitts.

12-26

for 1

—

Raytheon Mfg.

Lerner Stores

Life

stim-

been

of

5-15

12-22

2-24

for 1

>

Philip Morris & Co._

10-16

4-16

12-11

for 1

——_

for 1

Corp.

Koehring

trend toward lower-priced

shares

registered share¬

Bros.

Mfg..

for 1

5

8-20

for 1

3

Airwaysr

5

______

11-

for 1

(Chas.)

2

Mills

12-26

for 1

2% for 1

Penney Co.____

Pfizer

3-27

___100% Stk.Div.

T. Grant

Hazeltine

8

C.

__,! 2

:

Household

There has

perceptible decline.

a

for 1

Pepperell

10-

for 1

2

____

Performance of 185 Stock Split-Ups Announced Since January 1,1946

/

Iri

W.

the

has experienced

in bear markets,

2

J.

3-12

for 1

,,

Amer.

Pan

10

Newberry

J.

9-21

for 1

2

Quigan

Freuhauf Trailer

American

of

price"

2
i;

J.

4

10-

12-19

Mfg.

National Candy

9-28

for 1

for 1

Dresser Industries

equities, in bull markets as well as

doubt have been

have

splits,

the

12-18

for 1

Stores

Gimbel

record, but the really

increases

of

result

a

"average

v;

moderate

by

selling at higher prices than the

shares

shares.

public was not as avidly en¬

Most

fol¬

was

in

gaged in speculation,

In 1945

practically every split-up
lowed

sulted

split-ups

for 1

5

for 1

Battery Co.

National

9-26
4-

for 1

10

Stores

Minn. Mining &

Date

for 1

2

__

& Co.

Johnson

Mercantile

6-26

Iron

Stores

Diana

Mead

12-31

Carbon

Dejay

Fedders

J-' 4-10 •?';

Stores

Dept.

May

for 1

Myers

Colorado Fuel &
Columbia

8-13

for 1
__

Bullock's Inc.

-

observe

_;

11-15

for 1

Stores

Bristol

,

to

for 1

Insurance

./

Magor Car Corp.

of Meeting

Split

M:,_!/ 4

Company

4-17

for 1

&

Bond

1945-1946 split-ups

failed

Approx.

V

Rate of

Meeting

V

fori

*

Mid.,1

Boston

■

•

3

Mfg.

Archer Daniels
Best

Split

___!_

Steel

American

The long-range

•',

■

! yyx

Company
Acme

few rather closely held and quite
'influence of the
hardly can be high priced stocks. Splitting a $50
stock two for one may have made
General
Observations
and
stated at this early date.
There is
the issue appear to fluctuate less,
Conclusions
little evidence, however, that they
but actually percentage-wise the
resulted in
any such
rapid in¬
From this study it may be con¬
crease
in
stockholders'
lists as difference between the market for
cluded
that
the
trend
toward
the old shares and the market for
that
which
followed
the
1920split-ups in 1946 in some cases
the new has been very slight.
1929 splits.', The splits were too
was overdone.
Close students of
numerous, and in some cases re¬
the
market
hardly could have

commission

important ones split in that year;

Date

of

many

1945. Be-*

subdivided into smaller units of ownership in

were

Approx.

only in a

attained

been

1946,

in

announced

split-ups

numerous

Rate of

:

'•'

■

more

low is presented a list of the more

50% and 100% increases in

many

special

a

larger

the

Among

Before

.; ;
V
its registered holders.
to
Splits may have accomplished
wasannounced only a moderate relief to overthin markets, and usually this re¬

Pictures, for instance, made
high -the day the intention

most cases;

than

panies, there is little evidence at
the moment that there have been

Brothers

Warner

nouncements.

alone.

Split-Ups Effected in 1945

house
splits

by investment
by
the /

more

salesmen

phasis through the first quarter
of 1946, but by the end of the sec¬
if
.the 1945 and 1946 split-ups re¬
ond quarter of 1946, stocks ceased
sult in commensurate gains in the
to be responsive to split-up an¬
number
of
owners
of
record.
I'shall be very much surprised

so many
be accurate,

-

..

prepared
made to

.

,

Jiy;-;
Price of
Old Stock
as of
in Terms of
10-11-46
Split-up Shs»
Bid
Asked
1-2-46
price of

v—zp

Price of
New SplitV-

'p

Split

LABORATORIES

Previously split
and

3

-AETNA
Had

1

in

1

in July

fori

Split

3-29

1-1-4G

1-2-46-

Sale

69

for l

3-21

200,000

400,000

2

fori

3-26

125,208

250,416

8%

19%

Old stock

12%

26%

8'/4

1,325 stockholders Sept. 1, 1945.

Old

stock

5 In

as

ALOE

(A.

1937

S.)

AMERADA

Old

(before

43

in

8

'V ;■

of

5-

35,000
788,675

6

1

27

140,000
1,577,350

Sale

would

common.

fori

4-17

1,290,568

16%

Sale

BAKERIES

2

2% fori

for l

585.012'!

5-24

292,506

6-

7

600,000

1,200,000

19'A

.6- 1

446,492

892,984

AVi

,28 i!

CANADA

;>y 27.;'

29%

split

LINES

1,270

r u

.

Highest earnings for
share

AMERICAN

any

GENERAL

Controlled

by

AMERICAN

tori

t'

fori

5-23

1,326,564

5,306,259

3

First split-up or

PRODUCTS

3

9-16

for 1

1,287,186

*33

3,861,558

Prior

split

fori

2

had

company

3-13

421,436 'V

842,872

35%

:

-

.,iV.

AIRLINES

OVERSEAS

Controlled

by

American

3

7-11

233,310

12%

699,930

SAFETY RAZOR
split 1 for 4 in 1924,

for 1

8-22

471,500

J.5%

1,414,500-

12%

Sale

Also

fori

8-26

85,000

7%'

340,000

!

to

later

75,000,

,

Also

split

'

4 for

in

1

fori

May

1925.

.

,

ENGINE

Ha,d 956 stockholders Jan. 2,

.

5-20

634,840

for 1

2

IMPERIAL DEISEL

ATLAS

4-19

"180,405

1,269,680

21%

.

11

:.y

:

2

360,810

"

stock

Old

5%

as

1936,

.

2

:

shares

19%

7%

fori

9-18

393,060

2

fori

6-12

150,000

786,120

22

8

•

-J

Sale

^

: 20%

^

9

(before

split)

sold- as

of March

-

3-29

-

>

202,205"

948;820;^

y

7

22%^23%

4. i for 1
for 1

10-

9

121,934

800,00042%^

*12%'

263,868

44,

;

*14%

/"':y

t

38%J

;

15%

'

-

1929

split

and

3

lo

for

for 1 in October
April 1935.

1

Booth fisheries——,!—
•

Preferred
.

dividend

arrears

settled

recapitalization in 1943,

bower

roller

4

,

525,514

_

.14% .15

..

.

.

,

Split

14%

-:;/v:-;•

yifor 1

3

2-

1

'69,153 ;

207,459

r

' T8%

19%

:

3

i

V

,

Also

200,000

13

y

13%

8

550,000

1,100,000

24

'y.

Sale

for 1

108,361

433,444

2

120,000

300,000

V 120,000

600,000

57

i

960,000

>10

32

10-

5-

for 1

/

1-14

for 1-

5
6

5-

,

2

dividends:

.1917;

35%,

33%1922 ;

1-16

16,000

40,000

fori

6-17

299,494

598,988

3

fori

8-21

335,298

3

—

fori

4-16

289,164

dividends prior

;

t

;

;

3

14,

for

1

split)
1939-1944.

in

2-21

2% for 1

3-19

"

was

.

'

200,561
■

1915;

3




.

15

2oy8

*

for 2

>9-

4

300,000

"

450,000

*24'

'

44%'

' 37%

"

"

Had

1

17%

Sale

y •:*.

r

187,228

y

.

137/a

/

..

y

22%

20

18%

1,005,162

\

16

Sale

33

f

Sale

14%

501,204

'

-30

35 "

.

34%

/"

:'"

y
6-25

139,567

*478,515

for 1

3-12

755,312

1,550,624

446,560

!•' 893,120

v

9%

2
1922.

.

/
•

./

.

L__U_i.-i.l4-l—for 1

split 2 for 1« in 1939*

.

„

7-

1

-

-18 %

v

Sale

1,870 stockholders April

~

17%

t

•

by

100%,

"1

14%

867,492

.* " 46,807'

,

22

'•

.

34

;; .36

did not sell

November 1927 and

November

10%

20%

3 ' for 1

-——

1 in

for 1

'%V

:r

(before

for

for. 1

.

4

--

—

1937-1938

vV59|U

1,005,894

355,054

6-15

3

TRUST

D-W-G'CIGAR—L_1—4

20.%19.35,

160,000

2

—

RENDERING-—-

-

Sale

-

—

GROCERS

in

Sale

67%

1

pfd.

—

stock

old

14%

for 1

split into 2

-

J

low

as

6, 1946

fori

2

190,781'^ v 381,562

5-15

14%

y'

15

16..

•

*
300,600,, .1,500,000

;DAN RIVER MILLS—5, for.l
8-19
!•. 'S
Also split/4 for*l| in January>l930i^v.*;a
4,4 •»,*#,
.

: Stock

■

*

"

bearing_i_^_

j:
'■

2% for 1

STORES

CUNEO PRESS

J14%

'

3-19

f for 1

CROWELL-COLLIER

262,757,

■

Previously

«

2

2% for 1

common

24

22,- •23

292,815

100,000

4-18

ior 1

TRUST—

stock

above

8-15.

for 1

58,563

;

1929

———

NAST—

of

Old

for 1

5,514,107% 21%

2,205,643

5-27

.',

v

TRUST—r——

CORO, INC.—

or

2

9-19

1935.

sold

plus 0.15

common

9%.-

•

1945, Sheila Corp. of

laughlin—

for 1

V,

CONSOLIDATED

> Low
•

Sale

Sale

;v!v

year

CONTINENTAL STEEL

•200/000

'

.•

•

•

r"Y-

7%

511,356

split,

to

1

.

'

6

•

low

2

15,

■

Call*

MFG

Common did not pay
,

1943.
6-, 1

170,452

2

split)

(before

CONSOLIDATED

V

! for 1

8-

5

—

CONSOLIDATED INVESTMENT

Philadelphia held 98,709 shares,
81% of outstanding shares.
&

300,000

,

4

manufacturing--—--

bliss

"

8%

12

/

-

INVESTING———'——!—i-

COLONIAL

shares.

in

./

in August

1

1944 each old
new

CLINTON

to

blauners, inc.
'

/

(all

increased

mills

stock

as

As

%);Sale

19

for 1

high as 372 before split.

as

CONDE
f

officials)

by

120,000

-

28
v.

/

.

ties

outstanding

300

beaunit

bibb

356,400

178,200

low

as
.

5

split 4 for 1 in 1936.

owned

Oltt

sold

:

beau' brummel
In

split)

1943.

cigars-.;

bayuk
Also

(before
in

4-

7,001,410

700,141

3

,

CORP

below every

or

in 1924.

In

fori

*8%y

18%

6-20 '

—J'* 2%

1927. /

split 3 for 1 in 1916 and 4

Sold

2

•7%

26,000

fori

10

—

in

1

.

CHICAGO TITLE &

1946.

_•

52,000

9-11

as 8% in 1943.,,
Also

23%

Sale

10%

•

Sale

inclusive.

stock

CITY

bros. !_

barker

fori

-

INVESTMENT

CHESEBROUGIl

GOO,DS

DRY

613,957 ;*/ 1,841,871

15%

! ! / !!v;

CORP

split 7 for

Old

■;:y.

to

90,000.

ASSOCIATED

10%

1919

in

-

CHECKER CAB MFG.—

io y»

Sale

1922, 30,000 shares of com¬

increased

mon

4

325,000

7-17

CHAMPION PAPER & FIBRE.

then

MFG.

ELECTRICAL

December

in 1920.

7%

1944,

Sjplit 3 for 1 in 1936.
APEX

at

Sold

3

fori

CENTURY RIBBON MILLS

26%

13

32,500

6

5,

—!

dividend

fornia real estate.■'

J'.

Airlines.

AMERICAN
Reverse

for 1

V

5-

3,446,152

1940.

Had 770 stockholders end 1945.

/

2,800

stockholders.
AMERICAN

Dec.

in January

stock

split 4 for

CENTRAL

.43%

Sale

fori

1,723,076

6-10

2

holders

PRODUCTS

Also

.'

NEWS

to

for 1

3

ALE—

GINGER

INDUSTRIES

CELANESE

stock dividend since

|

19%

Sale

19%

/Also split 31 for 1 in 1936.

34%

Sale

13 %

*13% *14%!,

v

MACHINERY

100%

CASCO

organization.
AMERICAN

373,984

10

3%

3%

Equity Corporation.

HOME

186,992

2

common

and 50%

V

9-27

J

>

split 5 for 1

].<• Paid
4

for 1

36

25%

in 1937.

MILLS

DRY

CANADIAN

recent year

CORP

24%

stockholders at end of 1945.

5,438

Had

s

CANADA

4%

.

stock.

old

on

2

492,000

■yy; 1945, y
Also

!___.

FURNITURE

a

>:15%

Sale

stockholders.

common

AMERICAN

49c.

had

company

i

;

"

to

246,000 v

split 2 for 1 in March 1945.

Had 210

EXPORT

Prior

1-11

23%

Feb-

CALIFORNIA COTTON MILLS

fur¬

AMERICAN

for 1

75 -V

-

AMERICAN

in

1

COMPANY

BURLINGTON

* 10%

6,452,836

588,974

2

"

1926.

294,487

■

November

for

3

7-23

2

split

Also split 8 for 1

69%

in

for 1

Sale"

20%

in 1942.
'

Also

ruary

BUDA

15%

Also

5

preferred

Increase

for 1

3

.

AIRLINES,,:

Conversion

:

4-

low

as

1942.

2
1%

low as

as

shareholders

2,606

lifv. 1945.

\iV:

for 1

2

sold

Had

v r'fc;

P

1940.%-

4

split)

19

low

as

CO

(before

in

AMERICAN

ther

and

sold

PETROLEUM

stock

as

split)

sold

BROWN .SHOE

PRODUCTS

267/s

Sale

!/25,;y

594,298

shareholders before split.

BROWN FOREMAN 1_

2

Split

Split

-297,149

3-19

fori

2

STRATTON

&

Had' 2,759

-'P !:

ENGINEERING

Meeting

'

BRIGGS

40%

.

After

Before»

Date of

Shares

•

Shares

Shares

;

Since

Split-up Shs.

Asked

Bid

1,699,916 '

Split

in Terms of

10-11-46

p Split

949,958

1

of

as

up

1936

1935.

STANDARD

ALLIED

,

for

for

3

Meeting

2

After

Shares

Shares

Before

Date of

1-1-46

i? at

-ABBOTT

up

,

Shares

Since

Split-

New

Price of
Old Stock

.

_

-16.

.15.

•■■

.

\;,32

,

;

;

|-'.sV':>■;

k

-

*»

' 4•fit

ft.*

■

JL;

.Volume 164

Number 4534

'X:'

i,

Price of
New

Split

Shares

Since

._

__

3

„

Formerly Spicer Manufacturing Corp
575

stockholders

Old

sold

common

',1943.

•: v

low

11%

as

xX*lVJ

•

/

•

.■

New Split-

in Terms of

of

as

10-11-46
Bid

Split

up Shares

19%

for 1

7-30

2X

for 1

1-

:

85,581

Split

Split-up Shs.

Asked

19%

V, 900,000

Price of

Price of

INTERNATIONAL BUSINESS MACHINE

..';.X '

171,162

34

Sale

18%

Sale

stock

split

24%

453,342 "

20%

24%

226,671

dividend

in

stock
4

1926

and

3

After

Split

Split

1-

8

1,145,926

2

split 5 for 1 August 1937.

DeLONG HOOK &
DENTISTS
Had

for X

11-

6

388,325

for 1

3

EYE

*

7-29

*22

776,650

xx

X;>xX;T'

XL-..X--

COHN

&

85,568

Sale

XX

8%

~X

,;-x

256,704

7%

: •

5

for 1

2-20

9,000

45,000

31

for 1

3-20

300,000

1,200,000

22

23

2

for

i

1-10

149,116

400,000

10

10%

SUPPLY

in

1

2

594,336

"

Decembei

-

-

DETROIT INTERNATIONAL BRIDGE..

2

for 1

5-

7

186,616

373,232

12%

5

for 4

6-25

758,745

948,428

10%

Sale

Old

MICHIGAN

stock sold

STOVE

In

K..V »•!' *' ;'•*

had

1944
class

Had

13%

7J/4

B

Paid

2-20

225,000

450,000 V, 16%

3

each

45

364,692

Sale

262,539

787,617

12

90,000

270,000

13%

old

1/100 share

GLASS

_

40

.-■..■jr.uOff

12%

t-i)
3

for 1

4-26

2

for 1

1-15

for 1 *

-

8-

stockholders April 18.

50%

stock dividend in

14%

&%

DIANA

...

iuiii

9

370,000

740,000

599,760

1,199,520

:

15%

Sale

25

Sale'"
—,—^H44-

Also

1.

Also split 2 for 1

DISTILLERS

in February

1944. .v;»

LYNCH

split)

24.

225,000
(before

high

16%

Old

Sale

UN

s

CORP.

GLASS,

sold

had

been

split

pf

1946.

a

high-priced

&

for

1

Also

,

stock

stock

high

as

about

V

v4

_

split)

as 45 until

500

economy

grocery

4

'

1945.
4

for l

stores

:'XV

690,194

2,388,640

23%

Yi' v"*<

72,036

i

'

V

7 f>

•

'

'

,

t

\\
((

Includes

29%

sion

7

for

*

'

c

V.

j

for 1

9- 9

117,000

234,000

16%

for

in

i

9-16

393,750

787,500

19

Sold

200,000
split-up.

for 1

1-23

1

420,059/

26%

840,118

Feb. 28,
holders.

inc

28

2

watch

in

1-25

a600,000

3%

Paid

4

3-27*

400,000

800,000

1

; 19

>

Safe

^

Also

2

split

for

1

in

February

3-18

§501,645

334,117

Also

30

1946.

PLAYERS

69%.

Old

-A
advanced

1938 to 106 in

*

low

of

4

exchanges,

3-22

STEEL

2

CARBIDE

&

fair

for 1

7-31

1,053,248

.

26

2,106,496

Sale

;

.

:

'< / 28%

Had

•:

-fp\

f:

steel

•

,

■

4-11

5

10

for 1

3-12

6

fori

6-14

21

Earnings trend
dynamic.

stable

Had

.

for 1

5-29

for 1

4-30

5%

;-X

5%

.

23%

-

*

for 2

3-19

185,767

16,928

for 1

3-19

426,787

than

".

3
at ;

1

4-18

209,250

418,500

.

22%

23%

•

fori

;X: 28 "X
XX |I»W

In

5- 8

562,241

16";

1,686,723

11%.

Sale

.

fori

3-12

201,488

Vj.V";'*.«■/

•],

10

805,952

'

'•

i'it

:■

10%

fi

•-

Also

3

Also

for

.,

IV

7- 9

3,085,737

*12%

9,257,211

Sale/

V'y

fori

and -2

for

2

1

9-

3

434,409*

30%

2,172,045

for 1

7-29

1,316,710

54%

2,633,420

V
issued

2Va for 1

for

•

.

..

5-

3

472,750

1,181,896

,

March

1

for 2

6- 6

522,433 X

784,646

20%

Sale

.26%

X?

'-24%j

2% fori

4-14

449,494

10%

11%

9%

10%

SERVICE

of

rail.!,

predecessor
H

$1938'reorganization,
SHIRT

354

"

SHOPS

stockholders

as

IVV.

'V'-V'V:/i

Sept.

^XXXXV-'-'v;

stock

(before

75,000'

V.-v;

450,000

;C%

,

30,

ninswi.

XXyV

split)

in 1940.

paid

sold

:a

higher

2

.

A;

INDUSTRIES

XX-X
in

1935

and

2

6-18

fori

2-14

for 1

4

for 1

&

792,246

V/:V ■.v.-V'."' VV;

3,752,136

V..

7,504,272

31%
"'

■'

Sale

35%

v,j

V

31V*

39%.

Sale

for

190,000'

V

380,000

1- 7

128,184

1,281,840

6

4-30

167,268

669,072

30

212,000

424,000

10%

Sale

124,673.

249,346

O't'Ll '.-fi;

PLOUGH,

for 1

;

3

POND

—.

fori

141,510

566,040

18

23

fori

450,442

900,884.

24

Sale

2

in

CREEK

Also

POCAHONTAS

&

:

H

233,107

466,214

*11%

fori

6-12

375,698

751,396

*12%




/

4-16

300,000
'»Xs.V

>c/', J t

,

•

450,000

15%

^

1

'

15%

"TY

>.vT

nm

■

:

fori

9- 4

*

169,742

339,484

21%

22%

2

fori-

3-26

300,000

600,000

16%

Sale

".15.%.v,.
11%.:

1936.

2

6-4

for 1

3

for 1

154,700

309,400

1%

358,857

19%

20%

fori

3-19

241,655

483,310

17%

Sale

2% fori

8-15

612,087

14%

Sale

2

July 1945.

22%

"

/

MFG

1,067

2

holders

common

17%

V

'

2

hi*

-:

t

■

20

1,

i/.X

;

.

March

;

-

-

CORP

5TH

;X

AVENUE

,«r
fori

9-18

for 1

4-12

103,126

324,378

3-15

2,520,000

3,600,000

13 %

498,200

Sale

iJ

'

11

split 2 for 1 in February 1937.
&
568

FISHER

;

—

—

stockholders May 1,

"

10
*,

t

V for

7,

;

;

,

1% for 1

-

BREWERIES

shares

in

4

INC

voting

stockholders

trust.

March

for 1

Had

1

In

,

84% X
.it)

7

213,839

320,758%

10%

Sale

4-26

238,000

952,000-11%

12%

2-

•

for 1

6-29

165,103

330,206

15%

17

2

in

507o

1926;

n

:*

9V4
i.

A

2

1929.

'

■-

15, 1946.

SOUTH PENN OIL

for

•:,4%i

fr.

for 1

5-28

1,000,000

2,000,000

34%

Sale

.

4

Sale

■V.-x^rXXX-'-

•

MFG

dividend

4%

62 %

/

-

-

split 4 for 3 in 1945 and 3 for 2
1944.

3

1945.

SNAP-ON TOOLS

Split

8%

29%,>v/

stock

•,

}p2

for 1

3-27

759,825

1,518,650 V'

3

fori

4-24

1,633,105

4,899,315

Price given is old stock reduced to equivalent of new.
tProposed by president
sBefore Magazine Repeating Razor merger.
transactions.
**Includes A and B stock,
ttStockholders disapproved the
if Split was disapproved, so both quotes are for resent (or old) stock.

oold stock still traded.

39%

Sale

33

-of comnanv

.

([Includes

I

for 2
.

411, stockholders June 1, 1945.

328,128

Sale

20'/a

i

12%

—

119,619

SICK'S

fori

1934.

STEEL

9

2

COAL

;.

SHELLER

1937.

split 4 for 1 in 1920.

2-25

7-28

Had

Also

1920,

—

29,

ALEXANDER

split 4 for 1 in

1,333

2

fori

".

"...

POWDRELL

:..

rTt't:

—

March

3s).,/4, v5i

6%

;

2

stockholders

-.

35

9-16

.

X

in

1

RUBBER

INC—

i

..■)(") o

2

4,425

'

V

:i-

PITTSBURGH METALLURGICAL
Had 700 stockholders June 1, 1945.

Had

v'irto

Sale

;

,

.X
TIRE

'

yeai
,

!

PAUL

for 1

2

each

396,123
•

10

dividend

years.

1

3-19

V'>; 'V".V ' V

X

PICTURES

seven

tot I

low

as

.

X
nuv'i;

7-11
of

■

>SYa

'

RADIATOR—

issued' for debts

1945.

SAYRE

1923, and 2 for 1

INDUSTRIAL RAYON—

INLAND

3

f

blO

25

as

iX,

SCIIENLEY DISTILLERS

10

split 3 for 1 in

high

Sale

in

INDEPENDENT PNEUMATIC TOOL-—

Also

Sale

split 10 for 1 in 1926.

div.,

STORES

as

7%

Had

BUNTS, LTD

Also

27%

:

1945.

for

sell

464,013

:

,

2

3

j.ii ,j>

RUSSEK'S

Sale

4

split

10%"
•

,

LINEN

1946.

30%

in

FURNACE

stock

Sale

RONSON ART METAL WORKS——
Also split 1 % for 1 in 1929.

10%'®

-

.

(A.)
Proposed split not yet approved.

100%

15 Va

7-29

-Had

5
1923.,

CO._

Previously

,

Also split 3 for 1

HOLLANDER

k.

600,000 111,415,370

for 1

RELIANCE

i

in

7-11

u

not

REED-PRENTICE

GLASS

for 1

19%
'Li

'

RAND'S

CHEMICAL

split 5

15.

3

Also

HOLLAND

for 1

14%

'i. 11 %

1936.

1943 four old
shares
each share predecessor.

BIGBEE

2

280,000

Sale

1946.

1937.

,

140,000"

.

.

4

IBERCULES POWDER

DEYDEN

4-16

fori

—

1937.

853,574

PRINTING

Split 4 for 1 in 1922

for 1

4

—

LINES

PETER

278,651

Split 4 for 1 In 1928 and 2 for 1 in
vv-v'V; 1937. !'•/■ - .•;' •••
XX,V
in

2

330,000 X11%; 13

11%

PHARIS

——Si X: for 1■

rather

Previously split 4 for 1 in

1

did

Split 2 for
2

1,948 stockholders June 30, 1945.
'GREYHOUND CORPORATION——.,

split 4 for

33,000

-

22%

for

Had

Also

4-17

1944.

t
at

PARKER PEN

•.

1BAZEL-ATLAS

fori

Dec.

end

v

.

:-

MACHINERY

(W. F.)

10

of

:vvv:s;
iT

■

/

<

10%

Has

33,856

Vend 1945.

1BALL

4

*o)"<

39

,0

W

78,404

Old

20%

August,

shareholders

common

fori

2,659,257

XX;

7, -1945.

*

•GENERAL

3

1 in August, 1943.
stockholders March 2,

PATHE

_c

15-'x
-</.

X\0]l

6%

366,276 §1,470,912

3

CONTAINER

1,945

'

iWiglJ

y.v

7-24

In

■

•GAYLORD

-ni

Sale It

for 2

as 8

4

—.

in

X. l4% '-

63

237,605

3

Had

J946.

——.

«GARLOCK PACKINft—.i
■

for 1

2

-

shareholders

V",.:.

10%

'»

*10

2

NATIONAL

V'-

for 1 In 1937.

1945.

580,000

' *

for

PARAMOUNT

1,000 stockholders Sept.

i;284

*9V4

1927

FACIFIC; MILLS—2

1froedtert grain & malting
Had

for 1

600,000

7-

t''-1/,;'

2

tour wheel drive auto

•:

5- 1

17%

0

in

—

'

rights double that

stores—-

Also split 10

for 1

2

oi

1

December

DEPARTMENT

stock

Stock

1945

Had 164 stockholders March
12,

eood

for

Split 3 for 1 in 1943.

2

elorsheim shoe—

eostoria pressed

2

X 150,000 x

X

for 1

in

v

Class A (dividend
of B shares).

4-

-

,

3

602,226

figures may

114 stockholders in June,

23%

22

•

NATIONAL

301,113

,

i.

Sale

18

%tx

lor 1

-

STERLING

24

386,280 '

Also split 3 for 1 in November 1933.

2

ferry cap & set screw

Had

/193,140

conver¬

2

NATIONAL DISTILLERS-

:;

1945.

not be exact.

29rpr#

• ,

'v V;' ' h:(

in

department stores-

"FIRTH

'

/'X-X
fori

,/VVX

NATIONAL

to stock

2,047,368

■■

24% hi"

NATIONAL HOSIERY MILLS

from

FEDERAL MACHINE & WELDER
100%
stock
dividend

Due

2

1,464

before 1945.

V

EANSTEEL METALLURGICAL—_—_
stock

1

C.)

1946.

CANADIAN—

Paramount Pictures, Inc., owns about

for

CITY

split

Had

NATIONAL

FAMOUS

i: Old

for 2

1,023,684

V9%o!

.

Split 9 for 1 in 1927, 3 for 1 in 1936.

,,

3

and

stockholders

(G.

NATIONAL

Eversharp

1 %

1,600

MURPIIY

1920;

.

7-15

v

'■*■'■

"V.;

MUNSINGWEAR, INC,

stock

1903; 20%,
25% in 1923; 25% in 1925.

debt

in

preferred.
1944

23%

;'V

1945.

Had

2

1920.

200,000

' '\

„•

dividends—25%,

8-27

fori

4

for

issued

13%

fepVXV; p':

2

issued

13%

440,000 11,300,000

February
1937.
April 6, 1945.

MONTREAL COTTON, LTD
Had
298
stockholders
as

after

,

2-22

for 1

lowing

♦
v

shares

:

for 1

2

CHEMICAL——.—

split

31,

additional

for

4

On

common

national

Split

15'/a

'-U(m*.^

At. :

r

2 for 1 in 1929 and
paid folstock
dividends:
60%
in
1915, 75% in 1916, 285.7% in 1921,
100% in April 1934.

Sale

2

1937.

electromaster,

elgin

Sale

and

17%

for 1

656,400

►

HOSIERY

Also

2

'

1946, had 1,501

-V

INC.——-1-—I-I.

old

MONSANTO

;f: i-v £

t

2

CDISON BROS. STORES
3

15

;Xl?36.g,: - V"

X

;

219,100

stock
►

.

SUPPLY—

1

common

of

Split 3 for 2 in

9%

*'•

■.-(

split 3% for 1 in February 1945

Spilt

„>

6-21

757 stockholders

MOJUD

8%
/^v

•A

Sale

'Vi ti' i

288,144

'

(now

STOP AND SHOP)
& l:CKO
PRODUCTS

i;:

-

1-19
t'Xxv

March

XVX ■'

XX

:

-

4-23

for l

XXV'v/

never

stockholders

1,1946.

Also

450,000

'

2

treasury

&

Company's stock
' predecessor.

(200%,r. stock divi-

(before

for 1

2

PIPING

split

Had

;

Eastern steel products

i'S

"

'

f.ppr;

—

split.

MILLER-WOHL,

Had

150,000

sell
■■

MINNEAPOLIS & ST. LOUIS

Eastern air lines
old

3

did not

split 2 for 1 in 1939.

Also

CHEMICALS

.

3

split)

.

'r,7.r dend) in August 1944.

sold

3-22

after

1930-1944.

additional

after

MIDWEST
—

_

for years.

DUREZ PLASTICS

a"

2% for 1

—

sold

MELVILLE SHOE

-

LTD

20,

as

Includes

650 shareholders Jan. 15,

DOMINION

The

f

GARDEN..

(before

high

MARATHON CORP

1,218 stockholders Oct. 31, 1945

Also

and

1

shares

SQUARE

stock

as

not sell

split) did
1937-1943.

10,

as

450,000

DODGE MFG. CO

This

1929

.

1945.

:

75,000

MADISON

v;

stock

Had

CORP,

in

1938-41,
old
stock
did not sell as high

CO CORP

as

in August

Includes

"

for. 1

.

years,

efore

Old

split ;1%
for 1

2

SEAGRAMS

four

i

-nor'

1929.

Sale

holders March 10, 1946.

STORES

1

W

..

Sold additional shares after split—839
common

rfMf'V

Sale

com.

_

(JULIUS).

KIMBERLY-CLARK
fori

2

-

91,198

I

3llvfU

\

;

UTILITIES—

share got

1,150

KAISER

1938-1944.
-

VvJriT

29

common

recapitalization,

JEANNETTE

above 8 only one year,

DeVILBISS CO.

4

1,042

J

28

'■

"

20 %

13%

DETROIT

SILVER

1946,
"V

INTERNATIONAL

1 '

.

HARVESTER

J,

1,188,672

■

20%

1,211 shareholders Feb. 28, 1946.

DETROIT

19Q%;f

.■

24

'".X

Jan.

holders.

T<

.

35

4

On

1-2-46

Sale

209

■

CELLUCOTTON_,

INTERNATIONAL

27%

SpliUup Shs.

Asked

small

1936.

RECORDS

Also

BECKER

in Terms of

10-11-46
Bid

1,432,407

1

for

numerous

Previously split 2 for

XX;Xv:-'vXvXoXX;:

1925,

Before

for 4

Price of

Old Stock

of

as

dividends.

INTERNATIONAL

in

In

Date of

Meeting

5

•

DECCA

Shares

Since

29%
•

Shares

1-1-46

1-2-46

/;

1946
,

as

Split
300,000

X 7- 8

2

April 15,

DAYTON RUBBER MFG

/»'.

Old Stock

1

DAVENPORT HOSIERY MILLS
Had

After

'•

Meeting

for 1

Shares

Before

Date of

1.-1-46

CORP

:

..

.

Split-.'

up Shares

DANA

X

THE COMMERCIAL & FINANCIAL
CHRONICLE

38

X!

Sale

proposed

34%

tlncludes new stock sold subsequent to split-up.

result
split,

of

other

•

i

m

X,

Xv-v-X

.

(Continued on page

1970)

-

THE COMMERCIAL & FINANCIAL CHRONICLE

1970
■"

■"

I

HI

'I-

..I

I."Ill

'■

1

'

■

•

■

V' ,v :v,;'

V

'Ti.-,'

-r'i."

ry/r--

V,

■

'

'

,

■
,

southeastern

SQUARE

D

-

-

STALEVjr^^G.
Paid

100%

STE»mN;BROS.fET.;,^!!!;„
STEIN

(A.)

&

4-23

fori
£

4

264,000
1,377,480

3%
17

for 1

,101,792
240,000

-

407.168

^^ck^JSloid^irl 2

256'200. 16

^

fQrl :f19

December

1^24

-

'

■

STr™r^:^!!!-.'
•

,Stock dividend was paia.

25%
;

-

split

IT for^I

^

583,742

•

'

♦

THATCHER MFC

16%*

*

Also paid
,

two 5%' stqck dividends in

:

1

1946.

36A

*

v_

^

15%

14%

Sale

TIDEWATER

POWER^ui™

■«-

'7>•

AXLE__^____
Also split 10 for 1 in November 1919
and
paid stock dividends as follows: 200%, 1914; 150%, 1922.
DETROIT

TIMKEN

—_1—,

"

1,983,950

991.975

*

,,

Sale

17

•

,

.

(Continued from page 1930)
the so-called system oi free en¬
terprise develop?

1- > 14
,

45%/

42%

353,000

5-22.■/35,300

lllncludes

<

44%

of

result

The

Feudal Organization

tween, say, 1000 and 1500, all so¬
ciety was organized and directed
from above. There was little if

privately organized economic
activity. The king was supreme;
and
through the heirarchy
of
lords and retainers the entire eco¬

any

nomic system was

organized from

the center out. The masses of the

people were servants of the,,lord
and king to whom they gave their
labor and
their loyalty in ex¬

subsistence and pro¬

change

for

tection.

Theirs

was

not to reason

why; theirs was but to do or die.
This same -general philosophy was

affluent and

like measure become

powerful.
-

,* '

.

*"

•

,

a

explanation of this great
change in point of view is to be
found in part in the growth of the
scientific spirit and in part in a
natural reaction against the exces¬
sive restrictions imposed upon the
The

In due course

world.

scientific discoveries came
ert

profound

a

in

ideas

and

disintegrate

in the fifteenth and sixteenth ccn-?

turies, and by the eighteenth cen¬
tury it had almost entirely dis¬
appeared in the Western world.

such

national boundaries/

upton

influence
other

realms

of

Was not man, the cre¬
God, as much a part of
to an ordered uni¬
verse
as
the physical earth on
which he had his setting?

These
fullest

North
the

view

The

arose

that there

ex¬

essence

contended that there had been es¬

the
system. The
of
mercantilism, which
its
culmination in the

reached

eighteenth century, was that the
growth of national wealth and
can
best be fostered by
means of extensive governmental
trade and commercial regulations.
power

It

was

the

erroneously assumed that

wealth

of

a

nation

was

de¬

pendent in large measure upon
the acquisition of huge supplies
of the precious metals, gold and
silver.

International

commercial

regulations were accordingly de¬
signed to foster the accumulation
of precious metals. Such regula¬
tions inevitably required support¬

ing regulations of domestic trade.
At the heyday of mercantilism
everything was regulated —- from
the cradle to the grave, if one may
coin a new expression.
The

Emergence
Law

Between

of the Natural

Conception

the

years

1730

1850, roughly speaking, there oc¬
in the important nations
of the Western world a profound
transformation in the organization
curred

Instead of look¬
ing to the government as the di¬

of economic life.




isted

a

which,

tablished by the Creator a

simple

of natural law or ethics,
the
constitution
and

system

that

and

humanity had been so
contrived that if jve but pursued
of

frame

"true

own

our

and

substantial

happiness" we could not fail to be
in tune with the universe of na¬
ture. Moreover, according to
Adam Smith, the great Scottish
philosopher who founded a sys¬
tem of thought known as political
economy, each of us in pursuing,
his

own

welfare and hapoiness is

the Divine hand to
promote the welfare of his fellowled

by

as

The

,

governmental

which

with

the

restrictions

individual

was

beginning

very

vicious in their effects upon freehorn

man.

not

to

William

Godwin held

the function of society
make law but merely to

was

interpret "that which the nature

of thing$ has already decreed."
This

new

philosophy of natural

of gov¬

our

American

sys¬

tem emphasized the vital signifi¬
cance

of the unfettered human be¬

'

;

V

23% •

32

Sa^

I '

10

34% Sale * \

-

,

fori

%

9-20
^

•

fori

2

'

*

" ;;

8- 1
'

-

'2,886,148

*27Sale
1
•
\
3.701.090 7.402,180
18%
Sale
r'V\ «' >*
721,537

.

"

26%

*

1

lfl% '
'

*

,

5

" 400,000

"2V*

2

2V*
v
>

- .

.

t'

^d.OOO"- 15%^ 16%.
^f >'v» i
r

for 1

351,364'
1

24%

*

25%

6QQ.Q00

300,000,

5- 6

18%

Sale

0<1Includes

and

A

stock/

B

tfStockholders

its goal the welfare of

as

14%

,,

v,-;- '• : «
! 15%

~

j
10%

disapproved

the

its

founders

who

—

the

were

great constructive liberals of their

day

economic

—

progress
would

.

and
best

advancement

human

among

the masses of the people.

Thd-iold

/

cannot

order

dis¬

be

missed;; therefore, with the inde¬
fensible generalization that

mote1 the ■ welfarevof society?:

The
free
and

the

from

enterprise of the nineteenth
early twentieth centuries to¬

ward

government-controlled

omies

analogous

degree

greater
cantilist

and

feudal

centuries

econ¬

lesser

in
to

the

down

of

international

or

mer¬

systems

of

commerce

and finance in consequence of the

maladjustments produced by the
First World War. Countries whose
production and trade had been:

adversely

affected

sought to

re¬

vive their agriculture and indus¬

try

by means of import restric¬

tions

and

subsidies.

internal

To

story

short,"

crisis

of

credits

make

in

and

long,

a

the

1929-33

«jad

world'

heW

after
itself bjr

country

country sought to

save

the control of* exchange and
rency

cur¬

and by rigid restrictions

on

trade.

The New Hybrid System
In every
a

country the 1930's

i
was

decade of experimentation with

government

Responsible for Change

recent; revision

security, why, the question is in¬
evitably raised, should we hot:
look to the government to control
the business cycle?
The third factor was the "break¬

control

designed to
suffering- and to
restore prosperity. The extent of
the
government
control varied
widely in different countries and
the methods employed were often
dissimilar; but everywhere the
old free > enterprise ?• system was
being replaced by a hybrid system
—partly free, partly controlled.
alleviate human

earlier

nomic

power

in

was

the hands of a

relatively small group of success¬
ful enterprisers. The enormous

disparity in wealth naturally .cre¬
an impression — however er¬

ated

roneous

that

—

the

system

was

In v the nineteenth
century of the classes at the expense of
nearly everywhere the. role of, the masses. This conception lay at
government in relation to eco¬ the heart of the Communist phi¬

nomic
the

fined
or

activity was regarded in
as
passive. The func¬
.

main

tions

of
to

government
safeguarding

were

the

con¬

rights

individuals, and to handling a

few general

problems where

cen¬

tralized
as

in

fense

authority was essential,
provision for national de¬

and

the

maintenance

of

a

It was
not
regarded
as
properly
the
function of government to engage
currency

to

in

system.

economic

regulate

private

enterprise
business,

except when such business tended
to

become

acter, 4

monopolistic in char¬

"Wy:■

Many people have looked
the economic and political

upon
?.ys-

tem of the nineteenth century
an

everywhere confronted.

were

as

unorganized society, one lack¬

ing in social purpose. 3?y way. o|
contrast, they emphasize the
"planned economy,"
which en¬

losophy and was, of -course,
marily responsible
sian revolution.

/J
of

in

-pri¬

for the Rus¬

response

individual

to the decisions of
businessmen/ peeking

profits to afford continuous

em¬

^

government;

invoked to stem

the tide of;

depression and promote recovery,
i in.
the United States and in

—

other

countries

alike-

—

there

be called 4
new philosophy of
economic or-*
ganization. In such countries
the United States and Great Brit-*
ain, France, the Low Countries^. 1
and

Instead
ized

may

Scandinavia, it

munism

A second factor was the failure
an economic system operating

i

Once the power of
was

't- ;: designed to promote the welfare developed what

ing in the scheme of things.

directly

institutions

The founders

system

pression to the inalienable rights
of men to life, liberty, and the
pursuit of happiness. So from the

or

that it

lb'<

% the out¬ This development came in the
forth the natural law philosophy
growth
of
numerous
develop¬ main not as a result of conscious
and its conception of individual ments.
First, the free enterprise planning. It represented, rather,
freedom. The Declaration of In¬
system in its flowering, days nat¬ a drift occasioned by the practical
dependence gave
eloquent ex¬ urally placed extraordinary eco¬ difficulties with which nations

tury came naturally to be re¬
garded as in fundamental conflict
with the laws of nature. Rousseau
social

States

ernment, notably Jefferson and
Madison,
were
steeped nU the
European
literature
which set

surrounded in the eighteenth cen¬

all

America.

American

unified

/

men.

declared

and

4

other !.transactions.

Factors

^

the young United

of

so-called mercantilist

tinued in modified form under

peo¬

conceptions "found their
opportunity for develop¬

of

of

subject

system of natural law
if it were not interfered
with by governments or other hu¬
man
institutions, would always
lead to progress. Blackstone, the
great English jurist, for example,

Meanwhile, however, centralized
control of economic activities con¬

repealed.

against the migration of

ation

Feudalism began to

were

ple from country to country,. The
conception of the world society
was
born, in which men should

ment in

and

16%

&

the belief that
hampering regulations. Third,
national boundaries came largely underr this system; the develop¬
to be ignored through the removal ment of .our resources would be
of barriers and restrictions most rapidly expanded and that,
as .a
result of competition,the
against
the
free
international
movement of trade and currency; benefits would be disseminated

thought.
System

22

5"101 10f81/:: 209'362 ;13 '

'

■''

24

these
to ex¬

men's

The Mercantilist

260,000

erations without reference to any

looked solely to the higher pow¬

guidance.

• 65,000

and to conduct their business op¬

that

as

ical

ers

2-13

3-26,: , 692,980 , 1,385,960

,

!

'17% 1 "

24

basic laws which govern the phys¬

centuries

seventeenth

toae

200,000 .21

Galileo, Kepler, and New¬
ton discovered and formulated the

mercantilist sys¬

It was in the sixteenth and

men

Sale

/4

100.000

it was
be free not only to develop their planless. The only question at is¬
individual capacities to the ut¬ sue is: What plan of economic and
most but also to live in whatever social organization, or what com¬
spot on .the globe they desired bination. of., plans will best pro-

individual by the
tem.

14%

_
v•

-7*

7-16

•be promoted. It was

in

individuals, would

of

individual

the

of

potentialities in Second, industry and trade were
from
a
multitude
of
the nation, which relieved

own

fullest measure,

consists

588,838
3 784,316

T

the

ing the freedom and the initiative

to de¬

left free

were

his

paralleled in the development °f
the
mediaeval: church
and the
canon law. Here too the individual
for

agency,

individual
as the true source of power. The
idea came to prevail that, if the
velop

1,264 772

people. Nothing could be
more misleading than
(this com¬
law led in due course to practical parison. The so-called system of
by
results
of
great significance. laissez-faire was a method
First, innumerable laws restrict¬ which, according to the belief of

to look to the

individual

that is be¬

In the Middle Ages,

controlling

and

come

we

|«.«?|

7-16

37*

,'

.

tlSplit-was disapproved, so both Quotes are for present (or old) stock,

proposed split.

Enterprise System

recting

^

' '

visions

Free

„

Also split 20 for 1 October 1944.
^
, .
V"1 '—
" '
*01d stock still traded. Price given is old stock reduced to eqaivaltnt of new. t Proposed by-president
of company./' tlpcludes new stock sold subsequent to split-up. §Before Magazine Repeating Razor merger.,

.

—

fori

(Cleve.) 10

33% *

jr'-i! :A.iV.-l.:
'
,

.

'

,

—

1

WYANDOTTE WORSTED:_"__J__2

l

V.
'

.

..

.

'
—

UNION BANK OF COMMERCE

6-H

for 1

7%

8

j

/
2

7%

395,572.;,

;

-

13%%%"

Sale

■

98,893

7-15

fori

,4

Outstanding common;increased frpm
115 to 98,893 in 1944.

10%

,

4- 2
100,000
Had 403, stockholders; Sept; 30,719441
■,
' . ,
WEST-VIRGINIA: WATER;«SERVIC^Bi^^"fori. 3-15
110,000
Had 644 common. stockhblder^Feb.
■
21, 1946. " . .
•
'-*"r"
VVESTERN DEPARTMENT. STORES^- 2 fori . Ir24* 175,682
Had 927.stockholdersMarch 36,»1946
►

—

i * tlllld'' lllff

,

-

1938-194Z, inclusive. .r
WAYNE' SCREW^ PRODUCTS____Li^- -4.V ior 1-

1%

2%
Sale

in Terms of

.

.

fori

3

*»

10-11-46 Split-up Sds.'
Asked
1-2-46* .?

.

3,438,764

••

WARNER ;BRQSi..,PICTURES——
Old St^>^^liigher/than7%%,

—"r .;„■

314,372

*

>

2

Walker (hiram)-gooderham
WORTS
"Old stock, split 3 foril irr l929.** -

'

•

>

'

.

--After
Split

'

.

Old Stock

3 lor 1 3-23 2,825.000 8,775,060 43', Sale

.

Also split 2 for 1 in 1945.

±

•'

^

1926

1938-1944, inclusive. *

Sale

1,118,980
1%
1,980,896 t$13%

279,745
'."fOTi'ttS-l? ' 990,448
'
'
'*
2
fori
8-29
157,186
6-17

for 1

4

Shares

UNIVERSAL PRODUCTS—
2 ; fori
utica-mohawk cotton--.-,..^. 4 fori

oe1/,

60

510,6Q0 ' 1,021,200

'Split

,

UNITED MERCHANTS & MFRS._____.1_
v

j

t

-

•

i

c„

3-25

fori

«;v...

fo^Tlrf ?""UCTS

,

^

>

f 17% 19%
'

.r,

.

:

•'■v'">up Shares
Shares
as of

^

V1CK CHEM1CAL__-__L..,_.___.„_ 2 Tor i

^

;

in September, 1945.

••

596,216 17%

*

>

:

V

.

«

.

»■;

AVIATION_i_i:___—-

1

TEXTRON
.rns

■

.

.

•fAYLORCRAFT

.

2

SUNSHINE BISCUIT.—1

f

14%

1

for

O"./.i*7

::

:•

298.108

'

1907.

split 4 for 1 in 1927 when

;

9-7 - 291,871

fori

2

1925 and paid

split 6% for 1 in

stock dividends, 150% in

Also

:

^

^

-

*

'

-

.

^

;Since Date of
Before
^
^
„
1-1-46/ Meeting ,:;4/ Split
2 for 1
5-16 - f,363,382
■}*«*
•< low
.
■

•,

-V/V^

3

S^^vJrseC^iilhFl^^r ^5^ hi

Also

1

15U
27 JA/ 28%

.

■

,

-VW

v

,

..

,.f ^ ^

1914"

stockholders in January 1945.

Had 653

•«
.

,

,

^v.
leffS/w |M|

.480,000

1' 4-25'

3%
Sale.'

36* * 38
•

846.506

3-30

fori

1.———2

CO.

as of
in Terms of
10-11-46 Split-up Shs.
Asked > " 1-2-46

r

Thursday, October 17, 1946-

-

I

_

ir:.'"- -••»-

Bid

7-<*.-•;
1 423,253

-

Old Stock

Shares

After
Split

•

66,000
459,160

4- 8

Jtorl

2

1934;

in

dividend

stock

4 ' "for 1

pfd._>

;

;

Meeting

3

corp., partic.

;

Before
Split

Date of

Since
1-1-46

•

Shares

Shares

Split
;

■

•

: •v'/;C.v,v:; :£.r ;
:"V
'•
V*- P'Priceof ?'.//
Price of ::•'-w;? ■*■■.'V":
New Split-Price of

Price of
New Splitup

."I"

.

1969) v

.Vv. -(Continued from page

'■

"/

...

Announced Since January

Performance of 185 Stock Split-Ups
'»•

■

I

I.

■.II"

or

of

even

a

and

or

not Com¬
Socialism^

completely centra!-*

domination

economic life

of

by-the government
munism

was

State

as

Fascism

instead, of

under Com-^
and

Nazism,

State .Socialism

which calls for

government own¬
highly complex
or machine as ership and operation of key in¬
dustries and services, under the
I prefer to call it, appeared to
new philosophy the primary task
run
by fits and starts — now
of government was conceived a$
plunging
wildly
forward
and
that of stabilizing the economy byagain stalling and backing, car¬
means
of certain control devices
rying blight and ruin in its path.
and of safeguarding and promote
The individual, however efficient
and far-seeing he may be, finds ing the welfare of the masses.
Under this system as it worked
it impossible to stem the gen¬
eral tide by any acts of his own out in the United States individ-*
uals were still free to own and
and
is swept downstream with
the' devastating current of
de¬ operate whatever type of business
enterorise might s<*em to Offer the
pression. If the free enterprise
best hope of profits. Indeed, pri¬
system fails to provide general

ployment.
economic

The

system,

'

economic

stability

and

economic

mary

reliance

was

still placed

on

-Volume

Number 4534

164

THE COMMERCIAL & FINANCIAL CHRONICLE

private -enterprise to provide employ men! and to make the tech-.
Tnical advances upon which prog¬ respect to
long-term capital

uncertainties- and hazards -of pri¬
vate enterprise, particularly with

•»

depends. ;

ress

'V.iVv

-

mitments.

!•

In addition to

commercial

risks

com¬

1947.

ordinary

-'

The function of the government
twas four-fold: (1) to promote de-

and that .the government must be

prepared7; to provide work for
some
eight millions of people in

business

/

;v.v.

nations.

tion In. administration.

One of the'

Goal

"

!

;

II.

A

Progressively

not

capacity,

Wider

for

American view appears to
that the gains resulting from

be

improvements

creasing
should

prosperity, a catas¬
business practices in order to pre-: pertinent
questions
always
is: trophe that must be averted
by
nseirve " competition and prevent- Will this legislation be adminis¬
the continuance of price control;
abuses of power; and (4) to sta- tered by officials with ulterior ob¬
At the same time it was conceived
ibilize The economy as a whole and jectives or by men
sympathetic to be necessary to maintain na¬
onsure adequate
employment by with private enterprise? Will it tional income
at, or close to, the
means of an extensive system of
be administered by theorists or by
wartime
level
if
we
were
to
"control centered on the distribu-. practical men who understand
escape a business slump and ac¬
lion of income and the provision business?
The problem is often
companying deflation. Since some
*t>f ^employment by means of gov¬ -further complicated
by : the fact millions of workers would retire
ernment expenditures. In short,! that legislation combines short- from the labor
markets and others
The primary objective of the gov- run recovery plans with long-run
would no longer receive the high
Ternment
is to protect certain reform objectives.
pay afforded ; by war jobs, - and
ddeals of democracy, and to keep
The second factor which'makes since overtime pay would be elim¬
"D$e. economy as a whole in bal¬ a hybrid system difficult to oper¬ inated
nearly ^ everywhere, it
anced adjustment.;
ate is the inevitable confusion and seemed that
>
'.1
wage rates per hour
.

,

.

the

is,

and

we

the many rather than in¬
creasing
concentration
in
the
the

of

few.

Such

resulting from the
bears.

goal

a

also

reasons

•'

DifficultProblems Either Way

The

conflict

:

successful; operation

of ,:a;
Jhighly .complex economic system
s e r i o u s.> difficulties,;
whether we rely upon private en¬
terprise or government control.;
Notwithstanding; - the ; enormous;
economic progress and rise in liv¬
ing .standards which occurred dur¬
ing the nineteenth century, when
government interference with pri¬
vate enterprise was at The mini¬

•-«

-

.presents

mum,

did not succeed in

we

es-j

raping; periodic crises and de-j
"jiressions. Between 1819 and 1933
there

were

Serious

less than fourteen

no

depressions,

\

^duration; frbmtnihei
months
in

in

the longest occurring,

-—

late

the

ranging

id tsixty-'six
Over

seventies.

the

whole business was
a state of depression approxi¬
mately 30% of the time. The rec¬
period

as

a

4n

ord

similar in other countries.

was

This unfortunate state of affairs

'has; naturally been

matter i of

a

deep concern to all students of
economic organization, and many

.explanations • and. remedies
of
widely varying, types' have'been
suggested — by mathematicians,
astronomers, physicists, engineers,
businessmen, and ^ politicians, as
wall as by v professional econo^
'mists. But to little avail, The f? ct
is that the complex economic sys¬
tem or machine may get out of
gear in a variety of ways. And
Die' multitude of> individual busi¬

make; up the pri¬
vate enterprise system are pow¬
erless to act concertedly in re-

nessmen 'who

tnoving sources or causes of mal¬
adjustment.
7
: Since.,the
hybrid economy
half 'free, h^f^controlled
has
existed only since .1933, we do
jnot have

period of comparable

a

duration by which to test its per¬

formance. But the record, to date,
has been far from- reassuring.
It
follows: Following'a sharp

runs as

recovery

in the: Spring, and early

Summer of 1933, there was

mod¬

to

be Lound. within The

an
enduring dictatorship—.a government's; economic policy is; in'-

works

..

.

.

.

;

.

(

/

■-

...

tion

quickly fell off to the level
Of 1935, and- the. unemployment
problem continued- without abate¬
It took

a

vast

war

program

that

uct

gov¬

efficiency.'

oped industrial era.
The agriculf
tural pioneer, the mediaeval
feu¬
dal serf, and the slave, all

of

people were still on a plane
of living too low for health ;and

-Second,

-

except
1932..

for

There

the panic

peripd

of
.

are

two reasons why

is extremely, difficult to

it
attain and

often necessary to accept or pro¬
mote unsound policies—not in the

versus

long-run interest of the public—

the various types of plan¬
there, in fact, any
with respect to

ned economy is
real
agreement

because of the immediate exigen¬ basic economic and
ces of the political situation.
Is
there a
This; tives?
does

not

policies

imply that government
can

be

never

tive; it does hold that

they
of

are at the best
good and bad.

a

construc¬
a

and the

ramifications 6f the job of main-:

taining.

smoothly

a

functioning,

balanced national economy is be¬
yond the" capacity of government

officials.

In

sponsibility

divided—between

Congress on the one hand
Administration v on "the

and the

- other.
Moreover, various divisions of the

'
disagreements.', develop
the government groups and
.

among

interests involved there
to be

long delays.

^Moreover,
the most

are

nomic

organization;

•

-

A

In

the

^

\

are

variables; often working in
opposite : 'directions.: There is
many

of the

en¬
eco¬

as

well

the gains from increasing produc¬
tive efficiency were increasingly

This
we

fluences
trends.

separate political in¬
from pur el v
economic

or

A concrete illustration of

unemployment would reach many
millions by the end of the
year

government

polices

increase the




some

I.

That

to

of

Progressively

Larger

;

aggregate
is far from

common

adequate

observation

as

7

imply that

.

now

to Tbe consid¬

•*!.T;T.TT'f-')'•*.'«7;-*

7

;7 "-7

on

Work Performed

It has always been a principle
of the system of individual enter¬

prise

that

the

individual

should

well| be paid for what he
does, and not
according to his needs. A national

from statistical evidence.
Al¬
most every individual feels
keenly
that he should have more income
in
order, that he
may

.77 7

^Primarily

American people is apparent

or

■1

Goal IDC. A Society in Which In77; dividual Rewards are Based

,

national

our

as

self

•

goal does not

have

.a

of

j

goal of rewarding each -individual
without
reference to
the work

performed

appears

so

repugnant

living for him¬ to the basic
thinking of the Amer¬
Every organized ican
people as scarcely To require
society is con¬ comment. It should be
observed,

family.-

stantly striving to increase its
income and improve its economic
position; Political. parties are al¬
ways

committed to

a

program

of

however, that The proposition that
rewards should be directly related
to .productive contributions is not

greater ;, national

,;

The case for a progressively
larger Total national wealth and

income

-

is H buttressed

considerations
needs

and

t h

a n

desires.-

A

by

other

individual
nation

is

potentially stronger from the mili¬
tary point of view. Moreover, in¬

the

U.

and
em¬

ployment

evidences a conviction
that the provision of the in
divid¬

security 7 which
steady employment
mount requirement.

Goal V.
of

is

front

a

para¬

The Greatest Possible De-

yelopment

-

flows
*

of

the

Capacities

Every Individual

An economic system which stul¬
tified the individual and
resulted
in human deterioration would ob¬

viously not be acceptable to' the
American

people.
The
system
provide a stimulus3 to
individual initiative and promote
must rather

the

development of

cities.

in

latent ^capa¬
Such.a system aids
directly

achieving that expanding"

na¬

tional production upon which the
realization of progressively
higher
standards of

living depends. ' 730

v

This goal is of the
very essence
of

democracy, the strength} of
which is directly dependent
upon
the power ,of the individual units
of which it is
composed.
It

is,

moreover, essential to the achieve¬

ment

of

that

self

desire for which

realization, theis so deeply in¬

grained in human beings.'
Human

"T; r.

;

intelligence applied to

the processes of production under
favoring conditions constitutes ihe
ultimate basis of economic ad¬
vancement.

With this in mind, we
provided a vast free ele¬
mentary and public school system,
supplemented by extensive voca¬
have

tional

education

and

programs,

also

by subsidized institutions ;of
higher learning. In short, we have
endeavored to give everyone the
best possible training, mental and
physical, with which to realize his'

S.

personal potentialities.

S, R.,

Article XII,

ap¬

the

work."

:

This principle of basing income
on

em¬

And in the Constitution of

following ' principle:
"From each according to his abil¬
ity;
to
each
according to
his
pears-

peo¬

state of full

a

ual

denced

nism."

a

maintenance of

consistent with the realization of

satisfy the needs and desires of

from

the

ered.

A

production
the

to

American ecqhomic ana aor i
the Third goal,

Total National Income

ernment,

security for certain classes of
ple.
Similarly, present-day
phasis upon the restoration

wish to have complete equality
income; for this would not be

:**VV7'*■-

■

as

*

dencies

The first as that

.

security^—nt

agency of gov¬
minimum of economic

essence

operation of the economic and po¬
litical system. A society in which

of the term.'

of

cial system.
Goal

It is of the

to share in the fruits
to participate in the

comparatively
few
could not, be regarded as
democratic, in the deeper meaning

are

remainder

ideal.

a capitalist doctrine merely.
The
income,
evi¬
Socialist party does not advocate
by, such slogans .as "a full The
communal idea of equal pay;
dinner pail," "a chicken in every
regardless of 'productive :output.
pot and two-cars in every garage."
Nor does the present day Com¬
"one-third of our population illmunist party. 7 The Communists,;
clothed, ill-housed and ill-fed,
to be sure, long extolled the docand by perpetual
promises of per¬ Trine:
"From each according to his
the government may indeed be petual
prosperity. The only doubt¬
ability; To each according to his
called upon to make recommenda¬ ing voice one hears is that
of the
need.'*
But experience in Russia
tions,.. but decisions must rest occasional philosopher or religious
demonstrated that this principle
with responsible officials. In any leader who expresses the
thought and human nature do not work
case, the technicians are unable that we would perhaps be more
well together. - Lenin eventually
to make reliable forecasts because truly
happy if we were less ma¬
referred
to this principle as a
they- usually cannot assess the terialistic and more devoted to the
"childhood
disease
of
Commu¬
relative weight of
simple life.
■
•
conflicting ten¬

usually

this fact is found in the confident
pronouncement a year ago that

economic system

pos¬

of democracy

.economic group in

Theilprt&leri^^
There

or

cratic

restricted

this analysis I shall set forth what
I conceive to be the
primary goals

likely, higher Standard

complex character and

beset with pitfalls.

objec¬

fundamental

private
terprise and other forms of

the first place, re¬

is

social

between

character?

finally, the, magnitude

;

whole

antagonism

the
combination | goals, in final analysis, similar in
as

economic stability and
full employment under a hybrid
preserve

the modern

level.

-

pletely -eliminated by the new
control /-machinery.;,
No longer
would innocent people lose their
hard-earned savings. ; But the in¬
dex; of stock
prices has shown
oscillations comparable In magni¬
tude to those of former times-

of

sessed economic

broad distribution of

a

,

•!

a prod¬
highly devel¬

stantial proportion of the Ameri¬

excess

an

Security
Economic insecurity is

sub¬

can

Amidst the pre vailing Confusion
with respect to private enterprise

little in The training or
previous experience of Presidents,
to lift production definitely above
Cabinet officers, or Congressmen
the level of. the late 1920s. ;77;7> i
to equip them for the
job of inter¬
•v. Stock market-fluctuations were
preting ^statistical data -or anal¬
also supposed: to be % reduced to
yzing
economic
processes! and
moderate proportions, if not-.com- movements.
Technicians
within
ment.

held

!

-1

■

5

r—-Tasted of
Produc¬ is

year..,.

ernment

should

v'

■

Goal

army

a

he

pur-,

be kept in mind.
A fundamental
maxim of politics is that rit is

mental

-a

7;;Thus, simultaneously, the

in

that

bread

7:,7.:.7;:#' ,'• •
IV.
Increasing
Economic

...

-activity until the "middle of 1936.
The prosperity period of 1936-37
f-rproclaimed as -the exemplifica¬
tion of the. accomplishments -pos¬
sible under a government planned
than

increased

reveal

the more

get.7!7"-..r1
y.,:

The evidence af¬

by health tests and

examinations

and -that The

.

basic policy. Even when no funda¬

more

be

forded

of fore¬

But
the
free, and
purchasing
power national income is essential to the
inde¬
policies of .past and present admin-; threatened
inflation, and that an economic growth of the nation as pendent worker of the modern age
istrations, and of compromises re-[
has long been faced with
The continuous expan¬
impending deficiency of purchas¬ a whole.
periodic
.suiting from the power and influ¬ ing power threatened deflation. sion
of industry, agriculture and loss of income in consequence of
ence of the many ^special interest The
policy adopted was to en¬ mining depends upon markets, and periodic fluctuations in -the labor"
groups who strive perpetually for
courage sharp advances in wage our only permanently expansible market. ; The problem7 has been
gqvernment favor or protection.. rates while Tstill holding the line markets T are
greatly magnified by the profound
those
which
are
In the nature of the case, a
pro-j with respect to prices.
The only found in the unfilled desires -of economic changes of the last 15
gram resulting in large measure
possible result was a new double the great masses of the people. years, as a result of which un¬
from .! the pressure of
economic! pressure toward higher prices! :On Whether The stimulus'To economic employment on a large scale has
blocs cannot be internally con¬
seemed To be chronic in
the one side, more pay for the growth
character.
springs from expanding
sistent. Nor hi sa democracy with same
A greatly increased measure
work meant more purchas¬ mass
of
consumption or from pre¬
frequently recurring elections can ing power as
individual economic security is re¬
compared with the ceding capital development, there
there be any certainty as to how
garded as a goal of
goods available for purchase.
On can be no .doubt that the wants
primary im¬
long the major elements of an ex¬ the other
side, the higher wage of the masses constitute the pri¬ portance. Without reasonable staisting program will endure. Po¬ rates necessitated
.upward adjust¬ mary ultimate markets. What we biltiy of income, no one can make
litical forecasting* thus becomes of ments of
prices, and started the are interested in is a dynamic, adequate provision for the hazards
importance in .the calculation of vicious spiral
of
rising .costs, growing society; and maximum of sickness and the requirements
business risks.
prices and" a gain .costs, in -which growth is dependent upon a pro¬ of old age, or plan personal and
'■>
'
Tvtoreoyer, si hco government we are still enmeshed; The re¬ gressive -expansion of the buying family; development
programs
policies pertaining to business en¬ sponsible officials simply did not power of the
with any assurance that
great body of con¬
they may
be carried out.
have sufficient comprehension ; of sumers.
terprise are; formulated and exe¬
•
'
7 ;
$
cuted by political paries whose the complex issues involved to act
The recent establishment
of: the
A narrow distribution of na¬
first objective is re-election, vote- with-wisdom.
Social Security system was a rec¬
tional income, it is worth noting,
getting is necessarily a primary
ognition of the Importance of pro¬
is
inconsistent with
the
demo¬
Some Basic Objectives
consideration which must always
viding, through the

erate reaction in the Autumn-, -of

and controlled economy

to-

escap^lTyAapierecomposite nf-Tfre; accumulated

that year, followed by subnormal

little

have

government program itself; :I isay; order; to maintain national
inevitable because—except under chasing power. -

Administration aspire to play .a
leading role in the formulation of

a

would

work

exceptions .do not,

intelligently he

,

•

efif eiency.

These

sweat of his brow,
harder and more

why it commands the

:
First, larger /incomes; make-^
within broad limits—for individ¬

ual

Second,

however,
undermine
the
basic
philosophy that everyone is 'ex¬
pected to earn his bread by the

meets the approval of the masses
for the obvious,reason that it ben¬
efits them directly. But there are

support of all classes..

pro-

recognize, to a limited degree, The
system of inheritance under which
individuals may receive income

income

among

hands

we

cial Security system
are'provided
with old-age benefits.
Third, We

in large measure to

of

humanity

public charity.

or

retirement and

of the

distribution

of

those who have reached the
age of
are under the So¬

in¬

population. That
wish To see a progressively

broader

applied.

unable to work; and

are

reasons

private

efficiency in production

accrue

masses

universally

videfor such unfortunates
Through

The

technical

quite

First, sonie members of society,
' because of mental or
physical in¬

Division of National Income

to ;

menace

1

\7'/\

;

man¬

An excellent illustration of con¬
the prob¬ flicting government
policies
is
•-sired forms of enterprise through able effects
of
government re¬ also afforded
by the events of the
Sloans, subsidies,•: and other aids,? strictions as incorporated in legis-.
past year. Inflation of prices, re¬
-and
occasionally7 to engage di- lation, and also as they may be
sulting from the carryover of war¬
/rectly in business;;;.i(2) dosafe¬ carried out by government offi¬
time, savings or purchasing
power,
guard the interests of the ,weak cials who <enjoy no little discre¬ was proclaimed as the
greatest

.

creasing wealth is regarded as a
prestige in the family of

road to

agers now have to -gauge

dand^^hessedl7 (3); T^ TdgulaTe;

1971

work

performed is, however,

?

Closely

related

to—indeed

an

essential mart of—the

individual
conception

principle of
development
is
the

of

free choice in

nomi"

(Continued

eco-

Excent in time of
on

page

1972)

THE COMMERCIAL &

1972

FINANCIAL CHRONICLE
sellers to gamble
price con¬

have encouraged

Enterprise System

The Free

the

on

destruction of

This group, today as in the past,
(Continued from page 1971)
is thinking in terms of millions
It is like¬ of dollars instead of millions of
war, the individual is under no capacities and talents.
compulsion with respect to the wise indispensable "to the self re¬ people. This same group has op^
type
of
economic activities in spect and personal independence posed every effort of this Admin¬
which he may engage.
Everyone of the individual citizen—so es¬ istration to raise the standard of
to
a
virile democracy.
has the right to determine for sential
living and increase the oppor¬
adequate work oppor¬
himself what kind of occupation Without
tunity for the common man. This
tunities our society will deteri¬
or career he wishes to follow and
same
group hated
Franklin D.
orate physically, mentally, spirit¬
to acquire such training as may be
Roosevelt and fought everything
necessary; he has the right to quit ually and politically, as well as he stood for.
This same group did
his job if he does not like it or in terms of material wealth.
its best to discredit his efforts to
thinks he can better himself else¬
..These six goals, it is believed, achieve
a
better
life
for
our
where; he has the right to shift represent the basic economic ob¬ people.
from one occupation to another; jectives in which the American
Admits Disregard For Law
he has the right to move from people are interested.
Additional
place to place if he thinks he can goals will perhaps occur to the
There are reports of widespread
improve his position by so doing; reader, but it is believed reflec¬ disregard and violations of the
he has the right to decide for him¬ tion will indicate that they are price-control
law.
Experience
self for what purposes he should embraced by, or are supplemen¬ shows that this leads to a tendency
use his income.
This lack of com¬ tary to, the primary objectives to disregard the sanctity of other
In any case, it laws of our country.
pulsion by external authority ap¬ here outlined.
I need not
plies equally to laborers, profes¬ seems clear that if we could move point out the .danger of such a
sional
groups,' and - businessmen steadily '; in the directions indi¬ public attitude. ■>.'/ 'y-v both large and small. The oppor¬ cated we would be enjoying wellDuring these last weeks I have
tunity to realize one's ambitions rounded economic progress and

moving toward the larger goal of
economic democracy. On the other

tunity for individual development
through
the
exercise of free
choices is virtually unrestricted.

hand, to the extent that we lose
sight of these goals or adopt

pol¬

In

market

be

*

tive work.

;

A remunerative

pears

occupation

ap¬

indispensable to the main¬
reliance
development of latent

tenance of individual self
and to the

growth over the past cen¬
The lessons to be drawn
from this experience should also
be useful in helping us formulate
tury.

a

sound economic

lic and

program—pub¬

private—designed to real-

ize these goals.

this

that

Price control,
on

June

left
?

same

30.

with
few

no

therefore, expired

For weeks we were

controls

men

in

the

the
Congress

while

again debated how they could do
lip-service to
an
anti-inflation
program and
still scuttle price
controls—how they could pass a

price-control law and,
at the same time, take care of the
special interests they wanted to
enrich.
Prices naturally soared
so-called

during all this delay.

The Con¬
bill which

made

the

of

to

possibility of

ports that his investigation of cat¬
health

tle

pleted

ber

happens
of

at

into

this country.

them

will

be

be

will

re¬

be

the

domestic

shipped

houses/
For

slaughter

the

to

v

'

months

many

representa¬

fort

would

on

order

I

declined

to

would

which

bring to market the meat

people want, at reason¬
able prices.
The American people
will know where the responsibil¬
our

ity rests if profiteering on meat
raises
prices so high that the
average

American cannot buy it.

the

.

*

Slowing Down

Production

If industry should go on a strike
in

commodity

any

to make

for

should

sell

or

by hoarding prod¬

or

higher

prices,

continued

be

would

the

refuse

goods

freely—if by slowing down

production,
ucts

and

the

be

scarcities

—

industry

courting disaster.

other

hand,

not maintain

if

labor

On

should

high efficiency and

a

productivity—if labor should slow

Decontrol

Not

An

Transaction
The

•

andsafe road to

/I

am

a

free market.

industry wants to hurt their

nor

country and their fellow citizens.
It

is

plain

that the

present law

As

inflation.

Isolated

proceed

we

lifting of controls on meat,
transaction.

in

an

orderly but accelerated process of

.

lifting controls,

shall all have

we

however, cannot be treated as an to exercise restraint and
isolated

7'

certain that neither labor

does-not; guarantee prevention of

Meat

is

common

so

sense,

was

further price increase
This would be in¬

freeing meat from controls means

ac¬

remedy proposed

a

livestock. ;-

if inflation: is to be avoided

because

still

be

held

the

In

long run, that which is

best for the nation is best for all

the

Going

people.

which will be taken tomorrow in

the
livestock that their programs of lifting con¬
back in the trols will have to be accelerated
under existing legal standards.
I
expectation of the lifting of con¬
have directed all the agencies of
trols and even higher prices.
effective

would

to¬

forward

gether in that spirit, we can win
sound

a

,

economy,

and

has

and

lasting ' peacetime

with

high

prosperity such
never

production

as

this nation

known before,

fi/-

Seizure Plan Discarded

,

to

tle

government go out onto the
and seize the cat¬
for slaughter. This would indeed

All

be

a

the

I have made that effort.

honestly

administer

a

,

be made to make the

law work.

tried

sure

as

some

Cautions Against

can

lots to

people

special interest—*
will be benefited.
;,
V- 7

them

Most of

be

must

we

American

whole—not

num¬

cattle which
have been sufficiently fattened to
place

the

either

thin, but they
the feed

into

sent

get rid of them
that

When

Mexico

from

come

inflationary

and the need for government

controls will pass.
No one is more
anxious to get rid of these controls than I am.
But before we

in¬

border

once.

disappear,
pressures
will

ease

com¬

it

substantial

a

cattle

was

that

Mexican

opened

be

that

and

the

that

dicates
may

conditions

Saturday

,

and

this

government

I have

sincerely

feeble

law.

agencies
have
vigorous effort.

made the same
finally passed a
25.
Even in From the outset, however, the
responsible for the
this second bill, the same Con¬ very forces
gressional group stripped the OPA weakening of the law in the Con¬
of the power necessary for effec¬ gress have demanded the lifting
gress

beef

investigation

an

cause

government to cooperate in speed¬
ing up those plans to an extent
Another remedy suggested by compatible with our economic se¬
would not have taken place.
•
7 many people was to have the gov¬ curity.
When I signed this second OPA
ernment seize the packing houses.
This does not mean the end of
bill
which
the
Congress
had
This
offered
no
real
solution, controls now.
Some items, like
passed, I stated that I did so with
however, because the seizing of rent, will have to be controlled for
reluctance.
I said further that it
empty packing plants would avail a
long
time
to vcome.
Other
fell far short of what I had hoped
us nothing without the livestock.
items, consisting of certain basic
for, but that a whole-hearted ef¬
Some have even suggested that materials and other commodities

inflation—I had to veto had not occurred—this wasteful
slaughter
of
unfattened
cattle
bill.
^
- /

runaway

I

Recently, they have been telling
me
their plans for relaxation of
controls in the future.
The action

summer.

Another
to

(Continued from page 1939)
In the interest, had been enacted by the Congress
ing amendments.
of the people—to prevent legalized in time—if this lag of two months

increase

of

the

As

to

important a part of our cost of
and adequate production is to be
living that removing price controls
achieved.
I am confident that this
a short period. ^ But, in the
long on it may have an effect on our
economic structure generally.
run, it would be bad for our coun¬
can7 be i done if the American
The
Price -Administrator
and
try because a famine
in -meat
people will use the same kind of
would surely follow the temporary the Secretary of Agriculture have
teamwork that has always carried
feast.
We saw that happen as a been lifting controls on thousands
us through all our problems.: \
/
result of the two months' holiday of items on their own initiative.

cept-that remedy.

Traniah Eiids Meat Price Conbols

to

flow

lifting quickly the present quaran¬
tine against cattle from Mexico.
The Secretary of Agriculture re¬

-

nomic

effort

further

a

immediate

the

to

therefrom—tomor¬

'V:'V;

continue

the

many

'

poorhouse and the dole, necessary
though they may be, are not sat¬
isfactory substitutes for remunera¬

products

row. /,

spectacular.

shortages

dies in an effort to find

prevent their attain¬
government and also from many
ment, we are failing to achieve
citizens in all parts of the country.
Goal VI. Opportunity for Every our national objectives.
have
considered them all.
I
Capable Individual to Earn
A clear and precise perception
have discussed them with my Cab¬
His 'Own Income
;
•
of our national economic aims is
inet, with experts in the field, and
J
Self-help has always been re¬ the essential first step in the for¬
with many others who are quali¬
garded as a cardinal principle of mulation of a national economic
fied to
advise with respect to
file American system. Instead of program. The goals provide stand¬
them.
\
if
a situation in which
large num¬ ards or criteria by which to meas¬
Reviews Remedies - ;
bers of people are dependent upon ure the soundness of national eco¬
It has been suggested, for ex¬
the State or charitable institutions nomic
policies and also the meth¬
for economic support, we covet a ods
ample, that a price-control holiday
employed in carrying them
be declared for a limited period.
society in which every individual into effect.
But before we begin
This would be politically expedi¬
who is not physically or mentally
the discussion of national policies
defective shall have the oppor¬
ent because it would bring animals
we must pause to survey in broad
tunity to earn his own living. r. he outlines, the sources of our eco¬ to market in large quantities for
which

icies

feed

livestock and food and

on

instances

tives of the livestock and meat in¬ down, or call unlawful or un¬
proposed reme¬ dustry have insistently demanded necessary "strikes
or
carry
on
the proper the lifting of controls from their
jurisdiction conflicts—labor, too,
solution
of this
meat problem. products. 'They have made the
would be inviting disaster. Abun^
Many suggestions have come to definite promise that the lifting
me
from responsible officials in of controls on livestock and meat dant production is the only sure

considered

of course, be handicapped by
various factors; but the oppor¬

■may,

Agriculture and the Price Admin¬
istrator are
removing all price
controls

■'■

trol.

Thursday, October 17, 194$

became law on July

farms and ranges

drastic remedy. But we gave

and serious consideration.
decided against the use of this

of

which

there

is

now

a

grave

shortage, will have to remain un¬
der
control until production of
them has been
We all

it long

greatly increased.

recognize the close rela¬

Infiltration

Communist
United

States

—

Its

the

in

and

Nature

between wages and Bow to Combat It—Chamber of
If either one rises too Commerce of the United States,
er
of government.
It would be high, the other is certain to be Washington 6, D. C.—paper—25c
Price control and wage
wholly impracticable because the affected.
per copy printed 6x9 inches;
are
cattle are spread throughout all control
largely
dependent smaller edition 4x9 inches, 10c—
We

extreme wartime emergency pow¬

tionship

prices.

* upon each other.
As we speed quantity prices lower.
I signed this of even the inadequate controls parts of the country.
It has also been suggested that up the removal of price controls,
perfectly clear which the Congress had enacted.
the removal of wage controls will
Handbook
for
the
Securities
that the Congress would do no Besides,
many members
of the we import dressed meat from other
In this way Cashier
John
S.
Thomson —
Congress
and;, many candidates countries.
This would do little also be accelerated.
better.
we
shall move steadily—and as Fleming Publishing Co., 548 South
have pledged themselves to vote good,
In this second bill—and this is
however, because the
for the removal of price controls amount
of
exportable
dressed quickly as we safely can—toward Spring Street, Los Angeles 13,
very important—the Congress di¬
as
soon
as
rected the removal of price con¬
the, new Congress meat, not already contracted for, a free economy and free collective Calif.—fabrikoid — hard covers —
/; $6.00.
trols on meat and provided that meets. ■ ;•>71/ 7;.':::: which could be brought to this bargaining. /. •>'; •; ■ 7:
tive

price control.

•

bill because it was

—

they could not be restored

before

Aug. 20.

Claims Production Withheld

As
Assails "Selfish Men"
'

a

result, many businessmen

have held

on

to the products they

would normally sell,

country is very small in compari¬
son with our demands.
Anyway,
we

would not think of asking for

Production Now Increasing
•

The

risk in

the

action

we

Proposals for
are

supply for ourselves, taking in removing meat controls
because the people of other coun¬ is less than it would otherwise be
tries must; have it in order to because production in general is
exist.
The figures show, for ex¬ now increasing at a significant
rate.
The
constantly growing
ample, that during this year the
people in England and France stream of goods from our factories,
our mines and our farms is rapidly
will
this meager

gambling on
the possibility of the release of
price control and the opportunity
for- greater profits:
This has been
conspicuously true in the case of
meat.; The American people will
during which time meat had re¬
consume, per person, only a
mained free from all price regula¬ not dondone the conduct of those fraction of the meat we consume. closing the gap between demand
There are now 58,So all these and other proposals and supply.
tion.
This lag of two months was who, in order further to fatten
the direct result of the failure of their profits, are endangering *the and recommendations as alterna¬ 000,000 people at work—an alltime high.
Industry has provided
the Congress
to pass a proper health of our people by holding tives to the removal of controls
price-control bill in due time, as I back vital foods which are now on meat were carefully weighed jobs for 10,000,000 returned vet¬
National income, business
ready for market and for which and considered.
They all had to erans.
had so often urged.
profits, farm income—all these
During this period, selfish men the American people are clamor¬ be rejected,
are
at an all-time high.
Total
rushed unfattened cattle to the ing.
Only Remedy to Lift Controls
The real blame, however, lies
production of private industry has
slaughter houses in order to get in
also reached a new high level.
There is only one remedy left—
under the wire and make high at the door of the reckless group
that is to lift controls on meat. The improvement in production
profits.
That inevitably caused a of selfish men who, in the hope
the
Secretary
of has been steady and in numerous
shortage later.
If price control of gaining political.advantage, Accordingly,
20, the Price Decontrol
Board, after a hearing showing the
necessity for price ceilings, re¬
stored controls on meat.
But al¬
most two months had gone by,
On Aug.




-

.

Consideration by
Conference

011

Employment—J.

B.

International

an

and

Trade

Condliffe

—

4
East
York: 17, N,
'

; Inc.,:

Association,
Street,

American Enterprise

New

paper—50£.

41st
Y.—«

Adams & Go. Adds
John Lockett to Staff
(Special to

The Financial

Chronicle)

CHICAGO, ILL.—John Lockett
has

'become

associated

with

Adams &

Street.
been

Co., 231 South La Salle
Mr. Lockett has recently

serving in the U. S. Army.

Prior thereto he was with Shields
& Co. for

a

number of years.

Volume 164

Number 4534

THE

COMMERCIAL

& FINANCIAL CHRONICLE

The World Bank and Its Securities
(Continued from page 1930)

,V

.

fronted

with

aiming at

the

tne

task

same

the

v

object. Their
ultimate responsibility is a com¬
mon one.
They fulfill each a dif¬
ferent part

%

can only
essential

should

//,

,

same

of the

task

succeed

but

understand

It

that

i

each

rium

yours.

The

twin

of

sister

of

the

Fund

"to

It

edent

International

in the international
■balances of payments of its
mem¬
bers." The Fund's
resources how¬
to be used

for transactions that
are not "cur¬
rent transactions." A
is

of

uon-current

J

large imports of a
nature, either because

it has to rebuild its
war-battered
economy or it intends to under-

fake; development

projects

/ can¬

not use the
resources of the Fund
for the

financing of

It

will

have

to

such imports.

conclude

to

loans it

obtain
has

vestors of those countries
that are
possessed of surplus
productive

capacity.

There

•

is

nothing

new

about that. The
capital market of
such countries
is,

usually, well

w

or¬

ganized to bring prospective bor¬
rowers and
prospective investors
together. The question arises
why
it was felt
necessary to create a
special international institution—
an

organ

of

the

nations

of

.world—to help the capital
;4cets fulfill a task which

viously used
out

such

firstly
world
such

the

mar-

pre¬

to be fulfilled with¬

help. •' The

that

answer

conditions
the second
-

after

that, without

such

capital

is

in V the
war

are

help, the

markets of the
"surplus
countries" could neither
be ex¬
pected nor asked to
provide the

financing of

the import needs of
war-battered countries to the nec¬
essary extent; secondly that the
experience of the 1920's has
taught
Lthat in the
labyrinth of after-war

conditions

international

without

may

guidance

way and, thirdly, that
the world has
settled

lending
lose

even

its

after

down, de¬

velopment programs
may not be
to find
adequate financing

able

facilities

through private chan¬
nels only. The
Bank, as is ex¬
pressly stated in the first article

of

:

its

statutes, is meant to pro¬
private foreign
investment,
not to supplant it.
If the Bank is
mote

successful in

fostering the recon¬
struction of the world it
will help

create the
conditions under which

private foreign investment
will
again take its natural
place in the
world. Its ultimate task
apart

h

—

from participating

M
;
h

in such foreign
•investment and
acting as a guidiog and coordinating factor—will
then be focused on
economic de¬

velopment of reconstruction. Fiancing pf development is part of

'

its task from the

economic

will

development will—it

hoped—enable

,

:

beginning. It

become its major task at a
later
stage and the knowledge it will
gradually acquire in the field of

;

of

v

the

main

it

/'..

become one
promoters of world

.*

and

of

the world. That
they share the risk

the

that

will

be

given

development
means

of

any

and

that

loan

are

re¬

sponsible for any, obligation
Bank will incur. It

also

means

that

■■;

the




Bank

has

nition
that

in,

will

it

be

possible for the Bank to avoid or
help avoid the errors made in in-

Ta+u0nal lendinS in the 1920's
the

and

catastrophic events that

followed

And

the

m

what

Bank

offer

security

to

has

confided

the

service

with
has

that

1930's?

the

his

of

does

money

guaranteed

to

money

loans it

is

is

—

it

not

paid notwithstanding
to avoid such errors?

if

giving

which it

or

—

the
who

its

being
efforts

Previous International Lending
useful

is

to

question

recall

briefly the
unhappy history of international

^drngin the inter-war-period.
After World War I
it took

seven

before the major economic

years

and financial dislocation and dis¬
till bances that followed the cessa¬

tion, .of hostilities

Around

were

overcome.

1925, the depression that

followed the after-war restocking
boom was over. The currencies of
those European countries that had

^been rocked
being

by

of
in

fomenting
still

at

.on

were
stable

a

basis. Most countries went back to
the

international

that

is

to

an

of currencies
able at fixed

goltf

standard,

national

freely interchange¬
"parity" rates of ex¬

economic, situation

restored and international
to

take

precedented

plaoe

scale.

on

For

was

lending
an
a

un¬

very

large part this international lend¬
ing

done

was

basis

from

on

short-term

a

markets over¬
flowing with money to money
markets where money was in de¬
mand. Then, in the wake of the
crisis of 1929, the situation in the
money

borrowing countries deteriorated
and in 1931, the lenders at short
term
to

lost

confidence

and

started

their

call

lending

on

money
back. The
short term had created

semblance of

equilibrium in the
international balance of payments.
The recalling of that money did
not cause the disequilibrium, it
only made it apparent. The world
had been living in a fool's para¬
a

dise

and

work.

That

was

unprecedented scale

because there

was

disequilibrium in
If
of

only

fundamental

a

the

money

1931

was

its

hard

awakening. A process of disinte¬
gration set in that made some
countries "go off gold" and forced

used

or

rencies

employment in one country and
following to fill the gap in others

tual

v/ould have existed. I do not want

a

not

the

place here to go
analysis of these
unfortunate happenings or to de¬
scribe how they created a favor¬
careful

ablei climate for the growth of the
totalitarian
aspirations that

plunged

the

world

into

World

War II. What asks for our atten¬
tion m connection with the work
of the International Bank are the

re¬

the

that international bankers

say

the

whole

judgment
most

of

of

showed

the

better

any

and

situation

than

politicians. But

the

e^en

the worst lack of

judgment could

ture

scale

if

the situation had been sound; in a
sound
situation
the
glut
of

there.

a

\

i

.

The first requirement to avoid
repetition of what happened in
the

second

decade

recognition
of

the

of

period is therefore

war

of

the

inter-

timely

a

situation

and

the factors

causing disequilib¬
rium. Broadly speaking those ele¬
ments
are
economic dislocation,
caused by war, trade impediments,
capital flight and
heavy price
fluctuations. In creating the two
Bretton Woods organizations, the
nations have equipped themselves
better

speedy

instruments

recognition

ments than they
disposal before.

for

the

right

situation
Bretton
the

other

tions

be

the

cure

taken.

The

organizations and

international organiza¬

the

should

of

augury

the

up

U.N.O.

provide the machinery to
right cure. They should

find the
also

be

able

to

prevent the ap¬
plication of methods that hide the
defects of the situation instead
ol

curing them such

as

the large

scale short term lending that took
place between 1925 and 1931. It
is wise not to be too optimistic
about

what

tions

international

do

can

to, avoid

that have been

institu¬

the

errors

committed

in

the

past. It is especially wise for those
who

lead

diffident

such
of

can

teach.

and

even

institutions

what

human

Bankers,

to

be

insight

economists

below

limit—and

several years at
not reach it—the

least

it

m

would have

last

twenty

sufferings of
have

years

the

to

eyes

seem

obvious

many

opened

now

aspects

and

were

that
mis¬

immeasurably greater

and

international consultation and co¬
operation are being organized so
as

to

enable

,

consciousness

to

-—would

to

prove

be

or

guaranteed

Also

ing.

might be default¬
of the sharehold¬

some

ers

might not be in a position to
transfer the amount of their nonpaid
do

subscription when called to

so.

But unless the total of such

defaults

by

shareholders

and

debtors would surpass half of the
that is $10 billions, the

total,

creditors of the Bank would hot
yet run any risk.
Amongst the

non-paid

subscription of $8 bil¬
lions $2,540 hundred millions are

billions
assets

remaining $7.5

therefore covered by

are

and

totaling $17.5
Amongst these assets a

billions.

will

amount

held

in

convertible currencies.
take

be,
form

liquid

of
in

One must

an

extremely
pessimistic
of the solvency of all the

view

to give to assume that the obliga¬
tions of the Bank would not be

chance of fundamental

more

us

than

more

just

lending, the
errors

been greatly reduced.

has

7

however,

important

may be to the investor—and

important to him
negative

not

than fully covered.
loans to be given

The
Bank

But

will

be

that

governments

it is

member

only in the

the

in the

being

and
be

can'

of

the

it needs,

beginning of this ad¬

that

their

preserved.

;

real
It

value

is

only
thereby that the standard of liv¬
ing of the peoples of the world
be" raised.

can

It

is

with

that

object in mind that the Bank must
get to work. It is for that object

/

loans
or

or

member

guaranteed

governments

central bank

by the

to

some

by
by its
comparable
•

or

Cut in Silver Restored

Restoration of the official quo¬
tation to 90
cents an ounce for

refinery payments to miners for
silver

in

ore

Oct. 5 by

lion dealers.

tation

official

said

lowered
1%
cents,
the first change in the
quotation since • Aug. 1,

the

New

tic silver from 71.11
in accord

with

projects

and

the

ac¬

price to 89 cents from 90 Ys cents,
was
split. as to reasons for the
break, and the possibility of a
comeback.

"Belief

>

•

:

'

was

expressed in soihe
quarters that the price would re¬
bound

shortly.

beled

it

a

*

One executive la¬

'very

extraordinary

situation and traced it to quanti¬
ties of silver that may have been
withheld
debate
.

since

"These

the

Congressional

silver last June.'

on

quarters, who, assumed

that the flow of silver to the
ket

caused

lowering

such

90.5 cents

yesterday,
lowering of , the

the

not give any loans without careful

of

to

Congressional

"Wall Street opinion

following

enough.

study

of.

The Oct. 4 issue of the paper
indicated went on to say:

to

financing of

"Journal

tion.

In any

the

York

Commerce," when the Treasury
lifted its buying price for domes¬

price

for

On Oct. 3, under ac¬

was

marking

level.

be

on

tion taken by the bullion dealers,
the New York official silver quo¬

weil

will

announced

was

Handy & Harmon, bul¬

defined projects of reconstruction
and development.
The Bank will

—

as

wealth that savings can come into

agency of the member govern¬
ment acceptable to the Bank. They

He has the right to ask
what protection there is for
him,

confidence

now
though the
proportion of the activi¬

that it will protect
the investment he made but also
in the positive sense that it
en¬
ables productive use for his fu¬
ture
investments
it
is
not
sense

co¬

the

of

said

claims

to believe that, at
any rate in the
field of international

little

that will have its

dress their aim and object are the
same—it is only by the creation of

non-trans¬

ferable and part of the loans
given

other member countries and of
the sort of loans the Bank is going

a

the

the stipulation in the Articles

mg

all. There is reason

make

cowards of

taking

claim

a

this claim and the

the

be

lending

$8 billions.

about.

should

compen¬

on
shareholders of that it is asking your cooperation,
Now part of its assets conscious of the responsibility it
confident ?
may consist of subscriptions in lo¬ has towards you and
that it will justify your trust. ; /://>
cal currencies
that—notwithstand-;

and

owned
by
the
United
States.
Twenty-five percent of the obli¬
gations are already covered by

politicians

real

a

Bank and of private
agencies may be different.
As I

they

$12 billions assets

never

confidence

ties

for

obligations of $10 billions

of

high
rates, detrimental to the

need

relative

its

modest; as the famous saying goes,
they have a lot to be modest
But

his

will
coverage will be
higher than 200%. Against a to¬
tal

past.

greater

attraction

private investor then

the

that

the

ordinating and constructive task
alongside with private lending. It

by its
on

lured

the

ful agency

non-paid
subscriptions.
As
the total obligations re¬

as

existing or being built

under

for

long

by

international

extended

200%

an

field again.
By that time it hopes
to have established itself as a use-'

of

its

for

is

sation for the risk incurred.
If It
successful it will see private

operatons to the fullest possi¬
ble extent—that is when it
has
incurerd obligations to *the aboveindicated
limit —its
obligations

shareholders

in

into

will

covered

greater

it

is

one-

assets and the claims it has

the

recoil

a

because

be

not

interest

of ,their

to

and

debtor and

liquid form.

main

should
Woods

and

one

.When the Bank has

be

would

investors

will

risks

percent per annum charged
all direct and
guaranteed loans.

will

investor

by private

This special reserve shall be held
■in

private

risks

knowledge

half
on

take

can

it will on the other hand avoid
risks of the kind sometimes taken

It will create

commission

a

and

one

had at their

ever

measures

of

part

such

The second requirement is that

:

between

It

agency of the nations themselves.
Because of this greater

to meet its lia¬

reserve

out

ele¬

of

Right Measures Should Be Taken

the

special

bilities

the

It

and surplus.

such

development

than

more

knowledge

exceeding its unim¬
subscribed
capital,
re¬

serves

and

from because it possesses

7

paired

do

private

total

a

reconstruction

wherever

of

moment.

guaranteed bythe Bank
without restriction by the mem¬
bers
whose
currencies
are of¬

to

of

investor could do directly at this

The Bank cannot
lend, partici¬
pate in loans or guarantee loans

a

relief

an
economicaily
undertaking.
It can be¬
its strength and strue-*

sound

loans

fered."

such

finance

development

cause

on

term

on

the

equipped with the

be considered

can

own
borrowing, or to meet
the Bank's liabilities with
respect
to such contractual

not have led to international short

lending

It is

reconstruction

cur¬

payments

undertake

to

means

have

currency."

Bank's

to

course,

is

the

to

countries.

of interest, other
amortization" in the

or

considerable

into

posed

been

or

;

cooperation in the carrying ofct of
task.
The Bank is not sup¬

payments

charges

ness" is

severely by a
combination
of
monetary and commercial con¬
trols only partly justified by real
balance of payment difficulties.

dollars,
being

"local

Cooperation

confidence

its

required to meet contrac¬

judged at the time. The "aware¬

more

are

exchanged for

became

and

this
sub-

has

mem-*

therefore
that the Bank is going to
appeal
to the investor and to ask for Ms

Bank. All currencies
paid
subscription to capital shall be

of international

-more

or

organizations

Wants Investor's

the

the

encumbered

2%

year.

gold

others to introduce exchange re¬
strictions. Before long the service

long term loans
impaired.
International
trade, already hampered by pro¬
tective tariffs before 1931, was

Of

been

(best

'

It is with

remaining 80% will only be
required to meet the obligations
in

large
finding . no

has

The

been

had

billion.

international

bers.

be Paid-up, in the first

next

18%
paid in

been

of

such

no

$10
billion

the

to

nl this m°ment. Of this

u

of

balance

there

equilibrium

such

other

The

maining

short

oh

international system

change. Confidence in the inter¬

started

disequilibrium

lending took place

with

inflation

reestablished

of

have

ture and its close relations with
the International
Monetary Fund,

by "talking bal¬
International
authorized statutory

an

$8

funds seeking short term invest¬
ment Avouldi just not have been

W J.n answering the first
it

capital
about

paid

on

investor

recog¬

will

and the governments of its

I*have

clear

and

information at its dis¬
posal because of its special struc¬

this address

S
S
half

amounts

extent

of

after, 1925,
disequilib¬

fundamental

Bank:

what

shortly

or

the

payments.

to

crisis

rium in the world's economic and
financial condition was still far
from eliminated and that

in international lending
through the intermediary of the

they have pledged them¬ errors
committed
before
1931
by their participation in rather than
the consequences of'

selves

sheets."

v/ere

important to

that

make

ance

an

ticipate

To
end

the

studies

available

Resources of the Bank

stopped. The crucial moment for
of

use of the
money shall be carefully supervised. The Bank is be¬
ing organized to carry out such

are

him, not only by their collective
judgment but also by their com¬
bined financial strength.

the

prevention

errors

a right to know in which
way
the nations that cooperate to fos¬
ter foreign/lending do look aftei

longer be

term

■

unavoidable

has

Once a collapse of that kind has
started because nothing was done
to prevent it, it can no

many

a

investor who is asked to par¬

It

of

International Bank have made it
their common cause to foster the
reconstruction

iv

is

to

economic progress.
;
The member countries

as

long

such long term
apply to the in¬

to

/,

Two questions are
the

term loans for that
purpose, in

■order
•

cial crisis has set in there is
very
little that can be done about it.

case

committed and what risk he runs
if unavoidable disasters occur. He

factors

behavior

own

risking punishment

rowers.

country that

in need

his

bad prec¬

a

exchange shareholder for the influence his
example may have on other bor-

■disequilibrium

not intended

set

can

by

without

•.members." It is possessed of
am^
means to extend short term
V 'Credit to its members. It is
one of
its
purposes; "to shorten the du¬
ration and lessen the
degree of

are

borrower

no

the

If ; one

1931, would have been the

borrowers'

f'>ple

ever

a
a

afterwards.

errors

lesson can be learned from the
events of the years after
1931, it is
that once an economic and finan¬

«

is the task of

promote

only

dirfct interest in the soundness
+vL good behavior of its policy and
??nu s .lendi"g
the

.stability and to maintain orderly
'exchange
arrangements
among

'

in

such

Bank

is

payments has—in the
been the main cause of

borrower from the Bank is

those

co-

auboruroSer; and ishas as also
he
always
shareholder

'

International Bank

to

international indebted¬
Last but not least — no

ness.

other's

International

Monetary Fund.
.the

,

.

Bank

of

past —default

is

they

complemen¬

tary to

the

™Jintaining equilib¬
international balance

the

in

balance

functions. It is my object today
to make you understand
ours; we
realize that they are

Functions

and

iu

of payments — and
everybody
knows that disequilibrium in the

they

together.

therefore

,

Fund

and

in

1973

added that
is

'used

the

price

as soon

up'

as

they

return

to

mar¬

lowering,

the material

expected the
its previous

event, they advised,
they did not consider yesterday's
as anything more than a
temporary move."

v

THE COMMERCIAL & FINANCIAL

1974

and

deserves

portant innovation mat should be
retained.
,'??'.
;'•??
As

toward

move

we

peace

a

in mind short term

well

desirable

a

The Taxation of Corporate Profits

system.

tax

The

should, for example, seek to
a
tax policy which so

We

possible aids in the con¬

as

of the inflationary pressures

trol

which still endanger the
of

of

year

a

demand for

the

peace,

stability

Despite

life.

economic

our

goods and services by consumers
and others is still far out of pro¬

profits as are distributed to
stockholders are again subject to

tax

under

tax.

against prices continues un¬

This

abated and in some cases with in¬

intensity.

creased
tem

can

tax

The

personal

the

first

is the

ute

corporate

of

o n

ing

portion to available supply, with
the result that the upward pres¬
sure

t i

x a

profits has been the subject of
widespread debate in the last year
or two, with particular emphasis
upon the so-called "double taxa¬
tion"
of
corporate income. In¬
come received by a corporation is
first subject to tax at the corpo¬
rate level, and then such remain¬

maintain

far

tet

to

step

income
in the

is

by absorbing some excess pur¬
chasing power and thus reducing
the demand for goods, without at
the
same
time imposing undue

the

corporation passes on
income tax to its customers in

hardships taxwise. Consequently,
even if for the
long run higher

the

form

and lower
income' tax rates may be deemed
desirable,
short run considera¬
tions indicate strongly the wis¬
dom of retaining existing levels

its

If

clear.

a

of higher prices

or re¬

it through lower wages to
employees, there is of course
double taxation. The corpora¬

coups

in

used

for

also

important

strations

and

its

Finally, the administra¬
tive
aspects,
particularly
the
maintenance of the greatly inJcreased simplicity achieved in re-£
cent years, must receive careful
consideration.

points,

growth,

are

necessities but
demon¬

opportunity
in
a
society."
Suggestions to stimulate small

business

free

have

been

very

numer¬

ous

in the tax field and elsewhere.

To

some

made

taxing

corporate profits has found ap¬
peal. The tax paid by the corpora¬
tion is considered to have been

extent,

same

as

the

business, generally,
the elimination of

made

outlook

is

basis

the

cash

that

on

a

strictly

intake
nearly $3,000,000,000 in
excess of expenditures. In 1948, in
the President's own words, it is
will

Treasury

be

his purpose
the budget

"not only to balance
but to manage the
fiscal program of the government
so that a substantial surplus may
be

in

used

national
of

such

the

debt."

reduction

of

the

vantage compared with the return
on other forms of investment. It is
income
be

3%. This plan has a

corporation

the

to

only

subject

tax, at a rate which may
substantially lower than the

personal income tax rate to which
at least the major stockholders
are

tion

subject. Moreover, the reten¬
of profits in a corporation

frequently involves more than
merely postponing the individual
income tax on such profits. Be¬
cause of other elements m the tax
reductions
improbable system, such profits may ulti¬

desirability

The
is

course

substantial

of

would

tax

highly

seem

.

This latter

normal tax.

suggestion contemplates, of course,
a
substantial
increase
in the
normal tax rate from its present

beyond dis¬
pute. To maintain it in the face
a

the

from

in

Federal, tax

our

for

proposal to allow a cor¬

mately escape personal income tax

familiar

altogether, or at least receive the
benefit of the limited rate applic¬

poration to deduct from net in¬
come part or all of the dividends
distributed to its stockholders. If
it
distributed all of its profits

assume

I have men¬
extent to which

categories

major

tioned beyond the
such

reductions

possible

or

an

would

be

either

discreet under present

circumstances.
run
objectives of
policy
must J include
strengthening of the forces mak¬
ing for a high level of national
income and employment. The tax

The; longer

our

capital gains.;

Prevailing attitudes toward re¬
of the corporation income
tax differ widely among different
vision

groups.

would

Some

make

no

struc¬
either that a cor¬
poration has
an
identity and
tax
paying
capacity
that
is
to separate and distinct from its

tax

system must be shaped so as
avoid a repressive effect on the
demand

able to

of

consumers

for

goods

change at all in the present

ture, contending
-

stockholders, or that the corpora¬
tion income tax adds a desirable

and services and to stimulate in¬

element of progression to the tax

vestment in

structure. Others would eliminate

which

the

productive enterprise
will employ labor, mate¬

corporation

income

tax

en¬

rials, and equipment. 'Unless we tirely, ignoring both the windfall
attain this objective, the post-war profits which would thereby ac¬
crue to the owners of outstanding
period may mark a return to the
instability, mass unemployment corporate securities and the
added incentive toward the ac¬
and
depression
of
the
early
cumulation of untaxed profits in
thirties.
In

particular
features of the tax system with
which much current thinking is
concerned, I want to make clear
that I
am
not forecasting the
course
of. probable post-war tax
revision, nor am I prepared at
present to state for myself or
the Treasury how these
issues
should ultimately be resolved. My
discussing

some

the
•>

corporation.

Between

are

a

these

be allocated to each

would

hi

stockholder

s

proportionate

of the corporation's profits

share

for the year,

whether or not dis¬

tributed to him. He would include

such

share

of

principal objective is to stimulate
of these-prob¬
to note that

income

tax

the essential elements

find with the




be

on

the

profits in his

and pay personal income

it. A major difficulty many

partnership method

arguments
the undistributed profits

glad to forget their

against
tax.

with

*■

.

,

the

field

stimulate

•

further

executives

by

their

of

earned

activities

equity, and
personal ef¬
in expanding

and

undertaking

ventures.

new

In

opposition to any substantial
in the burden of the
personal income tax are those
who would make it by far the
major source f of revenue in th^
Federal tax system; greatly, re-?
ducihg the significance; if; not
completely eliminating other Fed¬
eral taxes. If our post-war reve*
hue needs are? to be met, this
would mean retention of the" broad

that

We must be certain that the ad¬

type of small

at the expense of

post-war tax revision
to be the issue of tax
rates and exemptions. They rep¬
aspects of
is

likely

resent the clearest element to any

taxpayer in the determination of

respect

income

tax

most '.<■

-

the

the prob¬

Although some of the plans
doubtless
are

been

suggested

being supported by

those

with

particular axes to grind,

the

most

part

they

sincerely held, although
convictions

as

for

a

personal income tax is the
important determinant of
yield.

question of exemptions,
people will urge that the
level should be based on a mini¬
On the

some

mum

living stahdard.

standard should be is
to

be

What that
itself likely

highly controversial.

Con¬

sidering the differences in wages
and price levels in different re¬

represent gions of the country, as well as

divergent,

to which of various

possible devices would contribute
most to

taken: into v account

the over-all tax

urban

smooth and stable econ¬

The problem is one which

and

rural

differences, the

translation of such a standard

into

dollar, exemption
would be extremely difficult. To
add to the complexity, the stand¬
ard would have to be adjusted for
a

omy.

be

prime consideration, and the yield
of the

diversity of opinion on
lem.

to

conflicting ^factors resolved.
The revenue goal is of course a
and

'

-

corporation
indicates the wide
to

have

of proposals

•

brief review

This

and

there

would

eliminating double taxation

have

proposal,

to
in-i

devices to improve

corporation tax his tax liability, and consequently,
the greatest interest seems to lie
or it would be at a minimum. You
will recall that such a plan was in this area. And yet, because of
in the law some years ago, not as the inflationary situation and the
a
substitute for the corporation need for revenue to finance the
income tax but auxiliary to it, in still high level of expenditures,
the form of the short-lived and the opportunities for reduction in
much criticized undistributed rates and for increases in exemp¬
In
arriv¬
profits tax. Possibly some of those tions r seem limited.
now endorsing a corporate deduc¬
ing at the level of exemptions
rates
many-influences will
tion for dividends as a method of and

nership method of taxing corpora¬

lems. It is pertinent

or

approaches

to

proposals»/for ' special
in

as

fort

there would be no

tions is one. Under this

further discussion

oi many

two

number of others. The part¬

like¬

groups

incentives

to

of this plan is

immediate

we

pur¬

income may also come to the fore

particular ■ scheme will accom¬
plish the objective that we seek.
one

their

other

or

a

prior history vantage given
system. The business is not

will

higher income

treatment

for example,
double taxa¬

assurance

There

power.

iri

groups

consumer

reductions

base, that is, low

exemptions, and

relatively high
tax brackets,

rates

in

;

Averaging
We have

lowest

,

;

occasion recognized
that the convention of a one-year
on

accounting period is not an en*
tirely rational one for some purposes, and that some other period
should
it.

for
of

occasion be substituted

on

For

example,

business

ordinary

in the ?case
operations,

the net result of operations for a

single year has been considered
an
inadequate measure of tax^
paying
capacity. ; Consequently;
there is the five-year loss offset
provision, under which business
losses of corporations are carried
back

for

two

years and carried
same period to bo
the profits of those
years.
This
provision
appears
likely to be retained in the post¬
war
system Jin the form %of a
longer carryforward of losses and
without the carryback feature,
f

forward for the
offset against

that other types.'Small business* in¬
it would give a special tax ad¬ cludes corporations, sole proprie¬
vantage
to : stockholders
where torships and partnerships, and
corporations are able to shift the they must all be given a lift to¬
The averaging of business losses
increase of the corporate tax.
gether.
with business income is only part
In contrast to these methods of
of the general problem. Fluctuat¬
Tax Rates and Exemptions
awarding a credit or exemption at
income represents ? another
One of the most controversial ing
the
stockholder
level,
is the

main weakness

curtailment of expenditures in the

unless

must be reasonable

dif¬

Vest in risk enterprises. Kestora-f
tion of an earned income credit

,

the

income

maintain

increase

dividends, and more favor¬
treatment of capital gains

on

the

on

tion of
able

paid

these

wise be pressures for a reduction

behalf of the stockholders,
and losses.
just as in this country the tax on
no
This identity of tax proposals
tion's profits after tax are the wages and salaries withheld by an
employer is considered paid on is partly a reflection of one major
same as they would have been if
developing special
there were no corporation income behalf of the employee. The Brit¬ difficulty in
ish stockholder in computing his schemes to promote small busi¬
tax, and the amount available for
of taxation for the time being.
ness. It is almost impossible to de¬
distribution
to
stockholders is tax liability includes in his in¬
And, entirely apart from infla¬
fine
small
business
in
general
also
unchanged.
Unfortunately, come not only the net amount of
tion, it makes little sense to at¬
the dividend distributed to him terms and in such a way as to
however, there is no convincing
tempt to discuss or advocate tax
evidence which serves clearly to but also the tax paid on his behalf apply to all types of enterprise.
reductions except in the light of
substantiate or to contravene one by the corporation. Thus, with a Regardless of whether the defini¬
the existing budgetary situation
tion be couched in terms of asset,
or
the
other
hypothesis. Even corporation tax rate of 50%, the
and the government's needs for
size, - number of employees, net
among
businessmen themselves, British stockholder reports. two
revenue to meet its requirements.
dollars in his personal income tax worth, profits, or sales, a firm that
we find differences of opinion im¬
As you probably know, the Ad¬
•return for each dollar of dividends by virtue of the definition would
ministration is bending its every plicit in their various views as to
that he receives. He then receives be considered small in one type
the impact of corporate taxes.
effort in the direction of reducing
as
a
credit against his personal of industry would be considered
The argument that stockholders'
expenditures without at the same
large in another. A manufacturing
dividends are taxed more heavily tax liability the amount of tax
time unduly hampering essential
firm with 50 employees might be
than other forms of income by paid by the corporation.
operations — not the least of
Another proposal which would a small enterprise but a whole¬
reason of the corporate tax is only
which, in these troubled times, in¬
distributor' with
the
same
also operate at the stockholder sale
one aspect of the problem. It con¬
volves an unprecedented level of
number of employees might be big
siders only profits distributed by level is the suggestion that divi¬
peace-time expenditures' for na¬
business in its field. Similarly un¬
a
corporation. However, a large dends be partially exempt from
tional security and defense. The
reliable are criteria based upon
proportion of corporate profits the personal income tax to com¬
present outlook from a budget
sales or net worth. And as to in¬
earned
each year are not dis¬ pensate the stockholder; for the
point of view, as pointed out by
come as a criterion, even the big¬
tributed
to ; stockholders.
This corporate tax. This plan is often
the President in his report to the
gest enterprises may operate at a
situation has been aggravated by combined with the idea that the
country early-in August of this
small profit or even at a loss for,
the combination of the high earn¬ corporation tax rate should be the
year, is for a budget out of balance
a
time,
'
v
ings arjd business uncertainties of same as the normal tax rate un¬
by not more than $2,000,000,000 in
the individual
income tax,
In evaluating various proposals
the war period. Such retained in¬ der
fiscal 1947. In fact, even for 1947
come
frequently has a tax ad¬ and dividends would be exempt for assisting small business, there

exemptions

personal

of

some

question of rates, there
a reduction

low

to

chasing

suggestions

those

the

on

order

behalf of small business

on

the

are

each

expect

of* opinion.

the

On

On

may

will be pressures for

of

democratic

we

ferences

favorable

practical

of

distribution

burdens.

"A rising birth rate

business

not only economic

system

Britain for

Great

small

environment

proposal raises difficult technical
problems.
.

the

has said:

man

for

be found to be limited to
relatively small or closely held
concerns. Even as so limited, the

quarters

disproportionate

strength*

the ? relative

on

war,

small business. As President TruJ

am

some

preference
businesses,

own

the volume of consumer

on

ity, and since the exemptions ap¬
ply to all taxpayers, their effect

as a result of
combine to give added
importance; t'o the problems of

may

In

strong

a

acquired
and

-

the

proach. In any event, if there is a
field for partnership treatment it

analysis and up to this point there
general' agreement.
But
whether this actually constitutes
double taxation is not quite so

sys¬

help to check these forces

size

would have to be financed
other than retained

not suggesting that
these results would necessarily be
undesirable, but am only pointing
out that they would
inevitably
follow from the partnership ap¬

matter of wide

a

establish their

have

sources

profits. I

effect

expenditures and economic stabil¬

and the fact that large industries

a

degree, the expansion of an enter¬
prise
from

shown

have

upon - the
manage¬
corporation to distrib¬
profits, and to an increased

ment of

Business

increasing interest in recent
years. The needs of veterans, who

the

by

family units of different size.
?; •,? Other factors to be considered in
setting the exemptions are the

our

and

Great pres¬

exerted

be

would

sure

heated.

Small

of

has become

ness

part of the corpora¬
which have not been

distributed.

actually

larger and the debate

are

that

on

stockholders

the long range objec¬

as

of

tives

tax

tion's profits

receiving

V

The development of small busi¬

•

them

more

not have

which to pay the

the funds with

legacy of high rates has
more
urgent.
The

war

stakes

have
considerations

tax structure we must

time

as

the

made

Taxation

is that the taxpayer may

problems to be discussed have
been with us for many years. But
the

is

attention.

careful

Issues

Tax

Current
(Continued from page 1931)

Thursday, October 17, 1946

CHRONICLE

uniform

part.

of the

Because

progressive

rate

structure under the individ¬

ual

income

tax

corporations, the
period of years on

for

and

small-

taxes over «at
given amount
of total income are likely to be
a

greater if that income is spread
unevenly than if it is received ii*
relatively
equal
amounts
each
To a small extent and in at
area,
existing law takes
account of this difficulty. Having
a
direct interest in it, you are

year.

limited

,

probably
aware
that
lawyers,
among
others,
may ? choose
to
average the income received in a
given year if it, is the product, of
effort expended over a period of
three years or more.

The "bunch¬
ing" of income is perhaps most
striking in the case of actors, au¬
thors, and other professionals, but
it also occurs in the case of busi¬

workers,
and
others.
it has been suggested that
in which the averaging

nessmen,.

And so,
the

area

principle, is applied be expanded
to include other, sources of income
besides certain professional earn¬
ings.
A

■
more

:? .'? ;. '

/:.•

'••'?/'''

.?•'•

restricted application of

the averaging

principle is the sug¬

gestion that taxpayers be allowed
to carry over

unused personal ex¬

emptions. This plan would be of
assistance to those who move from
one

year

to the- next between a
status. In

taxable and non-taxable

"•

v"'

:

.''v-

¥■¥f§j¥
.Volume 164

Number 4534

'

*"•'••

^cdwi^^
his

taxpayer

a

current

would add

personal

exemp¬
tions that part of
his personal ex¬
emptions for some
other
year
which was of no
tax benefit to
him because his
income was not
high enough. The practical
appli¬
cation of such a
proposal must

take

into

account, among other
difficulties, that the statutory per¬
,

sonal

exemptions

may

change

from year to
year, that the
ber of dependents
one
x/ix%a.

that for

to
tv

j v,ai
year

some

num¬

change

may

from

-A* uni

another,;] and
unu

years the

taxpayer

inay not have filed an income
tax
return because of his
non-taxable
status.
A
.

.

.

,

In

'

must

be

time

faced

.

is

the

period

which

over

Should

the

averaging
logic

take

justifies

a

place.

of

What

carry-forward of busi-

ness

losses

than

one

THE COMMERCIAL & FINANCIAL CHRONICLE

property v iaw<to
resultant tax reduction would be
establishment of family trusts,^ as^ leonfined^to
persons
above the
signments of income, gifts of in¬ first income tax bracket.
Again, if
come
the fullest
producing property from
advantage in preventone
spouse
to another and the ing tax losses from the division
setting up of family partnerships. of income within the
family group

Thus far all efforts to divide the
of earned
income for tax
purposes
have
evoked

of

two

year

rather

years

three years?

or

If

personal income is to be
averaged

what

period should
Should we take our

choose?

we

is

flow

have eliminated

larger

measure of success. Even

■

mer

years

-

being

much of the for-

was thought to
family trust. More

the

recently,

Estate

these
decisions
have
virtual finish to the
course of

Taxes

erty

The outcome of all this has
not

satisfactory. Endless time
and energy have been
poured into
the creation
of various devices
and their subsequent defense
becourts.

The

costly

liability

deaths

pact

open to revision,

it is clear,
to
complicate the income
But if
they can make a substantial contribution
to increased
and

stimulate

creased

investment in risk

prises,

in-

terns.

complexity
thesprice.

a

progressive income tax
ours, there is a keen infcentive for
members of a
family
unit to
arrange their affairs so
that, for tax
purposes, each member of the
group will have as
nearly as possible an
equal share
Of the total
income. With certain
such as

minor

and

technical

success,

partially
others

have

ultimately

not

in

area

which

where

been

established state sysproperty law has lent it-

self to the task.
In the income
tax

Jield,

the

community

concept has
intact its

thus

property
maintained

far

vitality as a method of
income splitting for
tax purposes,

The attacks fnade
upon the very
considerable tax
advantages which
flow from a
division of
and income
between

;\vife in

,:

;

property
husband and

community property states
successfully repulsed
jvherever they have
appeared in
Jhe income tax field, at the cost
only of surrendering to a
legisla-

have

been

°1nslauugl?t

on ,^e

es^a^e tax

'standirS^o/the°communitv
omDertv
2vsten?tero^tax^'
FS&EPby Te™ cfS
Unued

;-within the past few
years
.with

an

heritage

English
has

adoDted

state

a

common

,

law

community

th^

property laws whose orighUn
country of course goes back to the
early Spanish settlements.' The
success

attained
in forcing tax
.recognition of this new state law
given to1 tax-avoidance-by-

-has

.statute

and

code

of

rerentlv

of

more

nromise of

in

sucoess

tefore

would
all

states
for

to

tax

divide

other

j

of

law

states,

proposal

•and
>

In

individual devices.

non-community

limited

,v

?

property

.states, the division of income be.tween members of the
been attempted

family has
through a variety




rem-

as

of^ property

of

amount

and

in

single tax,
being con-

a

as part of the estate.

comment

is

the

that

his

de-

continuing
the

on

from

the

to

be

income

liable

which

for

flows

property.

jt js obvious from these
illustrations that the

heard
or

in

courage

for tax survival.

it

said

here

neighboring

I

consumption

commodities. It
the excises will

in

com-

fui scrutiny

the

need

peacetime

Manufacturers
will of

Anotner
Another

—

.

«

it

of

commodities
\

•

in

a

order

to

seems

come

scarce

likely that
in for

tax
and

seek

course

reduction

of

care-

in the development of

■

aimcuiiy arises num
difficulty arises from
the fact that the benefits from the

Co.,

with

now

(Special to The Financial Chronicle)

Penobscot

LOS ANGELES,

;

distributors
the repeal

excises
in

^

structure,

on

which

(Special

Carr

&

Street.

j

(Special to The Financial Chronicle)

Co.,

LOS

to

The

Financial

Chronicle)

Janms

—

increase

they deal

-----ihmr

their

CAI03.
sales.

ANGELES, CALIF.—Mil¬

ton W. Corkran is with Mitchum,
Tully & Co., 650 South Spring

Street.

E.

>

Holmes, Jr. has become affiliated
with

First Securities
Corcoran Street.

Corp.*

(Special to The Financial

Ill

1404

CITY, MO.—John R.

and

Charles

H.

Wornall,

are with UVllivn, Waddell &
cu e
Willi
Herrick,
Co., Inc., 1012 Baltimore Avemjp-.
■V

Street.
Financial

Chronicle)

ORLANDO, FLA.—Paul

I

I

;

Treville

j

(Special to The Financial Chroj*tcle)

Franklin

(Special to The

I » -v.-

LA

Chronicle)

CALIF.—John H.

Bunce, Jr. has joined the staff of
Stephenson,
Ley decker
&
Co.,

(Special to Tfne financiat Chronicle)

KANSAS

OAKLAND,

.

w

J-

-

-

Leedy,
Bank

has joined
Jp,
Wheeler

the

;

C.

de

staff

Pn

of

"Flrvrida

Building

CROSSE, WIS.—U. Setdon

Snellbaker

has

become

with Holley, Dayton
Bank

affiliated

Gernon, State

Building.

(Specj&J to The Financial Chronicle)

LEWISTQN, MAINE—Louis B.
Gosselin is wm W. H. Bell & Co.,

(Special to The Financial Chronicle)

LINCOLN, NEB.—Claud W.
has

been

added

to

the

Roe

staff

PUEBLO,

COLO. —Henry

-L.

of
John M. Alexander & Co., Stuart

Kirkpattrick has become affiliated
with Hutchinson & Co., Thatcher

Building.

Building.

(Special

to

The

Financial

J

Chronicle)

LINCOLN, NEB.—Lee G. Lig¬
gett

has

Ellis,

become

Holyoke

connected

&

with

Building.
(Special

LOS

(Special to The Financial Chronicle)

QUINCY,
Thayer

Stuart with

Co.,

The

Financial

Chronicle)

LeBel,

Douglass

Bank

with

(Special to

ANGELES,
-

530

Conrad,
West Sixth

(Special

ST.

to

.

has

to

The

Financial

and

Thomas

H.

become

connected

Waddell
Locust Street.

C.

(Special to The

LOS

Financial

(Special

SAN

Wm.

R.

Colorado

Staats

to

&

Co.,

-

The

with

.

Chronicle)

&

Financial

FRANCISCO,

Inc.,

..

Street.

418

Chronicle)

CALIF.

.

.

!

—

Barth

'

ii
.

(Special

7!

,

Co., 482 California Street.
7

joined the staff
Co., 311 East

:

Her¬

.

Julian J. Meyer is with J.

ANpELES, CALIF—Don¬

ald Gi Webber has

Chronicle)

LOUIS, MO.—Albert Bresch

ANGELES, CALIF—Lew¬ rick,
Sperry

Chronicle)

MO.—Robert ,E.
joined the staff of
Co., Inc.,; 408 Olive

&

(Special

ST.

Thorp are with Francis V. Nixon
& Co., 607 South Hill Street.

of

Financial

has

Slayton

(Special to The Financial Chronicle)

E.

The

LOUIS,

Street.

ANGELES, CALIF.

Joseph L. Huber is with Flynn &
Levitt, 411 West Seventh Street

'LOS

Chronicle)

with

(Special to The Financial Chronicle)

is

Financial

& Co., 311 Locust Street.

CALIF—Geo

is

The

LOUIS,

Baldwin
LOS

Building.

MO.—Natalie A.
Weiss is with John R. Kauffmann

.

Pflugfelder
Bruce
&
Co.,

associated

Illinois Na¬

Buckley

(Special to The Financial Chronicle)

LOS

Co.,

RALEIGH, N. C.—Louis du B.

ST.

>

become

J.

formerly with Rees is with Kirchofer & Arnold,
& Co., has be¬ Inc., Insurance Building.

associated

come

has

:

Henry

—

(Special to The Financial Chronicle)

ANGELES, CALIF.
B.

Nelson

ILL.

Slayton &

tional
to

SAN

to

The

Financial

FRANCISCO,

Benjamin

:

•

■

Chronicle)

CALIF.

Morgenstern

is

—

with

Walston, Hoffman & Goodwin, 265
(Special to The Financial Chronicle)
LOS ANGELES, CALIF.—Ralph Montgomery Street.
C.

Morse, Jr. is with Bogardus,
Banning, 618 South Spring

(Special

Frost &

(Special to The Financial Chronicle)

LOS

to

The

Financial

Chronicle)

SAN * FRANCISCO, CALIF. —
Raymond Hornby, Jr. has been
added to the staff of Dean Witter

Street.

&

ANGELES, CALIF.—John

Co., 45 Montgomery Street.

S. Newberry, Jr. is with Buckley

Brothers,

530

(Special

West Sixth Street.

SAN

or

specific

CALIF.—Wil¬

J.

Building.

DURHAM, N. C>

relationships among
the estate tax, the
gift tax, and

are badly

affiliated with

now

Gross, Van Court & Co., 458 South
Spring Street.
;<
' ,

Street.

^1.

California

&

W.

erty

ANGELES, CALIF.—Rob¬

ert L. White is

Brothers, 530 West Sixth Street.

tax

.

(Special to The Financial Chronicle) •'»

LOS

affiliated

Lionel

terms

West

411

liam W. Speer, Jr. is with Paul D.
Speer & Co., 458 South Spring

Penobscot

occurrence

an

i=t

not

Chapin

Cady X is

op.portu-

a

such

Levitt,

1

Julius W.

become

(Special to The Financial Chronicle)

prop-

however,
difficulties, although

although

has

DETROIT, MICH.—Frederick

Pr?P"

addition

gift tax, but is not
considered for purposes of the
income tax, the donor of the

does,

consideration,

iii

Building.

the

so

munity property states that the
single person is- one of the disappearing species in the struggle

more

in-

present some
they would not appear,- to be in- the
surmountable In the first place, of
m
overhauling.
,
would resuU in a compa
.
"
increase in the weight bf the tax.1,
Excise Taxes
burden upon single persons; un-1 Excise
taxes played an imporJef. separate rate schedules for tant part duhng the war first, by
individuals and married couples
yielding large sums of revenue,
were
used.
This
aspect of the an(j
second, by tending to disproblem certainly
requires the
fullest

;

Jr.
«Ji>

was

purposes of the

ment income.

The

with

Bailey

Finally, there is the strange
anomaly
where
a
transfer
of
property is recognized as a gift for

be-

as

j

fer of the
property is recognized
for estate and gift tax purposes.

tween earned income and invest-

.

.

Baldwin

scendants, from his living son to
his yet unborngreat-grandchild,
can each in turn
enjoy the property although only a single trans-

common

particularly

•At

-

under

proposals,

the

transfer

1938)

page

with

Flynn &
W. |
Seventh
Mv VGAHU Street
with

taxable transfer. It is possible
individual to establish a
trust or succession of life estates

inequities that

within

1

DElKUll, MiCtl.

?

ulti¬

a large extaskv %By a

this

nity to postpone the
for>

the proposal would tend to eliminate many of the
arisen

adequate

Another important defect which

invites

Another attractive feature is that

have

has to

at

Sift during life

sidered

community property states might
well claim discrimination in some
respects, which has been a defect

avoidance

.

each

■

scot Building. He was in the past
With C. G. McDonald & Co-

^at that they would

that
its
adoption
swing the balance of
tax equity to the point where the

the

as sourc¬

and

effeff constitute

purposes

is

of

than

the suggestion has been
made to integrate the estate and
Sift tax9? s0

not

some

the

culty

proposal has undoubted attractions. One particular merit of

of

On

Jhere
ax savings.bTnS correct this d*
To porreo^ thi^diffi-

This

plan

failed

tax on the total
transferred,

I

Chronicle)

has become associated
Charles E. Bailey & Co., Penob-

of reve¬
for

Although4he gift tax

I erty

than

•»

1

Kirk

room

during life and at death, the total
estate and gift tax can be reduced
to a small fraction of the estate

tween the spouses either according to their respective incomes or
in whatever fashion suited them,

the

sense

program may

j income tax, it

has

aggregate
income
of
both
husband and wife, irrespective of
the source of the
income, and the
tax would be
proportioned be-

would

comprehensive

as]judicious

married

more

tended to complement and
force the estate tax, as well

This pro-

allow

a

Federal scheme of taxation.

the

FiNANaAL

few

and

revenue

tent

Tke

DETROIT, MICH.—Gordon

yr*

mately have some effect in alter¬
ing the role of these taxes in the

to of-

seem

In

elsewhere.

social-security

as

have

through

a

(Continued from

.

to

combined

instruments of
fiscal policy. The
development of

altemative

an

a

hand, these taxes may be

of

es

women

attention

upon

whole.

.

source

leave

hereditary fortunes

—.

morals
claim that

receive.

contraction

wives,

family

as a

curious anomaly, for an

would

other

pro-

far more successful rec¬
ord than has been
enjoyed by tax
a

a

nue

the

proposed?

1"

a

The level

relatively

expansion of this

The total tax would be twice the
amount of the tax on one-half
of

proved

the

Jem of

this is

joint

w

S Income

still

the
income

cui

couples

been

unnaturally,

was

tos™advanrd

desired

splitting has succeeded has

it

cases.

that

they

a" aucumuv., to tax-community
alternative>

noSfl

crowned

have

husbands

should approach the task of post¬

revision not as protagonists
of narrow group interests, but as
defenders of the nation's interest
war

tax

country. The im¬
gift tax probably is

fewer

fact

which

eys-

was

employment,

prop¬

play
our

regarded more as instruments to
retard
the
growth
of
huge

income to the spouse
having the
management -and control! of it.
The
criticism
aimed
at
these
plans ranged from arguments that

fp-r

upon or

while

it

mandatory

solution which would

(

Perhaps
largest

others

successful,

for

More

family, the less the tax
en
the
aggregate income of all.
Various
methods have been
seized

with

have

been focused

the

to achieve the
Some have
been

time

one

and

in

persons
are
affected „by
these
taxes may account in
part for the
rather meager popular attention

be-

legal

imperiled to the
hard-gained
rights
were being lost.

hetwTo16 ftqUal tht distri^ution
bctween the
members
of

end.

law

gift

this

even

The

es-

equity

property

another,

the

limitations,

Invented

to

returns

tax

common

At

At

A

Under

the

community
posed

;j':
Division of
Famiiy xiivuiue
Income

.—

greater

tween

enter-

the increased
may well be worth

•iThe

tablish

to

by

of business and

stability and plenty. Given this
possibility, it is essential that we

our

In

before the war, and continue into
the post-war period. In
part, how¬

yield that is
much less than the
yield of the
tax on cigarettes alone.

of wage

made

structure.

part, some
of the changes will be a reflection
of attitudes that prevailed long

care-

of

role

or

tural defects result in
estate and gift tax

professional- groups.

attempts have been

if

our
post-war tax structure
differ in many respects from

in the

play

in controlling booms and depres¬
sions, and in building a world of

that
will

suppose

should

taxes

exert an important influence in
regulating fluctuations in the vol¬
ume

It is reasonable to

Taxes

transfer

which

_

pre-war

a new

economy. There is a growing body
of opinion that tax policy can

Conclusion

of exemptions and various
ana various strucsuuc-

and

Several unsuccessful
legislative

tend

tax.

equity among taxpayers
they can serve to

and

-earners

Averaging devices,

in

of the

felt in

wasteful litigation thus
promoted

and investments than that

' '

,

the changes are likely to re¬
conception of the role

ever,

flect

with due regard for
needs and the relative

system. Because of the rather high
exemption, the estate tax applies
only to one out of every 100 adult

been

the

Gift

the

death

at

made

'

and

relatively minor

tax-inspired

family partnerships,

fore

on

ex-

taxes, changes will have to

revenue

sanctity that

surround

general revision of

a

t

1975

importance of various taxed commodities to the maintenance of 0
prosperous economy

fully studied.

a

period of the tant revenue system.
Moreover
taxpayer's
working
life?
And and perhaps more
important, is
what shall it be in
the case of a the tax
inequity which has encorporation
that
endures
for sued. There is hot
only discrimmany generations? The answer is ination
between families in comprobably that conclusions based
munity property states and those
On a neat
system of logic must be of similar
circumstances in other
tempered by practical considerastates, but there is also the postions. Neither
the taxpayer nor
sibility of more favorable treatthe government
would be
happy ment of income froth ; property
tinder a system
where tax.

always remains

be

be gained from the
plan,
provision will need to be

in this latter
area, however, court
decisions in the past few

investments have met with

ness or

social
an

But in

cise

made
to
bring .'minor children
within its scope,
possibly by treating their income as that of the
parents at least to the extent that
it is derived from
parental gifts,
These; and the many incidental
technical problems are

from the is hardly compatible with the
satsecurity program and adopt
isfactory operation of an imporaverage over the
cue

to

some

only a
judicial frown of disapproval. Ef¬
forts to split income from
busi¬

developing these averaging written a
one
logical difficulty that triumphant

plans

■<d

'

'

of

given year,
to

""

"

Parker
ParKei

ANGELES, CALIF.—Marc
has

become

associated

The

Financial

Chronicle)

CALIF.

—

Forrest Tancer has been added to
the staff of Sutro & Co., 407 Mont

(Special to The Financial Chronicle)

LOS

to

FRANCISCO,

I

gomery

Street.

-

.

FINANCIAL CHRONICLE

THE COMMERCIAL &

1976

'

store

it is

throughout, the vast nation,

well.

and
shown and demonstrated and sold
in thousands of stores. A And to
reach
those
multitudinous sales
Wares

heralded

be

must

How a

New

England, can be bought by a cow¬
boy, say in Texas, is typical of the
workings of thsd modern commer¬
cial miracle called distribution.
whatever

1 venture to state that

the problems of distribution prior
to' the' war, they were relatively

Television offers the advertiser
the ideal

simple compared with those when
world industry finds its full post¬

say

production stride. Remember,
productive capacity increased
tremendously during the war. We

can

our

have

Also,
the visual story, supplemented by
a few well chosen words or even!
significant sounds, is many times

which to make both old and new

We have millions of extra

things;

And

effective.

more

provided
with useful employment lest they
he earried on the backs - of stillharderrworking
taxpayers.
We
tjave countless brand new prod¬
be

must

who

workers

through the microphone alone
now be expressed on the tele¬

vision screen in; a second. '

plants in

more

many

medium for his message.

might require a minute to

What

war

now

greater appeal. But that automo¬
bile stands still von the printed

many more

since

presently.

point to the
various
features;
operate
that
easy
clutch;; handle the sleek
steering wheel; shift gears at the
can

persons

living, dynamic,
believing presentation
the

have

you

seeing
that

-

is

-

makes

the

It is
this sort of dynamic advertising—
true-to-life
presentation — that

advertising is the concise, to-the-

stirs the latent buying urge

to the

point of action that spells a sale.
Now television, as is the case
with sound broadcasting,
in its

of the
disseminating

broadest aspects makes use
ether

or

for

air

v

■

tion.

where

can

Adapted to

cities

of

•Hundreds

be

must

re¬

entation of words and words

The in¬
dustrial life of many countries
must
be
re-established / with

stored to full usefulness.

working tools. Millions of
hew Homes must be built; count¬
less
partially
destroyed homes
must be rebuilt; and the normal
the

of

tear

and

past

-.

Any typical radio advertising
will illustrate what I mean.
For

proper

•Wear

words.

more

and

instance, the merits
brand of soft drink.

of a given
The usual

points of Bottoms-Up Soda, with
a
verbosity frequently extending

years must now be matched by
overdue repairs.

Telecasting,

with broad¬

as

casting, does riot exist merely for
the convenience of the sponsor,

Sponsored Program

sponsor

the bill,

Television
Unlike

"
a

the

Public

printed

Service
newspaper

magazine, selectively bought by
the reader, television is a public
or

Inasmuch

the

as

contributes little

sale

of

telesets

nothing to the

or

installation, operation and main¬
tenance ;costs of telecasting, the
telecaster is obliged to seek other
sources for his economic support.
Just

broadcasting by 1924 had

as

boiled
of

to

revenue

feasible

its

down

the

sources

sponsored

pro¬

telecasting in 1946 is
already banking on the sponsored
program to make financial ends
gram,

so

meet.

vy'-'Vyy:Great things

stated, the

expected of
previously
must provide a

are

sponsor

definite

contribution

total

television

of

enlightenment

or

the

the

to

sum

entertainment

education as

or

for his

vehicle

well

into

If I

speak in optimistic terms it
is because I can now bring to your
attention a new advertising medi¬
fully

um

task

the gigantic

to

geared

of

of

if

glass to the accompaniment
appealing gurgle of a

a

foamy drink; a couple of tinkling
ice cubes are dropped in; and the

touch,

final
drains

buying audience of world-wide
proportions in due time.:.u I refer

same

television.

pioneered in

Our

development of#

the

television

commercialized

has

company

equip¬

the

the performer
and smacks his

as

glass

Now try and describe that
in mere words! It just

lips.

scene

adequately, regard¬
the script writer,
dramatic the narrator, how

can't be done

less how skilled
how

imaginative the listener even if
has been fivetted—

ment at both transmitting and re¬

his attention

ceiving. ends; has operated a tele¬

and that is

vision

the com¬
mercial, the greater the advan¬
tages accruing to television's vis¬
ual
presentation.
The cooking
recipe, for instance. In television,

station

1941

since

a

on

regular scheduled program basis,
through the restrictive war

even

and is now working with
the largest television studio fa-

years;

ei

1 i t i

thq

yet made available

e s

Du

serving

vision

Wanamaker
Mont

Du

WTTG in

and

Telein

WABD

Stations

York

Tvew

John

Mont

Studios

—

Wash¬

ington, together with a regular
•exchange of programs between
the two metropolitan centers as
the basis of the first television
hetwork.
In the television

presentation—

The instantaneous sight-and-sound

presentation

of

things

persons,

and events via wire

radio to

or

a

gemote audience—we have that
jmtimate
Which
.gap

contact

universal

yet

bridge

must

and

can

between the postwar

the

manu¬

facturer with the product and the

public

with

the

sell-me-and-ITl-

Therefore, I

buy frame of mind.

to my major theme—Tele¬
vision and the Future of Distribu¬

..come

tion—which

I

shall

briefly.

discuss

now
...

*'i"

.;. ;"

Advantages of Television
.

Television is the greatest

medium
when

ever

devised.

Confucius

said

that

fact,
"One

Even
billboard or

devoted to advertising.
so,

more

with

the

The sponsor Or advertiser is
given a franchise to perform a
public service and raise the en¬
tertainment standard of this new
medium which reaches into more
and more homes.
In return for
the franchise, the sponsor expects
and is expected to make a discreet
expression of his own interest but
always with the interests of his
audience foremost in mind.
*
ple.

is
words," he

worth

was




immediate

any

or

coaxial
*

-

it is

,s*

impor¬

to point out that movie re¬
cordings are frequently made of
usual television programs directly-

filmed from the television
Such films

are

permanent

screen.

first of all for the

Production

record.

staff,

advertising
sponsor can review

and
study past
performances, thereby improving
future efforts. Prospective sponsors

be

can

shown

sponsorship

agency

or

how

works.

But

all, these recordings,

commer¬

own

can

as

be presented over

again.

telecast

best

of

with tele¬
and oveir

-

And now, having dealt at some
length with telecasting to the gen¬

eral public, which will always be
show business primarily, and ad¬

I
must
telecasting to the
selected group interested in adver¬
tising or sales talk pure and sim¬
boxing bouts are telecast on an
ple, after the manner of the pub¬
average of once a week, with a
lic's interest in that mail order
safety
razor
manufacturer
as
catalog found alongside the Bible
sponsor.
Even the leading boxing
in many a rural home.

cial plug.

Already we have many
examples of such worthy vehicles.
Thus the Madison Square Garden

vertising

touch

with

baseball, football, basketball,
meets, midget auto races
and other events.
True, the spon¬

track

is not selling these

these sports
television

mobilize

sports, but

an

attentive,

which

audience

not resent brief interludes

which

the

speaks of
watches

during

referring particularly to
term Intrastore Tele¬
vision.
This consists basically of
non-broadcast merchandising pro¬
am

what

we

grams

piped from

a central studio
part Of the storey
special coaxial cable to

located in any

through

a

receivers

displays or
blades or hats or

sponsor

razor

or

does

secondarily,

upon

Intrastore Television
I

or

monitors strategically

located throughout the store.
programs are

what have you.

are

Such

not broadcast. They
the outlets con¬

restricted to

"

Therefore

that
must be
coupled with the show business,
but I cannot repeat too often that
It

the

strange, perhaps,

seems

commercial

show

is the

message

thing,

mercial-must

and the com¬

ingeniously

be

slipped in place with the*utmost
of good taste.
}
'.-,•/ * '* ■
However, because of the visual
presentation
made }. possible by
television,
the commercial can
prove far more effective than in
sound broadcasting. Documentary

example,

for

films,

in

limited

^ith

nected

heretofore

their showing to busi¬

bak¬

Hence we arrive at

that

public

commercial
basic
principles of the
It justifies the license ments,
granted the tele- workings of various devices, and
reconstruct a
Again the entire presen¬
caster:
It parallels the editorial so on.
mere verbal description.
"
• v"
matter which justifies the adver¬ tation is commercial.
Printed advertising, highly de¬
tising in the newspaper or mag¬
Has Extreme Flexibility y.'y'.-;
veloped as it is today with its azine;''
:.i; V,
ferent than
eyes

and

seeing through other

and having to
mental picture from

minds

splendid artwork and crisp text,;
nevertheless

tion.

It doesn't

the

the

a

movie

static presenta¬
move.

puts

And just

motion

into

presentation, and thereby tells
greater story than can the
best drawings or still photographs,
so television.'supplies that all-im¬
a

far

is the vehicle for the
message.

franchise

or

There

is

another

side

to

tele¬

favors the adver¬
primarily.
It is a parallel

casting which
tiser

situation

to the

mail order cata¬

As

time

goes

on

the specially

television movie will
play a still greater role in tele¬
cast programs because of its ex¬

produced

treme

flexibility in handling any

Sears

given

subject.

or

limited

log.

Surely anyone requesting a
Roebuck, Montgomery Ward
other catalog expects a book

to

the

no

coaxial

ing license is required.
tiser

or

cables.

government operat¬

franchise is involved.

No public
The

adverf

merchandiser can "go to

town."

Already we have had consider¬
favorable
experience
talk.

able^ and

with this form of visual sales
In the large

department store with

its dozens of separate
it

becomes

now

departments

possible to expose

buyers within that store to
offerings of each department

all the
the

in turn, via

tation.

■

creates

the television presen¬
method
positively
traffic in the low

This

more

departments by featuring
products
of the erstwhile

traffic
the

slower moving

departments in the

places in the store where traffic
is heaviest.
Television receivers

placed in the show windows are
bound to attract more people into

merchandise that
in already
The
Intrastore Television system also
for

store

the

cannot

displayed

be

overcrowded store windows.

Instead of being

monitors and television receivers,
is

bought or leased by the store
operated strictly within its
But even at this early

and

four walls.

the near fu¬
there is nothing to prevent

date, and certainly in
ture,

the store from

telecasting beyond
branch stores or

its four walls to

outside groups

selectively reached

coaxial cables and possibly
over
ultra-high-frequency radio
channels if these should become
available
for
such
commercial
by

studio facilities, the
movie can be made; purposes.

filled with sales talk from cover, television
a
thousand
Tele-! to cover. Such a book is obtained anywhere and with unlimited fa¬
simply stating the portant element of action.
vision is dynamic presentation., ; and read in the buying frame of cilities.
Also the movie can be:
case for television.
By bringing
Likewise with television* made at any time, in any handy!
The printed advertisement pre¬ mind.
sight
to
the
heretofore
blind
deals
with a
selected sequence, and finally edited intoj
radio audience, television appeals sents a new automobile,- -forA ex¬ when it
audience
say
in a department the smoothest running presenta¬
to the eye as well as the ear, and ample.
Various
features
are

picture

a

and

tant

exists prima¬
rily in the interests of the adver¬
tiser.
But
telecasting,
as
with telecasting is primarily in the in¬
broadcasting, belongs to the peo¬ terests of the public, so that the
electric sign, which

here

both

the premise ness groups, school and college
television—the tele¬ classes, luncheon clubs, church
permits demonstrations of various
cast program intended to reach gatherings and other non-theatre
ing of a cake, the making of deli¬
television; receivers
or
telesets crowds, are finding a logical out-, products, fashion shows, cooking
cious ice cream or the concocting
No end of such recipes, household suggestions and
wherever they may be installed— let via television.
of the perfect salad.
The house¬
other subjects that would other¬
in homes, taverns, clubs and other films have been telecast and fa¬
hold appliance or gadget is actu¬
wise be confined to some over¬
public meeting places, in-hospitals, vorably received by the audience.
ally demonstrated, and since "Seer
looked corner of the* store or even
schools, and so on—cannot deal Travel films are telecast on be¬
ing Is Believing," this sort of
to an already overcrowded audi¬
with the television commercial or half of railroads, air lines, travel
commercial is superlatively effec¬
torium.
A limited stock of good3
message
alone, but agencies,, traveler's checks and
tive.
New
clothing styles, re- advertising
can
be displayed in any number
must be coupled in the best of other organizations tied with tra¬
requiring hundred of words of
of spots in the store—and outside
The entire presentation be¬
taste with a suitable program of vel.
skilled reporting to convey the
the store.
entertainment or enlightenment comes the commercial, yet it is in
necessary mental picture, can be
This Intrastore Television tech¬
or
even
educational merit. Thus good taste and acceptable to the
flashed on the screen in a moment.
nique has tremendous ramifica¬
television
advertising
isr show audience. Various industrial films
What
is
most
important,
the
tions. At present the regular tele¬
are
being telecast; dealing with
looker-in sees for himself or her¬ business, just as with broadcast
vision studio equipment, such as
advertising.
The program proper the making of various products,
self which is something quite dif¬
lights, microphones,
research activities and achieve¬ cameras,

the audience sees the actual

as

selling

In

questionable.

The more complicated

is

i;

;■

are

It

for

widely scattered tele¬

stations

cable tieups.
- ,
In this connection

the. patience

not

that

appealing
effectively,
thoroughly and economically to a

to

the

beyond

taste

the

basis

vision films for program purposes,

As L have

television.

the

as

limitations of radio link

limits of good
Studio features ranging from
service, rapidly becoming part and
of the
staggering de¬
the variety show to the special
parcel of gracious American liv¬
But let the television
mand for goods and services, we listeners.
telecast drama or comedy, to the
ing.
The printed newspaper or
have a humanity which, promised touch be added, and. thie "audience
interview or the audience particL
magazine is a private enterprise.
d fuller and better life in return now sees the actual bottle of Botshow, and again to the
It can have as much editorial and pation
for the unparalleled sacrifices of toms-Up
Soda, makes a mental
advertising matter as the publish¬ news commentary with suitable
the war, is now ready to collect— note of its label, shape and other
maps and photographs and even
er
decides and his readers will
or else!
''*•
identification; the metal cap is
stand for.
A third to a half of movies, are rapidly gaining com¬
snapped off; the bottle is poured
mercial sponsorship.
the. pages of a popular magazine
-■■n A New Advertising Medium
climax

To

used

abroad, far beyond

the telecast program, we

or

have here pretty much the same
formula as in sound broadcasting.

sor

that" the

granted

even

pays

commercial extols the fine

radio

few

return.

at

and

be

vision

Returning again to public tele¬
vision

is made, the
available- any¬
any time.
It can

is

be repeated whenever desired.

readily-remembered mes¬
sight-and-sound programs to the
sage or brand name or package
scattered audience, And this ether
identification, television tells the
or air really belongs to the gen¬
ucts
and
refined
old
products. story in minimum time and with eral
public.
It is the people who
greatest'effectiveness, thereby
bouts of national and international
More potential buyers than ever
maintaining a high degree of in¬ grant the license to broadcaster import
before virtually beg for the com¬
are
telecast under one
or telecaster, for commercial use,
terest as against the danger of
forts and luxuries of modern life.
sponsorship or another. Likewise
and the people expect -much in
boredom from the lengthier pres-„
point,

Once the film

presentatioq

V'

Television

lasting

real and

impression on the audience.

good

private

a

network of

that automobile is

Living

over

I shall deal with this aspect

talk.

In television, contrariwise,
alive. It moves.

page. •!

remarkably effective advertis¬
ing medium, the addition of sight
and
motion to sound,f which is
television, achieves not only the mere touch of the fingertips; and
By means of the movie
appeal of the voice and the au¬ so on.
thoritative spoken argument, but interlude so often used in tele¬
the further qualities of graphic vision programming, that automo¬
presentation such as arresting at¬ bile can be put through its paces
tention, clarifying the presenta¬ —flashing along the main high¬
tion of any idea, and establishing way at express-train speed, wend¬
an image in the mind.
The radio ing its way through dense traffic
commercial becomes many times with the greatest of ease, smoothly
more effective when the audience
negotiating the rough side road
sees as well as hears.
leading to the summer camp. Here

outlets, the product must be di¬
through representatives or
salesmen, distributors or jobbers,
xetailers and finally sales people, to
reach the eventual buyer.

is

reached

system.
Then it can deal
entirely
with
visualized
sales

Color may be added for

shown.

the

a

rected

pair of shoes, say made in

that

time more pro¬
ficient in grasping details.
Also,
the
visual
impression is more
lasting than the aural. Therefore,
if sound broadcasting has proved
eye

and.,

indeed, to overseas buyers as

well-known fact

a

and

iy.

-

„

'wire

Television and Distribution
(Continued from page 1927)
now
oe multiplied and
displayed

Thursday, October 17, 1946
\

,r;WM»u

-rr>

It may be that telecast
make such facilities
without detracting or
interfering with the major service
-to the general public.
I do not
hesitate to predict that branch
stations may

available,

.

-

'
1

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[Volume 164

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the

financial chronicle

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,

tied

be

may

in

with

mendous

the

:tore by means of interstore

People

levision,

thereby featuring a
^emendous array of merchandise

agement

ex¬

limited to merchan-

of

develop

interest,

an'

finally the buying
We

a

urge

longer think

can no

the

Boston

Dallas, Atlanta or
Spokane, Chicago or New Orleans,
or

that

telligently.

the

of

American

down

in

can

hopeless

government

red

short¬

attempts to dominate

play

Orient with Yankee

can

any

address

can

scattered

a

formidable role in the de¬

a

velopment

of

sales

^Television,

I

teadily

„to

prove

be

the

merchandising force

eve*

to

in

wares

East

ex¬

spices

vision.

from

runs

one

Even

In

time

same

land.

the

the

to

wares

of

displaying those
peoples of every

to that epochal prob¬

its

highly concentrated
attention
value, can present a
product or a service as never be¬
fore,
I believe that the public,

unprecedented

an

due

telecasting

course

will

"Y'Y Y' VYYYy ''YY,A

to

few

the

bill in
the

weeks

President

veto

suspends

meat.

over

of

the

before

By

Mr.

first

OPA

June, he is responsible for

lapse of controls in

the

first

or

-

And;

control.

television

so

seeks
of
the

merchandising
pioneers
calibre of Woolworth, and Kresge,
Sears
and
Montgomery
Ward,
Macy and Gimbel, and others.
Gentlemen, I extend to each and
every one of you this invitation

means.

'

to utilize the universal sales lan¬

thing to make things;
another thing to sell those
one

guage of television to the utmost,
on

things.

The tremendous produc¬
tion capacity of the postwar era
stalls for a correspondingly tre-

behalf of telecasters who

ready with the

means

are

if not the

ultimate end itself.

his

I

mention

situation

this

phase

because

of

qf- the

the

manner

in which the Administration has
abused

such

in

powers

the

past.
During the late summer and fall
of
1944—shortly before the elec¬
tion—*the v:; Administration
abol¬
ished

ration

goods

and

some

controls

vegetables

meats.

canned

on

and

on

respect

With

The

-even * said

advisers

had

Presi¬

to

other

Voted against the bill and only 52
Voted for it; 157 Democrats voted
Sot the bill and only 22 voted

against it. It
passing that

be remarked in
many of the Repub¬
may

lican members who finally voted
,for the bill announced at the time
/that

they

thought

meat

controls

Ishould not be reimposed, and that
they were voting for the measure
•only because they desired to pre¬
serve such

iand.

few

a

which

things

as

rent controls

other

restrictions

they believed to be

been

''/Y'Y" AyS

duction

of

Nothing could

more

emphasize the fundamental
flict between control of
our
from

omy

I

pro¬

said

it was
the OPA price veles which were

neces¬

causing the trouble," said Sena¬
sary. ' '
'
tor Wherry. V
The whole tragic business is
There are many other similar
<>ne^ more illustration of the com¬ warnings from Republican sour¬
plete confusion which prevails in ces which might be cited, but I
Washington today. It was Mr. vail not take your time, by re¬
Truman's veto of the first price peating them tonight.
That they
control bill last June—against the were valid warnings is proved by
.

con¬

advice

of

all

the

responsible

own

party in Con¬
gress—which permitted price con¬
to lanse in the first place.

trols

Meat

ceilings, were
reimposed
early in September. Now it is Mr.
.

Truman's
had

administration

which

ordered

after the

controls
taken off
damage has been done.

If Mr. Truman's denunciation of
•"'a few men in Congress" is in¬
tended to apply to the Democratic

:majorities in Congress, I am willring to let him settle that issue
■with

rparty.

•1!
■

those

I

members

would

of

his

own

to

like

suggest,
;however, that by his denunciation
; the President has
provided an¬
other

powerful

argument

Jvor of the election of
1

in

fa-

Mr, Truman himself in the action
he announced last night.

possibilities.
Senator
course
was

Republicans

finally said, as
Wherry argued, that the
inevitably to be followed

to take controls off meat.

If

that is not the right course,
did he take it?.

that

when

he

price-control

of

the

government announced at
time that this lifting of re¬
strictions was made possible be¬
cause of an
improvement in our

that

the

American

wife

can

been

testify—should,

have

political issue. " But the
President rejected the advice of
his

own

Congressional leaders. It
political issue because

became

a

the group of radical
advisers to
whom Mr. Truman has
listened
insist upon

retaining

bureaucratic

unjustified

controls

over

our

productive

system. The fact that
Tiruman
elected
to
tie
up

Mr.

practically all of the radio facili¬
ties of

the

nation

to

explain

his

action proved that he
realized he
was

dealing with

litical issue. It
for

essary

to

-

why
Everybody knows
vetoed

bill

the

first

June

in

in

errors

food

the

alleged

was

serious

some

estimates

supplies. Controls

of

our

were

re¬

established, previous ration point
values
this

reinstated.

were

stage

that

It was at

Chester

Wanted

Decontrol

It must not be overlooked that

Republican members of the pres¬
ent Congress warned the Admin¬
istration long ago that unless a
realistic approach was made to
'•the meat problem there .would
"be serious shortages. As long ago
-as
March
30,
1945,
Senator
Wherry of Nebraska—one of the
men
singled
out
for
personal

plies

Republican

the

advice




by government order

repeal the common sense of the
American people. Every one of us
is dependent upon the free inter¬
change of goods and services.
All

taxes,'

all

interests,

wages,*■<. all-dividends
e

r.rnings

come

from

*

the

and-

,

all
all

Ameri-

but

all. of them. The Exchange pomtsr;
out, for instance, that last sum?
mer,

despite a no-strike provision
the contract, the union >pulled

in

its walkout.

Y

.

The union threatens to affiliatei
with some large national' labor

body—such
or

as

the

John

even

L.

CIO, the AFL
Lewis'

United

Mine

Workers—in the
event it
into any real
difficulty with
the Stock Exchange or its member
runs

firms.
Mr. Keefe
has promised
that he will let nothing interfere
with
the
unionization
of
Wall
Street.

Y;

•

Y The

air

demands

side

of

that

issue.

of

union

at

last

a
meeting with the
Friday afternoon. At

met

cers

Monday evening to

con¬

sider the Exchange's counter-pro¬
posals and another meeting be¬

tween the union
and
Exchange
negotiators, to which members of
the union are again invited, /is
fringe, this
would
scheduled for next Monday"after¬
never

Republican

mem

never

therefore,

have become

a

political issue. Now, however, the
A dministration
has
created
a
de¬

veloped at all.

In all probability
some time will elapse before we
have an adequate meat supply—

as

crats.

After

sup¬

plies were, and again I quote, "at
the lowest point since the war be¬
gan."
But, - of course,
in
the

just

Republicans regret this situ¬

held.
I am

to

wondering if

look

of

forward

meats

upon

the

reimposition

a.

tion

to

we are now

as

prospect
controls

of

soon

the elec¬

as

of 1946 has passed

tory. That, of
possible
only

would

course

in

into his¬

tains

control

Nov.

5.

noon.

,

,

~V

,

The Exchange has offered as a
basis for a new contract—in addi¬
\

tion to its

no

work stoppage

pro¬

posal—-increases in" pay ranging
from $3 to, $5 a weelc over and
above the approximately 15% in¬
crease given
voluntarily on July 1,

the

Republican

will

be

never

fling

elected

problem

as

supply.

that

that

such

which

date

kind

wilj

of

tri¬

important

an

national

our

that

sure

Congress
on

permit

with

be

may

meat

: YYYY

The

point

the

the

is

that

executive

no

branch

should

have

to make such far-reaching

power

decisions. Decisions of that nature
should be made by the
Congress
of

the United States, the elected

representatives

themselves.
the

of

It

Democrat

abdicated

the
people
only because
Congresses have
is

their

constitutional

and duties that it is now
possible for Mr. Truman and his
powers

Don't
meat?

to

make

:Y

.

you

see,

meat

People
shortage

home

to

them.

Y.

it

those

deci¬

V/.
isn't

the

Demo¬

all,; Republicans
as

are

any one

and.-double-time

to

those

whose work

pay-

exceeds

12

hours in any one day. The union
is seeking a 25% increase in pay

across-the-board,., a. seven-hour
day and a five-day week. Twenty$even points in all are included
.

.

A.Principle at Stake.

,

While you are waiting for hanis
chops the unfortunate dilem¬
ma gives the American
people a
chance to recognize that there is
and

a
principle at stake. There is an
irreconciliable difference between

the

Republican1 party

and

in the union's demand.
1

At the request of the UFE, the
Labor Board will conduct

State

election to determine collective
bargaining agent for the employ¬
an

ees

of A. M. Kidder & Co.

on

"thet

the

ed

by

The

it

the PAC-Democrat party.
great political alignment

once

that followed Jefferson and Jack¬
son

and

control

Wilson

—

at

has

the

fallen

under

policy-making

level—of persons who believe that
government

ple—that

should

our

enough

the peo¬

run

citizens do not have

to

them¬

govern

selves.

That is the philosophy of
Wallace and Pepper and Kroll.

The old-line Democrats never be¬
lieved

that,

but those in

control

only
the

comes

But

it's every¬
thing—it's control of interest rate,
.it's housing, it's exports and im¬

ports, it's labor, it's management.
In short, it's the American sys¬

%
union, trying
ately to get a foothold
p.m. •

Another
.

Street—Local

96

desper¬
Wall

on

of the Financial

Employees' Guild, CIO—won two
elections
last
week
among
the

employees of the Merchants Bank
of NewYYork. It won 42 to 5 in'a
vote among the bookkeepers
and
won

stenographers but it
by the narrow margin,
a vote covering the

of 19 to 18 in

travel

tellers, personal loan and

void
ballot
in
covering the
Republican party has sought un¬
ceasingly to protect the rights of tellers, personal loan and travel
department which, could it have
the
individual
against bureau¬
been counted, would have made
cratic domination. The Republi¬
of

this

Administration

do.

The

There
the poll

department.

the vote

a

was

a

tie. The union and the

can party—the real liberal party
bank will have five days from this
—in America believes in fighting
against encroachment by govern¬ day, however, in which to file ob¬
with the
State
Labor
ment and Federal domination over jections

the

life

of the American

people.

There is only one way you can

understand

when

do

fond of meat

as

sense

whole

as

unlikely present Administration, represent¬ premises of the firm today from
3 to 6

the

party re¬
Congress after

of

You

be

much

else.

meantime, the election had been

bureaucrats

paint.

con¬

ac¬

shortage which need not have

that

sions.

or

the

of

of the terms,

some

the

that if
the Administration had listened to

ation

automobile

batteries

tract, not

was

Briefly, that viewpoint is

months," and that civilians'

difference whether it's
meat or nails; whether it's lumber
or soil nine; whether it's lead for
You cannot

incumbent upop the
itself to observe

issued in Washington and the
the request of the union off5
rials,
peo¬
ple would have been very ade¬ the Exchange agreed to permit
quately informed of that action members of the union to attend
through the normal channels of the session of the negotiators as.

fruit have been short for several

in

any

upon

as

faithfully the terms

on

go

complished by executive orders

Price

government

Republi-I any business to produce at a
loss,
weeks from for it cannot succeed.
It doesn't

as

union

Bowles,
due to
the
Administrator,
an¬
Administration-cre¬ 1946, a jthree-week vacation for
that; and; I quote, "Sup¬ ated shortage-prices of meats
employees with* >15 years or < more
of
commercially
canned will rise substantially, I am sure of service

then

official

a

that .it is

nounced

of

Without government controls the
producers were glad to sell it in
the open market. They will not
produce at a loss. You can't ask

d:raw;

That

to

decontrol meat.

preserve a

voice in your own gov¬

Board, the Board has announced.
At the request of this same CIO
union, too, the State Labor Board
an election among the

will conduct

ernment; that is by electing to
Irving Trust
Congress those who really believe employees of the
in the American system. Let's re¬ Company on Monday. The union
has also filed an application with
store
the
government
of
the
State
Labor Board
for an
United
States to the American the
people.

Let's elect
Congress Nov, 5.

a

*

Going a IPtlk
the Exchange holds

•

meat would

thereafter it
that there had been

country got meat. People actually
it in stores, they could
buy it, they could take it home
and eat it. The meat was there.

the entire

for

po¬
nec¬

present
situation
have developed and,

the

see

part, the union
stoppage by

Exchange
presented
its
counter-proposal to the tmion's

not at all

was

him

explosive

an

u'-ion«

generous

work

no

further, too,

house¬

a

the

for

tion of the contract.

It is unfortunate that
the meat
and other shortages—
for meat is
only one as
any

from

exchange

concessions on its

people.

shortage,

guarantee
in

will tolerate
its members

agencies
function. Whoever Presi¬
Truman's advisers may be
they certainly, this time, have
served to point
up the true issue

feels;

bers of Congress instead of to the
advice of the radical

could

Congress three
■•today.
Y '«.'y-V - vyYYaY> ■;> ; YY make
can

He

solid

that,

government

Y

however,

contract with the union can
little
meaning without ha

a

have

should

before

Exchange,

meats, the ration point press and radio news. However, interested spectators. There were
were changed to the
pur¬ since Mr. Truman chose to make about 100 members of the union,
chaser's advantage.
a political
speech on this subject, it is reported, who took advantage
The highest responsible officials I have felt impelled to
present the of the invitation. The union offi¬

event that Mr. Truman's

The President discussed various

that

econ¬

Washington and the
viewpoint.
The Re¬

our

Mr. Keefe PresLV

or

values

•

leaders of his

The

publicans believe that
Congress
should prescribe the
standards by

which

Schram

dent of the union?"

strikingly

ately

meat.

Mr.

Republican Viewpoint

the Administration was re¬
turned to power, Almost immedi¬

impediment to the

an

UFE Threatens

-

(Continued from page 1935)
confiscation / of live¬
attempt to run the affairs of the
stock on the ranges.
Imagine it, union.
The question that is
he said, that
posed
step was seriously
by the union is put this way: "Is
considered..

and

mention by the President; last
night-—said in the Senate:
"I have charged on the floor
.of the Senate, not in the
way of
destructive criticism, but I have
done it- constructively,
day after
day, that the reason why we are
hot getting meat is the unneccessary regulations, and because
of the price ceilings which have

^ *

considered

supplies.
So, what hap¬
pened?
The election was held

(Continued from page 1939)

-r

seriously

food

Meat and Politics

1977,

that 'he1

dent

delude the American

control

Truman's

be

ofworld-wide distribu¬
It has untold possibilities.

done.

satisfy many of these new de¬
sires, or will work .that much

it's

country;

The basic framework has already
been laid.
Much remains to be

buying

Broader Markets Needed

area of our
rural districts

all

era

tion,

-to

It is

the Ameri¬

Administration's technique

been

election,

Television is geared to the post¬
war

urge for new and old items alike.
And I am told and I believe that
the public either has the means

liarder to find the

system.

...

when exposed to skillfully hand¬
led video presentation, will de¬

velop

Administration's

other means. And then,
place. Then, a government
agency
broadcasting
suddenly restored controls after
the sec¬
beyond
our
domestic ond OPA bill
was
passed.
Now
boundaries and spoke to and lis¬
the Executive branch of the
gov¬
tened to peoples in the four cor¬
ernment removes these
controls
ners of the world, so telecasting
again. This is a familiar pattern,
will speak in the universal lan¬
before election, whether it's meat
guage
of
pictures
to
peoples or
anything else in the field of
everywhere,
•
'
•
government

lem. i Believe that television, be•cause

frankly

Administration's Technique

just * as
jumped

I believe that television has

answer

the

mitters

end of

jtheY world. to the other, while 'at
the

the

control. :V; A

service will be operating in every

main

to

is at stake.

Republican

are

through government
spending, lending, planning and

reached by automatic relay trans¬

street that

opposed

The

guage is pictures—the thing itself
shown in animated terms—tele¬

tracts

that

why these government

Republicans

people

metropolitan

on

in¬

inevitably will fail.

The

has

introductory premise — the need
for stretching out that simple sign
of early Williamsburg until it at¬
attention

dramatic

one

orders

to many strange people

my

only;
of

and

We must speak
in a new

is

age

stance

universal language. And that lan¬

greatest
offered

those who live by sales.
And so I return again

go

change for Far
ivory and silks.

top-flight, alert,
organization.
am
positive, can

a

aggressive

The

government control of the Amer¬
ican economy and the meat

group in a minimum of time and
inconvenience.
Television
can

at

heads

snarls

tape.

to spell our great Amermarketplace..
We must go
overseas
again in search of still
greater markets, with history re¬
peating the days of the New Eng¬
land Clippers that sailed to the

Sales meetings can be
time, since the sales

economy,

,

tem that

dent last night
and

present Administration believes in

with all the Main Streets between

its sales peo¬
ple how to present their wares in¬

held

govern¬

steps in and tries to domiY

bogged

ultimate markets in terms

our

of

show

can

ment

When

:

each dislocation produces a fresh
dislocation until finally we are all

to

for them.

admirably to
training.
The man*

sales

be

system.

nate

taste and

It lends iteslf

visual

everywhere must

can

•

order

,

no means

merchandising capacity.

vj

t

posed to the good things of life in

With a minimum stock involved.
V Such commercial television is

by

.v

Republican

election at the People's
Bank.

•:

■

Industrial
-

i

.

iconfirming
the

Markets

but

in

resistance

itself is

to

Says—=By WALTER WHYTEs

not

itself dries up.

This was seen
Anaconda,
Inflation is now in the sad¬
Standard of New Jersey and
dle. It can carry stocks to un¬
i

a

levels.

believable

It's

to buy

boy s-here-we-go-again market
that

ahead

seems

now.

*

The

signs

these

Unfortunately

until

didn't become apparent

and Friday.
column was already in

late

hold-on-to-your-hats-

a

few others.

Suggest

waiting for reaction
stocks named below.

Bethlehem,

n

Thursday

The

.

print and there was nothing
that could be done about it/"

first signs of it * were seen
Monday's market is now
Monday. Confirmation came
history; so is Tuesday's. It
Tuesday. The spark that set was
it off

of

Truman's removal

was

Whether

controls.

meat

can't

how

see

a

market

can

potential aspirin and
public buy¬
sleeping pill customer,
ing while necessities of life
-1 list a few stocks below
drain its buying powe^, ; !;/• which I now
suggest buying.
it is

a

on

last week's

When I wrote

column I said that

These stocks and their

toms and averages

The

of

truth

which

was

seen

during the break of last week.

to

and

business

who

are

While the averages were re-

Standard
of New Jersey between 65
and 67 with a stop at 62.
I
had
also
intended adding

consistency,

as

1856

and

men

all

York

New

Commodity

Exchange

1

Orleans
And

/

Exchange

of

,

;

Inc.

Exchange,

Board

Chicago
New

/

Curb
Cotton

York

New

Exchange

Stock

Trade

Cotton Exchange

other

Exchanges

ago..
I also

N.

Y. Cotton Exchange
NEW YORK 4, N.

CHICAGO

DETROIT

//

facturing 17 to 19 with a stop
15; Gulf, Mobile and Ohio
around 12 with a stop at 10;
International Paper
41-43
a

38 and last

at

stop

Bldg.

Y.

PITTSBURGH

GENEVA, SWITZERLAND

Pacific Coast

Securities
Executed

Orders

LAMBORN & CO.
99 WALL

on

Pacific Coast Exchanges

STREET

NEW YORK

5, N. Y.

Members

New

York

York Stock

Chicago

ExporU-^lmports—Futures

COrtlandt

Private
San

DIgby

4-2727




Board

'

14 Wall Street

<

Principal Offices

—

risk
in

to industry the
capital which* it

the next few years,

shall have to make a real sell¬

ing

effort

securities.

market

to

disseminate infor¬

able to

be

To

Santa

Oakland
Fresno

—

-

:

-

,

CVt'y;•/' {f. f '-'t

of this country and a willingness
to assumevthe very real risks so'
.

its economic growth.

necessary to

/In

opinion, the present con¬

my

dition of
sult

of

which

our

a

have

economic
control

is the re¬
and labor policy

economy

wage

all

but

halted

our

machinery and a price

the ' failure

policy,;

of

ability of government to control
a
free-enterprise economy oar of

;

/The/mex^

'mention-is

%

which

is

apparent

now

been clearer

fthfe dangers

involved

to

the in¬

evidence of

-t$

one

even

in I such

to which I do riot

a
ready solution, and, in¬ /Dovernmeiit.^^Control vs. Private:
/•i:Enterprise///^:>;:«
deed^
I doubt that
there/isr any/- single • solution: ap-. £ This"
bHugs-.^oawiard-/ih5i/f:
cdpccfrh-which transcends frr iriv/
and^haf/is.vthh matter of em¬ portance" these immediate--prob¬
that our
conduct will show the ployee relations within our .in¬ lems of our own business. The
dustry. We have all witnessed great battle of Government Con-r
Commission
intent
on -I carrying
out the will of ? Congress 'right over the past decade or so the trol versus Private Enterprise, be^
dowrv the middle' — in line with spectacular developments in this gun thirteen years a$<v although
,

in

field

the law.n

Personally^ I do not think we

;

have

could

cause,

other industries and be¬
deservedly or otherwise,
been much more fortu¬

have

we

justly ask for a fairer or
nate than most in the past, I am
statement from
inclined to believe that we have
one officially charged with the ad¬
not been giving this problem the
ministration of the Federal S eattention which it deserves. We
reassuring

more

curities laws and I think it also

for

grounds

substantial

affords

hope that, cooperatively, the busi¬
and

ness

the

Commission

be able to achieve

should

great improve¬

ments in the machinery

and tech¬

recently seen several inter¬
esting developments in this field

have

in

be

industry, which should
recognized as warnings of

our own
,

things to come. Certainly it is our
responsibility to give prompt and

niques of the
capital markets
careful consideration to ways and
within the frame-work of those
laws
I

as

also

so

means

administered.

found another aspect of»

and

which

Caffrey's speech significant I
which I think tends to bear out joyed.
Mr.

the

hope I have just expressed. ? >

Disseminating Information^in
Waiting Period

•

'/ As

dealt

outlined

certain

proposals

consideration by the Com¬

mission which are designed to ef¬
fect the

dissemination, during the

waiting period, of more informa¬
by underwriters and dealers

tion
than

is

now

;the case. The pro¬

posed regulations have just been
released and we are now study¬

of

the
we

preserving the loyalty
harmonious,
relations
have for so long en¬
'

,

* '

it

was

now

functioning as

is

once

the
clearly

during

obscured

years,

more

drawn-into the open.

>

I firmly believe the future of
this
country —/ indeed
of 'he
world, for the world desperately
needs

a

States

—

surgence

of

strong virile United
depends upon the re-^
establishment

and firm

the

system of free enterprise
the open acknowledgement

and

the

soundness and propriety
profit motive generated by
hard work; a philosophy of en-^
couragement
and
opportunity
of

of the

rather

than

vindictiveness

.''something for nothing.*

and

;

.

>

And, yet, we irv business, who
^•wThe* Margin Restrictions.
-/• not1 only have a'"great stake in
these United States, but who, in
'^Sihce buii last meeting we have
effect,.are trustees for our fami¬
witnessed a sharp decline in marour stock¬
ket prices which has focused our lies, our^,employees,
holders and our successors, show
attention upon the propriety of
an
amazing apathy toward all
the recent margin restrictions. In
things political. Frankly, I sym¬
my opinion, the prohibition
pathize with that Senator, Rep¬
against the use of credit in the
resentative,
Governor or
State
purchase of securities is discrim¬
Legislator who publicly supports
inatory when no such restriction
our system of free enterprise, for,
exists against purchases of real
estate
or
commodities. Such a subjected to terrific pressure from
powerful groups opposed to our
regulation should be rescinded
unless it is all-inclusive. If all- system or seeking only special
he
seldom
receives
inclusive then it should be sounds privileges,
substantial.- encouragement
froni
ly and fairly administered as long
The facts are thai
term policy and not invoked or any of us.
in
promoting
our..." respective
relaxed in an attempt to control
causes our opponents have done
fluctuating prices, for prices must
a
far better job than we havel
result from the operation of free
and unhampered
markets based We are too prone to dismiss our
individual political responsibili¬
upon supply and demand.
ties by sending a campaign check.
We have also recently suffered

less

It is our duty to know our Sen¬
ators, Representatives and Legis-r
and to be willing to help
.

if we did not lators

than realistic

intended to by the Congress

recognize that both issuers and
of its underwriters are in some part to
workable blame for flooding the market be¬

volition, seeking a
solution to this admittedly

war

.

and that the Commission is,
own

somewhat

them

with

their

problems. It is

not

enough to elect them and then
forsake them until the next elecr

very

yond its apparent saturation tion. They need our constant sup¬
important problem.
port because they are called upoi*
point,
/
*
,
But he also very rightly pointed
/We cannot, and should not how¬ to fight on our behalf against a
out that the Commission cannot
smart, well organized adversary.
ever, accept all of the blame, or
succeed in this endeavor without even a major part of the blame. We cannot send them into battle
the full cooperation of all other
with only a pat on the shoulder^
The really tragic aspect of this
interested parties, and the group situation is that the inordinately we must be forever alert and at
in this room represents a large
/.;
v
large back-log of new financing their service.
segment of these "parties" in in¬
is merely one symptom of the un¬
/ Politically it is not so much a
terest. I am very hopeful, there¬
contest between
Democrats and
settled if not chaotic condition of
fore, irrespective of the outcome
Republicans as it is a question of
of the discussions which are to be our while economy, "and for this
the
fundamental
philosophy • ofheld on this subject, that he and condition I do not believe busi¬
each individual candidate. Afaove
his associates will find that all of
ness. is.
responsible. .Rather, * it all we should vote in the coming
us are willing to cooperate fully
election and encourage all citizens
seems to me clear that business in
difficult

but

.

..

with the Commission. /

•

add,

every

field

wanted

wants now, and has
since the close of

ever

to

do

so- we

_

likewise, but before

r

we

_

do

should know the basic be¬

that, in my personal
liefs of our candidates — not their
opinion, we shall never find a the War,, to go forward and to ex¬
completely satisfactory solution to pand its activities and production campaign lip service to the basic
this problem without a ehange in
issues but their actual convictions
even though it fully realizes the
the law. But, being realistic, I
and I hope we would support
risks involved and the obstacles
this point,

—

Trade

Teletype NY 1-928

Wires to

—

(Associate)

New York 5, N. Y.

7-4150

Francisco

Monterey

of

this

in

.

,

Exchange

Exchange

Curb

to break the

are

•

on

New

SUGAR

additional

we

those

In addition. I should like to

Schwabacher & Co.

expressed

precedents on which business men ally in that undertaking, /g , v /
may safely guide their affairs.
r
Employee'Relationship^ ^
"It is an unfortunate tendency

like Dresser Manu¬ respect is not

at

with

we

substantial
losses from
underacknowledge that the law in this writings. Certainly we would be

'

Members

York

New

views

ankle do not necessarily at any

those of the author only.}-

-

supply

will need

affected by the Commis¬

ever,

H. Hentz & Co.

ing, and

a

Jersey, how¬
I think you are still ing them in anticipation of dis¬
cussions
with
the
Commission.
long of both the steel and the The significant thing to me is that
oil stock bought some weeks he was frank enough publicly to
to

Bethlehem

V [The

;

Its.,ewn creators. Never, has ther^'

under

stop at 34.

a

4"More next Thursday.'- *

sion, that our decisions represent mation with reasonable .safety,
a common sense application of law
during evepL the} latter part of the
and
that
they
will -constitute waitingsperiodiwould aid materi¬

also

Anaconda 35 to 37

Buy
with

those top, / Ac¬

present /log jam of equity wand,
particularly, new money financ¬

quasi-judicial body, we hope to
establish in the minds of lawyers

kind of set back.

this

Established

,devotion

if

because

(Continued from page 1931}/
early and clear decisions- on
disputed matters. While we will
not sacrifice justice to a slavish

make tops.

that stocks

use

tape action.,

ing

make bot¬

rule

trader's

old

says

or

timey coincide with/those of the
toohever de¬ tually j/L depend^ mostly on Chronicle.: They are presented as

every

all of you know, his talk
principally with the subject
of "Dissemination of Information
Under the Securities Act" -and
silly by the time you read more particularly with the prob¬
this, If that happens I prefer lem of disseminating information
during the waiting period.
He
to wait until* there is some

neglected to remember was

an

ouija board

Unsettled Invesfment Banking Problems

prices

as long as
were
computed as of Mon¬
stayed above 164 day's close. 41 realize that
market was okay.
What some of the levels will look

the averages

the

use

vised to arrive at market ecfhl

Monday's action which of
many contemporary writers to
Truman's speech of characterize people fjn -the;.g0w*
that night.
the
But the wild buy¬ ernment service as being
ing which followed the next right' or 'to the left*, T assure
you; we shall carry no ideological
day had all the earmarks of banner and if we are to be de¬
ending as soon as the first fined geographically/: I am sure

,

sustain itself

Cal. I

I would

S., South Pasadena,

forecast

justified or not, this removal
has given the stamp of ap¬
proval to inflation and all it
signifies. It is ironical to note flush is over.
that the exponents for remov¬
Monday's market had bot¬
al
of
controls
consistently
tom signs all over the tape.
argued that controls stopped I
harp on that day's action
the normal processes of sup¬
because
Tuesday's
market
ply and demand. Remove the was full of
public buying. I'm
artificial obstacles and there
not against that sort of buy¬
would be ample supply of
ing. But it's most always con¬
meat ' at
reasonable / prices,
fusing, made up as it is of a
they said.
cross-section of hopes and
I recall that dairy products
wishful thinking.
Yet it is
are not controlled./ So butter
this kind of buying that can
is more than a dollar a pound
upset all the carefully laid
and eggs about a dollar a
plans. A public on the ram¬
dozen. If I feel strongly about
page can do practically any¬
such things it is because I
thing. Anybody Who fights
..

H.

E.

interesting

significant. ; 'It be¬
comes
significant when the
stock in question shows-, an
ability to pull away from the
jlows every time the market

Whyte

a

.

A

trend.

trend

Walter

bear, market, im Boeing 23 tor 25 with ,a. stop elusions,... If
were resisting
at 21. ' 4 /.

a

dividual stocks

Tomorrow's•

I

FINANCJXAL-.GHRpNIGLE,Thiursday, October^ 17, 1946

THE COMMERCIAL &

1978

Barbara

Sacramento
,

.

-

don't think we can

reasonably

pect such a change

ex¬

in less than

in. its

path.

Certainly the large
new
money
issues

only those who

are

sincerely in¬

terested in the preservation of the
and perhaps not even so number of
soon.
It seems to me, therefore,
nwrd+ing disbdhntUv
iwif in¬ United States as a lard-of private
that even a partial solution, if it
initiative and individual oppor*dicates a belief on the part of
can be worked out under the ex¬
V"<
" •'
business in the future prosperity tunity.
isting law, is highly desirable,
a

year,

I.

.c-*

Volume

'■■xr

164'

Number

4534

;,u.-v

w.

*•••

.-**

•

4.

<v,

i

v.'

•'•".•.

'»

\ /.-r •»>

of

praisal

of

thinking and

mass

the

future.

gated to the
ap¬

Actions

of

jpeople with money for invest.ment, be it in large amounts or

jsmall

amounts

curately than
'

speak

more

.

words;

mere

ac¬

Generally

the

of

.

Future

\%Vs*-Y-;V\;v' r-:'#y

;r'.«r;

CHRONICLE

A,r":'.'?&j

«•

suspect that you may have
isome interest in asking me to do
little crystal gazing at this time.
shall try.to oblige but with the

-press

cial.

that

mind

the

personal

are

There
that

is

views

and

I

are

houses

our

Lauds
I

carry

a

have

office

offi¬
my

coming into

a

not

been

in

well.

have

Association

with

Not

all

of. the

frauds

70%

\

us.

to

Institute

of

none so

ganizations

perpe¬

trated upon the public have their

the

origin in direct misrepresentation
and high-pressure selling. Manip¬

kept

job

are

of

on

a

keen

selling
^

clean

to

or¬

that

see

securities

and

living

clear

is
cut

:go

but

era

until

up

with

production

of

con-.

-sumable

goods comes nearly to
.equalling demand and money sup.ply. It would be my opinion that
jprices will hpt recede iti,the fujture to what we were accustomed
.-•to. before the Tast War. We -shall
(have with us two relatively per-,

the

investigation into

an

specific situa¬
We have some

evidence that the public is tanxr;
ious, I think I can- say over-im)

patient, for our report. I think
perhaps it is not realizedrwhat^ a
colossal task an investigation of
manent increased -costs
^ wages this type really is. In the par¬
and raw material costs, particular¬
ticular case in question we have
ly farm product costs. Technologi¬
already conducted a • great many
cal inprovements will
offset to examinations
under
some

extent but not in any. revo¬

lutionaryway
seem

dend

oath. In order

to

ascertain

we,

in

conjunction

optimists with the Toronto Stock
Exchange,
expect. Interest and divi¬ had to conduct an
extensive audit

tc

rates

to

as. some

attract

capital inmoney bound to

•vestmer.t, with
•become less cheap

into

consulting

good

a

adviser.

cannot

no woman

X think
where

consult

most

reaching

decent

healthy/sign. As far
mission

is

a

a
score
of brokerage
houses in
time goes Toronto alone. •'
People who take
-on, will likely tend to move up¬
part in the manipulation of mar¬
ward.
New ; issues will likely kets
do
not
employ
simple

us

the

as

concerned

tools

and

for

to

some

is

attract

time

to

the-

investor

come.

Busi¬

methods. 'Whether
science

almost

it

is

in

they realize they
w rongsomething

con¬

are

which

than

more

it

nay

our

is

we

I

the Com¬
can

only

we'll

the job."

justment

the

in

cost

imperative,

of

war

The

vast

loans financed
by
mone¬

huge section of the public

a

and

thus

created

-

an

enor¬

was) bubble
thin air.

It

money.

money blown out of
course it was
cheap

Of,

was

designed to be
in order that the
Treasury could borrow cheaply.
Perhaps the policy was wise, per¬
haps it was necessary^ but the
price was inflation.
money

a

at

Such

far

a

a

pro¬

slight increase in

carrying

the* public

It would be infini¬

now.

"Life insurance does not
appear
special pleader upon the sub¬
ject of fiscal policy.
We are ask¬
as a

subsidy
If

free

a

we

for
were

investment

would have

our ; policy¬
operating in

market

we

problems or, if we
had them, they would be"
solely
our individual
responsibility.
no

"However, rigid

mous

expansion in the supply of
.money and credit.
Much of this

future

tesimal compared to the cost of
inflation to the
country.
I mean
the inflation which we
have

holders.

portion of

the

exceedingly
moderate
price
of
controlling inflation. It would be
insignificant compared to the na¬

ing-no

Reserve.

radical read¬

more

That is the unavoidable but

the

Federal

whole
neces¬

right, it tional budget.

duty. /

of

the

gram involves

debt.

can

benefit

Delay may well

much

a

by the Treasury and supported
by
manipulatory mechanism of

try to do cheap

French Dollar Bonds
Drawn for Redemption

the

It
accomplished gradu¬

greater ultimate cost.-

no

• '// ♦
1
J
"The problem of inflation is in¬

debt

are

...

continue

;

our

stage tized

people

Exchange records and almost paraphrase Mr. Churchill—"Give

as

authority

selling bonds to the banks

taking a real interest in the se¬
curity/business and that is a most

sitate

us
who are their
To speak for them with

implicit,

be

economy.

through

the

destructive deflation.

now

ally to

ex¬

the

friend—and

a

everyone
but
that substantial

can

extricably interwoven with the
cheap money policy inaugurated

The

Either:

we are

cept

in

advice of good lawyers and bank
managers is always available. No
man is so much on his own
that

he

ciently gradual to avoid precipi¬
tous and

They have
bargaining

is

high-pressure.
Before
investing
he always has the
opportunity of

a

tion of thi$ kind.

as

have

power of collective

muster is

public should not be taken in by

robs

would

years ago.

insurance
proceeds.
These
bid
fair to become the
forgotten people
in our present
economy.
They are
not
organized.

all

investing

Commission is engaged in

few

our population which is
fixed incomes from life

trustees.

basis. The real thing to be ac¬
pronounced ulation of markets on
securities complished is to
develop an in¬
birth pains. Prices are going up
listed on the Exchange have 'the formed and
intelligent public. An
inevitably- and will continue to same result. At the
present time alert member of the

.hew

on

it

as

cruelly

portion of

Ac¬

countants. All of these various

a

"Inflation

cooperate

Chartered

much

as

bought just

I

the

1

(Continued from page 1933)

efforts

might also say that we
are
getting the same kind of co¬
operation from the Association of
Professional Engineers and from

long

0

Manipulation

of the

you

Dealers

We

enough to have become altogether
complacent.
->

/

Cooperation

told

1979

Lays Inflation to
Cheap Money Policy

conspiracy

being made by The Toronto Stock
Exchange and The Investment

pride

which r is
constantly
with a certain degree of
as

ex-

not

little " doubt in

we

of

their businesses. It is

lawful act if

a

a con¬

wariness and caution

&" I

{injunction

done is

'1

'J

is not present.

the

degree of pride at the

most

way
on

files.

in

Commission entertain quite
siderable

tinged

View

dead
we 1

however,

/■:

'

A

for

room

speaking,?

•*. •? v

Tjt

y?"

Regulating Canadian Security Markets

section

;a

■:

THE COMMERCIAL & FINANCIAL

';- (Continued from page 1934)

•I

'■ '7 • ■*.♦
*'* "

J;

,-f'^

trols

monetary con¬

were

employed and infla¬
tionary devices were resorted to
in
order
to
finance
the
war.

These controls still exist in our
peacetime economy. They are the
keys which will open or lock the
doors upon inflation.
How they

will be used should be
determined
by sound considerations of

public

7 sure v to
con¬
We respectfully submit
"Now everyone affects to be policy.
doing
J, P. Morgan & Co,
or
that in
Incorporated,
process/of becoming whether it is
approaching a decision
they try to cover as sinking fund administrators, on against inflation just as everyone
^concentrated
in
upon
this momentous matter of
large corpora¬ up the trail for other
is opposed to sin.
notified holders of the
reasons, Oct. 15
Many, however, the utmost
tions whether we like it or not,
importance to the en¬
they do not do things in a way Government of the French Re¬ are seeking an easy road to virtue.
tire nation, the effect of
*with a L relatively/ permanent in¬
We are told by some that we
calculated to help the investigator.
monetary
must
public external loan of 1924 25creased cost structure that is more
policy upon the life insurance sav¬
In addition to what was
inflation
yet
maintain
necessary year sinking fund 7 % gold bonds fight
or
less inevitable. There is, of to
ing of 70,000,000 Americans is1 a
he done in Toronto, we have due Dec.
1,1949, issued under loan cheap money policy. Such a pro¬ consideration which
course, a wide difference of opin¬

ness

,

tinue -the

"

...

had

ion

to whether the recent re¬
in market prices is the
'beginning of a prolonged. bear
as

cession

to

do

number of

partial audits in
houses in New York

and also in Montreal. At the
pres¬
ent time an

contract dated Nov. 22,

$3,983,300

principal

gram stultifies itself.

1924, that

amount

contradiction

a

of

of

It involves

terms

and

cannot

fully,

or

re¬

right¬

wisely, be ignored."

,.

V: /

veals a confusion of
these bonds have been drawn
purpose.
We
by
cannot have our cake and
investigation^under lot for redemption on Dec.
eat it Britain
market or a corrective interlude oath
Irked
|, 1946, too,
in Vancouver is in course of
fiscally or otherwise.- We can¬
at
in a generally bullish one. I in¬
105%,,
The announcement
being done. With our mining en¬ states that
not stop inflation at the
Palestine Demands
nozzle
the drawn bonds will
cline to the latter viewpoint. 1
gineers, we have also had to con¬
It must be controlled at
the pump.
A public statement
be redeemed and paid on and
should expect the market gen¬ duct
by President
an
This policy is of a
investigation on * the after
piece with the Truman sent to Prime Minister
the
redemption date, in
erally to move uj> but in no spec¬ ground in Yellowknife. I tell
fallacies that prices can be held
you United States
Attlee of Great Britain and re¬
tacular way for some time jto all this
dollars, at the office
so that • at least some of
regardless of cost and production leased on Yom
of the Sinking fund
'come.
" ■
'
Kippur regarding
..
;
administrators,
the public will realize that
maintained
■>■
they, 23 Wall Street, New York
regardless
of
;■ ■ .V'■ ?X /:•:/■■
price. the Palestine Conference in Lon¬
like ourselves, will have to be
City, Prices
and interest have functions don
subject to the issuance of licenses
urged the opening up of Pale¬
Position of Investment Dealer
patient in matters of this kind
to perform in our
under Executive Order No.
economy which stine by Great Britain to Jewish
8389, cannot
Now, having made that venture while we ourselves must be very as
be prevented without in¬
immigrants from Europe immedi¬
amended, permitting the dis¬
into the field of crystal gazing, industrious as well.
))(
bursement of funds for the pur- curring a penalty proportioned to ately, The statement, according to
VI should
I come to problems which are less
say in this connection
the folly of the
abortive attempt. Associated
Press
advices
posh, . upon 'presentation and sur¬
from
We
hazy, more "tangible* and more thatx we have no complaints in render
cannot
whip inflation with Washington on Oct. 4, also en¬
of the bonds and of all
easy to grapple with—namely the collection with the eooperation we
cheap money because inflation is* dorsed the Jewish Agency's
appurtenant
plan
coupons
maturing
position of the' broker and in¬ have received / from the various
cheap money and cheap money is for the creation of a Jewish State
after the redemption date.
Inter¬
who
vestment dealer in the immediate witnesses
have
been
ex¬
in an "adequate area" of Palestine
est will cease on the drawn bonds inflation.'
.future. First of all may I say that amined to date. The Governing
and rejected outright the
"A test of.
after Dec.. 1, 1946,
plan for
The advices
I think government regulation in Committees of both the Toronto
statesmanship now is
an
Arab-Jewish division of the
the formation of a
also state:
fiscal policy
this field is here to stay. The ex¬ and Montreal Stock
Exchanges
Holy Land Which Britain and
"The Government of the French which will lead us down
tent and degree of it depend on have
fully cooperated as well.
q safe
many of Mr. Truman's own ad¬
the brokers and dealers them- The fact is lhat there appears to Republic is notifying holders of declivity to normalcy, instead of
visers have been
one
the drawn bonds that
which will sooner or later
supporting. The
.selves. If they organize together be a general sentiment in broker¬
payment
President reaffirmed his support
push us over a precipice from the
either (a)
to establish sound ethical codes age circles that this manipulation will be made
upon
for the earliest possible
immigra¬
'and discipline themselves as is business must stop as it is harm¬ presentation and surrender at the heights of inflation to the depths
tion of 100,000 Jews into
of
Palestine,
depression.
Recent develop¬
done in some of/the professions, ful to-the brokerage-business gen¬ office of J. P. Morgan & Co. In¬
but urged that. "substantial imT
we shall have little to fear from
erally and in the particular case corporated, together with evidence ments have been somewhat en¬
migration" should begin at once
A near miss at least
Overmuch bureaucracy. If they we are investigating is very harm¬ required by French law as regards couraging.
before winter brings new suffer¬
at a balanced
-don't, we shall have a great deal ful-to the mining busines as well. residence and non-enemy interest
budget, the stress
ing to the masses of Jewish home¬
as follows: to holders not
-to fear. In that connection I may Without /anticipating the?
resident which the Administration is laying
report,
less in Europe. In this projected
say,
I
think without > breaking I might say that it has become in the -franc area, payment will upon governmental economy, the
endeavor he promised American
Confidence,'"that A The' Toronto rather apparent to the Commis¬ be made in, United States dollars; use of a big Treasury balance to
assistance in the form of shipping
Stock Exchange and the Invest¬ sion that the Criminal Code is inV- ,t© a holders resident in the franc reduce the .unduly
large short- and other economic
aids.
term debt, the abolition of the
ment. Dealers /Association > are adequate insofar as manipulation
area,;or to a bank in France des¬
Mr. Truman's statement
brought
preferential rate to banks borrow¬
working towards such ends at the of markets is concerned. While it
ignated by (such, holders, payment
ing in order to purchase govern¬ open opposition on the part of
present time. As to-others in the ^covers conspiracy to manipulate,
will be made at the office of Mor¬ ment
Arabs and British
officials, Lon¬
business/ I have seen little evi¬ it fails; to make the: manipulation
bonds, the very slight but
don advices stated on Oct. 5, which
still helpful
dence of similar activity.- If they itself/what is known as
gan & ^ Cie. Incorporated,
stiffening of interest
Paris,
"rigging
added that on receipt of the Pres¬
don't organize as has been sug¬
rates in the market are all con¬
the market" up or
*dowh, air of¬ upon their ' receipt • of advice of structive
ident's communication Mr. Attlee
gested on more than One occasion,
steps.
The direction is
fense unless the element of con¬ presentation ahd surrender in New
had requested that publication be
tl am afraid they will have to take
right. We

by Truman

.

,

■

■

.

•

,

■

rthe

of c having a
(f&irly stiff regulatory body acting
Hid the public interest. / *. :>.-v.
'

;I

consequences

have^said

occasion

that

on

the

more

than

number

of

one

of¬

fenders against decent sales prac¬

spiracy eanb^^^

1

beyond:

a

reasonable doubt. We don't think

amounts, calcu¬

lated upon the basis of the official
the Commission should! have
any
power

or

the

rate of

economic forces

France

authority

ordinary, general

against

exchange for' the dollar in
on

the

date

of

maturity;

comparatively . few. By which effect the security market or, (b) until further notice, upon
far the great majority of our files but we do think we
should have presentation (and
surrender
by
'on brokers and dealers are quite
the tools available
to
see
that bankers, brokers or financial in¬
thin. Some have been in business
artificial
manipulation is pun¬ stitutions at the office of Morgan
for upwards of a quarter of a cen¬
tury,1 without a single complaint. ished, whether it is accomplished & Cie. Incorporated, Paris, in the
We have a comparatively small by individuals
acting by them¬ French franc equivalent of the
number of very thick files full selves: or* in
conspiracy
with dollar ; amounts, calculated upon
of complaints, some of which did
others. After all, it is a bit il¬ the basis
of the official rate of
not go back beyond five years. In
the past few months a fair pro¬ logical to define conspiracy to do exchange for the dollar in France
portion of these have been rele¬ a thing a crime when the thing on the date of maturity."
tices

is




hope for greater strides.

York, in the French Tranc equiva¬
lent of the dollar

"It is.no radical
program which
we

of

propose, ( lit is to the interest
the Treasury

itself,

w^ll

as

as

for the good of the
country. The
time is more propitious than it
may be for a long time to refund
at
least
a
reasonable
portion

of

the

dangerously preponderant
short-term obligations in an or¬

derly way
with
Such

upon a

favorable basis

non-inflationary

holders.

delayed pending study by British
A
spokesman for the
Prime Minister said, "This request
was not complied with.". He went
on to
say that the "British Gov¬
officials.

ernment
has
been
conducting
negotiations with both Jews and

Arabs and these negotiations have
been broken off. Consulta¬

not

tions with the Jewish representa¬
tives are in fact going on at this
moment.

a

program; would help to
drain from the banks more of that

monetized
debt still

segment

of the public

inordinately large which

constitutes

the

dangerous

infla¬

tionary potential.
At the very
best, it necessarily would be suffi¬

"It

is

nate that

■

therefore
a

most

unfortu¬

statement of this kind,

which may well jeopardize a set¬

tlement of the most difficult prob¬
lem of
at

Palestine, should be made

this time."

THE COMMERCIAL & FINANCIAL CHRONICLE

1980

Acme Electric Corp.,

1

Cuba, N. Y.

stock.
First
Offering—To be offered publicly at $5

132,740 shares ($1 par) common
Underwriters—Herrick, Waddell & Co., Inc., and
26

■

filed

; Colony Corp.

mainder for working

Acme-Hamilton

capital.

;

Proceeds—Net proceeds esti¬
will be used to pay a mortgage on
plant, pay accounts payable, purchase equipment, for
building alterations and working capital.;
;»

4.

Corp., Bedford, Mass.

will

•

Co.,

Air Lanes,

Oct. 9

July 18 filed 100,000 shares each of $100 par prior pre¬
ferred stock and $100 par convertible second preferred
stock. Underwriting—Union Securities Corp., New York.
by amendment.
Proceeds—Net proceeds, with
other funds, will be used to redeem $20,000,000 of 7%
Price

$115 a share plus accrued

in the State of Maine, they will be made by Frederick
C. Adams & Co., Boston; ' To complete plant and equip¬
ment and to

provide working capital.

American Brake Shoe Co.,

to

common

will be

stockholders of record
share for each
expire Oct. 21.

sold

to

other

persons

in¬

officers and employees.
Price, $35 a share.
Proceeds—Net proceeds, estimated.at $6,915,285, will be
cluding

; used to defray part of the cost of
improvement program.,
' '

pire on Nov. 21.
Unsubscribed shares will be offered
subscription to officers and directors of the company.
Price—By amendment. Proceeds—Working capital.

its plant expansion and

Ansley Radio Corp., Trenton, N. J«
Aug. 29 filed 70,000 shares of Class A cumulative con¬
preferred stock ($5 par) and 70,000 shares of
common
(50c par) and warrants for 50,000 shares of
common stock to be sold to underwriter at 5c per share
warrant

and

June

27

filed

Broadcasting Co.,

Inc., N. Y.

shares ($1 par) common stock.
Underwriter—Dillon, Read & Co. Inc., New York. Offerlug—A maximum of 100,000 shares may be sold by com¬
pany to persons, firms, or corporations with whom the
corporation had network affiliation agreements on March
31. The remainder will be offered publicly.
Price by
amendment. Proceeds—To prepay notes payable to ac¬
quire radio station WXYZ, to construct broadcast trans¬
950,000

exercisable

through Oct. 1, 1951 for pur¬

share. Underwriter — Amos
Treat & Co. Offering—To the public in units of one
share of preferred and one share of common. Prices—
$7 per unit of one share of preferred and one share of
chase of

common

at $1 per

Proceeds—To

retire

bank

loans

of

approx¬

imately $100,000, to purchase wood-working machinery
and for working capital. Temporary postponed.
Arkansas

Western

Gas

Shares

Price by amendment.

by six stockholders.

are

being sold
v

Armour and Co., Chicago
Cladmetals

Co.,

of Pittsburgh

-

July 8 filed 196,500 units comprising 196,500 shares of
voting common stock ($1 par) and 589,500 shares of non¬
voting

common

stock ($1 par), each unit consisting of




The 1,355,240 shares of
subscription to common
in the ratio of one-thirdl

common

will

common

share held.

Unsub¬

be

Hosiery Co., Philadelphia

^

>

u

.

covers

shares of

common

reserved for issu¬

conversion of preferred. Underwriter—New-

burger & Hano, Philadelphia. Price—$25.50 a preferred
share and $12 a common share. Proceeds—Company will
receive proceeds from the sale of all of the preferred
and 100,00 shares of common. The remaining 50,00Q>
shares of

being sold by three stockholders.
be used by
the company to pay off bank notes of about $1,100,000
and to purchase additional machinery and equipment
common

Estimated

net

are

proceeds of $2,300,000 will

of $1,200,000.'

New York

' *

Sept. 27 filed 180,000 shares ($2.50 par) common. Under¬
writer
White, Weld & Co., New York. Price — By
amendment. Proceeds—Of the total, 140,000 shares are
being sold by St. Regis Paper Co., New York, and the
remaining 40.000 shares are being sold by I. Rogosin*
—

President

of,Beaunit Mills, Inc.

Bendix

Helicopter, Inc., New York

Sept. 18 (letter of notification) 20,000 shares of common^
stock (par 500). Offering—To be publicly offered at $1.2fr
per share (estimated market). Underwriter — Bond 8c
Goodwin^ Inc. will act as broker. Proceeds to sellinjgr
stockholders.

Berbiglia, Inc., Kansas City, Mo.
Sept.

12

(letter of notification)

shares of 5%
Offering price*, i
$6 a share. Underwriter—Estes, Snyder & Co., Topeka,.
Kans. To pay outstanding indebtedness and expenses an<|i i
to open five additional stores in Kansas City, Mo. Offer¬
ing temporarily postponed.
41,000

cumulative convertible $6 par preferred.

Black, Sivalls & Bryson, Inc., Kansas City, Mb*
July 29

filed

100,GOO

Underwriters—F.

Byllesby

Co.

and

underwriters
will

ing

S.

shares
Yantis

($1
&

par)

Co.,

common

and

were

Offering—Shares

Inc.,

sold

stock..
H. M,
to

the-

July 29, 1946 at $10.70 a share. They
be offered to the public at $12.50 a share. Offer—

date

on

indefinite.

(Sidney) & Co. Inc., New York
Aug. 30 filed 119,706 shares (no par) common and sub¬
scription warrants relating to 30,000 shares thereof,.
Underwriting — None. Proceeds—For reimbursement
of

company's

demption
ferred

for

treasury

of

3,907

shares

funds
of

expended

in

7% ^cumulative

re¬

pre¬

April 1, and for funds deposited in trust for*

on

redemption

though it

Oct. 1 of remaining preferred shares. Al¬

on

was

proposed to offer the stock for subscrip¬

tion to stockholders at $10 per share, company on Sept,.
20

decided to withhold

Sept. 23

(E.

action at this time.

H.)

& Co.,

(letter of notification)

stock (par $10) and

$1).

•

„

.

Belle Glade, Florida

27,000 shares Class

27,000 shares of

Underwriter—Blair &

capital.
;

.

Co.

common

stock (par

Proceeds—Working:

-

Boston Store of Chicago, Inc.

.

(no par) cumulative first
preference stock, Series A; 300,000 shares of convertible
second preference stock, Series A, and 1,355,240 shares
common stock
(par $5).
Underwriter—Kuhn, Loeb &
Co., New York.
Offering—The 350,000 shares of first
July 12 filed 350,000 shares

American

upon

;

mitter for station KGO at San Francisco and for working

vcapital.

of

Borchardt

filed

the public.

It also

ance

Co.

33,639 shares of common stock (par $5).
Underwriters—Rauscber, Pierce & Co. Inc., and E. H.
Rollins & Sons Inc.
Offering—Stock will be offered to
June 5

for

company

Blumenthal

vertible

common.

American

subscription offer will ex¬

New York

Sept. 13 in the ratio of one additional
four shares held at $35 per share/ Rights
Unsubscribed shares

St. Louis

Sept. 6 filed 336,550 shares common stock (par $1).
Un¬
derwriting—No underwriting.
Offering—Stock will be
offered for subscription to common stockholders of rec¬
ord on Nov. 1 in the ratio of one additional share for
The

publicly.

offered

Beaunit Mills, Inc.,

subsidiaries,

each two shares held.

shares

in the aipount

for

Aug. 16 filed 199,101 shares (no par) common. Under¬
writing—No underwriting. Offering—Shares are offered
subscription

-

I;

Sept. 27 filed 53,648 shares ($25 par) 4*£% cumulative!
convertible preferred and 150,000 shares ($1 par) com¬

N. Y.

American Zinc, Lead & Smelting Co.,

(letter of notification) 15,000 shares each of preand common.
Offering price, $10 a preferred
a common share.
If offerings are made

be

share for each

new

mon.
-

exchange offers are to be sold for cash to underwriters.
For details see issue of April 4.

Inc., Portland, Me.

share and 1 cent

for

r

general funds. Temporarily postponed.

ferred

,

,

Community Water Service Co. and
and provide cash working capi¬
tal.
Common stock is to be offered initially for cash
to common stockholders of parent and to public holders
of preferred stocks of Community and Ohio in exchange
for their shares.
Stock not subscribed or issued under

Inc., and Burnham & Co., all of New York. Offering—
The shares will be offered publicly at $6 a share.
Pro¬
ceeds—Estimated net proceeds of $656,250 will be added
to

/

:

.

American Locomotive Co., New York

two

$ July 22 filed 125,000 shares of 50-cent par common.
&

-

Ohio Cities Water Corp.,

Internat'l Agency, Inc., New York
Gearhart

_

bidding are known. Underwriters—
To be filed by amendment.
Probable bidders include
Dillon, Read & Co. Inc., White Weld & Co., and Shields
& Co. (jointly), and W. C. Langley & Co. and The
First Boston Corp. (Jointly).
Offering—Price to public
by amendment.
Purpose—The common stock, together
with $15,000,000 10-year 3% collateral trust bonds (to
be sold privately) are to be issued to acquire certain
assets of American Water Works & Electric, liquidate

£ will be added to working capital. Offering postponed.

Hano;

Harry Bloomberg, President. Price—By

.

sults of competitive

and employees of the com-

&

of

March 30 filed 2,343,105 shares of common (par $5) plus
an additional number determinable only after the re¬

$1,025,000 of- proceeds of debs, for payment of an
indebtedness to Bankers Trust Co., New York. Balance,

Underwriters—Newburger

account

amendment.

American Water Works Co., Inc.,

use

Air Express

for

offered

will

Artcraft

25 filed 75,000 shares of common stock (par $1) /.
Underwriter—Riter & Co. Proceeds—Stock; being sold

dividends. Indefinitely postponed.

£ Underwriter—Ames, Emerich & Co.', Inc., and Dempsey
& Co., Chicago.
Offering—The debentures will be of¬
fered publicly. The common shares will be issuable upon
the exercise of stock purchase warrants for purchase of
common stock at $2 a share above the bid price of such
I common on the effective date of the registration. Com¬
pany will sell warrants for 25,000 common shares to the
underwriters at 10 cents a warrant. The remaining war¬
Price—Debentures at 98. Proceeds—Company

Limoges China Corp., New York

Sept!

cumulative preferred stock at

Aug. 22 filed $1,500,000 of 5% sinking fund debentures,
due 1961, and 50,000 shares
($1 par) common stock.

•••*'

Proceeds—Net proceeds initially will
general funds, however, the company antici¬

American

ff

Shares

purchased by the
underwriters.
Price—Public offering prices by amend¬
ment.
Proceeds—Net proceeds will be used to retire all
unexchanged shares of $6 prior stock and to redeem its
outstanding 7% preferred stock. Temporarily postponed.

Offering date indefinite.

program.

a

scribed

pates it will use the funds for its building ana expansion

Trenton, N. J.

<

pany.

stock will be

of

by amendment.
be added to

$6 prior preferred.

of first preference not issued in exchange will be soldi
to underwriters. The 300,000 shares of second preference

stockholders of the

Aug. 12 filed 30,000 shares ($100 par) cumulative pre¬
stock.
Underwriter—White, Weld & Co.
Price

'

-

N. J.

Colortype Co., Clifton,

ferred

,

rants will be sold to officers

stock for each share of

ence

common

American

'Aug. 29 filed 50,000 shares 5% cumulative preferred;
stock ($20 par) and 82,000 shares ($1 par) common
: Stock.
Underwriters—G. L. OhrstromV& Co. and'S. R.;
Livingstone & Co.
Offering—Company is offering the
50,000 shares of preferred, while the 82,000 shares of '
common are being sold for the account of certain stock¬
holders.
Prices—$20 a share for the preferred, and
$11.50 a share for the common. Proceeds—Company will;;
apply proceeds to fully discharge secured -demand
; notes, mortgage notes
and partial .discharge of debenture indebtedness. Offering temporarily postponed, V
Aerovox

preference stock will be offered in exchange to holders
of its 532,996 shares of $6 cumulative convertible prior
preferred stock at the rate of 1.4 shares of first prefer-

intends to

mated at $1,179,000

<;.,,

Mfg. Corp.,

company

stock directly to the public. Offer¬

$6 per unit.

ing—Price

Proceeds—Company will receive

share.

common

PREVIOUS ISSUE

and 3 shares of non-voting

Underwriters—None—the

distribute its

proceeds from
.the sale of 68,880 shares and four selling stockholders
the proceeds from the sale of 63,860 shares.
Company
also will receive proceeds from the sale of 20,000 war¬
rants for common stock to underwriters at an aggregate
price of $200.
Of the net proceeds ($292,940) $50,000
will be used to pay current bank loans; about $20,000 will be used for machinery and equipment, and the re¬
a

.

share of voting common

common.

.

Registration

INDICATES ADDITIONS SINCE

•

June

in

Now

Securities

Thursday, October 17, 1946

Sept. 10 filed 30,000 shares

($50 par) 5%

cumulative;

preferred and 500,000 shares ($1 par) common. Under¬
writers—Paul H. Davis

Offering—Preferred

& Co. and Stroud

will

have

& Co., Inc-

non-detachable

stock:

»-C£.Y.

.Volume 164

.

Number 4534

,J: (ShowingISSUE CALENDAR
NEW

ing and 55,177 shares are to be offered in exchange for
outstanding capital stock of Consolidated Printing Ink
Co., Quality Park Box Co., Inc., and John Beissel Co.,

;

which will become subsidiaries, In

October 18,

Enterprises

$103.50

1946

Inc._

Lime Cola Co. Inc.-

a

common $26.50 a share. Proceeds—Net
proceeds to
the company will be used to redeem
unexchanged shares
of 6% preferred at 110% and for
increasing general

..Common

Morrison-Knudsen Co., Inc

corporate

Pfd. and Com.

funds.

Brunner

1946

Sept. 13 filed 180,185 shares ($1 par)
'

common.

October 22,
12

Noon

(EST).

23,395 shares of Class B common of American Gas
Machine Co., of Albert
Lea, Minn., on the basis of three
for each Class B share.
Price—$10.25 a share.

Equip. Trust Ctfs.

Excelsior Insurance Co. of N. Y

Common

Helicopter Digest Publishing Co
Konga International Inc
Maltine Co.
Red Rock

for

.

shares

Pfd. and Com.

Proceeds—Net proceeds will be used to redeem the out¬

Common

standing ClaSs A

..Preferred

l

Bottling Co. of Youngstown

the

y

October 23, 1946

|

October 24,

ance

Buffonta Mines Ltd., Toronto, Can.

Sept.

v

1946

12

share. Proceeds—For development of
gold

a

ing properties.

Noon

(CST)

Burgess-Norton Mfg. Co., Geneva, III.
Sept. 23 filed 10,000 shares ($50 par) 5% cumulative

—Cond. Sales Agreements'

November

4,1946

films Inc. ——^Class A

and Common

com"

anon stock of the total
common, 375,000 shares will be
offered for sale for cash.
30,000 shares are reserved for
issuance upon exercise of warrants attached to
preferred
and 95,000 shares are reserved for issuance

cise

of

outstanding warrants. Price—By * amendment.
Proceeds—Net proceeds, together with other
funds, will

fbe used to pay the company's
"the principal amount of

2% subordinated note in

$5,268,750 and accrued interest.

Offering date indefinite,
*

Bowman Gunv Inc.,

Philadelphia

'

'

{holders who will receive proceeds.
V—-/: ^v>
': Braunstein
(Harry) f Inc^
.

_

,

.

f

.Wilmington, Del.
Sept. 25 filed 12,500 shares ($25 par) 4y2% cumulative
convertible preferred stock and
50,000 shares (200 par)
common

stock. Underwriter

INew York. Price
a

share

for

—

$25

common.

a

—

C. K. Pistell & Co., Inc.,
;

share for preferred and $11

Proceeds—7,000 preferred shares

being sold by company, the remaining
ferred shares and all of the common are
are

5,500

pre¬

being sold by

jpresent stockholders. Net proceeds to the
company, es¬
timated at $147,500, will be used to
prepay to the ex¬

tent possible

outstanding $149,300 mortgage liabilities

•

Briggs & Stratton Corp., Milwaukee
Aug. 9 filed 76,000 shares (no par) capital stock. Under¬
writers—A. G. Becker & Co.,
Inc., Chicago.
Price by
amendment. : Proceeds—Shares are
being sold by stock¬
holders. Temporarily postponed.

Brooklyn

(N. Y.)

Union Gas

Bids

two bids

re¬

Blyth & Co., Inc., and F. S. Mose- i

ley & Co. and associates submitted a bid of 100.06 for
a
4.30% dividend.
Harriman Ripley. & Co. and Mellon &
Securities Corp. bid 100.779 for a
4.40% dividend.
In¬

.

_

Brown & Bigelow, St. Paul
July 19 filed 35,000 shares of 4y2%

preferred
stock.

stock

and

427,558

&

fins—19,079 preferred shares
ferred stock

on

not

a

($100 par) cumulative
($1 par) common

shares

Underwriters—Reynolds

1"

-

' t

'

'•

1

'-f,7.

<

^

'

1

/V

'j!

May 24 filed 312,000 shares of

stock (no par).
bidding. Under¬

Underwriters—To

J/

be

determined

issued in exchange plus
15,921 additional will be
offered to the public. Of the total
common, the company
is selling 67,500 shares to
underwriters for public offer¬

7%

,>V.\'fj

Camfield Mfg. Co., Grand

{

*

>

<*•

-

'rv,

f

HaVen, Mich.

July 29 filed 220,000 shares ($1 par) common stock. Un¬
derwriters—Gearhart & Co., Inc. Offering—Of the shares
registered, 100,000 are 'issued and outstanding and will
be

sold

to the underwriters by three
stockholders at
share for their own account. The remaining
120,000 shares are being offered by the company. Price
$4.50 a share. Proceeds—Company's share to pay rene¬
gotiation refund in amount of $180,000 to the U. S.

$4.50

a

Government, and for additional working capital. Offer¬

ing date indefinite.

i

:

Canadian Admiral Corp.

Ltd., Toronto

July 8 filed 150,000 shares ($1 par) common stock.
Underwriter—Dempsey & Co. Offering—Stock initially
will be offered to common stockholders of 'Admiral
Corp.
at

$3

a

share.

Proceeds—$75,000 is earmarked for pur¬
machinery and equipment, and tools, jigs, dies

chase of

stockholders

common

shares

held.

The Marine Midland Trust

•

Members New York Stock
NEW

YORK

ALBANY

Y

r

Registrar

PITTSBURGH




TRENTON

NEW YORK

INDIANAPOLIS

'

-

v

holders

at

rate

of

one

share

for

each

two

shares

for

will

be

offered for sale to officers, directors and
Price—The debentures will be offered at
preferred at $20 a share. The common will
be offered to stockholders at $10 a share. Pursuant to the
common
stock subscription rights, F. S. Yantis & Co.
will purchase 100,000 shares of the 170,000 shares of
common
for investment. Any of the remaining 70,000
shares which are not subscribed for by stockholders and
officers, directors and employees will be sold to th©
underwriters. Proceeds—Net proceeds, estimated at $5,—

employees.

100 and the

856,125, will be used to pay the balance of the purchase
price, amounting to $5,150,000, for acquisition of the
candy manufacturing business operated by Clinton In¬

dustries, Inc., as Rs national candy division with plant®:
(Continued on page 1982)

Distributors

•

YY; of

Municipal—Railroad Y •'

principal (inancial centers.

E. H. Rollins & Sons
-

'

*

Incorporated

•

40 Wall
3

.

•

.

1

■

v

"

•'•.

.

•

•

••

I

...

.....

Street, New York 5, N. Y.

.*•

New York
...

held

of record on Oct. 19. Shares of common not subscribed

WASHINGTON
.

sold ror

•—

15, N. Y.

RECTOR 2-2200

.

for eaeta.

be

Trustee

•

,

PHILADELPHIA

will

ONE HUNDRED TWENTY BROADWAY

Exchange

CHICAGO

share

one

Sept. 12 filed $2,500,000 of 4% sinking fund deTbentmest
due 1961; 100,000 shares ($20 par) 5% convertible cumifclative preferred, and 170,000 shares ($1 par) common.
Underwriters
F. S. Yantis & Co., Inc. and -H. fit.
Byllesby and Co. (Inc.), Chicago, and Herrick Waddell
& Co., Inc., New York. Offering—Common will be of¬
fered for subscription at $10 a share to common stock¬

Direct contact with Markets in

Hemphill, Noyes C&, Co.

of

shares

Public Utility—Industrial Securities

*

Transfer Agent

rate

Candy Co., St. Joseph, Mo.

Company

OF NEW YORK

at

Unsubscribed

Underwriters

Industrial, Public Utility, Railroad

Wayne, ind.

capital, etc. Offering indefinitely postponed,

(letter of notfication) 60,000 shares of common.
Offering—Price $2 a share. Underwriter—R. A. Keppler
& Co., Inc., New York.
Proceeds—To demonstrate the
-

;

underwriters. Price by amendment. Proceeds—Working

Cameron Aero Engine Corp., New York

'

■

—

to

Oct. 2

v,-Yv

v

shares (no par) common. Under¬
writers
Glore Forgan & Co., Chicago. Offering —
Common shares initially will be offered for subscription

Chase

j1;4"<

company,

Aug. 21 filed 90,000

erties were recently acquired
by the company; to pay
off short term indebtedness and to reimburse its
treas¬
ury? for previous expenditures.

•

utility holding

Central Soya Co., Inc., Fort

by

UNDERWRITERS—DISTRIBUTORS—DEALERS

Municipal Securities

ment. Business—Public

.

competitive bid¬
ding.
Probable bidders include Halsey, Stuart &
Co.,
Inc. (bonds only). Proceeds—Net
proceeds will be used
to redeem outstanding 3y2%
mortgage bonds of East¬
ern
Oregon Light & Power Co., whose electric prop-?

Co., New York. Offer-

will be offered to 6%
pre¬
share for share
exchange basis. Shares

and

exchanged for shares of the merged corporation^
by amendment.
Possible bidders: Glare*
Forgan & Co.; Lehman Brothers-Lazard Freres & Obl
(jointly); Smith, Barney & Co.-Harriman, Ripley & Co.
(jointly); Blyth & Co., Inc., Stone & Webster Securitibeai
Corp. and First Boston Corp. (jointly). Price by amend¬

Underwriters

Blyth & Co., Inc., and First Boston Corp.
bid of $28.33 a share, and Harriman
Ripley & Co. bid
of $24,031 a share.
Stock will again be put up for sale

California-Pacific Utilities Co., San Francisco
Sept. 6 filed $1,670,000 of first mortgage bonds, Series
B, due 1971, and: 33,610 shares ($20 par) common.

Utilities Co.

not

un¬

satisfactory.

when market conditions improve.

issued

not

proposed merger into the issuer of American Pubfte
Service Co., to provide funds for retiring the prefereae®
shares of the issuer and American Public Service
Co^

rejected
as

shares

as

of California.
Co.

of

for the purchase of a sufficient number of such sharoe
same will be constituted
upon consummation of m

by amendment, c Probable bidders in¬
clude Blyth & Co., Inc.; The First Boston
Corp.; Harri¬
man
Ripley & Co.
Offering—Stock is being sold by
Standard Gas and Electric
stock

sale

Central & South West

writers—Names

Bids Rejected—Standard Gas & Electric
June 25 two bids for the
purchase of the

from

Aug. 30 filed its ($5 par) capital stock. Company's name
is to be changed by post effective amendment to Centxxd
& South West Corp. (Del.)
Prospectus will be issued
in connection with the public invitation for sealed bid*

oY

common

Stock will be sold
through competitive

W

than 150,000 shares of old
preferred stock are de¬

exchange will be used to redeem old preferred at $I1G
share and accrued dividends.

California Oregon Power Co.

;

-

Rejected—Company July 23 rejected

definitely postponed.

*

pro-?

Underwriter—To be determined by com¬
petitive bidding. Probable bidders include Dillon, Read

a

Cameron Engine by flight tests in
company-owned plane.

Co.

May 3 filed 70,000 shares of cumulative
preferred stock
t$100 par). Underwriters—To be filed
by amendment.
ceived for the stock.

\

Co., parent,

Sept. 27 filed 268,875 shares ($1 par) common. Under¬
writer—Van Alstyne, Noel &
Co., New York. Price—By
amendment. Proceeds—Stock is
being sold by share-■>
„

1

Springfield^
- Y
;; '
•

Aug. 14 filed;150,000* shares ($100 par) cumulative

N

1

*■'

■;-

fefred stock.

ceeds—Net proceeds

machinery and equip¬
$98,386 and payment for new building
being constructed at estimated cost of $223,700; balance
for purchase of additional machine tool
equipment.

exer¬

upon

Service Co.,

posited for exchange the number of shares to be ex¬
changed will.be pro rated. Shares of new preferred
issued in exchange will be sold to underwriters.
Pro¬

cost of

a

Public

38,564 shares of such stock.

stockholders. The remaining 10,000 shares are reserved
issuance upon the exercise of warrants attached to
the preferred. Price
by amendment. Proceeds—To re¬
imburse treasury for purchase of

ment at

Offering—

Savings Bank. Chicago, bal¬

SY|>Y;iil : VY:Y-YYY^-Y

more

for

purchase warrants for purchase of 30,000 shares of

American,

an

will be offered on a share for share
exchange basis
holders of its old preferred stock other than the Middle
West Corp. which holds

preferred and 120,000 shares ($2.50 par) common. Under¬
writer—H. M. Byllesby and Co.
(Inc.), Chicago. Offer¬
ing—Of the common, 110,000 shares are
being sold by

Central of Ga. Ry. 12 Noon (EST)—Eqp.Tr. Ctfs.

of

name

amendment.

& Co., Inc.;
Smith, Barney & Co., White, Weld & Q04
Glore, Forgan & Co.; Lehman Brothers and LazardL
Freres & Co. (jointly).
Offering—New preferred stoek

min¬

/

October 29, 1946

Atchison Topeka & Santa Fe

corporate

working capital. Offering deferred indefinitely.

Central Illinois

filed

1,000,000 shares $1 par (Canadian cur¬
rency) common. Underwrtting — GeotgeVF. Jones C64"1
Inc., Buffalo, N. Y. Price—$1 a share, American cur¬
rency. The underwriting commission will amount to 20
cents

Baltimore & O. RR. 12 Noon (EST) —Eqp. Tr. Ctfs.

post-effective

cago and Harris Trust and

outstanding preferred stock of Brunner,

Common

Gulf Mobile & Ohio
RyjiLjL--J\j-.Equip. Trust Ctfs.
Stereo Pictures Corp
Pfd. and Com.

for

Y--Y;

off $3,000,000 loan from First National Bank Chi¬

pay

shares of American Gas and

common

.

Central Electric & Gas Co., Sioux Falls, S. IX
May 29 filed 35,000 shares of $2 cumulative preferred
stock, series A (no par), but with a stated value of $59 a
share, and 175,000 shares of common stock (par
Underwriter—Paine, Webber, Jackson & Curtis, Chi¬
cago. Offering—The stocks will be offered to the public
at prices to be
supplied by amendment.
Proceeds—To

total, 110,000 shares will be offered publicly and
the remaining 70,185 shares will be offered in
exchange

1946

& Western RR.

available
v —

Under¬

Of the

Delaware, Lackawanna

be

writer—Registrant will supply

writers—George R. Cooley & Co., Inc., Albany, N. Y.,
and Mohawk Valley
Investing Co., Inc., Utica. Offering—

..Common

will

tion, sinking of shafts, diamond drilling and working

Common

;

balance

Indefinitely delayed,

capital.

Common
—

fixtures;

underwriter by

Manufacturing Co., Utica, N. Y.

Polish Review Inc

Co.

and

purposes.

To the public at $1 a share in Canadian funds.
Proceed®
—For a variety of purposes in connection with explora¬

Offering indefinitely postponed.

Dumont Electric Corp.——.

Sharab-May

1981

Carscor Porcupine Gold Mines, Ltd., of Toronto*
Ontario
June 24 filed 400,000 shares of common stock.
Under¬

share;

_Pfd. and Com.

October 21,

addition, stockholders

of the company are
selling 322,521 shares to the under¬
writers for public
offering. Price—Preferred

probable date of offering)

Leader

&

THE COMMERCIAL & FINANCIAL CHRONICLE

•

Boston

-

Philadelphia

»

Chicago

-

Sen Francisco

,

-

1982

(Continued from page 1981)
in St.
to

Louis, Mo., and Chicago. The balance will be

redeem

its

4%

Continental Motors Corp., Muskegon, Mich,
v
July 8 filed 250,000 shares 4%% cumulative convertible

used

serial debentures and for additional

preferred stock, Series A ($50 par). Underwriters—Van
Alstyne, Noel & Co.
Offering—Price by amendment. /
Proceeds—For rearrangement and expansion of the com¬
pany's manufacturing plants, acquisition of additional

working capital.
-

Clary Multiplier Corp., Los Angeles
Sept. 3 filed 150,000 shares 5V2% cumulative convertible

Continental-United Industries

Aug.

preferred. ($10

par)

and 250,000

shares

(Originally

par)

convertible

out-

Corp., issuer's sole stockholder, is offering
own account. Price of preferred
$10
common $4 per share. Proceeds of
to pay company's indebtedness to General

f Finance Corp.,

purchase equipment and real estate and
for working capital.
Indefinitely postponed.

1970, at 108.

and

Proceeds—Company will receive

150,000 shares and Generoso Pope,
•/;' President of company, who is selling the remaining 150,i"000 shares will receive proceeds from these shares. The

Colorado Milling & Elevator
Co.,

Denver, Colo.

($50 par) cumulative con¬
Underwriter—Union Securi-

vertible

~

preferred stock.
ties Corp., New York.
Price by amendment.
to the proposed issue of
preferred

—Prior

Ero

stock,

j. company plans to call its $3 cumulative convertible

the
pre¬

ferred stock for redemption at
$55 a share plus accrued
dividends.
Funds for the redemption will be
supplied

by

6hort term bank loan.

a

preferred, together with other funds, will be used to
repay the bank loan. Indefinitely

common

J.
filed

150,000 shares ($4 par) 30c cumulative
convertible preferred. stock, convertible into common
stock in the ratio
initially of 1% shares of common for
each share of preferred,

Underwriters—Floyd D. Cerf
Co., Inc., Chicago. Offering—Company offered 59,585%
[shares for subscription to present common stockholders
,

,

of record

Aug. 6 at $4.50 a share in the ratio of one share
of preferred for each share of common
held. Rights
expired Aug. 20. The offering to common stockholders
excluded

the

two

principal

stockholders

their rights to subscribe. The
and shares not subscribed to
:

will be offered to the
public

•—$5

a

share.
as

loan

a

to

Palmer

Brothers

subsidiary, balance working capital.
1

v;

•'

waived

'

'

.

remaining 150,000 shares

by common stockholders
through underwriters. Price

taxes; $250,000 for payment of

net
to

pay¬

Engines, Inc.,
»■

"

;

j'-

Commonwealth Aviation Corp., New York
June 28, 1946 filed 150,000 shares
($10 par) 4%% cumu¬
lative convertible preferred stock and
300,000 shares
($1 par) common stock. Underwriters—To be
supplied
by amendment. Price—$12 a share of preferred and
$7
a share of common.
Proceeds—Estimated net proceeds of

Sept. 23 filed

16,071

shares

Madison, Wis.

($100 par)

Ben Weingart, President and
add the proceeds to

Consumers Power Co.,

—

—

-r-

common

Jackson, Mich.

"

competitive bidding.

Probable bidders include Morgan
Stanley & Co.; Lehman Brothers; Shields &
Co.; Harriman

Ripley & Co.

and The First Boston

Corp. (jointly),

Price by amendment. Sale
Postponed—The company

on

Sept 19 postponed indefinitely the sale of the stock.
Bids

were

advertised for Sept. 24.




,/

*

*

*

^

*

[ 1

\

Insurance Co. of New York

"

s

York.

-

r

ratio of

one

new

share for each four shares held. Rights

Farquhar (A^ B.) Co., York, Pa.
Sept. 26 filed 30,000 shares ($25. par) cumulative con¬
vertible preferred; 45,000 shares ($5 par)
common; and

'

an

unspecified number of

version

of

the

shares to permit
Underwriter—Stroud &

common

preferred.

con¬

Co.,»

Inc.* Philadelphia* Price—By amendment Proceeds7
Proceeds will be riised to redeem $355,3507 4% % sinking
fund mortgage; bonds, due Aug. 1, 1957, to pay off
certain

contracts and

chattel -mortgages

$800,000 to reduce principal
Fashion Frocks,

on

of $72,000 and

outstanding bank loans.

Inc.

July .24 filed: <200,000 ^shares ($1 par) cCittmon stock.
Underwriter—Van Alstyne; Noel & Co. Offering—Offers
ing does not constitute new financing but is a sale of
currently outstanding shares owned by members of the
Meyers family, owner of all outstanding stock.
After
giving effect to the sale and assuming exercise of certain
warrants and an option, the Meyers family will retain
ownership of approximately 58% of the common stock*.
Offering temporarily postponed.
■
r *
■

Felt & Tarrant

Manufacturing Co.

Sept. 25 filed 251,340 shares of

stock (par $5).

common

Underwriters —^ Lee Higginson Corp; and Kidder, Peabody & Co. Offering — Shares are being sold by share¬
holders after consummation of proposed changes in com¬

pany's capitalization and the merging into the company
of Comptometer Co. Price by amendment,

Fiduciary Management, Inc., Jersey City, N. J.
Sept. 27 filed 867,420 shares ($25 par) common/ Under-/
writer—No underwriting.
Offering—Stock will be of¬
fered for subscription to common stockholders on the
one

share held.

share.

a

>

Films Inc., New

Offering—Stock will be offered to stockholders'

York

(11/4)

June 25, filed 100,000 shares

($5 par) class A stock land
300,000 shares (10 cent par) common stock, of which;
200,000 shares reserved for conversion of class A. Each •
of

dell

class

A

common

stock

is

stock.

initially convertible

2*

into

Underwriters—Herrick, Wad-

&

Co., Inc., New York. Offering—To be offered;
publicly at $8.10 a.unit consisting of one share of class A'

one share of common stock. "
Proceeds—$201,- '
at rate of one-half share for each share \held. .' Unsub- > 000 for retirement of
2,010 shares ($100 par) preferred1
scribed shares will be sold to
underwriters.
Price by y' stock at $100 a share; remaining proceeds, together with
amendment.- • Proceeds--To be added to
general funds. V other funds, will be used for production of educational t

stock and

<

Temporarily postponed.
Dobbs

•

films,

Houses, Inc., Memphis, Tenn.

^ -

-

i'

.

i

' '

p;

p

pp,

»j

] .l^odFdir

Sept. 27 filed 75,000 shares ($1 par) common. Under-r [ j"
.^Stores, v Inc., ^ Philadelphia/a:7
^|
writer—Emanuel, Deetjen & Co., New York. Price—By ! Aug. 5 filed 60,000 shares ($15 par> cumulative preferred]
-

Proceeds—Net proceeds will be used for <'
expansion of business consisting of airline
catering and i
restaurant-and coffee shop operations. Date-©f :

indefinite.

offering

•

.■

7'7V:;-r ;:

.•••

.

stock, j Underwriters—Eastman, Dillon & Co.
amendment.

Proceeds—To

be used to

Price by;

15-yearil

redeem

;•

•:' 3%% sinking fund debentures, due 1959; and $2.50
ulative preferred at $53 a share. /Balance will be added

; Drayer-Hanson, Inc., Los Angeles
Aug. 12 filed 80,529 shares ($1 par) class A
stock, con-into common stock
(par $1).
Underwriters—
Maxwell, Marshall & Co., Los Angeles. Price—To public
$10.25 a share.
Proceeds—Net proceeds, estimated at'
$694,761, will be used to pay off loans and accounts

cum-jj

,

vertible

able.

Offering temporarily postponed.k

pay¬

r

;

4'

(10/22)

(letter of notification) 26,000 shares of common'
Underwriter, none. To be offered at $10 per share
by stockholders of record Oct. 22 in

[shares of

-

July 25 filed 65,347 shares (no par) common stock.' Un-?
derwriter—Merrill Lynch,
Bierce, Feriner & Beane, New'

are

unspecified number of shares (no par);
stock.
Underwriters—To be determined by

being sold by stock¬

are
'

expire Nov. 15. Of the proceeds $100,000 will be added
to capital and $100,000 to surplus.

share

a

an

' '

Proceeds-7-To, increase capital so
company may expand operations in the field of develoji-*
ment and reorganization financing.

amendment.

Aug. 9 filed

9

subscription

Price—$3

—

Dictaphone Corp., New York7

working capital.

r

basis of four additional shares for each

a

a>

remaining shares
being sold by'
director. - Company will L

Shares

Detroit

share of preferred and $9 a share of
common.
Proceeds I
—Of the total, the
company will receive proceeds from
the sale of 851 shares of
preferred. The
common

be

Typesetting Co*, Detroit, Mich.
Sept. 25 filed 70,920 shares ($1 par) common. Under:-7
writer
C. G. McDonald & Co., Detroit. Price
$5.50;
a share. Proceeds
Stock is being sold
by six share-/
holders who will receive proceeds.
;7 ^

,
Consolidated Hotels, Inc., Los Angeles r vv o.
Aug. 9 filed 97,363 shares ($25
par) 4%% convertiblepreferred stock and 150,000 shares <50c
par) common.,
Underwriter—Lester & Co., Los Angeles.

and all of the

will

drilling and
exploration program. Indefinitely postponed.

$4 cumulative

Price—$25

balance

expand

|

f

of preferred

The

Proceeds—Part of the estimated net pro¬
ceeds will be used to
pay a bank loan.
The remainder,
with other funds, will be used to

—

$110

for.

amendment.

preferred. Underwriters
Paine, Webber, Jackson &
Curtis and Stone & Webster
Securities Corp. OfferingShares will be offered for
exchange for $5 cumulative
preferred, on a share for share basis, plus cash
adjust-*
ment. Shares not exchanged will be sold
to underwriters.
Price by amendment. Proceeds—To
redeem at

share, plus divs., all unexchanged old shares.

company of $1,007,913 will be added
be applied for corporate
purpose.
anticipates expenditures of $300,000 in 1946

Derby Oil Co., Wichita, Hans.
July 19 filed 131,517.3 shares ($8 par) common stock.
Underwriting—H. M. Byllesby and Co., Inc.,
Chicago,
and Nelson Douglass &
Co., Los Angeles.
Price by I

$3,420,000 will be used for working capital.

Telephone Co.,

for

to

ready have been contracted
added to working capital, t

.

v

Commonwealth

proceeds

7

-

estimated

Company
$300,000 in 1947 for equipping and absorbing costs
of starting operations of four
plants, two of which al¬

a

,

being sold by Apponaug

general funds to

and

* -

i:.V\

;

are

Manufacturing Co., Inc. Principal stockholder

loan;

a

Jackson, Miss.

(200 par) common. Under¬
writers—Names by amendment.
Price, $8 a share. Pro-;
ceeds~Of total, company is
selling 150,000 shares land

remaining 90,414% shares

Proceeds—Approximately $55,000 for

ment of Federal

$50,000

who

Delta Chenille Co.,
inc.,
Oct. 2 filed 300,000 shares

.

;•/; ' v

^

v

15

stock.

preferred stock and 71,950 shares (par
$2)
stock 40,000 by
company and 31,950 by certain

stockholders. Underwriters—Paul H. Davis &
Co., and
Shillinglaw, Bolger & Co., Chicago. Price by amend¬
ment.
Proceeds—Company will use proceeds, together
with a $1,000,000 bank
loan, to purchase machinery,
buildings and to retire bank indebtedness.
Offering date
indefinite.

'

Excelsior

bet.

—

'
'

•

convertible

Columbia Aircraft Products Inc., Somerville.

June 26

Proceeds

holders.

Danly Machine Specialties, Inc., Cicero, III.
July 26 filed 62,000 shares ($25 par) 5% cumulative

postpo^d.

;

by present stockholders. Of¬

Manufacturing Co.r Chicago

share.

a

—

Proceeds from the sale of

stock and the pre¬

common

Sept. 5 filed 105,000 shares common- stock (par $1)/
Underwriter—Straus & Blosser, Chicago. Price—$11.50

Clothes, Inc., L. I. City, N. Y.

Cyprus Mines, Ltd., Montreal, Canada
May 31 filed 500,000 shares of common stock (par
$1).
Underwriters—Sabiston-Hughes, Ltd., Toronto. Offertag—Shares will be offered to the public at 75 cents a
share.
Proceeds—Net proceeds, estimated at
$300,000,
will be used for mining
operations. Business
Explor¬
ing for ore.

Proceeds

sold

be

fering, temporarily postponed.

Aug. 9 filed 300,000 shares ($5 paifj: %oinmon istodk.
Underwriters—First Boston Corp., New York. Price by'
amendment.
Proceeds—Go to Joseph Levy;
President,
selling stockholders. Offering date indefinite.

Aug. 20 filed, 70,000 shares

-

expand the business. The

company will use its proceeds for

Crawford

.,

remaining 100,000 shares of

1

payment of mortgage
[.notes, open account indebtedness and for purchase of
.' additional equipment. Any balance will be added to
working capital. Indefinitely postponed,

.

ferred shares will

working

capital. Offering date indefinite.

.

ceeds from the issuance of 50,000 shares of the common
stock which will be used to increase
productive capacity,
add new lines of products and

being sold by a stockholder. The company will use its
proceeds to provide additional factory space and'
pur¬
chase machinery and equipment and to construct a
new
office: building. The balance will be added to

pro-

ceeds from the sale of

Electric Co.

Empire Millwork Corp., New York
Aug. 28 filed 50,000 shares of $1.25 cumulative converti¬
ble preferred stock, (par $25) and
150,060 shares el
common
stock
(par $1). Underwriters—Van Alstyne,
Noel & Co. Proceeds—Corporation will receive the pro¬

Proceeds—Of the shares being offered
selling 100,000 shares and 15,000 shares are

company is

'

amendment.

Co.

by amendment.

J August 15 filed 300,000 shares ($lx par) common stock.
I Underwriters—Emanuel, Deetjen & Co., New York. Price
by

&

Copco Steel & Engineering Co., Detroit
Aug. 19 filed 115,000 shares ($1 par) common. Underwriter—E. H. Rollins & Son, Inc., New York/ Brice

Colonial Sand & Stone Co., Inc., N. Y.I

~

Underwriters—Otis

(Tex.)

Include Stone & Webster Securities
Cbrp.; Haisey, Stuart
& Co. Inc.
Proceeds—Net proceeds together with gen¬
eral funds, will be applied to the
redemption of ita
$6,500,000 of first mortgage bonds, Series A,
due

filed for 80,000 preferred shares
shares.)
,1' •'

common

preferred.

(par 10c)»
Offering — 25,000

Corp.

fSept. 27 filed $6,000,000 first mortgage bonds/ due 1976.
Underwriter—By competitive bidding. Probable biddera

share.

per

equipment, manufacturing space and working capital.
Offering date indefinite,

share; price of

preferred

Under¬

common.

$8.25

tures, due 1967, to pay certain debts and for additional

for its

common

par)

Colony

(10/21)

stock

common

Offering; temporarily postponed*

El Paso

Prescott & Co., Inc.
Offering—To the public.
Price—
$25 a share.
Proceeds—Estimated net proceeds of $1,356,200 will be used to redeem its outstanding 4% deben¬

eral Finance

per

($1

Corp., New York

shares'being offered by Dumont Electric Corp., and 69,Co., a limited partnership.

Cooper Tire & Rubber Co., Findlay, Ohio
July 17 filed 60,000 shares ($25 par) 4%% cumulative

standing common stock. Underwriter—Brailsford & Co.
Offering— company is offering the preferred and Gen¬
the

shares

company

$25 and 350,000

par

cumulative

($1

150,000

First

Prices by amendment.: Proceeds—Net
proceeds from the
sale of the company's
25,000 shares will be used for gen¬
eral corporate purposes;

Proceeds—To repay demand loans and for general funds.

$250,000. The balance will be added to work¬
ing capital. Offering temporarily postponed.

,

filed

2

—

000 shares by Dumont Electric

Co., Inc.

writers—Aronson;; Hall & Co. Price

mated at

Climax Industries, Inc., Chicago
Aug. 28 filed 150,000 shares 5% convertible

Underwriter

tools and facilities, and for additional working capital
requirements. Offering temporarily postponed.

preferred stock (par $5). Underwriting—Maxwell, Mar¬
shall & Co., Los Angeles. Price—$5.25 a share. Proceeds
—Net proceeds, estimated at
$650,000, will be used to
repay a $90,000 bank loan, to construct a factory and
office building at San
Gabriel, Calif., at a cost of about
$250,000, and to purchase additional equipment, esti¬

Dumont Electric

:

Aug. 29 filed 94,000 shares of

to

working capital.

Temporarily postponed.

;

'

Foreman

Fabrics Corp.,

New York

July 29 filed 110,000 shares ($1 par)
outstanding.
amendment.

;

Underwriters—Cohu & Torrey.

Offering

date

indefinite.

"Jzz.

[£.

r.

.

t

1;

stock, all :

common
•

Price by

'rr'-'S-v

Volume 164

Number 4534

THE COMMERCIAL

& FINANCIAL

CHRONICLE

Foster & Kleiser
Co., San Francisco -r

A.
000 shares of $1 par common stock.
Underwriters—H.
100,000 .shares of $1.25 cumulative con¬ k M. Byllesby and Co., Inc.
Offering—Underwriters to
stock (par $25).
purchase from the company 18,500 shares of
Underwriter—Blyth
preferred

July 29 filed

to retire

| & Co., Inc. Offering—Underwriters

are

offer to holders of Class A
preferred
basis plus a cash

•

$500,000 short-term bank loan, to make loans
Ltd., a subsidiary, and to increase working capital.
.■/>:

and 20,000 shares of
common; and from Fred P.

making exchange

adjustment. Proceeds—Approximately
$1 ,060,950 for redemption of class A
preferred; balance
expansion, working capital, etc. Dividend rate and
price by amendment. Offering

; Jan.

par com¬

mon.

Offering—The building which the
company owns
converted into 21
apartments, 20 of which will
be leased under
proprietary leases to the purchasers of
will be

to

be

offered.

The

prices will vary between
Underwriters—R. A. Knight

unit.

a

and E. J;

Knight, who also will receive proceeds under
terms of contract
whereby they transferred title of land
and
building now owned by the company.

-

1

retire

a

loan.

"

$6

Kane County Title
Co., Geneva, III.
Sept. 25 (letter of notification) 4,000 shares of
common.
Offering—To be offered to stockholders of record Oct. 4

cumulative

Offering tem¬
/ for subscription at $30 a share at the
v 4 f ■
for each two shares held.
Nov.

Transports Co., Jacksonville, Fla.

17 filed 270,000

shares of

common

stock

>

ment.

Proceeds—Net proceeds will be used to redeem
6% cumulative preferred stock at an
estimated cost of $213,258, exclusive of accrued
divi¬
dends.
It also will use
approximately $402,000 toward
the purchase of a
manufacturing plant in Chicago; bal¬
ance for
-working capital.
its

Inc., New York

($1 * par) capital stock and
30,000 shares of capital stock to be sold to
underwriter at 10c per share warrant and
5,000 shares
pf capital stock to be purchased
by Milton Gluckman at
$9.50 per share for investment. Underwriter
Van
warrants for

-

Lake

common

V

•

for

uct,

•

Registration statement effective.

>

.

> -

sinking

fund

Atig.>"30'filed 450,000 shares (100 par)

common. Uhderwriter—Newkirk & Banks, Inc. Offering—Of the total
company is selling 350,000 shares and two
stockholders,

••

•

'

A*

'-v '

-1,

\

Underwriter—Keane &
a

share.

Proceeds

working capital to enable issuer to produce its
prodan

conditions.

secured

JyM '*£'&*i /i-■ •/''

issuer.

Langevin Co. Inc., New York 1

debentures due 1958.
Offering
Underwriter—The Ohio Co., Columbus. For
payment of notes and additional working capital.
"'V

Fresh Dry Foods, Inc., Columbia, S. C.
1

(J. E.) Co., Worcester, Ohio
(letter of notification) $150,000 of 12-year 4Vz%

price,! 00.

-

of

automatic dishwashing machine in commercial
quantities. Offering delayed due to
market

,

Harris
7

for benefit

Co., Detroit. /Offering—Price $2.50

—

Oct.

State

Products, Inc., Jackson, Mich.
Aug. 27 (letter of notification) 100,000 shares
($1 par)

outstanding

Offering date indefinite.

Alstyne, Noel & Co., New York. Proceeds—Shares are
being sold by Ivens Sherr, President .and A. I.
Sherr,
Executive Vice-President, who will receive
proceeds.

■

share

one

Subscription rights terminate

3.

•

'

Fownes Brothers &
Co.,
Aug. 6 filed 100,000 shares

rate of

,

Any unsubscribed shares will be purchased
by
Chicago Title & Trust Co., a stockholder. No under(par $1).
writing. For expansion of building and plant facilities.
Underwriters—Blair & Co. Offering—Stock is
being of¬
fered to present shareholders at
•
$3 per share. > Holders
Konga International, Inc., New York
of approximately
(10/22)]
200,000 shares have agreed to waive
$ Oct. 15 (letter of notification) 50,000*shares of common
their preemptive rights. Offering date indefinite.
stock. Underwriter—John J.
O'Kane, Jr., & Co., New
York will act as broker.
Hammond Instrument
Price, $4.25 per share. Proceeds
Co., Chicago
expansion of business, manufacture and sale of
beverage
Aug. 8 filed 80,000 shares ($1 par) common.
Under¬
extract, beverages and other products.
writer: Paul H. Davies &
Co., Chicago. Price by amend¬
Gulf Atlantic

no

Proceeds—To

notes, discharge

pay

porarily postponed.

temporarily postponed.

$2,500 and $6,000

share.

a

preferred,

•

shares

$14

mon

for

41.4 East 74th
St., Inc., New York
Oct. 8 (letter of
notification) 260 shares Of

.

Murphy
Graham, Jr., 100,000 shares of issued and out¬
standing common. Prices, preferred $100 a share; com¬
and J. C.

share for share

on

a

to The KVP Co.

vertible preferred

■

Oct. 3 (letter of
notification) 39,000 shares ($4 par) convertible Class A stock and

19,500 shares (10c par) comon behalf of the company and 19,000 shares of
($4
| par) Class A and 9,500 shares of the common on behalf
of Carl C.
Langevin, President of the

g mon

1

Hartfield Stores, Inc., Los Angeles
^ 27 filed
100,000 shares ($1

Company. Offering
—Price $5,125 a unit
par) % common stock.
consisting of one share of Class A
Underwriters—Van Alstyne, Noel &
stock and one-half share of
Co., New York, and
common.
Roland E. Fulmer and Louis H.
3,000 units are
Newkirk, Jr., are selling
Johnston/ Lemon & Co., Washington, D, C. Offering—
reserved for sale to certain officers and
the remaining
employees of
100,000 shares. Price—$6 a share. Proceeds
To be offered to the
public at $8 a share.
Proceeds— : v the company.
:
Underwriter—Hill, Thompson & Co., Inc./
—Fori purchase of sweet potatoes, plant
expansibn; addi¬
Company is selling 60,000 shares and stockholders are
§ New York. Proceeds—For payment of indebtedness and
tional storage
facilities, research and development work
selling 40,000 shares^- The company will use its proceeds > to increase
working capital.
.
M
<
•and working capital.
to pay the costs of
opening additional stores and to ex¬
'
' '
ft' >~ ^ 'A '• * ' '11
!'
'" 's
*V y
; [ j * f\
IJ"'
\
pand merchandise in its existing stores.
deader Enterprises, Inc., New York
Offering tem¬
(10/18)
Genera),Bronze Corp.,. L. I. City
porarily postponed.
v
Sept. 26 (letter of notification) 150,000 shares of
July. 26 filed 115,000 shares of cumulative convertible
(100
par) common and 57,000 shares ($5 par) 6% cumulative
'preferred stock ($25 par).'Underwriters—W. C.
Hayes Manufacturing Corp., Gr. Rapids, Mich.
Langley
convertible preferred, Series A. Price—10 cents a com¬
& Co. and
Aronson, Hall & Co. Price by amendment. ^; Feb. 27 filed>185,000 shares of common stock
mon
share and $5 a preferred share. Underwriter-($2 par).
Proceeds—To pay cost of
Shares are being sold
acquisition, construction and
by certain stockholders.'- Stock
Gearhart & Co., Inc., New York. Proceeds—To
.■»
replace
equipment of new plant, and for
working capital. 'In- /acquired by selling stockholders in exchange for 43,2,000
working capital used to promote new publication called
definitely postponed.
shares of common stock
(par $3) of American Engineer¬
Fashion Trades and to provide additional
working
ing Co. Underwriter—-By amendment. Offering—Price
'
~
by 'H capital... < 1
Glen Industries
/
>

June

.

:

•

,

•

-

*

'

„

-

1

-

-

r

•

,

Inc., Milwaukee, Wis;
amendment.
July 31 filed 50,000 shares of $1.25 cumulative converti¬
ble preferred stock series A ($20 par) and 150,000 shares^,; S i Helicopter Digest Publishing Co., Inc. (10/22)
(10c par) common, all issued and
Oct. 15 (letter .of
outstanding and being
notification) 10,000 Shares of preferred
sold by eight
selling stockholders.
Underwriters—Van
Alstyne Noel & Co. Price by amendment.
Proceeds—
To selling stockholders.
Offering

.

-)"

"^

'V

Glencair

•

temporarily postponed;

!

V-l

'< t '

7*

'

'

-V'

1

}

•

"

I

f

v

Mining; Co. Ltd., Toronto, Can.

•

Oct. 2 filed 300,000 shares ($1
par) stock. Underwriter—
Mark Daniels &
Co., Toronto. Price—40 cents a share
.•>
(Canadian Funds) v; Proceeds—For mine
"development.
.

Glensder Textile

Holt (Henry)

Corp., New York

Aug. 28 filed 355,000 shares ($1 par)
common, of which
.55,000 shares are; reserved for issuance s
of

purchase warrants.
Underwriter
Van
Alstyne, Noel & Co. Offering—The 300,000 shares are
issued and
outstanding and being sold for the account
of .certain stockholders.
Company has also issued 55,000
"stock purchase warrants to the
selling stockholders at
10 cents a share
entitling them to purchase up to Aug. 1,
1949, common stock of the company at
$11 a share. Price
'by amendment. Offering

land, Ohio.

"

>*.

'

>;

Price—By

sion

and

departments

and

Temporary postponed.

.

,y

-

the total
500,000 shares
jwill be offered to the
public and the remaining 136,500
; shares will be reserved for
issuance partly in payment
jof an indebtedness.
Partly as a commission to the selling
/agents and partly on exercise of
options. Price—$5 a
share., Proceeds—-For
refinancing of company and for
working capital and funds for
development and construc¬
tion program.

Griggs, Cooper & Co., St. Paul, Minn.
3 (letter -of notification)
12,000 shares ($1 par)
^common.
Underwriters—Kalman & Co., Inc., St. Paul.
/Price—$25 a share. Proceeds
For

*

common

-

stock

purchase warrants
entitling registered holders of shares
of the $4.25
preferred to purchase at
any time 64,750
■shares of common stock at
$16 a share at the ratio of 3%
common shares for each
preferred share held; and
120,-




V

<

100,000r shafes '($l; par) dapital stock.
Co., Los Angeles. Price-

Dean Witter &

Proceeds

—

To

pay

off

outstanding

.

Mines, Ltd., Toronto.

>

June 7 filed 250,000 shares of
capital stock (par 40c).
Underwriters — Names to be supplied by amendment.
Offering—Stock will be offered publicly in the U. S. at
40c a share (Canadian
money).

Proceeds—Proceeds,

v

estimated at $75,000, will be used in

operation of the

company,

developing

Business—Exploring

and.

gold

mining properties.
Maine Public Service Co., preque Isle,

Me.

25 filed 150,000 shares
($10 par) capital stock.
I Underwriters—To be determined through competitive
bidding, v Probable bidders include The First Boston

4

!
'

^

Corp.; Kidder, Peabody & Co., and Blyth & Co., Inc.
(jointly); Harriman Ripley & Co; Coffin & Burr and
Merrill Lynch, Pierce, Fenner & Beane. Proceeds—The

r

Underwriters—By competitive bidding. Probable bid¬
include Blyth & Co., Inc. and Mellon
Securities
Corp. (jointly) and Morgan Stanley & Co. and W. E.
Button & Co. (jointly). Proceeds—Net
proceeds from the
sale of preferred will be used to reimburse the
pany's treasury for construction expenditures. Net
ceeds from the sale of common will be

not

converted
The

into

balance

comm^i^ prior to
will

the

tribution and sale of
/

redemption

to treasury' funds.
to defer action on its fi¬

,

Kalamazoo-

Vegetable

Parchment

Co.

Sept. 3/filed .100,000 shares ($10 par) common stock.
Underwriting — No - underwriting.
Offering — For sub¬
scription to common stockholders in the ratio of one
share

far

each

logical products.

•

five

Proceeds—Proceeds,

shares held.
Price—$15 a share.
estimated at $1,500,000, will be used

/

>

pharmaceutical, medical and bio<

>

'

:

Aug. 22 filed 175,418 shares> ($1 par) common stock:
Underwriters—Goldman, Sachs & Co., and Hemphill,
Noyes & Co. Price—By amendment. Proceeds—Net pro¬
ceeds go to 11 shareholders who are selling the stock
being registered. Offering temporarily postponed.
Michigan Gas & Elec. Co., Ashland, Wis.
June 24 filed $3,500,000 of series A first mortgage bonds,
due 1976; 14,000 shares ($100 par) cumulative preferred
stock and 120,000

derwriters—To

(Mich.)

(10/22)

May McEwen Kaiser Co., Burlington, N. C.

be? added
SEC

Maltine Co., New York

Dillon & Co. Price—$100 and dividend. Proceeds
together with funds from loans, will be applied to con¬
struction cost of new plant and laboratories at Morris
Plains, N. Y. Business—Engaged in manufacture dis¬

V

applied for re¬
demption of 5% cumulative convertible preferred stock
date.

?

man,

com¬

pro¬

•

Oct. 15 (letter of notification) 2,900 shares of 4>k°!o con¬
vertible preferred stock (par $100). Underwriter—East¬

'

Grolier

.

,V/ V:r-

International Dress Co.,
Inc., New York
Aug. 28 filed 140,000 shares of common stock
(par $1).
Underwriter—Otis & Co. Offering—Price
$10 per share.
Proceeds—Selling stockholders will receive proceeds.
Offering date indefinite.

improvement and

Society, Inc., New York
.July 29 filed 18,500 shares at
$4.25 cumulative preferred
stock ($100
par), with non-detachable

\

/

•modernization program.
Offering indefinitely postponed.
f

?'!

nancing program because of present market conditions.

-Sept.

—

I

Howey

Company has asked the
f

-^.v1

ders

and James

selling agents. Offering—Of

.

Juno 17, filed 200,000 shares ($50 pat) cumulative
pre¬
ferred stock and 966,870 shares
(no par) common stock.

iSept. 3 filed 636,500 shares ($5
par) capital stock. Under; writing—There will be
no
*as

,.v'

Illinois Power Co., Decatur, III.

City, Nev.

underwriting but Everett N.
Manoil, Treasurer, will act

"

r

"

-Grand Canyon-Boulder Dam
Tours, Inc., Boulder

-Crosby, President

!

land planted to citrus trees in Lake
County, Fla. Offer¬
shares are being sold by Consolidated Electric and Gas
ing: price, a total of $300,000, or from $600 tO/ $1,200
:i; Co., parent of Maine Public Service, in compliance with
per acre.
No underwriting. For general corporate pur¬
geographic integration provisions of the Public Utility.
poses.
Holding Company Act.

establishment of new
replenish working capital.

to

/

(W. J.) Co., Howey-in-the-Hills, Fla.
(letter of, notification) securities evidenced In
part by warranty deeds and in part by development
contracts used together in connection with the sale of

.and, modernization work,

retail

S

1

f

Mada Yellowknife Gold

are

Inc., Bremerton, Wash.
Oct. 8 (letter of notification) 490,000 shares of common.
Offering price, 25 cents a share. No underwriting. F
mine development.

Oct.

amendment.

selling 120,000 shares

'

'•

'

Offering—Company is selling the preferred

Horseshoe Basin Mining & Development
Co.,

•

Proceeds—Company is
90,000 shares are being sold
.by shareholders. Company will use
proceeds for expan¬
i

r

'

Goldring Inc., New York

York.

,

,

Proceeds—Net proceeds will be added
to general iunds. Offering date indefinite.
•

—

By amendment.
bank loans.

Price—$25 a
by amendment.

.Sept. 27 filed 210,000 shares
(100 par) common. Under¬
writer—Merrill Lynch, Pierce, Fenner & Beane, New
.

Underwriter

selling the common shares.
share of preferred. Trice for the common

—

temporarily postponed.

,

f j' '

Sept. 25 filed

& Co., Inc^ New York

shares and stockholders

upon the exer¬

stock

4

f

Lime €ola Co., Inc.^ Montgomery (10/18-21
)•/•
June 28, 1946 filed 225,000 shares
(10 cent par) common
stock.
Underwriters—Newburger and Hano, Philadelstock (par $5) and 10,000 shares of common stock
| phia, and Gearhart & Co., Inc., New York. Price—$4.50
(par $1). - Underwriter—^Frank P. * Hunt, 42. East Ave.,
a share.
Proceeds—Working capital, etc. Offering temRochester, N. Y. Price—$6 per unit of one shasre of each.
porarily postponed.
'
:
Proceeds—Purchase of machinery, paper and working
capital; JBusiness—Publishing^
Macco Corp., Clearwater, Calif.

June 28,1946 filed 20,000 shares of 4% %
($25 par) cumu¬
lative convertible preferred stock and
33,884 shares
($1 par) common stock. Undrewriters—Otis & Co., Cleve¬

;

cise

'

,

j*»

'

«

shares ($10 par) common stock. Un¬
determined by competitive bidding.

be

Probable bidders include Blyth & Co., Inc.;

Kidder, Pea/body & Co.; The First Boston Corp.; Harris, Hall & Co."
(Inc.); Merrill Lynch, Pierce, Fenner & Beane, and Ira
Haupt & Co.
Offering—New preferred will be offered
on a share for
share exchange baste to holders of its
(frmtinnprl

nn

nape

19841

■

,

-

.

4:4. ■4.

-

•

Y-:

f

(Continued from page 1983);..■;rv

ytf i
outstanding

p

;

Y

National Manufacture and Stores

I

prior lien, 6%
preferred and $6 (no par) preferred.
Of the common
fiiotK being registered, company is selling 40,000 shares,
"Middle West is selling 57,226 shares and Halsey, Stuart
& Co. Inc., New York, is selling 22,774 shares.
Proceeds
—Michigan will use net proceeds from bonds to redeem
$3,500,000 3%% series A first mortgage bonds, due 1972,
at - 106.75 and interest.
Net proceeds from sale of com¬
mon and from shares of new preferred not issued in ex¬
change will be used to redeem $375,000 3V^% serial debentures, due 1951, at 101.2 and interest.
It also will
redeem at 105 and accrued dividends all unexchanged
prior lien,

7%

$6

no-par

/

V

shares of prior lien

"

and preferred stocks.

.

*.

$25,000,000 2%% 1st and ref. mtge. bonds
June 1, 1981:
Underwriters—Names by
amendment.
Probable bidders include The First Boston

stock.

of

rate

1

for

share

amendment.

No

each

Blyth

shares

underwriting.

held.

For additional working

y

Middle East

•

■

/

v;

the 67,009
the 47,806

of refinancing at a lower dividend rate
outstanding preferred shares of Pacific and

Newburgh Steel Co., Inc., Detroit :
27 filed 100,000 shares ($1 par) common stock.
Underwriters—Cray, McFawn & Co., Detroit. Offering—
To be offered publicly at $8.25 a share. Proceeds—Pur¬
chase additional facilities, expansion, etc.
Offering in¬
definitely postponed.
•" / •'
.bY:YYY/Y/YYl:

Ore.

Blyth & Co., Inc., White, Weld & Co. and Smith, Barney St
Co. (jointly); The First Boston Corp., W. C. Langley & Co.;
Harriman Ripley & Co.
Offering—Company proposes to
issue the 100,000 shares of new preferred for the pur¬

Price—By

pose

Aug. 2 filed 30,000 shares of 6% cumulative convertible
preferred (par $10), and 30,000 common shares ($1 par).
Underwriters—Names by amendment. Offering—Shares
are
issued
and: outstanding
and are being sold by
Maurice
Cohen
and
Samuel
Friedman,
President
and Secretary-Treasurer, respectively, each selling 15,000
shares of preferred and 15,000 shares of common. Price

June

construction program.

July 10 filed 100,000 shares ($100 par) preferred stock.
Underwriters—By amendment. Probable bidders include

^ capital.,i

'V:,'. Michigan Steel Casting Co., Detroit

■

Co., Inc.
J,

Halsey Stuart &

Inc.;

Pacific Power & Light Co., Portland,

-

Anderson, Ind.

2Vz

Co.,

&

Proceeds—To finance part of

(letter of notification) 50,000 shares ($1 par)
Offering to stockholders for subscription at the

7

P

Corp.,

^ non-cumulative stock,
indefinitely.■'% 44'4

National Tile & Mfg. Co.,

•'

Oct.

due

Series

tion of outstanding $2.50 class

.

Thursday, October 17, 1946

4 filed

Oct.

(letter of notification) 8,500 shares of common
stock.
Offering price, $35 a share.
Underwriters—
Clement A. Evans & Co., Inc.-1 Proceeds—For redemp¬

Postponed

;

-

Pacific Gas & Electric Co.

Corp/, Atlanta

June 12

;5;

^'-• ••Y;V,Y// ''Yy; "/y '

:;

;/'■:■■#£'.'■■

THE COMMERCIAL & FINANCIAL CHRONICLE

1984

<

■■,

...,

preferred shares of Northern Electric Co., in connection
with the proposed merger of Northwestern into Pacific.

'

the outstanding preferred

In connection with the merger,
of Pacific

stocks

ferred stock of Pacific, the surviving

.

exchanged

and Northwestern will be

share, with cash adjustments, for the new pre- -

share for

corporation. Offer¬

Co., Cleveland, Ohio;
ing price—TO be supplied by amendment. ;
Y
y —$10 a share for the preferred and $6 a share for the
C.?;;;!£ •/: :•;■;
:• y: • • y-y: ;/;/>.:/?y YygY Y/:Y:
(letter of notification) 1,335 shares each of no
■y commony [iyy
Pal Blade Co., Inc., NeW York
V
par $5 cumulative preferred and no par common.
OfY fering price, $101 a unit consisting\of one share of each.
New England Gas and Electric Association
y 1 June 28, 1946 filed 227,500 shares ($1 par) capital stock. Y
Underwriters
F. Eberstadt & Co., Inc.
,:No underwriting.. For working capital. ; >
Offering —
Cv#
July 11 filed $22,500,000 20-year collateral trust sinking
225,000 shares are outstanding and are being sold by 10 ;
fund Series A bonds, and a maximum of 1,568,980 com¬
4Mississippi Fire, Casualty & Surety Corp.
stockholders, and 2,500 shares are being sold by A. L.y
mon
shares ($5 par).
Underwriters—By amendment,
•„ August 19 (letter of notification) 14,000 shares ($10 par)
Marlman to all salaried employees. Indefinitely post¬
y Bidders may include halsey,I Stuart & Co. Inc. (bonds
; common stock, offering price $20 a share. Underwriter—
poned.
,
' : Y. i.
only), Bear, Stearns & Co. (stock only), First Boston
Clany M. Seay, Jackson, Miss, will undertake to obtain
Corp., White, Weld&Co.-Kidder, Peabody & Co. (jointly).
Palmetto Fibre Corp>r Washington, D. C.
signatures authorizing subscriptions for the stock to
Offering—Bonds and common stock are being offered In
create- 'capital and surplus for operation of business.
connection with a
compromise recapitalization plan 'v August 16 filed 4,000,000 shares (10^ par) preference
Company is to be organized in Mississippi. .
1
•
stock. Underwriting—Tellier & Co., New York. Price
approved by the SEC, on June 24, 1946, which among
50 cents a share. Proceeds—The company will use esti¬
other things provides for the elimination of all out¬
• *, Mormon Basin Mines, Inc., New York
,r
mated net proceeds of $1,473,000 for purchase of a new
standing debentures and preferred and common stocks,
Oct. 9 - (letter of notification) 50,000 shares
($1 par)
factory near Punta Gorda, Florida, at a cost of about
and for the issuance of $22,500,000 of bonds and 2,300,000
i Common'.
Offering price, $1 a share, y Underwriter—
of new common shares. The SEC has extended to Nov.;
$951,928. It will set aside $150,000 for. research and de¬
For the present, Henry Hartmann, President of the com¬
30 time within which refinancing may be carried out.
velopment purposes and the balance will be used as
pany, a1 registered broker-dealer, will offer the stock
Bids for the purchase of the bonds and the common
operating capital^
for' sale.
Proceeds—for: property payments, construc¬
stock which were to be received by the company Aug. 13
tion of buildings, purchase of machinery and equipment,
Pantasote Plastics Inc., Passaic, N. J.
.
were withdrawn: Aug. 12.
Sale postponed indefinitely^
working capital and other expenses.
./
Sept. 27 filed 60,000 shares ($25 par) 4^ % cumulative
•
Nicholls (Walter J.) & Co., Spokane, Wash.
preferred and 1,352,677 shares ($1 par) common. Under¬
Y *01 '• Morrison-Knudsen Co., Inc., Boise, Ida.; (10/18)
writer—Underwriting arrangements will be supplied by
Oct. 7 (letter of notification) 250,000 shares (5c par)
July 22 filed 249,550 shares ($10 par) common and 70,000
amendment, but it is contemplated that Van Alstyne,
common. ■ Offering price, 10 cents a share.
No under¬
shares of ($50 par) 4^2% cumulative convertible pre¬
Noel & Co., New York, may be one of the underwriters.
writing. For mine development.
ferred.
Underwriter—Blyth & Co., Inc., and Wegener
Offering—Company is making an exchange offer to
&vDaly, Inc.
Proceeds—Selling stockholders are of¬
stockholders of Textileather Corp., Toledo,
O.; The
y Northern Engraving & Mfg. Co., La Crosse, Wis.
fering 149,550 shares of the common and will receive
Pantasote Co., Passaic, N. J.; and Astra Realty Co., New
Aug. 29 filed 70,000 shares ($2 par) common stock.
proceeds from these shares.
The company's proceeds,
York, for the purpose of acquiring the controlling in¬
Underwriter—Cruttenden & Co.
Offering—All shares
together with funds to be provided from the sale of
terests of the companies. Pantasote Plastics will offer •
are issued and outstanding and being sold for the account
$2,000,000 of 3%% debentures, due 1961, will be used to
three shares of its common/ plus % of a share of preof present holders.
retire its certificates of indebtedness, outstanding pre¬
Price—$16 a share. Proceeds—To
ferred, for each share of Textileather common. It will
ferred stock and a portion of its bank loans.
selling stockholders. Indefinitely postponed.
It also will
offer two shares of its
common for
one share of
usfcthe funds for investment in preferred stocks of sub¬
Pantasote common, and 12 shares of its common for
v
Northern Indiana Public Service Co.
sidiaries. Price—Preferred, $50 per share; common, $16
each shares of Astra common. It is proposed that under¬
per' share.
,
Aug. 28 filed maximum, of 384,016 shares of common
writers will offer publicly a maximum of u0,000 shares
stock. Underwriters by amendment as shares will be
of preferred and 250,000 shares of common, of which
yyJSyfcMountain; States.. Power Co.
offered under competitive bidding. Probable bidders in¬
12,853 shares of preferred and 50,000 shares of common
y. June 6 filed 140,614 shares of common stock (no par).
clude Blyth & Co., Inc.; The First Boston Corp.; Stone
y are to be purchased by the underwriters from the com¬
,y Underwriters—To be determined by competitive bidding.
& Webster Securities Corp., and Harriman Ripley &
pany and the balance (which are part of the shares to be
Probable bidders include Blyth & Co., Inc.; Kuhn, Loeb
Co., Inc. (jointly). Of the shares registered, 182,667 are
received under the exchange offer) are to be purchased
&; )Co. and Smith Barney & Co. (jointly); Harriman,
being sold by Midland Realization Co.; 54,426 by Mid¬
from selling stockholders. Proceeds — Proceeds to the
Ripley & Co.; The First Boston Corp. Offering—Shares,
land Utilities Co., and 146,923 by Middle West Corp.
;
■k company will be applied to make loans to Textileather
are owned by Standard
Ga3 & Electric Co. and con¬
and Pantasote for various corporate purposes." ' y; f
stitute 56.39% of the company's outstanding common.
Northwest Airlines, Inc.
/ VY YYv Y V,:
/'• T'JV •*v /•
.

6ct.

4

-

*

—

*

.

•

■

.

,

"

v

Sale Postponed—Standard Gas & Electric Co.

asked for

bids for the purchase of the stock on Sept. 4, but the

,

D.

temporarily postponed,

.

—

v

Muehlebach

(George)

Kansas

Co.,

Brewing

City, Mo.

;

Sept. 25 filed 41,327 shares ($25 par) 5% cumul. par¬
ticipating preferred and 40,000 shares ($1 par) common.
Underwriters
Headed by Stern Brothers & Co., Kan-

subscription to common stockholders of record Oct. 15
in ratio of one additional share for each two shares
Rights expire Oct. 28. Unsubscribed shares will
be sold to underwriters.
Price—By amendment/ Pro¬

;

4
'

v

City.

Offering

—

of

common

New

York;

to

finance

a

expansion

proposed

and to increase working capital.

Murphy

(G. C.)

/

c

.

.

share.

filed

Y

Co., Inc.

ceeds

Co., McKeesport, Pa.

from

corporate purposes.

for other

$197,000

ance

other

the

3,000

13 filed 250,000 shares of common stock (par $1).
Underwriter—Smith, Barney & Co.
Price by amend.* riient.
Proceeds—Redemption of outstanding 4%% pre¬
ferred stock at $109 a share plus dividends. Indefinitely
postponed.
•
y
yy
^ /y-Yy
YZ/yYYY'Yyy :y^/y Y^y
National Alfalfa Dehydrating & Milling Co.,

•'.-■tfuv

Lamar, Colo.

yyyY.-.yv

y

Securities

Co.

Price

by

amendment.

Proceeds—Shares

National Aluminate

Sept. 27 filed
mon

and

an

are

f

out¬

000

Tempora¬
':
,

Corp., Chicago
unspecified number ($2.50 par)

owned

.g £ ;




I > ■; irto .)>

care

loans;

to

pay

General Telephone

by General

and

to

J;

wishes to have available 6,000 shares to take
options which it proposes to give to manage¬

</

* "

$15

y

19

shares
.

filed

are

140,900

shares

ment."

,; i-bc

' •" Y

ii/t vx-t

York. Price—By amend¬

Y;' *,~\Y.

r'._
...

sii i't £

1 /

*
1

Y*.
./.*

exploitation of its
YY/y-v.:;Y'y Y,vYJ;:Y y

Y/,■;

New York (11/25)

;

Aug. 27 filed 60,000 shares of preferred stock ($10 par)
and 75,000 shares of common (par 50c).
Underwriter-:-^
Herrick, Waddell & Co., Inc.
Offering—Company is
offering the preferred stock to the public, while the
common is being sold by certain stockholders.
Prices— >
Preferred, $10

a

share; common, $4 a share. Proceedspreferred will be used to purchase

equipmentj pay bank loans, and other corporate purposes.

being sold by three stockholders. Underwriter

—The First Boston Corp., New

:Y/

Proceeds from sale of

• ~'•

par), common. The

($5

period

share. No underwriting. For

Plastic Molded Arts, Inc.,
.

Corp.

Old Town Ribbon & Carbon Co. Inc., Brooklyn y

Sept.

a

business.

its treasury for

.

services, the options to run over a

and six months and provide that the stock •
may be purchased at $10 a share within 18 months and
thereafter and before the expiration of the option, at /
of two years

cumulative preferred

Reimburse

of

ment for past

com¬

ment. Proceeds—The stock is issued and outstanding and
is being sold by shareholders. Names of the. selling

•

bank

funds previously expended.

shares. Underwriters—First Boston Corp., New York,
Lee Higginson Corp., Chicago. Price—By amend¬

Y Y

in

$937,518 in retirement of its 6%

Y

^stockholders and the number of shares to be sold by each
will be supplied by amendment.

building from

company

Corp.1, and Bosworth, Chanute, Loiighridge &

standing and are being sold by stockholders.
rily postponed.

of loans and to replace

present stockholders on the basis of one share for each y
share held. Price not disclosed although it is stated that

y
■ _
Sept. 11 filed $3,250,000 of first mortgage bonds, 27/s%
series, due 1976; and 35,000 shares (no par) $2 cumulative
preferred. Underwriters — Paine, Webber, Jackson &
Curtis and Stone & Webster Securities, both of New
York. Offering—Of the preferred being registered, 21,000 are being sold by the company and the remaining
14,000 are being sold by General Telephone Corp. Price
—By amendment. Proceeds—Net proceeds to the company will be use to redeem its $1,770,000 of 3M>% first
mortgage bonds, due 1970, at 107to repay $1,450,-

YylS

.

Newark, O.

(letter of notification) 14,164 shares of $5 par
Offering—To be offered for subscription to

common.

The pro¬
to selling

Ohio Associated Telephone Co.

.

Jupe 28 filed 28,960 shares of 4^% cumulative preferred
"stock ($100 par), 250,000 shares of common, stock ($1
par) and warrants for 28,960 common shares (attached
to preferred stock).
Underwriters—Stone & Webster

equipment

Phillips & Benjamin Co., Waterbury, Conn.

*

.

Proceeds—For payment

Sept. 23

postponed.

stockholders. Offering temporarily

/June

will go

shares

other

construction of a building. Busi¬
ness—Manufacture of tires and tubes and tire repair
materials.
,
'
'

ceeds to the

program

YY Y\

.

RFC and to complete

Price, $6.75 a share.
Proceeds—Net pro¬
company from 62,000 shares, estimated at
$350,200, will be applied as follows: About $111,300 for
retirement of outstanding preferred stock; $41,649 to
purchase 100% of the stock of two affiliates, and bal¬
&

being sold by the company. Proceeds—

are

Proceeds together with other funds, will be used to pay
off. $181,909 balance of note held by Schroder Trust Co.,

and

machinery

working capital expended in purchase of

85,000 shares ($1 par) common stock.
Underwriters—Newburger & Hano, and Kobbe, Gearhart
21

-

Y/.-:

Montreal, Canada

Sept. 27 filed 100,000 shares ($20 par) cumulative convertible preferred. • Underwriter—Van Alstyne, Noel &
Co. and G. L. Ohrstrom & Co., New York. Price—$20 a

'

Nugent's National Stores, Inc., New York
June

Y'-;

Pharis Tire & Rubber Co.,

ment and facilities.

plovees at $4.75 each. Price—Preferred $25 per share
and. common $5.75 per share. Proceeds—Of shares ofiered to public. 6,500 share of preferred and 20,000 shares

drilling

purchase

bank loans; purchase of additional equip¬

ceeds—To pay

Preferred and 20,000 shares of
common
will be offered publicly.
Remaining 20,000
shares common will be offered to officers and key emsas

,

held.

—

•

r-v.,

.

Peninsular Oil Corp., Ltd.r

Sept 3 filed 600,000 shares of common (par $1). Under-/
writer—Sabiston Hughes, Ltd., Toronto, Canada. Price—
60 cents a share. Proceeds—Net proceeds-will be used to Y

C.; The First Boston Corp., and Hornblower & Weeks,
Offering—Shares initially will be offered for

New York.

YyY

.

4"-;- •'Y Y'*' '

Sept. 19 filed 271,935 shares ($10 par) common. Under¬
writer
Auchincloss, Parker & Redpath, Washington,

sale has been

.

"r"Y'
* Y-u

"

O
*

Polish

Review, Inc.,

New York

(10/21) .'

,14*

(letter of notification) 2,495 shares of common .
stock" to be* sold at $10 per share. Proceeds, to. increase- y
circulation of Polish Review, Inc: and other legitimate
Oct.

business purposes.

Y

■rt i4.1

"
\ 'l

Y
'.i

i-,*»

AVhtoxH"-**.- •

hvfypjO/i.Y^b'K)*,^-?"••/

vf;.yn ,K'V^5IV.-J
,|lJ'

yolume 164* Number 4534

S ■■■■'«'■

;-V^;-i^•-;.^TM?^.0'>;;'

Vr-'. ;v

i f?H

i

THE COMMERCIAL & FINANCIAL
CHRONICLE
1985
■

^

•

>. Pomona

y; Oct.

iMy

Mining Co., Inc., Hereford, Ariz.

7

(letter of notification) 15,000 shares ($10 par)
stock.; Offering price, $6 a share! No underwriting
For retirement of lease and bond, mill concommon

,v,

f.,

struction,> equipment and labor.

,

^ y,tfv<ji«*i-/vY
:

with interest and reoffer them to the
public.
The pur¬
pose of the recission offer is because the earlier secur¬
ities were not registered with the SEC.

;

v

"

,

•

.

*

be

sold

capital. Offering
temporarily postponed.

at

i-.r

—

'•

,/r'•vh*V«HVV\^7\V;'
Style Industries, Inc., Chicago
7
! •

Portis

-

A

'

Price—The notes
100, the preferred at $100 a
share, and
the common at 10 cents a share.
Proceeds
Proceeds
will be added to general
corporate funds.
;
'7
will

Republic Pictures Corp., New York

.'V

who will re¬

company

ceive

proceeds.

The registration showed

that

the

5 to the extent of

com-

not

changed its authorized capital from 4,000 shares
<$100 par) common to 400,000 shares ($1 par). Each
shares of $100 par common was changed into 100 shares
of $1 par
common, which exchange was consummated
Sept. 23. • •
:
"
v
'
'
'
pany

>

v

Portland

(as amended) 60,000 shares of 5% cumu¬
lative convertible preferred stock (par $25) and 300,000
shares of common
stock, of which 80,000 shares will be
sold to Pacific Associates Inc. at $6 per
share, also an
of

■

capital.

Precision

Parts

.

Co. of Ann

pft

St.

Products Corp.,

Chicago

v <

Read (D. M.) Co., Bridgeport, Conn.
£5ept. 27 filed 100,000 shares (250 par) common. Under¬
writer—Van Alstyne, Noel & Co., New York. Price—

By amendment.

Proceeds—Estimated

net

proceeds

of

$476,362 will be used to pay off a loan from the Marine
Midland Trust Co., New York.
Business—^-Operation of
department $tore.,
A

Red Rock Bottling Co. of

Warren, Ohio

whose

.

•

.

Youngstown,

(10/22)

and warrants for purchase of

$1.50 a common share and
Underwriters—Frank C. Moore &
Co., New York; and Euier & Co., Philadelphia.,For pay¬
ment of plant mortgage, purchase of additional
equip¬
ment and for working capital,
cent

a

warrant.

Reed-Prentice Corp., Worcester, Mass.

+

Oct. 11 filed 120,300 shares of

common

common

Regal Games, Inc., New York
Sept. 27 (letter of notification) 80,000 shares (250
par)
37,100 common stock purchase warrants and
shares subject to such
warrants; and 85,500 shares of

common;

issued

to

organizers

for

cash

which

may

the

N. Y.
Oct. 9 filed 100,000 shares
($50 par) convertible pref erred stock. Underwriters—Hayden/ Stone &
Co., and
Kidder, Peabody & Co.
Price—By amendment,Pro¬
ceeds—Proceeds, together with bank loans, will be used
to increase working capital.
Such funds are deemed
hecessary in view of the additional facilities that com¬
pany intends to acquire and its large backlog of
peace¬
time business.
i■

.

.

'

!

.r-.v-"-'1-..--.
'

••■.

Republic Foil & Metal Mills, Inc., Danbury,
Conn.

'

Sept.

6

filed

$500,000 of 3V2% notes, due 1966; 2,500
3%%' preferred stock (par $100) and
15,000
stock (no par).
Underwriting — No
underwriting.
Offering—The securities being registered
include notes, preferred and common
previously sold to
s,private subscribers for an aggregate price of
$434,384.
The company is
offering to repurchase these securities
shares

of

shares of

v

•

common

common




stock.

pay

outstanding debt to its
factors, balance for expansion. Business—Formed in
1942
to take over and continue the
foreign business of Butler

4

,

:

•,

Seaboard Finance Co.,

Washington, D.
common

stock

C.

(par $1).

Underwriters—Van Alstyne, Noel &
Co., and Johnston,
Lemon & Co.
Offering—Certain stockholders are sell¬
ing 140,000 issued and outstanding shares.

Company is

offering 100,000 shares.

Price by amendment. Proceeds
—From company's 100,000
shares proceeds will be used
to reduce
outstanding bank loans and commercial paper
and for other
corporate reasons.
'

•

are

also

(no par)

cumulative pre¬
Read & Co. Inc.
Offering is subject to>an

Underwriters—Dillon,

preferred.

In

the

"public offering price of the new
preferred, is
share, holders of the old preferred will be
grant¬
the opportunity to
exchange their stock for new

March 27 filed 500.000
shares of capital stock
(par $1>
& Co.
Offering—Price to public bj
amendment.
Proceeds—Net proceeds will be added
to
the general funds and
will be available for
general
corporate purposes. Offering date
indefinite.

^

Stereo Pictures Corp., New York
,(10/23) ■'■>&*■
(leter of notification) 2,985 units of
stock, each

consisting of one share of $6 cumulative
(no par)
non-voting, non-convertible, preferred stock and one

share of common stock
(par 50c). Underwriter—Ayres
Barley & Associates, Inc.,, (165
Broadway, Suite 1717.)
New York. Price
$100 per unit. Proceeds—for working
capital, machinery, equipment, etc.
—

v^4'.

Stern & Stern

Textiles, Inc., New York

Aug. 29 filed 191,000 shares of common stock
($1 par|«
Underwriter—Carl M. Loeb, Rhoades & Co.
OfferingsCompany is offering 51,000 shares and selling stock-

holders

are

shares.

,

Price by amendment.

disposing of 140,000 issued and outstanding

Proceeds—Proceeds from
51,000 shares by the company will be used to
reimburse treasury for funds spent on June 26 to retire
5,000 shares of preferred stock, $100 par. Offering tem¬
the sale of

a

"s

v»'

,

^

"

',

i» f-

'-,N f

-

'*

/

,

"•

•

Stix, Baer & Fuller Co., St. Louis
Aug. 28 filed 102,759 shares
Underwriter—Goldman, Sachs

-

y

"S

stock

common

(par $5)u
Offering—Eight
selling stockholders are disposing of 62,000 shares, and
the company will offer 40,759 shares
initially to its pre¬
ferred and common stockholders.
Price by amendment
Proceeds—Net proceeds from the sale of the
company's
&

Co.

shares will be added to its "building construction
improvement fund." Offering date indefinite.

and

..

t

Street & Smith

Publications, Inc.

July 17 filed 197,500 shares of common stock. Under¬
writers—Glore, Forgan & Co.
Offering—The offering
represents a part of the holdings of the present stock*
holders. Indefinitely postponed.
Swern & Co.,

~

Aug. 28 filed

Manufacturing Corp.

June 14 filed 80,000 shares of
$1.12% cumulative con¬
vertible preferred
stock, series A (par $20).
Under¬
writers—Van Alstyne, Noel & Co. Price
by amendment.
Proceeds—Net proceeds will be applied for the
redemp¬
tion of
outstanding series A convertible preferred stock
ceeds

>44,

Offering temporarily

postponed.

which

C

•

Aug. 29 filed 240,000 shares of

Solar

series

a

"-,i

(letter of notification) 90,000 shares of
common
25c). Underwriter—Hautz & Engel.
Price—$3

.

the

Brands, Inc., New York

porarily postponed.

.

retire

Underwriters—Otis

Sharat-May Co., Inc., New York (10/21)

Brothers.

to

;

ai;e

„

_

Republic Aviation Corp., Farmingdale,

used

Steep Rock Iron Mines
Ltd., Ontario

selling 244,000 shares
registration

effective date of the registration for
officers and directors at $5 a share.
The company also
is selling 200,000 stock
purchase warrants to executives
of the company at 50 cents a
warrant.
Company will
use its proceeds for
general corporate purposes.
Offering
date indefinite.

Proceeds—To

be

unit

days following the
sale to
employees,

share.

share

Oct. 14

underwriters at $5 a share.
% The
stated that 24,000 of the
244,000 shares of
being reserved for a period of four

per

each

—

Underwriters—Clement A. Evans & Co.,
Inc., At¬
Price of preferred $10.75
per share; price of com¬
mon, $5,625 per share.
Proceeds—Company is selling
the 25,000 shares of
preferred to the underwriters at

15

For

preferred plus 50c
D stock one share

—

Inc., Atlanta, Ga.

stock (par

privately at 25 cents each. Underwriter—W. H. Bell &
Co., Inc., Boston. Proceeds—For machinery and
equip¬
ment, sales offices and working capital.

ed

lanta.

a

Co„

pre¬
ferred at the rate of 1 l/10th
shares of new preferred for
each share of old
preferred.
Price
By amendment.
Proceeds
Company will use net proceeds from
any
shares sold to the
public to redeem all
unexchanged
; shares of old
preferred at $110 a share.

stock.

Oct.

new

of series

Blyth & Co.

$100

cumul. converti¬
ble preferred stock and
244,000 shares ($1 par) common

be

integral part of this offering. Offering
share of common; one cent a warrant and
organizational
shares
which
latter
were
sold

following basis:
share of

and for each share

event the

Aug. 7 filed 25,000 shares {$10 par) 5%

•

Payson &

Offering —
offer of exchange to
holders of company's
200,000 out¬
standing shares of $4.50 cumulative

on or before
April 30, 1947,
per share and the
remaining 20,000 shares are
being sold by two stockholders. Price to the
public $12
per share.; Proceeds—Working
capital, purchase equip¬
ment and plant, etc;
■ *

are

the
one

Sept. 6 filed 220,000 shares
ferred

at $10.50

an

~

■

shares.

sale to F. G. and P. F. Searle

share and stockholders

4%%'

offered for ex¬
preferred and series D

on

Standard

Corp., New York
175,000 shares of capital stock (no
par).
Underwriter—George F. Breen, New York. Offering—
Of: the total being offered
company .is selling 155,000
shares of which 9,524 shares are
reserved for possible

a

M.

E"

Investment

stock

C

'

series

:

and

the

par)

Underwriters—H.

Proceeds—Will

Sardik Food Products

to

preferred.

($100

stock at $103 plus
dividends and series D stock at
$105
plus dividends. Business—Public
Utility.

are

working

Scrip to,

City Water Co.

of new preferred
plus $1 in cash and a
$1.25 dividend
payable Jan. 1, 1947. Shares not
issued in exchange will
sold to underwriters for
public" offering at $104 a
share.

May 29 filed

price, $1.50

;

the

(Mo.)

8,827; shares

be

common stock.
Un¬
derwriters—Dunne & Co., New York.
Offering—Price
by amendment.
Proceeds—Nat E. Heit, President and
director, and Harry Preston, board Chairman,
Secretary
and Treasurer, will receive net
proceeds as selling stock¬
holders. Offering date indefinite.

considered

■

stock

series

in cash

July 24 filed 80,000 shares ($1 par)

$10

stock (par $2.50).
•Underwriter—Tucker, Apthony & Co.,* New York, Price
—By amendment. Proceeds—The shares are being sold
by stockholders who will receive proceeds. BusinessProduction of plastic injection
molding machines.'

common

securities

filed

preferred

of

at

company owns 25,000
The balance of proceeds will be
used io restore

125,000 additional

Offering—Price

common.

one

5%

subsidiary, for redemption
Both

16

Co., Portland Me. and The
Moody
Springfield. Offering—Stock will
be
change to holders of series C
6%

cumulative

capital.

Aug. 16 (letter of notification) 199,000 shares (50c par)
common

Oct.

unspecified amount will be

preferred.

Springfield

cumulative

Sait-Nap-Pak Mfg. Co. Inc., New York
Graphite

r

,

.

$52.50 a share plus accrued dividends.
In addition, the
company will apply $2,675,000 of the
proceeds as advances to Alabama
Pulp and Paper Co., of

(Colo.) Amusement & Recreation Corp.

bushings and other products.

>

an

advanced to Taggart Corp., a
its $2.50 cumulative

of

(letter of notification) 2,000 shares ($100 par)
€% cumulative preferred and 750 shares ($100
par)
common.
Offering price, $100 a share. No underwriting.
For equipment, working capital and other
expenses.
Randall

'££0

■■

d

.

•

pro¬

ceeds will be used to redeem
company's 5%

redeemable

Oct. 15 filed 100,000 shares ($1
par) common. Under¬
writer—White, Noble & Co. and Smith, Hague & Co.,
Detroit. Price—$3.50 a share. Proceeds—Net proceeds
v
go to selling stockholders.
Business—Graphite bronze

'}

filed 375,000 shares
(par lc) common stocfe.
Underwriter by
amendment.
Proceeds—To repay RFC
loan, to buy Canton Mills, Inc.
and for
working capitaL
Price by amendment.
t
•
'
®

Regis Paper Co., New York

prior preferred stocks and

Oct. 8

#

}

y.y- ',.l:y y;-\

Soya Corp. of America

;

-

Underwriter—To be supplied by amendment.
Probable
White, Weld & Co. Offering—Terms of
offering and price by amendment. Proceeds—Net

Offering temporarily postponed.

Pueblo

development.

v'M'■

underwriter,

reimburse treasury for sums spent in acquisition of the
electrical division plant of the company, $30,000 for con¬
struction of space for executive offices in the
economy
baler plant, and the balance will be deposited with
gen¬

•

Hurt, Tulsa, Okla., and George A.
Lee, Chicago.
Purpose—For mine

111.

Sept. 27 filed 150,000 shares ($100
par) first preferred.

Noel & Co. and associates. Price by amendment.
Proceeds—Of the net proceeds, $250,000 will be used to pay
3% notes held by National Bank of Detroit, $75,000 to

eral funds.

—-Walter
■'

Arbor, Mich.

July 5 filed 75,000 shares 5% cumulative convertible
preferred stock ($10 par). Underwriter—Van Alstyne,
I

-

Southern Arizona
Mines, Inc., Casa Grande, Ariz.
Oct. 9 (letter of
notification) 4,400 shares ($10
paf)
capital stock.
Offering price, $10 a share. Underwriters

Rowe Corp., New York
July 29 filed 100,000 shares common stock.
Underwriters
—Hayden, Stone & Co. Offering—The selling stockhold¬
ers, who include Robert Z.
Greene, President, are offer¬
ing the shares to the public
through the underwriters,
for their own account.
Price, by amendment. Offering
date indefinite
1'

shares for conversion

—

\

-J.;:*:

.

.

Aug. 28

preferred. Underwriters
First
California
Co.;
Scherck, Richter & Co.; Weeden & Co.; Allen & Co., and
Kauscher, Pierce & Co. Offering price, preferred $26.50
per share; common, $7.50 per share.

-

■

r

—Net proceeds to the
company will be added to working

June 14 filed

common

>:

..

Reynolds Pen Co., Chicago
May 4 filed 400,000 shares of common stock
(no par),
of which 100,000 shares are
being sold by company and
300,000
by
stockholders.
Underwriters—Names • by
amendment. Offering—Terms
by amendment. Proceeds

(Ore.), Transit Co.

undertermined number of

share for each five held. Issue
will

one

underwritten..

/

'•

■.

•

r

,

be

/•,

one

and

be offered to the public and 10,000 to
employees of the

7

<.

offered to common stock¬
holders for
subscription at $25 a share in the ratio of
preferred share for each five
shares of common lieM
unsubscribed shares will be
sold to underwriters at sahie
price. Price -— Public
offering price of unsubscribed
shares by amendment.
Proceeds—For expansion of plant
facilities and for
additional working
capital. Offering
postponed.
-

originally filed July 31 covered 184,821
cumulative convertible preferred
($10 par),
277,231 shares (50c par) common stock, with
Sterling,
Grace & Co. as underwriters.
Company has decided to
issue 454,465 shares of common stock
only, which will be
offered for
subscription to stockholders of record
Sept.
shares of $1

company. Price—Price to public $6.50 a share. Price to
employees $5,525 a share. Proceeds—Shares are being
sold by four stockholders of the

,

Manufacturing Co., Detroit, Mich.

Sept 3 filed 40,000 shares
($25 par) 5% cumulative con¬
vertible preferred.
Underwriter—Ames, Emerich & C6.,
Inc., Chicago. Offering—To be

Registration

.

■'/

Soss

;

Sept. 27 filed 110,000 shares ($1 par) common. Under¬
writers—Brailsford & Co., and Shillinglawy, BOlger &
Co., Chicago. Offering—Of the total 100,000 shares will

■{.

■■

facilities in the amount of
$600,000; for additional inven¬
tory amounting to $400,000. and
for additional
wonting

not converted into

will

be

used

for

common

stock.

additional

Such pro¬

manufacturing

Trenton, N. J.

195,000

shares

/\\
stock

common

(par $1).
Offering—Com¬
eight selling stock¬

Underwriter—C. K. Pistell & Co., Inc.

is selling 45,000

pany

holders

shares, and
disposing of the remaining

are

price—$10.50
sold

by
!

share.

company

initially..
;

a

/
" 7

Proceeds—From

will be

applied to

150,000 shares,
45,000

shares

working

capital

;-v:./
"

(Continued

on page

•

;

-'.v

1986)

r

THE COMMERCIAL &

1986

(Continued from page 1985).

■■•.-/,

•

;j

by Allen & Co., New York, with Shea as underwriter.

registrant

has

an

"j

**

...

,

i

v

.

1 '•* V

'■ J. v v.,'.

•/.

**•>/• V

'•

•>

Velvet Freeze, Inc.

Oct.

New York

tures; balance for working capital.

Oct. 8
mon.

the

in

•

postponed*

White's Auto

building which it

The issuer owns land and

to convert into 14 apartments which will
proprietary leases to the purchasers
shares to be offered.
Underwriters—Rachelle

proposes

leased
the

under

be
of>
A.

sidiary, retire loans from banks and from White's Em¬
ployees Profit Sharing Trust, and for additional working
capital. Offering date indefinite.
v
* v

the company,

^

*

,

United Benefit Fire Insurance

<

Oct.

Co., Omaha, Neb.

50,000 shares ($10 par) common. Under¬
None. Price — $30 a share. Proceeds — The

filed

7

writing

—

stated that $500,000 of the $1,495,000 proceeds
constitute the capital of the company, and after

company

will

deducting

$5,000

estimated

expenses,

$995,000 as surplus.

y

Cincinnati, Ohio

United States Shoe Corp.,

Aug. 25 filed 24,000 shares ($4 par) common. Under¬
writer— Benj, D. Bartlett & Co,, Cincinnati. OfferingShares will be offered to the public by seven stock¬

holders, who will receive the entire
Price by amendment. Offering postponed

holders at the rate of

net proceeds.
indefinitely.

;

Mich.

■

indeterminable at present.

plant facilities. Offering date

.Corp,!

sold

Co., Portland, Ore.
; V
Oct. 4 filed 14,000 shares ($100 par 2% cumulative Class
A preferred and 2,000 shares ($100 par) 2% cumulative
Class B preferred. Underwriters — None. Offering —
Stocks will be offered for sale to customers and former

Pierce,

{Power & tight Co., Madison, Wis.

competitive
Probable

Fenner

&

include Merrill Lynch,

White,

Beane;

Weld

&

Co.;

Glore,

(jointly);

Harriman Ripley & Co.

Co., and

Proceeds-

top holding company of the System/and part by pref-v 7
erence stockholders of North West Utilities Co., parent
of Wisconsin, who elect to
common

will

which

of North

dissolution

sell such shares of Wisconsin

be distributed

the*

ta them upon

West Utilities Co.

Yoiande Corp., New

'

*'

-

York

Sept. 17 filed 50,000 shares ($1 par) common stock.
Underwriters—Headed by E. F. Gillespie & Co.', and in-'
eludes Childs,
eludes Childs. Jeffries & Thorndike. Tnr.
Thorndike, Inc., New Vork-'
York;
Courts & Co., Atlanta;

Irving Rice & Co., St..Paul, and

Maxwell, Marshall & Co., Los Angeles and New York.

Price—$io

share.
Proceeds—Estimated net proceeds
together with $87,125 from the sale of 10,250
shares to J. William Anchell, Vice-

a

of $400,000,
additional

common

President/at $8.50 a share, will be used partly for the*
purchase of 10,995 shares of capital stock of Island!
Needlework, Inc., of Puerto Rico, out of a total of 11,000-'
outstanding shares.
The shares will be purchased for a:
total price of $220,522 from Mrs. Gertrude S. Korsh, sister
of Herbert L.
Miskend, President and Treasurer of
Yoiande Corp.
Of the remaining proceeds, $68,750, plus
dividends; will be used to redeem at $110 a share the

Inc., Seattle, Wash.

Sept. 2 filed 245,000 shares ($1 par), common. Under-writer
Auchincloss, Parker & Redpath, Washington/
—

share. Proceeds—Will be used for pay¬
ment/of various expenses, repayment of bank loans,;
purchase of equipment and for working capital.
D. C. Price—$7 a

company's 625 shares of $100 • par 6% cumulative pre¬

^

v

Underwriters—By

bidding.

bidders

Part of the shares are to be sold by Middle West Corp.,

funds.

Water Service Co.

held by, the- Reconstruction

off bank loans of $600,000, and tot

The Wisconsin Co., and Dillon, Read & Co.,

"shares will be sold to underwriters. Price^-By amend/;;
ment. Proceeds—To reduce bank loans. Offering., tem¬

West Virginia

at

amendment.

Westinghouse Electric Corp.

Valsetz Lumber

pay

May 21. filed. 550,000 shares ($10 par) common stock to;

Aug. 14 filed 1,647,037 shares ($12.50 par) common.
Underwriter—Kuhn, Loeb & Co. Offering—Stock will be
offered for subscription to holders of outstanding preferred stock and common stock in ratio of Ys share for
each share of common or preferred held. Unsubscribed

West Coast Airlines,

obligation

contract

Wisconsin

Racine, Wis.

proceeds to redeem 645 shares of its prior

Light Co., Escanaba,

share for each two shares held;

Proceedsi—-To retire a conditional

working capital.

preference stock at $110 a share- and accrued dividends,;
and 1,386 shares of second preference stock at $100- a
share and accrued dividends:
The balance will be

.

July 18 (letter of notification) 5,500 shares of 4^4% first
preferred stock series B ($50 par). Offering price, $50
a share.
Underwriter—First of Michigan Corp., Detroit.
Proceeds—For enlargements and improvements of power

■

sales

Finance

porarily postponed.
Upper Michigan Power &

one

Price -by amendment;

Forgan &

it will classify

*

H, Rollins & Son's,
Company is initially offering the stock to its commort

and by shareholders.
The respective
amounts will be supplied by amendment,
Brice by.
amendment.
Proceeds—Company will use about $210,-

added to general corporate

common

Underwriter—E,

company

000 of its net

Mich.

stock (par $1),
Inc. V Offering—*

Aug. 28 filed 119,337 shares of

be

the

.

,

Winters & Crampton1 Corp., Grand vi He,

estate at Red Bank, N. J,
Webster Electric Co.r

Stores, ?Inc.

75,000

offering 75,000 shares of preferred; the 50,000 shares !common are outstanding and being sold
by lour .in¬
dividuals for their own account. - Price by amendment!
Proceeds—Proceeds from the sale of the preferred stock
will be used to provide funds for a wholly-owned sub¬

Sept. 3 filed an unspecified number of shares of com¬
mon stock
(par $1). Underwriting—Loewi & Co., Mil¬
waukee.
Offering—The shares are being sold both by

Pro¬
E. J,
contract whereby they trans¬
and building now owned by

Knight and Edward J'. Knight, both of New York.
ceeds—Proceeds will accrue to R. A. Knight and

Knight under terms of a
ferred title to the land

filed

of

Inc.y Red Bank, N. J.

39,948 shares of capital«
Offering price, $3.45 a share.
Underwriter—,
Ray H. Stillman, Eatontown, N: X,' Mil act as selling
agent.
Purpose—To acquire all of * the * equity iri War¬
wick Gardens, Inc., which owns Certain improved real

29

is

(letter of notification)

8

'

shares $1 cumulative convertible
preferred stock ($20 par) and 50,000 shares common
stock (par $1).
Underwriters—First Colony Corp. and
Childs, Jeffries & Thorndike, Inc.
Offering—Company
Aug.

stock, ,//

(letter of notification) 124 shares of no par com¬
Offering price, the price of each unit, which vary
number of shares, will be between $6,000 and

$11,000.

Warwick Apartments,

Oct.

New York

East 78th St., Inc.,

by amendment. Price

Sherck, Richter & Co., and Straus & Blosser. Offering—
Of the total, 200,000 shares will be sold through the
underwriting group at $8.50 a share, and 3",500 shares

■

10

Names

—

by amendment. Proceeds—Will be used to redeem
$625,000 4% bonds and $638,600 first and second deben¬

.

•

Underwriter

July 24 filed 203,500 shares of stock which are to be sold
for the account of certain stockholders:; Underwriters—

stock (par 50 ,: will be offered to certain employees at $7.50 a .share.
Offering postponed indefinitely.
Underwriters—Hirsch & Co.
Offering—Com¬
pany is offering 75,000 of the shares registered.
Eleven
Virginia Dare Stores Corp., N. Y.
stockholders are selling 135,000 issued and outstanding
July 3 filed 90,000 shares of 5% cumulative convertible
shares, for their own account.
Offering—Price $6.75 a
preferred stock, ($10 par). Underwriters—Newburger
share.
Options—Selling stockholders are also selling to
& Hano; Kobbe, Gearhart & Co., Inc., and D. Gleich Co.
the underwriters at 7 cents per option warrant options to
Offering—Underwriters propose to offer 'the shares in
purchase 18,000 shares of the issued and outstanding
part to the public and the balance to certain dealers,
common owned by them.
They are also selling to Hall-,
among whom any underwriter may be included, at the
garten & Co.. for $1,500, plus $360. as a contribution
public offering price, less certain concessions. Price $10
toward the expenses of issuance, options to purchase an
per share. Proceeds—It is presently ; anticipated that
additional 18,000 shares of the issued and outstanding
$437,500 will be used to acquire the capital stock of Wil¬
common.
Proceeds—Net proceeds for the sale of com¬
liams Stores, Inc., and Levitt Millinery Co.
The bal¬
pany's 75,000 shares will be used for increasing working
ance
will be applied to general
corporate" purposes.*
capital, with a view to entering the Frequency Modula¬
Offering temporarily postponed.
; ' *'
tion and Television fields at an advantageous time. Of¬
fering date

80,000 shares ($5 par) 50c cumulative con¬
preferred stock and 100,000 shares ($1 par)

common.

210,000 shares of common

filed

Aug. 1
cents).

7 filed

vertible

■

1

'

•

Wheeler, Osgood Co., Tacoma, Wash.

-s

,

Offering—Price $6 a share for
preferred and 75 cents a share for common. Underwriter
—Amos Treat U Co.
Proceeds—For payment of notes,
mortgages and for general corporate purposes. Offering
temporarily postponed.
' 1
*
1 •
Radio Corp.,

account and the remaining 20,000 shares are being sold

exclusive sales contract
whereby all the lumber produced by the registrant will
be sold to Templeton. Price—$100 a share for each class
of stock.
1 *
'
'
'
the

whom

stock (par 50c).

Tele-Tone

tr.

customers of the Herbert A. Templeton Lumber Co. with

July 12 (letter of notification) 44,300 shares of ($5 par)
cumulative convertible preferred stock and 44,300 shares
common

Thursday, October 17, 1946

,

Inc., Saybrook, Conn.

Taylor-Graves,

FINANCIAL CHRONICLE

ferred

Aug. 6 filed 46,400 shares (no par) common;. Under¬
writer— Shea
& Co., Boston.
Price, by amendment.
Proceeds—Shea & Co. is selling 26,400 shares for its own

stock.

The

balance

will

be

used

to

reimburse

the company'^ treasury for previous expenditure land for'
additional working capital,
v
"
'
• - - "1

Prospective Security Offerings
(NOT YET IN

REGISTRATION)

INDICATES ADDITIONS SINCE PREVIOUS

our

ISSUE

[EDITOR'S ^OTE—Due to the paper situation, we are limiting
coverage of "prospective" financing in this issue to only those

during the past week, thus
reported in previous
issues.
We regret the necessity for this action and will resume the
usual complete tabulation as early as circumstances permit.]

undertakings which have come to hand

omitting the items of this nature which can be

•

•

| American Telephone & Telegraph Co.

Oct.

16

stockholders

voted

to

create

a

new

issue

of

$351,000,000 23/4% convertible debentures due IS1!!, and
approved an increase in the authorized common shares
from 25 million to 35 million. Debentures are to be of¬
fered to shareholders of record Nov. 8 in proportion of
$100 debenture for each six shares held. Up to 2,800,000;
shares of stock may be issued and sold to employees. -

Atchison Topeka & Santa

to exceed - $2,352,000;

Fe Ry. (10/29)

Bids will be received by F; G. Gurley at

Boulevard, Chicago, up to noon (CST), Oct. 29, for
lowest interest rates at which bidders will provide
for

the

•

funds

to exceed

Baltimore & Ohio RR.

(1) not

$2,904,000;* (2) not to exceed $927,800; (3) not

First California Company

v

Corporate Securities
Underwriters and Distributors

Blair & Co.
INC.

Blauner'sy Philadelphia

publicly to refund the $3 preferred and to provide work¬
Our Sixteen

Serve

Offices

California and Nevada

ing capital." Probable
Co.

underwriter, Van Alstyne, Noel

•

CHICAGO

BUFFALO

PHILADELPHIA

PITTSBURGH




CLEVELAND

Central of Georgia Ry;

Bids

Head Office: San Francisco

.;>/

./

■

NEW YORK
■OSTON

«

(1) to refund the $3 cumula-'"
tive preferred stock with a new issue of 150,000 shares"
of convertible preferred,' to be issued in series; (2)"
changed the par of the common from no par to $3 par;*'
(3) split the common on a two-for-one basis. An initial
series of 30,000 shares of preferred may be offered
8 stockholders voted

Oct.

INCORPORATED

the

Co., Inc., and Salomon Bros; & Hutzler. / '
t

State, Municipal and

(10/24)

purchase ^of $7,620,000; equipment trust J
certificates/series R, to mature in 10 equal instalmentsof $762,000 each on Nov. 1, 1947-1956 will be received"
up to 12 noon, Oct. 24, at company's office, 2 Wall Street, /
New York.
Probable bidders, include Halsey, Stuart &>
;•

United States Government,

for

Bids

financing the acquisition of railroad equipment under

conditional sale agreements, in five lots, viz.:

(4)' ilot to exdefed; $2,024j00(L Mahcl' /

(5) not to exceed $2,744,400.

80 E. Jackson

for

the

r:

/■

,

purchase of $2,300,000 equipment trust
be received by the trustee, Merrel P/'

certificates will

ST. LOUI8
^

;

(10/29)

Callaway, up to 12 noon -(EST)r Oct. 29, at main office

W„r.

Volume

Number 4534

164

of Chemical Bank

THE" COMMERCIAL & FINANCIAL
CHRONICLE.

&

Trust Co.;
bidders include Salomon. Bros. &
& Co. Inc.
•

V

New York.

Probable,

:

Hutzler; Halsey, Stuart

•.

V.;!,,' ■;>/„

Ry»J

Chicago & North Western

Oct. 10 company applied to ICC lor;

r'

Interstate Rower.Co.

Smith, Barney & Co. (jointly); the First Boston
Corp,
Glore, Forgan & Co, (jointly) and Halsey, Stuart &
(bonds only),.
/*',••

Co. Inc.

bonds ■ and

initially $19,400,000 new first mort¬
•
Philadelphia Electric Co.
>■.
j
3,000,000 shares ($3.50 par) common
stock to be sold under competitive
Oct.
14
reported company ready to undertake new
bidding. • Probable
bidders, The First Boston Corp.; Halsey, Stuart & Co.
financing in amount of $60,000,000, to be divided into
Inc. (bonds only); and
Dillon, Read & Co.'Inc,- (stock- $30,000,000 bonds and $30,000,000 preferred stock, to be
sold under competitive
only).
t"*
r
(
f
bidding.
Probable bidders in¬

authority, to issuey

.

clude
•

and Middle West banks.

Kingdom of the Netherlands'

,Oct, 4,
would
as

i'

-

.

stating

as

like to

soon as

that

float

the

bond

a

Netherlands

issue

market conditions

are

in

satisfactory.

States

•

The mat- '

and

.

tificates, dated Nov. 1, 1946 - and due serially, Nov. 1, ;
1947-58; will be received by the company, up.to Oct ^3..
Dividend rates
'v

V

•

/\{*'

bt -J

v

•

*

are
'it,

-

,'j

•

;|v f

1

«'?

Illinois Cities Water Co#.

Nw

.

•

^ork Statd Electric & Gas

a

issue

new

new

of

..

plans

to

refund

series of bonds

bonds

28

hearing

'

'

scheduled

before

SEC on proposed
of Peoples Gas Co. and Atlantic City Gas Co,
(both subsidiaries of Public Service Corp., of New Jer¬
sey),
New company, subject to satisfactory market

merger
/

Corp#

conditions, would sell $3,000,000
refunding purposes.

bonds for

companyr advised the SEC that it proposes to
$13,000,000 1st mtge. bonds due 1976, interest not
to exceed 2% % and.
$12,000,000 preferred stock, dividend

^

The

South Jersey Gas Co.

Oct.

issue

-V

serial notes.

it

Corp.; Blyth & Co., Inc.; Halsey, Stuart & Co, Inc.;
Dillon, Read & Co. Inc. and Harriman Ripley & Co.

Oct. 10

,V,

Corp.

that

is expected
through competitive bidding. Registration ex¬
pected about Oct. 25.1 Probable bidders: Lee
Higginson

'

iii the fbids.

to. be; specified

announced

company

to be sold

^.

.

4

$19,131,000 4Vk% bonds through

favorable, he said. The
(10/22) ; total amount
reported is in neighborhood of $50,000,000
Company will receive bids for the purchase of $4,250,000 ; and
Kuhn, Loeb & Co. are mentioned as possible un¬
equipment trust certificates up to 12 noon EST Oct. 22
derwriters, ■ ;
1
;;,
i:.
•
at office of J. G. Enderlin; Treasurer, Room 2008, 140
Cedar St., New York 6, N. Y.
Interest rate is to be spe- ,? •
Lithomat Corp.
•
cified in the bid.
Probable bidders .include Halsey,. .•
Oct, 14 William W, Garth, Jr., informed stockholders;
Stuart &* Co. Inc. and Salomon Bros. i& Hutzler.
that corporation is
going to need additional capital
•
Gulf, Mobile & Ohio RR. (10/23); | When, and how much, cannot be determined at this
time, hOstai^.; •
Bids for the purchase^ of $2,406,000 equipment trust cer¬

'Delaware Lackawanna & Western RR.

r

Safe Harbor Water Power

Oct,

ter has-been discussed with investment
bankers in New
York and the reaction has been

f

(bonds only).

First Boston Corp.; Halsey, Stuart & Co.
(bonds only); Morgan Stanley & Co.; W. C. Langley &
Co., and Glore, Forgan & Co. (jointly), and White, Weld

•

Government

the United

The

& Co.

-

DriJPieter/Lieftine^, IVKnister of Finance,;was

reported

Circle Wire & Cable Co.

bet 16 early registration of common stock expected, with
First Colony Corp* as underwriter. >
*

1987

and

•

would issue

gage

*

,

1/-';,; i':.v.i:"

.

Get. 9 amended reorganization
plan, with two alternativc,proposals filed.with SEC under altered plan, com¬
pany

Y'

$10,140,000 equipment trust certificates, to be dated
Pec. 1, 1946, and due serially in equal annual instal-*
meats,Dividend rates to be specified in bids; ? Prob- :•
able bidders include Otis & Co.; Salomon Bros. & Hutz- #
ler; Harris, Hall & Co. (Inc.); Halsey, Stuart & Co. Inc.,

•

•

4

Studebaker

.

new

first

V

.

,

.>

mortgage
' -

Corp.

rate not to exceed 4%, the
proceeds to be used to retire

Illinois Power Co.,the property *
supplying water .id ,Mt. -Verizon, 111. and ;has contracted v .to purchase the company furnishing water service in ;
Edwafdsville; III. Financing plans pot yet announced. .
pany to purchase, from

j

f

$13,000,000 3%%.bonds and $12,000,000 5.10% preferred c
stock. Plan also provides for issuance of an additional

and sale of up to 200,000 shares of
preferred stock
for the purpose of increasing
corporate capital. Probable
underwriters include Kuhn Loeb &
Co., Lehman Brothers

$3,000,000 preferred to be applied against cost of
construction. Probable bidders include

When tenders werd epened it

appealed that
.<

Nov.

a

the

;

road

/through

of );

an

2.2958%,

.

while

the bid pL a

error

sources say.

$ )ing t^ilt be
:

second group headed by Morgan

Stanley

Co.

&

The market success

tended

the

Pacific

Telephone

and

the

H.

like

acted

recent

encounter

Co.

has

The

in

turnabout

the

rules

"red-herring" prospectus.

done in two separate

£>v\

■

a

snag

hours

some

an

market, of

Co. worked

&
a

basis

cost

of

2.2945%. Accordingly the bonds
/were/) awarded
to
the
latter '<

bourse, has exerted its. influence

Securities

-

nr

and

;

'•* V

Reversing the Field

000,000

Sale of Duluth, Missabe & Iron

Railway's

Range

serial

new;

brought

on

Plans

i

Tuesday,

in the annals of

but

HELP WANTED

Company

competitive bid¬

TRADER WANTED
A

large
opening

The

/

Trader Available

Experienced
desires
lished

over-the-counter

connection

firm.

with

well

for '

trader in

DIVIDEND, NOTICE

v

The Board of Directors

organization

today the fol¬
lowing regular and extra

been

33 years old.
Commercial de Financial

dividends:
$1.25

share for the fourth
of 1946 upon the $5
Stock, payable De¬
cember 16,1946to stockhold¬

■■

New York

8, N. Y."

A

quarterly

A regular dividend

of $1.00
extra dividend of $ 1.00
share upon the Common
Stock, payable December 16,
1946 to stockholders of rec¬

:

.

—

prompt and satisfactory
excellent correspondent.

decisions

abstainer, and trust-worthy in

valuable

thereto.

in

experience
modern

as

j

every

any

If

a

clean

and

orderly

circumstances.

interested

in

life

*

..."

r




at

the

close

of

business

November 1, 1946.,

Detroit, Michigan,

Geo.

Evans,

October 15* 1946

)Secretary

INCORPORATED

Name

in Rubber
Fourth

225

Avenue,

New

York

3,

N.

AT £

meeting of the Board of Directors of the American Woolen
held today, the Plan of Recapitalization approved
special stockholders meeting
July 17, 1946 was declared
effective. *
V

jf\Company

Wentworth Manufacturing

at a

declared

a

dividend

and ;: one-half

methods

and

C)

and

.

be

t.

.

depended

Secretary.

DIVIDEND

pertaining

..

upon

under

.

an

initial

quarterly dividend of $1.00

share on the $4.00 Cumulative Convertible Prior Preference
Stock, payable December 16, 1946 to stockholders of record
December 5, 1946.
The Directors also declared a dividend of $12.00 per share on

coordinator

details

was

The Board of Directors declared a dividend of $58.50 per share,
representing the entire accumulated dividends in arrears, on the
undepo&ited 7% Cumulative Preferred Stock; payable December
12, 1946 to stockholders of record December 3, 1946. .This sum
hasi been deposited with the Dividend Disbarsing Agent* •

The Directors declared

-

of Pfeferrisi Stbck under the PIan

per

JOHN E. McDERMOTT,

A

NO.

dividend

Cents

can

,

Checks will be mailed.
-

^epdsits

extended to October 31*. 1946.

^

22, 1946 to stockhold¬
Of record at the close of

...

and

Solicitation of

of

cents

Common Stock, payable
record December 5, 1946.

JOHN MORRELL & CO.

personal interview, please write Box S 1018
Com¬
mercial & Financial Chronicle, 25 Park Place New York 8.
a

ADDING

COMPANY, payable De10, 1946, to shareholders of

Company

Greatest

Agreeable personality, with training and ability to handle difficult
problems, and placate diversified minds and individual .desires.
Leads

BURROUGHS

extra

John

October

Morrell

31,

&

1946,

of

($0.50)

Fifty
plus an

dividend of Fifty

record October

the capital
stock
Co., will be paid
to

The holders of $4.00

69

Cents ($0.50) per share
on

_

of

>,

the
December 24, 1946 to stockholders of
>

,

Cumulative Convertible Prior Preference

Stock wishing to convert such stock into Common Stock in the
one share of Prior Preference Stock for. two shares of

ratio of

Common Stock must send in their certificates for conversion on
or

on

before December 5, 1946 in

order to receive the above dividend

the Common Stock.

stockholders of

11, 1946,

as

a

the

cember

f The

•

respect.

administrator

an

business

'

upon

American Woolen

business November 1, 1946.

important

on

'

.

advanced

($0.10)

cents

declared

™pr

vember

Has been Executive head of important financial
enterprises.

had

ten

record1

of

JAMES L. WICKSTEADv/ Treasurer ■ /

By W. D. SHILTS, Secretary

Akron, Ohio, October 14,1946.

reason
of long years of experience in the Securities
business,
fully capable of successfully making satisfactory
adjustments of
Stock*, Bonds and Real Estate investments.

Has

of

of

been

ord at the close of business
November 15,1946.

By

and is

dividend

an

is

Alert mind,

has

stock

$0.45 per share has
been declared on the stock, payable December
10, 194G, to Stockholders of record as of the
close of business November 16, 1946.

(12%c> per share on the out¬
standing common stock of the
Company, payable on No¬

and lighten the business burdens of
any

fjhakfng
an

share

B>ptnttt l&eUpgg

of record at the close of
business November 15, 1946.

Address Box 40

P: OC Box 226, Church St. Station

'■I

—AVAILABLE

and is

dividend

MACHINE

ers

ers

matters

DIVIDEND
A

per

The Board oiDirectors of

i

.;;;//:

High-Class Confidential Executive Secretary

Capable of

181st CONSECUTIVE CASH

Large,

advised

.1

York

over

Burroughs

Preferred

twelve

Ready and able to take,
of large affairs.

McGraw

Secretary•Treasurers

Compiany

man

of

quarter

has

/

E HAWKINSON,
Secretary and Treasurer.

of this advertisement,

Married,

Bo* L1017,
Chronicle, 25 Park Place, New
8, N. Y.
+..... 'r./vv; ••

Judfsoir

corporate trad*

has

Directors

October 19th.

has declared

hag dept. Give full details. Our

trader

estab¬

W

October tlv 1946.

Company have de¬
clared a quarterly dividend
of
500 per share, payable
November 1, 1946, to holders
of common stock, of $1 par
value per share, of record

mwAEU

experienced

an

their

1940,

Electric

has

investment house

the

DIVIDEND NOTICES

,

SITUATION WANTED

one-

on

declared, payable December 5,

'

The Goodyear Tire & Rubber Co.

ding for securities.

share

per

stockholders of reoord at the close of
business November 21, )946.. Transfer books
will not be closed. Checks will be mailed,

re-

per

said to call for the

are

been

Dividend Notice

and

sale, in competitive bidding, of

situation unprecedented

a

securities,

new

yet definitely set;

$19,200,000; of

bonds,

in

date of prospective issuance is not

.

eighty-one and

cents

to

'

.*1

MFG. CO.

3^% • Cumulative Convertible Preferred
Stook, $100 par value of this Company, has

McGraw Electric

j-.

Exchange

ments of firms concerned with

-

group
which
then
reoffered
Rapid absorption of the Coast
them at 100 to yield
1.15 to
telephone company's
$75,000,000
2.50% according to maturity.
of- new monhy debentures, and of
the preferred and common shares
Philadelphia Electric
of the big food processing t firm
brought
considerable
This company is reported push¬
lifting of
fagging spirits ihrough the in¬ ing plans for new financing which
is expected to run to about
dustry.
$60,-

HtIS* CHAIN IRS
PREFERRED DIVIDEND NO. I

quarter

Earful

i*■

culation

Morgan Stanley
out actually to

m)

DIVIDEND NOTICES

_

"" •'

.i

.

DIVIDEND NOTICES

1

fig¬

It developed that upon recal¬
of
the bids,
that of

;

re¬

spring tonic on the
banking
fraternity.

a

investment

The

Heinz

J.

which at*

.v/i:'•

fa its proposed change in
governing the use of the

gard

Commission should really get ah
uring it had -captured "the issue,
earful when it receives the com¬
proceeded with reoffering only to

offerings by
later.
& Telegraph

Glore, Forgan &

that the 'undertake

Getting

2.298% interest cost.

;

and

A quarterly dividend of

'xt">

; The first-mentioned groqp,

preferred

authorizing the issu¬

on

ance

operations.

figured' as

was

.

new

stoCk. Ordbiarily Well-informed

interest cost basis to

an

and /

bonds

new

$30,000,000 at

; by; Halsey>1 Stuart & Co.; Inc.;
had entered the successful bid

showing

$30,600#000 of

V

headed

group

new

Blyth & Co. and

20 stockholders will vote

shown

on

Dividend checks will be mailed.

the

books of the Company.
George A. Morrell, Vice Pres. & Treas.
Ottumwa, Iowa.

F. S.

October 15,

1946.

CONNETT, Treasurer

Y.

THE COMMERCIAL & FINANCIAL CHRONICLE

1988

courts

Only a Few of the Younger Men of the Larger
NYSE Firms Favor Permissive Incorporation
Few indeed

members of New York Stock Exchange who are

are

willing to stand up and be counted among those in favor of per¬
missive incorporation of member firms. Few, too, are proponents of

like to make

may

the question.

on

"the

incorporation

permissive

Enthusiasm

firms.

tiieir

for

house

a

of

develop

may

preserved
the
corporate form ^ of organization.
even among such members as are
Incorporation also tends to keep
inclined to view the proposal with
the

of

ernors

consideration

NYSE

through

further

for

over

Nov. 7 is lacking

on

the

■

is

years

.

long periods of time by
„

favor, Usually the propon¬

aome

intact,, even,.in; the

force

labor

a

face of major changes in the man¬
qualify their
stand. They are in favor of per¬ agement. A corporation can build
missive incorporation—but—it is up a reserve in capital out of
generally the younger men of the earnings, too. Incorporation thus
tends to give greater stability to
larger firms who support ' the

of

ents

the

plan

the

tinue

"

-

change has weakened the case for
incorporation by insisting on the
inclusion of the

such

of

Stock; Ex¬

the

provisions in the

plan requiring
Stock
approval
of
stock¬
of the Stock Exchange firms may Exchange
holders and limiting participation
like to make on the question. All
by outsiders to 45% of the stock.
opinion — both pro and con — is
In view of the close supervision
solicited. Communications should'
which the Stock Exchange would
be addressed to the Editor, The
exercise over the make-up of the
Commercial and Financial Chron¬
corporate body of the member
icle, 25 Park Place, New York 8,
the tax authorities are
N. Y. The names of those submit¬ houses,
almost certain to look upon in¬
ting comment will be withheld on
corporate
houses
as
merely
request. Recent comment received
another form of partnership.
by the "Chronicle" follows:
>
comment

the

think

I

in favor of the

degree of continuity to the busi¬
ness; that is, it would tend to give
proper
support to capitalization
as
large as this where it exists.
However, a small firm like ours
prefers the partnership form of
organization for the very opposite
reason

that it would preserve

—

flexibility in the relationships
to partner that pre¬
vails now. We ourselves believe

the
of

partner

that the advantages of

the partner¬

ship;; far ^outweigh, those of
corporation.
' ■.«?■■■■ V;

business.

force

required

corporations
customers
would, they think, probably take
out Stock Exchange seats them¬
selves if corporations
were
al¬
lowed in. It is my own view that
the
question
should not
be
smothered, however. Periodically,
it should be brought up for re¬
good

consideration. It

seems

to

fact that such corporations as

First

Boston

Corporation

the

floor

the

of

a

^i;i;;f;r>'5^Broker No. 45
I don't

see

of

1

definite persons. The
liability of the
corporation is without particular
significance, too, in view of the
quarterly accounting of the books
ity to

very

contents

of

see

page

1779

the

Board

sidiary

and

to

for

Governors

permission to set

all

handle

underwriting but
to

keep

our

our

could

an

the

now

Board

want

ernors

to recognize the

incorporated

course,

FOREIGN SECURITIES

but we
of

Gov¬

assets of

subsidiary

as

M. S.Wien & Co.

part of the capital of the broker¬

so

end of our business.

age

Commons & Pfds.

business

incorporated

would

the

non-

would want

we

form.* 'Of

form

RaHs
"■■■'

do some

brokerage

lilv partnership

Old Reorganization

the

sort of sub¬

up a

brokerage business. We

Exchange to turn the

down

of

underwriting house

New

of the

,

i

>

ESTABLISHED 1919

'

40

Exchange PL, N. Y. S

'•'

HA. 2-8780

"

Teletype N. Y. 1-1397

Trading Markets in

Allen B. DuMont Laboratories

liPliS; Higgins, Inc.§;||
148 State St., Boston 9, Mass.

Jefferson-Travis Corp.

-

Tel. CAP.

Lear,

N.

of the various member houses

by

itself and the
annual reports of financial state¬
ments which the SEC requires.

the Stock Exchange

0425

:

Teletype BS 259

;

Y. Telephone HAnover 2-7914

v-aVv-VTC

'*.a

Gearhart & Company
Suburban Elec. Sec.

INCORPORATED

.Rogers Corp.

Members New York Security Dealers Association

i

45 NASSAU STREET, NEW

philadelphia telephone

telephone

REctor 2-3600

;

Thompson's Spa Inc.

YORK 5

Enterprise 6015

Airplane & Marine

bell teletype
new york

Schoellkopf, Hutton & Pomeroy

1-576

Worcester Trans. Assoc.

financial

limited

the
the
and

Boston Real Estate Trust

MINING and O

Ralph F. Carr & Co., Inc.
Milk Street, Boston 9, Mass. *

81

Bought

—

Sold

Boston

Now York

Teletype

Hubbard €442

—

Hanover 2-7913

BS 328

'

-

Broker No. 43
I

opposed to incorporation

am

for'no

it

W.

could

other
be

than

reason

used

as

★

★

★

that

r

We

opening

an

incor¬

HAnover 2-0050

ST., N.Y. 4

Teletype—N. Y. 1-971

{

HANOVER 2-4341

TELETYPE—N.Y.

1-2866

Investment Trust Issues

BRITISH SECURITIES/

a

New

Eng. Markelt

Frederick C. Adams & Co.
Specialists in

Issues;-:;;v;:U;i

New

.

r

*

.

England Unlisted Securities '

?

24 FEDERAL STREET, BOSTON 10
■

§ r.ARI.

/

■

>

FOREIGN SECURITIES 1
•:

•

4

;

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50 Broad Street

Tel. HANcock 8715

~

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Tele. BOston 29

"

SPECIALISTS

.

Established in 1922

.O.r& IMC, ill

MARKS

|

-

Public Utility Stocks and Bond*
TEXTILE SECURITIES
;
Securities with

Firm Trading Markets

'

Industrial Issues

5$;

1924
»

BROAD

specialize in all:

Insurance and Bank Stock*

Morris Stein & Co.
50

All

-jpz.

index

house to continue in

a

,

Established

:

detailed

I

Exchange.

Stripped of all its fine phrases,
incorporation boils down to being
pretty much a tax matter. If in¬
corporation is made permissive,
our firm would probably petition

I haven't
given too much thought to it my¬
position

wedge by the various government¬
porate. The way we see it, incor¬ al regulatory bodies — and the
firm would like to

Our

For

business af ter the death of a large
owner.
>
*

fully expect the

Governors

York Stock

^vi:;

the floor

on

together. Corporations would al¬
authority .and responsibil¬

if
•

clerk

the

Exchange

Broker No. 42

tliq

what all the excite¬

ment is about. I

func¬

the

perform

locate

which is not brought there today.
1

the

tradition

of

Exchange, for instance.
Partnerships are too loosely held

Blyth & Co. are not members.
Large
corporations would
un¬
doubtedly bring a lot of business
to

mere

of

that

me

the Stock Exchange loses by

to

tions of

Some

now

are

index

see,

easier for

we

unduly influences Stock Exchange
rules, decisions and thinking. In
this
fact, I would like to see all pres¬
poration because, in the first ent Stock Exchange regulations
place, they can see no particular and procedures re-examined and
advantage to incorporation and, re-appraised. I feel that it is en¬
in the second place, they believe tirely unnecessary for one part¬
incorporation would mean a loss ner of Stock Exchange firm to be
.

members "of

as

Broker No. 44

majority of the partners of
firm are opposed to incor¬

which

basis.

what difference it would

either, just how in¬
corporation: would make it any

The

of

the
Nor

sections of

without

are

see

make whether banks are admitted

move.

Broker No. 41

-

in many

permissive a lot' of houses will
live to regret the day they were

I

proposed

the various partners

as

aroused

can

Board

a

publication

,

structure.

that

believe

I

healthy exchange
of
ideas
on
the
subject,
the
"Chronicle" will be glad to con¬
facilitate

To

business

the

for incorporation.

move

be¬

Incorporation might benefit a
large firm with five or six million
dollars of capital by giving some

the poration increases a firm's chances
for
continuity.
The
good will
which

my

-.

of^

proposition which is scheduled to
come up before the Board of Gov¬

the fears

industry

;4;:!

■.

willing to stand up and be counted among those in favor

are

the

don't

New York Stock Exchange

Few indeed are the members of the

who

industry. It is

However, I think many of
which the proposal has

on

lief that if incorporation is made

ever

plan who do not qualify their stand. To facilitate healthy exchange
of ideas on subject, the "Chronicle" will be glad to continue publi¬
cation of such comment as the various partners of the Stock Ex¬
change firms

self.

additional

restrictions

and

securities

impose

to

,—

controls

Thursday, October 17, 1946

Bank — Insurance

.

New York 4, N. Y.

-

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

Public

Utility—Industrial — Real Estate

"Seaboard Fruit

Co., Inc.

"General Products Corp.
.

Grinnell

Eastern

Gerotor-May
.

...

Sunshine Consolidated

Pressurelube, Inc.

Industries, Inc.

Traded
•

The

"

•

'

'

'

'

'

Company

•

is

Automatic

and Common Stocks

"Wl"

•

**

a

'

*

•

'

•

i\* A

L
r

■

consolidation

Signal

Eastern

of

BOUGHT-SOLD —QUOTED

Corp.

Engineering Co.

:

New York 5

Telephone COrtlandt 7-0744
Bell

Teletype NY 1-886




•

V

■

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J

*Prospectus

on

request

Amos Treat a Co.

REITZEL, INC.

REMER, MITCHELL &
208 SOUTH LA

120 Broadway

v'

and

Delhi Oil

W. T. BONN & CO.

"Susquehanna Mills
.

Empire Steel Corp.

'

'

'

SALLE ST., CHICAGO

WESTERN UNION TELEPRINTER "WUX"

4
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PHONE RANDOLPH 3736

BEtl SYSTEM TELETYPE

CG-989

Hill, Thompson & Co., Inc.
Markets and Situations for Dealers

120
40 Wall St.

BO

9-4613

New York 5, N. Y.

Tele. NY 1-1448

Broadway, New York 5

Tel. REctor 2-2020

Tele. NY 1-2660

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