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Volume 186.
•«
f %
New York 7, N.
Number 5682
-
EDITORIAL
The Bond Market Puzzle
W.-'
.•
a
Last
greeted
Was
,
with
was
Noted finance
and
dismay
■
quite warranted criticism in many quarters. To
politicians
dent's
in the opposition party, and to some
anti-Eisenhower
of the
own
of
members
Presi¬
the
professor perceives for 1958
reversal of
a
party, all this seemed to offer a large
opportunity to make headway against the Ad¬
ministration. All the ,usual political techniques
were called into play for the purpose.
For a time
little headway was apparently made in con¬
i
all
forces of
If
I Congressional committees went to work hack¬
are'
cause
the market for long-term money
Mr. Hayes finds danger of infla¬
tion is still present, and that the Fed is aware of the
opposite danger, too; and refutes fears of foreign run
on our gold.
Reviews demand for and supply of funds
ground here and there. The net result, or one of
them, was a somewhat lower total of proposed
outlays at least as these items appeared in legis¬
lation passed by Congress and signed by the
President. Under the necessity of making a show¬
and
its future
has
on
page
to
rose
a
new
times
as
•
30
I.
Jules
Bogen
by
and
are
wp
all
much
the
as
Continued
Dr.
page
Alfred Hayes
adding force to the
significant degree.
boom in any
whole has been
Although industrial production as a
increase
on
should
or
Inventory accumulation is no longer
peak because com¬
Bogen before Investment
New York University, N. Y., Sept. 21, 1957.
address
modest,
defense spending
actually be attained. '
Exports,
which, contributed much
more than was generally recognized
to
aggregate demand in 1956 and "
early 1957, are beginning to show
the adverse effects of payments dif¬
ficulties in many foreign countries.
increased by $3,400,000,000 in the
months—2Vz
six
♦An
Continued
measured
mercial bank deposits
first
Dr.
of
source
be
/
the proposed cut in
can
On the supply side of the market, savings as
demand.
usually
outlays, but for a time such curtailment as
actually occurred seemed to arouse no serious
general misgiving. Then the Kremlin announced
first the successful firing of an intercontinental
ballistic missile and then the launching of an
these
single
much of its strong upward
lost
should
as against $7.6 billion
truly an abrupt decline in
for money from the
important
will forgive me if
you
hearing many public expressions of
doubt, enhanced by recent develop¬
ments in outer space, as to whether
demand
most
perhaps
a
lays and Federal Government ex¬
penditures leveling out and perhaps
commencing a decline — yet the
decline in
capital expenditures
by $5.6 billion
expenditures at various points. There were critics
from the first who thought it unwise to reduce
merely to touch
momentum, with private capital out¬
mortgage borrowing,
demand, dropped
by fully $2 billion, or 30%, as com¬
pared with, the first half of last
year.
Mortgage debt outstanding—
and it is the change in outstanding
debt that absorbs savings—increased
the
to Reserve's policies.
as
much has been written and spoken recently
so
few of the highlights. It seems
clear that the boom of the past two-and-a-half years
I try
that, net
last year,
misconceptions
answers
Since
about current business,
the chief segment of
ing of economy, the Administration has for some
time now been hard at work reducing defense
course.
1
the first six months of this year, we
find
policy change, and by pointing out that present
excess capacity are not sufficient to alter
a
price stability
in
ing at this, that and the other proposed appropri¬
ation, and the President was obliged to give
by N. Y.
instances of
look at the demand side of
we
.
by prescribing the conditions which would
district head
the
determined by
demand and supply.
prices,
j
whether .the Fed will shift from its
present- policy of credit i restraint it answered'
in mortgage
.borrowing vis-a-vis an increase in supply of funds,
sparked by commercial banks. and relaxed Federal
Reserve policy if business recession deepens. Looking
ahead until 1960's, the author sees on the whole a firm
or rising interest rate trend despite next year's decline.
Praises wise monetary policy for checking inflation and
disabusing notion of inevitable inflation.
financing decline, off settingan increase
present conditions, and so how to appraise
prospects i more reliably.
It is a
truism to say that interest rates, like
stationary, for all
practical purposes, for about a year,
Continued
32
York
New
page
34
Hayes before the Bond Club of New York,
City, Oct. 16, 1957.
address
♦An
Seminar Meeting,
on
by
Mr.
REGISTRATION—Underwriters, dealers and investors in corporate
complete picture of issues now registered with the SEC and poten¬
undertakings in our "Securities in Registration" Section, starting on page 38.
SECURITIES NOW IN
securities
DEALERS
tial
are
afforded
a
State, Municipal
and
in
U. S. Government,
State and
m
60NDS
HAnover 2-3700
CORN EXCHANGE
ON
\
Burnham and
MCMBEAS NEW
THE FIRST NATIONAL CITY BANK
30 BROAD
ST.,N.Y.
IS BROAD
CABLE:
STREET, NEW
YORK 5, N. Y.
Harris. Upham & CMembers New York
OF NEW YORK
Company
YORK ANO AMERICAN STOCK
120
EXCHANOCS
•
Bond Dept.
W 4-1400
Teletype: NY 1-708
'
'
T.L.WATSON&CO.
1832
ESTABLISHED
;
.
Dealers,
Markets
Banks and Brokers'
Commission Orders
American
Stock Exchange
*
__
25 BROAD STREET
;
-
'
r
f
irst
S?CUiAwedi
COMPANY
i -
NEW YORK 4, N. Y.
?
i
from
*
<<
>'.
'
'
*
*
*
M
BOND DEPARTMENT
*
'
the
Chase Manhattan
BANK
eoast fo coast
,*
BRIDGEPORT >
*
' i
DIRECT WIRES TO
;
J"
PERTH AMBOY ;
Guaranteeing Quebec
Hydro-Electric
Commission
*
*
-
4%%
Due
•"
Debentures
December 1,
1981
Price 96.25
to
Dollars
yield 4.55%'
.•
MONTREAL AND TORONTO '
115 BROADWAY
NEW YORK
Domcuox Securities
STOCK EXCHANGE
A NORTH LA SALLE ST.
CHICAGO
40
for
California
'
GOODBODY 6e Co.
MEMBERS tfEW YORK
.
$175,000
Payable in United States
CANADIAN DEPARTMENT.-
Teletype NY 1-2270
.
/
YORK 5
PROVINCE OF QUEBEC
Executed On All
Canadian Exchanges
f
-
-
.
;
SECURITIES
Exchange
*
-
Maintained
CANADIAN
*
Members
New York Stock
insurance stocks
Stock Exchange
BROADWAY, NEW
offices
34
'
Active
Net
To
bank and
•'
r *
' 5
i
TELETYPE NY t-ZM2
COIURNHAM
.
c
AVAILABLE
*
REQUEST
I
BANK
department
•
-
ARE NOW
•
Bonds and Notes
'
DEALERS
BROKERS
'
:
.
KkVifcW"
"MAntvtl
UNDERWRITERS
CHEMICAL
bond
*.
/.
COPIES OF OUR
Securities
telephone:
Public Housing Agency
STATE AND MUNICIPAL
Municipal
.v
^ By ALFRED HAYES*.
The question as to
Carlyle wrote that experience is the best of school¬
masters.
The experience of 1957 can teach valuable
lessons about how our bond market functions under
vincing! the President that anything ought to be
done in the premises. It was not long,i however,
before it began to be evident that the critics of
the budget had gained a substantial following,
and in doing so had made reduced outlays a
rather important issue in a political sense.
J
a
President, Federal Reserve Bank of New York
higher bond, yield trend heretofore necessary to attract
buyers. Dr. Bogen bases this on a narrowing of financial
institutional savings gap* due to expected corporate
to begin July 1, 1957. It
understandable
j
Policy Not a One-Way Street
U
January, President Eisenhower presented
that
Federal Reserve Monetary
Professor of Finance, New York University
surprisingly large budget of expenditures for
the fiscal year
Copy 1
a
By DR. JULES. I. BOGEN*
We See It
sis
Price 40 Cents
*
Y., Thursday, October 17, 1957
Exckaage Place, New fork 5, N. T
WHitehall 4-8161
Teletype NY t-fOS-3
Municipals
i
t
2
The Commercial and Financial Chronicle
(1682)
The
Brokers, Dealers only
For Banks,
Security I Like Best
This
If
which, each week, a different group of experts
advisory field from all sections of the country
participate and give their reasons for favoring a particular security.
(The articles contained in this foram
banks, brokers and dealers
the nation, plus
across
mary
they to be regarded,
•re
GEORGE
markets in more than
as an
intended
be, nor
offer to sell the securities discussed.)
not
are
C.
ASTARITA
anemometers,
ters
Boettcher and Company
Colorado Springs,
scientific
other
and
ments.
Colo.
altime¬
compasses,
V.
main
Tne
help you, just
plant is located at
Rochester, N. Y., with assembly
plants at Chicago, San Francisco
and Tulsa.
Subsidiary plants are
located at London, Toronto and
Melbourne. Its business dates from
Taylor Instrument Company
Because the bloom is off growth
"Try Hanseatic".
stocks is
reason
—
to
neglect the
Taylor Instru¬
Many
1851 and
compa¬
are
ment.
other
New Yoik Hanseatic
no
this
in
nies
stock
classification
Corporation
talization
times
current
Teletype NY 1-40
BOSTON
•
CHICAGO
PHILADELPHIA
•
SAN FRANCISCO
Wires
to
r
earn¬
seven
times
nprfpd
C. Astarna
i
*
f*arn-
which
McnONNEXI&ro.
is
one year ago
exceptionally strong
an
for
showing
roughly $7 billion being
annually on research the
of scientific instrumentation
With
York Stock
Exchange
Stock
Exchange
spent
field
BROADWAY, NEW YORK 6
Life Insurance Co. of Va.
Opportunities Unlimited
Write
for our Monthly Stock
Digest, and our other reports
that give you a pretty clear
picture of the Japanese
economy as a whole.
Nomura Securities Co., Ltd.
61 Broadway, New York 6, N. Y.
Telephone: BOwling Green 9-0187
for
particular securities
LAMBORN & CO., Inc.
climate in which
can
operate
the
which
controls
—
STREET
Refined
—
'
'
'
have
Exports—Imports—Futures
Allied
the
is
the
evolved
one
I
investor
an
Tokyo, Japan
Brokers
Investment Bankers
&
thus
appears
to
be
including extras.
earnings estimate of $5.00
share for 1957 is realized then
Firm
in
Trading Markets
conservative for
an
Capitalization
is
3
—
PIPE LINES
/
Limited
•
*
.•
.
WISENER
AND
COMPANY
LIMITED
Trading Dept.
Toronto, Canada
EMpire, 3:B204
.
Vz% installment notes maturing
at the rate of
1
$150,000 each August
through 1968 and the balance in
1969.
There is
preferred stock
no
and the total
keep
equity is represented
by 653,859 shares of common stock.
his
of
totalled
which
of
TRANS-CANADA
73 King St West
small,
very
Maintained
Securities
the
All
Burns Bros. & Denton
As of Dec.
corporations
7-5680
stock dividend.
annually,
our
capital fully invested in the stock
increase their
Ltd.
a
debt consists of only $2,235,000 in
J
can
;
Yamaichi Securities Co.,
aug¬
financial condition.
growth security
Laboratories, Inc.
each
year
sales, report bigger
31, 1956, current assets
$12,916,000 arid? current
liabilities
earnings, and
capital
broaden
$4,715,000. Net working
was
thus $8,201,000 and
current
ratio
their
profit margins
2.7
to
1.
—then he has
little to worry
about. Allied
managed,
strong growth phase.
INC.
37 Wall
Street, New York 5, N. Y.
Underwriters—Distributors
The company is
obviously well
aggressive and in a
.
Investment Securities
drug
activities
Dealers
In addition,
it shares with other factors in the
Laboratories is
engaging in automa-, a
company
tion, Taylor can be said to be in which for the
the forefront of this fast growing
last five years
industry.
has. fully comApproximately two-thirds of its plied with
industry a strong element
of defense against possible busi¬
related
to
the
ad¬
recession. At
ness
this
writing, it
Canadian and Domestic
is selling at approximately eleventimes estimated earnings for this
,
and thirteen times latest
these require¬
year
vancement of automatic processing
ments.
a
ported annual earnings. Compared
applied to the production of
chemicals, petroleum derivatives,
record
a
to other
are
food, textiles, rubber,
many
and
can
sult
company
plier
of
has been a major sup¬
to the Atomic
controls
Energy Commission, beginning at
original Oak Ridge Project.
Such
experience
should
prove
with
commercial
tions.
Other
the
development
nuclear
installa¬
government
work
over
period of
other essential products. The
paper
Such
fernest
dividend
should
the
lead
stock.
shown in the
companying table.
Again, on the basis
the
looks
new
and
rising price for
Operating figures for
a
recent years are
for
Sieni
disbursements
to
of
re¬
the earnings of Allied is sub¬
stantially greater than that of
in
other
In
drug companies.
:
*'
ac¬
results
combining
with
conditioning
long
electronic
New York and Midwest Stock Ex-
opinion,
the
first
as
half of the year, it; changes, is an investment grade
if 1957 would establish a security suitable for inclusion in
high in
dividends
sales,
computers.
essing controls, the company de¬
ous
ing
and
profit
Net Sales
6 mos. to 6/30/57
6
mos.
,
1956
1955
Profit
Net
(0<*O>
M-—'n
Per Share
10.9%
.
10,229
22,630
$1,630
1,190
'
2,598
"
1
'»
Quotation Services
for 43 Years
-
$2.49
$0.60
11.6
1.91
0.50
11.5
3.97
1.10*
17,760
16,070
1,292
1,019
7.3
1.98
0.81
1954
6.3
1.56
14,569
885
6.1
1.35
0.71
1952
13,516
689
5.1
1.05
0.62
National Quotation Boreal
0.76
1953
commercial products includ¬
Over-the-Counter
Dividend
$14,913
to 6/30/56
Full Years
Net Profit
(OOO)
range
In addition to its automated
proc¬
^ving**
stock of
Allied Laboratories, listed on the
my
earnings and' the portfolios of conservative trusmargins,^, tees;and individuals. It is of high
controls of the Sage System, which while
possibly lower than last ? quality, but by no means a static
consists of a number of strate¬ year, will still make an impressive (Situation. On the contrary, it is in
showing compared to earlier years, a dynamic growth phase?'
gically
located
communication
has included the air
HOvm mp
leading issues in the drug
field, this is a very low ratio. This :
is particularly true when it is,
realized that the rate of growth
years
only re¬
in larger
the manufacture and sale of vari¬
i
this dividend represents a payout
of only 28%
of earnings which
success.
,•
votes one-third of its activities to
DIgby 4-2727
stock
•
peratures, pressures and humidity
and which in turn are used by
centers
Liquid
payment
$1.40
conservative
a
:
the
1956
was
quarterly divi¬
paid, and in July
and October this quarterly rate
was
supplemented by extras of
100 in each case. The current rate
Partner, Hooker & Fay
San Francisco, Calif.
If
operations controlled elec¬
trically to pneumatic and finally
to electronically actuated systems.
Because
Taylor furnishes auto¬
mated controls dealing with tem¬
radar
Raw
such
Inc.
Affiliate of
.
dend of 250 was
ERNEST STENT
functions
advantage.
valuable
SUGAR
at
best
"process automation" or
as
Taylor is important foij its proc¬
of
NEW YORK 5, N. Y.
Available
long record of
5%
a
April, 1957,
in
$1.10
in
"the
WALL
possesses a
by
of
category.
as
99
In
and
1930
like
all industries
IN JAPAN
any
dividend
mented
'
fields
of New York,
1
111 Broadway, N. Y. 6 CO rtlandt
high degree of automation in all
industrial production. Taylor is of
interest because it devotes a large
nortion of its activities to what is
ess
TWXLY77
solicitation
already
since
cash
year.
the
Yamalchi
industrial company in so strong a
from
or
year
government business remains im¬
for
write
Dividends have been paid every
Today
Taylor is engaged largely in com¬
mercial
operations although its
outlook
information
or
produced and
distributed world-wide.,
contraction ir> earnings but
groundwork for larger
portant.
are now
would be very
furnishing
Lynchburg:, Va.
offer
approximately 600 standard phar¬
maceuticals
Call
Securities Company
Asiatic
the
_
an
some
cnrrent
■
breaking out in
now
earnings,
STRADER and COMPANY, Inc.
for
of
prevention
spreading rapidly
through the United States. In all,
the
are
STOCKS
For
Pitman-
epidemic form in various parts of
predominately military to
commercial production., The
transition period caused a tem¬
The
JAPANESE
two
price in relation to both assets and
will
to best
not
(70%
one of six companies
manufacture the new
to
for
per
automatic
Is
is
chosen
fields is enjoyed and the campany
known
Commonwealth Natural Gas
orders
Accounting for
profit margins which
branch offices
is
require greater pro¬
ductivity per man-hour. To com¬
bat rising wages will necessitate
Industries
LD 39
40%
subsidiary,
its
serum
in im¬
a
rhis
Moore,
If
force
American Furniture
,
through
has been reaggressive sales
which Taylor operates is exciting.
A leading position in its several
grow
drugs and
the world and is
laid
our
and the balance for
use
Flu which is
of
portance because a rising popula¬
tion with a relatively small labor
Trading Interest In
About
to
major
a
human. It is the second largest
producer of Balk Polio Serum and
some
exceptional attractiveness
to the investor. The field of au¬
tomation has arisen from research
one
is
ago) of its production is for
veterinary
estimated
of
and automation will
Furniture
than
more
an
in
is
TEL. REctor 2-7815
Bassett
vaccines.
years
together with an ac¬
celerated pace of research and de¬
velopment, expenditures for which
average about five per cent of the
porary
Mobile,Ala.
Direct wires
•,
New operat-
this being witnessed this
of
company
a
nature.
Members
120
which
Per¬
haps of even more importance is
the fact that Taylor possesses $26
per
share
in working
capital
SCRIP
of ethical
NY 1-1557
•
-
roughly $35 per share.
was
Since 1917
American
more
HAnover 2-0700
New Orleans, La.- Birmingham, Ala,
great demand as
as
probable.
sales dollar.
George
ex-
its book value
New
than
for the fiscal
shrinkage in earnings during the
year ended July 31, 1957. Then,.
last two
years
was
the change
too, Taylor sells low in relation to
from
Specialists in
&
nas
ago
years
ponsible for
ings to be reported
RIGHTS
volume
19 Rector St., New York 6, *. Y.
particularly strong in the field of
expansion,
ap¬
proximately
10
less
Asiatic Flu
new
Laboratories
producer
con¬
ing management introduced
avail¬
at
paid
Sole capi¬
of
$25 million in 1957.
Mar¬
ket is
Principal Cities
consists
doubled since 1950 to
Over-the-
able
Private
Sales
whereas
Taylor, cur¬
rently at 33 in
Counter
been
since .1907.
appears
Allied
paying $1.20 and
have-
Members American Stock Exchangs
$5 per share and might ap-
vaccine is in
now
;
is
400,000 shares of stock.
ings,
New York 5
120 Broadway,
WOrth 4-2300
from
selling
Exchange
Stock
American
tinuously
20 to 40
Member
Associate
'i
-
1920
Established
dividends
still
are
mate
employed.
The
York Stock Exchange
Members New
proach $6 if the
;
Steiner,Rouse&Co.
Earnings, in fact, should approxi¬
than 2,600 persons
more
Bought—Sold—Quoted'».
Laboratories,' Inc.—Ernest
Stent, Partner, Hooker & Fay,
San Francisco, Calif. (Page 2)
instru¬
/'
'
Louisiana Securities
of Boettcher & Co.,
Colorado Springs, Colo. (Page 2)
Astarita,
mentation field
can
Alabama &
Taylor Instrument Co.-
'
to
best value in the scientific instru¬
curities
Week's
Their Selections
Allied
pri¬
Over-the-Counter se¬
400
Thursday, October 17, 1957
.
in the investment and
wires to
private
our
.
Forum Participants and
A continuous forum in
Try "HANSEATIC"
.
^
-
46 Front Street
CHICAGO
thermometers,
barometers,
♦Pius
in stock.
Incorporated
Established 1911
N«wYork4,N.Y.
BAN
PRANUIBOO
Volume
186
Number 5682
.
,
.
The Commercial and Financial Chronicle
(1683)
INDEX
Minuses and Pluses in the
Cunent Business Outlook
—Alfred
„
Vice-President,
.
Minuses
Three
.
.
.
reactions of businessmen and
difficult to
At
-
Tri-State Correspondent
our
Bank
Meeting
pressed
the
a
year
(1)
I
ago
following
.others:
among
people in general
pre-determine.
:
ex¬
opinions
there
That
would be only
small
a
in
de¬
crease
durable
;
poses
ing in 1957; \
(2)
That
capital ex¬
"business
1 d
w o u
services
than
not
\
•
■
•
'
•
*
■
4
_
"
■
•
—Hon.
Karl
.
6
CENTRAL PUBLIC
Magoldt-Reiboldt
von.
for Winter
but
Business—Roger W. Babson
COMMONWEALTH
11
___
Effect of Our Policies Upon the World Economy
7 ;—Delbert A. Snider
Mid-Term
and
Sales Outlook
for
Steel
OIL
CORPUS CHRISTI
12
REFINING
Industry
—Norman W. Foy__
Creeping Inflation
and
to
up
a
—Hon.
>
-
add
UTILITIES
10
>
:
STREET, NEW YORK
Telephone: WHitehall 4-6551
6
___r__
_
1
WALL
99
5
' '
•
about 99 Wall!
GULF COAST OIL
13
pur¬
defense
These
dollars
facts of life
4
:
Economy—Ira U, Cobleigh—___
'
Outlook
_t.
-
a
Menace to the Free World
NORTHWEST
Reinhard Kamitz_____
14
PRODUCTIONS
I
regard them
as
being"tag-along" in nature
and not likely in themselves to
produce basic changes of direc- 7
tion in the economy.
«'' ■'
penditures by
3
___
Germany's Position in the International Currency Crisis
.
spending for
other
'
of
Business Outlook
Land^.
.
.
goods -and
construction.
lot
"
■"
should be told the
—
Current
are'not
governmental
fense ^spend¬
A BOY GROWING UP
■
Cover
:
Investments in Latin America—J. Burke
Knapp
elements of the
listed are
expenditures for non-
consumer
in¬
Moonstruck
principal
that
N.
in the
'
Bogen
—James J. O'Leary
7
"
The
Pluses
I.
Near and Long-Term Outlook for Business and
Capital Market
ment), and change in business in¬
ventories.
/ 7 /
i
-
economy
and
'•
■J•
Techniques for Forecasting Stock Prices—Charles F. Roos
*
.
which is
—
1
"
mmmmmmmmrnmmmmJ
Cover
Help Wanted: A Psychiatrist!—A.. Wilfred May______.,_
year's inventory reduction prediction *
and believes inventory correction will continue through 1958. ".
Expects downturn of past few months to last until next spring
>
and possibly next fall, and its depth to depend on psychological
'
i
Market Puzzle—Jules
—James
economist recalls his last
<
!
'
4
Bond
AND COMPANY
One-Way Street
a
__
,
.
The
Policy Not
Hayes
Company, Pittsburgh, Pa.
bright spots of increased nonmilitary public construc¬
tion, residential construction, and auto sales, are coupled with
adverse trends in defense spending, business capital expenditures and business inventories, by Mr. Land, in
concluding that
the, negative, elements outweigh the positive.; The banker-
Page
mmmmm
Federal Reserve Monetary
By JAMES N. LAND*
Senior
ilCHTEHSTEllj
B. S.
Articles and News
*
Mellon National Bank & Trust
3
"Your Dollars and Your Freedom"—Orval W. Adams
-
14
Today's Thinking of the Federal Reserve System
•
7 —Hon.
William McChesney Martin,
Jr
15
.
show
any
than
'more
'
1 '
\.
a
,*• " t.-
a
N. Land
James
listed.
not likely
-
force pushing us up into
high level of business ac¬
a
new
tivity;
-
(4)
That; nonmilitary
would
public
continue
ris¬
ing and would probably be about
a
billion dollars higher in 1957
than in 1956;
-
(5) That automobile sales would
increase
000
cars
(6)
to not
in
than
more
6,500,-
1957;
That
sales
of
household
equipment would be moderately
higher in 1957 than in 1956;
(7) That a change from inven¬
tory accumulation to inventory
reduction
would
take
place in
1957, possibly in the second quar¬
and
ter;
(8) That
As
will
you
\
.
<
,
>
Strength and Limitations of Monetary-Fiscal Policies
—Beryl W. Sprinkeli
•,
7.';;,
able
increase
since
tures
the
matter of
a
a
expendi-
of
end
common
1955.
.
general
—H.
this trend.
cessful
in
If
their
the
they
•
ulation
ment
as
mid-year.
Sponsored
that
Russia's
about
by
ballistic
missile
•
Aircraft Radio
22
l
San Jacinto Pet.
Cleveland Trust Co. Looks at Plus and Minus Side of
Business Picture
:
These
fully
but
forecasts
accurate
on
the
in
whole
have missed the
proved
some
they
mark
not
respects,
in that direction
may
too
not-
badly.
In
'
trying to look ahead, I shall
start, as I did a year ago, by ana¬
lyzing the principal factors in the
economy
which in my opinion
make
the
differences
think
the
to
apparent
on
As We
Bank
See
It
(Editorial) ___L
Insurance
and
Business
Guardian Chemical
that
defense
are
so
Man's
Bookshelf..
___!
48
8
:
jl
Dealer-Broker Investment Recommendations--..
&
Einzig: "Monetary Restraint 15 Not Enough in Order to
Check Wages Spiral"
23
during
therefore
ence
the
on
a
negative
economy
These
key players on the eco¬
team, and their recent bat¬
ting averages, so to speak, are
listed in the accompanying table.
They are defense spending, busi¬
ness capital expenditures, residen¬
tial
construction," other private
construction, consumer purchases
of
durable
goods
(principally
automobiles and household equipnomic
*An address by Mr. Land before the
Correspondent Bank Meeting: held by the
Mellon
National
Bank
and
Trust
Co.,
Pittsburgh, Pa., Oct. 3, 1957.
Indications of Current Business Activity
cerned.
The
*
•>
next
of
7
•
;
the
46
44
expenditures rose substan¬
in every quarter of those
years
and also were materially
higher in the first quarter of 1957
than in the last quarter of 1956.
In
the second
quarter of 1957,
however, they were only about
the same as in the first quarter.
*: Our
seems
Continued
Reporter
Our
Utility
Railroad
1
47
Securities
33
Securities
Prospective
The Market
The
,
38
—
Security Offerings--
and
.
.
Reeves Soundcraft
42
Security I Like Best—
Pan American
47
^
You—By Wallace Streete
The State of Trade and
Lithium Corp.
31
—
Securities Salesman's Corner
r "
16
Sulphur
2
—
Industry-—
Narda Microwave*
5
:
pretty perWashington
on
page
and
\
45
r
Securities Now in Registration—
;
Dallas
20
Governments.
on
Reporter's Report
Public
tially
evidence
to
Los Angeles
Chicago
16
News About Banks and Bankers
.
segments
is capital; expenditures by busi¬
ness.
This is ;the factor which
above
every
other pushed the
economy ahead in 1955 and 1956.
The
Direct Wires
Funds
NSTA Notes
.
key
Such
Exchange PI., N.Y.
Teletype NY 1-1825 & 1-4844
as
r
40
inc.
Philadelphia
influ¬
far
as
9
Mutual
the
immediate consequences are con¬
between
good business and 'poor business.
From Washington Ahead of the News—Carlisle
Bargeron
Mackie,
HA 2-0270
I
count
next year or so will be downward
and
Singer, Bean
8
'
far
and
better
spending
& V.T.C.
22
cause; dur
layman,
had
we
Three States Natural Gas
Cover
—;
Stocks
Coming Events in the Investment Field
the likelihood that the changes
in
Pacific Uranium
27
Regular Features
announce¬
might
City
Teletype: SU 158
10
Women's
Organizations
intercontinental
an
Exchange PL, Salt Lake
DAvis 8-8786
.
•
39
*
spec¬
moves
early
*
present prospect
some
HEnderson 4-8504
Teletype: JCY 1160
22
#
"Money Matinee" Lectures
are suc¬
announced
There has been
so.
1
"Land Tenure and Taxation in America": A New Book
by the
Late Dr. A. M. Sakolski___
is, that
some such reduction will actually
be carried out during the next year
or
Cook__
»
objectives in this regard, defense
spending will be/ cut something
like $2 billion below the rate for
the second quarter of 1957. I think
that
Earl
knowledge,
Department
of Defense in particular are making a determined effort to re¬
verse
19
Adequacy of Bank Capital and the Sale of Bank Shares
*
the
and
Exchange PL, Jersey City
DIgby 4-4970
—A. Moyer Kulp
however, that the Administration
in
Spokane Stock Exchange
It
haps
t.
Members Salt Laki City Stock Exch.
Sound Investment Policy for Today's Investment Problems
consider¬
such
in
business would start in 1957, perT
as
18
-
1
•
Government to spend more rather
than
less
on
defense,, but no
general downturn in
a
J.F.Reilly&Co., Inc.
17
What's Ahead at the F. C. C.—Hon. John C. Doerfer
»r-
from the
see
table, there has been
is
construction
■
involved,
defense spending is presently, by
a small margin,
the most impor-i,
tant of the key factors that I have
residential
construction
to be
' 7
'
In terms of total dollars
1957;
(3)
That
was
'
Adverse Trends. *
.
in
'4b*
■
rise
•.moderate
-
!
You
28
,
48
Universal Transistor*
•
Published
Twlee
Weekly
;
1
Drapers'
land,
The COMMERCIAL and
For many years we
have specialized in
Reg. U. S. Patent Office
B.
Park
DANA
BROAD
New York Stock Exchange
Place,
New
•
Nashville
Boston
WILLIAM DANA
•
Chlcag •
•
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•
Worcester
second-class matter
Subscription
.
SEIBERT, President:
Possessions,
Other
Thursday, October 17, 1957
in
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-*
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on
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•
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TELEPHONE HAnover 24300'
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-
Eng-
1957
,
Reentered
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REctor 2-9570 to 9576
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•
25
25
Copyright
^
PREFERRED STOCKS
E.
,
FINANCIAL CHRONICLE
WILLIAM
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Gardens, London,
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c/o
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Salle
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eign subscriptions
°J--«rtisement8 must
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in New York funds.
Direct
PHILADELPHIA
Wires to
SALT LAKE CITY
4
The Commercial and Financial Chronicle
(1684)
Surely the timing of
of such indices
last month.
Help Wanted—A Psychiatrist!
as
are
which
market
their entailment of recurring
i n g
possible
succesafu1
forecasting
of
market fluctu-
in
this
ments—in
other
and
coun¬
x
,/
<
borrow a seven-month
period.
Similarly,
The there was a halving of the stock
forecaster
must
win
a
double market averages in the midst of
proved scien¬
"bet."
First, he must be correct the 1937-38 period of monetary
tific methods.
in foretelling not only the rele¬ expansion. The wildest bull marI maintain
vant
external
economic
events, ket in history took place, from
that
the
im¬
but also, equally important and 1926 to 1929, in a period of stable
possibility
of
A. Wilfred May
probably even more difficult, the to falling commodity prices. Con¬
correlating the
effect of those events on the mar- versely,
a p pa r ently
in the post-OPA price
relevant economic factors with the ket.
«,
decontrolling period of1946-48
ations
pation,
by
available
im¬
of
timing
of the
a
parlay
to
—
..
race-track term—is required.
movements
market
substantiated
the impact of each of reasons
motivating common stock
purchases, namely (1) to secure income; (2) to obtain
capital growth or appreciation; (3) to own property in liquid
form; (4) to gain protection of savings during periods of
rising prices, and (5) to acquire managerial control. Inter¬
prets indices as presaging a further stock market decline.
Common stocks are bought for
price-earnings and tries. There have been many cases
dividend yields. At least there is of'severe^falisTn the stock market at; least
the following primary
no
synchronization; the market in the very midst of„an infla- reasons: (1) to secure income; (2)
reflects the economic factors—if tionary environment. During our
obtain capital growth or apat all—with unpredictable lag or wartime inflation of 1917, stocks Prociation; (3)
nevertheless
broke - 50% v in - a t° Qiw^.prop,anticipation. In the case of antici¬
mak-
-
rational explanation therefor,
making possible successful
forecasting by scientific methods and improved current tech¬
niques. Cites economic factors for aiding the anticipation of
is
the way.
First,
unpredictability of
changes in the price level, high¬
lighted by a mere glance at the
long-term chart of prices, with its
-very sharp, inconsistent, and alto¬
gether chance swings in both di¬
rections. 'Then again, there is the
record of uncertainty and lack of
fluctuations in
planation
thereof
sharp
is
the twin grounds
on
Importantly contributing to the
divergence of the logical external
factors from the market's action is
erty *n a f°rm
which is "Qu 1 d
savings during
periods of ris¬
ing prices; and
(5) to gain
managerial
have
predicted
less
but
gories!16 br0ader eC0n0mist cate"
of policy followed
investment
certainly have
by
companies, ^who
all avail-
access to
stowedTw comnareCdhwAh
Port'-
£g° 'better^results
feameLldhTgUgh C°ntinUed l0ng~
?
stops.2
control of en¬
have
for other pur¬
least the tentative conclusion-that
hold
the
on
really .took'
a
economy;
-
9qkh
contradictory interpretations of a
single factor; pr PerhaPs eclectic
"S£ph°Ufi;!
£actt°hra
.
market performance expoU facto.
*rom 1^29
was
accompaniea
oy
40 /o
price
decline
of
stocks.
And
World War
that
the
Such
studies-
and
the
m
during
f?1'?68 a
II it was
Great
tne
a
net
conclusions
rise
Markets
to
many
at
dom,
ay®» d* course,
fears
othei* consid-
reflecting
of
the
the
of
mass
hopes
and
investors
as
hot tips these are modified by outside
shocks such as wars, political up-
of the elevator boy to the qualify-
ing shares purchased by
Each purchase or sale
a
director, heavals,
necessarily
and
-
various
Probably
events.
random
the
most
ex-
appraisal of the present tensive investigation of this genof conc(itk)n of
the
company
and eral
thesis
was
made
by
the
in
forecasts, either implied or stated Cowles Commission for Research
?tocks after
not until 1956
Bull
F. Roos
Charles
led
the pattern of stock prices is ran¬
There
poses.
naturally
ad-
an
bl quantitative terms, of the out- in Economics under
i00ks for the company and for the
my direction.3
Our conclusion was that the pat-l
tern of stock market prices could
economy as a whole.
-4
..
caught up with,
Differences with respect to n°t
shown to be random, nor
protection against,
w lt
Mavnard
is not onlva
knowledge available and opinions was the pattern likely to have
the cost of living inflation.
t
.
'
of both the present and the prob- arisen from J;he cumulation or
A. major difficulty in thG wsy
futurG nccGssarily exist, or summation of
a random series,
but als0 Chairman of the Board of inflation-hedging in the stock
there would be little market'ac- The pattern of the stock market
market is the unpredictability of
tivity.
Some
trades
would,
of was found to have non-random
trnM/iA
A study
the
victor
terprises, and
prices
coin-tossers;
is
A Random Pattern?
E82£ ^inP^nH
the
he
War when inflation
.
,
cite
which
for himself when the music
jmpiies
than
in
Snap neither too soon
nor too
late, who passes the Old
Maid to his neighbor before the
game is over, who secures a chair
says
after the end of the Second World
-
could
pastime
.
^
well
guished British economist that he
"
was led to regard
trading in the
stock market as a "game of Snap,
of Old Maid, of Musical Chairs—
who
erations ranging from the
I
Many buy or sell on their own or
other people's hunches. So much
of this uninformed or naive trading was observed by a distin-
a
(f/ to
».
protect liquid
wealfh and
and com¬
nition of the investment commu- the investment community s per- modity prices rose by 40%
and
nity's behavior—and that this is so sistent proclivity,, to rationalize the cost of living by 30%, the
irrespective, even of the greatly their interpretation to fit its own stock price average, nevertheless,
improved techniques for the use predilections.
These pre-deter4.
of economic indices. *
" .
mined conclusions, in the framework of market moods-of-the-moko<? •* ^ '
to 1950, a 52% rise m commodity
It is not only the
^|°ck rna ket merd often prompt successive
empirical record and recog-
.
Econometric Institute, Inc.
ments is
diffi¬
synchronization between cost-ofwith living inflation and market move¬
movements
price
The
Rejecting the theory that the pattern of stock price move¬
random, economist defends his conclusion that there
market
popular
the
there/ is
to "file" a disFirst, there is market psycholsenting opinion to the prevalent ogy,
including investor foibles,
view that the pattern of stock price on the one hand, making for dismovements
is not random, and parity between the logical economic factors and, on the other,
to the conten-r
tion that there
and
stand
culties
.
By CHARLES F. ROOS*
Founder,
the
of
forefront
the
indices, insuperable
timing
feel impelled
is rational ex-
in
is
economists'
supplanted by the unpredictable
psychological foibles influencing the behavior of the invest¬
ment community. Urges that investment decisions be concen¬
trated on appraising individual issues, on the premise that
"any time is a good time to buy a good value."
I
Factor
a
Thursday, October 17, 1957
.
Techniques for
forecasting Stock
price changes in
of commodities,
market policy to
the
price level
divergence between market fluctuations and external factors,
he maintains the latter
big
a
Regarding the gearing of stock
Citing the record to show the constant
of the stock market.
remains
terms,
"Inflation" As
May denies the validity of economic and fiscal indices
basis for forecasting and timing shorter term "trends"
a
market
in
X-factor.
By A. WILFRED MAY*
Mr.
effectiveness
the
.
.
chS"'.^ ' of^our" meeting' Mr*
y
vance
Exchan°/rm
Prrv/i
in
It
/lfiiirthr
o
stocks
thus
and
•
*
the
itv\
titi
+U
.
-
_
gave
u
action
of
the
•
..
various
cate-
take
place
since
there structure both on short-term
always be forced sales be- hourly and weekly bases and ancause Gf tax liabilities, conflict of
nually. In other words, despite the
as
since the early German inflations,
And, by way of informal con- forecaster
interests
etc.
even
when higher Cowles study on the records of
Here in our current inflationary
firmation, sophisticates know that
earnings' capital appreciation and stock market forecasters, and the
at forecasting bull sessions of the
period surely flight to the paper,
The Timing Difficulty
greater liquidity are clearly indi- Keynes theory, there ought to be
chemical, textile, and even metal cated
experts, the surest "bet" is to
Likewise there would be a
rational explanation of stock
'Vnnw fho muinrihr ^nin.'nn.
Manifesting the difficulty in stocks is not exactly working out
some
purchases for reasons of prices; and if the rational explathe greater the maioriW the more timing
is the investment com- as a satisfactory hedge.
public relations and because buy- nation of past stock market
a
u
...
t
conffdence
commence in the "buckettine"
in
bucketting.
Again,
for
example,
it
is
sig-
nificant that most of the statistical
and
economic
truly
services
invaluable
available
the
job
in
psychiatrist really called for
omist> wh0 Is
of
issues.
evidenced
munity's reaction—and lack of re¬
action—to the rising interest rate
and narrowing of the stock-bond
has
been
performance
in
This
of
differential.
related to that
its High Grade
on
forget
orders
cancel open-to-buy
to
instructions to agents.
or
Trend" Assumption
tion-wise
is
consistent
with
,
,
^ lhte
knnw?
the
thtn^
nrlan
bearing on companies and the Industrial Bond Index) which, in invalidity of market forecasters'
to
appraisal of thair issues; but go 1950 after years of stability, stood assumption that there is a single
and
trend mbodtal to a unified marawry
in the distinctly separate at a normal 2.8%, therafter enarea of
forecasting market move- tered a long extended period of Anf loiw
ie
have exjsted even among groups
ments.
drastic decline, down to 0.94% last Actually, as can be sensationally
jnformation was clearly
illustrated by constant examples,
shown some years ago by Alfr€d
c
July* The ratio at any time after there exists
The Causes of the Abortive
continuing and ex- Cowles IID
1954 when it declined below
He analvzed sepa1.8%, treme
Results
divergence between indiand particularly in late 1955 when
Vp^ records of investment
vidual issues and between erouos rat
y
reclor.ds of investment
Now for some of the reasons for it fell below the
minimum level
i
" oeiween groups counseiors and insurance compa-
Pledge
fo°rS
luch'luflS
^
market.
i
.
the abortive results.;
of
the
could
———-
1929
have
of
stock-craze
been
period,
regarded
as
an
pJ>Re?ark8 ?! M<f' ^ay under
at,meetin& of important danger signal. NeverForecasting Seminar
auspices
of the Econometric Institute,
Inc., Am* txlGlesS, th6 bllll market Continued,
issues
within the over-all
i
bassador
Hotel, New York City, Oct. 11,
Contrary views, expressed by the
i.
x
,
n e
ought
to
be
If a great many traders in comstocks, Possibly a majority,
know very little about their stocks
or why Pric,es should g0 UP or
down' and l£ pro£essional groups
®ro
have not been able to
turn in good
why/then is the pattern
records,
of
stock
prices not random?;The
q"
some
f
of
this
market action
adjoining column.
On
all
ignoring this logical indicator
through
these
Vears
with
x
xi
a
m
the short and
medium terms,
same
number
of
had
groups
merely tossed coins to determine
the outlook, one would have had
a record
at least as good as the
•
STATE AND MUNICIPAL BONDS
CORPORATE BONDS
investment
security
in market professionals. This study,
other fields, Lord Keynes, has de- however, covered a period time
picted this process thus:
during which many statistical sethan
"Professional investment may
likened to those newspaper
be
LOCAL STOCKS
competitions in which the
petitors have
six
prettiest
Robinson-Humphrey Company,Inc.
photographs;
awarded
whose
to
choice
to
com-
pick out
faces
from
the
the
100
ries now available did not exist
and econometrics was practically
unknown.
There
many
WALNUT 0316
ATLANTA
LONG
1, GEORGIA
probably always be
and many sellers
_
prize being who "have" little or no information
competitor on which to base their decisions.
nearly cor-
DISTANCE 421
pnppQ
ences
nf
OI
fhp
tne
nnmnptitor<s
competitors
as
as
a
a
Whole, SO Jhat each competitor
has
to
pick, not those faces
^
t
Continued,
on
on
page 39
i«
exvom
ro;n<;
t
th
to
+o
conditions
ance
or
other 100
with
sell *
.
a"t
x
par-
whether
Suooose
informed
are
in
as
accord-
information,
this
.
.,.
and
a
mereiy
determine
shouid buv
tha[the
of
x-
and
-
.
)vlth P1*0^1" interpretation of what
it means for the future. Then, if
conditions
improving,
are
Continued
2 J.
on
there
page
30
M.
Keynes, General Theory of Em¬
ployment, Interest and Money, New York,
155.
p.
3 Herbert
Runs
as
E. Jones,
"The Theory of
Applied t" Time Series", Report
Third. An™al
£e*?<?ch Coherence
o«
*An address by Dr. Roos before Price
Forecasting Seminar sponsored by The
fred Cowles 3rd and Herbert E. Jones,
"Some A Posteriori Probabilities in Stock
Market Action", Econometrico, 1937, pp.
Econometric
280-300;
.
responds to the average prefer-
average
th#»
nf
are j 000 equal traders
(icular stock and that
the
most
the
because
nprta*/nn
1936,
will
buyers
.
RHODES-HAVERTY BLDG.
tl^nds
that if the
Pectallon
Tne guessers is zero,
demonstrated tnai u xne Suppose> for example, that there
treme
on
The
irt
divergence
over
the formed few
generally determine market
answer11ls
Hprnonstrated
nnrI
a
'
accounting for exdisparity in yield, stems best of the professionals, and no
from the element of style—non- one would have had one as bad as
paper, pub**iajor Setback, ascribed to this
and other causes, only occurring economic and non-predictable, the worst. The coin-tossing group,
That ubiquitous economist, per- as a whole, would have had a bethaps greater in his observations ter record than either group of
ESTABLISHED 1894t;
other speaker on the program, Dr. Charles
F. Roos, are contained in his
4
mar-
ket
Price
in
methods
,
AU
««
lished
scientific
mon
nf
data
1957.
changes could be achieved, successful forecasts of stock prices by
possible.
■
a
statistical
would
ers
,
Fallacy
"The
course
ever
The stock-bond yield
Moreover, the difficulty in pickratio (the average yield of Standing the satisfactory issues inflamaking ard & Poor's 50 Industrial Stocks
perform
factual
gories
Institute,
New
York
City,
October ll, 1957.
1 Alfred
Economic
Cowles, III, "Can Stock Mar-
ket Forecasters Forecast?" Econometrica,
vol.
1,
1933,
pp.
309-324.
H. T. Davis, The Analysis of
Time
Series,
Bl-^omington,
1941; and C. F. Roos, "Dynamics of the
Security
Markets
193s,
lss-ise.
pp.
,
Econometrtca, April
f
Volume
186
Number 5682
...
.
The Commercial and Financial Chronicle
(1685)
stances
(F
Steel
The
Near-and
Long-Term Outlook for
Business and Capital Market
Production
Electric Output
Carloadings
State of Trade
-
Retail
Trade
Commodity Price Index
Food Price
and
Director of Investment
Industry
Business Failures
eral Reserve
the bearish and optimistic business outlook
factors, and the prospective demand and supply of capital
funds, insurance-economist O'Leary concludes: (1) plenty of
car
assemblies, output forged ahead by
preceding period.
some
67.6% from the low
Business
with
week
failures
the
last
week
.
declined
for the
*
-
•
third
"
demand.
'
straight
the
for
no
year.
I
to the
level of
a
that of the
year
first
-
-
Seasonal cutbacks in
ber
accounted
noted.
for
part
was
unemployment from
a
year
James J. O'Leary
caused
by the shutdown in New York of textile plants for:
religious holidays, the department pointed out.
•>\
Last week the Pennsylvania Railroad said it would
furlough
some 4,000 employes throughout its system because of the low
y
of traffic moving over the road. -This would
represent;
4% of the road's total employment;
'
;
The 4,C00 layoffs will be made in all departments and would
~
Vice-President/
/•
■
..
->
• v•
,
„
ital
11
department of the East Rochester Shops., The layoffs, which,:
for an indefinite period, do not affect ear repair
employes.;
market
tFMlyI sLnZesZ
to the
Total employment fell by 700,000 to 65,700,000 at mid-Septem¬
ber, the United States Department of Labor and Commerce re¬
ported.
Notwithstanding this drop, the jobless total remained sta¬
tionary at 2,600,000, the report further noted. Most of the job
reduction was caused by students who ended their summer work
to school.
The agencies said the decline in total employment was about
normal for the month and that there had been no consistent trend
,
in
unemployment
changes.
'
-
far
so
in11957, after
allowances
for
seasonal
*'
Steel users will have about
as
much steel in
inventory at the
close of 1957 as they had at the beginning of the
year, "The Iron
Age," national metalworking weekly, reports this week.
But "The Iron Age" adds that overall figures are
misleading.
Inventories of some steel products definitely are off. This includes
sheets and bars. But stocks of heavier steel products such as
plates,
structurals
and
oil country goods have held steady or
been
increased.
Industry sources estimated that last Jan.
1
user
inventories
stood at approximately
19,500,000 tons. This figure includes steel
Shipped from the mills but not yet in the form of finished con¬
sumer products.
It does not include finished products at the fac¬
tory or in distributors' hands.
During the first three months of the year, "The Jron Age"
inventories
declared,
rose
3,000,000
tons.
Even
in
the
cutbacks
picked up speed in the third quarter when some 2,500,000
lopped off.
Steel inventory declines are expected to continue in the fourth
quarter, but the pace has slowed. It is estimated that stocks as of
Sept, 1 were about 20,000,000 tons. So it is very probable that
were
overall steel
as
inventories will
about
match those
of
last
January
the year closes.
half
this
of
was
a
normal
This increase in mill inventories
•
seasonal
buildup of tinplate.
helped to hold
up the ingot rate
during the summer months.
In fact, steel production in the first nine months of the year
set a record of 87,700,000 ingot tons.
This is nearly five million
tons ahead of output during the same period last year and it was
more
than
1,900.000 tons belter than the previous record of
85,70.0,000 tons set in 1955. It was pointed put that 1956 production
was affected by the steel strike but'"The Iron Age"
says the build^
X'
.
'
,
•/' /
„
-
;4
..
"
;
n) The indication that business
expenditures for-plant and equipment aredevelin^ out. The latest
survey by. the SEC-and Department
.
of
commerce
vindicates that
expected to
rather than
They are now
amount to $37 billion
pated.
the earlier
figure ©f$37.4 billion,
Capital appropriations figures of
the National Industrial Conference
Board indicate the same tendency,
%-the^P«al goods^ndustries of
The picture of new orders
(2)
..
1
V
In considering ^
the capital
ket outlook, it will be
Sigrl
helpful for
: us
-
to take
backward look and to
a
analyze what has been happening
in the
capital market in the past
several
years, and particularly
the latter part of 1954. Gen-
since
eplly speaking, most of the period
since the end of World War II has
been characterized
by
Continued or] page 36
huge de¬
a
mand for capital funds which has
persistently tended to outstrip the
supply of savings. This great de¬
mand has, of course, been the
product of many forces—popula¬
tion growth and mobility,
pent-up
wartime
demands, technological innovations, the cold war, and many
others.
Elementary economics
,.
..
,
teaches
for
that when
us
the demand
product exceeds the supply,
its price tends to rise. In the face
a
of
a demand for capital funds ex¬
ceeding the supply, we ought logi¬
cally to expect an increase in the
price of these funds—interest rates
—and that is, of course,
been happening.
what has
of
persistent demand for
a
capital funds in
orders as they have
new
*or caPltal < funds to> outrun the
the end of July were
supply of savings. The natural resuit has, of course, been a steady
and pronounced increase in inter-
billion compared with $64.2
We
rates.
est
have
heard
much
about
"tight money" as
there had been some re-
nonsense
though
auction
in
the
supply of invest-,
ment funds. Actually, these funds
have increased steadily and are
today at record highs. Capital only
seems
to be "tight" because the
demands are relatively so huge.
have
We
also
in
nonsense
heard
recent
much
about
billion
belief that lack of de-
housing, rather than un-
niand for
availability of mortgage funds, ex-
residential
rebound
this vear< This breeds a belief that
a
fresb *rise jn residential construction cannot be relied on if
needed to offset a decline in busifailure
the
Diajns
construction
of
to
activity
piant and equipment expen-
ness
so
months
down to $59.4
jn December of 1956.
.
ditures.
,
(4)
The expectation that Fedwill be reduced, or
the role of the Federal Reserve in
eral spending
the rise of interest rates that
the
tain
truths
cer-
worth
repeating
and emphasizing here. Faced with
are
belief that
the
economy
a
new
impetus to
Federal
through
spending cannot be expected,
excess of market demand for
<
(5) The difficulty experienced
pqr,iffli funds ahnvp t.hp suntflv of
capital funds above the supply of hv the automobile industry:in. disby t.hp automobile industry,
savings, the Federal Reserve could posing of 6 million cars this year,
have held interest rates down as
(6) Recent behavior of the stock
they did prior to the Spring of market.
The softness in stock
1951
by providing the necessary prices since early Summer is inreserves
to the commercial bank-
ing system to permit an increase
in the money supply to fill the
gap.
.If the Federal Reserve
au-
terpreted as a possible
of
a
we
harbinger
softening in general business,
(7) The belief that a lack of
readily available capital funds and
thorities had followed this course,
Prior to the Spring of 1951 the
effect
exceed
acterized by. a persistent, and<in the past several months, with
s^ron^ tendency'for;, the. demand the result that unfilled-orders at
"
mar-
£
ment. This: boom has been char-
-'v
Continued
would again have been on the
a severe rise in prices. In-
on
page
24
road to
of the sup-
stead, the authorities followed the
ply of savings did not register in
rising interest rates to the extent
only course open to them in the
broad
public
interest — namely,
MONROE AUTO
which might have
policy of permitting market forces to work out a
balancing between the demand for
EQUIPMENT
excess
been
expected
because the Federal Reserve System
under compulsion to sup-
was
port
the
prices
of
securities and thus
Meanwhile, according to "The Iron Age," the mills have been
building up their stocks of semi-finished and finished steel. It
is estimated that over 1,000,000 tons were added in July-August.
About
by
caused
the following:
/d Sfr/cnUy'Tn businc/ o£ manUfartu.^s is cited as
Backward Look—- What's Been
Happening in the Capital Market?
second
quarter stocks were up an estimated 800,000 tons, but despite this,
bar and sheet inventories were on the way down. The inventory
tons
is
toward bearishness
was
of increases in the
since the "accord" between the
outiook
A
,
.•
us
outlays for -1957 as a whole, and'
Federal Reserve and the Treasury
particularly for the second half,
jn the Spring of 1951 it has be-4 will be
slightly lower than anticiy
cap-
.
went back
people.
gov-
ruii'^his year and over the
loneer
e
The East Rochester shops currently employ about 1,200.
1
A Central spokesman added that lessened
freight traffic was
the cause of the layoffs.
T
and
cause
,.
a's
to
busi¬
••; -■:
freight
are
T
conclusions
my
The New York Central: Railroad announced earlier last week,
that it has laid off approximately 400
employes in its new
car
mP
too
place, according to J. P. Newell, v
v
particularly in 1950-1951,
.
volume
not.'be concentrated at any one
omy,
«
about
;
r
T,
like
general
rehtly witnessing the development
developments. - Come the policy of * the Federal
i I- shan discuss briefly the Reserve to permit interest rates to
a
purees M, reflect the basic demand and supoinnrf' SI'
1 Fomi"i£ months, p]y forces in the market. Since the
J , . 5,
certain other forces jatter part of 1954 we have been
f
expected tq affect ,.going through a spectacular boom
ago"
would
of a moderately bearish outlook
the supply of savings. This injec- on business by-many forecasters,
tion of new money into the econ-: Among other things, this tendency
ernmg.influence / on
I
the
true today as in the past.
In the
light of imperfect and often delayed1* information
on
business
trends, a large ^element of prayerful judgment on the part of forecasters is required. We are cur-
cost of living. This pegging operation was abandoned in the Spring
r a
a
first
outlook because this tells
the demand for capital funds and
happens
have
some of the apparent increase in unemployed 0
filing, of new claims by those who had used up theirVquarterly allowance and become eligible in last week for a new
quarter's allowance, the agency added.
was
of
and supply forces in the
capital market.
It also gives us
a
clue to developments in Gov¬
ernment policy.
' ^ v •"
Business forecasting is an art
and not a science. This is just as
business ac- of 1951 because it was doing so
tivity, will much harm to .the American
apparel, textiles, construction and lum-;'"
the week's increase, the department-
of
Part of the increase in total
to
the direct
o ve
review
a
happening in the
mand
look because
in
more
what to expect in the way of a
general economic climate for de¬
what
However,
actually
ness
period to the Spring of 1951 by an
expansion in the money supply
sufficient to fill the gap between
ly the general
business out-
Department figures for total insured unemployed, which run :
behind the new-claims report, rose
by 31,000 to 1,185,000
for the week ending Sept. 28. For the
corresponding week a year
ago, the total was 914,500. ' ■,'f , •
...
;. , .
been
outlook;
consider
am
consider brief-
•
„
the
Sec-
ondly, I
planning
week
a
for
future.
,
much for
so
has
the
to
posits and accordingly in the
money supply. Thus, interest rates
were held
down in the postwar
perspec-
tive
•
even
capital markets;-let us turn now
,
tem, which in turn made possible
a
sharp increase in demand de-
a
has been
some
>
rose by 22,900 to 264,500
ending Oct. 5, the United States Department of Labor
reported.
take
capital market
New claims for unemployment
pay
in the week
to
what
in recent years in order to provide
preecdirigaveek and clo«e
ago.
like
happening .in the
Slight gains were recorded in total retail trade volume as an
upsurge in the purchasing of women's apparel and fashion acces¬
over
would
backward look at
......
sories lifted total sales
,
-
index of Dun & Bradstreet
change from the week previous, but the wnoieoaie
commodity price index registering a fresh low in the latest week
showing
what
con¬
Doubts Federal Reserve will take precipitous action
at first sign of downturn.
wholesale food price
pursued
The Business Outlook
But,
may persist for quite some time.
Notes
banking and corporate liquidity, heavy forward commitment
position of investing institutions, and backlog of defined
week for 1958 model
level of the
about
been
vigorously.
market conditions
*•
industry geared itself last
concern
pressures;
(2) interest rates can be
expected to remain firm at present levels for remainder of
1957, and (3) it's quite conceivable that present capital
similar week in 1956.
As the auto
optimism and for
tinuing inflationary
1.1% above the preceding week, but were 8.3% below the
were
exists for business
one
experienced
in
recent
months
shows that credit restraint should
Research,
After scrutinizing
room
it is
authorities
they have made themselves,
namely that the price rise we have
have
1
done
that
Life Insurance Association of America
Total industrial production the past
week, according to the latest
reports, gave evidence of some slight improvement over the previ¬
ous week.
The steel industry, however, continues to.
lag and in
the words of "Steel"
magazine, "steelmakers are plagued with a
drop-off in demand at a time when steel capacity is
being ex¬
panded substantially."
Carloadings in the period ended Oct. 5
have
to
otherwise would have set ruinous
inflation underway. Indeed, if any
criticism can be made of the Fed¬
By DR. JAMES J. O'LEARY*
Index
Auto Production
because
5
terest
a
yields
Government
to
peg
the in-
them. But what
heavy cost the American people
were
on
required to
pay
for this in-
terest-pegging operation!
In sup-
porting the Government securities
market
came
the
an
creating
for
the
*An
the
Reserve
be-
"engine of inflation" by
a
vast amount of reserves
commercial
address
Seventy-first
National
Los
Federal
banking
by
sys-
Dr.- O'Leary before
Annual Meeting 6f the
Congress of America,
Fraternal
Angeles, Sept. 24, 1957..
f
-
they pursued
a
capital funds and the supply of
savings. Since the supply of savings could not accommodate all of
the huge demand for funds, interest rates were bound to rise,
The
policy
of
credit
by the Federal Reserve
not
cause
restraint
thus did
interest rates to rise.
Latest Bulletin
On Request
M0RELAND & GO.
Members
A
Midwest
huge demand for funds outstripping the supply of savings has
been the underlying cause. A re¬
sponsible group like the Federal
Reserve
authorities had
no
alter¬
native but to restrain bank credit
fexpansion under these: cireum-:
Detroit
1051
Stock
Stock
Exchange
Exchange
Penobscot Building
DETROIT 26, MICH.
WOodward 2-S855
Branch
Office—Bay City,
DE 73
Mich.'
\
6
The Commercial and Financial Chronicle
(1686)
Moonstruck Economy
All
Containing
some
satellite slanted notes on the new orbit of
some brief reference to companies in line
*
"
.
,
'
■
'
"
v
claiming but missing, by is much easier to intercept. All in
either decades or centures, the in- all, however, our strategic position
vention of the steam engine, the is quite tenable but we should
While
that
Vice-President,
International Bank for Reconstruction and Development
bit more in detail.
a
Looking back at ten years of development loans in Latin
America, increasing year by year at an accelerating rate, and
foreseeing continuation of tbis trend, World iBank official
warns Finance Ministers, to undertake a determined effort to
-
^
increase domestic savings
as the first; task ofeconomic leader¬
ship. Mr. Knapp attributes inflation primarily ; to undersaving
Northrop has perfected its Bnark ;
which is
an
intercontinental type
telephone and jolly well get rid of our smugness, model, not really a missile but an
our talents to pro- unmanned air-breathing
;bomher
ducing and operating a moon, £nd which accelerates .from
subsonic I
in truth, been hydrogen toting missiles equal to, to
supersonic speeds in the final'
the first with or better than, the Russians'.
It
stages of its flight, ^ Somewhat
a
circumnavi- can be done, and it will be done similar is the Glenn X»i Martin % >
electric motor, the
misdirection of
television, the and dedicate
or
Russians have,
higher
.
,
dispatch if we just
remember our rival is Russia, and
"satel- not another branch of our Armed
gating
At
moon,
have
with more
a
they are Forces!,
V V;
:
'willing to , Well so much for the, celestial
lite"
nuclear warhead.
,
claim
U.
Cobleigh
research
aim
ucvtiu^nitMi
ment,
>
-
on; a
'[{
v
• ;
\
ifc
QnW'
development have been frustrated
Lockheed, Aerojet, Westinghouse
General Electric.
and
.itionics
and program.
With the challenge to
politicos and our our security that these advances in
markets. A person who is moon Russian technology pose, our restruck is a "lunatic," and many sponse
will not
be
a
pennyhave been acting just a bit that pinching one. On the
contrary,
way for the past fortnight.
new billions will be added to our
avionics;
*
financially
Believes the newly established lnternational Finance Corporation will, make more investments in
Latin America than in any other area
during its early years.
fort'unate eeo_
' h^.-gT
active entries here for strategic g
J .
govern- going to turn from an economizbombarding are, of course, the
°
our mil- ing, budget-balancing Federal
Army Jupiter by Chrysler, North
Y
our
Ira
example, placing: public and private utilities
Latip America continues to be know far better than T The; harsh
ope
the great (hopes ~ori the competition"
for'budgetary "funds
V
* • ■
sayings into military programs and into
levels,, and ■ suggests;;: as a. concrete
consumption
their
report—now what about the bearo w n.
And ing of all this on economics (which
what a rocket is supposed to be the flight orbit
and roll they of
this
column)?
It
looks as
have given to though, by popular request, we're
as
*
/
j
standard NATO squad¬
ron unit for the past three years.
Six hundred mile range with a
Matador,
they
last
By J. BURKE KNAPP*
.
they employ a wide
propulsion units and
fuels. It is in the long range mis-,
sile, however, that the major im¬
portance, and the major outlay of
money lies, so we should go into
benefit from rocketry.
to
Investments in Latin America
missiles-
listic, and
variety of
and
economy,
our
foregoing
'
Enterprise Economist
j
the
of
for the most part, tactical—
some are
guided, some are bal¬
are,
COBLEIGH
By Dr. IRA U.
,*
r
*
Interceptor
Bomarc
production.
mile)
(200
under
Thursday, October 17, 1057
...
Aviation
American
our
and
Sperry
-
the Air Force Thor,
by
Douglas,
General
ElectriP,
North
American
Aviation, and
Rand;
AC
and
■
Sparkplug Division of Gen-
eral Motors.
.
wo#
Our most
by
the
overriding demands of *
military
programs ; pr. by.
The
clarpor' for .higher standards,; of i?
.
consumption .before; the-; invest- %
the immediate
shadow of the
af..t T Y.f s7
contiict»i lt Js
a
°f mag-
ments which>
tain
these
are
necessary to
standards
have
made?r"'
Productive
•'
investment
sus- ^
been
'
;
in
eco-
riom ic developnient
this is! the
touchstone Of ecOnomic ;progress.,
The fact that: the great;; bulk of 1
Y
.
.
Senator Symington inveighs for
special session of Congress, Senator Bridges believes a committee
investigation is in order; Kruschev
cays
manned bombers are now
outmoded, and the whole extent
and direction of our spending for
defense and research will shortly
be reexamined in light of the Rus-
To equal or surpass the Russian •
defense budgets, especially in the
PPro
this investment must jbe derived
areas of rockets and research, and ICBM (assuming they really have
rncf ^
^
r, frpm domestic savirigs!'has PI
new billions, no doubt will be al- one) we have our Atlas at the
ways
-been a commonplace in discus- {
located to buttress and beef up testing level, for distances hp ^^ ^J^e^tRio *
sions. • It must:. be bven more so
9ur allies. So we will probably 5,500 miles. The major coritrac°" J. Burke^ Knapp
today in view of the acute capital
ne11 *
see no further military cut-backs, tors here are Convair Division;(of a • J
General Dynamics), General Eloc- ;
ai}d it is expectable that our $275
^^cording to
,
shortage which has developed
billion debt limit will have to tric, North American Aviation and fi fties, P£fPare^^^
Latin even in the most advanced counf>° by the boards. All of which is Burroughs. Our alternate is the nopiic^. Commission
sian moon, by our new Secretary
of Defense. Meanwhile the stock
inflationary in character,
market has fallen out of bed.
On
has already been sufficiently evi-
Friday, Oct. 11, 487 new lows and
no new highs were
recorded on
the New York Stock Exchange.
'And, on the frivolous side, an
aent and amply commented upon,
It was apprehension in action,
Stocks last week were hurled at
bids which kept fading, and1 the
a
Italian restaurant in New York is
¥
.
;
The first effect
issues
that
the
stood
riartin,Lfavu
the market
on
ctand? Are the Commies equipped
to
attack
us
immediately, and
win?
It does not appear so.
True,
they have an out-size basketball
bulleting through space at 18,000
MPH.
tt
can
It can't bomb anybody, but
take infra
red
pictures,
(Incidentally,
the
moon
Now
siles
if we'd ^ launched
first, the Russians would
done
down
their
their
it
so
best
wouldn't
to
pounding
to outer space, it might, be of in-
Merest to jot down some of the
companies m the main stream of
aerial technology. While by no
b^ans complete, the following
n°tcs about various rockets and
™}?sl}es ™*tY}e companies ldentitled with their development and
Production, may prove unforma!lve and helpful to investors seek-
,
of
that
mayhem.
deliver
Our
Army
In the 5 to 20 mil
arfin
operation
tStedfor accurate^ight^t l^OoY lhe Navyby
"(sreguetesrt'afhigha's
The
Tei
rler
I
{here's
missile
existing
production. We have
bases
close
enough
to
Moscow to
lay
of
a
zero in with
these, and
lethal wreath at the tomb
Lenin.
have
a
(And admittedly we
much larger atomic stock,
altimeter.
division
fo?
Hercules Powder,
F
a
k-?n
Etrate-'iV1 Mr Co'm in nd'V
a
th
B52™ averted
Boeing B47s and
at
key runways over the globe —
Alaska, Iceland, Japan, Morocco,
England — to swiftly atomize a
broad
swathswam
of
01
anv
any
aggrp^nr'Q
aggressor s
a
a
on
target
target,
take
while
wnue
a
a
missile
missile
only minutes. And
a
would
would
bomber
Standard
,
Coil makes
Vmv
^
the
development and it is sim-
nomic
.,..
...
jjost ;.deplorable- consequences^ wf
to eco-"
proposition relates
iviy piupubitiuxi icidtca^ w
barrier which
twp.n
it erects be-
ahd riotential hnrrower«? I
ue
:lv;
" a^.a
oorrowers.
an
altimeterWf«•.aev^opment. jj.
often just during a time of
?'* noiaf Patents °h an altimeter » can and wili be.achieved by those. - fl tidn that "a-countrv- is mosh
of remarkable
company,
Melchoir
Co
holds natents on
Engineering
tested
testea
bv
oy
'
Bulova
uuiova.
rdbhtrnes
do
want
it
eiibueh
channel
,
the
necessary
"Qn-tn.at a country is most
to;1
couptries ao .want it eiumgii iu
:
(
;
nronorhic ;deveIonment
nrv «tKaf
now.,be-
accuracy,
domestic
to
anxloUs
supplement
hvv borrowing
sourcps
its, re-,
from
the"
rSiL savAP^s; into j. productive..-. invest- Bank: Yet the inflationary devel-f
hut
•snare
«Hth
fhmihS1vnd'
:
rnmLnip!
'
:
opment itself is likely, to prevent'
f'.'3 '>
" Want it enough? Don't all coun- the proposed investment from ac-1
rdad
a
J?
nw
ffnfntf Sn It
tries obviously want it enough? complishing its purposes. For this
WeU> I am.reminded of a remark- and other reasons, it is also likely'
^veara not
with rocklfe able speech delivered
and Douglas
Emeis0lV brtreXarehtaeonlv new uenetra- meeting of ECLA by,at a recent to increase-the?risks>of lending;
our
a brilliant beyond those wh;ch : the Bank can
y
Douglas.
ln
f,
^ mde zone, tion into outer SDace develooine Latin American economist,. Dr. prpdently and reasonably incur;
Roberto Campos of Brazil. As Dr. m the abseuce of, som^ fundaJ
Army's Honest John the application of solar or
+7 Douglas and Hercules Powder ; power, and creating a technologi- Campos put it:
holn®77
Army Nike Ajax by Douglas, cal advance that may make Jules " "For the Latin American coun- and
^LmrSLid "
? ' Western Electric and Aero- Verne look like King Canute. The tries; there is no more dramatic sue-Tftrth'»
vefy successful indeed in the next
-
,
,
-
*
Firestone>
?
?h ®
5 *0°-500 ^
rhrv<?<!?
Chrysler,
tion
Eya^an^GilHlten^AU
a
right rocket stock should soar. It
be found amoni the compa-
of
nies we'^e cited.
more
Jonathan Adds
pr?du.ctlon>
miles) by
Staff
(Special to The Financial lhkomiclb;
w iuii riwsntiAi Chronicle)
vopcu«i
LOS
and
and all for either the Army or the
Air Force.
Boeing now .has its
to
fkTl
Ralph
h
Jim
C.
Courtney,
defense
^imes to
.^w of.
age
imnhrtant thah social
iiistiop
important, tban;. social, justice,
linpui nun; lutiu;. oyvia*. juauv-c,
be-
wv
_oe-
glSfcSSr'
V7he MiXtries of'Fhiance^'the
P*TtTT' a"Vhe
Central Banks of tjus Hemisphere
Phihp Sahl and Stan-
'w;ie
staff of Jonathan & C°" 6399 Wl'
Oo
shire Boulevard.
,
,
ANGELES, Calif Ayman'
Beardsley,
Jack
.
utoL to
^inies to over-consum^i^,som^
capacity, is. a 'by-product;.'of,, econorriic prosperity. It is.even more
since' ih; this, modern
Noith American Avia-
eve.r' models in various stages of
des,lgr?' research and development,
.
'
ran2e> only
fla^iSS'
or more
T™™ "7
,
urgent problem than that
economic development. It is
iniportant M than , defense,
may
Sperry Rand
Dougl
C.
geography. The only drawback to Lockheed,
Convair, R.C.A. and
this bombing armada is its speed. North American all have, howHours would be- required to "fly"
^-.pacity'of; the; growing xountiy.
Kohlsmann
of
rtood one, ana a auite unknown
gooa one and a quite unKnown
hv
? J
hdeh abl|xto overcome^
.
the
3et; the Army Sergeant by Red-
pile.)
Mi^S;
.
.
Vmle,
mass
both
thrust,— ep ^iad9»
rppay. ,.O.n tpe other Jipnd,^if
flight speeds of missiles. Some;but;on the; :yytiblfrj^he;i;'i)ut^;^-jthere:is a ^serious lack of,dopie^tic
of these fuelers are U. S. Biorax, grbwthTs Slowjer^-than. iL was. Jsavings?,; ythis^-is •, almpst , alwaysAmerican
Potash
and ■ Thiokol; may; weli be, timely, .therefore, .to associated, ^botli. as caqse and <,as ,
Corp, y Aerojet, Reaction: Motbrs,y givey sober reflectiqiir to some of cttect, with^'innau^
ana mone-.,,
Rocketdyne Corp.
and Thiokol<the.;difficulties: that have; arisen tary instability.
. r
.
'■ '
have pioneered in propulsion eie- and t6. some of the factors, which ' It would be superfluous ior me,
ments. Finally, how do you know ; haveystood in the way- of a more to expand pn the" evils ;of inflahow high a rocket is
-—
- - '
=—-*uOVi.vn
=■ tmn
mo rirvlv nssorf fhaf frnnrt
ment in flight? The
(alsostoSchedt hv
Convai? For tae Ata
Only last week the Terrier II
Air Force "Thor" had a second
Sperry and
successful test (2 out of 5 for a
?ord
.400 batting average) and between
the
these aerial pagan gods (Thor of Hnghpc nnH
the Norse, and Jupiter, late of
Rome) we may swiftly implement Electric
drawn
are
mum amount of savings for domestic investment. This is not becaUse^^ foreign sources of capital ;
seek to reward the virtuous. It^ Is
simply because notliing more effeetively reduces the risks, of irivestment and enhances the credit;
of the country concerned. The'
flow of domestic, savings com-y
binedv with the foreign investment
derpressures whichtheyhave^n.ot funds ddubly. strengthens the ca-i*
ble to the power take off
ins
ing
4,000 miles).
-
and
■
th
fuels
liquid and solid, are
shoot; it
photograph
can
weight
lisht
New
range (and also operational in the
functioning ICBM (5,000 Navy) is the "Sparrow" by G. L.
mtle range) but we do have a Martin, Aerojet (General Tire),
couple of Intermediate Range Bal- Raytheon and Sperry.
Missiles
•
-
a
plenty
^ b-e
t2ward those countries which
P^^ded
since investor thinking now runs
claim to have such. We don't claim
Jistic
mis-C0Untries< ;
!
;; What is more, external capital
these fascinating
all
and
l10n^n-ftethemselves producing; the maxi-,
La's.) Although it can't bomb any- * From two to six miles is the
one, it does prove that they have air-rto-air anti-aircraft "Sidewindperfected some, terrific booster er," now operational in the Navy
rockets—rockets big enough to be and built
by Philco and General
converted into ICBM's—and they Electric. In about the same
target
to have
,„
rockqts require directional
control
either
just
at
launching (ballistic) or continu- Parts.
ously during flight (guided). • For, •
this
electronics
business
IBM,, terms of trade,thab
RCA, Sperry, Minneapolis Honey- Years ag0- At the same time, there
well, Litton Industries and many..™9re
others ate important.
Perkin- ponsumption than eyerj before. 7
Elmer Corp. specializes in infraThis . progress has pot been
red control and photography and achieved . without
great ; efforts,
this company is also important in however, and the picture has its
making nose cones and the lens, "darker sides. The rapid expansion
mechanisms and instruments that of previous. years ; has put the
track and record missile flights.
; economies of some countries un-
mg promising issues in this area,
Qur approach will be a bit un~
top-secret military Shangri usUal from short to long range.
have
caii
.steadily.ai^ong
„
.
_
offering Sputnik Pizzas which, it best were those importantly readvertises, "are out of this world." lated to the missile program. And
Well, with all this earth shaking
going on, where do we really
.
.
being researched and dies-.best,: external capital
supply,
Glenn
L.
veloped
by
--a
J€9n:rl?ingRepublics as a onjy a smaji fraction of the total
r>«n
t
the
American
Avco
Corp., ' Bell Laboratories, •,^ie
American iiiuic cxicuuictgiii^, investment required for economic1
Republics
wnoie.
jLvt:ii
Arma Corp. and Aerojet.
h
whole. Even more encouraging progress in the underdeveloped
Titan
*An address by Mr/Knapp before the
Ecottomic- Goaferehee
of
'
American
..thef.OrBanlaatioB '
States, Buenos Aires, .'
tho
system.
economic
{f
if
mnu
development, I believe
rnn<;t TnmrWiv
''nrhnprlv
be
b^
attrib-^
a
^ SrSgforthl
mis-11
,
flirection of savings to unproduc-j
he'^atta American co^te!
achieved impressively high
haye
-rates ■ of savings in relation to
Cqkttimed Vti pageVS
r
.
f
Volume
186
Number
5682
The Commercial and Financial Chronicle
...
f
p
<
/
'
//
,';%X pvif
(1687)
7
V
/'
f'dfT ;
Cf
'
\
A
4 f'.r
-
.
S
'o
s
•'
$63,500,000
/
'
'
••
;
.
and Flood Relief Bonds
Improvement, Capital
nignway
Dated October 1, 1957
Due October 1,
-
1958-77, incl.
Principal and semi-annual interest (April 1 and October 1) payable in New York Ci/v/t Bankers Trust Company, in Boston at The First
National Bank of Boston, and in
Chicago at The First National Bank of Chicago. Coupon bonds .in denomination of
#1,000, exchangeable for fully registered bonds in multiples of $1,000, but .not interchangeable.
A
Legal Investment for Savings Banks and Trust Funds in New York and certain other
C
States and for Savings Banks in Massachusetts and Connecticut
,
H
These Bonds, in the
opinion of the Attorney General of the Commonwealth of Massachusetts, will constitute general obliga¬
of which its full faith and credit will be pledged, including the authority to levy
upon all of the taxable property within the Commonwealth. The offering comprises $42,000,000
Highway Improvement Loan Bonds, $15,000,000 Capital Outlay Loan Bonds and $6,500,000 Flood Relief Loan Bonds.
tions of the Commonwealth for the
payment
unlimited ad valorem taxes
U
S
AMOUNT DUE EACH
$3,183,000'1958
2.50%
3,183,000
3,183,000
■'
'
1960
3,183,000,
■:
1959
'
'
•
.
1970-71
1972-73
3.40
1965
3.20
3,183,000
3,183,000
1966-67
3.25.
3,182,000
1975-76
3,183,000
1968-69
3.30
3,025,000
1977
C
offered when,
;
"
(Accrued interest to be added)
..
.
and if issued and received by
as
.
3.35%
3,183,000
3,183,000
3.00
are
$3,183,000
3.15
,
.
...
The above Bonds
3.10%'
1964
2.75
•
3,183,000 .1962
I
1963
3,183,000
1961, 2.90
T'
'#■
YIELDS
$3,183,000
-
2.60
.
YEAR AND
f
us,
,1974
3.45
3.45
%
3.45
•
and subject to prior sale and approval of legality
r
'
.
The Chase Manhattan Bank
The First National City Bank
of New York
Halsey, Stuart & Co. Inc.
!
„
by the Attorney General of the Commonwealth of Massachusetts.
Bankers Trust Company
The First National Bank
of Chicago
.
„
Chemical Corn Exchange Bank
'
.
.
,.
.'
r
Blyth & Co., Inc.
Lehman Brothers
-
Harriman Ripley & Co.
Continental Illinois National Bank and Trust Company
Phelps, Fenn& Co
,
"
Smith, Barney & Co.
C. J. Devine & Co.
The Northern Trust Company
Salomon Bros. & Hutzler
Goldman, Sachs & Co.
Eastman Dillon, Union Securities & Co.
of Chicago
Glore, Forgan & Co*
\
.
Drexel & Co.
: The Philadelphia National Bank
R. W. Pressprich & Co.
'
(
Merrill
The First Boston Corporation
Incorporated
!
Kidder, Peabody & Co.
*.
-
Lynch, Pierce, Fenner & Beane
•
The First National Bank
^
L. F. Rothschild & Co.
...
Incorporated-
......
_
Seattle-First National Bank
White, Weld & Co.
Blair & Co.
Ladenburg, Thalmann & Co.
Bear, Stearns & Co.
of Boston
CarlM.Loeb, Rhoades & Co.
F.S.Moseley & Co.
'
Shields & Company
Stone & Webster Securities Corporation
Paine, Webber, Jackson & Curtis
1
The First National Bank ;
•
The Boatmen's National Bank
-
of St. Louis
*
of Portland, Oregon
A. C. Allyn and Company
G. H. Walker & Co.
Hornblower & Week^
Incorporated
Hemphill, Noyes & Co.
(
Barr Brothers & Co.
Baxter &
Dick & Merle-Smith
Dean Witter & Co.
Coffin & Burr
*
Adams, McEntee & Co., Inca,
Incorporated
.
Bache & Co.
B. J. Van Ingen & Co. Inc.
Equitable Securities Corporation
Company
Francis I. duPont & Co.
.
Hallgarten & Co.
A. G. Becker & Co.
J. C. Bradford & Co.
Braun, Bosworth & Co„
Incorporated
Geo. B. Gibbons & Company
Kean, Taylor & Co.
•
Alex. Brown & Sons
Incorporated
First of Michigan Corporation
Clark, Dodge & Co.
Dominick & Dominick
Incorporated
Estabrook & Co.
Stroud &
Company
Incorporated
Ira Haupt & Co.
Hayden, Stone & Co.
Schoellkopf, Hutton & Pomeroy, Inc.
Hirsch & Co.
*
Laidlaw & Co.
•
i
W. H. Morton & Co„i
Incorporated
Lee Higginson Corporation
W. E. Hutton & Co.
The Marine Trust Company
Shearson, Hammill & Co.
City National Bank & Trust Co.'
Kansas
Wood, Struthers & Co.
Branch
Reynolds & Co.
Laurence M. Marks & Co.
R. S. Dickson & Company
of Western New York
1
.
.
Fitzpatrick, Sullivan & Co.
*
Laird, Bissell & Meeds
Eldredge & Co.
E. F. Hutton & Company
Incorporated
Rand & Co.
Spencer Trask & Co.
Townsend, Dabney and Tyson
Robert Winthrop & Co.
Bacon, Whipple & Co.
California Bank
,
Wm. E. Pollock & Co., Inc.
Los Angeles
Courts & Co.
*
.
Tripp & Co., Inc.
Fidelity Union Trust Company
Incorporated
National State Bank
<•
»
.
,
Newark
Robert W. Baird & Co.,
King, Quirk & C&>
American Securities Corporation
Chas. E. Weigold & C v
Incorporated
Baker, Watts & Cs,
Rockland-Atlas National Bank
'
First Southwest Company '
McCormick & Co.
A. M. Kidder & Co., k-p
1
,
R. D. White & Company
of Boston
New.York, October 16, 1957.
Barfbw Leeds & Co.
Incorporated
Incorporated
Blunt Ellis & Simmons
:
R. H. Moulton & Company
,
Newark
Dwinnell, Harkness & Hill
Third National Bank
'n
-
T
Kansas City, Mo.
William Blair & Company
The Ohio Company
Wilson, N. C.
Bacon, Stevenson & Co.
Incorporated
Commerce Trust Company
Incorporated
City, Mo.
Gregory & Sons
Banking & Trust Co.
Incorporated
Tucker, Anthony & R. L. Day
Weeden & Co.
F. S. Smithers & Co.
Roosevelt & Cross !
Nashville
'
Wachovia Bank and Trust Compary
Winston-Salem
The Commercial and Financial Chronicle
8
Thursday, October 17,1957
...
(1688)
is
What
York 5,
Dealer-Broker Investment
Tax Free Bond?—Discussion
a
to
Inc.—Report—Peterson & Company, 3511
Street, Houston 2, Texas.
Ambrosia Minerals
Main
pleased
firms mentioned will he
American
send interested parties the following literature:
"fusion"
research and appraises the outlook for progress in this
field, ^mentioning Industrial companies carrying on fusion
research and describing the growth possibilities for radiation instruments in predicted expansion in use of radioactive
materials over next five years; comments on Newport News
Shipbuilding and Dry Dock Co., Preston East Dome Mines,
Ltd. and Metals and Controls Co.—Atomic Development
Mutual Fund, Inc., Dept. C, 1033 Thirtieth Street, N. W,
(No. 31)
—
Discusses thermonuclear
American
View
—
Monthly Investment letter
—
Bull Market Over
—
Bulletin
—
Brcgman,
•
-
Bethlehem Steel
Securities Co.,
Chippewa
a
pany.
&
.
is
Fluor
Food
vs.*
York
Component Manufacturing.
Bonds—Bulletin—Purcell & Co.; 50
—
Memorandum
—
the Broadmoor.
Eastman DHIon
Maryland Road Bonds
A group; headed "by
Eastman
Dillon, Union Securities & Co. is
offering $15,000,000 State Roads
Commission
of
Maryland
5%,
3Vz%. and 3.40% bonds- due 1958-*
-
Co.—Memorandum—Auchincloss, Parker
.
Ltd.—Report—William
R.
Staats
Bulletin
—.
&
.
.
1972, inclusive, at prices to yield
to 3.44%. The group
Co.,
from 2.60%
•
was
Conklin Organization, 120
Also available is a bulletin
for
a
U. S. Vitamin Corporation.
Ileyden Newport—Data—Joseph Faroll & Co., 29 Broadway,
New York 6, N. Y.
In the same circular are data on
Spencer Chemical Co.
/
120
Massachusetts
Blair
?
&
.
Bonding
,
and
Insurance
Company—Analysis—
—
Memorandum
—
M. S. Gerber,
scot
&
Co., Penob-
Building, Detroit 26, Mich.
Sanders Associates,
-
Inc.—Report—Kidder, Peabody & Co., 17
Sherritt Gordon Mines
115
Approx. 25
Southwest
300
Primary Markets in Subsidiaries:
on
Ltd.—Memorandum—Goodbody & Co
have
,
a memo¬
Corp.
—
become
Perry
—
First
California
Montgomery Street, San Francisco 20, Calif.
.
Tracerlab, Inc.
Milwaukee
Company, 207 East Michigan St, Milwaukee 2,
Wis.
Cramer Controls
;
•
.....
Sylvania Electric Products, Inc.
Jackson & Curtis, 25 Broad
Baird-Atomic, Inc.
E.
T.
*
c o n n e c
Blaine*
&
t
e ck
with
4519
Co.,
Co.,
—
.
LOS ANGELES, Calif.
G.
.
Analysis
—
Paine, Webber,
Street, New York ,4, N. Y.
With Lewis-Davis
(Special to The Financial Chronicle)
T
,
Ohio—Harry
Main Avenue.
Memorandum
Standard Steel Products Manufacturing, Company—Circular—
Cameo, Inc..
\
ASHTABULA,
Ultramar Co. Ltd.
Gas
Blaine
Kelly and Reuben P. Markijohn
Broadway, New York 6, N. Y. Also available is.
randum
Today's Market
Two With Perry
CSpecial to The
Wall Street, New York 5, N. Y.
,
Net Asset Value June 30, 1957
$43.83
Reynolds & Co.; Hemphill, Noyes
Co.; Coffin & Burr, Inc.; Dick
& Merle-Smith; SchoellkOpf, 'Hutton
&
Pomeroy, Inc.; Hayden,
Stone & Co.; Ira Haupt & Co.; F.
W. Craigie & Co.; HIrsch & "Co.;
Francis I. duPont & Co.; Roose¬
velt & Cross, Inc.
.&
Outboard Marine—Memorandum—Robert W, Bajrd & Co., 110
East Wisconsin Avenue, Milwaukee
1, Wis.
—
Hall-
Hutzler;
&
t
Inc., Ill, Broadway, New York 6, N. Y/
•
Cp.; White,, Weld & Co.;
Bros;
garten & Co.; Lee Higginson Cor¬
poration; A. C. Allyn & Company,
Inc.; Hornblower & Weeks; Kuhh,
Loeb; & Co.; Ladenburg, Thalmann
& Co.;'
.
Metallurgical Resources, Inc.
—
.
the offering are:
Salomon
Co., Incorporated, 20 Broad Street, New York, 5:
;
•;
,
New York.
in
to
.
Devine &
Big Piney Oil & Gas.
Discount of 42%
of coupons,
combination
interest cost. Of 3.5062%
Halsey; Stuart &JCo.Inc.; C. J.
"
-
Industries, Inc.—Analysis—Laird, Bissell & Meeds,
Broadway; "Nevv York 5, N. Y.
Production—Report—Western Securities Corp., l ]
Exchange Place, Jersey City 2, N. J. Also available are re¬
ports on Three States Natural Gas, Delhi Taylor Oil, and
American Research and Development Corp.
the
net
Associates
Houdaille
,
Monroe Auto Equipment—Bulletin—Moreland
We call your attention to;
awarded the bonds at competr
itive sale Oct. 16 on its bid of par
DeWitt
Northwest
For Financial Institutions
Group
Offers $15 Million
the Commission.
Broadway, New
4, N. Y.
(Colorado
*
National Security Traders Asso¬
ciation Annual Convention at
Hemphill, Noyes
Spring Street, Los Angeles 14, Calif.
—
29-Nov. 3, 1958
Springs, Colo.) -' *■
Transcontinental Gas Pipe Line Corp.
on
Broadway, New York 5, N. Y.
on
analyses of the Grocery Chain Industry and Food Machinery
in Atomic Plant and
Mart
- -
—
Discussion in current issue of "The1
Exchange"; Magazine—as well as articles on "Leisure Time
and aeommon stocks," "What Price Debt" etc.—"The Exchange*'Magazine, Department TB-7, 11 Wall Street, New
York 5.,. N. Y.—$1 per year.
Stocks
Oct
—
Street, New York 5, N. Y.
Corporation,
640 South
Richelieu, Murray Bay#
Quebec.
Company.
Soft Drink Industry
review of ' world potentials
Manoir
& Redpath, 725 Fifteenth Street, N. W., Washington 5, D. C.
Also available is a memorandum on Potomac Electric Power
;
Corporation.
a
memorandum
Federal JPaper Board
Industry—An economic analysis
—Puget Sound National Bank, Tacoma,- Wash.
Corporation; and <
a
& Co., 15 Broad
.
Problems, of the Fir Plywood
& Chemical
of Canada annual convention at
r
■
Witter
of
Emhart Manufacturing Co.
4, N. Y.
are
' V i'\:;
'
;■
Co.—Memorandum—Rauscher, Pierce & Co.,
Mercantile Bank Building, Dallas 1, Texas. Also available
up-to-date com-parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocks 1
used in the National Quotation-Bureau Averages, both as to >
yield and market performance over * a 13-year period — ■
National Quotation Bureau, Inc., 46 Front Street, New York;
Also available
■ ■.f
;
.
9-12,1958 (Canada)
Investment Dealers* Association
-
El Paso Electric
Kidder, Peabody & Co., 17 Wall Street, New York 5, N. Y.
Co., 120 Broadway, New York 5, N. Y.
June
Railroad—Analysis in current
"Gleanings" — Francis I. du Pont & Co., 1 Wall
Street, New York 5, N. Y. Also in the same issue is a brief
analysis of Public Service Electric and Gas and a list of
"Quarter Century" dividend payers.
Over-the-Counter Index—Folder showing an
&
at the Shamrock Hotel.
Also available
Corp.—Analysis—Dean
Co., 14 Wall Street, New York 5, N. Y.
issue
City Bank Stocks—Operating results at Sept. 30—
Upham
;
Texas Group Investment Bank¬
ers Association annual meeting
Denver & Rio Grande Western
City Bank Stocks—Quarterly analysis of 13 issues
Sputnik and the. Stock Markets—Bulletin—Harris,
April 23-25, 1958 (Houston, Tex.)
*
Analysis — William Blair &
Company, 135 South La Salle Street, Chicago. 3, Ill.r 5
discussion of Stocks for Income with •
Selling to Establish Tax Losses—Bulletin—A; M. Kidder & Co.,
Inc., t Wall Street* New York 5, N. Y. Also available are
memoranda on Atlantic Refining Co. and General Telephone
•'
^
Southern
the
Hotel.
Incorporated,
Electrodynamics
Continental Casualty Company
—Laird, Bissell & Meeds, 120 Broadway, New York 5, N. Y.
New York
Street, Milwaukee 2, Wis.
-
Consolidated
Strength—Harris, Upham & Co., 120 Broadway,
York 5, N. Y.
New York
Mason
& Co.
winter dinner at
.
reports on Massachusetts Bonding and Insurance Com¬
pany, Eli Lilly and Company and Travelers Insurance Com¬
Defensive
New
Plastics, Inc.—Report—Loewi
East
225
Japanese Stocks — Current information — Yamaichi Securities
Companv of New York, Inc., Ill Broadway, New/York-7,
New York.
Market Review—With
Baltimore Security Traders As¬
sociation 23rd annual
mid-
are
Ltd., 01 Broadway, New York 6,
.
Jan. 17, 1958 (Baltimore, *Md.)
Herbert D. Stern & Co., 52 Wall
—
Limited—Analysis—Burns Bros. & Com¬
Limited, 44 King Street, West, Toronto 1, Ont., Canada.
pany
Cummings &
;'N. Y.
Data
Holly¬
at
wood Beach Hotel.
Canadian Breweries,
Also avail¬
economic picture
Stock Market—Monthy survey of
—Nomura
—
Convention
Annual
Street, New York 5, N. Y. Also in the same circular are data
on Duquesne Light Company.
Co., 100 Broadway, NeW York 5, N. Y.
Japanese
Investment Bankers Association
Aircraft—Analysis?- du Pont, Homsey & Company, 31
Milk Street, Boston 9, Mass.
Also in the same bulletin is
an analysis of Best Foods.
.
Is the
Fla.)
Wall
& Co., 40
Express Co.—Memorandum—Riter
(Hollywood Beach,
Dee. 1-6, 1957
Street, New York 5, N. Y.
Burnham and
Company, 15 Broad Street, New York 5, N. Y.
able is current Foreign Letter.
the Homestead.
Raytheon Manufacturing Co.
on
Beech
Washington 7, D. C.
Burnham
National Security Traders Asso¬
ciation Annual; Convention at
Street, New York 4,
memorandum
(Hot Springs, Va.)
Nov. 3-6, 1957
Lines—Memorandum—Oppenheimer & Co.,
N. Y. Also available is a
Export
Broad
25
Atomic 'Letter
EVENTS
P. McDermott & Co.,
*
n
It is understood that the
COMING
N. Y.
Yielding 7 %—List of 40 stocks—Peter
42 Broadway, New York 4, N. Y.
Recommendations & Literature
in form of questions
answers—Hayden, Stone & Co., 25 Broad Street, New
and
—
*,
Irving
Searcy has become connected
with
Lewis-Davis, Inc., 523 South
Spring Street.
Ionics, Incorporated
Northwest Production
ATLAS
High Voltage Engineering
Three States Natural Gas
CYPSUM CORP. LTD,
Machlett Laboratories, Inc.
Midwestern Instruments, Inc.
Delhi-Taylor OH
MARKETS
Induction Motors Corp.
Big Piney Oil & Gas
SOLD
Special Reports
Trinity Place, New York 6, N. Y.
—QUOTED
Request
Western Securities Corp.
Association
One
74
on
Current Market 3%
TROSTER, SINGER & CO.
Members: New York Security Dealers
BOUGHT
.
Airborne Instrument Lab., Inc.
,
(Canadian)
DEMPSEY-TEGELER £ GO.
Exchange Place, Jersey City, N. J.
Telephone HEnderson 2-1000
Open-end' phone to N. Y. C. HA 2-0183
J.
C.
GRAYE
15 Maiden Lane
-
3%
CO.
New York, N. Y.
Tel. WOrth 4-1030
Number 5682
Volume 186
.
(1689)
.The Commercial and Financial Chronicle
.
justification of our foreign,, aid
program these many years.
No
word of this spending and this,
protection is now heard in the
From
Washington
Ahead of the News
lindt°of/our debt c^iling^that
Dullinour
must
;
Slpr]and
hsls
ineffable Stalin
The
said
once
but
by
them
invoices until Jan.
to
satellite
means,
whether
it
Unlike
death.
the
to,
tercontinental missile, an
military
enterprise is
one,
a
highly im¬
portant
and
still
be.
and
the
atomic
the
as
.firm
Two With Hill'Richards
LOS
A.
staff
bases,
these
of
spending * has
This
the
main
been
Robert
and
With Reynolds & Co.
L.
(Special to The Financial Chronicle)
added to the
& Co., 621
BOSTON, Mass.
Richards
Hill
of
Kimball
Spring Street, members of
South
With S
_
•
•
,•
....
LOS
Morton S.
—
added
to
With H. Carroll
..
(Special to The Financial Chronicle)
been
-
(Special to The Financial Chronicle)
BEVERLY HILLS,
ANGELES, Calif.—Jack J.
Calif—Wil-
Apple, David T. Fleischman, and liam F. McCord and George R.
Theodore Hersh have become as- Vincent
have *. become affiliated
sociated with Samuel B. Franklin with H. Carroll & Co., 324 North
(Special to The Financial Chronicle)
Company, 215 West Seventh Camden Drive. Mr. McCord was
Street. All were formerly with previously with Wilson and
Overton & Co., 1134 Orange Ave. J. Logan & Co.
Bayley. ,
&
CORONADO, Calif.—Francis G.
Lugert has joined the staff of J. A.
standard of
effort is spent
great
maintenance of the mili¬
towards
Russian system
Senator
Exempt, in the opinion oj counsel, under present laws from all Federal Income Taxes.
New Issue
Mrs. Roosevelt
—
Capehart
Homer
who
Indiana,
Interest
•
of
$15,000,000
the State De¬
says
partment is making a great mis¬
in
discouraging Americans
take
from
would
It
Russia.
visiting
State Roads Commission of Maryland
perhaps be a wise investment, he
says, to give all of our discontents
a
free
trip over there.
State
unquestionably accomplished a
achievement in thenlaunching of the satellite. Among
some
of
our
leading politicians
and in the Eastern press there is
a
hysteria that we have got to
take the brakes off our spending,
we've
to cut
got
other
and
such
this
meet
to
down
on
Coupon bonds in the denomination of $1,000 each, registerable as to principal only, and registered bonds without coupons in
denomination of $1,000 or any multiple thereof. Coupon and registered bonds interchangeable. Principal and semi-annual
interest,
our
The Series K Bonds will be
sit
to
it is called,
science,
the
headlines.
are
indispensable,
month
them.
did
Russians
German
arid
are
/mount
the
goes
President
days
fears
ago
the
Eastern
the
denied
penny
the
see
Yield
Maturity Coupon
Price
1958
5%
2.60%
$300,000
$500,000
V/2%
3.35%
1959
5
2.70
300,000
1964
5
3.15
500,000
1969
3Vz
3.35
300,000
1960
5
2.85
300,000
1965
5
3.20
500,000
1970
3%
300,000
1961
5
2.95
300,000
1966
3*4
3.25
500,000
1971
3i/2
300,000
1962
5
3.05
300,000
1967
3y2
3.30
10,000,000
1972
3.40
3.10%
•
told,
;
•
3.40
■
3.40
99.50
held
(Accrued Interest to be Added)
a
to
up,
and the
and also
"
that
It
was
he had
scientists
one
bonds when, as and if issued and received by us, and subject to the approval of all legal proceedings by Messrs.
Barton, Yost & Dankmeyer, Bond Counsel, of Baltimore, Maryland. Such offering is not made hereby,
but only by means of the offering circular, copies of which may be obtained in any State in which tlus
announcement is circulated, from only such of the undersigned as are registered dealers and
'
We offer these
Niles,
'
'
«
his
*
are
offering these securities in compliance with the Securities Law of such State.
.
nevct;
single
they asked for to develop
No. 2, he couldn't
C. J. Devine & Co.
Halsey, Stuart & Co. Inc.
Eastman Dillon, Union Securities & Co.
satellite.
White, Weld & Co.
that the satellite in itself con¬
stituted
any
Salomon Bros. & Hutzler
military significance. ~
the Eastern press
aid the leftists jumped on him in¬
sisting that it was not the satellite
Hallgarten & Co.
Immediately,
Lee Higginson Corporation
~
-
;
A. C. Allyn and Company
'
-
.
Hornblower & Weeks
'
■
'
-
'
*
'
*
Hemphill, Noyes & Co.
'*
-
"Incorporated
"
.
Reynolds & Co.
Ladenburg, Thalmann & Co.
'
.
.
/
"
Coffin A Burr
■'
i
Incorporated
that should
frighten the world but
the propulsion behind it.
•
/ "
-Anyhow* the great pressure for
more spending on the military
is
underway. How crazy could the
Administration be, it is contended, '
to-now
be
engaged -in
cutting ;
down on military spending. WelL
it so happens that a scarcely pub- '
licized scandal in Washington < is
that the Air Force,
wide
and
spent
its budget bv
Dick & Merle-Smith \
F. W.
more
sfle Thor alone.
incensed
that it was with difficulty he was
so;
Francis I. duPont & Co.
•
G. H. Walker & Co.
.
.
"
1
;
J
-
"
*
;
••••'
Rand & Company
McDonald & Co.
\
.
'
Hayden, Stone & Co.
.
: Roosevelt & Cross
•
'
,
Incorporated
:
<
Ira Haupt & Co.
W. E. Hutton & Co.
*.
.
McDonnell & Co. ; Courts & Co.
Blunt Ellis & Simmons
R. D. White & Company
;
:
•
.
,
Arthur L. Wright & Co., Inc.
G.C.Haas&Co.
Baumgartner, Downing & Co.
Burns, Corbett & Pickard, Inc.
4
-
October 17, -1957
*
i
!
*
Dreyfus & Co.
„
The story widely
was
Hirsch & Co.,
Mullaney, Wells & Company
.
circulating in. Washington is that £
Eisenhower
<
Schoellkopf, Hutton & Pomeroy, Inc.
I
Andrews & Wells, Inc.
over-
than $2
j
Kean, Taylor & Co.
running high,
handsome,* has
Craigie & Co.
C.
billion, $700,000 of it on.the mis-;
Mr.
or
several
allay any
press
stirred
1,
'
300,000
the Russians
is, being levelled at it.
No.
Amount
Yield
$310 0C 0
designed to get the Administration
from under the bitter criticism that
point
Maturity Coupon
conference
designed
had
leftists
Amount
Yield
Maturity Coupon
us.
Eisenhower
press
in part in inverse order of
1968
captive
are.
we
reason
"ahead'1 of
special
their
with
or
1963
the-
what
is
scientists,
is the
it
That
time,
AMOUNTS, MATURITIES, RATES, YIELDS AND PRICES
chorus, even, if they do insist on
living outside the laws, partieu- - '
larly security laws, and we should1
coddle
any
period, from the date fixed for redemption to the maturity date of the bonds to be retired.
scientists
so
whole at
pure
back in
are
These
as a
on any
them
to
think,
and
amount
turn
over
purse
around
don't
we
subject to redemption
interest payment date, after October 1, 1965 at a price equal to 100fAc/o pf the principal
thereof, plus
of 1 c/o for each full twelve-month period, and for any remaining fraction of a twelve¬
maturity
denied atomic energy secrets,
that
we
have mistreated
other
nation's
in
Those
was
the
April 1 and October 1, payable at the Mercantile-Safe Deposit and Trust Company,
Baltimore, Maryland or at The Chase Manhattan Bank, in New York, New York.
the
goods,
left-
consumer
threat.
because
Due October 1, 1958-72
Dated October 1. 1957
wingers who insisted that Oppenheimer was mistreated because he
scientists
,
Highway Construction Bonds, Second Issue, Series K
machines
washing
automobiles,
dna%2V3
3.40%
5%,
Rut in the light of Stalin's state¬
ment the Russian scientists have
major
the
gtrelT
gless
Franklin
R
has
an
the Pacific Coast Stock Exchange.
Joins J. A. Overton
have spent hundreds
under .the
Simon Com¬
-
pany.
ANGELES, Calif. —Vance
Gustafson
Rudolph have been
is
bomb
of L. W.
name
Calif.—John
BEVERLY HILLS,
Cleveland
(Special to The Financial Chronicle)
(Special to The Financial Chronicle)
it is claimed to
own
business in
...
no
tary. Recently two returning important personages have reiterated
this obvious commentary on the
and
if
we
tenance
Russia
people-. have
living,
And
of
Carlisle Bargeron
In
this
of millions of dollars on the main¬
living.
the
•
have atomic bomb bases
Russia,
capable
of C.
devastating
as
our com-
standard
in¬
effective
CLEVELAND, Ohio^-Lawrence
New. W. Simon has become associated
with Bache & Co., National City
admit M M Binlding;_ He formerly
conducted his
investment
.
With Daniel Weston
an
the
^nges
i^
Rus¬
of
members
York a?d Pacific Coast Stock Ex-
a
the
with
around
have
one,
forts
industry
up
McCullough is now with Daniel npi
destroying the essential parts of D. Weston & Co.,, Inc., 9235 Wilthe country within two hours. We shire Boulevard,
a
have
we
all
side endeavor,
costly
but we
the
sians unquestionably have
Russians,
our
that
means
catch
Building
soien-
sold to the American people in
recent years.
,,
.
.
the
the world so much^ nonsense^ has
^e,®,n J0*?,*0 ^ PeoP*e as has been
of what the
regardless of
regardless
spend them-
selves
1
'Now,
to
-
beltsandp^v chum, Jones
eive
ahcralt
the
?
the Air Force can't pay any more
caus¬
reign
SAN FRANCISCO, Calif.—Mit& Templeton, Russ \
4
we
v
Admit Gallaii to Firm
Russians on some little trick they
Air
the
Force general responsible for the
overspending. This situation .in
the Air Force is so serious that
defeat the United
States was not through any superior industrial or military might
that the way to
ing
firing
from
restrained
and
free
By CARLISLE BARGERON
MitchM, Jones to
■miviniuit vvneo iv
9
The Commercial and Financial Chronicle
101
.
.
Thursday, October 17, 1957"
.
(1690)'
ago. There can be no
question, therefore, of the scar-!*,
city of the supply of Deutsche
Marks for other countries except in the sense that in a number of
countries their demand for foreign
four years
Germany's Position in the
Crisis
International Cnriency
I
By HON. KARL VON MAGOLDT-REIBOLDT*
-
Alternate
Monetary Fund
International
the
of
Governor
currencies,
and
for
Deutsche
Marks in particular, has been in¬
flated even more since 1953.
•'
for
Demand
that during this year's first
German fiscal leader points out
further
A
eight months speculative influences accounted for more than
half of his country's exchange surplus. Reiterates assurance
Goods
Foreign
• :
untimely
had to
abroad
astonishing
this
in
in. America,"
economic
an.'
problems, '■
publication, of
and
Robert
Schalkenbach
Sakolski
Dr.
for
was
of
many
.
being distributed f
now
Foundation
.
which,'
New
years
York
City.;
member
a
of * {
the editorial staff of the Commercial and Financial Chronicle.
From
phenomenon is, of course, the very
liberal import policy followed by
from
a doubling of demand for goods
domestic demand. Doubt3 continuation of rise
over
for
reasons
the
1955,
delayed because of that fact, is
(Price $3.50).
the
already accounting for
be
by
tion to continue
Taxation
and
contemporary
death fin, December,
mand for foreign
surplus position, affirms her intenremedial policies, as by stimulating imports,
to
completed by the Tate Dr. Aaron M. Sakolski just prior to his
6
backs in Germany's present
Tenure
contribution
ing is that during the period since
1953 the rise in Germany's de-
change in dollar value of Deutsche Mark. Citing draw¬
no
book; "Land
illuminating
goods was more
than twice as fast as the increase
in our domestic demand.
One of
of
]
The
,
mention¬
worth
fact
•/
—A New Book by the Late Dr. A. M. Sakolski
Republic of Germany
For the Federal
.
"Land Tenure and Taxation in America"
master
background
a
economist
of editorial
and ; financial
experience
writer,
and
study
Sakolski
Dr.
'
as
a
ad¬
was
u
government. We have, indeed,
mirably equipped to analyze the subject of his volume in simple,-f*
over the past few years not only
and understandable language so that the layman can
acquire the **
abolished to a very large degree
the
remaining
quantitative
re- -• benefits and a lucid exposition of this most revealing
subject.
;
strictions on our imports, but also :
Dr. Sakolski poses many questions of deep concern to all of
made drastic reductions in import
our
Concludes the major international imbalances can
her exports.
only be cured by worldwide curtailment of inflationary pres¬
sures and
overspending.
It
I
is currency speculation.
I need not, in this gathering of
financial experts, go into the de¬
tails of what has happened dur¬
problem
remains unchanged. Thus
there is no intention whatsoever
in
to contemplate a
change in the dollar value of the
Duetsche Mark, or any change in
the margins. We have heard with
great interest the statement which
the Chancellor of the Exchequer
last few months.
the
lative
has
waves
been
the
on
able to state here that this... tariffs, and this unilaterally, that
am
policy
But it
may interest you to know what
the impact of the various specu¬
ing
Change in Mark's Value
No
that for the moment
pressing joint
seems,
most acute and
our
way
any
foreign exchange situation of Ger¬
many.
During
the
first
eight
has
just
him
of
months of this year,
question of the exchange rates is
actually more
than one-half of the foreigp ex¬
change surplus accruing to the
German Central Bank
two
settled
for
our
To get rid of the
definitely
countries.
due to
was
made, and we are like
opinion that now the
the
pres¬
ent
speculative distortions in the
international payments picture is
the very first goal we have to set
speculative influences of one sort
or
another, be jt shifts lin bank
balances, the impact of forward
transactions in foreign exchange,
leads and lags in the payments for
export and imports, and the like.
In August, these influences ac¬
But what about the
ourselves.
an
reasonable prospect of
a
early return to
librium
counted
imbalances?
underlying
maining
Is there
re¬
in
better equi¬
a
international
pay¬
probably for two-thirds
more of the very large foreign
exchange surplus accruing to our
Central Bank.
Excluding the ef¬
ments?
fects
tenance of international payments
or
there
on
speculative influ¬
ences, our genuine payments sur¬
plus in the first seven months of
this
was sizably lower than
corresponding time last
that there are some
governors here who could tell an
analogous story of the effects of
in
year
the
I
year.
suppose
on the current deficits
foreign payments. As a
result of all this, the monthly for¬
eign exchange surpluses and defi¬
is, provided
right kind of policy
sides.
stresses
these
of
I think there
is the
all
Annual
The
equilibrium is
responsibility not
a
only of deficit countries but also
of surplus countries.
I may add
to this that both surplus and defi¬
cit countries have also
extreme
payments positions.
at any
in
of the drawbacks
cits
of
countries,
some
own,
.
here
are
in
meeting on
which the eyes of the w^o ° fi¬
nancial and trading community of
the world
miss
this
a
opportunity
to
distorted pictures which
and
misleading
distrust
spread
of
ternational
German
with
financial relations.
German
have issued
on
German
The
together
Central
Bank
Aug. 20, when the
on
speculation
the
and
values have
l&ige sector of in¬
a
Government
the
misled
a
speculation
revaluation
a
mark
had
of
reached
first peak, a categorical
a
denial of
intention to alter the dollar
any
value
o€
the
Germany
currency.
They said, and I quote:
"It
is
value
that
is
to
known
of
of
the
that
the
D-Mark,
most
determined
as
external
well
as
other
currencies,
by its relationship
the U. S. dollar.
As evid°neQd
by all economic data, no change
is
reguired in the relationship
between
the
D-Mark
and
the
U. S. dollar.
ing
the
an
Any rumors concern¬
intended revaluation of
D-Mark
tion.
The
are
without founda¬
Federal
problems
for
monetary management and has
brought with it quite some infla¬
tionary
dangers.
restrain
domestic
mand
thus
and
We
had
to
investment
de-
•
internal
develop¬
booming
without
demand
an
excessive strain
in
economy,
now
on
our
effort to maintain
an
over-all internal
What
j abroad
from
stability.
can
a
surplus
Government
and the Deutsche Bundesbank will
b
e
11
international
e r,
equilibrium?
tial
contribution
maintain
tive
Certainly
coun¬
and
demand
would
increase
—
set by internal
within
essen¬
be
its
to
effec¬
the limits
stability, of
course
—and to open
the door to foreign
goods by a very liberal import
policy in order to give other coun¬
tries
an
earning
There
increasing possibility of
the creditor's currency.
facts
and figures to
exactly what we
in Germany have been doing to a
are
show that this is
large
very
you
some
years
degree.
figures:
Let me give
in the three
from 1953 to 1956
increased
we
have
purchases > from
abroad by no less than 74% (while
imports in the world as a whole
had increased by only 28% during
that period); and in the current
year, up to
now, our imports are
running again nearly 16% higher
than in the same period of 1956,
in spite of the fact that
recently
f
German currency, a stability
which is held in such high regard
of currency changes, have tended
to delay imports as much as pos¬
both w;*h'" *he it-jRepublic
and in foreign countries."
sible.
maintain
the
stab'iit"
the
♦Statement
at
Mia
our
and
obstacles, foreign countries
earning in 1957 about twice
>s many Deutsche Marks" by their
exports to Germany as they did
are
by
d'—u««:"n
Dr.
Mansr^dt-Reih^ldt
Fund's Annual
of the
Report, Washington, Sept. 24,
1957.
In spite of these distortions
book
is
document
a
the
of
most
timely interest
all
to
say,
thinking people, for it bares
reduction
siderable
made
only
present
social
economic,
of the root
some
political
and
behind the
causes
upheavals
that
7
{,
threaten
a
:
'
■
import duties on r the peace of the world.
industrial goods have on an aver¬
Dr.-Sakolski gives us more than a vivid, historically accurate'f,
age been cut by no less than 45%; *■;'
and
also, vis-a-vis agricultural
picture of land tenure as it evolved in the United States.... He! imports, our import policy has be¬
fills in the European background that explains why our colonial
come much more liberal
(witness
weeks
ago,
increase
of
few
an
,
75%
over
in
forebears
our
agricultural imports from the first
half
1953
of
the
to
first
half
1957).
much
what
the
for
the
of
be
recent
reasonably
Suffice
them:
to
mention
income
many
based
ward
movement
on
in
of
In
our
an
cn
of
has
shown,
new
orders
even
*
but
a
return
alters
to
better
governments
new
housing projects.
creation
bacause
now
num-
at
areas
direct
a
■
develop-;
The other
has
it
a
the
everywhere.
are
slum
of
of
"'
a
poses
bearing
leader of the free world.
as
the
land
press
explosive
for solutions, and those
in lands
where
the
quest
pres¬
for
eco¬
into
...
some
to
equili¬
hope,
length
and
on
on
im¬
developments because here,
think, is one of the decisive
future normalization
of
our
payments
structure, y. I
know, of course, that many peo¬
ple, especially in other countries,
expect an important contribution
to that end also from
an
increase
in capital exports bv
Germany. I
that,
viewed
mainly from The foreign exchange
side, there is much to be said for
widening the capital flow from
Germany
countriesvwhi?h
not
deny
Continued
I
maintain
to
their
foothold
in
Africa,
the
and
the' delicate
balance
were
lessons
of/world
meet
power
well:
as
Vv
from
the
Bhoodan
a
-
T ■*
movement
now
making *
up
r
came
the estates of the big land¬
The matter of
owners.
landlords and the inability of The peasants
most liberal
the
of
'{ *■
,
That country's Government has, .since it
allowing the tenants to become
even
the fruits
are
still with us, he might well have-drawn
being,, passed laws dividing
and
These
only spells the end of colonialism, but
payment terms has made
dead
a
letter of. the. law., To counter forcible seizure of the land in South
*
India,
advocated by the communists, Vinobha Bhave, a Hindu
as
mystic
confirmed ^
port
a
have witnessed1 the steady attri-'
we
Empire, the bloody struggle still being waged
compensation to the
on
page
37
and
saint,v enunciated
,
givenVpeaceably.
,
induced
.
.
a
.
Within-the
fortunate
more
some,
acres,
T These
world
better.
:
the
5,000,000
„
already shown a
t»*»dency as compared
of trade
French
further
lords
year
balance
single decade,
a
-
•
.
mere
a
been
I have dwelt at
would
for
most
history in India.
the
of
to be set
seems
a
already
factors for
hunger
If Dr. Sakolski
with last year.
I
attention
the
allies to the oil of the Middle.. East.
tions—apart from the effects of
speculation and currency fears-
our
international role
the
excessive
side
our
This is not
this
is today
notes,
the
and
fierce nationalism that hot
items, it is quite clear
concerns
declining
author
engages
realignment in the Arab world that imperils the; lifeline of 1 our f
last
by recent trends; for, as I mentioned
earlier, our surplus4 bal¬
ance
of known foreign transac¬
has
the
individual
as
dilemma,
urgent
more
Within
by
takes into
has
It
172.000,000
tion of the British
number of capital and other
brium.
as
nomic justice has long been thwarted.
abroad
from
restrain
picture—the stage
for
reform,
country, two facets of the land problem
will'be
some
that—as
persons.
concern.
well
as
few
hunger is unrequited, it will
account, fur¬
thermore, our increasing outlays
on
foreign military material and
a
too
is being adroitly exploited by
Nor does the fact that it is being used for
sinister! purposes lessen its propaganda value./ As long as that
repercussion:
the
over
to
"invisible"
of
land
the- communist camp.
demand.
on
Nations
Man's
six
months, definite signs of levelling
off, perhaps as a first reaction to %■
the measures taken by some other
one
of
are
flow
If
traditions
proposed to counter the further concentration
world-wide
own
our
-
and
significant
One of these relates to the growth of population
sures
,
primogeniture
Revolution,
•
pretty sure that
our
imports will continue their
steep upward trend in the future,;,
as well, the same is not so likely for our exports..
True, export
deliveries are still increasing sub¬
stantially at the moment. But they
we
while
the
continued
were
rate that keeps abreast of
incipient rearmament.
While
tenant
hands
facet
of
our
ing.
deficits, due to growing social and
of
the
bering almost
other public expenditures and not
least to the financial
in
United
up¬
position from the former
surpluses to current cash
cash
"land
matter
ries, social security payments and
the like; and second, the complete
change in our government's budg¬
etary
that
after
He analyzes the major remedies and methods of taxa¬
This
sala¬
wages,
shows
abolished
laws and
Ger¬
large
very
a
completely the feudal practices of
He
without
and
tion that have been
two
in
levels
largely
were
landlord
changes.
first, the continuous in¬
in
crease
it
off
control.
of
think
general level
ment.
shake
not
and
,
quitrenls gradually disappeared, the British
past.
I
future?
sure that the
of demand in Ger¬
many and especially the level of
import demand will go on in¬
creasing., I cannot go here into a
detailed analysis of all the various
factors that lead us to this judg¬
we can
of
entail
and
So
But
could
landownership
of
our
importers for several reasons,
not least among them expectations
further
us.-His
without asking for any
concessions from our
trade partners.
Including a con¬
a
payments
an
to
equivalent
countries
try do in order to contribute to
and
currency
over
difficult
and
new
clear
away, once and for all, the fog
much aware
dangers of
and
present surplus position. The
impact of foreign surpluses on the
Germany economy and the Ger¬
man
banking system has created
We should not
set.
are
very
are
ment in order to accommodate the
Foggy Pictures of the Situation
We
rate,
We,
our
including
have reached very ex¬
treme figures during the nast few
months, and speculation has been
feeding on these published fig¬
ures again, thus creating a sort of
vicious circle of speculation feed¬
ing upon its own results.
my
equally
an
strong interest in the removal of
speculation
their
Report
the main¬
that
7)
(page
is
are some
the
doctrine
past
to
six
that
donate
land
his
years
should
campaign
aggregate
an-
2,500 complete villages.
of
Its pages are
help
almost
_
of the signs and portents of a changing
that Dr. Sakolski's book .will
be
has
world,
to. understand the
us
crowded with drama, replete with evidence
cfmoble intentions—intentions too often negated by, human greed
and
bungling administration.: Our vast public domain is largely
squandered,/butj the
still exact
may
.,
.v.
Of *Dr A Sakolski's
will; say of,
in
bearing
>.with
a,;
our
and
long-term
implications
qualities:
personal
address,
an
gentle manner,-'and
we
example
an
of
interesting
He
an
interesting personality.
retrospective
life, besides being
man
of ' the
a
mind
and
had
a
a
lovable
was
an
modest
gifted
person,
a
endowed with
hopeful outlook
on
philosopher and scholar who loved his fellow
Dr. Sakolski was in every-sense of the word both
and
Chronicle
was
conversationalist.- He
of
man.
•
self-effacement,
good soul and
wonderful
its * disposition
former "editorial associate that he•
exemplified in his lifetime the elements
a
of
future reckoning.
a
a
gentle¬
altruistic thinker throughout his editorial'career.
'
Volume 186
Number 5682
.
The Commercial and Financial Chronicle
,
.
his
income, some consumer-ex¬
penditure plans are already being
affected by lower expenditures by
the Defense Department., Military
Outlook for
Winter Business
cutbacks
whole
Babson
business
during the coming months to be
moderately upward. The rate of
improvement to depend upon com¬
petition and consumer spending,
capital outlay, and changed gov¬
ernment spending as a reaction
expects
Higher wages are partly re¬
sponsible- for the continued rise
in
personal incomes.
However,
beginning to affect
which
for, concern to producers,
they add to the cost of doin^
business..
Coupled
with
lower
sales in certain lines, they further
squeeze profits.
however, change all this.
(Conclusions
What About Employment?
Those, who
are
laid
.:
show
off will be
the
readjustments which
industries have encountered
many
with
and
Which
some
still
are
hav¬
ing to
But the degree of improvement is
dependent
on
the
payroll
become more cautious about
spending. On the other hand, due
1
a
to
the
and
Is With
sumer
on
a
revival
of
CHICAGO, 111. — Willard N.
has rejoined .Blyth &
Co., Inc., 135 .South La Salle Street.
Mr. Schoeneck was formerly an
officer of Central Republic Co.
Now With Hayden, Miller
(Special to The Financial
long period of boom, the
average consumer has become ac¬
with Hayden, Miller & Co., Union
Commerce Building, members of
E. F. Hutton Adds
the Midwest Stock Exchange. Mr.
(Special to The Financial Chronicle)
Parker was
Clark
con¬
formerly with Fahey,
& Co.
^
-
LOS
R.
.
•
•
•
■
.•
'
•,
•
••
,
Joins
become
Spring Street.
—
With McDaniel Lewis
Richard A.
GREENSBORO, N. C. — Henry
customed
to
anincreasingly a] result of the Russian Satellite Rubenstein has become affiliated
T. Hicks III has joined the staff of
higher standard Of living. And it surprise. It may well be that all with Blyth & Co., Inc., Pacific
McDaniel Lewis & Co., Jefferson
is far harder to adjust one's tastes
three factors have been merely Building. Building.
.
-
,
„
Physical
Business
of
-
is
This announcement
currently only
is-neither an offer to sell nor a solicitation of an offer to buy any of these Bonds.
'N'" v\;:"
> trifle, below
The offer is made only by the Prospectus.
-
*
•
the high range
;
of
t
re c en
months, and is
just a few
pe r eentage
points
lower
Roger W. Babson
-than
the
$75,000,000
first
"
A
y :r
\
.quarter
peak
for.the year to date. During the
summer,
many
businesses have
been drawn downward because of
seasonal
influences
weather
and
such
vacation
hot
as
International Bank for Reconstruction
absences.
-
Therefore, I expect business dur¬
ing coming months to be moder¬
ately upward, helped by the Rus¬
sian Satellite.
;
and
Development
"
However, the*improvement de¬
pends
also
upon
basic
consumer
attitudes, which can change from
day to day. Recent surveys on
Twenty-Three Year Bonds of 1957, Due November 1,1980
consumer behavior
and* attitudes
indicate that buyers are
price-conscious
selective.
turers
are
and
i...
Interest Rate 43A%
becoming
more
more
Nevertheless, manufac¬
hopeful that their plans
Interest
payable May 1 and November 1 in New York City
and
output schedules for coming
months will tally closely with tho
purchasing
which
are
plans of consumers,
still continuing upward.
The Auto Outlook
The
*
automobile
bellwether of
industry is a
forthcoming trends.
Dealers' stocks
Price 100% and Accrued Interest
are currently near
of them 1957 cars,
sprinkling of 1958
models. Thus far, there has been
little apprehension regarding the
600,000, most
with only a
size
of
automobile
inventories,
hopeful that Octo¬
sales will at least approach
and dealers
ber
those of
The
a
are
year ago.
slight
degree
of
optimism
help¬
Copies of the Prospectus may be obtained from only,
among automobile makers is
ing
to
buoy
which
the
continues
steel" industry,
for a
'
-
v
these Bonds in
such of the undersigned as may legally offer
compliance with the securities laws of the respective Slates.
to .hope
strengthening of orders.
such orders havebeen
Though
coming in
gradually,. nearby weeks
may see
greater rush as the remainder
of the plants change over to the
a
tiously
with
respect
to
orders
so far this year. However, as
inventories in these lines register
ing
declines,
factory
output
TIIE FIRST BOSTON CORPORATION
MORGANiSTANLEY & CO.
production of 1958 cars. Appliance
makers are also proceeding cau¬
since sales have been disappoint¬
THE FIRST NA TIONAL BANK
THE FIRST NATIONAL CITY BANK
J. P. MORGAN & CO.
Incorporated '
OF CHICAGO
OF NEW YORK
.
MANUFACTURERS TRUST COMPANY
CHEMICAL CORN EXCHANGE BANK
\
should
GUARANTY TRUST COMPANY
OF NEW YORK
gradually trend up.
BANK OF AMERICA
*
N.T.&S.A.
Construction Industry
Another
major
the
to
have been taking a breather, al¬
steel
construction industry,
user,
THE NORTHERN TRUST COMPANY
,
-
:
HARRIS TRUST AND SAVINGS BANK
appears
DREXEL & CO.
BLYTH & CO.; INC.
EASTMAN DILLON, UNION SECURITIES & CO.
-
though the latest month's figures
show
a
more-tban-seasonal
the
after
disappointing
Work
rise
earlier
in the
cement industry caused shortages
of concrete products in some Sec¬
weeks.
There
tors.
basic
reasons
IIARRIMAN RIPLEY & CO.
GOLDMAN; SACIIS & CO,
GLORE, FORGAN & CO.
*
Incorporated
stoppages
are,
however,
more
LAZARD FRERES & CO.
KIDDER, PEABODY & CO.
^
'
'
j
...
•
,
LEHMAN BROTHERS
^
in
STONE & WEBSTER SECURITIES CORPORATION
SMITH, BARNEY & CO.
WHITE,
ing strength, however, should be
evident in public works, utilities,
and
^
^
SALOMON BROS. & HUTZLER
MERRILL LYNCH, PIERCE, FENNER & BEANE
for the slower pace
building,- such as scarcity of
money and the partial fulfillment
of demand for housing.
Sustain¬
road building.
October 15,1957.
,
.
.
,
:
•
'
.
t
Beyond the conundrum of what
the
Digitized forconsumer is going to do with
FRASER
affiliated
Company, 623
Blyth & Co.
PORTLAND, Ore.
as
has
Miller
South
expenditures; which in turn
.
ANGELES, Calif .--Charles
with E. F. Hutton &
(Special to The Financial Chronicle)
•
affected by capital
ing, which could be increased.
Sclioeneck
Chronicle)*
CLEVELAND, Ohio — Richard
A. Parker has become associated
outlays and
by changes in government, spend¬
are
Blytk & Co.
(Special to The Financial Chronicle)
con¬
Volume
,
appropriations
ciency of selling.
The to-
tend.
t
modest improvement over
lows of the summer months.
a
those
the
may
During most of this year busi¬
has
shown
basic stability,
ness
despite
All in all, coming months should
less eager to spend and will hesi¬
tate to go further into debt; while
who remain
ing
11
W. N. SchoeMck Now
advertis¬
the effi¬
cause
since
tary payrolls. The Russian Satel¬
lite may,
hesitating in order to consolidate
the gains of the past long boom.
Much will depend upon
these increases in pay rates are a
are
these towns dependent upon mili¬
Russian Satellite surprise.,.
to the
downward than to raise them up¬
ward.
largely dependent upon govern¬
ment contracts, such as aircraft
workers and others employed, in
By ROGER W. BABSON
Mr.
are
communities
(1691)
*
•'
i
'
'J >■!;>*
:
('
-
'
a
.1
'WELD
& CO.
32
The Commercial and Financial Chronicle
(1692)
stake.
Effect of Oui Policies
In
the
remainder
of
paper I intend to take our
cal
interest in the free
this
By DELBERT A.
/
we can no longer be too smog or complacent about
significance of world trade to our welfare and future
Cautioning
the
f
SNIDER*
growth, Professor Snider details the particular role he believes
should follow in world trade after pointing out
we
nomic
the
eco-
crucial
help, eliminate the
dependence of the free world on us and our
political dependence on them. Avers we can
dollar shortage -by maintaining an expanding domestic econ¬
omy with full employment and, thus, keep up our imports
without imposing illiberal commercial policies. Describes lack
of international banking short-term commercial loans and,
without miniminng obstacles to international flow of capital,
cites beneficial effects of private investments abroad.
-
.
At the present time, world com¬ have a significance for the func¬
modity imports amount, on an an¬ tioning of the economy not sta¬
measurable. The best
nual basis, to approximately $100 tistically
billion.
We Americans have be¬ analogy I can think of is the op¬
come so accus- eration? of a large industrial firm
f
customed to that buys a few component parts
hearing fig¬ from other firms. The volume of
juch purchases as a per cent of the
ures
on
econo m i c
ahd firm's output of finished products
financial a f - may be very small, but its pro¬
fairs
running duction would be seriously af¬
into the bil¬ fected, if not closed down, were
lions that $100 delivery of the component parts
billion may cut off. In a like manner, what
not impress us would happen to the British econ¬
very much. If omy, e. g., if imports were cut off?
Even after allowing for long-run
we try to give
the data on readjustments in the British econ¬
world imports omy, it is quite clear that Britain's
more meaning
present population could not be
Delbert A. Snider
by
relating sustained without import s—at
them to total least not at a standard of living
world income, we find
that
some¬
thing like 10% of world income is
spent on goods produced outside
that would be tolerable.
Finally, let's take the least fav¬
orable
boundaries
countries.
of
a
the
This is
smaller part of our na¬
tional income to buying imported
of world trade for
stand¬
Netherlands is spent on imported
ard of living, and especially for its
-goods; for Norway and Belgium
future growth.
.35-40%; Denmark, 35%; Canada,
I hope that I have convinced
22%; Western Germany and the
United
Kingdom, around 19%; you that world trade is important
Sweden and Switzerland, around —^especially for most other coun¬
one-quarter. We could go on for tries of the world, but also for our
-other leading trading countries, own welfare. The remaining ques¬
and very rarely indeed would we tion is that of the
particular role
find the ratio of, imports to in¬ of this country in world
trade, or,
come falling below 15%. Only the more
broadly, in the world
United States among the leading economy.
trading countries spends
as
as
our own
little
3-4% of its national income
Quid Pro Quo
on
imported goods.
There
Importance of Trade to U. S.
is
one
overwhelmingly
major point to be made at the out¬
set—a
fact
which nearly
important relationships
Statistical averages can mislead in this field revolve:
economically,
just as easily as they can inform. the United States is of crucial im¬
Even if the imports of a country portance to the free
world; politi¬
are not a very high proportion of
cally, the rest of the free world
its national income, they may still
s of crucial
importance to us. By
be of crucial importance to the this
statement, I do not mean to
country's economy. The whole imply that we are not politically
structure of a national economy important
to
the
rest
of
the
may be geared to an inflow from world, or that the rest of the
abroad of raw materials, food¬ world is not
economically impor¬
stuffs,, or capital equipment that tant to us. But I am trying at the
But this is not the whole
story.
*An address by Professor Snider bo-1
fore -the Wisconsin School of
Banking.
.Madison, Wisconsin, Aug.
27,
1957.
all
around
other
us
the
preponderant
forces
at
important. We may call it the
"liquidity" effect, and describe it
as
follows.
dollar assets.
ket
for
services in
paying
for
the goods
and services so
badly wanted and needed and not
available elsewhere, or not avail¬
able elsewhere as cheaply.
order to
goods
earn
and
the means of
Our Expprt Surplus
A second
teristic of the American economy
can market or from the I.M.F.
Or,
perhaps is the most continu¬
even if such financing is available,
ing source of disturbance and an¬
countries will not be willing to use
xiety to the rest of the free world
it
if
they are afraid that the
—namely the instability of our in¬
American recession is going to
come, employment and prices. I
continue for a prolonged period.
am
afraid that we cannot deny
There is the real danger, then,
that Our economy is subject peri¬
that an American recession would
odically to recession and, in recent
force other countries to protect
years more frequently, to infla¬
their international liquidity by re¬
tion.
The same; thing is true, of
sorting to discriminatory restric¬
course, of other countries,
bdt,
tions on imports from tire U. 8.
from the point of view of, the
world economy, the consequences
Dollar's Importance
are markedly different.
that
It must be remembered that the
Because
exports
such a
part of our gross national
product, a decline in exports, due
to a recession in a foreign market,
has relatively negligible effects on
our own level of production and
our
are
small
employment. But when we in the
U. S. have a serious recession, and
our imports from the rest of the
world
fall
as
a; consequence,
the
U. S. dollar is not only the meas¬
ure of value and medium of ex¬
change for transactions within this
country; it is also an international
currency. By this I mean that the
dollar is the most commonly used
currency in
which international
reserves are kept and in which
international payment settlements
are made.
It is true that large
foreign reserves are also held in
gold, but in view of our fixed buy¬
ing and selling price of gold, gold
and dollars are practically equiva¬
foreign countries
extremely serious for them.
This is because (1) the exports of
other countries, as we have al¬
ready noted, are an important part lent.
of their gross national products,
The international status of the
and (2) we are the world's largest dollar as a
key currency is the
market for exports.
monetary expression, of course, of
Inflation in the U. S. can also our
important p o s i t i o n in the
have serious repercussions on the world
economy.
It is interesting
world
economy,
again because to compare the role of the U. S.
such a large part of world imports now
and that of Great Britain become from this
country. Just as fore 1914. The
pound sterling is
many Americans suffer from a loss still a
very important world cur¬
in the purchasing power of the
rency, second only to the dollar.
dollar, so foreign countries may But before 1914 it was the inter¬
impact
can
on many
be
,
major fact is that for suffer if the value of their dollar
national currency in terms of
three-quarters of a century the
earnings and gold reserves decline which the bulk of world trade
rest of the world has wanted more
of our
goods and services than we
because
of
inflation
here.
It
was
is, conducted. There
are
however,
several very
primarily recession in important
differences, however,
have wanted of other countries'
the United States, rather than in¬
between Great Britain's position
goods
and
services.
In
other flation, that causes most concern
as the financial
center of the
words, the U. S. has for a long to foreign countries.
world in the 19th century and
time been, in both peace and war,
Even m the case of relatively
America's position today. One of
an export surplus country in the
mild recessions in this country, these
differences relates to the
world economy. From the begin¬ such as in
1948-49, the decline in question of international
liquidity
ning of World War I down to the American
import demand may touched upon a moment
ago, and
present day, the rest of the world have serious consequences for
may be of special interest to
bought from us something like many other countries. There is
bankers.
$140 billion more goods and serv¬ first, of course, the effect on pro¬
ices than we purchased from the duction and
Short-term Liquidity
employment in other
rest of the world. This, of course, countries whose exports to the
London
could not have
foreign
happened, unless U. S. fall. In a period, however,
houses
countries had somehow when most governments are com¬
been able to finance their
excess mitted to
maintaining full employ¬
expenditure of dollars. By far the ment, this affect can be expected
largest source of financing has t6 be offset by appropriate do¬
moment to state in a stark and been U. S. Government grants and mestic
monetary and fiscal poli¬
sweeping fashion- what* I reiard "loans,"especially, of 'cdurSe; during cies. There is a second effect of
as
Thursday, October 17, 1957
Finally, private cap¬
European Alternatives
ital has flowed out of the U. S.,
Foreign exports to the U. S. de¬
except during the depression dec¬
ade, to help in some measure cline because of a recession here.
can economy.
provide dollars to the rest of the Hence,, foreign earnings of Amer¬
ican dollars decline. But the de¬
world.
The discussion of our crucial
mand for American dollars to pay
In interpreting the significance
significance to the free world
for imports from the U. S. con¬
economy can conviently be carried of the large and continuing ex¬
tinues at the previous level, Cor
on under two main headings: the
port surplus of the U. S. we must
income and employment in other
first is the economic impact of the not forget that, beginning with the
countries are maintained through
U. S. on the world deriving from First World War. there has been a
domestic policies of full employ¬
its size, structure and other his¬ succession of international crises,
ment.
Hence, foreign countries
torically - developed characteris¬ hot and cold./In a sense, only
are faced with a dollar deficit, and
seven of the last 43
years since
tics; the second is the impact of
have, in general, two alternative
1914—from 3923-1929 —can rea¬
U. S. foreign economic policies.
courses
of action.
One is to fi¬
sonably be designated as "normal,"
nance the dollar deficit out of ac¬
Broad Considerations
i.e., a period in which neither
cumulated gold
and dollar re¬
First, Jhen, let's take a look at wars, hot or cold, nor deep de¬
serves,
or by
borrowing shortour place in the world
economy pressions were plaguing the world.
term in the American money mar¬
quite apart from the content: of And it is by no means accidental ket
or
from t h e I nternational
that it was precisely only during
any particular policies
we may
The second al^
those seven "normal" years that Monetary Fund.
adopt. I don't want to bore you
ternative is to clamp down jop
with any dry statistics, but some the excess exports of the U. S.
American imports by direct con¬
were financed by private capital,
of the broad facts must be men¬
trols. Of the two alternatives the
tioned. I have already indicated without extraordinary assistance
former is by far the more' eco¬
from the
U. S. government
or
one of the most important single
nomically desirable; from' all
facts—that
the s U.a S.
produces liquidation Of foreign holdings of
point's of view. From tlie forei gn
from 40-50% of the world's total gold and dollar assets.
point of view, the flow of imports
Still it cannot be denied, what¬
output of goods and services. Con¬
from the U. S. is allowed to con¬
sidering that we have only 5-6% ever the reasons, that the rest of tinue
uninterrupted; from
pur
of the world's population, this is a the world has for a long time de¬
point of view, the recession is hot
startling fact that explains more sired, and continues to desire, to
aggravated by a decline in bur pxi
than any other our tremendous buy more from us than we buy
port markets; and from the world
impact on the world. It explains from them. This perhaps shows
point of view, trade and exchange
why hundreds of millions of peo¬ up most clearly in the fact that,
restrictions, that distort the best
ple all over the world look to this with few exceptions, most coun¬ pattern of resource use and in¬
country as a model to be emu¬ tries today suppress their citizens' terfere with the
operation,of freelated in raising living standards; demand for American goods by di¬ market
forces, are avoided. But
it probably explains Why we are rect controls. This is what is really note
please that the more desir¬
the leading political and military meant by the world dollar short¬ able alternative
may not in fact
power; more tangibly, it explains age, and I shall return later to dis¬ be
available.
Foreign countries
cuss the relevance of U. S. policies
why we have been the "arsenal of
may not have enough gold and
in curing it.
democracy" in two world wars,
dollar reserves to draw upon to
the chief supplier of postwar re¬
finance
an
import surplus, and
Our Economic Instability
construction capital, and the main
they may be unable to acquire
Finally, we come to a charac¬
source of external capital assist¬
short-term credits in the Ameri¬
monds, coffee, cocoa, tea, nickel, world trade.
cobalt, chromite,
asbestos, and
Because of our great and diver¬
goods than any other country of manganese is imported. A third to sified
output, the quality of our
economic
consequence
in
the a half of our domestic consump¬ products, and the continuous
world. Putting these two facts to¬ tion of tungsten, lead, copper and
stream
of
new
and
improved
gether leads to an average of zinc is imported. As the Paley Re¬
products, the rest of the world
trade-to-income for the world as port a few years ago showed, the
looks to this country as a major
a
whole that grossly underesti¬ U. S. has turned, over the last 50
supplier, not only of heavy capi¬
mates the significance of trade for years, from a raw-material sur¬
tal equipment, but also of some
most of the world.
plus country to a raw-material
primary products. To buy from us,
deficit. country, and this trend is
.„The same point can be more
the world needs dollars—and the
almost inevitably going to be ac¬
concretely put by looking at the
major continuing source of dollars
celerated in the future. Even we,*
to! other countries are from ex¬
proportion of imports to income of
individual countries. Forty to 50% then, must not be too smug or ports to this country. Hence, the
of the national income
of the! complacent about the significance world looks to the U. S. as a mar¬
devote
has been the sale of
monetary gold and liquidation of
case imaginable for dem¬
ance for the
development of the
importing onstrating
the
of underdeveloped countries.
importance
certainly not an foreign trade—that of the U. S.
In the more specific terms of
insignificant proportion, but it too Because of our vast and widely
fails to yield a balanced apprecia¬ diversified
world trade, the huge proportion
resources, we are the
tion of the significance of world least
dependent of all major coun¬ of world income accruing to this
trade, and for two reasons.
tries, excepting the Soviet Union, country means that, even though
we spend less than 4% of our na¬
The first reason is that the fig¬ on imports. In effect, we have a
huge internal free-trade area that tional income on imports, vye im¬
ures quoted are "loaded," especial¬
ly by the rather extraordinary substitutes in large measure for port a total amount greater than
position of the United States. The international trade. Yet there is a any other country, and we export
more goods than any other coun¬
American economy accounts for long—and more important, grow¬
ing—list of commodities for which try. We are, then, in the peculiar
an unbelievably large part of total
world production and income— we are wholly or
significantly position of being at the same time
perhaps from 40 to 50%. At the dependent on imports. From 90 to the least dependent of all coun¬
same time, apart from the Soviet
100% of our domestic use of natu¬ tries on foreign trade and the
Union, we in the United States ral rubber, tin, industrial dia¬ world's largest participant in
the
paying for excess pur¬
world
for granted? and concen¬
trate my attention on the eco¬
nomic interest of the free world
in the functioning of the Ameri¬
University, Oxford, Ohio
Professor of Economics, Miami
%of
chases from
economy
Upon the Worid Economy
means
politi¬
.,.
and since World War II. Another
a
U. S. recession that may
be
more
banks
in the
and
financial
19th
century were
truly international in the scope of
their
operations.
Just as
your
clients look to you for additional
capital to meet temporary liquidity
requirements, so foreign conutries
Continued
on
page 35
/
Volume
186
Number 5682
.
.
The Commercial and Financial Chronicle
.
(1693)
forces better to handle
id-Term Sales Outlook for Steel
Noting that the immediate business prospect ahead shows
well
a
outlook
mid-term
better, and long-term prospects
live
as
"the
best that any nation has ever been privileged to anticipate."
Mr. Foy believes it is not alarming that the steel industry may
not operate at capacity during 1959-1961 since this can permit
'
:
'1
!
spurred by the replace¬
cycle, and by the develop¬
ment of
Gannon New Chairman
items which will be
new
introduced.
1
'
•
Of N. Y. IBA
<
all
Francis A.
Oil & Gas Industry
The
sales force for
requires
a
broader philosophy,
as
well as
more
intensive
training.
Good
salesmanship in the days ahead
will push the company's products
harder than ever, but in terms of
an orderly expansion
of markets
V
be
ment
pro¬
presentations of
building
tomorrow's
are
also
prod¬
our
OMI
.
But
,
officer
Steel
the
kinds.
preparatory to moving on to higher ground, Republic
asserts business short-term outlook is good,
pause
•
this
call
gram, for Order Makers Institute,
and it involves training movies, as
By NORMAN W. FOY*
Vice-President in Charge of Sales, Republic Steel Corporation
We
ucts.
a
outlook for
oil
and
dent
is
gas
and
Group
Cannon, Vice-Presi¬
Director of The First
a
Boston Corporation, has
especially strong. The use of oil
and gas will probably double dur¬
ing the next twenty years, and
this rate of increase will certainly
affect the 1959-1961, period. We
expect the oil and gas' industry
to be a dependable and expanding
markets
13
been
elected
Chairman pf
the New York
Group, Invest-!
.
market.for
to
steel.
••
•
*
;,
merit
Bankers
- ;
of J
Association
•
keep pace with the growth of
America.
Mr. 1
Another market for steel wind i
economy.
This will in no.
C a n n o n re^
looks good in these years is that
sense of the word be a limitation,
margin for emergencies.
places; Waiter ";j
for cans, barrels and drums. The
but rather a measure of the effi¬
H. Steel, part- V:
over-all gain will almost certainly
A review to the various 10- to pacity, particularly if expansion ciency of our long-range planning.
ner in
Drexel
parallel the total growth of the.
100-year business forecasts that continues—as it is likely to do—&
Co., who
production at most efficient point, reduce costs, and leave
;
a
the
.,
have been made recently
shows
remarkable. agreement
on
after
a
one
Is
I don't think
so.
On the contrary, I think it
leads
to
three "very
intriguing
point: we ain't
w
nothin'
seen
Popula¬
yet.
In
the
see no rea¬
to
ques¬
tion the
Norman- W.
l*oy
more
conservative
of these
the
in
pects
pretty
on
the
This
pros¬
as you
safe
is
prospects,
through what
years,
The 1930's, of course, were
-
steel than it did
more
a
few years
one
would have been thought fantastic
that
steel
much
the
in
made
was
as
War
II, and I think we can expect first half of 1957 at 91Va% of
firm, with per¬ capacity.
'
.
haps
a
modest upturn
in late
If the industry can hit the norm
,
,
But a
meaningful mid-term
forecast—through the years 19591961—is harder to come by. From
the standpoint
of the steel in¬
dustry, we can see the nearby ob¬
•.
stacles; we can see the long-range
goal, but we cannot be sure ex¬
actly what problems we will en¬
tain
the next
over
the
of
factors
rise.
to
Corn Exchange Bank, was
good/ better and
short-range
view
is
!
J. B. Stevens Joins
Smith,
,
eastern
picture, but
Stevens
J,
(Special tO'Tue Financial Chronicle)
SPARTANBURG, S? C.—Gus N.
Trakas
has 'become
connected
.
Donald C. Sloan Co.
\vifh Av M. Law & Company,> Jnc,.
295 East Main Street, members of
the Midwest Stock Exchange.
\
ginning of a substantial rise some¬
time during* 1959-1961.
In fact,
„
.
' (Special to The Financial
PORTLAND,
possibility that an¬
Chronicle)-
Ore. —Frank
Humphrey has become
K*
,
'
Shaw, - Bayliss Adds
(Special
tbTh»Financial Chronicle)
with
■<
/
•
Donald
C.
Cascade Building.
lies
what
we
faces
ahead.
begin with,
let's
what
see
stiff
from
other
j
_
the housing
follow
trend.
V.
-
an
Incorporated.
Robbins
'.''
It will Drive.
This announcement is not
offer to sell or a solicitation of an offer to buy these
made only by the Prospectus.
securities.
The offering is
-
$8,000,000
have to sell.
means
Pennsylvania Power
competition not only
steel companies, but
from other industries
that as the
as
well. This
production ratio
You
all
increase
know
in
the
goes down,
tremendous
has
few
capacity
place during the
Since 1947, ex¬
taken
last
years.
for new
plant and
equipment for all purposes have
penditures
totaled
steel
$300 billion, and the
some
industry has
been spending
its share of that total.
93 million
the
138
of
From about
ingot tons at the end of
the steel industry will
its capacity to about
million ingot tons by the end
war,
have
raised
the
ing goes up.
Further
year.
expansion
the
is:
conclusion
must learn to sell
We have
come
day of the
Dated October 1,
we
Due October 1, 1987
1957
again.
long way from
diamon d-ringa
salesman
checkered-suit
Price 100.777% and accrued interest
who
liigh-pressured people into buying
products they didn't want, couldn't
couldn't
and
use
,J;
,
second
The
industrial
that
the importance of sell¬
any
Mortgage^Bonds, 5%> Series due, 1,987,
First
'
Industry's Expansion
afford.
i
Sales¬
manship today is based on scien¬
analysis, and on sound
principles. A sale is bad
tific market
economic
the
unless
A
customer
good salesman
is
The
benefited.
Prospectus may be obtained in any State in which this announcement is circulatedfrom only
of the undersigned and other dealers as may lawfully offer these securities in suck State.
such
sells service as
will bring the total to around 145
million ingot tons by the end of
well
help
products. He may even
the customer with his own
1959.
sales
problems
For
Even when
est
we
allow for
rise in consumption
1955
level,
a
mod¬
over
the
think
it is quite
likely that the steel industry will
not be operating at capacity dur¬
ing the 1959-1961 period. In fact,
during part ofi this period demand
may
be considerably under caI
as
Such
of this
capacity
the industry's
production record for one year
was 117 million ingot tons in 1955.
measure
a
relative to demand,
talk
fay
Mr.
Foy
before
the
Na¬
do net
grow
HALSEY, STUART A, CO. INC.
on
a
more
Republic
worked
SINGER, DEANE A.
con¬
MULLANEY, WELLS A.
stantly to improve its sales train¬
ing program.
In
some
beyond
effort to
with
are
instances
we
our
aware
Sept. 20,
New
York
1957,'
t
.»>.
City,
that
business
warehouses
a
is
or
haveLinitiated.
these
INCORPORATED
FAUSET, STEELE A CO.
FIRST OF
a
customers
i!
PENINGTON, COLKET A, CO.
IOWA CORPORATION
Most of you
good part of tlie
handled
WALTER STOKES
distributors.
program
train
A CO.
ARTHUR
through
October 17, 1957.
We
.
,,,
tional Industrial Conference Board's F;fth
Marketing " .Conference,
RAFFENSPEPGER, H»«GHES A CO.
COMPANY
own
customers.
FREEMAN A. COMPANY
THOMAS A COMPANY
SCRIBNER
ALLISON-WILLIAMS COMPANY
have gone
salesman in our
improve our relationship
our
AND COMPANY
INCORPORATED
accurate title than "sales¬
man"
BURNHAM
STROUD A. COMPANY
trees, and even during the period
just past—when "order taker" was
steel
"*A
salesmen
to help
their
*
■
■
'
L-U-2—
*
sales
*
Co.,
SAN MARINO/Calif.—John W. who has been in the investment
appliance .industry, which- Ayers and Paul A. Schumann have business for many: years, was for¬
become -connected
with
Shaw,
has been -rather easy for the past
merly an officer of Campbell &
year or so, can he expected
to Bayliss & Co., 2304 Huntington
However, there is no room for
To
&
Mr. Humphrey,
complacency. Each steel company
to
•
W.
associated
Sloan
The
Learning To Sell Again
worth
~ '*
Stiver & Co.
Humphrey With
F: W.
I
the be¬
Should'see
Machinery
Sixth Building. Mr.
formerly an officer
Joins A. M. Law Co.
ing of industrial construction will
probably.be a counter- influence
until the 1960's, at which time this
too, should begin to rise.
associated,
National
was
of Saunders,
slow¬
a
East
&: Co.,
Goodbody
City
.
Schools and roads will fatten the
construction
become
with
Clanton * & : Co.,Y South¬
Building.
:
'
"
*
.
has
Stevens
— James
affiliated with
Chronicle)
Ohio—Joseph B.
CLEVELAND,
■
\ GREENSBORO, N. C.
formation and the grow¬
ing replacement market should
drive the curve sharply upward.
•I
Goodbody & Co.
(Special to The Financial
.
(Special to The Financial Chronicle) r
R.sCox has become
in family
use
while to examine them for clues
however, and it might be
named
Secretary-Treasurer*
Smith, Clanton Adds
housing, ,1957 or 1958 should
mark the low, point in residential
construction. After that, the rise
cies.
Cer¬
The
production should; good; the mid-term view is better,
6.5 million cars the long-term view is the best that
per year until 1960, and then the
any nation has ever been privi¬
curve
should rise rather sharply leged to anticipate.
with population, family formation
and average income.
its most efficient
facilities; it will tend to reduce
high maintenance costs,, and it
will leave a margin for emergen¬
company
be summed up
can
three Words:
best.
around
average
during
the period
ahead—high
production, but short of capacity
operations—I think it will be all
to the good.
It will allow each
known,
are
for the future
ip
work
out. Automobile
there is every
that level to hold
counter
estimates
various
is
as
forecast at the end of World
-
the
an obvious fact, but
nual spending for plant and equip¬
easily forgotten. Ten~.
ment will rise considerably over
years ago, for instance, the in¬
$38 billion before the end of this
dustry would have had to operate
period.
*
; r '
;;
•'
at 130%
of capacity to make
This is
ago.
level of business that
1957 and 1.958.
to account, what do they indicate
for the mid-term years?;; Let's see
once r curve,
1' It should also be borne in mind
-
a
70%' only
t'k
that "capacity" today means a lot
pausing briefly: to 1 take
moving on to higher
But even the - "pause"
represents
reached
inrthe decade.
before
ground.
as. a
exceeded 77% in only
and never * reached
we
three
erations
After living
probably has been the most re¬
markable decade in history, busi¬
ness
1920's,
90%.
ground
short-term
too.
stock
abnor¬
an
was
In the 30 years
abnormal the other way, and op¬
feel
about
far ahead
as
this
be¬
fore World War I, the industry
broke over the 80% mark only
twice,
and
in
the
prosperous
look.
to
care
I
good
are
of living.
long-term
the
technology, and a continued rise
in living standards.
In
good time to re¬
a
mal situation.
a
standard
that
means
is
ex¬
rapidly during the years
ahead, spurred by the ;grbwth of
the population, improvements in
pand
how
Will serve One,,/
•
slow, but there should be some" year- • fex/bff icio on the ex¬
Francis A. Cannon
improvement in the demand for
ecutive com¬
agricultural equipment.
mittee. Cushmaan ,McGee, partner,
To sum upj we have a selling
in R. W. Pressprich & Co., wass
job to do, but in view of the over¬
elected
Vice-Chairman
of : the
all expansion of the economy, as
well asmthe npw markets whic
group and William S. Renchard,
will be developed, the prospects Vice-President of the Chemical
Taking these three variables in i
years
that
member
expansion, point
continued rise
toward
way
16
But this
Certainly the population is
growing, and improvements in
technology, coupled with a high
the
the
100% Capacity Not Normal
fore¬
casts.
rate of industrial
not
since 1940, the
steel
industry's annual produc¬
tion fell below 90% of capacity
only five times—and these devia¬
tions were largely due to labor
troubles. As a result, we tend to
become
uneasy
unless we are
pushing our mills at full speed.'
omy.
1
does
\
•
..
Agriculture; in general. will. be1
;
third
conclusion: that markets will
'
In
to
future growth
of
the
econ¬
son
will re¬
we
ity.
inade-
measure
place,
"normal"
operating at 100% of capac-
mean
iliar yardstick
quate
first
that
the
discover
everyfam-
economy.
Expansion
And that brings me to the
alarming?
conclusions.
tion, Jncome,
production —
seems
Market
1959.
this
.
s
I
t
*
V
>
~l ,:
—i——is-4—U—-
-J—i-
L. WRIGHT A
CO., INC.
14
The Commercial and Financial Chronicle
(1694)
liberalization
As
To the Free World
Minister
of Finance
Professor
in
of Austria
small
a
of Economics
Though the present situation is not as
dramatic
at the
as
beginning of the Marshall Plan or in 1949, Austrian Finance
Minister contends sustained creeping inflation "constitutes
serious
a
the
;
free
ternal
measures
ceeded
have
so
far
his
big
a
country's ability to achieve double objective of high em¬
'
t
and price stability—classical monetary restraint
policies and a price-wage-commission on a voluntary basis.
Internationally, he suggests coordination of minimum internal
International
I
political and economic dis¬
cussions over the past year have
been dominated by one subject:
Full
the fight
This is
against inflation.
all
r e
the
markable
since
a
ficial
at
more
super¬
glance
the
eco¬
field
in
the
monetary
policy.
of
I do
problem which we are fac¬
ing today is being complicated by
the basic commitment for full em¬
ployment,
ernments
which alrpost all
of
the free
world
gov¬
have
adopted since the end of the war.
For political as well as economic
reasons no government can allow
•
coopera¬
not
mean
.••
■
reverse
'
.
the tragic course of price inflation if
they will
.
us
our
forward.
Mr. Adams
.
budget, reduce the debt
less than $5 billion every year, and
>
not
•
re-establish the gold stand-
,
Cites statistics
showing extensive inroads made by price
inflation on savings deposits,, insurance, savings bonds, and
social security; depicts direct relationship of human
rights to
inflation, and warns that if the forgotten savers "are not saved,
all of
't ' *
At the
financial and
to
'
The
international
tion
r .'i
'-t
'
Utah banker believes the "scarred and battered" middle class
ard.
/
and expand
Employment Commitment
.
>
>
'
gent, patriotic men* to., lead
recommends that we balance
;
think, therefore, that it> is of
utmost importance to pursue
the
fiscal-monetary policies among the principal nations.
The
Monetary
Harmony
ployment
.
forget parties and partisanship and vote for "honest, intelli-
policies pursued in other countries.
as
*
~
;
suc¬
menace/' and that vigorous action is necessary.
•
can
in
Domestically, Professor Kamitz recommends—on the basis of
Executive Vice-President
|
maintaining financial
stability, but, which mayv never¬
theless
be
infected
by the. lax
just
*
;
j
i
countries which through in¬
many
-
First National Bank, Salt Lake City, Utah
'•
inflation"- has
problem
for
''Imported
become
of
countries
Thursday, October 17, 195T
By ORVAL W. ADAMS*
*•
by economic developments
other
world.
.
"Your Dollars and Your Freedom"
for which
country
.
of
foreign trade represents a high
percentage of the national income,
Austria is necessarily greatly af¬
fected
REINIIARD KAMITZ*
By Dr.
diminution
a
tariff duties.
Creeping Inflation a Menace
v
or
.
outset, ponder the words
of James L. Gordon.
,
carry
lost."
us are
the U.
S.
resultant
.
j
:
;
.-
.
it to the 56% depreciation
These words
meaning having to do with
.
dollar has
1
o s s
which
suffered, the
in.
purchasing
as
monetary
a11
tant
each
•
relationships
trading
other,
with"Money
but I feel it is abso-
lutely essential to arrive at
imum of harmonization.
is
This
p owe r f u 1
min-
a
because
Dr.
it
figure; is
Walter
E
propounded
by
Executive!
Spahr,
Vice-President of the Economists'
Interna-/-Representsso
National Committee on Monetary ;
tional economic cooperation has
-much. What a
unemployment to rise over a cer¬
Policy,
and
Professor
of
Eco- ;
been very successful in such ornancial situa¬ tain
jremendous
maximum, which may differ
nomics at New York. University,
ganizations as the OEEC and the
tion of almost
investment
between the various countries, but
in a bulletin just issued, warning
y
European Payments Union, where has been made
all countries of is
fairly well known to each gov¬
of the seriousness and tremendous
the free world ernment concerned. This commit¬ it -contributed, on the one hand, -;jtl order
to
economic loss which dollar depre¬
to a strong expansion of - intradoes not reveal
/produce
a
ment may render it rather diffi¬
ciation has entailed. .;
v;
dollar
time,
any funda¬ cult or even impossible to fully Eujropean trade, and, on the other
D r.
S pah r not e.s - that ; the
mental
struc¬
utilize
the classical methods of hand, helped to solve the. Euro- vt h o u g h t, ;
•Jopinions,-,expressed in this issue;.)
tural disequi¬
pean dollar problem. On a-world- ,reffort,
toil,'
monetary and fiscal policy. While
of the bulletin are his personal
wide basis the International Monlibrium. In¬
Orval W. Adams : *
conflict
and
being difficult, the problem is,
views, and not necessarily those
deed, there is however, by no means insoluble. etary Fund has been of'«great\high-perved
*
^ -v
of
Dr. Reinhard Kamitz
other., members of the com¬
value
in
stabilizing
hardly any I
exchange endeavor. Therefore take-care of
am
in
full
agreement
with
mittee.,
,
country where President Eisenhower's
remarks rates, the GATT has helped free- money; it is the most;costly thing
we would find
Over the 17-18 year period, Dr.
the type of hignthat business and labor must show ing the flow of international trade1 in the world. "
from discriminatory impediments,"*
power inflation which was char¬ a
Spahr shows, the averaged total
statesman-like
behavior
in
..Time
is
IS
money.
Money
and the World Bank has made a
acteristic for the periods following
of
savings. and
life
insurance
order to avoid inflation.
It is of
character. Character is destiny. If
World War I and World War II.
most valuable contribution to in¬
a mounts
to
$329,042,400,000. J
essential importance that we all
these three short sentences seem
ternational investment.
But most countries have over the
Depreciation by 56% represents a
to you to lack logical connections
fight against a certain growing
loss
in
I
feel that
either
within
the
past
few
years
experienced
a
purchasing
power
by <
then
remember
the - suggestive
mentality implying that modern
frame work of existing interna¬
creeping inflation which has
words of Sir Bulwer Lytton.
modern
labor (and
capitalism,
He favers',
tional institutions
or
slowly but inevitably led to seri¬ modern
through a said, 'Never treat, money'affairs
government have a built1 sbaieholders,..and insurance
ous
disturbances in international
new
of
body monetary and fiscal with
in tendency toward inflation. We
levity, for money is charnnn
financial relations.
The situation
policies could be coordinated. Pre- acter.
must hold down the money supply
Money is ' character. How $184,263,744,000
is by no means dramatic (as for
vious work in this field, such as
to prevent further price advances
you get it How you keep ht. How
This is 97 tfmes the loss of
instance at the beginning of the
for instance the report by a combut we must also try,to maintain
y0u invest it. How you spend it.
deposits by bank customers in the
Marshall Plan or in 1949, when an
mittee of independent experts apa high level of employment.
How you hoard it. How you use
1921-1933 period which, accordabrupt devaluation was the only
pointed by the OEEC for studying it. How you are influenced by it. big
to -the
Federal
Reserve
I may state that over the past
means of checking the loss of for¬
financial
stability, have pointed Yes money is character'' " p
statistics, amounted to $1,901,000,few years Austria has succeeded
the way. This coordination of fiseign exchange reserves of some of
in combining this double objec T^at shouM be the { "theme 000, Dr. Spain- comments.
:• i
the most important trading coun¬
cal and monetary policies would
He tabulates the various funds
tive. We have maintained a high
song» j-or aj| Americans,
not have to enter into the details
tries). It is my conviction, how¬
%
"•
and accounts whose owners and
degree of financial stability with¬ of
ever, that the creeping inflation,
each country's domestic affairs,
Function of Money
beneficiaries have suffered loss
out impeding the growth of our
if sustained over a period of sev¬
but it would show whether a govMoney performs three functions:* of purchasing power, as follows: ;
economy.
Through the mainte¬
eral years constitutes just as big a
nance of a balanced budget and a
e£nn?S • -i1 3 %l\en ,sl^uatl011} first, " a • measure ''of1 exchange;
menace
for economic prosperity,
17-18 Year Average ,,v
should, in its own interest, as wel^
)
cautious monetary policy, as well
second, a storehouse of value; and
and that we should therefore take
as
in
the interest of its., partner;
\
(000's omitted)
;
as
third,'a medium of exchange. In
through voluntary efforts by
vigorous
action
for
countries pursue an expansive, re*U. S.. Savings BondSiLLiii- $42,180,000 >■
preserving
ajl three Of these, or in any one, *
business and labor to keep ad¬
*Time deposits, all banks.—
50,704,600
monetary and financial stability.
strictive, or neutral Policy. Suchinflation can occur and can do
vances in prices and wages within
"Savings and loan assns
13.786,100 |
recommendations would have .to
tLife insurance in force-.: 1_ 203,424.900 t
so at the same time.
certain limits,
Austria has been
Exposing the Culprit
,1 Annuities in force-1—-a--.)
1,112,600
able to keep price rises within
Various theorems have been ad¬
ho
In the first function-a .measure' Social Security, and unem-.« *
;
V
be
adjusted in accordance with.
f
.
,
f- mirchnsin"
ployment funds_;___-l_.-l
17,834,200
vanced about the origin of infla¬ IV2 % per year, and thus to have
changes in the economic situation.
bower
bv
inHaUon
occur
tion which is prevailing right now. the lowest rate of price increase
I think the basic
Total average holdiugs;'-$329.042,400
principles,un-'
debasement
In the secIn particular the theorem of cost- among all European countries. The
Loss in- purchasing, power—.' 184,263,744
derlying my suggestions are
valfc-toPercentage loss—_1—
' '
56fo 5
inflation has been opposed to the Austrian schilling has become one
If there is a disequilibrium in the
Lank deposit loss, 1921-33 ■* $1,901,000 '•
of the strongest European curren¬
flaHon
can
occur
through' the
classical case of
inflation, where
external payments position of a
cies—its valuation on the free ex¬
of
an
excessive supply of money is
"18 years.
tl7 years <averaged).
country
three tvnes of remedies
PaPer mohey — ■
chasing an inadequate supply of change markets of Zurich or New can be 'resorted to: a devaluatioA
York corresponds exactly to its
,
owner,
goods. Wages, which increase
or
revaluation of the
exchange
^i"w
" beneficiary, etc., the losses have
official parity, a fact which only
faster than
productivity, are sup¬
rate
a variation in the aegree or
mo"eY Pot created through the
as
follows on
tiie
anov(
few countries can boast of. While ldtt, a vdilation in ine degree of pr0(iuct10n of goods and services. ljeen
fnfniQ
posed to be the principal culprit
r>r
cnahr
noir.ts
outtrade and payments
restrictions, Inflation in the third function-a "S' Dr* ;Spahr P°intS
applying the classical orthodox
for this cost-inflation, but
govern¬
oi a change of direction m the inof' exchange
ment is also accused of contribut¬ means of monetary and fiscal pol¬
—
occurs
Loss in Purchasing Power
ternM monetary and financial pol
when
human
emotions
or
mob
(000's omitted)
ing to the price rise by imposing icy (changes in the discount rate,
institution of reserve requirements
and levying new and
U. S. Snvings Bond holders $23,620,000
^be efforts of all countries psychology become aroused, caushigher taxes.
of the free world since the end of
and credit ceilings,
Time and savings deposits
28,394,576
I do not want to belittle this ex¬
jng
people,
as
the
purchasing
balancing of the
war
have been directed at
S <fc L share holders
7,720,216
the
budget),.we have .also re¬
power of the dollar decreases and
planation, but I feel that it must
Life insurance beneficiaries 113,917,944
avoiding as far as possible resort
to
additional
measures
printing press money increases, to
be put in its right place within the sorted
Annuity beneficiaries623,056
to the first two types of remedies,
which may sound less familiar to
Old Age Social Security---,
jlWest their hard-earned money
6,172,544
general framework of a country's
and at employing them only in the
Unemployment funds—--13,814,608
our foreign friends.
jn goods; in other words, to flee
monetary
and
financial
policy.
case of deep-seated structural disfrom money into things.
There is no doubt that a
$184,263,744
Price-Wage-Commission
country
equilibria.
Stability of exchange
inflation has already begun in
which pursues a restrictive credit
I refer in
particular to the es¬ rates and liberalization of trade
How Much More Inflation?
air three of these functions.
Our
and-fiscal policy will not be af¬ tablishment
of
a
Price-Wage- and payments are the cornerstone elected
representatives
are
the
i now quote from the "Economic
fected
by cost increases in the Commission, consisting of repre¬ of the international agreements of
0nly ones who can stay inflation's Letter" of Aug. 15, 1957, issued by
sentatives of the
same
government, the today. This means that changes treacherous journey as it goes on
way
as
a
country where
fjie First National Bank in Dallas:
Chambers
of
Commerce,
Labor in .internal monetary and fiscal to fhe forest fire
credits are liberally extended and
stage,
"How much more inflation?
and Agriculture, and the Federa¬
policies remain the only way of
where the budget is in deficit. Tn tion of
"'How much further can infla¬
Trade Unions.
This com¬ normally dealing with balance oi
Extent of Inflation
tion go?' is becoming a common,
other wor'ds
cost-inflation in mission, working on an entirely payments disequilibria.
"Irredeemable ^ Dollar
is
100
everyday question. Speculation on
I trust that a coordination of inorder to exercise a marked effect voluntary basis, periodically re¬
Times Costlier Than Bank Failthe answer seems to be growing
views price and
wage
develop¬ ternal policies among the principal ures.
must be substantiated
^
by a corre¬ ments in an
as
an
influence upon individual
effort to determine countries would be of the
greatest
"Savers', Policyholders' Losses as well as business decisions and
sponding increase in the supply of to what extent
readjustments are value for further developing $184 Billion on $329 Billion 1939ma,7ninJ
money.
This means that a strict justified in the context of stability.
The commission may make
tr 19i* Ave?Bed
"An accurate answer would be
spe¬
monetary policy can also to a
cific proposals such as
m
:"If you-take a 17-18 year.aver- valuable information, indeed, if
e.g. to hold ing of those responsible for carrylarge extent negate the conse¬
ag£ of the total savings funds of
j
i
t
f '
knew- Kut
down wages in economic
branches ing out their countries' monetary the American people and value of
quences of this type of inflation. where
It b' improductivity does not' in¬
nomic
and
fi¬
,
—
...
bondholders, savings; and
o/ol
.
beneftciaries
,,v
.
,
r
f
.
1
,
,
?rito.tod to"
P££®l«,h
clear.SI
„ver-Lue
'l^pSg
?an
.
.
trough, the
money'is
Specifically bypass of
.
.
,
.
—
ilee
v,1'"/
df efrl
r
P,r„in,c|pal-
X, knowrthe answ^'
*An
address
by Dr. Kamitz before the
United States Austrian Chamber of ComC&Qi-ce,
Washington, D. C., Sept. 19, 1957.
crease, or to exercise
pressure on
imports
a
downward
prices by encouraging
an
increase in
through
hefd
inorder
ordination.
rlnmate^sueh £ l!fliilsurance in force' and subject
The
concerted action.
time
is
ripe for
countants,
Salt Lake City, Sept. 7,
1957.
possible to count the variable fac^
C07ltlTtlL€CL 071 pCtgfC cO
Volume 186
Number 5682
♦
.
.
.
The Commercial and Financial Chronicle
,
that
Today's Thinking of
right;
that inflation is
^eriniitiye iow
impossible in a democracy. Maintainsbasic policy should
prevent created: money substituting for saving and thus entailing erosion of peopled purchasing
power.
Assertsworld is
gradually recognizing that inflationary excesses aggravate
.-subsequent readjustments:-and hence .^resistance to inflation
is really ' the battle against deflation."
Concludes printing
money and reducing interest rates in face - of supply and
demand factors must lead to; lower ' standard of : living
doorstep.
parties in the
adopted our Em¬
both
States
no
see
dress
of
the
President
the
.
people, the aspirations
peoples for a higher
living—the problem
has not been one of creating jobs;
-the
problem has been
one
of
restraining inflation and seeing to
it that the stability of existing
jobs is not undermined in such a
-way that when the inevitable ad¬
justments
come
from
excesses
States,
less
less—-
more or
agree¬
that
ment
problem
have
the
we
bee
n
dealing with
in recent years
has
been
tendency
a
for
W. McC,. Martin, Jr.
inflationary,4
pervasive
in-
^
flationary pressure to develop and
to expand. I would say that the
agreement has been general; that
the situation has been character¬
ized, on the one hand, generally
speaking, by prosperity, great ac¬
tivity, and great vitality, and on
the other by pervasive inflation¬
ary pressures.
*•'. There
who
soine
are
at
that,
excesses
the
same
having
time
these two aspects
say
that
of the current
not
the
.
of
calculated
or
providence
be
so
and
eliminated
find
a
tain of
planned that im¬
imprudence can
and
that
we
will
way to develop the, foun¬
perpetual youth, pie in the
If
we are
going to
this very
sound concept of full employment
use
to which all of us subscribe as
provide for sustainable expansion
and growth and improved stand¬
a justification for continuous and
there will not be two people un¬ persistent inflation, then it seems
living without inflation.
whereas there would to me that it is our duty as re¬
It is fundamental—and this, I employed
have been only one person un¬ sponsible
financial
officers
t o
think, is the major; point — that
employed if it had not been for -point out that not only will not
growth-must; be financed out of
the growth and the higher stand¬
the preceding inflation.
: *
saying. It is fundamental in-times
I think in substance that has ard of living of the'peoples of
like these that-thbse of us who
been the: problem of the last dec¬ the world, >which they ate seek¬
hre responsible for the fiscal pol¬
ade in most of the world. And I ing, be achieved, but that we will
icies of our respective. govern¬
think that the world is coming unquestionably follow- a
course
ments see to it that public finance
to recognize that the resistance to ihat will undermine some of the
does not; dissipate the savings; of
inflation is really the battle existing stability and growth in
the community, but rather con¬
the world and actually retard our
against deflation.
tributes to theip and fosters their
Certainly in this country we progress and our development.
continued growth,
It is equally
I don't think this is necessary.
fundamental that those of us who have I been confronted with the
I think that with a little judicious
are responsible for the formula¬ fact that inflation got a little bit
.common
sense
we
can
handle
tion and execution of monetary ahead of us, and when you lose
these problems.
policies see to it that created from one year to the next more
than $10 billion of your gross na¬
money
does ; not substitute for
JJ.. S. Facing the Problem
savings in sueh a way as to con¬ tional product inv an increase in
In the United States we are do¬
tribute to an erosion of the pur¬ prices without any additional
goods and services being supplied ing what we can to face up to
chasing power of the people.
to the people, I think any think¬ this problem. Practically every¬
one
That is my credo; I think it
today recognizes that infla¬
ing person recognizes that you
represents the thinking of the have a problem on your hands tion is a problem. But there are
some people who say the answer
Federal' Reserve
System today; which requires some adjustment.
to
mnauon
is
to
and I believe is in consonance
print more
.• One of the most difficult prob¬
with the points of view that have
money and reduce interest rates.
lems we in the Federal Reserve I
been expressed by our President
merely want to point out that I
and
by
our
Secretary of
the ape confronted with is this charge think all of us as financial officers
,
7
not unreasbnable: price
that must be paid for, economic
progress. To this point of view I
say
a
First, I want to make the com¬ necessity for growth and develop¬
a
the
basis
of
Power Go. 5% Bonds
than
a
program
100.027%.
.of
"
Net
..
,
proceeds from the financing
will be used by the company for
the .payment bf outstanding bank
loans, and together with other
funds, for expenditures in connec¬
tion with its construction program.
The new bonds will be redeem¬
able at regular redemption prices
ranging from 105.78% to par, and
at
special redemption prices
ceding from 100.777% to
accrued interest in each
Pennsylvania
furnishes
of
as
well
to
four
municipalities.
by the
in rural
as
Pennsylvania,
sells electric energy at
served
case,
Company
Power
electric service in 133
communities,
areas
company
|ake
refuge in what I consider to
I
want
is not
-
wholesale
The
For the
12
months
ended
out
operating revenues of $16,681,500
of abundance and and net income of $3,135,515,
an offer to sell or a solicitation of an offer to buy these securities.
offering is made only by the Offering Circular.
the
rich- and
the
.Inflation's Alleged Novel Features
poor.
are
out
world
which
operations
of
cost-plus
act
of
the
to
con¬
accelerate
inflationary
problem
All
this
is
of
stimulating employ¬
ment.
Our
worry
true, and it is true
was
that inflation
understand
deflation
then
feeling
today
are
directly
Interstate Commerce Commission
vividly hear¬
ing quite a discussion on the basis
of the Employment Act of 1946,
which
problem.
But
the
fact
*Kemarks by Mr. Martin at the Joint
World Bank-International Monetary Fund
Informal Discussion, Washington. D. C„
Sept. 25, 1957.
•
Price 100% and accrued interest
The Offering Circular may be obtained in any State in which this announcement is circulatedfrom
only such of the undersigned and other dealers as may lawfully offer these securities in such State.
and
is
the
law
of
the
land
in
this country, and to the objectives
•
and guaranty of tbes<e Bonds are subject to authorization by the
con¬
cate
.
(-
a
that many of these factors compli¬
•
The issuance, sale
HALSEY, STUART A CO. INC.
nected.
I remember very
'
our
1, 1957
about deflation, and all of
us
spiral.
-
4M% Bonds, Due October 1, 1982
Dated October
some
in collective bargaining contracts,
and from the prevalence in the
tracts
First .Mortgage
that
resort to so-called escalator clauses
modern
any
Inflation
is a process which, once it gets
people who under way, is very difficult to
there are many handle, because it envelops and
novel features in today's general¬
develops and propels itself.,
ized inflationary pressures. Most
Think of these meetings and go
of us are now experiencing pres¬
back to 1946. At the end of the
sures that stem from unduly heavy
war, when we were meeting to¬
.defense expenditures, from growth
gether, first at | Savannah, and in
in population, from demands for
the meetings that followed, there
higher wages, from widespread was
general recognition of the
There
.point
$6,000,000
that that
,
of
DICK
&
MERLE-SMITH
At
that
was
particular time the
partly about the fact
STROUD
A
COMPANY
INCORPORATED
THE
WM. E. POLLOCK A CO., INC.
ILLINOIS COMPANY
INCORPORATED
McMASTER
which I fully subscribe.
worry
R. W. PRESSPRICH A CO.
October 11, 1957.
HUTCHINSON
& CO.
July
31, 1957, the company had electric
have had inflation
We
es¬
timated population of 270,000.
this
in
country, and in the last
the pursuit of sound fiscal and couple of years, the last 18 months,
monetary policies is impossible in inflation has gotten a little bit
ahead of us in this country.
a democracy, impossible in a free
society.
Inflation is a cancer that strikes
be the cynical rationalization that
area
has an
,
to point
so.
also
and
,
v
re¬
plus
par,
This announcement is not
The
:
Halsey, Stuart & Co. Inc. la
manager of an underwriting group
Which is offering today $8,000,000
of Pennsylvania Power Co. first
mortgage bonds,; 5% series duO
Oct. 1, 1987, at 100.777% and ac¬
crued
interest, to yield 4.95%.
Award of the bonds was won by
the underwriters at competitive
sale yesterday (Oct. 16) on a bid
very
"alternative to unemployment or to I
our
.
ment that from time to time peo¬
firm dissent. ple in smaller, countries, less de¬
I don't believe it. I don't believe veloped "countries, are prone to
that'either the jobs or the internal say, "In a country; like the'United
States you can't possibly know
growth
and
development, pur-,
what our problems are; you can't
Chased by inflation afford a firm
basis for either sustained employ¬ possibly have a problem-of infla¬
ment or development. I refuse to tion;
you can't possibly - worry,,
adopt what I consider the defeat¬ really, about the depreciation of
ist position that inflation is the your currency.'',.,
want to enter
really
Halsey, Stuart Group
; Offers Pennsylvania
sky.
•.
to
the erosion of our currency and
undermine the saving and invest¬
ment progress of all of us—under¬
pointed mine
only related- to each
other but they are indissolubly
linked, that We cannot enjoy the
blessings of vital and active eco¬
nomic progress without incurring
that we seek a recession, or that will
•
realize that regardless
of
in some degree the ravages of in¬ Treasury.'
we
are
using our policies as a whether we are being charged
flation, that a progressive erosion
The Basic Concepts
-of the value of our savings is a
means of stifling growth, that we .with being individuals who sup¬
I want to comment a little bit
necessary price. And they go on
are not
on the basic 'concepts.v
recognizing the legitimate port a doctrine of scarcity rather
;
scene are
of supply and demand fac¬
tors, which make such a policy
do nothing except contribute to
that have already
ards of
not-
entirely, but.
general
respective
governments to/ devise and apply
■.
policies
adequate
to
more
—
diminishes' our duty, as I
it,-the duty of the responsible
our
all
standard
financial
there
has been
or
of
way
financial, officers of
of
United
But
say
face
.
horizons of
of most of the governments of the
I
out'the
w©
ourselves
to follow the
siren song of printing more
money
and reducing interest rates in the
„
...
,
:r In this room we have gathered merely states, in my judgment, the
the responsible financial officials dimensions of the problem; it in
world, and starting with the ad¬
that
yising standard of living—if
permit
.
'
and misery.
our
so
business.
a
society—we will find at the end
ployment Act, and the objectives occurred, unless the world Of the road riot what we are
of the Employment Act are ob¬ jchanges, if imprudence and im¬
promising the people and, what
jectives to wnich all countries providence are engaged in, in just :we have within our
power, in my
subscribe. , They
are
sound, as the same way as if a child puts judgment, to achieve for the peo¬
virtue itself. The problem is in bis hand into the fire he will be
ple; a higher and a better standattaining those objectives. *
burned," then there must be some "ard" of'living; but we will have a
adjustment and some losses.
lower standard of living and a
-0; The
Aggravating .Effect of
Our economies are loss econ¬ good deal of misery and
suffering
Inflation
omies as well as profit economies,
that could have been avoided with
.{■, Actually the problem of the last and I think we have to face up to "a little prudence and common
10 years, with the technological that fact, arid we must hot assume
sense at the financial level.
development, with the growth in that monetary policy of fiscal
population,
with
the
widening policy cari be so ordered or so
}
'jl'
ment, and we are endeavoring to
punish people for their misdeeds.
great
Business Recession
on
Arid
United
is
.
the
coming out of uniform on all testified repeatedly, and I reiter¬
hands, we were told that this ate it, that I don't want any reces¬
problem;was a problem that was sion, I don't want any decline in
S. Delegation to the
Financial off iter denies "defeatist" position
i
of
had had persis¬
and * had not sucr
,
.
the^
time
we
Eschewed
in
really restoring the
employment that we thought the
Nothing, of course, could M be
world required. And with soldiers further from the truth. I have
J ; Twelfth AnnUalMeetfngoftheWorldBank
■
;
the
ceeded
By HON; WILLIAM McCHESNEY MARTIN, JR.*
Chairman of Board of Governors; Federal Reserve System
Adviser io the U.
from
depression on,
difficulty
tent
The federal Reserve
15
(1695)
'
•
.
THOMAS A COMPANY
The Commercial and Financial Chronicle
16
...
(1696)
much
as
dollar
a
Thursday, October 17,1957
last
over
year's $3.97.
THE MARKET... AND YOU
By WALLACE
A
of at least tem¬
measure
STREETE
NSTA
enjoyed much
c
Products, that have done vir¬ higher sales but lower profits
tually
nothing
NATIONAL SECURITY TRADERS ASSOCIATION
far
so
The National Security Traders Association has announced the
following program of events for the 24th Annual Convention to be
year.
Corn Products, as a
entities
matter of fact, has held in a
able
at
lour-point range, lately about
previous
in the middle of the bracket,
held Nov. 3—Nov. 6 at the
.11:30
a.m.
it.
ried
The margin was
and the technical
too
ac¬
tion too inconclusive to indi¬
that any
cate
important up¬
would be made
side progress
until some sort of
a
established,-, and
base
was
tested,
in
being the sole
session.
new
high
Bingo
shown
area.
tion
Standard
Brands
in
about
fairly spirited, some
five points and even the bell¬
managing multi¬
point gains per session when wether, General Foods, hold¬
the going was good, but the ing inside a 10-point move¬
ment. General Foods not only
group was highly sensitive to
is a candidate for a good in¬
news
developments. Martin
crease in
profits for this year
Co., which has a major role
in the Vanguard which is our but also is considered likely
was
of the
issues
eventual
answer
to
the Rus¬
sian
Sputnik, was a bit se¬
verely depressed by vague
rumors
of
a
contract cancella¬
tion which turned
contract
a
a
out to be
subsidiary
of
American Machine & Found¬
ry
had been g r
a n ted by
selling,.in short,
trigger-action not in full
Martin. The
was
accord with the facts.
*
*
«S
flu, augurs well for
Similarly,'rumors of a mis¬ the profit statements ulti¬
sile failure- for North Ameri¬ mately. The
industry predicts
can Aviation was
good for an a growth of some 15% per
immediate- setback in the year in its ethical
drug sales,
fanciers of the missile stocks
mostly from
#
Allied
were
new
*
products.
,
long-range
ac¬
quisition.
the
"Defensive" Interest
What
tions
vaccine and is
flu
being
top outfit in
vaccine! field which,
lately, has broadened
investment sugges¬ dustry-wide
were
a
proposed employees
to
in¬
innoculation
of
on
a
wide scale.
definitely in the defen¬ Earnings projections give the
sections, notably the food company a good chance to
lines
and those, like Corn boost
1957 earnings
by as
were
sive
"X
p.m.
Meeting
Tea
Cocktail
p.m.
*
"
-
,
Ladies Bridge and Canasta
,
.
,
\
...
-
>
-
"V
,
Party
Dinner
10:30
p.m.
Dancing—Entertainment
8:30
a.m.
Presidents
9:30
a.m.
Golf, Tennis and other Sports
Ladies Trip to The Greenbrier
TUESDAY
1:30 p.m.
-
NOVEMBER
5th
:
of Affiliates Breakfast
6:30
p.m.
Cocktail Party
8:00
p.m.
Dinner
10:30 p.m.
Dancing
10:00
National
WEDNESDAY
a.m.
-
6th
NOVEMBER
Committee Meeting—
Election of Officers
7:00 p.m.
Cocktail Party
8:30
Banquet
p.m.
.
'
Introduction of New Officers
Guest Speaker
Edward N. Gadsby,
10:30
p.m.
Chairman S.E.C,
Dancing—Entertainment
THURSDAY
-
7th
NOVEMBER
Golf—Tennis and
Other Sports
prizes in the golf and tennis tournaments. The
is'! awarding new trophies—two sterling bowls
the golf and tennis permanent trophies with plated replicas
the individual winners each year, the sterling bowls going
Among the
N.S.T.A. this year
for
for
permanently to any member of the Association winning it three
times. There will also be sterling prizes for low gross which will
be retained for one year, plus smaller cups to be retained for
permanent possession. There will also be silver bowls for low net,
and winners under the Calloway system, and unusual prizes for
putting, booby, etc.
National Quotation Bureau will offer their large trophy for
the winning team, plus individual bowls for winning team mem¬
bers, and the Blue List will have a cup for the best municipal
player.
'
A putting contest for women, with many attractive prizes, will
also be held.
portant maker of fluorescent
incandescent
and
bulbs
and
Alaska Lumber & Pulp Go., Inc. Arranges
added
$12,000,000 Financing Through Billon, Read
First sale in the United States in
Alaska Lumber & Pulp
Co., Inc.
(a wholly-owned subsidiary of a
Japanese corporation) has entered
into agreements for the sale oi
$12,000,000 .first mortgage sinking
fund 6% bonds, series A, due Dec.
31,1976, according to an announce¬
ment yesterday (Oct. 16) byTadao
Sasayama, President of the com¬
pany, and F. H. Brandi, President
at which it has been available of Dillon, Read & Co. Inc.
Dillon, Read & Co. Inc. nego¬
recently.
tiated the private sale of the bonds
[The views expressed in this and since, 1955 has acted as fi¬
article do not necessarily at any nancial advisor to the company
time coincide with those of the with respect to its program to fi¬
"ChronicleThey are presented nance its pulp mill project near
as those of the author only.]
Sitka, Alaska.
Vercoe Adds
to
curities in the United States by a
Staff
(Special to The Financial Chronicle)
COLUMBUS,
has
Japanese-owned
Ohio—Charles J.
been
added
to
the
staff of Vercoe & Co., Huntington
Bank Building, members of the
New
York
Stock
corporation
in
In 1924 Dillon,
Read & Co. sold the first dollar
.
issue
25
to be
years
of securities
Both
placed in the United States.
the bonds and' the senior
indirect:-
notes will be guaranteed
ly by the Export-Import Bank of
Japan. The balance of approxi¬
mately $36,500,000 will be fur¬
nished
by Alaska Pulp Co., Ltd.
Japanese parent company.
;
the
Alaska Lumber & Pulp Co., Inc.
organized in 1953 as a whollyr
owned subsidiary of Alaska Pulp
was
a Japanese corporation,
for the purpose of constructing
Co., Ltd.,
dissolving pulp mill in Alaska.;
The parent company is contract¬
ing to buy the entire output of
pulp from the Sitka-mill and in
turn will sell the pulp to certain
of its stockholders, who are the
major rayon and paper producers
of Japan.
of
Construction of the mill, located
years.
a
Japanese private cor¬
poration (first mortgage bonds of
Great Consolidated Electric Power
Exchange. He ; Co., Ltd.) in the United States.
was
previously with Saunders,
The proceeds to be realized by
Stiver & Co.
the company from the sale of its
bonds wilTbe used to help finance
the construction cost of the pulp
With Ross, Borton
mill estimated by the company at
(Special to The Financial Chronicle)
$55,500,000.
Of
the
remaining
CLEVELAND, Ohio — Louis $43,500,000 needed to build the
Hoss has been added
t<) the staff plant, approximately $7,000,000
of Ross, Bprtori & Co., Inc., The will be provided by the sale of
1010 Euclid Building.
senior notes which are expected
,
25
,
over
Benedict
over
for Japanese-owned company.
This marks the first sale of se¬
con¬
highly uncertain and tinues to attract favorable at¬
given to rapid reconsidera¬ tention from
market analysts
tion, which-is short-term ac¬ in
part because it is the sec¬
tion and not
overly indicative ond largest
producer of polio
of
worthwhile
National Committee
6:30
*
Laboratories,
a.m.
3:00 p.m.
im¬
an
Past Officers Breakfast
5:00 p.m.
importantly to its posi¬
tion early this year with ac¬
quisition of Argus Cameras.
to sweeten its dividend
pay¬ It is important in the elec¬
ment
in the not-too-distant tronic field in a
variety of
future.
ways ranging from defense
systems to basic materials in¬
Drugs Favored
Drug shares were also cluding a rating of being the
only commercial source of
among the more favored of
germanium and silicon which
the major groups,
mostly be¬
are
the base, of items like
cause
they have been outper¬
transistors. At its highs in re¬
forming the market and the
cent years the stock sold at
romance of new
preparations,
twice the times-earnings ratio
latest of which is the vaccine
for Asian
stock and it added
up mostlyto
the fact that even the
flashbulbs,
NOVEMBER 4th
-
a.m.
3:00
any
of
Cards
Committee Reports
It is deeply committed to the
photographic f i e 1 d, largest
maker
or
MONDAY
10:00
slowdown in its
costs for some of its basic ma¬
*
*
#
terials with projections indi¬ profit gain and is expected to
show above $4 a share this
With the list so well de¬ cating a good jump in 1957
year
for a comparatively
flated from the peak of three profits.
%
*
❖
modest price-times-earnings
months ago, some cautious
ratio of around 12 to 13 on
i
Penick & Ford, too, has had
buy recommendations were
virtually no market life de¬ reported earnings and some
starting to circulate for a
six-times the cash flow result
change, bolstered a bit by the spite the wide changes else¬
where in the list. Its range expected.
fact
that
the margin, calls
had reached sometlnng of a even after nudging to a new
Interesting Electronics Issue
peak and selling from this high is still only around 3M>
There hasn't been much of
sourc6 seemed to be at a lull points on the year and the
a
following for electronic-TV
for awhile; Tax-loss selling yield has been around
firms for some time. Sylvania
which is a good figure even in
was also around and the
hope
Electric, available at a 6 %
the face of high bond yields.
was
that an early start in
yield, is in line to report a
❖
❖
*
cleaning up such liquidation
sharp turn in earnings after
would keep it from reaching
The situation as to narrow the
inventory squeeze in tele¬
any fever pitch later in the price
ranges all year is much vision earlier this year. The
year.
the same in the other foods;
company is far less dependent
Beech-Nut Life Savers having on television than the com¬
Sputnik Buying
held in an eight-point swing, mon
concept would make it.
Buying in the missile sec¬
that
.
Dinner
8:30
on
i.
~
-
President's Reception
pm.
.
This
3rd
•
6:30 p.m.
9:00 p.m.
Phillips has an odd distinc¬
corporate
tion in that its postwar ex¬
name is little known although
its grocery items, like My-T- pansion amounted to around
Fine and Brer Rabbit, are $1,2 pillion for a .company
that reports total assets of
familiar names to shoppers.
less than $1.4 billion. More¬
The company is enjoying
over, the company hasn't
good profit margins and lower
one
NOVEMBER
8:00
,
buying
of resins and is one of the
#
%
moved in, the industrial aver¬
leading factors in the natural
Penick
&
age had dropped to 441
Ford,
also
a
gas field which is still grow¬
against the 430-33 area where maker of corn products, was
ing rapidly.
the selling on the President's able to
forge to distinction by
*
J®e
#
narrow
-
Registration
timid
car¬
Homestead, Hot Springs, Va.
SUNDAY
#
heart attack in 1955 had
Notes
the way of mass popularity
with the"ofamilar pattern of
"\n
this showing up in this group, too,
lately. But some of the large
currently are avail¬
largely due to continued in¬
prices well below
terest in missile issues that
peaks and, in some
are almost certain to
get new
attention in government although it is a component of cases, profit margins continue
to expand. For example,
the
industrial average that
spending.
Phillips Petroleum is broad¬
*
gave up 80 points in its three
ening its polyethylene line
month slide.
Before
the
porary stability set in on the
stock
market this week;
*
Deflated Oils
Oils haven't
Alaska,
about 860
of Seattle, com¬
menced one month ago, and it is
contemplated that it will, be com¬
near
Sitka,
miles northwest
pleted by Dec. 31, 1959. The mill
is designed to produce 340 tons
per day
(approximately 120,000
tons per
It
will
year) of 93% alpha pulp.
be
the
second
mill
con¬
structed in Alaska for the manu¬
facture
of
hi-grade
dissolving
The first mill, which is
owned by American interests, is
pulp.
located at Ketchikan, Alaska and
began production in 1954.
Volume
186
Number 5682
.
.
.
The Commercial and Financial Chronicle
(1697)
cord between the Federal Reserve
Strength and Limitations of
Monetary-Fiscal Policies
and
United States Treasury, that
monetary powers were exercised
with the objective of "promoting
monetary • and ; credit conditions
that
would
foster
growth together with sta¬
bility in the value of the dollar."
As indicated
Chicago banking economist's examination of price inflationary
is
omy
now
deflation; (2)
or
as:
(3) despite
enjoying
in
downturn in the economy
a
about tight
concern
some
money,
supply growth.
money
the
over
long-run "spending increases
head.
by growth in the
The
Introduction
Employment
placed
Act
of
1945
responsibility for main¬
economic stability upon
taining
Federal
Government.
.'
is
It
As
from
the
now
ob¬
avowed
jective
of
re-
s po n s i b 1 e
agencies
to
promote
nomic
growth,
and
stable
a
price
This
tive
level.
objec¬
is
cur¬
rently being
implemented
through
Sprinkel
with
cerned
those
and
the
affect
ct>st
and
availability of money
and,' hence, changes in the stock
of money. The tools available to
our
monetary authorities
(1)
open
serve
include
purchases and
of United
States Treasury
(2) changes in the redis¬
rate, and (3) changes in re¬
requirements.
Fiscal pol¬
icies
are
sales
bills;
count
market
with
concerned
those
decisions
and, actions taken by
Congress and the Administration
which
affect
government
enues,
government
and management of
rev¬
expenditures
the Federal
debt.
Stabilization
tools
the
toward
rected
are
By inflation I
general price
living."
di¬
now
objective
eliminating inflationary
of
pressures.
rise in the
or
''cost of
mean a
level
It is important to dis¬
between changes in the
tinguish
"cost
of
living" in the
above
and changes in the "stand¬
of living." A rise in prices or
sense,
of
"cost
living" means that
more
dollars are required than
previously to buy the same bun¬
dle of goods.
On the other hand,
a rise in the "standard of living"
means that more goods and serv¬
ices are being consumed.
Hence,
it is unfair to compare total liv¬
ing expenses between two points
in time and allege that the in¬
is
crease
due
inflation
to
or
higher "cost of living" when actu¬
a goodly portion arises from
higher "standard of living."
Unfortunately, the long-term his¬
tory of our economy is character¬
ized not only by a rise in living
standards but also by inflation.
In recent years, a substantial por¬
tion of increased family expend¬
itures is due to a higher "stand¬
ard of living" rather than solely
During the past five and
half years, the "cost of
price
consumer
an
problem
♦An
the
of
address
National
ence,
12%. As was true during
long-term history, this «in¬
crease in
spending is nearly twice
pulling
than
prices., No
doubt
of inflation.
ment
from
boom.
private
a
At
the
the
those
basic
stantjjyAy
tinued
long
while
consumer
increased
(2)
current
(4) the chances for
II.
United
the
past
States
forces
ment
available.
Among the
accounting for the invest¬
were
(1 decelerated
depreciation, (2) perhaps too
Continued
on
not continuous
October 16, 1957
suf¬
but
What
was
price
basic
were
bunched
were
The Siegler Corporation
financing.
war
increases?
the
320,000 SHARES
2.7%
increases
periods of
of
cause
The
an offer to sell, or a solicitation
of an offer
buy these securities. The offenng is made only by the Prospectus.
NEW ISSUE
has
economy
Price
data
the
sug¬
-
COMMON
gest that inflation stemmed from
too much spending relative to the
■
production achieved by our econ¬
1
STOCK
Par Value $1 Per Share
'
,
During this period, spend¬
ing increases averaged 5.8% per
omy.
while
year
output
increases
av¬
eraged
only 3.1%. Hence spend¬
ing increased almost twice as fast
as
PRICE 815 PER SHARE
production.
Why did spending rise so
idly?
Both theoretical and
pirical evidence suggests that
rap¬
em¬
Copies
over
the
are
the Prospectus
of
in States
long pull spending increases
determined largely by growth
in
which
may
be obtained from,
such underwriters
of the several underwriters only
any
are
qualified to act
securities and in which the Prospectus may
supply.
During the
period under consideration, mon¬
etary growth averaged 5.9% per
year, almost identical to the aver¬
spending
increase
dealers in
as
legally be distributed.
has
risen
goods and services.
ble result
aging
was
2.7%
United
per
States
an
inflation?
by
Dr.
of
average
Why then
over
The
Sprinkel
Agricultural Policy
Turkey Run, Indiana,
r
,
so
the
an-
before
Confer¬
STAATS
R.
&
CO.
SCHWABACHER
Since
the
continues
year.
economy
&
DOMINICK
&
CO.
BACHE &
DODGE &
CLARK,
>
CO.
CO.
aver¬
PAINE, WEBBER, JACKSON & CURTIS
HAYDEN. STONE & CO.
to grow,
due both to greater pro¬
efficiency as well as in¬
labor and capital facili¬
goal of stable prices implies
WALSTON
ductive
&
CO..
INC.
ALEX.
BROWN & SONS
creased
ties,
a
that
the
over
long
a n d
supply
money
should
rise
output
increases.
but
supply
money
is essential in any
vent
inflation.
System
serve
position to
Money in
and
in
J.
BARTH
modern
which the
The
HOGLE &
CO.
RYONS &
CO.
&
CO.
BATEMAN.
EICIILER &
CO.
WALTER
&
HURRY,
INC.
CROWELL.
WEEDON
&
CO.
economy
banking system
Federal
A.
LESTER.
COMPANY
&
BINGHAM,
Re¬
largely of bank deposits.
of bank deposits is
determined primarily by the re¬
holds.
J.
strategic
a
volume
serves
HUTTON
pre¬
Federal
consists
The
F.
accomplish just that.
our
CO.
spending
attempt to
The
is
&
'
_
Therefore, limiting growth in
the
E.
than
more
no
DEMPSEY-TEGELER
the
spending
term
CRUTTENDEN,
PODESTA
DOOLITTLE
&
CO.
&
\
.
'
DAVIS.
CO.
SKAGGS
&
CO.
FIRST CALIFORNIA COMPANY
(INCORPORATED)
has
Reserve
'
-
the. power to regulate the volume
fore,
it has
changes
For
in
the
the
years
many
tion of the
power
stock
There¬
to
of
money.
after the forma¬
Federal
in 1913, this
fully appreciated.
Reserve
power
until
&
CO.
HOOKER
&
FAY
MERRILL.
TURBEN
&
CO..
INC.
F.
S.
SMITHERS
&
CO.
Sys¬
was
not
WATUNG.
LERCIIEN
&
CO.
MORGAN
&
CO.
Even after the
policy
was
frequently
focused
upon objectives other than main¬
taining
economic
stability
and
growth without inflation.
It was
not
HILL RICHARDS
effect
effects of Federal Reserve opera¬
tions were understood, monetary
concern
DOMINICK
The inevita¬
inflation
an
tem
1% per
wholesale price
WILLIAM
of
5.8%.
Therefore,
both
monetary
and
spending growth was nearly dou¬
ble the increase in production of
age
1951, following the
ac¬
PASADENA
CORPORATION
WAGENSELLEII
-
&
RODMAN
DURST,
econ¬
spurt
the
years,
inflation averaging
an
year.
around
50
infla¬
could accommodate with the
This announcement is not
to
success.
Long-Term Look
During
rapidly than the
more
inflationary
(3) what is being done
the inflation and finally
stop
ing
affecting
the specific
forces and
to
some
and government to expand spend¬
and
•
without
local
savings
the
plant
boom
Also, higher Federal, state
outlays, added to the
problem. Therefore; I believe the
basic cause of the recent price
rise was the attempt by business
con¬
tip x&P©# iliberaR^.
run,
insufficient to finance the invest¬
omy
time,
same
Actually, per¬
savings were up nearly 25%
during the period, but this was
factors
prices;
of
causes
invest¬
government spending was up sub-
^However, unless
In
without inflation.
and
in
stemmed
costs have increased incentive for
use
tion.
same as the 37 %
plant and equipment
outlays. It appears that the major
strain placed upon the
economy
during
the
past
two
years
higher
to
resources.
words,
ment
increase
demand
willing
productive
sonal
period, about the
Some observers
are
if savings had in¬
creased as rapidly as investment
during the past two years, the
allocating
of
more
spending
toward capital
formation could
conceivably have been achieved
11%, business in¬
8% while combined
rose
find that outlays on producers'
durables
rose
36%
during this
spending relative
rather
other
Who, accounted for the spending
Consumers
increased
the historical trend in prices
by
the
risen
current
one-
living".or
index
about V2 % per year.
*
prices
fewer
our
we
the capacity of the economy to
ing
upon
of about
average
while
level has
much
(1)
and
and cost of these reserves.
higher "cost of living."
by
focused
past, the current in¬
difficulty appears to stem
output.
has
and/or
consumers
government
risen
outlays
unless
sures
finally
on
services
Federal, state and local govern¬
ment
spending
increased
14%.
Focusing on business investment,
pressures.
of Current Inflation
much
and
in the money
*
year
is
goods
increase?
in the
too
spending
years
produced
too fast.
re¬
a
push¬
Therefore,
I would like to consider ^briefly:
per
decisions
which
System
and
fered
actions taken by the Federal Re¬
serve
authorities
to
contend that the present inflation
is unique,in that costs are
monetary-
our
now
while
are con¬
niques. Monetary policies
of
turn
controlling infla¬
businessmen
to
raise
prices in
attempting to main¬
high levels of employment many lines, .but this ..condition is
growth.
:>nl\yay« characteristic of periods
tion
tech¬
1
a
a
Causes
increase
the objective of
tain
of
monetary-fisc
fiscal
the
utilization
Dr. B. W.
attention
eco¬
stabil¬
ity,
half years.
and
However,
half, in¬
two
again raised its ugly
us
inflationary
flation
swer, of course, lies in the fact
that most of the increase in prices
has been concentrated in the last
one
a
ized the past year and a
half, we
still appear to be faced with too
much spending. During the past
vestment
III.
analyzed that
determined largely
the
Let
and
year
has
providing some protection against
higher prices.
However* in the
short run, sharp increases in such
outlays create inflationary pres¬
of these conditions has character¬
their
to
I.
past
equipment spending raises the ca¬
pacity of the economy to produce
thereby encouraging growth and
prices will decline.,, Since neither
rent
supply."
money
at
demand is sufficient to ab¬
sorb output at higher
prices, then
either unemployment will rise or
view of the specific causes of cur¬
the economy is still
Dr. Sprinkel adduces
are
the
flation
from theoretical and empirical evidence he has
a
econ¬
operated
of price stability.
gree
drop in monetary growth
a severe
but there is good
for believing the transition will be successful; and
reason
the
has
and growing levels most of
the time with a considerable de¬
(1) the econ¬
tending toward stability rather than either runaway
could initiate
ally
previously, the
1951
high
inflation
the
since
omy
causal factors leads to such observations
ard
eco¬
nomic
By DR. BERYL W. SPRINKEL*
Economist, Harris Trust and Savings Bank, Chicago, 111.
the
sustained
final
17
&
INC-
RENSHAW
easy
page
29
The Commercial and Financial Chronicle
18
.
.
Thursday, October 17, 19£7
.
(1698)
TASO
Relates Rates to Earnings
What's Ahead at the F.C.C.?
DOERFER*
By JOHN C.
Communications Commission
Chairman, Federal
TnyX
favor of trial run for pay-as-youcontrollable basis, finds claims for and
F. C. C. Chairman, who is in
television
see
a
on
Doerfer
Mr.
agrees
Th^f
the field of $heer specu¬
the contention regarding
that
hrpath
possible destruction of television system "was and is entitled
to the most careful consideration." Discusses other problems,
a
,
'
do
+u-
mi
i
think, wiii
you
tjon 0f
'
endangering the free system.
Court
for
which
rooms
f
is
populate
50,-
television
are
modern
devices
bring
that
the
of
portion
public
cannot
which
in
dated
Doerfer
as
courtroom
the
of a
This is not
a new trumped-up concept of the
broadcasters.
It is as old as de¬
mainspring
the
is
society.
democratic
itself.
mocracy
»
Big Ten foot¬
being played be¬
Some years ago a
ball
Wisconsin and Northwest¬
tween
ern
on
The day was
wet field.
a
dull
a
was
game
drippy
and
one.
drive
Northwestern
consin territory was
into
Every
Wis¬
heard
to
say,
system
definite policy
definite de¬
some
Delay*.
difficulty of the problem.
of the claims for and
against subscription television are
in the field of sheer speculation.
Many
Yet the contention that its author¬
ization,
even
mental
stroy
basis, may eventually de¬
free television system
is
entitled
"Put him
wishes
who
of
aware
am
to
•
I
concern
free
against interest.
To be sure; I and the other Com¬
missioners will frankly admit that
admissions
any
we
fumbled
have
some
and
Commissioners
a
Table of television assign¬
(e)
for
have
indi¬
experimenta¬
basis.
Whether
or *
not
as¬
surances
that
while
we can
preserve
the
experimenting with the
should be
resolved
soon—I
1
hope in
I
(d) Clear channel and daytime
skywave problems.
desire
trollable
one
-
free
this Commission has sufficient
as:
Program classification.
a
selective
endangering
the
That is the reason
system.
other
(c)
a
their
tion upon a meaningful but a con¬
doubt do so again.
Shortly we will go into a hud¬
dle
to
tackle
such
formidable
(b) Network practices.
.
is how to reconcile
cated
will
(a) Subscription television.
contrary,
some
no
contestants
-
a
matter of
have been
a
air
subieS
ereeof
regulation
few weeks.
requested to
appear
ment
that
on
the F.
over
C.
C.
Oct. 1, 1958 to 1977,
•
;
•
...
...
,
on
Oct.
inclusive. One
fering of the bonds is being made
at prices to yield from 2.50% to
.
duced
bill
a
casting
earlv
as
decided
broad-
the
have
to
television
subscrintion
of
Carl
intro-
1953
as
rarrie"
to be a common
3.45%,, according-to maturity.-
9,tber members of the under-
Stuart & .Co. ,a7. Chemical Corn
Exchange Bank; Salomon Bros.
moti-
Hutzler; Harriman Ripley ;& Co.
line.; Smith, Barney & Co.; Blyth .
& Co.; Goldman, Sachs & Co.; Con¬
tinental Illinois National Bank'
creation of administrative agencies* You canno1 have the right
comPe^e and thereafter be prote.eted from competition upon the
Tlimsy ground that it is contrary
the public interest to be sup-
In
dav
The Northern
C. J. Devine & Co.; Eastman DilIon, Union Securities & Co.; Glore,
Forgan & Co.; Kidder, Peabody &
Co.; Drexei & Co.; The Philadelphia National Bank; R. W. Pressprich & Co, L. F. Rothschild.&
planted.
And yet we;< muse not Co.: Blair & Co. Inc.; Merrill
only accord such protestants ex- Lynch, Pierce, Fenner & Beane;
; concern
to
tended hearings and all the other The First National Bank of Boston.
F. C. C. As indicated before, our appurtenances of due process; we
w^ih kr rn«
problem is whether and under must, if need be, stop all other National Rank- Ladenburg Thai
what conditions the proponents of processing and>allow the* protest®
«
c
.
R'
Co <'
subscription television qualify un- ant to squeeze in at the head of r H
T
*'h
„s
der
that
provision of the Act the line.
'
Carl M. Loeb,_Khoades & Co.,
However, these matters
are
immediate
no
of
the
stearnf'*
p.Vp'?
commands
wmcn
frequencies
commission
me
basic
Another
inconsistency, in
naw°SStoL&& W^bster^Securittes
my.opinion, is the asserted duty, Corporation; Paine, Webber, Jack-
to encourage
a more
the larger and more effective use
eiiecpye use
of radio in the public interest.
and
on
^ part 0f the
•
Commission to
programming
eXamine
-
f.aiivin
thp
fapp
of
thp
periodi—
Congres-
cally in the face of the Congressional
strictures against censor-
(Section 303 (g) ).
Curtis*
&
SOn
^UU1S'
The
-
First National
r-
Portland
Oregon* The
Boatmen's ATotmnAi Bank of St.
National
Bank
of
DA^iwum'i.
Louis; A- c. Allyn & Company,
with free jnc#
,
v.
speech. Whether this is or is not
Equitable
Securities CorporaTime does not permit much dis-; oUr duty aS part of administering,
ti orr B J
Van In gen & Co Inc
cussion
of
the - other
important the "public interest" provisions of bon'
& Co
Hornblower
items
coming up on our Fall the Act, I frankly do not know. I
^Nnv
agenda, but here briefly is a prog- have been anxious to get a clear-^& Co °
ress report on some of them.
j
cut court decision on this question,
w
nAan
witti * rnand
ship
Progress Report
interference
Jf
Swppwnlin
f2
.
opportunity for-one has
never presented itself. I do know
that many specific* directives ;in
the Act could be emasculated by
an undue extension of the general
provision regarding public inter-
The Network Study Group
mitted
subcommit-
draft report to a
a
on
but
Sept. 30.
After
opportunity for committee
consideration, a report will be
The
made to the full Commission.
Committee
Senate
Foreign
-
.
1958.
Thereafter, if changes in the
rules
seem
warranted,
of
lebuttal
and
lative
any
PJ°Pps® cba^Sesparties.beInaccorded
will
all interested
the ab-
B
Oversight
contribution
t
pa
T
to
Adan^
Merle-Smith*
o
«
.
R
*Mc'
.
romnanv* Francis!
du-
rn
T%._
r^^
®
J;*' ^
o
.
r-
Rpri^pr i.' r^
o
.
.
T
'
*
r
ford & Co., and Braun, Bosworth
'
these
"
Dv
U7,'*U"
:\
T
--Albel .Wltn K. H. Konn V:
M;the
the advancement firm of Richard E. Kohn & Co.,
The House Committee on
appropriate opportunity for com-
•
D-
contradictions
Would, I am certain, reduce some,
0f the delays in our shop
Resolving
network
ment
an
est, convenience and necessity.
Interstate
on
Commerce will also
be advised not later than Jan. l,
and
can
make
LegisNEWARK, N. J. - Herbert
a real Aibel is now associated with
administrative process by members of the New York Stock
studying theSe problems together Exchange. He will divide his time
sence
with
some
procedural - reforms between the firm's Newark office
nile making process should
120
jlavjng no relevance to the proper at
20 Clinton Street,
^ ready for action not later than ^ministration of the substantive Broadway, New York.
May o. June, 1958.
0£
.
law.,
With respect
-
to revision of the
fn°t^e Renewal forms11 afwelL
has jurisdiction
such operations.
merged
underwriting com¬
basic Philosophy of the Communi- and Trust Company;
^tions Act and the purpose in the Trust Company,
de-!
same
some
?
At the
present time, it does not
waves-
Renresentative
late
the
Hinshaw
com¬
wired television.
nub
well find
the
to
tee of Commissioners
.
destroy free tele¬
the
one—without
made
never
most
Commissioner
television service with
add
On
no
the
to
careful consideration..
I
experi¬
an
of the
very
may
himself
our
and
was
upon
If any one detects a similarity
between this story and myself, let
to
however,
date,
to
vision.
hasten
ing therefor
if
in, Pappy—he's ready!"
me
we
without def-
have not! been inordinate in view
lower stands
the
in
we
an
bination which won award of $63,500,000 Massachusetts Highway
Improvement, Capital Outlay and
Flood Relief bonds maturing from
intprest
f,
T
like to have someone do a
re^derinJaservfeeandrfiare
fer
soon.
delays
of the
practice ball. As he was
groping about for the ball in a
half
stunned
condition, a lone
hoarse voice
a
Undue
No
attention
his
Given
entitled to
The
soggy
be
broadcast matters.
national -research job" of those
who supported the adoption of the
so-called protest law (Sec. 309(c)).
Tt is--incompatible both with the
in
televisor '
me
of
moment—just long enough
could
hli
p
sav
nrnnnsinStn
nart
fie dnmafn vhf—the
justice without order,
termination
get hit in the face with the wet
to
some
form
who wish
consider, if sue-
tnh^rinHon
The
that persists long
one
are
stopped by a
I cannot
ized
enough
to do some intelligent planning,
businessmen
can
readily adapt
themselves to most any situation.
Therefore, I am of the firm opin¬
ion that both proponents and op^
ponents of subscription television
and
Pappy
distracted
field
system,
economic
our
initeness.
receiving some
direct passes from a center. After
successfully
handling
about
a
dozen snap backs, something on
a
judicial
our
cannot have progress
hind the bench by
the
in
so
He instructed him to warm up be¬
for
pos¬
fiet
in
cannot have
Waldorf
was
exasperated.
He had used
every substitute halfback but one.
Coach
fumble.
will
cessful, the probability of being
subjected to eventual regulation
well.
As
the
or
legislative halls. A well-informed
public
should
business
justice is the denial thereof ap¬
plies not only to the judicial
process but to the administrative
c o m m o-
c
a
C.
John
physically
be
if at all
the next few weeks,
hearing to
or
a
r1nUlm0yroSythose
subscription television
pending in Congress
sible, than to have the public lose
faith in the integrity of the ad¬
ministrative
process.
The
ad¬
monishment that the delaying of
to
trial
a
been
15 to
Tn the face of the desire to keep
for more than four years.
ofVates^profits and"service prac- broadcasting in the competitive
There comes a time of decision.
tiees
Whether or not this lies in field and to have a broadcaster
It is better to come to a determi¬ store
for, the broadcast subscrip- survive or succumb according to
nation one way or another within tion television
business, if author- his ability to compete,-I would
Radio
and
t i ng
e c
have
a
of
town
rural areas? These
i
even
host of other questions
eventually be determined by some
sufficient to
0 0 0.
rural and
and
deaths in this
Delays
Publicly Offered
accounts
in administering a law that has Brothers and Phelps, Fenn & Co.,
built-in contradictions../1 and the other by The First Naun the one hand, it is clear that
nana
is.ciear mat
On tne
*°L
Congress intended that broadcast--• The First National Bank of Cta
mg was to remain m the field of -tago. Bainkeis T rust Company
competition. On the other, we are an"
*irst- Boston Corpora
or
areas
warrant
of births over
country
reasonably certain, would
a delay,
but in the ab¬
sence
of any such prospects, I
hold that suggestions of delay for
such a purpose must be rejected.
After all, various proposals af-
suburbmi
the
to
Three
tlZ cViHtfiiwi £ +SI^i'J^vsome
nent or
increase
net
if immi¬
action),
Congressman's
built
were
pastoral society can no
longer accommodate our expand¬
ing population.
Each week, the
a
Imban
;
Bonds
The basic contributing factor to account was headed by The Chase
gome Qf the delays is bur difficulty
Manhattan Bank; one by Lehman
/
profitable
or
Of Massachusetts
Another item of concern to the
Commission is its perennial fight
against long delays and the large
expense incident to the disposi-
on
j
,
whom
V<^+if is practical
not it it1
r
or
Administrative
hot
the
$63.5 Million Issue
solution of the UHF problem,
"coMen"
he
v
nf
j
And
judicial and administrative procedure, and insists Commissioners
wish to reconcile free TV with a selective one — without
ofSa
3v
re^flat
m
1958.
toward
contribution
substantial
'
fepRm?
iw
30,
June
hope their efforts will result in
Who
envisions huge
wired television had
in
profits
against subscription television are in
lation.
earnings
pxrpccivo
is
study
There have been 162 engineers
from 85 organizations participate
in TASO's work. I sincerely
how reasonable
the charges for the service may
appear, the public will generally
not tolerate rates which result in
of
Regardless
skywaVe proMems
I
am
,
"
'
Advocates Repeal
Mr. Aibel was formerly a part-
.
.
'
ner
of Malina Co., New York City,
For myself' 1 would advocate distributors of textile yarns, and
as
complete repeal of the protest law
hoDrful?and
a
principal in the National Tricot
other Pulsion which Co., Clifton, New Jersey.
ments.
Although I have no special
(f) U. H. F. and deintermixture" competence to predict its public
acceptability, in my opinion, if
policies.
successful, it will be subjected
(g) Revision or outright repeal
eventually to governmental regu¬
of the protest law.
lation.
dicated before Jan
1958.
1
:
-
rf
me^r^ stations6 shoifld^be
sometime
determined
before'No-;
vember of fhis year.
»
,
"
Subscription TV
With
subscription
, know
- that
many
respect
television,
members
I
of
to
the broadcast indus¬
like to have us kick
into the Congressional
section of the stands.
However,
much as Congress is welcome to
that ball, I am fearful we woiild
be remiss in our duty if we de¬
try
would
that
up
layed
a
decision
much
longer
merely upon such grounds.
To
tion
be
sure,
*An address
Radio
Congressional ac¬
from
a
(asf distinguished
and
-by Mr. Doerfer before -(be
Television 'Executive
New
York
City.
Society,
Historically few business enter¬
prises which use public highways
for
regulation.
Witness
the
experi¬
of the
telephone companies,
companies, the gas and
pipeline companies and the motor
ence
With resnprt tn thp ^elertivp deintermixture
nrnhlemq
T
substantial
portion of theij,'
plant investment and charge the
public for a service have escaped
a
the power
carriers.
Hence,
Trmr
and
the
public
^xr
too
larlv al
,
.
fate
,
of
tv.o+
-nmeeee
late
It
ic
tnn
Hdwever
April
^
the
to
aV
the
ot
of
^ one who is all for free. eompe- ' Devonshire.named Vice-President
Street: Frank Sherry
tition in the cocktail lounge—es- has been
Pecially when he wants "in." But and Frank Straceia Secretary.
when competition appears in what
.
spectfto
.
;
the
courts
instances?
I wish
what
■
^ GrUber PrCSident
.BOSTON, Mass.
Joseph L.
„
dustry^ to support,the same
—
jectives.
' •
...
•
«- Gruber, Jr. has-been elected Pres-- 1
have little patience for the Ment• and - Treasurer of'Pilgrim
armchair free enterpriser. He is Securities Inc. with offices at 68
'
h. he/considers
his private - domain,
approach
.
t
"that" would be
,
Reeardless
to
little
wis too^late
piecemeal
presently lies in the courts.
hold
when
still
am
lehef
^tolstotlve matters: PJ^jm Securities Inc.
roen ne asseris
tnai
wouia oe
r; '
*,
.,i
• ,
.
o
.Harrow Smith Company
_
-
•
*
•. .1 *
.,
1
agalnst the pubhc mterest- *. -' .* / Formed in Little Rock
"Jhe broadcast i ndus try, like' j.ITTLE. ROCK, Ark-Harrow
ot"er American industries,, must -
smith Company has been formed
constantly choose between main--with offices at 115 West Fourth
Study Or- taining
a • vigorous • competitive Street as successor to the invest-
real¬
to reiterate the Commission's con-
izes that it has contributed
part of
the
plant, it invariably insists
tinued interest in the work of the
regulation of the rates to be
charged, the net earnings, the
service
practices,
depreciation
charges and even the accounting
ganization.
upon
systems to be adopted.
Television
Allocations
George Towne, economy or acquiescing in a little ment business of Walter R.. Bass
director, has
,
.
.
.
.
Company; Harrow Smith is Presam happy
to governmental admi
-.oe *" jdent of t^e rtf^w firm with which
announce
Bt this time, that the homic' protection. .
1^submit,-/it F^d Cr-Wovthington and Ardelld
target date for completion of the: cannot have both.
Shoppach' will also be associated.
TASO's
advised
Dr.
executive
me,
and I
iste ed
.
Volume
Number
186
5682
.
.
The Commercial and Financial Chronicle
.
(1699)
be
Sound Investment Policy foi
By A. MOYER KULP*
the
*
.
.
Now,
of
Wellington Company, Philadelphia, Pa.
.
stock market to remain in
for
time
some
resumption of
bond
to
before
come
base
a
return
trading
^
for
Recommends broadly diversified
dynamic, basic industries; underplays immediate income
goal;
.
when
bank
of preferred
instead
common
as
amazing to
of
waves
the
level.
and
ment
see
optimism
stocks, and
pessimism which have marked the
past 16 months. What is the reason
for these
Furthermore,
is
this
accentuated
It
ated
inflations
,r
adjust¬
shift
in
emphasis
from
aircraft
to
guided missiles. This will cause
by the
readjustments
in
certain
but is not believed to' be
again
and
which
confidence
of
at
take
truly
place
acceptance.
terest
rate
clining
per-
Another
This does
spective,* in
in
the
of
extraordinary
and boom
war
strong rising trend for
past two years. According to
rent
the
be
be¬
we
lieve
get
can
clearer
a
view
A.
take
look
the
at
uation
W6
what
of
is ahead if
Kulp
Moyer
15
I
we
brief
a
business sit¬
we
got where
present
bow
and
3TG.
We
out
came
World
of
War
II
tremendous
with
pent-up
de¬
mands, with large liquid savings,
and a war-inflated money supply.
These powerful factors, together
with
the
continuous
more
or
cold
war,
which
about
generated
began
two
the
and
continuous
less
prosperity
erate
War
Korean
years
wave
to
ago
a
of
mod¬
when
approached full peace-time
employment. 'At about this time
the
Federal
Reserve
policy of
credit restraint was pursued ac¬
we
in
tively,
economy
order to stabilize the
at the newly attained
heights.
a normal,
for the first
facing the threshold of
competitive
time in
economy
over
decade.
a
From this
point we could only grow,as: (a)
the working population expanded;
(b) productive facilities were enlarged and,-(c) ways were f°und
to increase productivity. In other
words,
we
to
down
about to settle
long term historical
were
our
stride
(2%% increase in produc¬
tivity plus population increase).
Year to year progress, as we all
know,
irregular
is
—
sometimes
above—sometimes below the long
term
trend
line.
The
change
in
climate is quite
pared
to
recent
bewildering com¬
broad upsweep of
years.
This
the
brings
situation
us
which
the present
being viewed
to
is
with alarm in many
quarters,
par¬
ticularly in Wall Street. Are we
now
really headed for a slump;
will
or
with
we
next
be
threatened
inflationary boom such as
people expected in June
July of this year; or is the
economy
leveling off?
Will we
remain on a plateau—in a consol¬
idating area? - Those who have
an
many
and
-
maintained
a
constructive
but
current
doubts
are
prob¬
the. abrupt
cut
in defense
spending which
had risen well above the budgeted
ably
♦An
accentuated
address
by
by
Mr.
Kulp
DigitizedEngineers' Club, Philadelphia,
for FRASER
i, 1957.
1
before the
Pa., Oct.
know
various
in
industries.
On
the
other
'
common
risk
for 25 years.
which
The
the
del'ense government
including
which
the
will
momentum
be
expenditures,
highway program
gradually gaining
the next several
over
Automobile and residential
building which declined in the
past two years now appear to rest
years.
firm
h
on
base
and
might show
improvement over the com¬
some
year.
When
litinn
sequently,
look at
consumer
ex¬
penditures, which represent such
a
large portion of our economy,
4- U
«v*
the
vestor would
/a
w n
r.4
lent
of
confronts
sound
This
some
This
share
and
posi¬
The
resumption
of
conservative
in
of
common
insofar
it
should
enabled
in
able
to
of
cost
year was
by higher farm and food1
prices, as well as by increased
wage rates. It is just possible that
the rise in the cost of living will
to
slow
be
down
in
companies which in future
will be headed down hill.
After
all,
called
"defensive
is
against
game.
mind
that
in down-markets
stocks, and
their
compared
infla¬
are
which
as
a
all
will
the
Federal
with
flexible
be
used
instruments
and
changed
Settling
be
stocks
i
•
.
nance
as
stream
a
as a
i
oj record.
Pulp Co., Inc.
Japanese corporation)
due December 31,1976
.
Lumber
&
Pulp Co., Inc. has entered into agreements,
of the agreements,
be made in
employment,
high
of the above-mentioned Bonds, delivery
1, 1959.
four equal instalments prior to October
boom
Dillon, Read & Co. Inc.
October 17, 1957
fi¬
to
in
a
our
investment objectives.
,
a
savings
economy
positive force in reaching
respective
Down
economy, marked by infla¬
tionary pressures, to a typical
competitive economy, with high
employment
which
can,
and
should, generally move closely in
line with our historical
growth
trend.
Naturally, allowance will
time-
growing country and thereby act
might conclude that we
in a gradual transition from
full
of
growing
negotiated by the undersigned, for the private sale, subject to the
level
little
dynamic1 is¬
"
needed
as
One
a
years
proved principles of balanced' in¬
economy.
Promising
rise
application of these
First Mortgage Sinking Fund Bonds, Series A,
to
much,
as
the dynamic
period of
the
a
will
.
The
Nor
Alaska Lumber &
terms
so-
stocks"
calls' for
(a wholly-owned subsidiary of Alaska Pulp Co., Ltd.,
Alaska
the
stocks
will
sues.
Reserve
needed, in order to maintain
reasonably stable and growing
are
as
over a
dividends
should also bear in
monetary and credit policies, and
the government fiscal and tax pol¬
icies
These
probably decline almost
-
we
in
income
in
likely to be pretty much of
losing
a
Finally,
investing
investing
$12,000,000
1958 which
we
guard
.
•
highly desirable and
constructive development.
which
all,
years,
grow¬
should
common
>•
.
•
will
must
living;
acceler¬
ated
would
Above
bring
.
com¬
which
changes
expect.
that busi¬
seem
be
the
during the past
tend
a
This announcement appears jor purposes
isfactory balance with the present
high level of consumption.
rise
for
should immedi¬
ate
income
be
emphasized
as
greatly as is often the case. - The
inventories and production in sat¬
The
be
change in
attitude
toward
dangerous.
soundly
*
far-reaching
invest¬
such, rather than regard them
accounts
was
as
good
pay
basic
taken
limited
stocks in
a
investment
during recent years,
conceived
of
use
in
all,
good
static
approach. also
constructive
increasing
above
making
reasonably
uptrend.
for
and
of
predominantly in the rapid
must
we
of the investor's
it
knack
vestment are likely to produce
broad diversification
superior results and certainly they
industries, such as —
petroleum, chemicals, steel, alu¬ should enable the investor to pur¬
minum, building materials, paper, sue his own chosen activity with¬
rubber,
electronics.
These
are
out unnecessary distractions.
among the dynamic areas in in¬
They will also be a constructive
dustry
which
give promise
of
factor in channeling a steady and
above-average
opportunities.
A
in¬
well advised to
time to come, before a base
established
are
for
ing and rapidly moving world.
fairly normal investment
policy, in the belief that the com¬
stock market is likely to re¬
main in a broad trading range for
an
or
products,
the
profits and being able to
business
long-term
power
new
have
/-* v*
mon
is
which
forward-look¬
management,
Under these circum¬
stances. it would
nessmen
"
Con¬
conservative
seem
we
see
another
reassuring and
perhaps stimulating factor.
We
have
high
employment,
high
wages, with a record spendable
income and an upward trend in
retail sales.
f
past^
pursue a
percentage
-
we
hi
companies
strong financially, deep in excel¬
de¬
case
competitive
dollar—whether
money,
which use(l^to be one of the great
the
mAi»n
Income
Sound investment policy should
emphasize
managements today.
something
timing pur-
vulnerabilities in
"Defensive
Stocks"
It merely places
stock buyer in the
and
tion hedge,
trii
banks,
compared
as
industries
stocks
hand, there are
reassuring factors. There is a ris¬
ing trend in state, local and non-
merit,
best
com¬
panies
that
borrowed
the
commercial
great
Decries
stocks.
purchasing
on
in
utilities
with preferred stocks.
bonds has risen to
on
invalidate
not
Furthermore, there is a rel¬
atively small amount of common
held
stocks
electric
They should be
the
kets.
Reassuring Factors
in¬
over-riding considera¬
and
have
stocks
common
seen
same
us
common
an
dividends.
level not
tion
of
tion,
surprise. The much-talked- can be done about
ment approach requires, first of
declining rate of new orders chases arid sales of investments, all, that an adequate portion of the
probably reflects these two de-";but' we also know that this is account is invested in dollar re¬
velopments as well as the recent, more of an art than a science, serves
such
as
life
insurance,
decline in the production rate of • Based on historical earnings and bonds or mortgages.
Having made
basic industries, to the consumpincome relationships, the stock certain
that
liquidity and de¬
tion rate:
Thus, we see beneathmarket generally appears to be in fensive requirements are satisfied,
the surface
of
a
seeming calm a middle-ish position and fortu- the balance can then properly be
plateau, that production this year,nately did not reach the highly placed in selected common stocks.
as in the last two years, has been
vulnerable heights that generally They should be companies which
marked by strong cross-currents
characterized previous bull mar¬ have the ability to protect the
or
The
man¬
Advises Conservative Investor
All
then low and
while
—
common
agement.
cur¬
im¬
Where
ing in research and development
does
single most im¬
no
cautious attitude for the past year
two, based on the latter as¬
sumption, still appear to be on
reasonably sound ground.
the
accounts.
is
of
were
men
remains
portant factor in investment
may
ing
At this time business
the
and
reports it is also leveling' off
decline, but this should
and
last
present
a
background of
years.
ward trend in earnings and stock
rprices, but it does suggest that
careful selection of common stocks
con--and bonds **7s off handsomely
spending for plant
equipment, which had been
and
view
of
area
up-
-
is business
cern
Today
bonds,
are
relatively low-priced and
afforded a high yield.
Today
stocks are at a higher price level
and consequently provide a more
average yield at a time when the
a
sound
considerations
come
were
interest rate
a
Municipal
tax
portant* and corporation bonds in
For example: The in¬
was
business activity generally.
of
elsewhere:
where
stocks attained their general
mon
significant from the standpoint of
is
it
investment.
I would urge
that the investor look for income
sharing
Perhaps
difficulty
establishing
stock
panies
Buyer's Position
den shifts?
the
dynamic factors which are
the essence of successful common,
still valid.
investors
never-ending
re¬
underlying advantage in
in long term growth is
However, other factors
are
in
sharp contrast with the
conditions prevailing when com¬
Un¬
large portion of their com¬
have been able,
generally,
to
report
favorable
not guarantee a
was
trend
The
a
gales and profit trends.
position
.This
.
sharp
spots,
sud-
and
drastically that the
relative
•
Stock
stock money,
mon
yield, except at those infrequent
when everything is
cheap.
Reaching
for
income
usually
means sacrificing the vital
quality
situated
of
justify
many
conservative
in¬
the most dy¬
times
non-taxable
I
businesses were
not ready for full competition—all
of which is now being reflected in
earnings reports. A selected sam¬
ple of manufacturing companies
which
dollar
and
namic equities usually carry a low
during the 1930's and 1940's.
ca¬
investors.
in¬
most attractive
ceived additional impetus because
of a decline in interest rates on
bonds and mortgage investments
good
rate
of
war-time
personal
of
power
so
investor's
competi¬
a
will
high
in¬
span
accentu¬
was
great
severely shaken.
unusual
was
and
purchasing
post¬
two
a
taxes which shrunk the real
vestments
profit¬
dividend
trend
the
by
come
country
operated
will
fortunately,
'
it
companies to show
the
1
in
It ds rather
which
management
tive
a
This
This
years.
pat¬
his
would increase in
come
and
war
participate in long
that
assurance
profitability
general
years.
profitability
decries "defensive income stock."
sudden
and
historical
to
industry
pacity.
v
income needs be met in electric utility and
suggests
commercial
in
program
in
omy,
relationship does not invalidate the
case for common stocks, it does subject the stock
buyer to the
same risk and competitive
position confronting business management today.
seems
grew great in a competitive econ¬
uptrend; and finds that while the changed
an
the
competitive
boom
war
range
established
is
of
to
ability during the
stock price
versus
This
term growth of the
economy, and
insofar as it provided, reasonable
market—perhaps one
most confusing factors is
contrasted
as
.
broad
a
trend.
a
the investor to
variations
to the outlook for the
as
the
the
offers "time-proved principles of balanced invest¬
likely to produce superior results.
." Expects
common
such
normal
to
me
to
be
a
reassuring
promising outlook.
tern
ment,,
the
securities'-
Vice-President and Chairman of Investment Committee
Mr. Kulp
by intelligent business¬
for
around
Today's Investment Pioblems
The
made
men
19
The Commercial and Financial Chronicle
20
transferred
was
CONSOLIDATIONS
Bankers
and
OFFICERS, ETC.
NEW
#
-f
NEW BRANCHES
REVISED
additional
.
Thursday, October 17, 1957
.
CAPITALIZATIONS
$1,000,000, which gives total cap¬
ital funds of approximately $5,000.000.
The 30,000 shares was offered
Senior Investment Officer after
A
stockholders
to
with Girard Trust Corn
years
*"*
The
of
City Bank
15 an¬
National
First
York
New
Oct.
on
t n
nounced
Mr.
e
Douglas
B.
Hill
Vice-
as
President.
-
Hill
.Mr.
joined the
5
in ,1951
Bank
currently
and
affiliated
be
office.
<■
*
a
appointment
of
will
Baggott
with the Bank's 34th Street
approved Oct.
An increase was
special meeting of stock¬
holders of the capital funds of the
Federation Bank and Trust Com¬
8
at
a
through
N. Y., to $10,000,000
pany,
127,818 additional
Stockholders
will have
shares.
the
right to subscribe to one new
is assigned to share
for
each
share held.
A
the Fi f t h stock dividend calls for the dis¬
'A v e n u e tribution of 8,918 shares payable
:
O f f i ce;a t Nov. 1 to holders of record Oct. 18.
**51st Street,
Under
completion of the ; fi¬
-
,
M
hat tad.
a n
Previously, he
served
had
Hill
Douglas
with
the
nancing
Bank
Federation
program,
Trust Co.'will
and
have
a
from Sept. 10 to Sept. 30.
Security Analyst in 1933. He
subsequently appointed In¬
vestment Officer in 1941 and As¬
sistant Vice-President in 1951 be¬
a
Vice-President
after
stock to the
years
at a price of $36.25
share, and the stock was a
quick sell-out. The layoff stock
with Girard Trust Corn Ex¬
per
change Bank.
joined
the
the Underwriters
by purchase of subscription war¬
Trust
Department as a clerk in 1918 and
was appointed an officer in
1924
Vice-President in
rants from
a
Chairman of the Trust Exec¬
Committee
utive
Charles W.
Trust Administrative Division.
fairs
in the
:
of
.
the
#
fiS
of
*
President
Savings Bank,
River
East
the
#
Nodyne,
O.
George
Y., announced the election of
Charles E. Eble and Charles C.
N.
present rate. Last year the
bank paid four quarterly divi¬
dends of 30 cents a share plus a
extra of five cents a
a year-end stock divi¬
year-end
share
and
of
ton,
$
C,
S.
by
of
the
Plains,
N.
of
Committee
tinue
as
announced
has
Y.,
He will
31.
Dec.
he
con¬
Director until his term
a
expires in December, 1958,
Company of New York
Approval
Joyce
Cnarles E. Eble
Mr. Eble
was
elected President
Consolidated Edison
ifi
of
Vice-President
and
bank
the
He has
been with the East River Savings
Secretary.
as
since
Bank
Directors
Secretary since
Mr.
has
been
*
&
W.
both
Bank
has
been
Bronx
advisory committee of the Chase
Bank.
Manhattan
sociated
serves
the
with
in
advisory capacity for
an
offices
17
in
the Bronx.
Mr.
Bennigsen is President and
Trustee
a
the
of
Savings
Dollar
active
He is
of New York
Bank
in state and national savings bank
associations.
*
*
Trust
«!<
pointed
an
in the
dent
at
the
of
New
H.
Office
York, N.
has
ap¬
of The
Avenue
Bank
Y., and Robert
been
appointed
Vice-President
Assistant
Fifth
been
Assistant Vice-Presi¬
Banking Department
Main
Ewen
has
Office.
Bank
the
Wil¬
liam Reid, Jr., has been appointed
an Assistant Vice-President in the
Foreign
nounced
Department,
Oct. -8
on
Simmonds,
Jr.,
it
by
WHITE
was
an¬
Albert
President
Other appointments were
in
the
C.
the
of
William
M.
Robert
Department
and
was
E.
}
to
Total
U.
Assistant
on
Oct.
President
as
as
Executive
143,803,275
134,605,273
due
130,080,229
from
15,688,311
18,130,316
51,910,396
48,871,306
1,408,782
43,041,449
Government
security
Loans &
holdings
discounts.
Undivided
profits..
#
•<<
The
First
Trust
52,668,916
1,550,615
National
Company
of
and
Bank
Haven,
Association,
New
Haven,
stock
r;
"■
charter
The
and
New
Haven
"The
effected under
was
of
Bank
First
Trust
Company
and
under
New
First
the
National
At
-
Merger
Haven
National
the
effective
the
date
consolidated
divided
common
into
472,250
$10 each; surplus of $5,852,500;
and undivided profits of not less
L.
16
appointed an Assistant Vice-
Digitized President of The Hanover Bank,
for FRASER
New York, effective Jan. 2, 1958.
appointed
Girard
to
*
of
The
be
Orion
Bank
Mich., with
150,000.
of
and
the
30, the
State
close
merger
Bank,
Lake
common
under
of
Pontiac,
stock
Georgia
been
The merger
the
charter
effected
was
and
title
of
Bank
National
of
capital
divided
$10
stock
into
of
275,COO
Chairman
in
open
shares
of
stock of the par value of
surplus of $2,750,000;
and undivided profits of not less
than $103,536.
*
THE NATIONAL BANK OF
DETROIT,
MICH.
Sept. 30,1957 June 30,1957
resources-
1,960,579,981
Cash
and
1,938,060,968
1,756,089,201
1,778,551,850
406,411,318
Deposits
434,337,374
due
from banks
U.
S.
Gov.
sec.
holdings
THE
055,566,669
DETROIT
610,110,536
721,884,149
20,627,154
19,449,512
&
:'fi
BANK
&
TRUST
COMPANY,
DETROIT, MICH.
Sept. 30, 1957 June 30,1957
$
Total
resources-
Cash
926,486,382
925,596,919
due
and
from banks
S.
$
1,005,968,646* 1,001,684,043
Deposits
Gov.
>
183,808,695
__
167,918,693
sec.
By
St.
disc.
bank
He
as
wa«
a
teller at the Orthodox office
a
and
shall
B.
Hall
who
has
been
trust
the
stock effective Oct. 3.
new
of
The
serve
of
Thwaite
Mr.
the
on
Fourth
will
Board
National
JJJ
Sis
on
Nov.
continue
to
S.
D.
Directors
of
of
new
,
The
American
St.
4.
outstanding
stock
the
Bank,
its
com¬
(Number
—
200,000
value $10.)
Lonis
*
Bank
Trust
&
Company, Lewiston, Idaho, with
of
stock
common
$150,000
re¬
approval on Sept. 30 to
merge into First Security Bank of
Idaho, National Association, Boise,
Ida., with
000.
merger
under
the
"First
Security
National
At
effected
was
charter
title
and
of
Idaho,
of
Bank
Association."
the
effective
the
merger
stock of $5,000,-
common
The
date
receiving
of
the
association
will have
capital stock of $5,159,dividend into 51,590 shares
stock of the par value
of $100 each; surplus of $4,100,000; and undivided profits of not
000,
of
common
less than
$1,574,916.91.
The
#
Bank
*
#
County National
Bank, Clayton, Mo., has just com¬
of
was
California,
San
Francisco, Calif., has received ap¬
proval
the
from
the
in
Alto's
Palo
of
Comptroller
Currency to establish
fice
of¬
an
and
Town
Country Village shopping center,
Edwin E. Adams, President, an¬
nounced Oct. 9.
month
for
and
will
opening
begin
this
is scheduled
mid-December.
The
the
Palo
17th
Alto
office
California's
facility will be
in
The
tri-state
Bank
system
of
and
the seventh office to be added this
year.
t-
#
Crocker-Anglo
National
Bank,
San Francisco. Calif., elected Jess
E.
Wilson
a,-
Vice-President.
*
Jack
H.
rector
-.i
How,
of
was elected Di¬
Pacific
National
the
Bank of San Francisco, Calif.
Vance, Sanders Will
rj5
a
increased" from
of
$450,000
to
shares
outstanding—60,000
value $10.)
shares, par
,
Hold Fund Seminar
BOSTON, Mass.—More than 100
representatives
vestment
about
of
firms
in
in¬
40
Texas
and
nearby states will attend the first
Fall
seminar
sell
xjc
■f
mutual
sound
on
ways
sj!
which
funds
to
opens
Creation of 110,000 new $10-par
next
Tuesday (Oct. 22) at the
dividend of Statler Hilton Hotel in Dallas.
Oct. 8 by The two-day programs are being
Directors of First National Bank
presented by Vance, Sanders &
in Dallas, Texas.
The board set
Company, principal underwriters
Nov. 5 for a special stockholders' of
Massachusetts Investors Trust,
meeting for action on the pro¬ Boston Fund and other mutual
posal.
investment companies, in cooper¬
shares through a stock
5%
was
approved
capital
on
increase
from
$22,-
000,000 to $23,100,000 would result
ation
transfer
of
$1,100,000 from un¬
profits
to
the
capital
with
investment
dealers
throughout the country.
from the stock dividend with the
Guest
session
speaker
on
the
at
opening
Tuesday will be Her¬
amount.
bert L. Nichols/Chairman of the
000
Board of the Southwestern Public
Together with $28,000,surplus, undivided profits of
some $5,000,000
and a reserve of
approximately $7,000,000 for con¬
tingencies, the increased capital
would provide First National with
total
capital working funds of
more
than $63,000,000, according
to Ben H. Wooten, President.
Upon
approval,
the new stock
current market value
of $33 per share.
Coupled with
$3,118,500 in regular cash divi¬
dends, the issue would effect a
total return of $6,748,500 this year
for a yield of 19% in cash and
stock dividends on $10-par value
the basis of
increased
$
The
from
$700,000 to $1,000,000 by a stock
dividend effective Sept. 25. (Num¬
ber of shares outstanding—10,000
shares, par value $100.) .>
..j,'
( ''
stock dividend, the com¬
mon
capital stock of the First
National Bank of Hollywood, Fla.
By
isshe will bring $3,630,000 in new
*
par
of
stock
increased
was
Bank.
stock to shareholders this year on
Oct.
capital
common
deen,
ap¬
11,533,971
effective
shares
—
value $20.)
par
the First National Bank of Aber¬
the
These
pointments are effective
1.
the
company,
said.
announcement
ele¬
of
Vice-Chairman
341,361,389
County National
teller
later
to
75,000 shares,
succeed Mar¬
377,375.959
*
Mo.,
of
capital stock from
$1,500,000 by the
common
#
Thwaite will
12,474,953
capital stock from $1,700,000
$2,000 000 by the sale of new
shares,
the
meet¬
of Di¬
379,251,163
sale
the
Louis
Ave. and Orthodox St. since 1955.
1947.
the
329,513,379
and
Undivided profits
stock
in
bank's Board
of that
divided
721,072,991
Loans and disc._
Mr. Vadenais has been manager
of the bank's office at Torresdale
joined
of
Board
trust company, following a
A
Total
to
trainee
the
of
$2,750,000,
each;
*
Babk
(Number of shares outstanding
announced in At¬
ber
mon
to
Company
$600,000 effective Sept. 26. (Num¬
*
scheduled
Trust
At the effective date of merger
the
receiving
association
will
Clayton,
is
the
as
Pontiac."
Manager of
Corn
Thwaite
Mr.
was
Pontiac,
stock of $2,-
common
"Community
the
Exchange
Trust
approving
as
$200,000, into Community Na¬
Loans
has
20
National
lanta, Tuesday, by John A. Sibley,
of
Currency
effective
business Sept.
Bank, Philadelphia, Pa., office on
22nd St.,near Indiana AVe.
The
He
of
board
the
holdings
S&
Vadenais
oi
President
of
making
U.
$1,460,374.
He
than
of Atlanta.
to
shares
stock of the par value
of
Marcel
issued
was
con¬
bank
a
joined
1950.
more
First
the
Election! of
:Jt
certificate
t-
of
its
$1,250,000
sale of
Construction
•'
3.
with
for
and
He
in
bank
associated
years
bank.
the
LaGrange
was
vated
will have caiptal stock of $4,722,-
than
Oct.
Vice-President
of
by the Office of the Comptroller
Undivided profits
solidation
of
the
Mr.
of
title
the
Bank."
500,
effective
tit
,
#
National
First
#
Executive
Director
'
#
Conn.,
of
$1,325,000
merged, effective as of the close
of business Sept.
27.
The con¬
common
Director
a
becoming President of
the LaGrange Banking Company
in
1951, Mr. Curry served as
ing
common
New
New Haven, Conn., with common
stock of $3,000,000; and The New
Haven
Bank
National
Banking
The
year.
#
Colorado Springs, Colo., increased
rectors.
have
sje
and
Atlanta.
(Number of shares outstanding—
tional
$
148,564,301
resources.
with
President
of the Trust Company of Georgia,
Bank
*
#
stock
new
of
WESTCHESTER,
N. Y.
PLAINS,
and
S.
of
November.
Baggott
'
■
■
office
Lees
Trust Officer.
Thomas
Mothershead
Kurt Mahrdt
Orion, Mich., with
OF
*
Assistant Treasurer
Credit
Buf¬
of
❖
BANK
Bank of New York, N. Y.
D. Taggart, an
Creek,
Company
*
NATIONAL
an
at
Chairman of the Board;
as
J.
P.
Vice-President.
ap¬
First
Y.
N.
solidation
Austin
Arthur
William
of
9
of
Traders
falo,
as¬
which
group
Manhattan's
Chase
will be
He
the
Silver
of
Deposits
the
of
banks
of
N. Y., into the Manufacturers and
Cash
Bennigsen
and
»
$
*
member
a
Oct.
on
Wilson
+
merger
banks
Fred
elected
Bapk of Indian¬
apolis, Ind., announced the elec¬
Fiynn
Curry will succeed Charles
Thwaite, Jr., who has been
New
Sept. 30/57 June 30/57
Committee.
Personnel
of
the
National
*
1951.
is also chairman of
Joyce
proved
Vic e-President
Administrative
and
the
and
1920
Tlie
of
Indiana National
tion
Mr.
E.
this
£
the
elected
of
Prior to
directors
of
board
Ga., effective
15, Geo. P. Swift, Chairman
Board of the bank, an¬
nounced Oct. 8, following a meet¬
ing of the Board of Directors.
of
of
,
The
of Columbus,
12,000 shares, par value $50.)
*
23,-
various
continues
the
value.
Company
1957 after serving in
capacities since he started
to work there at the age of 16.
Mr. Joyce was elected Senior
July
given
was
by
3
$12,500,000 consisting of
shares of the same par
each, to
1,250,000
of Trustees.
of
two
The
common
capital stock of
Banking Department
to increase its capital stock from the National Bank of Austin, Chi¬
cago,
111.,
was
increased
from
$10,400,000 consisting of 1,040,000
shares of the par value of $10 $500,000 to $600,000 by the sale
members of the Board
as
two-
the
of
State
fork
Charles C. Joyce
Oct.
on
Trust
Midland
Marine
The
of
owners
stock
the
elected
was
Oct.
a
proved
Chairman
the County Trust Company, White
will retire
for
The merger must be ap¬
£
Couzens,
Executive
the
..
Ga.,
-
end
ceived
•
President of the Fourth National
Bank
the
;
merger.
%
Gerald
and
C., approved plans
D.
;
Curry, President of
LaGrange,
,
.
.
Liberty National Bank, Washing¬
banks.
«
D.
Washington,
thirds
dend of 21/2%.
of
of
-
.
supervising the^ Bank's af¬
group
-
*
.
the LaGrange Banking Company,
and
formerly
in; charge of the
Vice-President
stockholders.
1940. He
and
was
484,518 shares outgta^cj^,
""HMP. ■
jl;
*js
...
'
V
■" '
ing.. It is the intention of the di¬ Vffc;'••••'*
Directors of the National Bank
rectors, to, continue dividends at
total
obtained by
was
Loesche
Mr.
public, totalling about
9,000 shares,
39
as
only
Accord¬
ing to G. H. Walker & Co., who
the Underwriting Syndi¬
cate, there were two layoffs of
William H. Loesche also has re¬
tired
the
at
$22,-
from
estimated $63,730,000
an
was
headed
Officer in 1954.
has climbed
818,000 to
Out of
was
—c
...w
217 shares unsubscribed.
becoming Senior Investment
issuance of
the
$31 per share,
subscription war-
sn^Ti^on neriod
joined the bank as
was
fore
at
via transferable
Exchange Bank, Philadelphia, Pa.
Mr. Griffitts
structure
000,000, their surplus to $2,000,000,
and
undivided profits
to about
retired
has
shares
which
will increase their capital to $2,-
•»
Griffitts
Powell
S.
is
sale of 30,000
capital
stock
the
pleted
bank's
the
to
•Vissinoming office as assistant
nanager before
becoming maniger
of Orthodox.
He was ap¬
pointed
Assistant
Treasurer
in
i956.
News About Banks
'
.
(1700)
shares.
The
a
dividend
which
in
1937
ment
time
the
had
prior
who
public
the
utility
in
been
the
invest¬
banking business for
His
years.
subject
will
to
field
many
be
"In¬
vestment Research by the Security
Analyst."
Chairman
ner
of
pany.
meetings
of Boston,
Vance,
Sanders
participate
the
of
H.
Alec
Com¬
repre¬
who
will
Thomas A. Baxter
are
Arthur
firm
is
part¬
a
&
Other partners and
sentatives
and
the
of
Richard Piatt,
Haussermann,
B.
Stevenson
of
and
would Henry Parkman III, of Nashville;
give First National its fifth capi¬
tal
stock
increase
since
1950,
during
Company,
entering
Boston;
^
proposed
Service
and
Kimball Valentine, of Wash¬
capital ington, D. C.
Volume
186
Number 5682
.
.
The Commercial and Financial Chronicle
.
: 1
/
Delaware Fund Appoints
Rogers and Blum
PHILADELPHIA,
Pa. —
C. Graydon Rogers and Frederick
E. Blum haye been appointed in-
(1701)
/
■
■
above issues, the Bank has sold to
jointly by Morgan the Deutsche / Bundesbank $75,Stanley & Co. and The First Bos¬ 000,000
of 49a%
United
States
ton
Corporation and
the
third dollar notes due in three equal
issue to be so placed this year. In annual
installments on Jan.
16,
January the Bank sold $10$,000,- 1959, 1960 and 1961. These notes
000 20-year 4>k% bonds, followed are to be delivered to the Bundes¬
by the sale of an equal amount of bank against payment on Oct. 17,
1957.
21-year 414s in April.
ated basis by underwriting groups
H.
man
.
As
of June
30, 1957, the Bank
had outstanding bonds
.
Exch. Firms Ass'n
and notes
aggregating $1,034,000,000. After
giving effect to the present issue,
the sale of $100,000,000 414% notes
to
the
July,
Deutsche
Bundesbank
dollar
Firms
Ci
tirayaon
Kvgers
Frederick
E.
Blum
guilder
sterling
nominations
vestment
officers
of
of
election
the
to
firms.
member
Elections
November.
the
York
will
and
Wendell
Dean Witter &
meeting
W.
Witter,
Co.^-San Francisco.
Nominations for membership on
the
..
.
&
Committee for the presentation of
a
as
slate of governors for
follows:
1958
are
Douglas G. Bonner, Gregory &
Sons, New York; Charles P.
Cooley, Jr., Cooley & Company,
Hartford; Marco F. Hellman, J.
Barth & Co., San Francisco; Lloyd
W. Mason, Paine, Webber, Jack¬
son
&
Curtis, New York and
Charles L. Morse, Jr.,
Hemphill,
Noyes & Co., New York.. *
Amott, Baker Co. Adds
John P. Rumin has become as¬
sociated with Amott, Baker & Co.
.
Co., Philadelphia; James G. Tre- Incorporated, 150
Broadway, New
maine, Gude, Winmill & Co., New' York City, members of the New
of members in New York City in
aggregating
addition ' to
In
for
take place at the annual
and, Netherlands
obligations
$200,000,000.
ANGELES, Calif. — The
of
Stock
Exchange
announces
the
following
Board of 35 partners and officers
bonds
W. Baird
Co., Milwau¬
kee; Blancke Noyes, Hemphill,
Noyes & Co., New York; William
C. Roney," Wm. C. Roney &
Co.,
Detroit; Edward Rotan,
Rotan,
Mosle & Co., Houston; C. Newbold
Taylor, W. H. Newbold's Son &
Association
to
aggregating $1,052000,000 and Swiss Franc, Canadian
dollar,
Robert
Receives Nominees
LOS
in
delivery of bonds
under delayed delivery contracts
this figure is increased to $1,252,000,000, > including ; United States
and
Lawrence
Bogert, Jr., East¬
Dillon, Union Securities &
Co., New York; Edward N. Car¬
penter, Jr., Jesup & Lamont, New
York; Richard de La Chapelle,
Lee Higginson
Corporation, New
York; Herbert S. Hall, Morgan
Stanley & Co., New York; Joseph
A. Martin, Jr., Gaines &
Company,
New
York;
Ludlow
F.
North,
Managed
21
Association's
Nominating
Delaware
York Stock
tered
was
Exchange,
Representative.
as a
Regis¬
Mr.
Rumin
formerly associated with the
New
York
Stock
Exchange- firm
of Osborne & Thurlow,
v.
Fund and Delaware Income Fund,
according to a recent announce¬
ment
by W. Linton Nelson, Presi¬
dent-. ■>
i'-•"
•_
Mr. Rogers
joined the Delaware
organization-as a security analyst
in September, 1956.
Mr. Blum is
a
recent
more
addition
the
to
Funds' research staff."
Offers 078,000,000
4%% Bonds
Public
offering of a new issue
$75,000,1)00 International Bank
of
for
Reconstruction
and
Develop¬
ment (World Bank) 494% 23-year
bonds of 1957,-due Nov.
1(1980, was
made
on Oct. 15 by a nationwide
underwriting group of 164 invest¬
'
firms
ments
and
banks
managed
v( jointlyCbyi Morgan Stanley .& Co.:
and
The
bonds
The
Corp. .The
at
100%
and
that
Bell
Nov;
date
1967.
1
On
and
they will be call¬
able at the election of the Bank at
DREAMS
prices ranging from 103% and ac¬
crued
Telephone Laboratories,Murray Hill, N. J.
bonds will not be call¬
new
before
after
Boston
priced
interest.
accrued
able
First
were
interest
if
redeemed
on
WITH
A
PURPOSE
or
before Oct. 31, 1971, down to 100%
after Oct. 31, 1977.
During
the period February,
through 1967, a purchase
will be in operation.
The
1958 and
fund
fund,
which
from
year
to
is
non-cumulative
provides for
the purchase of bonds in the open
market
an
annual rate of
will be
proportionately less before
then.
In addition to the purchase
fund,
sinking fund has been provided,
calculated
to
retire
50%
the
of
issue prior to
maturity, at the rate
$3,000,000 annually beginning
in 1968 to and including 1979, and
$1,500,000 on or prior to May 1,
of
1980.
tion
tists and
certain
never
The sinking fund redemp¬
price is 100%.
As in the two most recent issues'
by the Bank in the United States,
arrangements have been made for
the sale of bonds for delayed de¬
livery to certain institutional in¬
Such sales will be at the
vestors.
public
offering
liveries will
tracts
be
between
purchasers
price
made
the
you
before."
seen
and
bell
to
But
goal.
one
The Transistor is
high
have
business.
over
And
eighty
tinuous
the
in
everything is directed
It is the betterment of
are
brought about Direct
Distance
there has been
determined
help make those dreams
come
there
was
First it
a
tories
just two
an
a
telephone
;
of minds versed in the
the need
grew,
initiative
pure
and
and
more
Today there
is
apparent.
I
are more
through
1
1'
"
a
of
careful balance of
research and developmental work.
The scientist is
practical values of research became
more
'
newest
There is also the encouragement
Bell and
men,
judgment and knowledge
scientific knowledge*.
attic workshop. Then
the idea grew, as
the
was
the
arc
of the Bell Labora¬
experience, combined with the enthu¬
true.
telephone laboratory.
was
Watson, in
there
serv¬
that have been gained from years of
to
siasm
For before
provide this better
The great assets
con¬
research
ma¬
Dialing. And, again, there
the development of those wonder¬
was
ful
always, for something
years,
and
the switching
phone cables.
ways to
ice at the lowest cost to the customer.
communications
Telephone
chines that have
ing of
always been dreams and
hopes
Bell
Battery. So, too,
communications service and the find¬
There
a
Laboratories invention. So is the Solar
a freedom
in industrial work.
rare
given
Some of the great
that
amplifiers for the undcrscas tele¬
It all adds up to a great
But there is much
ress.
All
that
has
been
deal of
to
more
done
is
prog¬
come.
but
the
beginning.
Never have there been
for wholly
opportunities
so
many
devel¬
new
opments in telephone service and so,
much
well-rounded
research
behind
them.
Each
day there
the beaten
that has
are
excursions off
path, revealing something
never
been
seen
before.
achievements of
-
the
than 10,000
Laboratories
Bell
have
in
come
recent years.
people at Bell Telephone Laboratories,
Working together to bring people together
BELL
TELEPHONE
SYSTEM
de¬
under
trained Scien¬
are
covers many fields and
exploring and developing in many
directions.
graiiam
3000
over
engineers.
Their work
have
goes
alexander
con¬
Bank
providing
and
for
the
deliv¬
py/"''
or
quarterly dates from Feb. 1,
/■
ipvy.'
,
*
''
mm
eries
in
more
find something
to
It will
$3,750,000
principal amount after all bonds,
including bonds sold on a delayed
delivery basis, are issued. The rate
a
of whom
Yon will he
or
100% and accrued inteiest.
be at
occasionally
by acceptance of tend¬
prices up to and including
at
ers
year,
"Leave the beaten track
and dive into the woods.
installments
on
one
,
Bfcy-
,
\
'■ ''
'
1958 through Nov. 1, 1960. A com¬
mitment fee of 94% a year will be
paid
by
the
Bank
under delayed
to
purchasers
delivery contracts.
Acrm $m
The
delayed delivery arrange¬
ment, as in the past, is expected
enable the Bank to
to
-
a
coordinate
[ portion of
its
its borrowing with
disbursements, and to
loan
make it possible for purchasers to
arrange
t
their
payments
This
'is
the
seventh
Converts sun's rays into
issue
of
World Bank bonds to be marketed
in the United States bh
a'riegoti
I
i
.
J
.
r[
THE TRANSISTOR
BELL SOLAR BATTERY
DIRECT
DISTANCE
DIALING
suit
to
their, projected cash positions.
r
electricity by
means
usable
amounts
One of the
of
of specially treated
come
mite
disc§ of silicon. Has been used experi¬
mentally <to power rural telephone lines. j;
VT/T
only
can
break-throughs in science that
at rare
do many of the
electronic tube
■
if
'''
"t.
intervals.
can
*
.
do and
This mighty
things that
more
i.
an
besides!
i
i
By the end of this
telephone
able
to
year
customers in
some
5,300.000
440 localities will he
dial directly to as many as 35,000,000
telephones all around
the country. 4
.
*
?
*
22
The Commercial and Financial Chronicle
(I702)
well
Adequacy of Bank Capital and
thorities
the
The Sale of Bank Shares
availability
Until
t'
underwriter, Mr.
now
;
time is
,
of
.
1
belittle
the
many
now
confront
the
both
banking
business
o r
agencies.
y
There
is
one
problem, how¬
holds
of
Cook
for
insolubil-
and
i t y.
with
from
us
It
the
has
very
be¬
ginning and is still today a matter
of vital import.
I refer to the
question of bank capital.
Years Ago
Ten
is based upon less philosophical
considerations
than
I
have just indicated. Instead, con¬
cern
is focused more upon the
Looked
banks
becoming evident; loans and
other risk assets were growing at
a
rate
greatly
exceeding
the
shrinkage in the volume of cash
and Federal
obligations. As these
continued,
banks
added
steadily to
their
capital,
even
managing to improve slightly the
trends
relationship
between
accounts and
total
capi-
total
assets, bu i
slipping steadily behind m the rela lonship
ot
capital
to
risk
assets.
quarters there is
position to
as
dis-
the present capi-
view
margin
a
inevitable
an
and
tolerable result of historic trends,
and to accept it as a new norm
adequacy. In that attitude there
great threat to
present
our
ba hiking system, failing as it does
recognize
the
vital
link
tween bank capital and
tioning of
a
the func-
economic
our
have
Banks
be-
system,
responsi-
primary
biiity in allocating credit
among
different economic demands. They
have performed this responsibility
in
efficient way. This is indi-
an
cated
by the development of our
to its unparalleled position of strength. The key to their
efficiency in doing this rests upon
economy
the
decentralization
making,
banking
system
of
decision-
a
decentralization that
goes hand in hand with our dual
sands of
and
our
thou¬
independent banks.
Raises
ism?
tions
to
do
Simply
are
this:
this
up
owners
aged
its
despite
how¬
consider-
able size. For
very
thing, it is only
one
periods, but it was accomplished in the face of declin¬
ing earnings for a large number of? industrial corporations,
•'
or desposits. For another, it is
aggregate very unevenly distributed among
banks. Further-
se;ts
an
to
ques¬
sored
bank permit
exercising authority and reaping
all
out
they
talk
of
proportion
assume.
br Mr.
Association
of
to
Our present
C.ok before
Supervisors
State
Digitized forBanks, New York City,
FRASER
,be
of
r*o'
spon¬
or-
a
in
series
a
given
entertainment
of
jointly
9.9%, for
"money matinees"
the Federation
V"
by
of Women Shareholders in Ameri-
ment
Business, Inc. and the Public
can
catiofol
happen
reported
than
West
turns
Wednesday, Oct. 23, in the
Foyer of the Waldorf As-
toria. Curtain time, 2
The
theme
"You
is
puce
^ie
few
and
uses
and
of
the
Lately,
fluctuating
market
values
for
fixeci
income
bearing securities
have introduced a new complica¬
tion. This latter circumstance is,
years.
_
-
of course, no cause for concern to
bankers whose asset structure leatures
high quality credits sched-
uled to mature
so
as
to avoid any
need to sell depreciated securities,
But not every bank can be ex-
pected to anticipate its needs
ac-
curately, and depreciation in the
securities
portfolio can be the
of
source
substantial
losses.
Sour
loans and sales of depreciated se¬
curities
tal
can
auicklv
impair
capi-
margins.
What
their
can
banks
do
to
capital position?
improve
parallel
The
is
has
pot
prudent thing
a
to
do, it
resulted in as rapid or
substantial growth in capital as I
presented
are
be familiar with
talk
before
Association,
the
my
Illinois
where
cast
fol.
the
remainder
new
up
stitute
order of
appearance
Management, who is a
foil for Lewis D. Gilbert, with his
CVntw Tnhn^rMihKchpr
51'
ll olaers
Activities
Meetings";
nf
"S+nriT
at
Harold
Corporation
X. :■ Schreder,
Executive
Vice-President, Dis¬
tributors Group, Inc.; Edmund W.
Tabell, Walston & Co.; and Jo¬
Seldom
has
the
& Stetson, who is a past President
of the New York Society of Se¬
curity
Analysts.
Wilma
President,. Federation
of
UJ-
x v:uv:llclllu,.l
T
Soss,
Women
vv ""1C"
Shareholders who is sometimes
Cadillac,'
called "Mrs. Solid Gold
is moderator.
Men
an
been
successful
flotation
of
banks
loan demand.
Recently
Chase
any
Hear H. T. Hallowed
PHILADELPHIA, Pa. —
Thomas
Hallowell, President
H.
of
Standard
will
Pressed-
address
Steel
Co.,
on
the Barclay
Mr.
Hotel.
Hallowell
plans
.
—
-
to
discuss
Prospects tor the next several
years- He Wl11 als0 touch on recent acquisitions by SPS and the
effect
^V^vWen^wouM Stract
new
USS" ,add
of
these
changes
on
SPS's,
William A. Webb of DeHaven &
capital than it would
TTc,'
&
*
m
as
is in charge of arrangements.
capital accounts. By lending their Market Street, Upper Darby, Pa.,
encouragement
to
this course,
of condition
re¬
assets;
from 0.4% above
bank, to the best gain of 8.8%;
one
look
for
of
continuation
a
years
weeks
the
good
past loan volume
continues in force.
Manhattan
increased
13,000,000,
its
outstanding
National City was next with an increase of 2,000,000 shares
new
from
shares
involving $47,000,000; First
operation
an
at $60,
funds that must be put to work;
finally, Chemical Corn Exchange, which raised its capital funds by
$47,000,000, the stock increase being 20%.
over
Again
count of
find that both
we
the
rate
of
the 1957 date records
been
price:earnings basis and on the
improvement
on
Sept. 30 book values,
over a year
earlier.
There has
steady improvement in these relationships for quarter after
quarter for
in
on a
operating earnings
number of periods.
a
the refusal
of many
This is
one
of the puzzling factors
investors to recognize bank shares
outstanding conservative values that they
as
the
are.
Twelve Months Ended September 30
% Earned
Price: Earnings Ratio
on
Book Value
1957
11)56
Bankers
Bank
Trust
of
11.7
8.3
8.7
10.7
8.6
10.4
8.6
12.2
Y.________
N.
1056
13.7
!
1057
"
1 13.5
12.3
8.6
Chemical Corn _'_—1_
13.3
10.6
8.9
9.7
Empire Trust
11.7
10.0
11.1
10.7
13.5
13.0
8.4
7.8
15.5
13.4
6.6
7.3
Chase
First
Manhattan
s
National
—
City
___—
9.0
11.8
10.7
8.8
13.6
12.0
9.8
12.7
10.8
8.5
15.2
12.5
9.4
9.6
13.7
12.5
7.9
8.6
United States Trust—
11.9
12.0
8.9
8.4
Bank
_______
In
the
the
Co.______
'
10.6
9.3
'
price:earnings ratio only United States Trust violates
accordant
there
Trust—
behavior
of
the
stocks.
In
the
second
comparison,
three discordant items.
are
a
meeting of the
Securities Associa¬
present operations and the future.
in
re¬
have had three capital increases of considerable
we
to
J. P. Morgan
8^en increment of earnings paid
more
-
These increases
that for several
the early depression
since
Of
the
have been
New York Trust——
Phila. Sees, flss'n to
and Drosnects for the next several
larger proportion
It is true
Manufacturers
Banks
can
improve the
attractiveness of such investments
a
this could
•
apparently
Irving Trust
the company's operations this year
shares.
year
the New York City banks has lost ground; but the top rate
among
Hanover
bank
new
of 3%.
average
The
Guaranty Trust
also welcome.
are
Friday, Oct. 18, 1957, at
4:00 p.m. in the Mirage Room of
situation
a
single exception, all of the 12 remaining banks
a
seph M. Galanis, of Winslow, Cohu
tion
Time Is Ripe
from
governments..
beginning to be competitive with equity yields.
are
of
Philadelphia
to the urgent need.
behind
in
of
Kourday, Manager of
General Research, Hayden Stone
& Co.; Jackson Martindell, Chair¬
man
of the Board, American In¬
Bankers
suggested
bank shares is
bond- holdings
increases
ran
recent
I
showed
bringing in $120,000,0000 of
Michael
feel to be necessary. Some of you
may
government
Sept. 30, 1956, figure for
for
prin-
retention of earnings. While
this
declining trend in
i.e., income producing assets.
business
current events approach,
they have relied principally
upon
survival?"
serjes jn
For many
years
a
The
is:
a
(or working)
the
in--
'
.
ported increases in the amount of invested
Your
price versus value?"
doesn't stock market be-
ciples of investment
gen-
characteristic
an
small fraction of 1% to
Another unusual feature of the Sept. 30 statements
is that with
an all-star
cast of Wall Street analysts. The
series of four matinees is built
always
them
on
with
prosperity
in
statements
p.m.
Money in 1958,". with
doubt been avoided
a
present high yields on bonds, for bond prices are low and the
The second of the series will be
tirely
era^
.
,
bank reported
every
from
ran
quite consistently been in
decreases
12,000,000
through the
interest
find that whereas until this time govern¬
we
part of the motivation
course,
men,
held
earlier,,
year
of 5%.
time
had
eight
size:
latent
higher
supply lendable funds, only five of the 13 leading banks
earlier;
with
stockholders
women
a
These increases
same
bonds
order to
einc°n°miC EdU"
Women
ca?°n o£ W°me,n\InC,
It
bound to
"Why
Many
and
heavy that authority always has the weapon of
an average
At the
investment
no
showing have been the
accommodation
way,
in loans.
conditions?" "What is the secret of
reassuring.
loan
mix
extremely low for several years,
the present situation is not enlosses have
for
that, compared , with
crease
havior
Though bank losses have been
for this good
reasons
..
:
ganizations.
<
Not Too Reassuring
°f their earnings. I feel that
well be accused of
.
"What about
by paying out
may
analysts,
by women's financial
Finance and
.as conducive as it is today for the
a
Street
banking system.
our
In
the
demand
the banks have been scraping the barrel for funds
to lend, as the ratio of governments to total assets is getting to be
as low as most banks care to go.
Of course, they may have access
to the Federal Reserve to borrow on rediscount, but this cuts their
margin of return; and, of course, if borrowing at the Federal
any
mechan¬
Serious
of
rates.
substantial
inroads around the questions most often
upon
these capital funds, even asked by
women
investors—
falling far short of exhausting "Should I take a loss?" "To switch
them, would do irreparable harm or not to switch is the question!"
more,
Of course,
t:
.continued
increasing the rate at which the banks may borrow. <
A noteworthy point about the September bank statements is
small fraction of total bank as-
ing. They
National
"12 months'
s
Reserve becomes
Wall
was
that large figure,
by
ever,
sures
in the enterprise to
drastically that they
so
a
capital
^
of
more
have little at stake in sound bank-
the risk
do
the only remedy today that mea¬
their equity
rewards
bank
entertainment, with all-star cast
bound to be raised if and
when the
shrink
light, how
today?
accounts of all banks
total almost $20 billion. We should
not be misled or unduly encour¬
that the sale of
Questions
with
this
Capital
What has the adequacy of bank
capital
in
at
measure
were
to
were Chase Manhattan and First National City, both of which had
'capital increases via fights. However, on the 12 months' showing
.ended Sept 30, the 1957 period had an increase of 8.6%. Not only
was this a successive improvement on top of half a dozen earlier
Staged
(
quacy
margin. The major post-war trends
a
"
banking integrity.
.
was
as
earnings with the like-period of 1956, the average result was ap¬
proximately 5V2% higher this year-. Omitted from the calculation^
we
Lecture series mixing finance and
discussion of capital ade-
Most
a
Something of the timeless char¬
acter of the bank capital problem
is
apparent in the emphasis I
placed upon it in my remarks in
Washington ten years ago. Then,
as
now, there was concern over
the adequacy of the bank capital
lies
oiit-
intelligent atten¬
day's developments,
equate
*
■
to have been
expected, the leading New York
City banks turned in another excellent quarter, ended Sept. 30,
so far as operating results were
concerned. Comparing quarterly
"Money. Matinees"
is, is right."
kind
a
record
persistence
tal
to
^
1
■
,
solutions
become
Bank: Stocks
—
1
Well,
f
which
ever,
some
~'
an
......
of believing that "whatever
cency
and
the super vis-
In
This Week
com-'
situations. All
new
the
to
with
need to awaken from the compla-
I
not
lal
problems
by
resolve
problems
would
and
been
the
over as our
expect is
tion
which
own
Earl
to
By ARTHUR B. WALLACE
a
flexibility in our approach to this
vital problem and firmness in our
system of decentralized decisions,
with
its inherent wisdom and
efficiency, may be threatened. To
assure the vitality of the present
system, banks need to maintain "
reasonable relationship between
capital and assets, and bankers
problem, of course, has
particular complications
complications
and
significance,
Every
its
find
soon
however, that present situation is not entirely reassuring.
warns,
of
old
bank shares. Aware that bank losses have been extremely low,
•
solution
and
over
moded
can
conducive for successful flotation of new
most
now
shall
problem itself is eternal; we learn
Cook, still singles out the question of inadequate bank capital
as a
problem known for its persistence and insolubility. He
points out that the only solution for lending institutions with
this problem is the sale of new bank shares, and asserts the
-
;
recently F. D. I. C. Chairman and
however,
expect,
or
plex problem of bank capital..The
Co.,
this
j
have
Bank and Insurance Stocks
to
/
not
must
we
permanent
Federal Deposit Insurance Corporation
Manager, Underwriting Department, E. F. Ilutton &
»
Kansas City, Mo.
capital
of
,
We
that
au¬
do much to facilitate
can
Thursday, October 17, 1957
.
meas¬
supervisory
bank
banks.
By II. EARL COOK*
Former Chairman,
by other effective
as
ures,' the
.
.
"
NATIONAL
Quarterly Analysis
BANK
of INDIA, LIMITED
Bankers
to
the
Government
13 N. Y. CITY
la
Kenya Colony and Uganda
Head
Office:
West
BANK STOCKS
End
26
Bishopsgate,
London, E. C. 2.
(London! Branch:
Bulletin
13, St. James's Square, S. W. 1.
in India, Pakistan, Ceylon,
Aden, Kenya, Tanganyika.
Uganda, Zanzibar, and Somali-
on
Branches
Request
Burma,
land
Paid-Up
Laird, Bissell & Meeds
Protectorate.
Authorized
Capital-Capital
£4,562,500
£2,851,562
Reserve Fund
£3,104,687
The Bank conducts every description ol
banking and exchange business..
Trusteeships and Executorships
Members New York
Members
,
120
American
Stock Exchange
Stock Exchange
BROADWAY; NEW YORK 5,
N. Y.
...
also
undertaken
Telephone: BArclay 7-3500
Teletype—NY 1-1248-49
Bell
(L. A. Gibbs. Manager Trading
Dept.)
•
Specialists in Bank Stocks
Volume
186
Number
5682
.
.
The Commercial and
Financial Chronicle
.
(1703)
Thwaite Named Pres.
Monetary Restraint is Rot Enough Freeh,ins» Meyerhoff
3
Of Trust Co. of Ga.
i
.
'■
ATLANTA,
Thwaite,
Jr.,
Ga
Charles
—
President
-
the
Fourth National Bank, of Colum- '
Ga.,\ Tuesday
bus,
-
In Order to Check
E.'
of
-
.
Wages Spiral
CHICAGO,
Meyerhoff &
Salle Street,
elected
was
Inadequacy of British Government's
York
anti-inflation policy,
new
respect to monetary-credit restraint, is Dr.
view—leading him i to conclude "the inflationary
Karmin
'
spiral^will continue; even if its;pace may be moderated
by
{{.curtailments of ' capital schemes?' The writer perceives wage
increases being placed on a::
self-financing basis in view of
ability fo pass on higher prices prior to wage hikes. Warns
that z limited quantity of money, in circulation is of no avail
£
*ui
*
5^
|
•
and
?: :!
long
so
as
pf October all
director
a '
T'j
^,Britain>j.\eie .directed towards the
the " Popula^rsea^> t*. ^:.
« -v;
-
K-
r>
,
of
Trust
Company of Georgia/ John
A. Sibley, chairman of the board
resort^of f
following a;meeting of the board -Conservative
of directors.
1
.'!•>
Party held its
annual
B.Hall, President of
the Trust
Company of Georgia
since January,
1948, was elevated
fer
to the
that
position of Vice-Chairman
con-,
e n c e.l 11
hop e d
of the board. Mr. Thwaite and
Mr.
will assume their new re¬
dication
sponsibilities
t h i
Hall
-
Mr.
on
and
Trust
*'<
.
Company
of
Georgia
tional BanK& Trust
He
of
nanv
As-
served
there
elected
was
until
Trust
Company
From
m
1946
Jy4b
as
Trust
the
of
Company
of
Company
the
Georgia and
of Georgia
themselves
duly impressed, there have been no indi¬
cations
He also
director of the bank and the
Trust
Company of Georgia As¬
sociates.
a
The Trust
founded
..Cmi4.
,
Company of Georgia,
in
1891,
,,
boutn s
cial
far
so
the
of
.
is
,
oldest
and
the
of
one
.
A
..
largest finan-
institutions.
Labor Not
The
slackening
any
for higher wages.
pressure
was
bus, in September, 1948.
is
speculators in sterling
showed
elected President of the
Fourth National
Bank, of Colum¬
Upset
Chancellor of the Excheq¬
Mr.
uer,
Thorney croft,
reaf¬
David Packard Joins
Tucker, Anthony, Day
David
{ C.
Packard
/
has
joined
& R. L. Day, 120
Broadway-New York City,
bers
of the
New York
mem-
Stock
Ex-
change, Vin ^'the municipal bond
department? the{Tirm announced.
"
-
.
-
_
.
..
--
•; Mr. Packard; had been with Estabrook & Co. since 1949 in their
municipal bond department. He*is
a
member of the
measures
to implement
policy of resisting the wages
spiral. \Indeed, the Minister, of;
Labor,
Mr.
Macleod,
made
a
speech in which he made it quite
plain that the Government does;
new
Municipal Bond
not
intend
would
to
{do
anything
be; 'resented
by
that
the/ trade
his
strikes
in
successes
by,, conceding everything,
history by inspiring Mr.
made
Bowden Cleveland Mgr. for
tion
CLEVELAND, Ohio
—
Chamberlain's
Paul
S.
of his
speech
ence,
it
ment
need
Singer, Deane & Scribner, located
Union Commerce Building.
formerly with Baxter
not
the
Govern-
any
Exchange, with the admis-
to
partnership of J. Horace
Block, member of the Exchange,
The fact that emerges from
the
conference is that the Government
will
rely
entirely
on
keeping
rising. The Chancellor
new
currency
is
made
avail¬
able, industrial firms will be
Admittedly, if a business firm
wants to increase its output- it
^as to ask for more credit facilities
prior
is bound to exist between paying
was
a
partner
in
Weil & Doyle.
•
.
R.
E.: Rodgers
5
South
Robertson
its
bank.
A
time
lag
lor the additional raw materials,
transport, fuel, and labor, and the
Opens
p
LOS ANGELES, Calif.—Robert
E. Rodgers, Jr. is
conducting a seeurities business from offices at
3020
from
Boulevard,
?me'"gf"ce ?f 'be additional goods
from the pipeline, their sale, and
the collection of the proceeds for
wages
addi
any
So
long
industrial firms as¬
they would be able to
add the higher cost to the
prices,
they will be tempted to take the
as
that
sume
line of least resistance
by conced¬
ing wage demands and adding the
extra cost to the prices. There are
indications that the Govern-
ment
has
primitive conception of
keep down the volume of
to
prevent
rise
a
in
money
prices.
The
Government advisors fail to real-
ize
that
if
incomes
wage
are
allowed to rise, the rigidity of the
volume of currency and credit will
not prevent a rise in prices. All
that will happen is that the veloc-
Conclusion
•
It may take some time before
the Government is likely to realize the inadequacy of its policy,
Meanwhile, the inflationary spifal
will continue, even if its pace may
be moderated by curtailments
capital development schemes.
of
Securities,
Inc.
has
been
Informed with offices at 37 .Wall
with
previously
was
Seymour Fink, *President and
Treasurer, and Elinor Fink, Vice-
Co.
President and Secretary.
the
attractive
soft
do soft drink
G.
H.
Walker
Forsyth Boulevard,
representative.
A
of
number
Boeger
Service
as a
the
Co., 8224
registered
ago,
is
payments? the exchange
compare
as
tures, profits and dividends of
tobaccos,
profits
lyzes sales, promotion expendi¬
the 25
companies listed
New York
does the future look? To find
that
swers
ana¬
How
chemicals, meat packers? How
an¬
to these and other ques¬
the
on
Stock Exchange
spend the most
adver^
on
tising. In "Billions for Adver¬
tions, editors of the exchange
tising"
Magazine went right to the top
widely corporate managements
executive of
can
ht-
William
leading
a
E.
company
Robinson,
Presi¬
for yourself how
see
differ when it
comes
to allot¬
ting promotional funds.
dent of Coca-Cola.
Wise
or
not?
Sales trends, marketing shifts,
competition
Mr.
-
all
analyzed.
are
also
Robinson
An investor interested
prima¬
how
rily in dividend income
may
tells
television, do-it-yourself hobbies
and
packaging ideas stim¬
new
ulate
sales;
population
how
changes in the next decade will
boost consumption.
He also
ap¬
praises foreign markets.
"The
Growing
dustry" is
that's
a
Soft Drink In¬
penetrating study
typical of the exchange
also
covers:
amounts of bonds and
preferred
stock outstanding. Is this sound
reasoning? Or not?
"What Price Debt"
with
gives
you a
prominent companies
substantial
ahead of the
obligations
common
stock.
trends and
new
developments
tion—is
the
exchange
be
bonanza to
days
may
industries.
a
In
a
cer¬
timely
article, "Leisure Time and Com¬
Stocks," the exchange
mon
Magazine presents
listed
a
table of 25
companies that make the
tools of leisure
-
from boats to
you're
function
of
investor
an
in every
and
from
the
Magazine. Whether
or
considered investing,
est
~
single low-cost publica¬
a
The trend toward fewer work¬
tain
>
Bringing together illuminatingfacts about investing, market
all in
Leisure time is money
be
of companies with large
wary
look at 25
Magazine. The October issue
have
ever
you'll fied
issue articles of inte
helpful
informatit
-
i
corporate executive:\9
financial
editors
and
marl'
t
observers.
performances
over
the
The lion's share
to
.
How do
pare
of
monthly issues
your
the coupon
lar and your
big corporations
year
with sales, profits, dividend
now.
below, include
advertising appropria¬
com¬
Magazine is dis¬
by subscription onl;
$
why not plan to start gettii
..
advertising?
Mr.
Investment
the exchange
tributed
so
tions
years
with
was
&
industry?
past 10 years.
CLAYTON, Mo. — Walter L.
Boeger has joined the sales force
of
investors
to
drink
with such stalwarts
market
With G. H. Walker
Fill in
a
del-
subscription loi
will begin with the
eu> rc
^
,%
issue.
Corporation of St. Louis.
Sartorius
Sartorius
&
Admit
to
Ne,w York City, members of the
11 Wall
New
York
Enclosed
Nov.
1st
Levine
and
Stock
will
to
David
Exchange,
admit
general
E.
Lavin
Charles
on
B.
partnership,
to
Magazine, Dept. 7
is
$1
(check, cash,
me
(Special to The Financial Chronicle)
money
ji
jt
of the exchange Magazine
name.
I
i
address-
BEVERLY
HILLS, Cal.—David
has 'joined
the staff of.
Fisher
city-
;j
the next 12 issues
limited
Joins Bache Staff
i
Street, New York 5, N. Y.
order). Please send
partnership.
Bache & Co., 445 North Roxbury
Drive.
During that period
are needed,
and
acting on the Chan-
the exchange
Co., 39 Broadway,
additional
funds
"A
bowling balls —and their stock
the goods sold.
if the banks,
Form Best Securities
un-
to finance wage increases,
This assumption is fundamentally
mistaken, however,
Mr. Block has recently been active
as an individual floor broker and
thereto
higher
without
covered
are
the
undue
t0 ^ t0Ugh W"h
no
Joseph Mayr- & Company, 50
Broad Street, New York
City, will
become members of the New York
sion
fear
is convinced that this will be suf¬
ficient because he believes that if
To Be N.Y.S.E. Firm
of which
tional credits.
by the rank and file of
wages from
Co.
by the confer-
that
seems
pressure
Bowden has been appointed manager of the
Cleveland office of
Stock
unsuccess-
attempts to appease Hitler.
Judging by the favorable recep-
Singer, Deane & Scribner
basis
settling
ful
&
But more
nowadays contain an
escape
clause, providing for an
increase of the prices in case of
wage increases. In any case, once
the goods are delivered under
of the notes and
of appeasement; whiclL is in fact. of. bank deposits will increase, so
lhe traditional language-of--the that the- unchanged volume of
Ministry of Labor ever since the money does more work.
days of Sir Horace. Wilson who ;
•
pal Forum of New York.
was
advance at prices deter-
unions. cHe;i;spQke; the •.'language{{'ity of circulation
after
./
formedma. Best
industry is
How
true, many firms sell their
the quantity theory of money, according to which it is sufficient to
Neviile
He
It is
wage increases. Apart from this,
however, the conference disclosed
Club c-f New York and the Munici¬
in the
covered.
no
the
Tucker, Anthony
can be done,
self-financing.
firmed with strong emphasis the
Government's decision not to provicie any new money to finance
no
has
Why the soft drink
If it
are
volume of contracts
e
!neasu£?s.m themselves would not
sufficient to induce the trade
deed ,while
,
Calif.
required
long as the
^f "V maximum mined by contracts.
-x
of
He
PaUl Ei"zig
ment' '■ wa? Widely lelt that.these
of
Ex-
are
so
a
increases
Although - the bank rate output, in
1940
Associates.
4
in
at llm?ns to abstain from pressing existing contracts, the new conThwaitV t eir excessive wages claims. In- tracts are made at prices on the
Ihwaite
Mr
Vice-President
Trust
purpose
are
Aususta
1948
iy4»>
to
10
■
moneY» credit, and public invest-
Virp-Prpci-
York
are
Scalir
Indeed, since the price increases
Usually apply to goods produced
before the wage increases, the ad¬
ditional outlay in the form of
higher
wages
is
more
than
in
Atlanta
dent of the First National Bank
served
-
wa^
the
Company, of
in
he
i^
spiral*
joined the Trust Com-
Georgia
and
When
r o m
showing
Gear-:ment's^fnteS"
with the
Career^viih^he5^^Na-
Macon.
wage
confer¬
s
New
,
..
Richard A. Fay &
.
of their goods.
A
will
f
emerge
ence
a
at 140 North Robertson Boulevard Street, New York City to engage
<&-*■
,
.
•.
;vin a securities business.
Officers
to engage .in a securities business.
position to add the
.increased labor costs to the prices
Jn-
Company of
btinks affiliated
banking
1939
'
Thwaite has been associated
with the Trust
gia
Noy. 1.
that
for
-firms
was
some
to
Mr.
No additional credits
.
Marshall
become.
Ichange member firm.
HILLS,
Lawrence' E.; Scalir
I:,*
Wages Are Self-Financed
.
x*.
South Grand Avenue, members of
the Pacific Coast Stock Exchange,
,rV The i state of \ affairs is totally
{different if the/additional money
{is needed, not for increasing the
output but for increasing wages.
B r * 6 n t on.
Company, announced-w " £ r e'? b ^
of the Trust
j
,
Formed
oecs.
(Special1 to TheFinancial Chronicle)
inCreased.
J
-
ANGELES,
Calif. — D.
Hopkins will acquire a
membership in the New York
Stock Exchange, and on Oct. 24th
Hopkins, H a r b a c h & Co., 609
B.
Stanley M. Warsaw
to partnership on Oct. 24.
■
Roger
Ex-
Kurt
Cal-Pacific Securities with offices
funds,
LOS
La
and
BEVERLY
refuse
■
Stock
»»«-
'
production
the
South
»-
To Be NYSE Member
U will,
provide
Brit-{
Freehling,
—
120
admit
L.al-raciric
cellor's £ instructions,
second
in
eyes
,
members of the New
will
Pol
velocity of circulation increases.
Marshall B. Hall
«
President
!•
^LONDON, VEng.—Inf the
week
v
CharlesE.Tbwai.e,Jr.
;;
111.
Co.,
Midwest
and
changes,
particularly with
Einzig's j
Hopkins, Harbach Co.
To Admit Two Partners
By PAUL EINZIG
.
23
.state.
tq-7
^
24
(1704)
Continued
(10)
from page 5
ments
Total
of
and
loans
commercial
Long-Term
pected to continue their rise on a
basis during the re¬
seasonal
Outlook for Business
mainder of the year.
And
and rising
These
portant
7
els
6
million
widely expected.
of the more im¬
are some
a
After
for the bearishness
car
•
year
mod¬
is
now
recent
veloping. But, I think it is highly
important to keep in mind that
it is difficult for me to foresee
bearishness
sizable
is
not
A
new.
year,
business and con¬
optimism
and persisting
concern
about inflationary pres¬
sumer
sures.
This should, therefore, pro-,
basis
the
vide
for
continuing
a
I
high demand for capital funds.
the
movement in
this
lieve, however, that general busi¬
ness
activity will remain strong
•
about business which has been de¬
business
downturn.
with continued
7,
7
reviewing
of a serious busi¬
At the same time,
there are signs that the boom is
losing a little of its steam. I be¬
indicators,
the
do not believe
to
ford
that we
lower our
can
guard against
7"
further inflation.
yet af¬
/
;
7"
in 1958,
expenditures turn down
this
and
offset by
is not
turn in residential
in
have
an
up¬
construction
expenditures
consumer
could
promises to be conducive to a big
demand for capital funds.
■
plant and equipment
If business
the^ possibility
ness
is high during the remainder of this
the introduction of the new
> '
.
reasons
,
The outlook for automobile
sales has been improving, and with
general business down¬
'1
"
v
(12)
rising interest rates will inevitably
turn.
•.
(11) 7 Consumer credit
moderately.
Capital Market
a
are
high and rising, and may be ex¬
Near-anil
lead to
invest¬
banks
some
Prospective Uses and Sources
or
Of
we
in.
relaxation
say
lieve, however, that an upturn in
business
plant and
months?
equipment
take a look at the
corporate financing.
During the first nine months of
First, let
expenditures decline, and I can see
no
reason
for any
picture
serious deteri¬
the
oration in business. Thus, the gen¬
eral business outlook for
ance
of
this
year,
about the prospective uses and
of capital funds in coming
sources
residential construction will occur
if
'
background of the
outlook for business, what can we
I be¬
business activity next year.
Capital Funds
Against the
year
us
on
corporate issues
$9.7 billion, as compared
and into 1958,
(bonds
will total an estimated
and stocks)
the bal¬
with $7.5
—
of the business
forecasting profession seems to be
chronically pessimistic.
This is
segment
undoubtedly
bred
of the convic¬
tion
fact)
that the boom
and
the
Whats
The bears are
cannot last forever.
of these days,
that
they will be any more correct at
this time than they were early
going to be right
but do
one
have any assurance
we
this year, or early last year?
the New York Central
v
Our
to have developed
economy seems
resiliency to go
through rolling adjustments but to
continue at a high average level.
amazing
an
new on
Mechanized muscle
;
Concern for Inflation1
so
Certainly, there is still plently. '
of room for optimism about the
business outlook. Indeed, there is
still plenty of reason
about
your
freight
moves
faster
for concern
inflationary
continuing
pressures.
;
(1) Personal income is high and
rising. This Summer personal dis¬
posable income after taxes reached
an
all-time peak of $300 billion.
is at
Per capita disposable income
an
all-time high and is rising.7
(2) Total personal consumption
expenditures are high and rising;
and amounted to nearly $280 bil¬
lion in the June quarter. One of
the
more
encouraging develop¬
ments is the steady increase, in
retail sales which has been un.
7
;
since April. During that
annual rate of retail 7:
derway
the
time
sales has risen by over $7 billion.
/
(3) Corporate profits in the first
quarter of this year dropped below the level of the fourth quarter
7
the
first quarter of 1956. Up-to-date
figures on corporate profits are
slow in becoming available, but
of
1956,
the
but remained above
that
is
consensus
.
*
•
-
Mechanized track gang
rolls into action headed by
ballast-regulating machine (1). Its rotating iron teeth
corporate
can
profits remain healthy despite the
"profit * squeeze" we often - hear
clear out macadam
crossings; plows fastened to
sides
move
machines
rock
can
ballast
work
on
from ties
away
so
other
them. Pneumatic spike puller
(2) easily pulls out 7" spikes which hold ties to rail.
about.
Despite the leveling out in
(4)
business plant and equipment ex-
'7
still expected
$37 bil-v-v
lion this year as compared with
1956 outlays of $35 billion. 4
(5) The economy is operating
penditures, they
to reach
with
a
new
a
are
record of
bare minimum of labor un-
re¬
employment.- Unemployment' is 7.
showing no trendy but has been ;
fluctuating around 4% of the civi¬
lian labor force,, a rate probably
representing little more than "fric- 7
-tional" unemployment.
1
7
There has been no apprecia¬
weekly
hours
worked in manufacturing 7/
(6)
ble change in the average
industries.
A
this
in
-decrease
average would indicate a softening
in -business.
7;; • 7/: & ; 7. \ v
\ '■
,
•'
The Federal Reserve .Board v
(7)
index of industrial
stable
remained
production.has
in
144
at
-
June',
July, and August, close to the
peak of 147 of last December.
(8)
Private nonfarm housing
starts
in
have
were
at
The
FHA
a
been
on
the
leveling machines (6 and 7) and
power
jacks-
machine
(8) with power-driven arms can shove rock
raise rail and ties to proper height so that tamping
securely into place beneath ties. Lining machine (9)
Mechanization
sample stretch of track
uptrend
in
and
months
recent
Track
August
million annual rate.
one
received
for mortgage
applications
insurance
on
nearly
22,300 proposed new homes in
August—21% above the level of
July and the highest since the
is the order of the
day
on
the
New York Central.
A column
attention
of the Central's maintenance-of-
equipment
may
look, at first, like
a
patent
of
Some of this
lawyer's nightmare. But these weirdly designed
Central... before most
machines
have
the
pressures
mands.
The
of
rise
de¬
consumer
has
been
from
118.2 in January to 121
the latest figure.
have also shown
—from
an
ary to 118
in August,
Wholesale prices
a
moderate
index of 116.9 in
Janu-J {
early in September.
rise
roadbeds at
This
more
an
incredible 4000 feet
means more
days each
moving faster,
a
day!
track open to more trains
year.
As
a
new
machines.
is in danger of being outmoded on the
ever,
way
(9)
The index of consumers'
prices continues to rise indicating
effortlessly grind out smooth, fast
get the undivided
unique, costly equipment, how¬
Spring of 1956.
can
may
dozen strange,
a
ever
had
a
of the country's railroads
chance to
use
it.
The Central is already experimenting with
.
..
result, trains keep.
smoother, with-less delay. A
newer
maintenance machines:
a
giant "fishing
pole'' that will string high-tension wire
tie
...
a
picker-upper that bundles these heavy beams
Volume
Number 5682
186
.
.
.
The Commercial and Financial Chronicle
to
billion in the first nine months of
The corporate bond calendar
956.
September
n
ite
showed
ag-
an
net
$1,290 * million bonds
offering with defiset, ; and $493 million
of
regate
cheduled
5
been
any
flow
of
of
high figure.
very
Secondly,
the
use
credit
This
set.
$1,783
of
seems
as
,
.
;
.
indicated
residential
to be
on
-
would
earlier,
mortgage
the uptrend.
With the increase in the FHA rate
there
has
increase
sizable
funds
to
question
demand for
the
easy
new
FHA
is
on
a
b
s o r
will
b
be
any
great
I
do
not
be¬
Treasury Needs
credit terms
can
Thirdly, with the $3 billion of
Treasury financing just completed,
stimulate home construction at this
time to the same degree as in the
latter part of 1953 and in 1954 and
early 1955, but if funds should be¬
cor¬
A big
whether
even
downpayment
enough
large
easy
come
it
mortgage terms recently made ef¬
fective,
available.
that
the
but
homes,
become
lieve
not
in
FHA's,
undoubtedly develop if
unanswered
on
more
return
porate rates should soften.
the
,
un¬
net
the
mortgages,
overall
dates
no
otal
mortgages
yields still considerably
FHA
million; reflects
gome
working down of the cal¬
endar
in prior weeks,
but the
amount remains at an historically
with
these
attractive than
for
dates
5V4%,
doubtedly have become more com¬
petitive. However, with corporate
to
to well
over
the
million rate.
one
expanding volume of
Residential construction and mort¬
gages could provide a point of ref¬
uge against a possible declining
if they
next year.
~
-
-
-
-- -
on
rest
this
of
series of sizable
will
The
next.
throughout much of this
a
tests
the
for
couraged
sell
to
long-term
some
in. Government securities.
year
satisfactory
refundings which
new
If any relaxation in the
long*«4erm capital market shoulcl
develop next year, it seems likely
that the Treasury would be en¬
the
markets
and
provide
maii^et;
difficulty which the Treasury had
maintaining
•
year
some
softening
in the .money and securities mar¬
important in¬
financial
for
us
is some
kets. Early next year the Treasury
will be required to start again a
an
fluence
of
time unless there
to
expected
an
of heavy at¬
offerings and the
savings bonds is
new
in
borrowing :likely to remain with
needs for the year are pretty much
taken care of, except possibly for
continue to have
face
the
on
cashing
more
readily available for some minor
financing toward the
purchase of FHA mortgages on
year-end if the debt limit permits.
a low down-payment
basis, I think However, the Government securi¬
housing starts could easily rise ties market can be
additional- corporate demand for funds early
amount of mortgage funds
the U. S. Government's
balance in
trition
the
Thus,
25
(1705)
Fourthly,
cash
and
local
in
the
field
Government
of
state
financing,
securities
offerings for new cap¬
billion dur¬
ing the period January-August
of this year, compared with $3.7
billion in the same
period last
year.
The 30-day visible supply
ital amounted to $4.3
of
eps
roadbed in trim
and your
state
securities
local
and
on
August 9 was $304 million, a rel¬
atively high figure. There is no
doubt
that rising
interest rates
have caused some postponement
of state
and local financing,
so
that a backlog of demand for funds
V%
r
f *
■
tpWjpr-Otf*
be expected to come into play
may
if
softening in the long-term
any
capital market should develop.
Finally,
ride is smoother
indicated earlier, alcredit has in¬
as
though
consumer
creased
:
only moderately this year,
a factor of importance
it has been
in
the
credit.
of
use
credit
business
Likewise,
in
reflected
as
bank
commercial
in¬
and
loans
vestments increased only $500 mil¬
lion through August
of this year,
$2.1 billion in
the corresponding period last year.
compared with
as
Sources of Funds
;
-
Turning to the sources of capi¬
tal funds, our studies show that
the overall volume of funds avail¬
able for capital uses
.
the
this year
same
will be about
last. How-
as
within the total there have
For example,
there has been a noticeable rise in
time deposits of commercial banks
i ever,,
been certain shifts.
/
.
-•
arid
decline in the net increase
a
deposits and share-*
loan associations.
This is undoubtedly due to a Comin savings bank
in savings and
\
I petitive advantage gained by the
1 commercial banks' when they
raised the rate on time deposits
::
The tie-replaqing machine that follows
(3) does sev¬
eral
jobs. Machine lifts track, kicks old
out from
under rail and pulls in new
cross
ones.
pieces
Power
spike driver (4) hammers in
new
time. Then ballast regulator
(5)
between ties for
spikes—four at
sweeps
tamping machine that
last December.
a
in
increase
net
available funds from all sources is
later.
comes
the
Although
rock back
about the
amount
this year, the gross
cash available for in¬
same
of
has
vestment
experienced
In the
decline.
case
some
of life insur¬
companies, for example, gross
ance
cash flow has declined somewhat
because
mortgage repayments
substantially, pol¬
icy loans have tended to increase,
have fallen off
a
volume
smaller
policy pro¬
of
deposit
for
,other similar reasons. The decline
in mortgage repayments refers to
other repayments than regularly
left
ceeds
.
being
with
•
are
the
"companies,
on
scheduled amortization.
est
rates
have risen
the
capital
this should be
the
.
-
*
As inter¬
there is less
of mortagages.
For
markets as a whole,
refinancing
„
and
a
"washout" because
availability of funds
reduced
is matched by a
reduced demand.
Some Other Factors Affecting
the
*
-
Capital Market
Before
then nudges track a fraction of an inch right or left
rubber
into perfect alignment. Ballast regulator (10) with
back
broom
occupies clean-up spot; banks rock
alongside the track and
sweeps
sions
turning
about
the
'
to my conclu¬
outlook for the
capital market, it would be help¬
ful to review certain forces which
ties clean.
currently are exerting a great deal
influence on the capital mar¬
of
like bobby pins
hook"
•
And
crane
soon
...
a
new-type traveling "sky
to erect
signal equipment.
the Central hopes to get mainte-
nance-of-way machines off the track completely
;..
onto
a
service road that will
run
alongside the
right-of-way. This will give maintenance
more
working time
...
yet keep tracks
Route of the
crews
open.
The
new
mechanized service equipment is
York
Central rolling
rarely
sees.
in
a
But
better ride
and express
you
...
stock that the public
will surely feel its effects—
in faster
service. From
gressive railroad has
a
any
speedy,
freight salesman to tell
you
freight,
pro¬
look. Ask
about it.
"Early Birds" —Fast Freight Service
passenger
angle, this
new
New York Central Railroad
New
our
ket, and which should continue to
an important effect into next
have
year.
seem
They are all forces
relaxation
First
which
is the
has
much of our
the
out
any
liquidity
throughout
financial system. In
decline in
occurred
corporate field we see
decline which has
corporate ratios of
to current
the
cash
which
significant
in the capital market.
rule
to
it in a
taken place in
current assets
laibilities, and in all of
ratios.
Throughout
the
The Commercial and
Financial Chronicle
.
.
Thursday, October 17, 1957
.
(1706)
W
■?"V
further
Continued from page
25
this
forward to next year
and even longer, what can be said
about the capital market outlook?
We have, of course, been through
a
prolonged period of economic
growth, heavy demand for capital
funds, and an uptrend in interest
Federal Reserve authorities realize rates. The old saying that every¬
that their actions in the second thing that goes up must eventually
half of 1953 helped to set the stage come down is probably no less'for the inflationary excesses we true today in the economics field
have experienced in the last few than it has been in years past.,.
years. It is my guess that certainly One hesitates to be classified as a.
for the balance of this year the believer in "new era" economies.i
Looking
Long-TeimOutlook lot
Business and Capital Maiket
Neat-aid
postwar period, to an important
degree the result of inflation, cor¬
porations have reduced their cash
position. They are now in much
greater relative need to borrow
funds—short and long—to finance
working capital needs and perma¬
capital requirements. Like¬
of commercial
of capital to de¬
posits have decreased and loans at
the case
in
wise,
banks, the ratios
restraint.
increased
recognized
commercial
risk to total loans have
It is widely
even
if many
steadily.
that
In
the
area
would have to
cerning the sad fate of some un~
weigh; to say noth-
the task
weighing each
ing of the magnitude of
and
isolating
of
factor.
-v.
-
.
peopl|.
forgotten
100
with
pared
identified
Scarcely have the politicians ever
pointed out exactly who these fof-.
would be worth only: 25
1970. A sudden
cents ,by vthem. They; a?e not a wfh. Th£y
I^ey
generSLkfib^edg^
are aflaong
ilsTn flesh
,
,
•r
to expand
banks had the reserves
V
"Your Dollars and Your Freedom''
And yet, our
Debt-Lengthening
Treasury
from page, 14
ownt^s >
national economy in« of this would surely;M#f^
policfes#vin; buildiag;:
the postwar
period has shown, mediate economic rOsppMetbri^
great facility for moving success¬ part of many people. V iV^^.W^aOd;Toan associations. ^They coihr,
fully through rolling adjustments.: .-."Here are a few/of countless,^pose .the great middle class;,bf
Americd;p;:^
?•
We have been enormously fortu¬ overlapping examples:
nate in having alternate waves of
"(1) Owners of surplus- funds ^They are not noisy or complairtcapital expansion in housing, on and/or of credit- funds at ^pnee mg. Omthecontrary,the reahfprthe
one
hand,
and plant and would seek uses for their money £°ttep.men and womenjhave dai|y
equipment on the other. This has which would offer the best hedge.: r emained .inarticulate. They have
not been entirely a rnattej: of good
or
protection against erosion ; by.™ organization, no pressure
inflation and the excess
of demand for capital funds over
the supply of saving will require a
continuation of the policy of credit
threat of
nent
Continued
{
r
time.
at
rise
significant
of Treasury financ¬
policy, it seems to me that
the important thing to remember
liquidity would be an important
luck but to an important extent'- inflation v v
-,,.They lssiie no propaganda. They
is the objective of funding some of
deterrent. In the case of savings
has
been a product of natural
the Federal debt. There has been
"(2) Lenders would refuse to
institutions such as mutual savings
market
forces
and^ government lend funds
a great deal of talk about this in
except attnterestiates . Th
banks and life
insurance com¬
banners or implepolicy. I think that a crucial ques¬
the past several years but little
panies, salable assets in the form
tion is, if and when the current action because of the pressing de¬
compensate for
of Government securities h a v e
wave of plant and equipment ex¬
mand for funds from private sec¬
been reduced to nearly minimum
tension runs its course, whether.
tors of the market. The most re¬
men
levels. Moreover, as interest rates
an
7 ?*;•••
expansion
of
housing, will
,7* Tenders—not even their unofficial
cent Treasury 4%, 12-year bond
have risen and capital values have
"(3) Businesses; immediately custodians. They have no lobby in
again take place to fill the gap.
shows that the objective is still
would be inclined to enlarge their Washington.
declined, the difficulties in raising
>■. ' v
,
,
Ji ,
As I have said earlier,; I do not
in mind.
Under the capital mar¬
cash to
make new investments
capital facilities, spending for new /:. They are the unknown, defensefeel pessimistic about the possi¬
ket conditions now foreseeable it
have been enhanced. This has re¬
•
7,less savings depositors. Thei;
bility of a new upsurge in hous¬ plants and equipment. 7
likely that the Treasury
inforced rising rates and helps to seems
ing next year if mortgage funds ..
"(4) Families would buy houses number is legion; They represent
problem of finding investors in¬ become
explain the emphasis placed by
increasingly available.
E. as quickly as possible, hoping to the very backbone of our citizertterested in a long-term Govern¬
investors on safisfactory bond re¬
ship. Truly they are the victims
beat the rise in costs.
With the cold war in interna¬
ment bond will be with us for
and bear the brunt of a blundering
demption provisions.
tional affairs and the inevitable
"(5) There;would be a general
some
time.
On the other hand,
A second factor of great im¬
huge Federal budget, with the po¬ tendency to convert money.;unto economy.
if some relaxation should occur in
litical
portance in the capital market to¬
emphasis
upon
directing things, thus increasing the v^loc-"4 They represent 'the
class of
the private demand for long-term
day is the very heavy forward
government policy toward main¬ ity of circulation. " % 'ri-;>V
thrifty investors, the men arid
funds, I think we can expect the
commitment position of investing
taining full employment, with the
"(6) By the "same token, sayings women, who, by rigid economics,
Treasury to make a prompt and
institutions. Outstanding commit¬
expenditure by business of several would be discouraged, unless the by self-denial, from the sweat of
vigorous move toward lengthen¬
ments to
purchase bonds and
billions of dollars for industrial
reward for doing
so waslarge their brows, have built up savings
ing the average maturity of the
mortgages are great enough to ab¬
research, with the vast highway enough to offset decline in buying accounts, accumulated funds in
debt. Thus, here is another force
sorb the flow of investment funds
program now being readied, with
power.
11;7
insurance policies, have purchased
tending to stabilize the overall de¬
for many months ahead. In view of
the
burst
of family
formations
"(7) In fact, just the opposite of, government
bonds. It is their
mand for long-term funds.
this great backlog of forward com¬
which will develop in the midsavings would" be Encouraged by money, large and small, that is
In the other area of Government
mitments it is difficult to foresee
1960's, with the increasing capac¬ inflation.
People-would go into invested in innumerable business
policy having an important effect ity of our economy to experience
any pronounced easing in the cap¬
debt as much as possible expectconcerns
throughout the land,
ital markets in the next several on the capital markets, namely rolling adjustments without going
They have practiced self-denial,
housing and mortgage lending, into a tailspin — with these and ing to re-pay in cheaper money.
months.
"(8) Unions would surely insist scrimped and saved in the hope
there are a number of proposals other
similar forces
operating—
Still
another important factor
upon
both shortei^contracts and of providing themselves with adewhich the shortage of available it is
quite conceivable that the
which should be kept in mind in
quate old-age security. It is the
escalator clauses. ^/,
funds has fortunately held in abey¬
capital market conditions which
assessing the capital market out¬
"(9) In buying -life insurance, savings of these people that repance but which may come into the
are with us today may persist for
look is the backlog of deferred
people would tendjto buy protec- resent the seed-corn of a governdemand which may be expected picture if any relaxation occurs in quite some period of time.
ment of free men. Something must
tion only, not investment.
the capital market. Through the
to come into play if some easing
"(10)
SpeculttiVe dealing s; be saved for these people. If they
device of Federal mortgage insur¬
should occur.
We are all aware
would increase greatly, mostly inare not, saved, all of us are lost,
ance under the FHA program, the
that in the past year certain pro¬
real estate, as people seek not only
/
entire population of the United
spective borrowers have tempor¬
to protect themselves agaipst in*
Cites an Example
States is likely to be offered, the
arily withdrawn from the market
flation
but to *$lofit from: it if ,;
Not so/long ago, I was at my
same
mortgage credit opportuni¬
their
the decline in bank ing
loans,
giouj>.
•
£^
** have
™
'
Thomas Graham Named
To Fourth Term
because of lack of availability of
This has
excessive.
as
ticularly
ties
interest costs regarded
funds and
Moreover, an am¬
"middle income" housing
program.
bitious
local
and
of state
financing
true
the veteran under the VA
as
loan
been par¬
LOUISVILLE,
Graham, The
Ky.
,
Thomas
—
Bankers Bond Go.,
Inc., has been elected to his fourth
is already receiving strong
political support. In other words,
given a relaxation of, inflationary
deferred demand will not auto¬ pressures in the economy as a
whole, and in the capital markets
matically come to market if rates
in particular, I think we "can ex¬
should soften, but a substantial
part of it undoubtedly will become pect Governments policy to be di¬
rected strongly toward stimulating
effective. The result should, there¬
program
to a
lesser extent public utilities and
industrial financing. Some of this
Government
fore, be
and
stabilizing influence
a
interest rates.
Still
the
on
influence
of
area
capital market is that of
Government
policy. Indeed, I sup¬
pose that many observers would
place Government policy foremost,
and I do not mean to assign it a
minor role. It seems to me, how¬
ever,
resurgence
that in
the
months
recent
basic forces of demand and supply
in the capital market,
and in the
whole, have restric¬
economy as a
the
Conclusions
Thomas
conclusions
follow
to
seem
forces
market,
capital
the
influencing
Graham
business
the
outlook and at the various
what
three-year term on the Louisville
Board of Sinking Fund Commis¬
sioners. He has been President of
commission for the
regarding the capital market out¬
the
look?
past nine
years.
ted the freedom of action of Gov¬
policymakers and have
the only sensible course
ernment
dictated
of action.
I
would
First,
the
what
outlook
we
can
Federal
for
Reserve
authorities
slightest indication of
a
at
The
of credit
On
the
that
restraint to
one
policy
of
ease.
contrary, I rather expect
they will await clear and
signs of a downturn be¬
definite
fore
easing
credit.
Moreover,
I
believe that the change from re¬
straint
comes,
to
it
if
ease,
will
not
sharp
as
1953.
There is
was
be
when it
sudden and
and
in the Spring of
evidence that
cess
of the
capital
for
demand
be
to
in
Street, New York City to engage
ex¬
in
supply of savings.
a
are
securities
business.
Officers
Seymour W. Nesse, President;
the economy, the Federal Reserve
business
downturn to change from a
Harding & Co. Formed
Hearding & Co., Inc. has been
formed with offices at 80 Wall
the
Reserve
prematurely
re¬
will
I do not believe that the
Federal
rushed
the
(2) In view of this situation, as
well
a
persisting
inflationary
pressures
generally
throughout
Policy?
be
for
pect the following:
funds will continue
about
say
that
say
mainder of this year we may ex¬
(1)
Non-Hasty Fed Policy
the
be expected to continue its
policy of credit restraint.
H. P. Nesse, Secretary-Treasurer;
and M. Popper,
(3) As a consequence, I do not
expect any decline in interest
rates during the remainder of this
year.
On the contrary, I believe
rates
will
remain
present
firm
levels.
seems
certain
main
firm
that
in
at
about
Although
rates
the
will
next
it
re¬
few
months, there does not appear to
be any basis for anticipating a
Vice-President.
knowledge
eVerrt;
the
see
itself-would
Likewise,
t
you
why, 4$%verybody -knows'
it, inflation is not likely to benefit
anybody very much. *
- •'
r
..
"But we haVe%ily assumed the
situatibnSThe truth is that
above
she. .made.; her;way '.to the
> r4 4
one
will
be
knows
more
Mass.
—
Amos
has opened an
office at 1737 Cambridge Street.
&
Co., Inc.
it
cotsfng."
was
some
With
deemability in gold and a printing
west
to
business.
engage
in
a
Treasury,
American
pteople,
in
the
work to
conserve
deposit as
possible.
,
dollars divorced from re-
anchored
domestic
much of her savings
United
the forgotten
holding voting
Her
earning
ability,
plus
the
$5,000, was all in the world she
had to provide for herself and her
three little girls. Imagine her
predicament, if, through inflation,
this body-and-soul money should
'.these credulous, for- lose- its purchasing power. The
gotten people?.jt know. Sometimes standard of living of this little
dependent on the
securities we are moved * to tears by the family was
N. Mex. —
Richard A. Waddell has opened
offices at 105 Fourth Street, South¬
ALBUQUERQUE,
.deposit of $5,000. Some little of
the principal had been withdrawn.
Then at my^request she told me
whence the $5,000 had come, This
was ber story:
Her husband was killed while in
as
States
Opens
stopped her and said: Lady, may
Jp
your savings passbook, , She knew I was an officer
of the bank and she acceded sto
my,request. Tnthrt.book was a
7
-
vital issuer-
press
R. A. Waddell
T
With the Federal Treasury now
Forgotten People
CAMBRIDGE,
,
my desk, ; I
$5,COO, payable to his wife, the
mother of his three little girls,
in
a
mess
and the
government This fatherless family lived in a
committed to arm a lot of the rented home. One of the girls was
world
democraeies
and
provide six—she was in school. The others
assistance for; rehabilitation on a were younger. The woman had
world-wide scale, the dollar ques-- drawn some of the principal, as
tion
surges to the front as the
well as the interest, and was doing
ized
most
Treat
front
fat sure that there
Inflation, or if so,
how much more. Not only that, i the line of his duty as a switchbut few peopleTwbuld know what man. He had purchased a life in¬
to do about -it/'Even if they-realsurance policy in the amount of
no
Amos Treat Office
may
the
very
hasten
can
at
.
able and
present buying power by J970,:
its
work.
looking
v
woul^ lose one-half of
the dollar
housing, even on easy credit terms,
is still there for the stimulation to
After
7
"In the above examples, you can
.
another
;
persons,
the
with
readily* see wh^pif everyone sud- ' V0^ ^^ ^
denly should learn for certain that - As
she passed
of residential con¬
struction.
A big question is
whether the basic demand for
a
on
desk in a savings bank. It was interest payday. A woman presented
knowledge, necessary, her passbook at the savings winwould 'flee frofh the dollar', by7dow. She was dressed in gingham,
converting to currencies of.coun- with three little, bashful girls at
tries whose money promised toJ be" her side. After she presented her
more
stable.
'V.T.7E '
4 V : book for; the purpose of having
"(12) Foreigners holding dollar the six months' interest credited
balances would draw them down. To her account, with her little girls
possible.
"(11) Some
control, must be alerted;
Who
.
are
lamentations
"oF*~politicians
con-
preservation
of
the
purchasing
Volume
186
Number 5682
.
Chronicle
The Commercial and Financial
.
.
(1707)
i
of this
tjower
Education,
culture, - self-reli¬
ance,
interwoven
were
collars.
All
in
binders
^onship
the
that there is
say
between
phasing
is destroyed,
power
So
modern
dollar
*are human rights?
*jBere is another
the
against
.
inflation,
which
the fruits of his earn¬
\
ings.
also
so
defend
must
man
,
,
,
,
example:
Protecting Productive Money
*
The stored-up monetary value,
into the bank. He
the returns from
Was 68 years old; a bachelor. He representing
In
had $10,000- saved. His accumula¬ labor, becomes his servant.
•
j-j A
man
tion
came
behalf
the result of many years
was
of
this
servant
has
he
right .to; ask that it be protected,
and security
in suSbtantial purchasing power;
living he sharpened saws, repaired '
second, as to its right to be in¬
locks, and made keys. I talked
vested; and third, as to its rea¬
/With him. He told rne his story:
sonable-compensation for its serv¬
.2
At 65 his arm became afflicted
ices^
-with some kind of paralysis. I re¬
He realizes that under our mod¬
member very
well he had dif¬
ern
economy,, money labors just
ficulty getting his passbook out of
as industriously and productively
his inside pocket; it was fastened /
as
does he, himself.
In this he
} in' withsafety, pip. He was a finds incentive for progress and
■thrifty man/ He prized his selfmore abundant living for him and
reliance. Having
self-reliance, he his
family.
-had
accumulated
this
money
so
Would not become
was
gNobody
knew
a
that
he
had
money.
anyone
othat there
Jiound
up
by this
hreliant
tand
.
with
argue
me
were no human rights
in this body-and-soul
accumulated over the
-
'money,
years
any
-
Would
to
independent,
American?
dollars
to, be
humanitarian
are
In
times, labor was
exclusively of the hands.
Negotiations were between one
and
man
another, with
Rewards
when
was
method
barter
in
that
the
As
"Representative
this
labor,"
time
did
and
-progress occur in the world.
began
to
Men
acquire
property as a
1result of their earnings.
Property
land
cattle
or
sheep at trading posts,
of
-
salable
articles.
herds
£and
sented
of
the
result
rthem he drew
tained
a
of
both
of
As
the
world's
worked
men
with
this
From
,
for
them,
their
or
income
an
meat
rvobtain
which
formed
'
!
from
with
his
found
he,
his
these
himself,
or
from
from
own
servants
him in his work and
those
of
"representative
this
a
public
is
Reserve
Board, and also
W; Randolph
Burgess,
former
stand against in¬
the
to
present
Ad¬
the recent past.
To: millions ; of
was
a
American
year/ and this should have been
accomplished each year during
thh unprecedented prosperity of
day,
medium of exchange,
not
less than five billion dollars every
.
tually, money entered into the
picture—a convenient method of
providing
but
The Federal debt,
however, should be decreased not
deemed worthy of its hire. Even¬
^
warning
elect, his
heard,
been
flation;1 and
aiding
a
storehouse
of value, and
of the de¬
the ybudget.
adding to his
labor"
years
voters.
ministration for finally balancing
brain:
earlier
unsuspecting
their forthright
and
.
pockets
Undersecretary of the Treasury,
for the vision they have shown in
to
per¬
resources.
For
to
management
his
to¬
1933, the construction of
United
the
Federal
the
hands
found
be
greatly indebted to William McChesney Martin, Chairman of the
By
enabled
.
own
talent
proceeding
He
was
leaders
and
has
And
provide milk
both
returns
i,labor
>*'
man
Examples
Virginia's Harry Byrd is
unquestionably the "Paul Revere"
of : these latter days.
for
process
which
on
heeded..
food, and wool and
thides for clothing—every product
beingv inherently and progres¬
.uthis
and
long successfully ad¬
so
spend;,i elect,
savings
sively "representative labor."
of
political parties.
voice
for
and the herds would
»and
much
structive policy of tax, tax, spend,
them, as
against the day when they, themnselves, could no longer toil.
The
lard would bring forth harvests
-
reverse
can
restore
Through all the
nature, it was for the purpose,
first, of storing up wealth, and
then either having their property
earn
and
the
-of
of
produce
believe it
such
ning in
and
interest
true
own
and
continue to hearken to the spuri¬
promises of wasteful and def¬
icit-building
politicians
when
casting your ballots, you, like the
people of so many other lands,
may lose even the right to vote as
you wish—and be reduced to vot¬
ous
ing
told to vote.
as jmu are
Steps
learned
today
we
the
Dictatorship
and
then
welfare
have
all
lesson, learned it in
out
dictatorship,
state.
"The
as
state
welfare
a
Whenver
dependent
slave to it.
starts
It
prom¬
want—
worry,
as
you
wish,
the
State
you
Ask the
wholly
are
anything,
on
said:
from
freedom
•except
itself.
state.
freedoms
many
has
always
from
the
then
Someone
slave
ises freedom
dictators.
you are a
Germans, the
the glib re¬
promise freedom
from
work
(hours in Germany
went up to 60 a week), and the
strange fact they hope you'll for¬
get is this: if you and I and
formers
Even
don't
work
everyone
freedom
and
effi¬
work
automatically
we
from
without loss of
have
worry
and want,
our personal free¬
dom."
Now,
to
turn
to
Daniel
Web¬
ster's immortal words:
"Other
borne
if
be
may
effects
overcome;
should sweep
war
from
commerce
the
tors—millions
insurance
--
have
oF
savings
bonds—old
earned
will
of
life
policies—millions
who
government
folks^you, who have
pensionsarihrough
self-
replenish
may
a
a
is
it;
civilization
emerged
Who shall
again the well-proportioned
columns of constitutional liberty?
Who
shall
frame
together the
skillful architecture which
unites
national
sovereignty with state
rights,
individual security
and
public prosperity?
No, if these
columns fall they will be raised
not again.
Like the Colosseum
Parthenon,
destined
to
they will be
mournful
a
mel¬
and
ancholy mortality. Bitterer tears,
however, will flow over them
than
were
shed
ever
the
over
or
Grecian
they will be the monu¬
of a more glorious edifice
for
ments
than
Greece
edifice
Rome
or
of
ever
saw—•
constitutional
Lib¬
erty."
Inflation
American
tems of
have
of
free people.
a
ing
I repeat, it
The
gold
standard
to guard against the poison
totalitarianism
entering
the
men,
blood stream of sound
money.
solvent democratic nation
went totalitarian.
After all,
only a receiver for
gone bankrupt.
Look
heritage,
for
seas
who
now
moment.
a
na¬
across
The
men
to control'the des¬
seem
into
down
the
at
power
of
Their
solvent
advent
a
"of
DENVER,
What
a
constitutional
inflation
LeDean With Boren
(Special to The Financial Chrontcle)
.
BEVERLY
E.
LeDean
with
is
Boren
levards
balance the budget and to reduce
public debt.
"Humanity with all its fears
With all its hopes
of future
years,
on
thy
fate."
resentatives
Mr.
rests
the
elected rep¬
this
responsi¬
Lord
LeDean
was
pre¬
Rayl With A. C. Allyn
(Special to The Financial Chronicle)
CHICAGO,
Role
C.
B.
Allyn & Co. Incorporated,
122 South La Salle Street. He
formerly for many years
Halsey, Stuart & Co. Inc.
government
that it handles its finances
,
111.—Richard
so
that
was
with
Joins N. Y. Hanseatic
the
people can have returned to
them money which they
trustfully
should
see
to
CHICAGO, 111; — John L.
Schlipper has become associated
with
it, not only that the
merely
dollars,
also
in
dollars
that
shall
New
poration,
money shall be returned
in numerically equivalent
but
(Special to The Financial Chronicle)
•j
put into its keeping in bond pur¬
chases, and our government
He
was
Sachs
be
York
Hanseatic
Cor¬
120 South La Salle St.
formerly with Goldman,
&
Co.
of
substantially the same pur¬
chasing power. This would be the
most ordinary, the most
common,
a
Reynolds Adds
the lowest kind of
sense,
to Staff
(Special to The Financial Chronicle)
CHICAGO,
honesty. Our representa¬
tive, republican form of govern¬
money
is
111.—John
connected
now
&
with
B. Nutt
Reynolds
Co., 39 South La Salle Street.
Cleveland Trust Looks at Plus and Minus Side
\
Judging from the few data available
on September, the Cleve¬
possible seasonal production
little below par. While not concerned
land Trust Company discerns
,
-
increase which
may
be
a
increase to prevent
The important role of the
sumer
the
a
about present large backlog of unfilled orders, the Bank
poses
the question whether consumer
spending will continue to
cutback in production.
con¬
regarding the direction of
is
economy
stressed
in
the
about the present volume of these
backlogs, which is still large. The
question
is
for
the
whether
they
October 16 Cleveland Trust Com¬
continue to decline to
pany's Business Bulletin. The well
where
known Bank points
might
back.
out, "Septem¬
ber normally brings a seasonal in¬
in
crease
total
industrial produc¬
tion.
This year the rise may have
been
a
little
below
par,
judging
production
military spending
fense
were
Department.
at the
billion
this
In
writing.
at 82.2%
were
Steel
of capacity for the
week ended Sept. 28.
higher
than
operations
This
was no
month
earlier,
though somewhat above the rate
a
in the first part of August.
allowance for seasonal
After
influences,
point
a
would
be
cut
"An additional element of doubt
is
from the few figures available at
outlays
rate
of
$39.8
half
first
July-August,
by the De¬
Such
annual
the
in
of
1957.
the
first two
months of the fiscal year 1958, the
rate advanced to $40.4 billion. The
Federal budget estimate for 1958
is $38 billion. If the latter is to be
realized, which is open to ques¬
tion, the rate of spending would
electric power output and freight
have
carloadings during the first three
weeks cf September were running
behind August.
Scattered reduc¬
tions were reported elsewhere, in¬
cluding copper mining and some
cent level."
been
In contrast, soft coal produc¬
more than season¬
increased
ally through Sept. 28.
one
important
quarter prospects,
prop to industrial
potential minus factor is the
decline in manufacture/?'
steady
ber.
orders since last Decem¬
There
is
no
great
re¬
On the Plus Side
"On the plus
income
side, total consumer
and
expenditures have
climbing. The Department
of Commerce reports
income
in
July
and
that personal
August av¬
6% higher in amount,
and about 2% more in purchasing
activity has lost some of its push
namely,
business
outlays for
new plant and equipment. Follow¬
ing a lengthy rise, such spending
is expected to turn down slightly
(after seasonal adjustment). An¬
unfilled
reduced from the
to be
eraged
A Prop That Is Falling
other
Thank
affiliated
&
Ray£ has become associated with
•—
our
Cal.—Delos
become
viously with Daniel Reeves & Co.
should, upon
all considerations, not the least of
which is its own
perpetuation, see
in
solemn trust is ours, to
In the hands of
HILLS,
has
Co., Securitites
Brokers, 9640 Santa Monica Bou¬
A:
"As to fourth
hanging breathless
—
J.
Co., 72 Wall
Street, New York City, members
of the New York Stock Exchange,
on'Nov. 1st will admit Harry A.
Kuffler to partnership.
possible
parent of national socialism.
Government's
Colo.
Leo
and
David Greene to Admit
breaks
made
was
Corey-Nelson
William C.
McCarty have
joined the staff of Corey-Nelson
Investment Co., 1575 Sherman.
Evans
government.
Liberty is in jeopardy
creeping
priceless
of free
,
(Special to The Financial Chronicle)
.
through economic exhaustion, the
Our
government
a
-
Two With
dic¬
a
tiny of all Europe were not selfelected. They were invited. They
came
but what
posseses,
lost?—Our
have
men!
ever
a
tator is
the
still
we
others
History records, I believe, that
tion
fa¬
David J. Greene &
is the automatic watchman on the
tower of the government of free
no
blessed and
peoples. Are we will¬
maintain and perpetuate
to
what
politically-managed medium
exchange.
of
the most
are
vored of all
from
is
a
blessing from an all-wise
Providence to prevent the
tragedy
that follows a
debased,
the saddle.
bility.
exchange,
not
its barter period
Ages. It is the only
against ruthless politi¬
cians debasing and
corrupting the
world exchanges and
money sys¬
ices.
Jeopardizes Liberty
edifice
The
Is
could
We
insurance
tion
when
not
na¬
as it now stands, is the last
remaining citadel of human rights.
defense work for the Armed Serv¬
of Roman
monuments
art,
There
will
base for
a
ment,
of the Dark
if it
fields,
shall reconstruct the fabric of de¬
molished government?
the
Creator.
There
as
tional and international
cultivation they
new
green again and ripen
harvest; it were but a
trifle; even if the walls of yonder
capital were to crumble; if its
lofty pillars should fall and its
gorgeous decorations be all cov¬
ered by the dust of the valley; all
these may be rebuilt;
but who
and
Without it
the
urged this
gift to the world
all-wise
substitute.
no
grow
rear
Gold is
an
be.
future
deposi¬
owners
p u T c h a sed
industry
the
re-establish
ocean,
desolate and lay waste our
the
it, fellow Ameri¬
to
before.
from
and in
misfortunes
their
or
disastrous
our
to
Use
Vote
I have
and
blood, sweat and tears, that the
steps to despotism are, first, na¬
tional
bankruptcy,
then
chaos,
hs
ballot box.
cans.
corrupted,
Toward
Surely,
years,
and, late
the 1 pipeline
from
the
States Treasury into the
struggled
yielding forces
slowly
survives
foremost, never fal¬
tering for a moment, looms Harry
F. Byrd of Virginia. He has con¬
sistently opposed from its begin¬
repre¬
goods.
great
a
Of course they can, and in
First
management acquired an unusual
measure
has
than 20
more
visioned
we
day?
competence, sus¬
and
by careful
himself,
your
ciently,
we
Can
or
labor.
life.
though scarred and
the malicious mis¬
Provides
flocks
Abraham
save
of
vanced.
cargo
or a
The
late, but not
Remember, if you neg¬
still under
Investment of the margin
in
lect
price¬
your
is
It
another generation may renew it;
if it exhaust our treasury, future
road
;
l
made
is, I
Fathers
took the form of
savings, repre¬
senting the margin of value bet tween
earnings and living expenses.
freedom.
partisanship, spurning Santa Claus
as a false god, choose honest,
in¬
telligent, patriotic men to lead us
forward on the road the Founding
not
great
any
what is left of your hard-
save
less
solvency,
have lost, if they will,
acting; in their own, real, selfish
interest, forgetting parties and
\,j-
what may be termed
came
"representative
-until
and
way
.**•
still
course
what
Labor"
Then
class
it
as
acted.
1 was
America,
by
treatment of
through which exchanges
goods were trans¬
of services and
/Money
our
America
battered
the
was
in
Only
transaction
This
of
middle class survived the ravages
of the demon inflation.
But here
returns
simple and tangible. Every
was
complete in itself.
were
savior
own
left
deficit" addicts.
inter¬
no
and
is
class
prove
It, and "it alone, can now rescue
this country from the clutches of
primitive
almost
mediary.
its
what
blood-brothers.
«
to restore
men
earned susbtance and
into
America's
great
middle
having voting control, must
selfrights
Human
I
power
public charge.
unassuming - fellow.
an
land,
Complete
loss
of purchasing Fascists, the French of the 'peo¬
in its money, which in the ples' Front.
final analysis is uncontrolled in¬
/ "Sure you can have freedom
flation, is the greatest tragedy from
worry
and want — at the
that can happen to any civil siate.
price of freedom itself.
Since
We say it cannot happen here.
time
began,
'reformers'
have
Hatfier let us resolve to force that
promised easy plenty, but these
resolution into reality.
reformers, once they have you
depending on them, always turn
; Middle
Class Survival
-jthat in the days when his earning
j power
would be lost to him, he
>iHe
the
you,
this
gold standard.
Choose
a
vof :saving a. little of his earnings.
,/He owned a little home. For a •, first;-as to'its safety
in
say:
hopeless.
in his compara¬
tive isolation, fought to protect
his property, against usurpation.
man,
restraint—to
majority
to
that when pur-, represents
assume
and
Primitive
rela-
rights
~£{nd human rights. Would anyone
/dare take issue with me or you
ihat human rights and purchasing
^power in this particular case are
Yrpt one and the same? Is it not
logical to
voting
monetary form.
Likewise, . money
became
the
token of
"representative labor,"
the agency whereby return in the
form of interest
was
produced.
spell¬
no
money
denial
individual
the
of
assumed purely a
;
.
have heard
us.
Compensation
value.
labor
for' the
these
-
of
of
measure
money.
hospitalization,
'27
concern
power,
than
a year
Sales
earlier.
of all retail stores in the first
months of
the
same
centage
1956
gain
of
that
1957
the
were
6.2%
period.
eight
above
This per¬
roughly twice
was
retail
price
index.
people do in the way of
buying will of course have an im¬
portant bearing on fourth quarter
What
business, since consumer
all
expenditures
services."
spending
two-thirds of
for goods and
accounts for nearly
The Commercial and Financial Chronicle
23
1957
Thursday, October 17,
...
(1708)
sales
Automobile
Continued,
from page 3
weil
capital ex¬
that business
penditures have leveled off, apd
it is my opinion that they will
show some decline in that period
ahead.
tive
Enlargement
has
capacity
of produc¬
been taking
place at the rate of some 7%. or
8% a year and that is a rate of
expansion too high to be sus¬
tained indefinitely. A number of
industries and
a
good many com¬
have got to the point
where they have excess capacity
in
relation to present markets.
Also
profits are running below
expectations for many concerns
and this is a potent influence in
panies
of
bringing about reexamination
capital programs. And so is re¬
duced
liquidity in many cases.
Tight money has also been a re¬
factor
strictive
addi¬
capital
on
tions, and its delayed effects are
probably not yet fully appaifdnt.
Cut-backs decided upon months
have
dropped, as -you will see from
Table I, from the rate of $181/2 bil¬
lion in the third quarter of 1955
to a rate of $15V2 billion in the
for
Outlook
'
lies.
the
easy-payment terms that were
employed in marketing cars in
that year; The fact that a lot of
people in 1958 will finish paying
the debt which they incurred in
buying 1955 cars is one of the
reasons
why the industry hopes
a
800,000
of
sell
to
this.
hopes.
be
a
probably nojt
industry
the
Alter all, it must be
.
that
membered
potential demand of 1,000,000 to 1,100,000 a year, or some¬
what higher than tne 1957 rate of
starts.
■'
v'..'
On the financial side, I doubt
whether there is going to be any
further reduction, in the amount
total
that
extent
the
to
than
fav¬
year
this will
think
I
next
cars
more
orable influence but
a
gives
war,
instalment basis.
the
on
the
creases
tinue
This in¬
of
<t
of
terms
of housing
and also, be¬
feet
square
who
man
a
the
gets
of
car
say
three years may not be in as
good
debt-free
position
a
as
when
times
he
debt
of
than
to
he
car
new
at
re¬
his
mortgage,y money v becoming
to
finance
residential
,
time
equipment will go up next year
they didn't this year.
I have now covered all the fac¬
constructed,
space
of
cause
trend toward the build¬
a
decline
ing of larger houses, the
been
has
in
smaller
of
terms
feet than in terms of num¬
ber of housing units built.
Many people ascribe the sag in
residential construction entirely
square
at
for
a
previous
had
his
end
the
at
end
trade
was
to
tighter
eral
and less lib¬
These have
money
payment terms.
had
an
are
not
story.
effect, of course,, but they
by any means the whole
Due primarily to the low
birth-rate in the
1930's, marriage
showing no tendency
expand, but the con¬
struction of public buildings has
been increasing and I would ex¬
pect this trend to continue in
1958.
Such
increase,
however,
will not loom large in relation to
total of the
tendency
of
free
car
not
more
Other durable goods
of
a
furniture
the
and
of household appli¬
in Table I,
spending for these purposes has
been approximately level in total
amount
since the
beginning of
1956. There have, however, been
shown
As
diverse trends in the demands for
wide range
different types of household equip¬
facilities.
governmental
bought by
range
ances.
to
and includes
other
a
consist mainly of
equipment. Such equip¬
includes
ment
key factors.
nonmilitary con¬
struction by governmental agen¬
cies.
This consists primarily of
roads, schools, water systems and
sewers
this
consumers
household
entire
now come
construction,
be thwarted for
can
time by unfavorable general eco¬
nomic conditions.
Nonmilitary Construction
I
are
Spending for such purposes has
expanding steadily, even in
ment,
been
were
1953-54
of household
and
net family formation
rates
substantially lower than they
a few years ago.
Some esti¬
mates place the present rate of
net
family
about
formation
at
This
800,000 a year.
with 1,329,000
only
com¬
residential
units started in 1955, 1,118,000 in
1956, and a probable total of a
pares
little
under
in
1,000,000
1957.
Even construction at the 1957 rate
is
dependent
extent
to
considerable
a
replacement
on
reduced
or
existing housing.
The
by which
replacement
takes place is complex and in¬
direct,
involving
frequently
a
of
usage
the
economy
think
ever
of shifts
pancy
people
as
ferent
in
income
property
occu¬
of various
brackets
dif¬
succes¬
is
weakening.
doubt
no
One
in
elements
the
I
of
construction
1
the
turn
favorable
up
of
If resi¬
list
my
except
business inventories.
in
How
the
has
effect
now
sales
on
equipment.
is
houses
relatively
of
ment
will be started.
list
are
definitely
there
was
factors
as
an
a
to
billion
$129.0
lion.
Of this increase,
of
a
and th6 -relative
tending to
push them iip "or down, I am of
the
opinion that the minuses are
weightier than the pluses; - - //
When the economic statistics for
this
haps ;a littie, longcr;;I further;believe'/that' 1 the downtrend > Will
continue at least until next spring"
and
in
the
in
first
increase
actually developed.
the
minor seg¬
a
total
pri¬
important.
more
market
for
enormous
amount
equipment.
1957-
U.
national
S.
Producers'
security
durable
purchases
equipment
1947
3rd
residential
private
Nonmilitary
Consumer
i
Change
____
in
,4th
3 rd
45.5
44.2
42.7
41.6
41.1
40.7
41.3
41.3
41.8
40.2
42.1
1949
so
far
severe
a
Table
indicative
not
downturn.
traction that
we
of business con¬
have had in this
The longest of these
periods was 1929-1933, which ran
.a total of 45 months.
Leaving this
of abnormal period out of considera¬
its tion, we find that the others avercentury.
Billions
Year
of Dollars
Qtr.
+
2.7
2nd
3.0
3rd
4"
3.7
4.3
4th
+
7.4
1st
1st
1952
—1.9
+
4.4
+
2.0
+
4.9
2nd
+
3.1
+
1.5
3rd
+
1.1
1953
—6.3
4th
—5.2
1st
—2.5
2nd
1954
—3.0
-
44.0
43.0
41.4
39.7
38.8
37.5
34.4
32.8
32.5
33.3
—1.5
'
1st
4*
7.3
+
—4.1
3rd
2.5
+
4.8
+
4th
1955
1st
-
•
-
0.5
+
2.7
+ 14.7
2nd
+
4.6
1st
+ 11.8
3rd
+
3.3
2nd
+ 15.5
4th
+
6.3
+
9.9
1st
+
5.2
4th
+'
4.2
2nd
+
4.6
'
1956
15.1
15.1
15.5
15.7
16.4
16.7
16.8
16.3
15.1
14.0
12.9
4.0
4.3
4.1
3.9
3.9
3.9
3.9
3.9
3.8
3.7
3.7
3.7
12.5
11.8
11.6
11.9
11.8
11.1
10.7
11.1
11.0
10.8
10.6
1957
+
3.3
4th
33.1
14.4
(
4th
—3.1
"
3rd
3rd
45.2
13.9
duration
the
records
III
of all the periods
1.0
2nd
43.3
+
5.1
+
1.7
—0.8
1st
10.5
35.9
34.8
33.0
33.3
34.6
35.4
37.2
35.3
34.7
30.4
29.4
157.5
154.2
149.5
147.6
146.8
146.3
147.3
142.8
140.4
132.7
133.1
132.7
—0.8
+ 5.1
+ 3.3
+ 4.6
+ 5.2
+ 6.3
+ 3.3
+ 4.6+2.7
+ 0.5
—4.1
2nd
29.2
157.3
+ 1.7
inventories?
are
of
1st
2nd
35.0
-
ments
3rd
3rd
—1.5
III
Duration of Periods of Business
Contraction
®
Duration
Duration
Total
••Inch
159.0
automobiles
household
Some
gas
figures
drilling.
and
above
are
iNonfarm
156.7
159.3
152.8
152.2
15.5
16.3
15.3
13.7
14.9
parts
equipment
14.9
14.9
14.7
only
but
^Including oil
including additions
;
- °
public
152.0
13.8
15.5
14.9
14.5
1(47.4
143.1
133.2
129.0
131.2
18.5
16.5
15.0
150.6
152.6
16.9
16.8
13.4
12.5
12.4
14.5
14.1
13.9
12.$
12.9
12.8
t"ble 2 below reflect changes
and
sewer
and
in physical quantities in terms of average prices during the
building plus
water and
Digitizedfarmvconstruction. >f Mainly highway*, ^schools,
for FRASER
.
f
*
systems.
§This line and
respective; .quarters,
as
such.
father, than
book -values
changes' in
f
'
•Jo*,*
e
*
i
*
*
*
,
' '3
•
•
•
'J.r '
in Months
Aug 1904
23
Oct
1908
13
Jun
1929
1910
Jan
1912
24
May 1937
Jan
1913
Dec
Nov
1926
Jun
Jan
1902
,
Apr
Aug 1918
18
July 1921
1920
...
•
i.
.
July 1924
Nov
8
1919
-
Jan
Feb
23
;.
14
1945
■'
45
.
13
1938
•
Oct
Oct
1948
July 1953/.
13
1927
Mar 1933
Jun
J
1914
in Months
Culmination
Beginning
May 1907
May 1923
■
Culmination
Beginning
Sep
preliminary.
nongovernmental
reac¬
However, develop¬
+'
4th
4 th
people
such
what
advance
in
3rd
1951
-19541st
2nd
4.1
,
business
1st
12.7
construction!
purchases of durable goods®
Subtotal
2nc\
45.3
construction!
construction!!
public
3rd
tell
+
,
2nd
equipment
-1955-
4th
and
businessmen
tions will be.
—3.7
1st
Phases of the Economy
lst
psychological reac¬
the
on
of
generally, and it is pretty hard to
+
4t.h
1948!
purchases
plus business construction®
Private
Other
or
-1956-
2nd
46.3
Qtrs.
pend
tions
of Dollars
Qtr.
3rd
Recent Trends in Certain Key Segments
as
were a year ago.
Billions
Year
2nd
rates in billions of dollars
the, same
about
are
I still have
no
fixed opinion as to whether
the downturn (if I am right that
one
has started) will be mild or
relatively severe.
This can de¬
they
II
1950
Seasonally adjusted annual
these
Changes in Business Inventories
has been made and sold since the
household
run
1929-
to
regard
4th
An
marily automobiles and household
of
has
reduction
in
views
matters
involuntary, reflect¬
in
previous
ordering in relation to the sales
I don't think that the process
to
comparable
1933.
ably mostly
that
be
not
did
liquidation
I ex¬
over-optimism
al¬
I emphasized, however,
not expect a period of
ignored.
that I
should
1937-1938
of
tude
quarter and a
in the second
ing
1957
%953-1954 or
1937-1938,
though I thought that the possi¬
bility of a recession of the magni¬
second
inventory
severe "like"
more
I think that the increase
quarter was prob¬
quarter.
no
opinion as\ to/whether any
downturn/that ^started-/in
change.
the
moderate
IsaTct that I: had
would-' be' mi Id >like
The Depart¬
ment of Commerce's figures in¬
dicate a small decline lin inven¬
tories
fall.,
quitc ppssibly:tintil next
A-year ago
;
fixed
guessed that it might take place
the second quarter.
There is no doubt that there
a
will indicate, I think,
that/a' genef £I _dqwnturnin. busi¬
has no^ heen.in. progress for
ait "least; a; month or "'two. and per¬
ness
in
has been
period are: analyzed in -retros^
spe'et they"
pressed the opinion that a change
from
inventory accumulation to
inventory reduction was likely to
take place some time in 1957, and
I
the relative
elements of
strength of■ the forces
the tend¬
ago,
year
on
economy /
My
talk
"/'Vr' fH' ■'■'I Vs.
various
reflecting
of these
our
of inventories to swing back
my
j
year.
After
size
and forth.
In
of
expansion, such as would be
represented by an increase next
year on the order, of 5% over this
some
$8.7 billion,
indicates
clearly
Also, the in¬
residential
I believe, in the diretcion
are,
nearly half, was due : to the
change from inventory reduction
at the rate of $4.1 billion in the
table
to ex¬
continue
construction and automobile sales
or
ency
will
tendencies, of
herent
bil¬
$147.4
it
vigorously.
pand
whole of $18.4 billion,
from
hand,
construction
those
for
in trend.
On
is a near-
adverse
other
certainty that nonmilitary public
quarters,
increase in the key
columns
the
T
;
spend¬
defense
classed
have
the
However,
equipment.
Replace¬
ment demand for equipment to be
used in existing houses is much
consumer
goods,
*
ing, business capital expenditures
and business inventories as being
•-
such changes
can be may be illustrated by com¬
paring the figures in Table II for
the third quarter of 1954 and the
second quarter of 1955. As shown
by the totals at the bottom of
household
on
'S
Positive
I
important
effect may not be very great
because
the
furnishing of new
Consumer Durable Goods
Next
to
Outweighs
Finds Negative
*
;
Reductions
Business Inventory
the
important volume
purchases of durable
try
to
against each other.
the one
which, from a short-term stand¬
point, is frequently the most im¬
portant of all, and that is changes
is tending '/-■
and
little, this will have
a
household
sales
number
construction
a
one
an
a
to
program,
where
t i
n
in
being built.
stopped declining
thing, the Federal
which has been
largely in the blue-print stage this
year, should be at the point next
year
houses
on
equipment has been
reduction
de
this uptrend will con¬
1958; regardless of what
business conditions may
For
road
adverse influence
new
what¬
that
general
be.
other
were
there
tinue in
process
chain
when
arrived
now
'
in
tors
two
residential
of
is
whatever to
the
has
weigh the pluses and the minuses
when
be due
available
latter
and
consid¬
I think the inherent tendency in erably larger minus figures will
that
household equipment is probably have been registered than
toward further sidewise move¬ for the iirst quarter of 1957. j
This completes the review of
ment.
I can find no compelling
the key factors on the list.
reason to expect that sales of such
The
it is finished
before
that
*
.
in terms of dollars spent than in
at
probably into next year,
and
replacement aemand.
years.
And this, won't third quarter of 1954 to inventory
entirely to the greater age accumulation at the rate of $5.6
construction and I think there is of his old car but also in part to billion in the second quarter of
a
chance that it will increase a the substantially higher prices of 1955.
the historical data on capital ex¬
little. V:;y
V' ;■
//'. new cars.,;, .■*.'
;; vvnen inventories in the pipe¬
penditures.
•
.v?"
1 There will again be numerous
line between the producers and
It is ray opinion that a declin¬ ■/- Reduced family formation and
model changes in cars this; fall, consumers of goods are being re¬
ing rate of investnient by indus¬ tight money have, I believe, run
particularly in the General Mo¬ duced, this means that part of the
try will be a drag on the econ¬ their courses as unfavorable in¬
tors line; and an entirely new car,
fluences on residential construc¬
ultimate demand for goods is be¬
omy
during most if not all of
the Edsel,.; has been introduced. ing satisfied out of the pipeline
1958.
'
*///+/■/;';- tion, and consequently I think
that
the
inherent
tendency of I don't know-how- much these and is not getting through to the
-Housing Looking Up
residential
construction is
now
developments will stimulate sales producers; When the reverse is
true and inventories are being in¬
Next on my list is residential toward a little .expansion.This but I doubt whether they will be
construction.
This weakened a tendenc y can of - course- be comparable in effect to the model creased,-the pipeline is transmit¬
thwarted, at least for a time, by changes embodied in 1955 cars. ~ ting a greater demand to produc¬
little in 1953 but easy money and
that
it
is
receivings from
easy-payment terms soon revived adverse general economic condi-? ;; Notwithstanding , the restraints ers
tionsv
\> ry
it and caused it to expand rapidly
-.i
1
■■/'£ ly+i.r on; trade-ins. that I have men¬ consumers.- Switches from one of
>;• A lesser item oil my list of key
tioned,? F believe that the inherent these conditions to the other have
in 1954 and the first half of 1955.
factors
is
that
designated
as tendency of automobile sales is a tremendous impact on business.
lit^ the fourth quarter of 1955 it
"other private construction." This toward some expansion, such as
As you will see from Table IT,
began to weaken and this weak¬
(a)
non¬ would be represented by an in¬ the period of inventory accumu¬
ening continued through the sec¬ consists primarily of
public
buildings crease of around 5% in the num¬ lation which started toward the
ond quarter of 1957.
Because of governmental
ber of cars sold in 1958 as com¬
end of 1954 was the fourth that
a ; considerable
rise in building such as churches and hospitals
This
costs, this decline has been less and (b) farm construction. The pared with 1957. As in the case had occurred since 1947.
because of ctHe difficulty of
arranging finances are in many
cases
still not fully reflected in
ago
on
present time and will con¬
least through this year
at the
postponability of much
it is going
believe
I
course.
and much of it acquired in
is still being paid for
,
recent years
'*
pulled forward into 1955 by
vigorous selling tactics and
was
;/■'
rate-
only
,
that
should be
mation
1957.
quarter of
good deal of 1956 demand but
also
considerable
19a7
demand
period, however, there
a replacement demand
for at least 200,000 and perhaps
300,000 houses a year. This added
on to an assumed net family for¬
Over
sales
I think it is clear that not
interruptible
than
dollar
a
type of de¬
experienced in
the 1946-1950 period, when mar¬
riage and net family formation
rates were materially higher and
when there was a substantial de¬
mand for housing from the "undoubling" of "doubled-up" fami¬
more
total
cars,
second
sively upgrade their housing ac¬
commodations.
These complexi¬
ties
create a less insistent and
mand
disap¬
and dealers.
Minuses and Pluses in the
suasive
as
year
a
to tne manufacturers
Despite higner prices
pointment
Current Business
this
been
have
last
as
8
1945
11
1949
'Aug 1954
.
I3
,
i.
-
Volume
Number
186
5682
.
.
.
The Commercial and Financial Chronicle
(1709)
aged
about
tion. If
started,
that
15
months
downtrend
a
there
will
it
is
a
have
dura¬
already
good chance
in
its
run
Continued
in
be
from
from
page
Unfortunately, the free enterprise
Strength and Limitations of
Monetary-Fiscal Policies
at
4
17
does not have automatic
forces which tend toward full em¬
new
a
progress
page
system
course
before the end of 1958 and
uptrend will
that time.
Continued
has
during 1955 and (3) higher avoided.
money
rates which
rates wh.ch
waae
wage
encouraee
encourage cap
ital substitution for labor.
Help WanfedA Psychiatrist!
IV.
What Is Being Done
the
current
inflation
is
which he himself fipds prettiest correct, the solution to the riddle
but those which he thinks likely, of price stability lies in restrain¬
fancy of the other ing investment, stimulating sav¬
competitors, all of whom are ing or some combination thereof,
looking at the problem from the the effects of monetary policy
same point of view.
It is not a through the cost and availability
to catch the
of
'
the
;
-
picking
those who, to
judgment are
really the prettiest; we have
reached the third degree where
; * case
best
of one's
devote
we
intelligence
our
to
anticipating what average opin¬
ion expects the average opinion
to be.
And there are some, I
of money
private
effects
important
element
adding
of
an
short-term
unpredictability!
$
portion
restricting
no
ef-
to
cover
spending
will continue
The long-term
evidence suggests that this is true
the
short run,
very
restraint
soon
on
affects
but
that
monetary
total
spend¬
ing and aggregate business activ-
my
raise
suffi-
outlays. For-
now
focused
on
of inflation rather
cause
than-upon the symptoms of inflation.
Proper monetary - fiscal
action is now being taken and
evidence indicates that these
tions
n,
,
,
Total
while
,
,
.
wholesale
less
risen
ac-
beginning to take effect.!
are
.
since
.
have
Pnces
the turn of the year
wholesale
pi ices
of indus-
recommendation
fundamental
ing
affirmative
an
for
constructive
procedure
for mak¬
investment decisions.
your
maintains
exclusive
emphasis
It
on
spent
money
on
has
been
product
six
past
national
level
for
the
Even though a
monetary growth
spending rise, there is
that such action will be
slow
in
a
the value components of individual
danger
issues.
followed by a business downturn.
In many past periods the reduc¬
tion
in
monetary
growth
was
It
recognizes that
share
a
of stock
actually constitutes partownership of a business property
a
ticker quotation.
It, is
premised on disapproval of the
prevailing concentration on mar¬
ket liquidity and on market price
quotation changes as such.
—not
sharp, and these periods were fol¬
lowed
by business recession or
depression.
However, since the
adoption of flexible money in
1951, changes in the rate of
mon-
etary growth have been quite
satisfying the
modest and, in
general, in the
concerning the
proper
direction.
The
rate
of
concept of yield and multiplier,
monetary growth has
declined
this approach rests on the logical
rather continuously for the
past
premise that the money-use and
two years as a result of the re¬
irisk elements of invested capital
strictive monetary policy, but the
are to be compensated for in the
rate of reduction has been mod¬
buying price. For example, we est.
Despite all the public con¬
might use the criterion that the cern
over
"tight
money,"
the
buyer can foresee the probability
economy is still enjoying
some
of recouping his
principle with
growth in the money supply.
Concretely,
for
need
interest
and
realism
over
a
reasonable
our
^Uennfum'bu^t^can'So
food
This index
sluggish indicator
rising after wholesale prices start
to
prices.
be
a
at
about
stabilize.
Wholesale
cost of
mid-year
1955
and
the
.living remained stable for
another
nine
months
several
months.
.In
raw
basic
recent
mate¬
rial prices have declined sharply.
It now appears that retail prices
have about absorbed the pressures
sale
the
prices are not getting new
from rising raw mate-
spending
tionary
have
Furthermore,
boom
appears
Topping Out
the
to be
investment
topping out.
Increased capacity in many
lines,
fore
an
oscillations of the economy, many
important economic pr o blems
the Allowing will remain:
(!) the ever present necessity of
Preventing monopoly in both in-
?n<J tabor; (2) the discour-
y
.
but it is
sired
The
quite clear that the de¬
adjustments are occurring.
economy
is
now
tending
toward stability rather than either
runaway
inflation
or
deflation.
must
icy past the time when it serves
The
record
since
1951
suggests
Hon, surpiuses will be automati¬
With Illinois Mid Continent
the
dissipated through lower
discourage produc-
Where
cuiture
tixillg
^nd
government
price
subsidies interfere with
may
for believing
transition will be successful.
(Special to The Financial Chronicle)
prices which
encourage consumption,
However
in areas surh as aeri-
reason
CHICAGO, 111.—Paul J. Christman,
Joseph J. Thomas and Frank
Woodall
C.
with
are
Illinois
associated
now
Mid
Continent
vested
capital within
reasonable
a
time.
persist for
protracted periods of
time, Pr0per monetary-fiscal policies through their
effect upon
aggregate demand
can
Joins
Webber-Simpson
(Special to The Financial Chronicle)
contribute
CHICAGO,
111.
>-
Such
achieving over-all price
Shillito has become affiliated with
stability
and
Webber-Simpson & Co., 208 South
La Salle Street, members of the
preventing
depres¬
sion
characterized
by
apparent
surpluses in many lines.
These
polciesdonotsolvrthe
problem
dustries relative to the total
econ¬
Midwest Stock Exchange. He was
Ibrmerlv
with
Cr utt
W. B. Wolf Adds
omy.
hoped that
an
of the strengths and
some
limitations
of
monetary
policies
will
spread
acceptance
Periods
of
(Special to The Financial Chronicle)
understand¬
contribute
tight
-
fiscal
to wide¬
and
money,
support.
such
on
demanding
higher interest costs.
isfied
so
Yet if
spend
as
that
everyone
could
desired, total spending
would increase sharply and infla¬
tion would become rampant.
policy of
The
at a time of
full employment and rising de¬
mands was tried during the war
and in the early postwar period
easy money
Arthur
Wolf
W.
B.
&
With
factors, classified ac¬
to the kind of company
Co., Penobscot
"
dates
have
meaning to the dividend and earn¬
r
Wagenseller, Durst
(Special to The Financial Chronicle) '^,"1
LOS
H.
ANGELES, Calif,
Dorner has
— Philip
joined the staff of
Wagenseller & Durst, Inc., 626
Spring Street, members of
the Pacific Coast Stock Exchange.
He was previously with William
South
R. Staats & Co.
,
*A
*
(Special to The Financial Chronicle)
ST.
chell
PAUL, Minn.
has
become
Cruttenden,
National
—
Weir Mit¬
affiliated
BILLIONS OF DOLLARS
appears to
been
be the
ings yield, rather than subjecting objective of the Administration to
them
to
tradition
other super¬
or
ficial
determination,
thought of as pawns in
of score-keeping game.
Of
there
or
reduce
defense spending by an
being annual rate of about
$4 billion to
kind a $38 billion annual rate
by year
some
end.
In
the
first
half
of
next
"bugs"
to be found in a value approach
(and I deliberately use the term
"approach" instead of "appraisal"
because I envisage arrival at a
range
for advantageous acquisi¬
tion
rather
than
a
pin-pointed
price). But I am firmly convinced
that such loopholes as are entailed
recently
gave renewed strength to budget
cutting activities by avoiding a
request to Congress to raise the
$275 billion debt limit. Outstand¬
under this
Since
course
nificant
policy
than
in attempts
are
*
vestor's
are
far less sig¬
those
contained
at market timing.
Summarizing
market
are some
*
my
*
reaction
to
timing activities:—the in¬
policy
should
be
essen¬
tially—if not exclusively—geared
to the
a
year, a further reduction of
billion is desired.
Secretary
the
corollary, no time
Digitized andFRASER
for as
good time to buy
http://fraser.stlouisfed.org/ a bad value.
Federal Reserve Bank of St. Louis
a
is a
$4
of
Anderson
ing debt subject to the legal limit
is now in excess of
$273.5 billion.
revenues in
nearby months
are seasonally
low, careful spend¬
ing control will be essential if an
increase in the debt limit is to be
avoided.
If
the
Administration
succeeds in its objective of cut¬
ting spending in coming months,
this
source
will
sures
of
inflationary
pres¬
disappear.
jeto
principle that ANY time is
good time to buy a good VALUE:
Treasury
V.
The
that
Chances of Success
inevitable
suggests
inflation is not
provided
'15
*20
'25
*30
^COMPOUNDED AV&. ANNUAL RATE Ot INCREASE
** TOTAL D£PO$rrSAW.(ALL BANKS) 6 CURRENCY OUTSIDE BANKS
1956 PRICES
long-term record
substantial
war
is
4
TOO
ac¬
by the Adminis¬
now
with
Podesta & Co., First
Building.
Bank
reduced
It
j.
With Cruttenden, Podesta
stretched out.
tration.
-
.
•
outlays is concentrated on
spending where some
delivery
G.
staff
the
,,"
"
"
the
all demands for money were sat¬
—
of
Building.
funds.
part of those
This is, of
course, due to the fact that some
Mich.
been added to
as
inevitably creates dis¬
satisfaction
DETROIT,
Wolf has
Although Congress
appropriations by about
cording
$5 billion, any reduction of actual
being considered, but in any event
spending in the next year must
giving realistic and dependable stem from action
additional
den
e n
sb?. sv bssfc-
projects have been cancelled and
some
W.
much to
defense
determina¬ other
buying-value
tion should take into account
,
Rolland
fruit in coming months. The bulk
of the planned reduction in Fed¬
eral
In-
vestment Co., 676 St. Clair Street,
period, plus retaining a continu¬
tion in the monetary sphere, the
ing equity as "gravy." In stocks
recent economy drive in Congress
as in real estate the buying price
and the Administration may bear
can be set to provide for annual
amortization out of dividend pay¬
ments sufficient to recoup the in¬
a
useful purpose Given the present low liquidity a severe drop in
monetary growth could well mMate a downturn in the economy.
future
In addition to tne effects of
policy
there is good
pay
savings,
bal¬
As the economy
equilibrium,
task of eliminating surpiuses jn agriculture. When the
price system is aUowed to funcagmg
trend.
and
a
...
potential borrowers are denied
funds and, hence, the ability to
purchase resources. Others must
investment
critics
forcing
investment-savings
is attained.
makers
availability of money is
even
more
significant.
Finally,
savings continue in an upward
between
in
easing of policies be¬
.
duced
impossible to predict the
timing of the prospective balance
having
now
be careful to
^ven assuming monetary-fiscal
PoU"e.s succeed in dampening avoid retaining a restrictive pol-
accompanied by lower profit mar¬
gins, is dampening the incentive
to expand. Also, money is becom¬
ing more expensive and the re-
is
succeeded
and growth-
the present
It
are
So far
pressures.
not
premature
approaches
ing of
Investment Boom
im¬
mi-
effect of slowing the
rise and, hence, infla¬
ance
It is
prices,
con-
vocal
a
desired
pressures
rial
of
nn
up after whole- such adjustments, imbalance*
prices started their upward march
outcries
nority, current policies
tion and
tends
inflationary
Contrary to the
sequences.
patient
much t0 foster'businessstabllUy
j
«rrw.7tu
eyer, continues up due largely to
months.
restriction
can
gross
stable
^a
gests
cany
living, how-
s2=-sjs5 sssta asss jams that jss
wholesale prices and js whole-
despair. For I have
and
prices.
economic history sug¬
tendency
to
oscillate
widely unless corrective action is
taken.
Monetary-fiscal
policies
Rather
cal products have been quite ■
The cost of
stable.
prices
and
skepticism ity. The liquidity of the economy
about the forecastsbility and
timing
of
shorter-term
market monetary restraint pursued in the
movements is not a counsel of past two years. The turnover of
Fortunately,
the basic
higher
that
ori its merry way.
growth
Technique
private
Congress
tunately, action is
over
%
Constructive
a
the
contend
continued
Affirming
of
!f,C'"P°n of money aSwill
,Srnding
Vul0city ?r sale
up,and continuing
merely
in
i<e
economy.
monetary growth will have
rise
and
upon
Some
All
—
the
of the system.
tu
true
of
Fiscal policy has direct effects on
the Federal sector and indirect
believe, who are practicing the
fourth, fifth and higher degrees."
too
influence primarily the
sector
typically fi-
^^largelyby the creation of
money due to the unwillingcient taxes to
preceding analysis of the
of
cause
are
new
ness
If the
Wars
can-
ployment
with inevitable
29
SOOACl' DIPT Of COMMERCE, MOCfttl RMERVf lOMD
50
'55
HARRIS Trust and Savings
BAN K
SECURITIES ANALY5IS DEPARTMENT
<lKM
The Commercial and Financial Chronicle
30
.
.
Thursday, October 17, 1957
.
(1710)
stretch of the imagination really correct the con-,
complaint was made. No one, that is no
one in a
position of political influence, suggested that the
farmers of the country be required to stand on their own
feet from this time onward, that people build their own
houses without help from a paternalistic government in
Washington, that veterans finance themselves as othersdo, or that the vast machinery of control and regulation
now
operating in Washington be dismantled. About all
that happened was in effect a demand for the impossible
—that we should retain all this and reduce expenditures
by
Continued from first page
We See It
As
earth
satellite
—
or followed by a
international dealings.
both accompanied
"tougher line" in its
The Budget
Forgotten?
became a secondary
popular thinking, while our failure, if it
is failure, to keep abreast of Russia in the development of
modern or ultra-modern engines of war moved into the
At once,
almost, budget matters
consideration in
spotlight. Interest has shifted to the need of catching up
with or surpassing the Russians in our mastery of science
as
applied to armaments. Without knowing the precise
facts we are unable to say what warrant there is for such
sentiments as these, but" it is certainly not difficult to
understand the general public uneasiness in the circum¬
stances actually now existing, the more so in view of the
boasts of the Kremlin. It may or may not be that we have
been slothful and negligent in pushing research and de¬
in hand.
expend what is necessary to be
today, but let us also in¬
crease that margin of safety by curtailing the waste, the
extravagance and the paternalism now so costly to us all.
The problem of determining what we really need to lay
out for modern weapons and in research designed to
devise new and more deadly weapons is a difficult one.
There is, of course, much difference of honest opinion
among those of us who know or ought to know what the
facts are. There is also much inter-service jealousy and
by all
means
safe in this troubled world of
rivalry, and there are now, as there always have been, a
number of highly vocal advocates of the utmost in arma¬
ment. The task of arriving at some sort of appraisement
of our real needs is one for officials and legislators in a
other loans;
strictions
from
to
the
and
sellers
550
of
trend
would not be
as
be
forefathers and indeed to
t
These
the
our
large
Where to Save
,
short-term
the
ence
would
traders
we must forego if the
much, so the argument
runs. When such a statement is made, it is usually in¬
tended to end the discussion, so out of the question does
it appear to the politician brought up in New Deal atmos¬
phere that any of these things "for the people" should
be discontinued or even seriously curtailed—turning the
clock back, he is likely to call it. It does not appear un¬
thinkable to us, however. In fact, that is just what we are
certain must be done not only to reduce outlays—an im^
portant consideration in all conscience—but iikewise to
restore this country to its tradition of self-reliance and
budget
are
things that
is to be reduced
individual
initiative
—
a
very
consummation
which
must
be
somehow achieved if the fiber of American manhood and
womanhood
enviable
It is
is
not
to
deteriorate
to
the
point that
of
ing
hand
course
Most
terly
common
annual
or
Dividend,
a
the
which
is
variable
in
the
from
both
due
paid
dividend
may
be
(a) cash in
bank, (b) income to
have
and
income
of
assets
and
borrowing on
The sec¬
income
the
of
pension
a
or
to
per
changes in the price
the share.
The dividend yield
is the rate which the investor will
with rates
types of investment.
other
One
turn
on
other
from
compare
,
common
;
.
r
■
type of re¬
investment is the interest
bonds. These yields dif¬
fer with the type of bond ranging
yield
on
from
relatively
low
rates
for
prime tax-exempt bonds to rela¬
tively high rates for poorly-se¬
corporate
or
security for which the special ad¬
vantages or disadvantages prob¬
is the average
high-grade corporate bond.
One
may, therefore, presume that the
investor
compares
the dividend
ably
out
average
stock with an
index of the yields on Aaa cor¬
porate bonds. In the general case,
yield
an
on a
common
investor
stock
for
will
buy
income
common
a
only if
(1) the
larger
than the current yield on Aaa cor¬
porate bonds, and (2) there is rea¬
dividend
current
son
to
believe
dividend
will
yield
that
be
is
the
current
maintained
on
The trend of earnings! of
the company is obviously an im¬
average.
for
whether the dividend
be
maintained
over
determining
is likelv to
the
,
short-
term, since directors are known to
ge^r dividend policy to past earn¬
ings.
So far we have as variables to
be tested in our proposed explan¬
.
,
and (b) the ratio of the
yield to the short-term
loan rate on securities. There are
no data
available on (a), but the
net customer balances of
on
firms
member
the
of
with
correlated
to be
closely
therefore,
be
and
it
York
New
must
Exchange,
Stock
seems
good proxy variable
a
true
variable which is, of
loans for the purchase of
stocks. However, in the
1920's
and
early
1930's,
course,
late
the
for
loans
brokers'
others
of
account
another
represented
and
is
on
investors' cash and de¬
are
which
are
Even so, there
to using data
abroad.
alternative
no
this kind
of
loans
some
arranged
not available directly.
there are data on per¬
sonal holdings of currency and de¬
share and to
of
common
stocks,
presently available.
are
The series above are all
of
measures
parts or
investors'
of
parts,
disposable purchasing power. Data
holdings of currency
and deposits, and for cash position
However,
available in
amount
of
purchase
indi¬
investor
receipts
Data
owners.
This rate of return to the
changes
the
for
of
private welfare fund; it may
corporate savings. Investors'
assets may be used at any time to
obtain cash or bank deposits.
brokerage house and in other
investor
Therefore,
it.
only two additional vari¬
ables to consider: (a) bank loans
other
yield—the
places.
with
highly
are
common
be
of dividends divided
any
lated
there
be
dividends
to
of
income loans
on
usually higher than the bank
rate on security loans but corre¬
im-;
portant source of stock market
ond provides a flow of funds for credit. Today various Targe hold¬
the purchase of stocks.
The in¬ ing or quasi-holding corporationsf
vestors' income may be the part appear to be able to arrange with,
saved by individuals out of dis¬ non-banking
sources
for
large^
posable personal income; it may loans to purchase common stocks,
stocks pay quar¬
income
by Moody's
The bank rate
either income or assets.
.
constitute
in
¬
are-
is
series
to
stocks
loan rate.
available
afe
The loan and pur
common
reasonably stable and sig¬
higher than the bank
for the
various
Obtain Income
to
divi¬
bonuses, winnings at the races or
otherwise, inheritances, sales of
Stocks
Common
portant varia^e
that could
other assets to
nificantly
like
To simplify
i
Buy
or
of
cash in the future, and
(c) other assets. The first flows
from
various
past
transactions
presentation and language hence¬
forth, by investor we shall mean
the sophisticated buyer.
Investors
<
.<,
.
stocks
stock is
provide
we
a
for the investigation.
of the saddest commentaries upon
Digitized
all was heard
http://fraser.stlouisfed.org/ about adopting the only
Federal Reserve Bank of St. Louis
.
only if the dividend yield of the
Good in¬
dividends
average
presumed
have pre¬
starting point
which
stocks
vious listed offer
fi-
other
and
.
worthwhile to the income investor*
source.
The
The five primary reasons for buy¬
our
the think¬
ing of the times that in all the hullabaloo earlier this year
about the
for FRASER-indefensible budget of the President, nothing at
business
from
chase
all of which use
statements as the orig¬
company
best, therefore, we can only hope
to
explain a large part of the
long- and intermediate-term
trends of common stock prices.
position in the world is seriously compromised.
one
buy
purchase deal.
sources,
many
inal
(1)
Records
Service.
and
stocks
vidual
influ¬
trends
bond yields
earnings
foreign bonds.
The range of choice of the in¬
vestor is indeed quite large. The
T
money
to
Presumably the investor' who
stocks for income is
not >
counting on appreciation. Hence;-
published regularly by
and good in¬
Investors
prices; and the market from time
to time would be subject to out¬
side impacts which give bias to
the decisions of the guessers. At
cured
fathers.
may
new
use
buys
and Poor,
of
dexes
just indicated, since there would
usually be chance deviations from
the
average
expectation. More¬
over,
are
Standard
I have
as
of
dends
balance
actual
precise
oner-r
these borrowings
stocks. If the in¬
ket.
earnings and divi¬
both
dexes
buyers
will
prices
The
downward.
450
and
prices:
corporate bonds.
Aaa
on
Contrariwise, if conditions
deteriorating, there will be
are
too
not
are
actually help to
which he can
common stocks.a
Even if new money is not created,!
a
loan made for the purpose of,
buying
common
stocks
diverts i
then
posits
our
that
may use
he
create
earnings, and (3) yields
dends, (2)
prices
prove.
about
stock
of
ation
buyers and 450
will im¬
share
and
or
and with certain re¬
buy common
bank,
Techniques for
Forecasting Stock Prices
sellers
may i
bank
for
vestor borrows from a commercial
4
page
vestors and is readily
to
investor
an
assets
only when the bank rate is low enough to make profit-:
able the
combined bcrrow-ancM
may.
government tries to do. The Federal Government in recent
decades, particularly since the beginning of the New Deal,
has added function after function that were quite alien
he
ous,
buy
posits
greatly reduced. The President, and others who have gone
before him, are right when they have said that important
reductions in outlays depend and must depend upon re¬
duction in the number and the scope of things that the
his
of
he will borrow on
Continued
annual rate
by the price
—is followed closely by many in¬
enough, however, to see that we are spend¬
ing a great deal more money than we can afford on vari¬
ous
programs which have nothing to do with defense—
unless in one way or another they get in the way of ade¬
quate preparation to defend ourselves. Nor is it difficult
to know how these expenditures could and should be
time
any
all
or
cash
high enough in all
conscience, but we can bear it without serious conse¬
quences if only we practice real prudence in our public
expenditures elsewhere.
position to know the facts and to weigh them carefully.
The rest of us have to reach our conclusions as best we
It is easy
At
•
pledge part of his income or part
nancial activity to the stock mar* ;
The cost of modern armament is
will be about 550
unfortunate in any event that consideration
of such topics as these is so impulsive and haphazard, and
so subject to popular clamor and to emotional impulses.
The cold fact of the matter is that there is no conflict
whatever between adequate outlays for defense and a
total of expenditures far below that now planned. Enor¬
mous expenditures unrelated to defense—some included
in the budget and some not— afford ample opportunity
to reduce total outlays far below those proposed in the
President's January budget. A few, but very few of these
opportunities were seized upon by the budget cutters
earlier this year. Most of the activity of these groups was
aimed at gaining popular favor, and no one was eager to
risk disfavor by disturbing vested interests in largesse.
It is very
Let us
of which
severely, too.
velopment operations in these fields. We doubt if we have
failed to spend all the funds really necessary for the pur¬
poses
any
dition
,
for personal
and these contain a sub¬
portion of investors' cash
and deposits.
It should be borne
in mind, however, that the pro¬
of institutional investors, measure
stantial
the
There is some question as
liquid assets
the short-term bills and
portion of stocks held by institu¬
growing,
and therefore that the series on
such
ings of currency and deposits also
contain cash and deposits needed
curities
enterprises
and un¬
incorporated businesses. Nonethe¬
less, the series embodying per¬
sonal
holdings of currency and
deposits is probably a reasonably
good proxy variable for investors'
cash and deposits, especially if one
adds to it a reasonable estimate.of
the cash position of institutional
marked
tional investors has been
other
whether
to
of the in¬
position
liquidity
vestor.
as
notes held
by individuals and in¬
investors
should i be
personal holdings of currency and added. Unquestionably, short-term
deposits does not adequately securities have frequently been
measure
investors' purchasing used by the bears as temporary
power.
Moreover, personal hold¬ havens. But these short-term' se¬
for
various
personal
like farming, professions,
investors.
Data
income
showing
are
also
to
of
•
have
uses
for eaiv
funds, that in this study
stock
omit
them.
represent
income
are
available i for
series
which
flows
to
chosen
have
Other
investment,
market
and
the investors' willingness
measure
to
other
many
so
temporary investments
we
incur debt for the purchase
common
of
stocks.
;
ii
Stock Purchases to Obtain Capital
complete.
the
per
disposable
the top
Growth
investors'
not
pertaining
series
changes
cent
in¬
cent of
the non-farm population has be¬
come available.
Also data on the
incomes of pension funds are be¬
the
come
as
■
However, in recent years a
in
stitutional
personal
one
per
coming increasingly more reliable
and there have been data on the
flow of funds to investment
trusts.
good measure of investors' in¬
come can be obtained by combin¬
A
ing the ratio of half the income of
pension funds plus the flow of
funds to investment trusts to total
disposable personal income
the per cent change in the
with
Series
of
or
Appreciation
preceding section
the
applicable to investors
who buy for capital growth or. ap¬
also
are
preciation. These gain seekers al¬
so
Study earnings and dividends
but with a different
emphasis. The
seeker is
a
greater
give
growth
earnings
than
dividends and he seeks pri¬
capital
apt
to
weight
marily situations for which earn¬
ings
of
been
have
stantially
for
a
increasing
period
of
sub¬
more
The rate of change
earnings with respect to time,
than
a
year.
becomes
an
additional significant
variable.
Because of the record
growth in
dis¬ earnings and the consequent ex¬
posable personal income of the top pectation that growth will con¬
tinue, the capital gain seeker is
one uer cent of the non-farm pop¬
willing to buy at a plice which
ulation.
Volume
Number 5682
186
.it
.
.
.
The Commercial and Financial Chronicle
(1711)
represents
a
of fcurrent
higher capitalization
Contrariwise,
IV
earnings.
fields of production and
new
Stock Purchases to Protect Liquid
markets.
In every fight for
new
con-
he wants to; buy at a
higher-than- wealth
and
Savings
During trol of an enterprise there is alavprage earnings yield, the stock '
Periods of Rising Prices of
ways a
motive other than the
ofi a
company
which has been
•
Commodities
normal motive of buying for inshowing
decreasing trend of
And, of course, when a
a
earnings.
growth
company
and
turn
pHce'«.
to
of
correiateci
loses its momen-
begins
lower earnings
the
ices
expenence
ciurjn£
sharp decreases in
jndustrial
tbe
which data
with
commodities
past
are
are
highly
quite
of
storks
common
years
for
available. This fact
a8ajns' inflation-
Therefore
in
contests for control, prices of a
stock may deviate considerably
from levels indicated by the major
normal factors.
.
.
PPreC
P+hCG 1S
than the earnings.
6 m°ie l*eves that commodity prices
are each factor has been nor does it
fall, he sells stocks. Al- enable one to judge their present
this explanation on the impacts.
'
surfaCe sounds plausible, it should
Lateness in the reporting of data
apt
_
market index or
necessarily contains both
stock
good
average
decay stocks. Hence,
differences^ip valuation cop-
Sndv
a
^ock
makes
whpf
?ho vaiinf
inriilidual
gro wth
gro w i n
individual
and
ana
be ll0te(j that there are significant needed to keep up-to-date a cribetween commodity terion of stock prices, long ago
Prices-and stock prices. Alter- prompted search for other indi-
wy
nf
Images
price
?ativ^y> lt
differences
more likely that cators. Some years ago we disthere 1S a common set ot factors covered that there was some rewhich operate to change commod- lationship between changes in the
nriri
+v.
ity priceS and stock price8 and th stock market and the speculative
differences are due to the pecul- non-durable goods markets. A
iar factors which affect each
tittle investigation showed that
ries' The key to the explanation (i) many of the manufacturers in
decav
aecay
appear
of'<4x>ck^ fn the fndex lose
in ri he eiri a r
begin
ioritv
thPir
then
momentum
re
a
anct
of ^e correlation
^
nfomentum SSMn
SS
a
and these-correlated
changes will cause the stock price
index to change substantially
-
A little
than
more
-
of the
ket
eral
they
and
have
for
been
of
Price
x
-f Residuals
That
the
industrial
highly
correof
are
flow
and elsewhere.4
That the longterm interest rate is a function of
in the commodity prices is a thesis proposed by Irving Fisher5 years ago.
investor On the other hand, the speaker
gives special attention to the long ago gave a more complete
earnings trend, he cannot ignore; explanation of interest rates which
either the dividend or the long- did not involve commodity prices.6
dicating
*
change
major
a
market trend.
stock
While the capital gains
term interest rate.
may
If he does
he
find himself paying absurdly
prices for a growth stock;
really is buying is the
high
for what he
earnings
which, according to the hypothesis, have been
increasing; at a
known rate.
This present value
necessarily changes with the long-
present value
of future
interest rate.
term
t'imes
current
To pay thirty.
interest
long-term
the
three
earnings when
is
rate
cent (3%) ; does not require
nearly so much faith in the future
as
when the long-term
interest
per
rate
is four per cent
(4%).
Whenever
bank
deposits
are
changing, liquid assets of individuals as well as business sales are
likely to be changing in the same
direction.
Hence,
the
rate
of
change of bank deposits measures
with some difference in timing (a
short lead or lag) at least the following five variables in our list of
io chosen to explain stock prices:
corporate earnings, corporate dividends, personal holdings of curr€ncy anci deposits, cash position
Gf institutional investors, and the
rate 0f change of earnings. In addition, the rate of change of bank
'
'
-
deposits bears
111
some
■
•
.
of Market
Liquidity
interest
long-term
new
goods
relation to the
rate, and the
net customers' balances of member
Liquidity of the individual firms of the New York Stock Exhas long been a significant change. Therefore, one would exfactor determining its price. Be- pect that the rate of change of
fore an issue can be listed on the bank deposits would indicate
stock
changes in the prices of common
meet certain standards with re- stocks, and it does. Prices of eomSpect to number of stockholders, mon stocks advance during pepercentage of stock available in riods of rising demand deposits or
the market, and breadth of trad- money supply, and decline during
ing.
When an/issue which has periods of falling money supply.
been traded over the counter or on
to
its price gener¬
the big board,
ally advances relative to its earn
¬
ings and dividends.--An important
reason
for this change in price-
The
Purchases
Common
of
tops and bottoms of
cyclical movements in stock
prices. Near, the top, trading is active
and
thousand-share; blocks
race across the ticker tape as dif-i
ferences of ouimon among investors
express
for Other Purposes
and
One
.
policies on future earnings; (2)
dividends;
and
(3)
managerial
capabilities. •- An
outside
group
control
plan
may
sell
DW1
Such
in.. liquidity at tops and
cantly^affecting
change
thousand-
bottoms takes
place
individual, stock
price.
both; for
both tor
tne
the
4Spurgeon
Bell,
Productivity,
and National Income,
thinks
the
business
rose
number
of
months
of
estimated
cars
loaded
1957
compared
On
the
principal
in
the
basis
the
by
of this
commodities
13
with
quarter
regional
this
freight in
period
revenue
with
of
A decrease
ago.
the
like
Shippers
Advisory
estimate, freight carloadings of the 32
be approximately
7,457,797 cars
7,611,295 cars in the
should
fourth
quarter of this year against
like 1956 period.
Of the 32
commodities, it is forecast that 15 will show increases
ago,
with the balance showing decreases.
The
1956 is estimated for loadings of citrus fruit
which are expected to be up 8.1%. This is followed
by an ex¬
pected gain of 7.9% for agriculture implements and vehicles,
over
a
year
largest
other
gain
than
12.8%
over
automobiles.
under
a
estimated for
Automobiles
and
This
one
ago.
year
is
trucks
the
are
largest
placed at
declines
group.
any
The largest drop for any classification is estimated for
hay,
and alfalfa, which is , computed at 37.3% under last
year
while loadings of potatoes Should show a decline of 20.6%. The
latter
should
adversely affect the earnings of the Bangor &
straw
Aroostook
Central
of
Railroad
and
and
Boston
months
are
&
the
to
lesser
a
degree
those
of
the
Maine
Maine
Railroads.
It might be noted the
seasonally high period for the movement
potatoes.
Shipments of iron and steel
placed at 6.3% under
are
.,
■'
MINNEAPOLIS, Minn.—Gerald
R. Wilson has joined the staff of
_
w
McKendrick7Ha7eitine"& Wilson',
n4
Inc
South Ninth Street,
E.
Wages,
1907.
6 c.
F.
Rons
and
staff
has
of E.
E.
Victor
s.
Von
Szel-
1942.
year
gains
over a
Of
the
year ago.
13
Shippers Advisory Boards, only two districts are
over a year ago.
These are the
Valley and the Southwest regions.
The Ohio Valley is
important from a manufacturing point of view as well as for
soft coal loadings.
For the country as a whole, coaUand coke
loadings are placed at 0.3% ahead of 1956. This should mean
expected to
show improvement
Ohio
sustained
well
earnings for
the -bituminous railroads, .including,
Chesapeake & Ohio, Norfolk & Western
—
been
added
Henkle
for
Actual
Shippers Advisory Boards:
New
England
Atlantic
Western
Mid-West
Northwest
Trans-Missouri-Kansas
Southwest
*
Pacific
Coast
Pacific
Northwest
Total
to
and
Halsey, Stuart Group
&
Co.
Inc.
and
associates on Oct. 11 offered pub¬
licly $6,000,000 of Toledo Terminal
Co. first mortgage 4%%
bonds, due Oct. 1, 1982, at 100%
RR.
and
accrued
bonds
interest.
was
won
competitive sale
the
Co., Federal Securities Building,
Award
of
Commission.
The bonds will be uncondition¬
ally
W. B. Milius Opens
Milius and Co. with offices at 101
South Meramec to engage in a
securities business,
With Pacific Coast Sees.
(Special to. The Financial Chronicle)
BEVERLY HILLS, Calif .—James
C.
Hodge,
Jr,
is
now
connected
with Pacific Coast Securities Com¬
pany,
9201 Wilshire Boulevard.
Hooker & Fay Add
FRANCISCO, Calif.
Tsung Chi Lee has been added to
SAN
of Hooker & Fay, 805
visy str66t»
guaranteed by the six pro¬
prietor railroads—The New York
Central
RR.
Central
RR.
Co.; The Michigan
Co.; The Baltimore
& Ohio RR.
Co.; The Pennsyl¬
vania RR. Co.; The New York,
Chicago & St. Louis RR. Cp. and
the Chesapeake & Ohio Ry. Co.
Redemption of the bonds will
made at optional redemption
prices ranging from 104%% to
be
par,
par,
and for the sinking fund at
plus accrued interest in each
case.
Net proceeds from the financ¬
ing, together with funds from its
treasury,
will
be
applied
by
Co.
1.9
—
0.5
—
2.6
—
1.2
—
2.4
—10.2
4.1
—
—
0.7
—
5.4
252,025
—
5.7
7,450,797
—
2.1
operate^ a total of 87.58 miles
roads.
owns
The
greatest
company
part of
its
derives the
total income
from its many track rental agree¬
ments and from
its switching op¬
erations.
FIG Banks Place Debs.
The Federal Intermediate Credit
Banks offered yesterday (Oct. 16)
a
new
issue
of
approximately
$108,000,000 of 4%% nine-month
debentures, dated Nov. 1, 1957
and
maturing Aug.
debentures
being
are
T.
1, 1958. The
priced at par and
are
offered
Knox, fiscal
It
was
also
John
through
agent, and
tionwide selling
ties dealers.
group
a
na¬
of securi¬
announced
that
of
outstanding maturities, $8,000,000
of
3.80%
debentures
maturing
Jan.
2,
1958
and
$8,000,000
of
3.90% debentures due Feb. 3, 1958,
were
sold and privately placed.
financing
$142,000,000 of 3.80% and 3%% debentures
Proceeds
will
be
used
from
to
the
refund
maturing Nov. 1, 1957.
the
toward paying off $6,000,000 principal amount of its
50-year 4^% first mortgage gold
bonds, due Nov. 1, 1957.
Terminal RR.
1.8
+
City
Toledo, Ohio, and adjoining
areas, and has freight connections
at junction points with 14 rail¬
Hess Inv. Co. Adds
company
Toledo
0.9
—
of
by the group
Oct. 10 on a
guaranty
of the bonds are subject to author¬
ization
by the Interstate Com¬
merce
3.6
—
of track which surrounds the
Offers Railroad Bonds
Stuart
—
1,092,765
905,572
516,998
277,685
862,617
553,226
330,954
525,333
338,701
7,611,295
Lakes
Central
112,008
1,072,411
909,891
530,545
281,194
884,060
615,825
345,023
521,665
411,045
267,184
Southeast
%
•
Change
764,889
868,024
884,052
Valley
Great
1957
116,182
772,218
States
Allegheny
Ohio
Est.
195C
.
Issuance and sale and
Investment
Virginian Railway.
following tabulation shows the actual carloadings for
district in the final quarter of 1956, the estimated
loadings
the last quarter of 1957 and the percentage
Change:
each
bid of 99.167%.
Herbert A.
and
The
the
(Special to The Financial Chronicle)
«!e
'
loadings has been indicated by the drop in steel operations
as compared with the like 1956 months. Carloadings of
cement and also lime and plaster are estimated to record
slight
this
at
Henkle Adds
year
a high rate group and produces sub¬
tor the Eastern industrial carriers. The drop in
revenues
Halsey,
(Special to The Financial Chronicle)
a
This classification is in
stantial
until July and
Brookings Institu-
tion, Washington, 1940, seems to have
originated the idea.
5 Irving
Fisher,
Theory of Interest,
and the market
average.
what
to
few the enterprise to enable it to enter
himself Slgnifl-
good index
non-durable
of
fights./ vary, but usually rest on
differences of opinion with re¬ v CLAYTON, Mo. —William B.
spect to (1) the effects of current Milius, has formed William B.
themselves. The aver- seeking
car»"nr»t
,l
the
three
was
year
Boards.
With McKendrick Co.
Manning
investor is "^riain" that, if change substantially the character
he did make a mistake, he can sell of the business by merger or even
to someone else; that is, that he liquidation. - It may wish to
incan call Snan or Old Maid.
At the crease the financial strength of
share lots wtthout
public
LINCOLN, Neb.
age
bottom, however, trades are
the
'■
or
shows up-at
for
measure
a
a
,
Stocks to
Gain Managerial Control and
Hence,
orders
market
E.
Financially able groups from
earnings yield
is that the investor has a broader time to time contend with each
market and greater liquidity.
''
-• other for managerial control of an
:
The
factor -of
liquidity
also enterprise. The reasons for these
ratio 5
earnings
cause'
has since declined sharply. Yet it
is n°t yet down to the criterion
level, i
is being moved
exchanges
in
final
1956
winter
will be. Whether this appraisal of
the business outlook is right or not
is a matter to be determined by
later developments. The public
acts today on this outlook, right
or wrong though it may be. This
thesis fits the observed facts about
stock price movements for, as all
of you know, the stock market
frequently moves contrary to the
true business outlook,
rNew orders, of course, precede
both earnings and dividends, and
so also have certain predictive
-value-for stock prices. The lead
time is, however, variable and
new
order
indexes,
therefore,
should be used with an indicator
°f market level. Combinations of
the Institute's various new order
series can be used with information on price changes, taxes, monetary changes and the Institute's
criterion of stock prices to obtain
interesting speculative results,
For all of 1957 the criterion has
been below stock prices, although
the two became equal for a shorttime in February. Since February
the criterion has pointed steadily.
Nevy York Stock Exchange it must
lesser
is
investing
prices
commodities
sev-
or
of
fourth
a
these
-f Residuals
Interest Rate —Constant
nearly a year
increasingly in-
diffusion
available
indexes,
2.1%
the
Carloadings
freight
carloadings in the
expected to run under those of
are
ago.
(Unit Labor home towns.
;
mar-
today
are
of
Earnings=Production x (Price- changesan new orders,'are often
Unit Cost^'
regarded as business seers in their
Price ^Constant x
lated with unit labor cost has been
well established in these seminars
There
trend.
were
year
Cost)
'
twenty years
short-term indication
markft
retailers,
who
-(2)
this
used
between stock this non-durable goods field
Railroad
Railroad
tt
idea of rolling
change to construct a diffusion in¬
dex which was useful in giving a
I
ago
—i
prie/s an<? commodity prices is to active stock
be found in the equations:
drastically
-
on/i
nnnOI-
slock?neressarilv do
HrmPvo. Tf tho larrd ngsofnma
no
to
though
?£0Va3
the
Railroad Securities
appreciation, owning property in a lifluid form, or protection
c<>me'
oft its stock inevitably ]ias led some students of the stock
develop. Similarly, if a declining j^arket to conclude that
investors
v
trend of earmngs it> reversedas a
buy ancj sep common stocks priVT
result of new management sigmariiy as hedges against changes
mf leant technological
change .or
commodity prices.
In short,
^ Stock P^ice Criterion
invention, or an improvement in when the investor believes that
A mere listing of factors likely
its markets arising from changes
commodity prices are going to to affect stock prices and a discusm the age structure oi.population
rjse
he buys stocks on balance sion of the reasons such as I have
or some social or political .trend,
an(j(, contrariwise, when he be- given does not tell how important
pi ice
.A
31
*
*
(Special to Th* Financial Chronicle)
-
QUINCY, 111.—Frank R. Warnis now affiliated with Hess
hoff
Investment Co.. 721
Maine Street.
The Commercial and
32
Financial Chronicle
.
,
.
Thursday, October 17, 1957
(1712)
population growth, inThe restrictive Federal Reserve
which is moving policy has been effective in cutpeople from one part to another— ting mortgage borrowings sharply.
and they can't bring their public
The decline in mortgage borfacilities with them—and higher rowing has been largely offset by
costs of constructing schools and increased
bond
financing,
esthis is that
Continued from
first page
ternal migration
Puzzle
The Bond Maiket
the
in
p e
same
ri
last
d
o
year.
Actually, our bond market suf¬
fered one of the sharpest declines
In July of this year, as
record.
on
Moody's
corporate bond yields
basis points—3.50% to
compared to a year ago,
of
was
up 77
4.27%.
Moody's average of state
and local bond yields was up_ 80
average
of one million
other
happens when low down
ments
and
low interest
need
short
charges,
o w
are
available.
bonds—rose 5 3 basis
points—from 3.05% to 3.58%, ac¬
cording to the new index of longterm Treasury yields.
These are
policy of the Fed¬
the restrictive
System, especially
eral Reserve
two years ago,
"What lessons can we draw
from
Obviously, what economists call
supply and demand—
of
law
operation of which we try to
study in these statistics—is as ef¬
fective as it ever has been in the
bond as in other markets. The les¬
sons
of 1957 for students of the
bond market are these:
the
First,
refine our sta¬
the demand
must
we
tistical
of
measures
for and of the supply of
cannot
One
bonds.
would have made the inflationary
A major
contribution to holding down in¬
flationary pressures has been the
prices.
Secondly,
have
we
analyze
to
interpret these statistics very
and
Sometimes, the story
is not apparent on the
surface. We have to dig deeper to
carefully.
tell
they
is really happening,
really going on behind the
at what
get
what is
statistics.
shall
When
find that the net
bonded debt
outstanding was $4.2 billion in
1955; it was $5.2 billion in 1956;
and it has "gone through the roof"
the
three
big segments of the demand for
long-term funds this year—mort¬
gage
borrowing, corporate bor¬
rowing and state and local bor¬
rowing.
Mortgage debt had increased
spectacularly in the years preced¬
ing 1957. It was the rise in mort¬
gage borrowings more than any
other single factor that has turned
the trend of interest rates upward
1954.
since
Mortgage debt in¬
by $16.2 billion in 1955,
creased
the peak year.
$14.8 billion in
even
in
there
if
home
months
It increased by
1956. This year,
is
little recovery
a
building in the last six
the first six
over
months,
debt will increase by
billion, a decline from
peak of almost $5 billion in
mortgage
about $1112
the
the amount of increase.
This will
be
mortgage
the
smallest
debt for any
in
saw
can we
spectacular
mortgage borrowing in
in
1957?
a
result of low down payments, and
interest
cost
of
financing
government-underwritten
with
Family formation,
income and other eco¬
mortgages.
persona'
nomic
have
factors
give,
housing
us
starts.
would
years
alone
ot
That
starts this year are
not
i,oU0,Ua0
housing
likely to fall
3.8
4.2
5.2
7.5
6.5
4.0
4.8
3.4
3.2
4.0
4.2
18.7
21.1
23.8
23.2
23.0
22.7
of
learn from
can we
performance?
First, that American business is
its
losing
pression,
fear,
of
born
the
incurring
of
de¬
heavy
bonded debt.
Secondly,
that
high interest
only a rela¬
tively weak restraint on corporate
borrowing, because corporate
managements measure the cost
.
rates on bonds exert
after
I know
taxes.
one
before
than
treasurer of
a
corporation who was ter¬
annoyed when he had to
large
ribly
borrow
But
rather
taxes
the
for
when' he
time
first
put out
he showed little
cause, he said, after
sue,
just costing
us
3%.
at
is¬
5%%
a
taxes
"it is
2%%c."
Thirdly, lessened availability of
bank loans, such
year, can
above
as
occurred this
boost bond financing far
level
any
encountered
in
State and Local Financing
When
we
look at the third seg¬
state
and
local
bond
<u,
.11
*
,
rr,
Taking the total flow Of institutional savings, the change is
the
financing—
banks,
commercial
The
are
ever,
how-
time
in
much
as
enjoying a record gain
deposits. It looks very
if
will
1957
witness
1955. 3.2 billion in
in
the
first
and
standing
half
local
will
debt
probably
out¬
reach
about $4 billion for the year as a
wnoie,
in view of the heavy cal¬
endar of financing that lies ahead.
The
lesson
to
be
drawn
from
— the
f^ure is $900 million—as against
biiUon'in'0^ Look^t
parison with
(in Billions of Dollars)
1953
in
1955
the'com-
Table
II
,
1955
1954
5.9
1S56
1957 (?)
19581??)
Life insurance Companies
5.2
6.0
5.6
5.3
_____
3.7
4.5
4.9
5.1
4.8
Mutual
__
1.8
2.0
1.8
1.8
1.6
1.4
.1.8
1.9
2.1
2.2
2.3
2.4
1.1
1.2
1.4
1.5
1.6
Savings and
Loan
Associations_____:
Banks____:._
savings
Corporate Pension Funds
State and Local Pension Funds
Flrc Rnci Casualty Companies
Bond & Mtge. Holdiigs of
;
——
r
Commercial Banks
1.0
1.1
0.8
1.0
0.9
3.4
2.8
1.3
0.9
1.7
2.5
;
_______
4.6
1.3
1.3
18.7
The Gap;: individuals, Etc._.
Total
0.9
5.4
1.5
21.1
3.9
5.0
5.6
4.7
23.8
.
23.2
23.0
22.7
rise
spectacular.
so
was
an
The
increase in
holdings
bond
mortgage
and
in 1957, it looks
In
banks this year will be less than
a third of what it was in 1955. The
times
as
much
as
as
if it will be
commercial —based upon the figures we have
of
to date—$5,600,000,000.
The size of that gap is about
in
time and
savings reliable an
when deposits will be more than three happening
than some of the war years
1955. If we
in
happen
in
as
indicator of what is
01*
the
what is about
bond market
to>
as
want to be realistic in appraising any other single figure under the
the supply of investment funds conditions of this year and last
$iy2 billion in time and savings for the future, we must not in- year.
deposits; in 1956, $2.2 billion in elude—as I and a number of other
Projections for 1958
the first half of this year alone students
of
the
subject
have
Looking ahead to 1958 and trythe
increase
was
$3.4
billion, hitherto done—the change in com- jng to make projections based
There is very good reason to be- mercial
bank time and savings upon reasonable assumptions, this
lieve that this will be the first deposits, out substitute the figure js what I can see:
year
on
record that the increase for the net increase or decrease in
savings deposits will commercial
bank
holdings
of
may
exceed mate- mortgages municipal and corpo-
in time and
and
exceed
rial y,
The
laie oonas.
$o billion.
reasons
for this you know
year
mined by Federal Reserve credit
Commercial banks
had tended to price
policy and short-term loan demands, and not by the trend of
themselves out of the market for
time and savings deposits. Federal
the
deposits.
in recent years
savings;
funds
at
with
ample
outlets
for Reserve policy, through its impact
attractive interest rates,
they have latterally priced themselves back into the market in
many
commercial bank lending and
on
investing, thus has a
very
strong
direct and
influence
upon
the
trend of long-term interest rates.
cases.
Secondly, along with the payment ot highei
lates has come
more
active solicitation and promotion of savings deposits. Results
have been striking,
although in
a
~
.
b
The
.
1
mortgage demanc!
bfe8
FHA rate hag
^
raised
5y4%. Under the new housing law,
that fh© Administration has reluctantly
foremost, commercial bank mortgage lending and bond buying are deter-
and
First
It has heen clear this
paymant ot higher
interest on savings and
liberalized terms to
if there
bS
some
extent
ifl rtsl^and
won't be much of
there
rise, it seems,
jn residential building
then there
COuld be
a
residential
a
further decline in
about;
tob™putup,
i11£r
anvwhere
Was
the
A
non-
building. Some of the
buildines most reeentlv nut
case
are
near
as
ud
or
not renteasilv as
before
building boom is like Humpty-
Dumpty—when he is thrown off
T(le Institutional Savings Gap
the wall, you cant put him back
invaluable clue to changes immediately.
in bond prices is the difference
The increase in mortgage debt
between institutional funds, which .
<,19
An
easily measure, and total \f
a
fittle higher than the
demand
for
investment funds.
<mik
nf 1Q=7
When institutional funds fall short
dc 1
* Jz
*
of total demand, then it is necesWhatever increase m mortgage
sary for these who sell bonds and borrowing occurs next year should
and savings deposits has been so for mortgage
borrowers to find be m°re than offset by a decline
much
greater than any slowing other buyers, to make yields high m corporate bond financing. There
down in the gains of competing enough to attract into the market are
a* least three factors that
thrift institutions.
individual investors, trusts and could lead to a reduction in cor-
part this has reflected a considerable shift of deposits from demand
you can
time accounts. That
is
necessarily so, since the increase
in commercial bank time
to savings or
.
„
An
increase in savings deposits
sharp
rise in the demand for mortgages
and bond investments.- But commercial
banks
differ
funda-
would ordinarily point to a
eleemosynary investors.
I would suggest that we call the
difference
between
the
llow
of
major financial institu-
funds
to
lions
and
the
total
amount
porate bond financing From the
abutting back'of plant ami
] s.'
,11 8
°V. ? f ",
#S2i
'it ^ th« n?!t
„
Tru?Js
of
mentally from other financial institutions. They are versatile and
flexible institutions, tied neither
money
form of organization nor by
policy to any particular outlet for
funds.
Commercial
banks
are
Table II, I have tried to measure
at the bottom line, the gap be-
lenders
short-term
long-term
of this
bonded
commercial
year
of all long-term investments by
deposits increase
larger gain in time
even
lenders,
demands
>
well
as
they
other
to
are
pronounced.
The experience
that
as
seek
and
where
gain in time and savings
billion
this
mercial banks.
state
3.4
savings
and
v
com¬
of
outside
negligible
1956, and that
year of¬
ferings were 10%; higher than a
year
ago.
The net increase in
totaled
that
Supply of Long-Term Funds
mutual savings
reporting
somewhat
smaller gains than last year. On
„...,1
the
other
hand,
corporate an J
state and local pension funds are
Showing larger gains than a year
meet
it
to¬
TABLE II
are
most
find
mort-
of
associations,
banks
in
we
time
to
happens
Life
companies, savings and
insurance
loan
be¬
concern
holdings
bank
little.
changed
has
banks
time
well reach
could
into thrift
savings
items
institutions other than commercial
of
debt
to
have
we
eages and bonds and ignore what
rates
But for the full
1957, the increase in corpo¬
quarter.
accurately,
1957, we find:
flow
three
the
actual increase in com- less than a billion dollars
use
mercial
second
this
markets
Savings
of
take
we
find
the supply side of
the market for long-term funds in
is
bond
If
gether—mortgage lending, invest¬
ing in state and local bonds and
investing in corporate bonds—we
banks will increase their holdings
Turning* to"
well.
ment of the demand for money—
for homes of recent years was the
low
4.8
there
new
of the demand
part
Corporate Bonds
State and Local Bonds
amount.
12.0
by
First, it becomes evident that
considerable
11.5
very
draw from
drop
14.8
In the first quar¬
ter
of this year it was nearly
double last year's figure.
The in¬
crease was moderately less in the
rowing in 1955.
the past.
since 1953.
What lessons
this
rise
that
we
in real estate mortgage bor¬
What lessons
all
1957
$7V2 billion, as against a record of
$5.2 billion in 1956. (See Table I)
in Mortgage
examine
now
us
in
seen
financing
bond
porate
Borrowing
Let
have
kind of upsurge in cor¬
same
year
lessons
we
We
1957.
in
rate
The Decline
16.2
1955, the commercial banks of the
reported an increase of
increase in corporate
1958 and thereafter.
these
apply
1956
12.5
country
corporate
to
turn
we
borrowing,
to
1957 statistics, and then attempt to
project the probable demand for
and supply of long-term funds for
I
1955
9.9
the
Upsurge in Corporate
Borrowing
The
conclude
that are
Reserve
policy in reducing the demand for
mortgage funds.
long-term
together
going to shape the course of bond
Federal
of
effectiveness
1958(??)
1957(7)
1954
Real Estate Mortgages
Supply
as
increasing their holdings of cor¬
porate bonds by a relatively small
(In Billions of Dollars)
1933
relatively
and
year
compared with past years.
Thirdly,
commercial
banks
are
I
TABLE
last
as
same
borrowing.
gage
Demands for Long-Term Funds
explosive.
truly
forces
slap
demand and supply forces
prevailing
prosperity, fear of inflation, plus
easy money), then we would have
had a level of borrowing, business
activity
and employment that
easily obtained statistics and
that we understand the
some
certainly
we
with
had
have
would
(as
starts
housing
this?
the
building as, say,
if we had 1,350,000
home
and
ing
1957, we find.
.
conclude—
that if we hadn't had this restric¬
tive credit policy, if we had had
the same level of mortgage lend¬
of 1957
and other loans. Secondly, noldI
d
iiraricin2 has in^s of s.tate, and loca| bonds by
increased 00
Ct c 8
commercial banks will increase
offset reduced real estate mort- by about $200 million, about the
.
for
demand
the
at
Commercial banks have
year.
shifted their lending from mortgages to short-term commercial
little
The
Finally, we have to
basic statistics
we usually use pointed to a strong
bond market, and yet the bond
market suffered acute weakness.
in
last
abrupt drop in mortgage borrow-
in the face of rising in-
Looking
funds
of lending.
other words,
Lessons
up
very
if
have been much more
In
such
total demand for long-
Hence,
term funds is registering very
little decline this year, despite the
high interest rates have
little deterring effect on
borrowings. Borrowing has
inflexible rates on
combined with
yields would
sharp.
pecially by corporations.
the
local borrow-
and
ing, and
conventional
with
Secondly,
mortgage
government-underwritten mort¬
yields on outstanding issues.
If gages, curtails mortgage borrow¬
we had taken yields on new issues
ing and home building and
is
alone, which is a much better more effective in curbing mort¬
measure in a tight bond market,
gage lending than any other type
the increase in bond
state
terest rates.
financing dominating
the housing marketing as it once
basis points—from £.79% to 3.65%. again is doing in 1957, the demand
And even the yield on long-term for homes and, therefore, the de¬
government bonds, which the mand for mortgage money will be
Treasury has protected from the substantially lower than the level
test of new offerings—except for of the last few years.
the very recent and small issue of
Thirdly, we can conclude that
12-year
swells
works
public
for
gone
1
causing
shows what
pay¬
rates,
monthly carrying
no
longer freely
deposits. Then, this is what we
find: ■
r:' %
' V
-rThis year, based upon the
figures to date, commercial banks
will increase their mortgage holdings by perhaps $200 million,
against an increase of $1.7 billion
we
cannot
thrift
of 1957 showed
as with
assume,
institutions,
that
a
tween
funds
the
and
institutional
the
volume
flow
of
of
bonds
and mortgages looking for buyers.
1954, that institutional savings
gan was $1.3 billion—we had to
In
sell that, amount of
bonds
and
mortgages to individuals, to trusts
and to buyers other than the b'g
nf
J
J? J
iOv?
Th0
7".
i
JL
,
'
,J?.fif f J
of la-t December, that sales aie
nlat ItL
nmnnnnwl
becoming more pronounced, an J
smaller profits are not conducive
to large-scale spending on plant
feiiiSthe^quiditv^uee^moro
feejli
the quid tv squeeze mo^
and more, and, finally, that busiIn nessmen as well as bankers and
institutions listed.
1955, that gap rose from $1.3 to
$3.9 bUlion
deposits financial
equivalent to an increase in the
supply of funds to buy long-term
bonds and mortgages. If we want
to measure the supply of funds
for the mortgage and bond
is
needed to absorb the bonds
and mortgages that are offered,
the institutional savings gap.
In
others begin to understand what
the
Federal
Reserve
is
trying to
had to be made more attractive to
J b
bring in these new buyers. In 1956, do: a" these factors together point
the gap rose to $5 billion; and to material cutting back in plant
.Volume 186
Number 5682
.
The Commercial and Financial Chronicle
.
.
(1713)
">
and
equipment
spending—not
in
(all industries, pjaybq,
not in the
telephone industry or in the utillties—but in enough industries so
1
that the total
,
I
will
declihe.-What
concerned with herd is the
we are
total, not parts of thatitotdl.; " ^
C Secondly^ there will also be
i
'
tendency in
down
demand
USES:
funds
has
been
to
lands has been to
year.
big
a
rise
last
,
1957<?)
24.2
30.0
32.0
30.5
3.0
—1.0
6.5
4.0
n
2.2
*
9.2
4.8
Other Assets
a
0.2
0.1
will
bring
huge
21.7
0.1
43.0
The chief
0.2
threat
to
0.1
43.9
39.2
an
Depreciation
14.8
16.4
17.6
5.7
8.8
8.2
7.1
6.5
"3.8
4.2
5.2
7.5
6.5
Stock Issues
2.0
2.4
2.8
2.5
2.2
Mortgage Loans
1.1
1.3
1.3
1.0
1.0
—2.0
3.6
—1.0
Issues..-^
Bank
Loans
Cash &
_
_
Governments-
5.0
Other Liabilities
—3.2
Total______________
1.3
0.7
7.9
21.7
43.0
chronic
If
we
look at the very valuable
the
on
and
uses
of
sources
corporate funds (Table
III) we find inventories rose by
$7.3 billion in 1956. They will
probably rise by about $3 billion
this year. If you ask me to give
my
guess,
for whatever
it
is
worth, I think it is more likely
that inventories in 1958 will show
a
little decline rather than
Even
rise.
a
if
they remain about the
that means a reduction in
same,
the need for funds
to finance in¬
ventories
$7
of
over
compared with 1956.
Thirdly,
that
there
bank
available,
•
is
loans
and
billion
<■•••-•
the
will
a
as
prospect
be
more
important
very
for the
reason
bulge in corporate
bond financing this year has been
from
come
and
earnings is to
state
and
local
bonds
that. So if there is
in
credit
a
change
state
conditions—and
is
and
highly
local
offer
change
a
I
think
probable—
bonds
would
re¬
flect it very quickly. They would
be
most
sensitive
because
the
municipal
from
than
the
suffers
buying more
single factor.
ago, the banks
other
any
Three
market
lack of bank
a
were
bond
four years
or
absorbing more than 40% of
supply of municipals.
bank buying virtually
new
When
a
if
as
have
been
with
abandoned
and
ago,
the
wind.
did
instead
in
area, there
in recent years.
of
turning,
1954, to
tribute
a
erties
of
screws
the
for
That is
a very important
change
policy. The Federal Reserve is
thereby trying to disabuse the
of
this
people, of all of
notion—which
the
3%,
up
4%, or whatever
professors teach is
will
market, the
reverse
occur.
for the period indefi¬
first,
—
some
lessening in
borrowing
demands;
short-term
second, which could be
portant,
more
relaxation
some
of
im¬
the
restrictive Federal Reserve
policy.
Such a relaxation is inevitable if
a
business recession .becomes
pronounced, r e a c h i n g a
point where it generates consid¬
erable
unemployment.
have had
slight business
a
without
material
ment. That is
politically
which
So far
lot
a
than
we
more
only
the
been
short-term
market
has
been thus tested. Even if there
further
term
offerings of longmaterial size, gov¬
ernment bonds could
in
least
recover
general rise in prices.
a
In conclusion
then,
1958 could witness
in
are
new
bonds of
reces¬
feasible
have
by the acid test of large new is¬
of
long-term
obligations,
unemploy¬
unemployment,
bonds
sues
no
more
sion
Government
under least pressure. The govern¬
ment market has not been tested
the
trend
we
how
see
major change
a
of the
bond market,
change brought about, first, by
attention
a
Federal Reserve policy to a
degree that no other development
a
porate
bond
would.
ondly,
by
Therefore, 1958 could see a nar¬
rowing of the institutional savings
gap
if demands for- long-term
of
political
upon
funds
should
decline,
even
increase, chiefly from the
banks,
erately. The
would
then
even
mod¬
institutional
decline
the
volume
conviction
flation
gap
will
substantially
this
in
cor¬
bond
bank
in¬
mortgage lending
contract
the
savings gap
and issues would not have to offer
higher and higher yields in order
reluctant
buyers
to
narrower
that
other
more
residual
individual
buyers
into
and
..
the
bond market.
the technical
of
bonds.
the
gap,
The
stronger
position of the bond
the
Let
us
now
A
I wouid
look at each of the
three major segments of the bond
yond
market
longer
bonds
rise
in
they
of
individually. Municipal
shown
the sharpest
have
are
yields
this
year, because
hurt most by curtailment
commercial
bank
buying.
In
each of the last three
years, com¬
mercial
banks
increased
their
holdings of state and local obliga¬
tions by, roughly,
$200,000,000. In
1954, they increased such holdings
by $1.8 billion.
If there is
a
decline in bank in¬
Long Look
the
we
the risk
Ahead
like to look ahead
be¬
next year. While
the
look ahead the greater
we
of
run
overlooking or
appraising correctly important
market
forces, yet we all have
not
to
do
The
the
this
as
practical
a
experience
of
1957
following lessons
long-term
outlook
rates
bond
and
so
The
outlook
as
for
we
the
look
as
the
interest
is
i
economy;
uninterrupted in¬
As
for
the
are
con¬
•
ahead
into
Aug.
31
compared with $2.37 in the previous 12
interest on construction credit of over,
an
are
improvement in earnings in 1954.
This gain in share
earn-,
ings of about 72% since 1953 compares with similar gains of 63%
Central
for
Light.
Illinois
Dividend
Public
payments
E. & G. in each of the past
Service
the $1.60
is 11.1.
,
that
a
and
43%
for Central
have increased for
five years (1953-7).
At the recent over-counter
on
signs of it,
going to in¬
dividend rate is
Central
Illinois
Illinois
price of about 28 1/2, the yield based
5.6% and the price-earnings ratio
over
The dividend payout is 68%, somewhat below average, so
moderate increase in the rate in December or March would
While
to
there
believe
a
a
to
mands
many
the
reasons
for
Earnings
Dividends
$21.0
$2.35
$1.45
19.0
2.07
1.14
15.9
1956
1955
1.54
1.07
_
U
not
must
we
-Common Stock Record
Revenues
(Millions)
:
Years
repeated tendency for
fall short of the de¬
capital,
of the year.
will
1960's
high level of capital de¬
mand and
savings
are
that
surprising assuming that earnings hold up during the bal¬
On March 6, 1956 the quarterly rate was raised
from 30 to 350 and three months later to 400, the present rate.
ance
Not the Secular Trend
-
*
Appro*. Range
32
-261/4
27%-21%
2P/4-173/4
with
1.953
15.4
1.38
1.02
cyclical fluctuations that the
changed Federal Reserve policy
1952
14.7
1.55
0.87
171/2-15%
13.7
1.57
0.87
17
will make
1950
12.5
1.80
0,87
161/4-123/t
11.3
1.70
0.87
10.9
1.65
0.87
151/4-111/4
0.87
17
that
trend
secular
even
more
pronounced.
1951
is
_
._
__
1949
part of the long-term rise in
interest rates. What we have
seen,
1948
What
we
have
in
seen
1957
not
a
bubble
brought
about
1947
by
wise
a
Joins
restrictive Federal Reserve policy,
a
bubble that will not last. Next
year,
there could well
nificant
which
decline
will
not
in
be
the
rates
long-
trend, but which will greatly
affect us in our operation for the
1.78
183/4-171/4
-14%
141/4-10%
-12
MENLO PARK,
S.
Baird
Robert P. Davis Adds
Lichtman, Mong
has
SAN
Calif.—Peter P.
become
affiliated
<
(Special to The Financial Chronicle)
Chronicle)
FRANCISCO, Calif.—Wil¬
liam Houghton has
become associ¬
255
was formerly
with Lichtman, Mong & Co.,
ated with Robert P. Davis Co.,
Chestnut
Grant
Street.
He
was
1139
previ¬
ously with La Montagne & Co.
Avenue.
He
with Samuel B. Franklin & Co.
term.
With Pflueger & Baerwald
(Special to The Financial Chronicle)
SAN
9.6
if Special to The Financial
sig¬
a
interest
affect
term
nearer
_
__
'
that rising
on
FRANCISCO,
Calif.—
Richard A. Losh has become
American
ended
share.
a
for the
many
presents
far
for
prices
cerned:
matter.
time next year, for completion in 1961.
some
of this program
not be
trend
Municipal Bonds Most Sensitive
result
pected to reappear.
As indicated in the table below, earnings were irregular dur¬
ing 1947-53 but have advanced sharply since that year—from $1.35
to $2.36. The company received a fairly substantial rate increase,
effective in the latter part of 1953, which was doubtless responsible
of
signs
I think, is
market.
-
The recent earnings show a gain of 10 over calendar
1956. Next year with initiation of construction on a new
generating unit the interest on construction credit might be ex¬
60
dan¬
the
gap
a
months—despite loss of
It
that.
more
inevitable.
There
confuse
—
'
the
respectively, Central Illinois E. & G.'s earnings of $2.36 for the 12
stopped the boom in 1937; and, as
sure
as
day follows night it is
stopping the boom in 1957 and
—
that has to be filled by
individuals, trusts, and other more
attract
that
is
witness
the
increased
and
than
even
of
time.
same
1956
generating unit
months
crease.
buying
of
Gas Pipeline Co. of America in
1958, which would permit expansion of house-heating sales.
The table below gives the company's financial record in the
past decade. While share earnings of the other two "Central
Illinois" companies have shown recent declines of 3% and 6%,
tight money, Dr.
Marcus
Nadler
is
so
right.
It
stopped
the
boom
in
1920,
it stopped the boom in 1929, it
and
increased
and
vesting
is
effectiveness
sec¬
gas'receipts is,
space-heating customers. Transit prop¬
capacity of 2.2 million cf of 1,000 btu manufactured gas is used for
purposes.
The company expects to obtain some addi-!
than inflation, a universal
cor¬
borrowing
market
more
gerous
of
These two factors—smaller
porate
does
what
financing, and,
mod¬ policy at the
if the supply of funds
seeking long-term investments
commercial
in
relaxation of the tight credit
some
erately;
should
decline
end
con¬
of
year
it
1958.
71%
stand-by
combats inflation,
money
fights
bonds and mortgages by commer¬
cial banks, particularly if there is
centers
About
tional natural gas from Natural
it?
Tight
but
.30%.
ability from which approximates 12 million cf a day. Two propane
peak shaving plants with combined daily capacity of 4 million cf
will be completed in 1957. A manufactured gas
plant with daily
difficulty as well as
Corporate bonds have been af¬
can
higher cost of financing through fected
order, since every year you
by the fact that they ex¬
the banks.
perienced by far the largest in¬ delay, it will cost so much more.
And then, when we get all loaded
Finally, on the supply side, the crease in the
supply of new offer¬
volume of funds available could
ings this year. If the volume of up with all of ihese inflation
be increased materially next year
offerings should contract, yields hedges and we have no place to
by increased commercial bank could
go, doesn't every sensible person
drop materially because the
bond buying and mortgage lend¬
have to conclude ihat we would
pressure from new issues would
ing. That would occur if one or relax.
really get a depression that will
curl our hair, or whatever is left
perhaps both of these things hap¬
pen
business, while commercial customers
industrial
The company buys natural gas from Panhandle Eastern
Pipe
and Natural Gas Pipeline Co. of America.
It also has an
interest in a gas storage project in northeastern Illinois, deliver-
ings into equities and real estate,
business should buy all the plant
and equipment and inventory it
the increased
rural
and
Line
nitely ahead. If this is assured,
then people should put their sav¬
back into the
■
the company did pot have to do
permanent financing in 1956, and bank loans can also be used
during 1957. Presumably financing of some kind may be necessary
in 1958, The equity ratio approximates 33 %.
so
ceases, that hits the market and
hits it hard. When the banks come
a
any
or
Harvard
the average
Freeport is in
sold in 1953.
the
As
dangerous—that the price level is
going
and hardware.
an
new
a
us,
be
can
air-conditioning
exchange of electricity and joint use of excess capacity
through June, 1961. Central Illinois E. & G. will start constructing
in
our
has
A favorable agreement has been made with Commonwealth Edison
tight
policy.
minds of
Co.
industrial
company's generating plants had an
aggregate capability of 163,700 kw providing a generous reserve
over peak load of some 39%. As a result the
company has only had
to spend about $4-5 million a
year on construction during 1956-7.
massive easy money, the Fed¬
eral
Reserve
authorities
have
tightened the
23%
were
At
of
money
new
increased
an
Gas
&
of
has been considerable industrial development
derived from domestic and
policy
a
and
a
they
as
centers, plus
addition
.Electric sales contribute about 68% of revenues, gas 30% and
Of the electric revenues, about 42% is obtained from
residential
leaning
as
the
steam 2%.
this year.
some
and
1953
about
is
shopping
farming
seems
Business
whole has receded
Yet,
it
now
from
years
dairying and agricultural area and in addition has a number of
manufacturing establishments. Although Lincoln has been mainly
a commercial and
trading community in the center of an excellent
assured, and
bring a boom and
to
sure
time
a
by Central Illinois Electric
recent
parts,
con¬
is
leaning against the wind
32.8
get income which is tax exempt,
you
is
-
Rockford is one of the important
manufacturing and com¬
mercial cities of the State, principal industries
being the produc¬
tion of tools, automotive
The old Federal Reserve
policy
of
loans, the most effec¬
tive way to sustain
States
in
load.
in its wake in time.
bust
year
series of statistics
United
inflation
that is
—0.9
39.2
the
served
area
plants and
productive
as
tion, they will .let for
to
43.9
The
benefited
we
vinced there is going to be infla¬
1.5
1.0
that of
that is
a
supplies electricity, natural gas, and steam heating service to a
population of 241,000 in several sections of
Illinois, including the I
cities of Rockford, Freeport and Lincoln.
*
.
p.
' "
that bright
question. But if everyone is
1
4.0
1.0
18.5
economy
as
13.3
Bond
$21 million
The stocks of the other two are on the
big board, but Electrie & Gas is traded in the
Over-the-Counter Market. The company
year.
have inflation in peacetime in
can
32.8
•
Of the three ''Central Illinois"- electric
utilities, Central Illinois
Electric & Gas is the smallest with revenues of
about
economic prospect is not so much
inflation as e general belief that
1.0
URGES:
Retained Earnings_____
Central Illinois Electric & "Gas Co.
capital
Interest
g s.
Utility^Securities
By OWEN ELY
1960's. These capital
tend from time to
should
inflation is inevitable. Whether
Total
Public
is
technological
slackening in the
desire of our people to raise their
living standards. These develop¬
rates, therefore,
should be firm or rising
during
much of that period.
195K( ??)
4.6
There
year.
no
time to exceed the supply of savJ95G
Cash & Governments._
3,000,000 a
slackening
in
progress,
i
1955
Plant & Equipment____
22.4
Inventories
—2.0
Receivables
1.2
almost
no
needs in the
,
1954
60's, is not only as bright as
it is brighter than ever. Our
population growth continues at
ever;
needs
.
-)*
the
ments
III
Sources of Corporate Funds
(In Billions of Dollars)
;
,
v..
for
1
^
fmancef larger inventories. Inventories registered
a
fields to hold
inventories.
A
considerable part of the corporate
TA&LE
Uses and
many
reduce
or
nected with
con¬
Pflueger & Baerwald,
Mills Building. •
-
Now With Reynolds Co.
Joins Wm. R. Staats
(Special to The Financial Chronicle)
(Special to The Financial Chronicle)
OAKLAND,
Calif.
—
Reynolds
Street.
&
He
Co.,
was
2150 Franklin
formerly
with
Harris, Upham & Co.
FRANCISCO, Calif.—Jack
SAN
Robert K.
Miller has become connected with
A.
Dalziel
William
T-Tnrris
is
now
associated with
R. Staats & Co.,
ter Street.
He
Tlnham
was
&:
Ill Sut¬
formerly with
Co.
The Commercial and
Financial Chronicle
.
.
Thursday, October 17,
.
1957
(1714)
prosperity. So long as the econ¬
omy could not do everything that
all of us were trying to make it
Federal Reserve Monetary
some
Fed
have
policy of the Federal Re¬
that the record is, about
as
good as frail .human beings
could hope for. Moreover,whjle we!
may not have succeeded fully in
checking inflation, we seem to be
achieving at least partial success.
There are growing signs of public
awareness of the inflation threat
System has been to respond
conditions outlined above
with
continued steady restraint
on bank reserves.
I think that in
serve
the
to
the
at
prices since early summer. This
change of sentiment may not last,
but to my mind it is a healthy
rise
summer
all
of
Reserve
the
optimism of a few months ago.
Meanwhile, what has been hap¬
pening to commodity prices? The
wholesale index has stopped ris¬
and basic commodities as a
have dropped rather sharp¬
ly. The index of consumer prices,
on
the other hand, continues its
slow and seemingly inexorable
ing,
It
that it
indication of the future, in¬
dustry will again be under pres¬
sure
to grant wage increases in
we
gains. While
derive some satisfaction
may
hope from the slowing down
of the price rise, it is certainly
far too early to say that the dan¬
and
of inflation is past.
ger
Demand for and Supply of Funds
*
Another
for
area we
might consider
moment is that
a
of the de¬
supply of funds.
Corporate and municipal bond of¬
ferings have been at record levels
this year, and the calendar for
such issues is still heavy. To some
extent
these offerings have en¬
abled
borrowers
to
repay
old
for
mand
and
bank loans
or
to avoid new ones.
rate, total bank loans have
less sharply than a
At any
much
risen
On the other hand, the
ago.
year
Treasury's difficulties in the way
of attrition and savings bond re¬
demptions, while helping to pro¬
vide funds for the corporate and
municipal markets, have also put
heavy
pressure
the
on
banks as
underwriters for the Treasury.
new
factor is the
the
in
prospective shift
financing of defense
curement
A
from
contracts
pro¬
the
Treasury to the banks, which will
reduce the need for Treasury bor¬
rowing but
for loans.
will
increase
develop
demand
gradually
over
a
of months, at least in so
actual drawings are con¬
period
far
the
This demand, however,
as
cerned.
The
banks, especially those in
chief
the
good
deal
were
a
centers,
money
are
a
liquid than they
ago.
Consequently,
less
year
the
crease
more
contributed
to
the
various
Reserve
increases
the
rather than
have
leading them, should
demonstrated
this
pretty
clearly.
should like to
single statistical
series can give an adequate meas¬
ure
of the degree of real tight¬
ness
in the money and
capital
markets.
There is always grave
that
I
no
hope you agree that it would
great mistake to relax credit
restraint just as we see some hope
of
achieving the price stability
a
that
have
well
as
to
expectations,
current
money
as
by-product of the
well as of the size
cash surplus.
the
has
a
as
"capital investment
boom"
*
International Outlookf
.
held
been
partiy responsible
inflationary pressures of
the past year or two, but we are
for
the
beginning
now
effects
of
in
vestment
benefit
to
the
from
in¬
enormous
facilities
over
this
period.
Some
degree
of statesmanship on the part of
new
plant
labor
and
management
will
still
All
the
of
/ ;l
v
/
wh6:are intere^ted in
us
achievement
capacity to export those
enormous
:Pr°ducts.
*
,:.
/ /-'/>'■?<
stable:uhnd.f-y As-.an exporter we are at a
of
great,
trading and investment'-advantage- because our exports,
relationships among the countries though large iii absolute terms,
of the world must have felt, satt' .are. still relatively small in produrable
isfaction
the
in
results rof;
the
poition
meetings in "Wash-ypribduce,
recent annual
to our total capacity to
and cam ,be expanded
ington of the International Mone-
Fund and /the
tary
Bank. In addition to
in
industries, no doubt at
least partly as
a
result of the
recent vast capital expenditures,
are
the best ally we could have
in-seeking this goal. They should
permit the normal forces of com¬
petition to become increasingly
effective
and
to
put
check
a
to
further
price increases.
Profits
be squeezed somewhat in the
without
further
be
a
ultimately
restraining
wage
such
effect
boosts" that
a
on
cannot
absorbed through increases
in
productivity.
While
our
policies
balance,
checking inflation.
position,
difficulty.
been
uneven
on
many
impact
specific
We
support
that
No
seg¬
long
as
we
receive
to
are
on
may
face
as
your
you
moral
believe
the right track.
One-Sided
of
a
exceptionally ' American
tive
especi$ty>in the matter
powerfullyttavorable German
the
on
inflation
that
in
insidious
the
last
of
two
problem
year
or
may
have given the im¬
pression that
of
we
other
we
are
unaware
real or po¬
impression would
be wrong.
Our policies must al¬
ways be framed with a view to
any
tential.
the
as
problems,
Such
dangers
those
of
an
of
recession
inflation
necessarily
—
couched
from
in
well
the
varies with
the current environment.
rectives
as
but
Our di¬
Congress
are
pretty general terms,
Restore
most
Chief
the
•
exce^iye spending, both
private.
There are
and
Some, of the less developed coun¬
tries have the additional problem
e x
diminishing
4h
a n g e
witty/the
earnings
declining
prices of the primary commodities
they
try
risks, but there is no coun-
better
Moreover,
fairs
are. and
encouraging signs of success
the curbing/of;.such spending.
foreign
some
as
so
stable
able
if
to
we
to
assume
manage
dollar,
the
them,
af-
our,
sound
risks will
maintain
a
pf inflation in- be small,
now
which
monetary
It is not only to our great
benefit, but a part of our grow-
a
of
countries
in
duced by
of
international-
our
and fiscal; this system work smoothly and
balanced efficiently. Of course, there are
monetary
can
for
mainly problems
in
a
of
relativity/small and that ' ing world responsibilities, to make
countries,
The
crucial
factor will be their' ability to cope
with their internal problems,
public
normal part of the functioning
system.
it would
trading
which
the holding of
large balances for foreign account
is
appropriate
Concentration
.
mind,
my
has 'receded,
that thd margin of imbal-
is
m +To
the , chief
Now:that the specula-,
measures
The Federal Reserve System has
had to concentrate so much atten¬
tion
were| hever
wave
appear
ance
im- -likely to be.
pointing to some
while
position
emphasis
there f have
complaints of the
of
tics,
might well nullify such results as
we
have
already
achieved
in
continue
several
condi¬
tions, has shown some signs of
stabilizing, or even strengthening,
limit,
ca¬
of events should not be
to
partly
ar¬
all
sought so
dently. The moderate excess
pacities that have appeared
we
sequence
sensitive
was
difficult decisions in the year that
lies ahead, and I hope we shall
but
so
to the
market. That frequency, of course,
mature easing of credit conditions
I
be
process,
time in recent years. In con¬
the bond market, which is
commeftts'iOf Private working balances which
withr^1"- lncfispensable to the conduct
Now.a'itAv. o.f..business ..between the United
words on the international out-.plates,and other important tradlook. The American economy npw.in£ countries. But /the main safeplays such 'a key; role fn t-the-f SH?,r4
^hnsf a,, sudden- large
world economv that the levPlvofP;W.ithdra\va\tfn -gold-lies in - the
our activitv affects people every-.Powerful attraction which Amen,
where '
^
iv :
* i ;r3can products have for :many for/;
/t/ •.tytyi'/'W oign -;C o un.t r i e s, and in our
point my
Up to .this
the domestic situation.1
—
may
trast,
frequent trips
understand
also
we
have dealt almost exclusively
the
such
that
twithout impinging to© greatly on
International. domestic consumption.- Also, the
economy is self-suffir
be a necessary ingredient if the
able exposition of guiding, princh-Jcient to ay high degree so that
specter of creeping inflation is to
pies by the heads: of the world -Our exports, can expand without
danger of reading too much sig¬ be laid completely.
However, I
organizations, the meetings were requiring'a corresponding rise in
nificance
into
changes
in
the see no reason to accept the defeat¬
notable for the unequivocal state- ^imports.
These factors were
week-to-week level of net bor¬ ist argument that the
only alter¬ ments by the British and Geritoam pointedly* demonstrated by last
rowed
reserves
without
giving native to creeping inflation is
governments of their determina-'*'*winter's Suez crisis, the effect of
enough attention to other factors serious recession and unemploy¬
tion to maintain the present par-which was to cause foreign coumsuch as the various market rates ment.
values
of
the
poundj 'and the -tries to draw down their balances
of interest themselves, the geo¬
Naturally we are gratified by the deutschemark. Already there are not in gold but in American ingraphical distribution of reserves, degree of public
acceptance at¬ signs that this determined catti- idustriah and , agricultural
prodthe concentration of money mar¬
tained by Federal Reserve poli¬ tude, which is further underlined iuetg. We took this sudden increase
ket
pressures
evidenced by the cies. But we don't know whether
by the British pi&gram announced -in the demand for our goodsOn
financing problems of the Gov¬ the tendency for
wage settlements a few days before the meetings,'PUr stride.We can best ensure
ernment
security
dealers,
and, to outrun productivity gains will
has borne
frui|p$j the form:p£ .adour continued capacity to export
more
generally, the "feel" of the persist
in
spite
of our
steady cessation of the heavy speculative by preventing inflationary forces
market
including
your
own
credit restraint, or whether the
flow of funds ^v&ich had tended -hi this country from putting our
evaluation of the supply-demand
cry for relaxation of tight money
to
cause
concern/about various goods at a competitive disadvanfactors in the capital market.
will be overwhelming if unused
European currehf&jes. The under- tage. They are not now at a disresources
tend to increase.
Pre¬
lying trade and/Payments statis- advantage,
Mistake to Relax Credit Now
nor do they seem
the
any
if
make
the
Incidentally,
stress
deal
good
and for the Federal Reserve
Treasury had not had to
ury
The
followed
market
rates
a
er.
Similarly, debt management
problems
might
have
involved
less difficulty both for the Treas¬
of
Banks
in
street,/largest..international money market. A very large part of these
that
we
don't
know/alty tiie/^ims.LvOh/ us constitute official
answers; that each business cycty/monetary reserves on which the
differs greatly from all that have; foreign
country in <: question is
gone before,
and that we must,- glad,to earn a return, in contrast
always approach our- task in. .all, with
unproductive holdings of
humility.
'
;/// ,/ty. gold.; Also,, a large part consists
other side of the
the
—and
helpful if it had been larg¬
debt
the money market,
and
the
way
in which during
August the discount rates of the
in
pressures
been
merely want to emphawe
understand that', at
central
a
work
over.
surplus
budget
the
but
course
is
bility for combatting inflation has
been placed on monetary policy.
has had some help from fiscal
required for a sizable in¬
in the quantity of money,
of
times
not sure that
test
I
that
size
It
have
we
am
difficult
would
By
ments.
ieadju'sh,, strength, and are aware of the
advantages, both- to ourselves and
to foreigners of the development
bank may hayefos-of/pur .^market
as
the world's
economic
fundamental
monetary
that
Perhaps too much of the responsi¬
in
spite of the slowing down in
growth of bank loans, the
banks in general feel that money
is about as tight as it has been at
has, and I
most
the
policy,
ing.
the
in
said
been
two
or
year
policy has been going through a
difficult testing period. It is true
pressure—but when the demand
for money continues to increase,
rise, primarily because of increas¬
interest rates tend to continue to
ing prices for services and for food
rise, even if our action consists
products, and perhaps also reflect¬
only in limiting the increases in
ing with the usual lag the upward
the supply. We have not intended
movement of wholesale prices that
occurred some months ago.
Im¬ and do not now intend to intensify
portant wage negotiations are due
next year, and if the past gives
;
often
has
last
be some
and I am
move may
.
policy cannot take all
but it deserves some
reserves
group
fOr^anf;.;have ~ been exaggerated. ? The
di|tancb ~Srojvyth of these foreign-held dolahead of us,
making far; balances is really the most
no
attempt at a prediction. 3.ut" convincing J evidence we
could
we
must be as careful to ;ayoi{l have of the strength of the dollar
"overstaying" our market asp to/ .and . the, confidence of foreigners
avoid
premature ease of credit,, in it. The rest pf the free world
There is always some doubt as, to.has,; to •. a- considerable
degree,
how quick and effective an easing \y.illingly made us its banker. We
of credit may be in remedying a assume this - role with assurance
downward turn in the*-economy ,/becmise we: are ourselves confiif
the
turn
reflects a need!} .for .-dent.:of .'our-.economic and financial
occasion
The
direction.
major
Difficulties Are Not Over
was
refusing to provide
credit,
the credit.
of
Basi¬
Banks.
substantial increase:in unused rex
theory that creeping inflation
desirable or inevitable.
the
not so much Federal
Reserve policy as the continuing
excess of record money demands
over
available
savings,
which
caused interest rates to go on ris¬
cally it
with^h^tions, -and individuals,dhthe sense *
tthat ; their - s u d d e n liquidation
sources
of ; labor and materials,ycould cause a heavy drain on oui?
some
change of policy would be monetary gold stock. It has always
logical either in intensity Or Jnv seetned to , me that these fears
faced;
should.. be
we
either
is
the discount rate
cent increase in
tially less than it is-now inrelax-iSizabieoutstanding short-term liation
to available 'Savings,, Or if bilities to foreign banks, corpora**
disbe¬
of
signs
example, if thc upwards-tremt ^ kThere,have beeii a -number of
prices is stopped,^or if the pres^ .o.ommenfs recently on the potenfor. funds becomes substanr. lioi danger to this country of our
of
sure
part of the public in
the
on
Monetary
including the one-half per
rates,
development, if held within rea¬
sonable limits, after the rampant
lief
the
interest
in
encouraging
and
the
of
For
suggest
But
there
are
enough
"soft some
quarters there have been
spots" and doubts as to future de¬ misconceptions as to this policy
mand to have caused a good deal
Contrary to some impressions, we
of uneasiness among businessmen
have made no attempt to force
and economists as to where the
liquidation of outstanding credit
economy is going next.
It would or to interfere with the normal
seem that the greatest change in
flow
of savings
into industrial
the last two or three months has
plant and equipment, new homes,
been
not
in business
statistics, or
public projects. We have been
which on the whole have changed
accused in recent months of in¬
very little, but in business senti¬
tensifying our policy of restrict¬
ment, which has deteriorated ap¬
ing the availability of credit, and
preciably and has been reflected for evidence the finger is pointed
in the declining trend
of stock
of productivity
that
distributed in a manner
different policy/ivomZSTi&im
last two-and-a-half years,-*; it
Runlfanger
^
tirely
arbitrary, and out of keeping
with the market processes of a
free economy.
On that score, I
Leads, Market
Rates
expenditures, to mention
of the expanding sectors.
excess
only serious question would
been
whether the / impact
The
was
Not
Follows,
The
ernment
any
actually became visible.
was
as
appears to be some further up¬
ward thrust in state and local gov¬
one
effects
the
when
cern
restraint
last few months.
evidenced by such mea¬
high employment and
personal incomes, and record fig¬
ures
for retail sales.
And there
serious con¬
of such
should have been no
in recent weeks. And there have
product contin¬
also been encouraging signs sug¬
ues to rise slowly, even in physi¬
cal terms. There is no doubt that gesting that personal savings may
have grown appreciably over the
business over-all is still extremely
the total national
as
all at once, there had to be
restraint somewhere. There
do,
Policy Nol a One-Way Street
sures
of
levels
difficulties of the primary pro4
our
actions to the general obje- ducing countries, but we shouldlive of sustained economic growth
bear in mind that neither these,
—how
much weight to
give to countries nor the wond as a whole
price developments and how much would benefit in the long run'
to signs of greater availability of
from a departure by any of . tnej
unused resources. I think we are pleading
trading' nations from £M
fully aware that the time may general program aimed at orderly )
come
when it will be necessary -anrt substainable growth free of
and appropriate to follow^amven^ inflationary-excesses-. >•: - r
>
ment in deciding how best to gear
has con¬
high
enjoy
to
admittedly increase the
declines
for judg-
and there is wide room
fact
the
economy,
remains that the country
tinued
good,
the
of
ments
'
Continued from first page
e^tySTt.'
These
price
Two With Morgan
& Co.
(Special to The Financial Chronicle)
LOS
ANGELES,
.
*
Calif.—Walter
E. Partridge and Robert M. Russell
are now
affiliated with Morgan &
Co., 634 South Spring Street, mernbers of the Pacific Coast Stock
Exchange.
■4
Volume
^
186
Number 5682
.
.
.
'
;>
'V
^
The Commercial and Financial
Chronicle
'^L
35
/irM cv
(1715)
1
4
"
4
-
'
•
*Y*
A
Continued f rom
page 12
•
for later discussion the last-named
.
goods Americans want and to set
countries
.
'
,
throueh
MM
W
••
Ivimt
■»
to
short-term
to
go
credits
London
to
meet
for
mand
their
of
their citizens
goods/through
for
import
operation
atfo,?3" rS
of
ation
the
of the
Lon-
These
exclusive
Reserve
on
possible for American
demand to continue
icy
-
region..
If
c A
«esirapie.
temporary---e.g., T!^.^^Wrdown of gold and d°llar
seasonal—phenomenon, theto finance an excess of
able
and
to
provide
protect
their
do"ari'foPf's is only
the
the
with
In
19th
cePted
F^d^rni
'
si'mflar
a
Tn ^
maipmr
able to obtain.credit in London
to
finance temporary deficits in their
lntepnatipnal payments
'
S- Government
are
thA .^CI.p^nas
than
I,
kind
same
credit
of
is
are
•
solution
The fust
is
com-
f
^
n
^
the degree to which
Wiijfng
alfow
to
foreign
tors
the
many other fac-
also responsible—is the
frequent
international
desirable/
'
controls
Tn-'!
'central
wnrk.
trols
economy
,
in
the
and
economy, there remains to be discussed
the
economic
most
role
of
policies.
useful way
identify
to
would
is
economic
which
U.
S.
policies
have
production
and
SThave described^it
ing 'that
mg.uidx
there
mere
is
is
trade
•
•
Sv
that
—
inin
anv
any
of
into'
striet
voluml
eon-"'
is
course
has
Dolicv
been
of
re
fraTe
a't
S
free countries
foreign
to
bv
all
to estab
oavments
the
^nce
cases
y
the
of
one
II
agreed
restrictive
c^htrtol' since
an
at
the
^Ind"
eon
?n
effect
least
two
of
been
the
of
recent
U.
War
ll
and
the Great D
pi^matmn
^
nrohipmc
.
,
,
Meeting the Dollar Problem
Let
be<rin
us
alreadv
doltar
alluHpH
with
to—thp
shorta^A
on
shortavp
Of tho
rost
rnm
r
•>
the responsibility for the dollar
shortage >is not any one country's
sole possession. Indeed, over the
.
nrnhlpm
a
mav
railed
dpfinp
Ae
wnHH
n
abroad
the
anroaa
to
ments
percentage
same
in
our
eood
countries
ioreign
current
be
increased
are
for
reason<?
small amount of
in
countries m
1914, the volforeign invest-
There
over.
ot
that England
foreign
in
of
percentage
income
would
times
many
doubt
no
the
relativelv
foreign in-
our
vestment activity: the unfortunate
pxnpripnpp
0f
American
invest
!*nt in^foreign' bo^Sirh?J
tiie
"^tionalizltion
1920's' the risk o£
of foreign capital, the difficulties
of transferring earnings and re-
unemployment'
the
0f
ume
dishrrhJnccs
some
the
assumed
we were to invest
same
xne
national
invested
con-
hhangAfss^'dfiriminatory^ax-
®tio^ etc %tc I^d^not wTsh to
Kb,eJr'1£L obstacles
the
to
privaie
readjustments
But
i^ux
capital,
I
i
towS
f/ conuiouuons xo worm
F "!toimized by reasonably long somenow xne ouxiiow of Am^can
"d^glmnort
^u°«tow 01 American
barriers
over
p
j
a
period of time according to an announced and predetermined sched-
•
-las^ 43.-years the inevitable
sequences of two world
majpi;' world depression,
con-
wars,
a
Pf^?nagld ^ fncrea^d
uvmg, an increasea
flow
iiow
of
oi
the direction of protectionism, cul-
reasoning.
minuting in the Hawley-Smoot
Act of 1930. Beginning in 1934,
the officially-proclaimed policy of
the u- s- has been to lower our
own tariffs in return for the recipi'°cal reduction in the tariffs of
other countries on American
g°ods- In recent years, however,
the forces of protection against
foreign competition have become
If I may be brutally frank, it is
my opinion that our uncertain and
increasingly illiberal commercial
policies are the result of a producer-oriented legislative process
in this field. Neither the general
interest of the American economy,
nor the interest specifically of the
mass of American consumers, is
served by artificial restraints on
the import of foreign goods. The
one exception I am willing to
grant-with proper safeguardsis in the case where military secunty is genuinely involved, though
I must point out that this argument can easily, be abused.
r
I would conclude, then, that
would
for the export surplus of the U. S.
both
to
periodically
renewal of
Trade Agreements
the
Act; by the insertion of the escape
A
P«U-P»tat clauses, allowing
the U. S. to rescind agreed reduc-
juiy
.
xiuiii
_
liiipuiib,
wy
uic
.
uiipu—
gition of quotas on certain agricultural commodities subject to domestic price supports; by d.iscrimination against foreign bidders on
government procurements; by socalled "voluntary" restriction of
m
...
our
own
general
j
#
policies
on
economic
u* wiiiuivxi^icu
our part.
^
.
-
American capital to underdeveloped countries would have two
^eiy important
by-product effects.
^ e,, A 1T
W01jJd k® to ease the
world dollar shortage. I have defined dollar shortage to mean the
attempt of other countries to buy
more from us than they are able
to finance by normal means. Now
on strict economic grounds, it is
normal for the country having the
great bulk of world savings to buy
Jess ft™i the rest of toe worid
than it sells to the rest of the
world, even assuming that the
country has full employment and
tariffs. What
no
be
iwciu^
the
.
«
Capital for Underdeveloped
for the world economy, with the
possibility of contributing to the
solution both of the dollar shortage problem, and of the longer-
temporary,
iimuwu
with
of
higher
rates
of
expanding
the
best
of
use
the
It should be noted that the dollar shortage problem of the devel-
the U.
an
is
world's productive resources.
.
and a imports, such as the "understandsei'ies of international political ing" with Japanese textile exportcrises bear the chief responsibility ers and with domestic oil compafor the historical dollar shortage, nies; by the snarl of red-tape which
Nevertheless, since the end of the importers have to untangle in order
reconstruction phase after the last to get foreign goods admitted and
war—say, roughly, in 1949—the valued for customs; by the introcoritipjuajtion of the dollar short- duction of security considerations
age,, even though on a consider- as a reason for raising tariffs; by
problem of
by
wuu
prospect
accord
Countries
Let us turn now to another policy area that has great significance
run
normal
not
is
financed
return than at home is strictly in
,
tries to stop
Wp
«^pn/pnJv fnr
in h.,i/ L.-p
th
pI hP finqnlpTh!
normal
moaU-rhic
m.pstinn
nfnnnrll
whot
if
mpant 1hv
^nancinonoimai means • or
dollar
ihp
•
I"
Let's be clear at the outset that,
interest' in*
mxeresx m^
V,
.
?T
thst.-'hflvp
oredominant
vearc
]9th century. If
our
continually necessitated, e.g., by
technological changes—and could
x-i-
F°re,ffn Competltlon
Reciprocal
a
DOli-1Wlaf.
S.
f
not
^eAe moie T:iaV, y o^inouxea,
ule,
both geographically and by inAs y°u aro a11 wel1 aware, until
Many of the other objections to duf^y*
1934 the general historical trend a more liberal commercial policy
^ 5Sn^t^^rde
of American tariff policy was in are based on invalid or misleading
^
nersistent.
te^ifon^non^T^and>
consequence lor which
cause
comparable
policy
resurgent and increasingly strong,
This trend has manifested itself
in several ways: by the increasing
difficulty of getting Congress to
the
depends of
however, upon
thp
W1
our
What has
this respect?
approve
stirpris-^
is not
hardlv
naraiy
countries
Influences of
havFbeen i^
important bearing. In view of the
quantitative role of the U. S. in
world
the
It
problems
in the origin and
possible solution
of
less
or
result
i^hTwo^
*vsfehV^e of
to
some of the chief current
international
that it would be
is
including localized
iS
,
have
we
„iit,
dbiectives
foreign :e^ohomic
Perhaps the-thp'maior
this
a
jts~diversion into uneconomic
our
do
f"?2
to imports.
the
inconvertible
more
The
Vhannils
world
that
nnt^ide
American
are
st^tM^f
chief characteristics of the
American
tndav
except within the frame-
the
of the
world
shortage
currencies
that develop
periodically in
contemporary world.
•
Having briefly described some
the
c!mda^ Swit^erTand Ld
f*
more
nf
dollar
liquidity-dbll^,
crises
do not
the u- s-ls» the Pr°P°rt,on that
exchange
connfriec
this-thoigh,
are
there
course,
we
myself, do not
agree with this judgment. No one
we
pro-
—
n
the decades before
then, why
d^tnddc^S Sfi
eJv
arc
.
invesxea
-
,
tas' and
One
of
of
consequence
th-it
ter«ts° a" dom?tlc econo"lic in"
® ®sts. As you know,( most economists, including
not
heyday of
leadership.
1
i n a n c i a
for-
ducers to compete with domestic in certain of our domestic indus;
Producers: in satisfying American tries.
But
these
disturbances
demand. No matter what total de- would in any event be of minor
™and £or. 8°ads and services in over-all significance-not at all
less
on a.scafe
parable to those provided by Eng->
ish
from
ingredient of its
<
we ask,
be given
day, at least not
lish banks to the
thi<?
essential
an
If
to
exports to tnis country tnat
solution.
dee,d) it Js- the mass of controls: satisfied through imports can be
by American banks to-' OVc,v^^international
trade nhd rwv.;'-reduced or expanded through low-
provided
exoorts
however, is the shackling of free
trade .and payments through quo-'
inter-
facilities
D.ecome an ac
level'of\ncomfrandemI
»
^^tnrirbe explcted'V^onttnue
indefinitely. Even
bank-
more-fomiliar^ with
this
national
which
reasons
tar
are
g
bearing directly ^on the dollar pursue a more liberal commercial
<mem!us be: es op- policy, the answer most likely to
sho rteg.e that
,
v*?
yet
gener-
per- roie that England played in the
ronntrv
earnings
eien
P/oyment in the U. S. is one of the
burden chief determinants of the volume
a
makfa s?gn ffoantTmitri
a significant contn
bubofn.to lts S0]utl0n through
ac-
program in our country.-
-foeg*
cpnt.lnued beyon^
F°r ?.vaFlety o£ h'stprical and
ers
a temporary;
lover-burdened;
^*'?*Aa^Payer'1&re humdiatnig to
were
an
A c
other policy areas
?^.'t^.a<^e^.fieducmg necessary
.working reserves. Grants from the
Rpcprtm
become
*.
thaf tepdsto restrict the vofome
reserve
century 'TOufories
institutional
has
device that cannot last long, and timistic about.
rue
position-by; borrowing:!or: redisBanks
believe
a
extra credit reonired hv thpir
tomers
I
.
.
counting'
T-nen,
would
™1 * 410 f? ,and encouraging the
larger dollar
is oneof economic sta
is one 01 economic sta-
bilization at full employment, and
this
-
usually
then
.
committed commercial total world savings being
E°i'Cy 0n ,OUr ft** W0Um
?,ny ated in thls countryT?S solye.the ,,worl,d dolla5
,e
„
the dollar
earnings demanded bv other countries
The most critical U S pol-
••
are
import
to^growran-
idly e"°uSh to furnish
since
„
just*
T
For onlv then will it
be
alterna-
a
Nc M:
on
employment
tiv6SV
in' faCt wide scale been
both have
resorted;to
°Per'
Federal
not
are
to in
tarSAnthfi 'eoods^ncreased'21 thC versed: we are the most capitalfoiTfasb
is to Am oiTdo!
1
^ ®
fTT
rich country in the world' with
mestic emnZvcxDrnZfat foil ,J d? n0! eontend that a more perhaps as much as two-thirds of
fo
Banks within the U. S. If
any one; the end of World War II.
V
region in the U.S. buys more from
--vr-V^ ink
•
,
the
rest
of the
mnntrvthan
it
Now.from the point of view of
orln * f-4. «.!
\iy /lL a health^ and exnandine world
sells to it, this is
likely to show> Y ■ Ar y d.;r
p
Y
up > in
a
pinched reserve nn^itinn- eConomy> neither of the alterna*
+t
,piT!
reserve position .. .
.
.
described i
desimhle
of the banks in that
is
significantly contributed
t^elfminath^
dollar
licensing,
temporary international liquidity; quotas,
exchange controls, or simirequirements.
Perhaps a better lar devices- that limit and disanalogy would be between the in-s criminate
against dollar imports,
ternational
this
UP. the ^borate marketing ma- loans and investments. Thus, e.g„
chinery necessar y to sell the our own
economic
development
for the American public. Such expendi- was
a
economic point of view
Upon World Economy rA'Sr&tt
able
■
mTeaHe,iiihrUrd obvioucrsly
desiiable fiom
general
lft ^1.
JulieCt 01 Ulir rO lCieS
were
•
international
■
.
•.
oped countries
the
well
as
that of
as
countries
directly receiving
American capital, would be eased
by
increased
American
foreign
lending and investing. For then
the Western European countries,
world economy. I have reference
nf
to the provision of development
would be better able to earn
capital to the underdeveloped additional dollars through exports
nwr
lfofo
countries of the world.
to the underdeveloped countries,
nnlv
twn
mainrmnxn* ably diminished scale, cannot be the reluctance of Congress to ap1 shall confine myself to those rather than having to rely so exnf LILTi
into!!! fuJly explained on the grounds of prove our participation in the pro- particular aspects of it that bear ciusiVely on increased exports
tinnni
pv^fnrtitn^" thrmmh^
militajry or political exigencies. A posed Organization of Trade Co- most directly on world trade.
direct
to
the
American
market
pvnnrt nf^nnrio
A eSe
First let us consider how the for the
export ot goods and services, and lar^ part of the explanation must operation; and by the reduced auearning of more dollars,
j|e jn
failure of many counthority granted to the President in flow of long-term capital from
tfiroughiong-terra borrowing
rm
rrm
'
on
irom
mat
tile
abroad.
a
1
dollar
est
ot
Hence,
we
may say
snortage exists when
the
world
persistently,
inflation, in the maintenance
of
artificially high exchange values of national currenr>i£ic
'anH
nfhpr
the last renewal of the R. T. A. to
lower
tariffs
trade
in
agreement
negotiations.
nf
mi
/.•
^
«j
_
ui_ji
..
±1.
_
yealr after y<
to
S. to the underdeveloped
countries
would
contribute
to
easing
the
dollar
shortage.
I
statpH
pnrlfpr*
that
thprf*
nrp
turn
Long Run
The
trade
Effect
effect
second
increased
of
r
tt
on
world
capital
n-C
c"
n
flows
«*•_*»• m
purchase,
and services than their
exports to
us,
plus
long-tei*m
our
loans
thehi, provide the dollars
On
been
this
as
shortage
Drier
wnen
mmll'
things
the
definition
we
have
since
1914,
interlude
a
a
except
during
genera
lor.
there
seen,
lor
deficit
is
of
dollar reserves
made
through
gold and
grants from the
U. b
S? policies
shortage,
account for
theTdol-
a
its solution.
4
•
^
;
■
Possible Solutions
It should be clear from the nature of the probiem that the possibie solutions to a
general dollar
shortage
(l).are: (1)
up
foreign
or
a
shortage
.
lar
has
1923-11129.
dollar
u;
to
dollar
ineyitfbly one df"
must happen:
either
liquidation
to
are few in number. They
an increase in U. S. de-
mand. for
foreign .goods and serv(2) a decrease in the for-
ices; or
eign demand for^U.
S.
goods and
Government; or (2) the coun- services;:or
(3) an increase in the
suffering from the dollar amount of
long-t^£ju dollar lendshortage suppress the excess de-.
ing to foreign countries. Leaving
tries
o£
commercial
policies exert
on the
our
imports than does
the height of our tariffs.
It has
often been noted by foreign exa
our
greater restraining force
volume
of
porters that it is above all the uncertainty of American policy that
constitutes
the
most
formidable
barrier to their developing an export market in this country. It is
costly for
ganize
to
a
foreign business to
produce
the
J
term capital from abroad. "
° Thereby'be"broadened. The overThe flow of long-term capital whelming bulk of world trade is
-.
h?gh""But'perhaps ^theTaspecYs
kind
or-
of
national boundaries
perfectly normal economic
across
is a
phe-
nomenon when the capital moves
in
response to differential rates of
return
on
different
capital
investment
in
countries.
Historically,
the most economically advanced
countries, with relatively large
amounts of capital available, have
contributed to the economic development of the less advanced
now
few
carried
on
countries
highest
real
among a
—
those
incomes.
relatively
with
The
the
very
c0untries of the world simply
P
?
,?
,
.
n
..
itv
d(> not have the productivity
the
jn
a
purchasing
power
to engage
iarge volume of trade, either
;nternallv
or
externally. The most
,
Continued on page oo
The Commercial and
Financial Chronicle
-Thursday, October 17, 1957.
...
rmsn
m
Continued from page
from page 35
Continued
breather before the big push.
a
"Steel" survey of contractors, suppliers,
association execu¬
gains in private con¬
struction will stem from easier mortgage money for housing. An
increase of about 80,000 housing starts over 1957's 1,000,000 is
A
Effect of Our Policies
The State of Trade and
Upon World Economy
its course.
by the
orders
alter that.
One good reason behind the mill inventory buildup
is that many steel users are buying on the basis of quick delivery.
countries ^vould
mean,
then, both expanding foreign mar¬
kets for producers and expanding
sources of imported supplies. What
I am suggesting, in other words, is
that all countries, developed
as
well as underdeveloped, have a
real economic interest in an in¬
poorer
crease
in the
comes
of
the
productivity and in¬
impoverished areas
of the world.
further the subject of
U. S. policies as they affect the
world economy. In closing, I have
only one last comment to make:
in view of the central and crucial
pursue
position of the U. S. in the world
economy,' there can be no such
thing as the absence of American
policies having a significant im¬
pact on other countries. Even if
decided to sit back and let na¬
we
that, in itself
would be a policy, and a highly
interesting one at that. In fact, of
course, we are bound to pursue
some kind of more positive poli¬
ture take its course,
cies;
and
have the
good
or
choosing these we
power to do either great
extreme harm, both to
in
world
the
and
economy
to
our¬
selves.
increased
"Only
better.
programs
there
But
is
.
on
volume is 3%.
an
that
the wane
Steel
.
Power Stock
Consumers Power Co. is issuing
to
holders
its
of
common
stock
rights to subscribe for $35,156,700
of 4%%
convertible debentures
due 1972 at the subscription price
of 100% at the rate of $100 of de¬
bentures
each
for
25
shares held of record
on
Oct. 16,
subscription offer will
expire at 3:30 p.m. (EST) on Nov.
The
1957:
1, 1957.
The
offering is being underwrit¬
ten by a group of investment firms
headed by Morgan Stanley & Co.
The
debentures
new
into
vertible
are
the
average
spread
Feb.
1, 1958 through Nov. 1, 1972
at $47 per share. The debentures
not redeemable
are
.1,
1958,
interest
they become re¬
104.50% and accrued
until
thereafter
the
at
Nov.
1,
1959 and
declining to
prices
principal amount
on
Nov.
proceeds from this sale and from
recent
first
sale
mortgage
of
$35,000,000
bonds
in
of
connec¬
tion with its construction and im¬
provement
program
and
for
re¬
funding certain outstanding obli¬
gations, including short term bank
loans.
Capital expenditures for prop¬
additions budgeted for the
period from Jan. 1, 1957 to Dec.
in
a
company
is
engaged,
en¬
tirely in the State of Michigan, in
the generation, purchase, distri¬
bution
and
sale
of
electricity in
1,497 communities, and in the pur-,
chase, distribution and sale of na¬
tural gas in 286 communities. The
company
ice
than
to
furnishes
over
100,000
electric
farms,
serv-|
their public announce¬
same
Battle
area
sharply curtailed
idled until Oct. 16
upbuilding
which by virtue
early start continues to dominate the industry's new model
in operation last week
of new model introductions between
On the truck front all producers were
the
to
series
15 and mid-November.
It is reflected in the rate for
ended
the
scrap declined
another $2.67 in the week ended Oct. .9.
$39.50 a gross ton, it is at its lowest point since July, ;1955.
Substantial mill buying is absent, "Steel" concludes.
1
The
.
American Iron
Institute announced'that the
Steel
and
rate of steeE companies, having 96.1% of the steelmaking capacity for the entire industry,.will be, an average of
operating
...
81.7% of capacity for the week beginning Oct. 14, 1957* equivalent \
to 2,092,000 tons of ingot and steel for castings, as compared with
82.2% of capacity, and 2,105,000 tons (revised) a week ago.
The industry's ingot production rate for the weeks in 1957 is
based on annual capacity of 133,495,150 tons as of Jan. 1, 1957.
For the like week a month ago the rate was 82.1% and pro¬
duction
2,101,000 tons.
A
year
ago
the actual weekly production
"
! '
placed at 2,495,000 tons or 101.49%.
The
rate
operating
is
not
based
on
an
annual capacity
comparable
because
capacity is '
The percentage figures for 1956 are
higher than capacity in 1956.
of 128,363,090 tons as of Jan. 1, 1956.
Higher the Past Week^
Electric Output Pointed
The amount of electric energy
distributed by the electric light
industry for the week ended Saturday, Oct. 12, 1957,
was
estimated at 11,709,000,000 kwh., according to the Edison
Electric Institute.
Output the past week reversed its downward
trend of the preceding week and pointed modestly higher.
and
power
week's output increased 145,000,000 kwh., above that
previous week and advanced by 409,000,000 kwh., or 3.6%
comparable 1956 week and 1,110,000,000 kwh. over the
week ended Oct. 15, 1955.
The past
high
nearly $4,600,000,000 in August.
The continued high building activity made the third quarter
the most active three-month period on record, a joint report of
of
Department of Commerce and Labor reveals.
departments jointly estimate the value of actual
construction work accomplished each month, as distinguished
United
the
The
above that
,
Loadings Rose 1.1% in Latest Week But Were
Car
States
Below Like
8.3%
housing starts or projects completed. The September total
ran a trifle above $4,600,000,000, 1% higher than the August level
and 4% above the $4,400,000,000 a year earlier.
After adjustment for seasonal factors, third quarter construc¬
tion was at an annual rate of $47,400,000,000, the departments
noted.
This compared with a $46,800,000,000 rate for the first
half of 1957 and actual outlays of $46,100,000,000 for all last year.
For the first nine months of 1957, the value of new work
put in place climbed to $35,000,500,000, 2% more than a year
earlier, according to the report.
from
United States gasoline stocks declined
contra-seasonally last
according to the American
Institute, trade organization for the oil industry.
fuel in storage at the week end totaled 177,383,000
week but topped the level of a year ago,
Petroleum
Motor
barrels,
a drop of 47,000 barrels below the preceding week.
Heating oils continued their seasonal increase last week, but
increase
was
the smallest
in
five
Loadings of revenue freight for the week ended Oct. 5, 1957,
by 8,381 cars or 1.1% above the preceding week, the
advanced
Association of American Railroads
reports.
•
1957, totaled 747,647 cars,
a decrease of 67,546
cars, or 8.3% below the corresponding 1956
week and a decrease of 53,912 cars, or 6.7% lower than the cor¬
responding week in 1955.
,
Loadings for the week ended Oct. 5,
S. Automotive Output Rose
U.
67.6% Last Week as
Model Car Assemblies Forged Ahead
1958
1957,
Reports," advanced 67.6% the
past week as 1958 model assemblies gained momentum.
Last week's car output totaled 37,999 units and compared with
21,975 (revised) in the previous week. The past week's produc¬
tion total of cars and trucks amounted to 56,762 units, or an in¬
crease of 23,109 units above that of the preceding week's output,
Automotive
output for the
latest week ended Oct 11,
when they fell by 1,399,000 barrels. A year
week light fuel stocks advanced by 864,000 barrels.
19,
last
ago
declined last week from the previous period.
Runs averaged 7,779,000 barrels daily, a loss of 139,000 barrels a
day. A year ago, the pace was 7,697,000 barrels daily.
runs
Crude oil production dipped slightly last week.
more1
averaged
6,811,550
barrels,
down
9,250
barrels
Daily output
the prior
from
The rate last year was 7,021,650 barrels daily.
week.
Steel
The
of
.
•
•.
<
industry will score dollar volume records
$47,500,000,000 this year and $49,000,000,000 next year,
Magazine reported on Monday of the current week.
agree
1958
!,
will
.
<
v
be something of
:
.
;
j
;
!
T
'
a-
t
plateau year,
jO
-
J ;
i
vehicles
the week. In the corresponding week last year 70,175
cars and 21,028 trucks were assembled.
Last week the agency reported there were 18,763 trucks made
in the United States. This compared with 11,678 in the previous
week
and
21,028
a
year
ago.
output last week was placed at 855 cars and 321
trucks.
In the previous week Dominion plants built 1,290 cars
and 305 trucks, and for the comparable 1953 week, 4,242 cars
Canadian
1,541 trucks.
Lumber
construction
Observers
previous
while truck output climbed by 7,085
7.6% Above Output in Past Week
week ended
7.6% above production, according to the Na¬
Lumber Shipments
about
"Steel
output advanced above that of the
during
and
Output This Week Set to Yield 87.7% of
car
week by 16,024 cars,
Ingot Capacity
Creek,
Rapids,
"Ward's."
Last week's
Light fuels, including those used in the home, rose by 1,470,000
Refinery
states
weeks.
barrels the past week or the smallest gain since the week ended
April
;
1956 Period
according to "Ward's Automotive
the
;
two
includes the cities of
transportation is being watched,
the St. Lawrence Seaway may
of the
Construction work in September just topped the record
Bay
City,
Flint,
Jackson, Kalama¬
zoo, Lansing, Muskegon, Pontiac,
Royal Oak and Saginaw.
Grand
of
Oct. 13.
At 81% of capacity, it was 1 point
preceding week's level. ■
1
"Steel's" price composite on the prime open hearth grade of
time Edsel 1958 production was
change in factory paint equipment and Mercury
preparatory
tion of the territory served is es¬
timated to exceed 3,700,000.
The
service
reduced demand for
For the
week
below
was
production picture.
served
by any other util¬
ity in the United States. Popula¬
are
in
Completion
slowing in the production pace.
the
week, according to "Ward's," was Chrysler Corp.
1958.
The
a
to cut production costs, improve quality and speed
moment at least, steel companies can give fast
service.
Some output is being delivered within the month in
which it was ordered, but the tendency over the country is for
$57,000,000,000
erty
31, 1958 are estimated by the com¬
pany at $219,500,000 of which ap¬
proximately $116,500,000 is to be
expended in 1957 and the balance
possibility of
a
steel competition from Europe further into the
Japan, too, looms as a growing competitor.
domestic steel companies, consequently,
are pursuing
service.
operations were slowed by a strike at its Mahwah, N. J. Plant.
Climbing despite strike problems the past week and prior
new
The utility company will use the
the
At the
1,
1971.
see
At
by the Ford Division changeover; Lincoln was
prior to Nov.
when
deemable at
:
,
steel
only three and one-half weeks prior to
Oct.
and
:
foreign
The
entirely
ment; Oct. 31 and Oct. 29, respectively.
con¬
stock from
common
1
many courses
to
This week, "Ward's" pointed out, will find all passenger car
producers in assembly of the 1958 models for the first time, with
Pontiac, Oldsmobile, Cadillac and Ford set to join the parade;
Last week, Chevrolet and Buick launched new model output
of its
some
also
development
stated.
smaller than that for 1956.
retail and wholesale trade,
the trend of recent months when increases have been
similar
production in the United States last
model assembly gained momentum,
"Ward's Automotive Reports" stated on Friday last.
The statistical service said passenger car output jumped to
37.999 units in United States plants from 21,975 the preceding
week.
Truck manufacturing increased to 18,763 from 11,678.
a
-:
1958's dollar
see a good deal
United States.
was
week increased 67.6% as 1958
by
trade
'
are
companies
Another
report continued.
common
than that and
see more
forces
"Steel"
Domestic car and truck
Offering
the next five years, this
.
;; • '■
-
mines.,
compared with July's $57,400,000,000.
Underwrites Consumers
only
the
plates for railroad freight cars and an increase in demand for
light structurals for electric transmission towers. Rising freight
rates are making it costly to haul coal via railroad to electric
powerplants. The tendency may be to locate powerplants near the
increase in book value dur¬
sonally adjusted basis, August's sales were put at
Morgan Stanley Group
with
is
Looking ahead, they can see shifts in wants for steel and threats
of increased foreign competition.
attributable to manufacturers inventories, the
Higher holdings of automotive dealers was the
biggest factor in the retail trade rise, accounting for almost the
entire inventory increase at durable goods stores.
Total business sales declined during the month.
On a sea¬
almost
boom
to
money
giving steel companies plenty to
think about. Steelmakers are plagued with a drop-off in demand
at a time when steel capacity is being expanded substantially.
earlier months of the year, but much
The August rise was primarily in
counter to
Some
Economic
monthly increase for
rise
this
More
construction equipment.
total manufacturing and trade sales dropped, the
United States Department of Commerce noted in a current report.
On a seasonally adjusted basis, the total book value of manu¬
facturing. wholesale and retail stocks went up $200,000,000 from
the end of July to Aug. 31, the report further stated.
It added
as
continue
building.
less because of adequate supplies of structural steel, cement
companies and industries are working hard to solve the
skilled worker problem.
"In fact," says "The Iron Age," the
number of apprentices in training has shown a significant in¬
crease in recent years."
Business inventories showed
military
The best estimate of the inflationary influence on
and many
ing August
in
portion of steel construction in
week!y declares.
.
lot of evidence that pirating is
a
will
-
;
expected to be
spent on conservation. The highway program promises to show
solid results in 1958. Highway bridges will account for the major
in the next 10 years," says the
.
\
,
construction
Public
plants and industry-wide will prevent an even more
age
this
weakness
a
of training in individual
acute short¬
metalworking publication.
"The Iron Age" says Secretary of Labor James P. Mitchell
has been "shocked to learn that there are no more skilled crafts¬
men on the job today than there were five years ago." He charges:
"Instead of training the workers we need, we have sought to steal
them from competitors. Pirating
has become a wide-spread
practice among some employers."
of
private construction next year will hold its own or be
year's level with the biggest drops in industrial and
Other
below
the business.
deliver fastest gets
can
indicates
commercial building.
special report this week, "The Iron Age" predicts that
the skilled labor shortage facing industry will get worse instead
In
available
I wish that time were
to
sources say
The mill that
officials
government
jjossible.
the stockpiling will have been completed
end of this month and that ingot rates will reflect only new
Some
important basis for trade is high
income, with
its accompanying
great demand for goods and serv¬
ices, foreign as well as domestic.
Economic development of the
Industry
and
tives
of steel stocks at the mill level has just about run
up
gain inflationary, but they look on it as only
most of the
with
5
l
)
Oct.
5,
shipments of 481 reporting mills in the
1957, were
tional Lumber Trade Barometer.
were
stocks.. Production was
In the same period, new orders
Unfilled orders amounted to 30% of
3.4% below; shipments 8.0% above and
2.1% above production.
;
Volume 186
Number 5682
.
.
The Commercial and
Financial Chronicle
.
(1717)
orders
new
down
were
2.9%
from the
previous week
and
below the like week of 1956.
year in purchases of men's
topcoats
increases in furnishings and
sportswear.
Business Failures Declined for Third
Straight Week
Liabilities
of $5,000 or
failures, down from
last
Failures
year.
with
more
217
were
in
liabilities
the
involved
in
previous
202
week
week
a
of
ago
i
Following sharp declines in the past three weeks, the whole¬
index, compiled by Dun & Bradstreet, Inc., devel¬
last
week.
At
$6.12
of
as
Oct.
8, it
was
Moving higher in wholesale cost the past week were
flour,
wheat, rye, oats, bellies, lard, eggs and steers. Lower in
price were
hams, butter, sugar, coffee, cocoa, beans and hogs.
The index represents the
the comparable date
on
mixed
resistance to prices helped prices
a
com¬
over-all
some scattered orders for hard
Winter bakery
flour
trading was sluggish. Prices, however,
Export sales of flour continued to
somewhat.
fall and winter
New York
railroad
terminals
flour,
recorded
as
in the South
a
week
earlier.
in
a
slackening in purchases from
the
level
trading helped boost
of
preceding week.
prices. Warehouse
against 3,333,376
bags in the comparable period last
For the first
past
week
as
time
trading
in
over
improved.
Hog
below those of both the prior week
Steer prices declined
prices advanced the
receipts in Chicago were
and the
similar 1956 period.
considerably reaching a three-month low.
Total cattle receipts were
nearly 25% higher than a week earlier
and
close
prices
to
was
those of
a
year
ago.
attributed to curtailed
from illness among workers.
in lard futures prices.
Much of the decline in cattle
slaughtering operations resulting
Wholesalers reported
a
slight decline
•'
r
'
.
After declining for the first few
days, cotton prices recovered
at the end of the week. The
pick-up at the end of the week re¬
sulted from reports of unfavorable weather
reports from growing
areas. The New York Cotton
Exchange guessed that cotton
tion
as
of Oct.
1 would be about
produc¬
12,884,000 bales,
substantially
up
from the 12,713,000 bales Government estimate
of Sept. 1.
Increased transactions in print cloths
helped boost total trading
in cotton gray goods slightly over that of the
prior week. While
volume
in
woolens
and
worsteds
was
close
to
of
a
week
Trade Volume in Latest Week Higher Than
Period and Close to Level of Year
Preceding
Ago
An upsurge in tfre buying of women's coats and
moderate gains
in dresses, sportswear and fashion accessories
helped boost total
retail trade over that of the
preceding week, and volume was close
to that of a year ago. There were
slight year-to-year declines in
purchases of men's apparel, housewares and
furniture, while sales
major
ago
appliances
levels.
and
new
passenger
cars
remained
at
year
18-
The total dollar volume of retail trade in the
period ended on
Wednesday last was from 2% below to 2% higher than a year
ago,
according to estimates by Dun &-Bradstreet, Inc.
Regional esti¬
mates
varied from the comparable 1956 levels
by the following
percentages: West North Central, West South Central and Moun¬
tain States +1 to
4-4;
+5%; East South Central and Pacific Coast 0 to
South Atlantic —2 to
4-2;
East North
Central
—3
to
4-1;
Middle Atlantic —5 to —lr and New England States —6
to —2%.
While moderate gains from a year ago
prevailed in sales of
has been comparatively
small. But even on very
optimistic
assumptions, capital exports could
not even approach in size the con¬
dresses, handbags, gloves and sweaters, volume in
millinery and lingerie were down somewhat. The call for children's
clothing was
close to the
now
which
ing
comparable 1956 level.
imports.
in
better equilibrium
a
be expected from
can
crease
our
last
to
few
and
years
continue
ris¬
After all, the in¬
imports to which we
have become accustomed
at
over
which
the
seems
present has added
to
the
Declines
from
World
Bank
For
less
than
Moreover,
vance
total
a
from
systems,
de¬
fiers
and
components for
our
foreign exchange
trading partners.
In addition this most recent
ler division is
for
the. Armed
airborne
sumption of capital exports. There
is in Germany an internal
capital
shortage due to large development
as
—
well
test
may
add
rates
of
one
improve
its
the
main
func¬
capital markets.
our
I
in
that
recently
interest
Germany have slowly
been falling—in contrast to the
tendency everywhere else
and
—
only
was
a week ago our Central Bank
able to reduce the rediscount
rate
for the third time in succes¬
sion since the autumn of 1956. As
concerns
scale
the
possibility of large-
capital
exports
I
do
not
want, however, to rarise exagger¬
ated
hopes.
It will take quite
some
time
chance
of
before
there is
a
real
Commercial
normal
capital exports from Germany ap¬
pearing feasible and likely on a
larger scale.
I
Our
authorities
meantime done
way
a
have
in
the
good deal in the
of public capital exports. We
have released the
of
our
on
missile.
as *
development
equipment
The
for
Hufford
the
Cor¬
poration, also acquired last month,
is a pioneer in the
development
of
heavy
machinery
for
the
stretch-wrap
used
in
the
forming
missile
industry.
of
and
metals
aircraft
.'
'
The net proceeds from the sale
re-
of
the
with
common
other funds,
stock,
are
together
to be used
subsidiaries, to retire short-term
no
deliv¬
Corp.
goods, we have
anticipatory pay¬
and
its
and The
increase,
capital.
public foreign debt.
our
ternational
thorities
the
on
payments
in¬
situation,
doubt that
no
will
our
endeavor
Long-Term
There is
au¬
to
find
that
remaining part
subscription
local currency
Remedial
Action
possibility, however,
of bridging in whatever
way, by
balance
no
of
pavments
credits
otherwise, imbalances of the
fears.
as
mon¬
itoring purposes and general test
equipment for the tactical aerial
navigation system known as "Ta-
these measures have worked
also in the direction of diminish¬
nitude
to
finding
amplifiers,
magnetic tape recorders for
All
needs, and our interest rates are
on the high side.
Our government
it
direction
compass
internal German
our
situation has, up to
now, not been
particularly favorable to a re¬
objectives
tioning of
Forces—including
radar,
equipment,
ad¬
some
ways of working in
direction in the future also.
Shortage
Sieg¬
engaged in the man¬
ufacture of electronics
equipment
In
similar
Germany's Capital
Moreover,
custom
fidelity systems under the
"Bogen" and "Challenger" labels.
to retire present
long-term indebt¬
edness of Siegler
future
and I have
earnings of
and
built
working
on
ap¬
systems, audio ampli¬
eries of armament
ments
for
intercommunication
other sound
ago.
made important
on
ing the present strain
the
"Olympic."
debt of Unitronics Corp.
Hufford Corp.,
and to
payments
Marks
to
name
accounted
million.
of $175
apart
phonograph high fidelity
Dec. 31,1956. Unitronics also man¬
ufactures and sells public address
was
that, our Central Bank has
centlv lent to the World Bank
last
proximately $23,000,000 net sales
during the calendar year ended
and, besides
annually an amount of no less
than four to five billion Deutsche
..
women's better
business
work
considers
that
earlier, purchases of carpet wool lagged again.
of
to
up
tributions to
year.
month hog
a
This
Germany's Position in the
International Currency Crisis
the
cocoa
in New York totaled 279,449
bags on Friday com¬
pared with 362,150 bags a year ago. Arrivals in
United States for
the season to date amounted to
2,665,993 bags as
cocoa
a
-
and
under the trade
For the
of last year.
acquired
phonograph combinations, mainly
'
the like period
radio
receivers
Atlas
supply outlook for this season and the next
slight drop in coffee prices the past week and a
A moderate rise in
stocks of
of
v.
can"
favorable
resulted
t.
Continued jrorn page 10
i
.
A
apparel.
Corp.,
merger in which
combination
a
reported.
a
Sieg¬
ler was the
surviving company, is
principally engaged in the manu¬
facture,, distribution and sale of
rjadiq,, and
television
receivers,
_
helped speed up harvesting, nevertheless, rice stocks
were limited. A
slight decline in the buying of raw sugar occurred
and futures prices
dipped, but costs of refined sugar continued at
the levels of
Unitronics
month in
For the period of Jan.
1, 1957 to Oct. 5, 1957, the index
gain of 3% above that of the
corresponding period of
1956.
on
preceding week
Improved weather
The Holly Manufacturing
Company, General Water Heater
Corporation,
Kinnaire
Corpora¬
tion, Baby-Mate, Inc., The Hufford Corp., and Unitronics
Corp.
1957, a decline of 3% was reported.
ending Oct. 5, 1957, a decrease of 6% was
registered.
increased
Rice prices were sustained at the
level of the
the domestic and Cuban demand
advanced.
on
1957, dcreased 6% below that
the preceding
weeek, Sept. 28,
For the four weeks
lag. Flour receipts
Friday, Oct. 5, amounted to
21,053 sacks with 12,638 for export and 8,415 for domestic
use.
at
sales
principally into the
—
pany,
According to the Federal Reserve Board's
index, department
store sales in New York
City for the weekly period ended Oct.
5,
noted in prices of oats and
rye.
Except for
•
store
manu¬
heating
since
three years
interest centered
as
stock
1921, has been
expanding and diversifying its ac-,
widely during the past
Temperatures that were above normal
during the week were,
according to trade observers, responsible for the
poor showing
in sales of
slipped as purchases lagged.
Reports showed that producers stored larger amounts of
soybeans
hoping for higher prices at the end of the season.
Slight increases
were
equipment
on
Retail trade sales volume in
New York City last week
clined 3 to 5% below the volume
of the similar period a
year
year ago.
during the week.'.Farmer
and soybeans
corn
high level
a
5,1957, a decrease of 1% was reported.
1, 1957 to Oct. 5, 1957, an increase of
2%
registered above that of 1956.
fractionally.
both
on
on
offered
common
Siegler, engaged in the
facture and sale of space
ago.
four weeks ended Oct.
the period Jan.
recover at the end of the
week,
earlier in the period.
Trading in wheat was close
week earlier and
prices dipped
a
Prices
publicly
Co.
320,000
(par $1)
Siegler Corp. at $15 per share.,
of
country-wide basis as taken
from the Federal Reserve
Board's index for the week ended
Oct. 5,
year. In the pre¬
following declines
to that of
headed
group
&
Staats
electronics field and tool and ma¬
chine production. Acquisitions in¬
clude Hallamore Electronics Com¬
1957, showed no change from the like
period last
ceding week, Sept. 28, 1957, no change was also
livestock, and
daily wholesale com¬
modity price index, compiled by Dun &
Bradstreet, Inc., fell to
281.59, moderately below the previous 1957 low of 282.10 of
Sept.
30. The
were
R.
tivities
Department
1957 Low the Past Week
prices
16
shares of
suites.
Wholesale Commodity Price Index
Registered Fresh
general
underwriting
William
Oct.
dining room sets, upholstered chairs and bedroom
The call for
major appliances and television sets was close
to that of a week
earlier. Wholesalers registered
moderate gains
in
draperies, linens and floor coverings and food
buying was close
to that of a week
earlier.
sum
index stood at 295.89
by
•
primarily
total of the price per pound of
foodstuffs and meats in general use and
its chief function
is to show the general trend of
food prices at the wholesale level.
Grain futures
An
Chicago reported moderate year-to-year
Sales of furniture remained
at
raw
Declines in prices of steel
scrap, sugar, some
lard resulted in another noticeable decrease
in the
modity price level last week. On Oct. 7 the
in
Textile wholesalers
reported a moderate rise in trading in cot¬
ton gray goods
following a reduction in some prices. Transactions
in carded cotton
yarns were sluggish and volume
in woolens, wor¬
steds and carpet wool
lagged again during"the week.
Many mills
curtailed output.
There was a
slackening in bookings in wide
industrial fabrics and man-made
fibers.
unchanged from the previous week and continued at the
lowest
level since May 28, when it stood at
$6.11. It compared with $5.97
on the
corresponding date a year ago, or a rise of 2.5%,
31
goods
Group Offers
Siegler Common Shs.
Retailers
household
year
sale food .price
trend
Staafs
better dresses
From Latest Week
steadier
slight
Re-orders for women's Fall cloth
coats, fur-trimmed suits and
were sustained at
a high level in
major wholesale
centers the past week and
continued
moderately higher than a
219
under
Wholesale Food Price Index Held
Unchanged
a
offset
-
Despite extensive sales promotions in
many regions, volume
in upholstered
chairs, bedroom suits and dinette sets
lagged behind
that of a week earlier.
Consumers stepped up their
buying of
television sets, lamps and
automatic laundry equipment.
Although
interest in draperies and linens
was sustained at a
high level, sales
of floor
coverings slackened. Retailers
reported "moderate declines
in volume in
glassware and china. Housewives'
purchases of food
slipped somewhat last week.
the
and
of
gains.
week.
oped
suits
Contrary to the national trend, purchases of
men's apparel
expanded considerably in Atlanta.
The call for women's
clothing
fell most
noticeably in Boston, New York and Detroit.
$5,000 dropped to 42,
but remained above the 40 of the like 1056
Twenty-three of the businesses had liabilities of more
than $100,000
compared with 20 a week ago.
from 44
and
1
Commercial and industrial failures
dipped for the third con¬
secutive week,
dropping to 244 in the week ended Oct. 19, Dun
& Bradstreet, Inc., reported. The week
before 261 failures were
recorded and a year ago, 259. In the
comparable prewar week
in 1939 there were 239 failures.
week's
37
last
5.5%
from
that
of
late
and
-
credits
term
can
at
or
ho*>R WOf
arisen
currency
Moreover, such balance
payments
short
have
speculation
or
mag¬
only
the
be
most
of
a
£
a
medium-term stopgao meas"re. ir
o
order to
buy time until the efforts
to bring about a real equilibrium
in
the
basic
payments situations
have produced results. They
will,
therefore, be
no
lasting
cure.
They
have to be accompanied by effec¬
tive remedial action, that is to
say,
by
combating
sures
and
done
by
inflationary pres¬
overspending. If this is
common
efforts—and I
for
that
in
see
and
continuous
good prospects
parts of the
various
world—there is
no reason
why the
payments situation should not in
straighten itself out. The
Fund, bv giving a helpful hand in
time
the necessary coordination of
tional policies, will no doubt
a
useful
we
role
in
this context,
shall be gla^
contribution to this effort.
our
na¬
play
and
full
</>
rn
*
Financial Chronicle
The Commercial and
.
.
.
Thursday, October 17, 1957.,
(1718)
38
AD DITION S
* IN DICATES
Registration
Securities Now in
Inc.
Akin Distributors,
(letter of
Aug. 2
A
,
of class A
notification) 90,000 shares
stock, 90,000 shares of class B common stock
and 25,000 shares of preferred stock (all of $1 par value).
Price—Of class A and class B common, $1.50 per share;
and of preferred, $1 per share. Proceeds—To retire bank
loans and for working capital. Office—718 South Bould¬
common
Underwriter—May be Walston & Co.,
Tulsa, Okla.
er,
Tulsa, Okla.
Life Insurance
Alabama National
(letter of
2
Oct.
stock
of common
Proceeds—
notification) 37,783 shares
Price—$3 per share.
(par 25 cents).
selling stockholders. Office—Bessemer, Ala. Under¬
writer—Joe S. Hanson, 794 Navy Bldg., Pensacola, Fla.
To
Corp., New York (11/14)
shares of class A common stock
(par one cent), of which 233,000 shares are to be sold
for account of the company and 23,300 shares for the
account of Ben Degaetano, President of the underwriter.
Price—$1.50 per share. Proceeds—For working capital
to be used in realty financing activities. Underwriter—
Midland Securities, Inc., New York.
16 filed 256,300
Power Co., Inc. (10/29-30)
Oct. 7 filed 185,000 shares of common stock (no par).
Price—To be related market price on the New York
time of public offering. Proceeds —
Share Co. Underwriters—Lazard
Co. ^nd The First Boston Corp., both of New
Stock Exchange at
To
&
Freres
&
Bond
Electric
York.
American Income
Fund, Inc., New York
of capital stock (par $1).
Under¬
is President. Invest¬
Securities Cycle Research Corp., New
filed 500,000 shares
May 24
market.
Price—At
ment Adviser
Proceeds—For investment.
Burton H. Jackson
writer—None.
—
Y'Y'
American Provident
50,000,000 shares of common
Feb. 15 filed
Inc., Rockport, Mass.
6%% deben¬
Lee, N. J.
partnership
(minimum).;
apartment building. Underwriter
/.V'YY /Y-v
Bridgeview Towers Associates, Fort
Proceeds—To
buy an
(10/23)
Edison Co.
Brockton
stock (par one
cent). Price—$2 per share. Proceeds — For working
capital and general corporate purposes. Office—Dallas,
Tex.
Underwriter—Peoples Securities Co., J. D. Grey,
Orleans, John S. Tanner, of Dallas, and C. L.
Edmonds, of Houston, three of the 22 directors, are
Chairman, Vice-Chairman and President, respectively.
purchase an undetermined number of shares of . Mc¬
Industries, Inc., class A common stock at market,
established at a later
date.
Price—To be supplied by amendment ((expected
Lean
the exact number of shares to be
Oct. 23 at 49 Federal
New
funds, to purchase five C-2 freighters to be converted
into trailerships.: Underwriters—Eastman Dillon, Union
Securities & Co. and White, Weld & Co., both of New
(10/30)
(10/29)
Oct. 3 filed $250,000,000 of 26-year debentures due Nov.
1, 1983. Proceeds—For advances to subsidiary and asso¬
ciated companies; for purchase of stock offered for sub¬
scription by such companies; for property additions and
improvements; and for general corporate purposes. Un¬
derwriter
To be determined by competitive bidding.
Probable bidders: Morgan Stanley & Co.; The First Bos¬
ton Corp. and Halsey, Stuart & Co. Inc. (jointly). Bids
American
Telephone & Telegraph Co.
—
New
Oct. 29. ;
★ Ampal-American Israel Corp., New York
Oct. 14 filed $5,000,000 of five-year 6% sinking fund de¬
bentures, series F, due 1962. Price—At 100% of principal
—To
be
received
at
2315,
Room
York, N. Y., up to 11:30 a. m.
amount.
ment.
195 "Broadway,
(EST)
Proceeds—To purchase
on
machinery and equip¬
Underwriter—None.
AMI, Inc., Grand Rapids, Mich.
4 filed 114,323 shares of common stock
Oct.
with
(par $3),
warrants, to be offered for subscription by common
each four
Price—$9 per share. Warrants entitle
holder to purchase one additional share at $10 per share
for each share subscribed for.
Proceeds—To retire 5%
held.
mortgage note, 5% unsecured notes and to reduce bank
loans.
Underwriter—None. Cage Trust, a trust organ¬
ized
the
under
laws
of
the State of Liechtenstein,
has
agreed to purchase any unsubscribed shares.
Anita Cobre U. S.
A., Inc., Phoenix, Ariz.
Sept. 30 filed 85,000 shares of common stock.
Price—At
share). Proceeds—For investment in sub¬
sidiary and working capital. Underwriter—Selected Se¬
curities, Inc., Phoenix, Ariz.
•
par
($3.75
per
Apache Oil Corp., Minneapolis, Minn.
July 22 filed 200 participating units in Apache Oil Pro¬
gram 1958.
Price—$10,000 per unit. Proceeds—To ac¬
quire, develop and operate oil and gas leaseholds; and for
other corporate purposes.
made
Underwriter—None; sales to be
through corporation and APA, Inc., its subsidiary.
★ Axe-Houghton Fund B Inc.
Oct. 8 filed (by amendment) 2,000,000 additional shares
of common stock (par $1). Price—At market. Proceeds
—For investment. Office—Tarrytown, N. Y.
Over
$20 Billion!
securities. And
than any
more
own over
$20 billion in
of them read the Chicago Tribune
When you advertise in the
professional buyers and the
'general public. Find out more about Mid America's most
influential medium. Call your nearest Chicago Tribune
representative today.
•
other
newspaper.
Tribune, you reach both
s
July 5 filed 248,132 shares of common stock (par 10b).
Price—At market.
Proceeds—To selling stockholders*
St., Boston, Mass.
if Commercial Credit Co. (10/23)
Oct. 10-filed $50,000,000 senior notes due Nov. 1, 1977.
Price—To be supplied by amendment. Proceeds—To in¬
^ California
America''s most
widely
^circulated market table pages
(11/7)
150,000 shares of common stock (par $5).
be supplied by amendment Proceeds—To re¬
Price—To
•
Mortgage Bonds, Ltd., Englewood,
$1,000).
Proceeds
Oct. 7 filed (by
Canadian Prospect Ltd.,
Consolidated Edison Co. of N.
Y., Inc.
(10/22)
approximately $43,000,000 of short-term bank notes and
for construction program.
Underwriter—To be deter¬
N. J.
competitive bidding. Probable bidders: Halsey,
Co. Inc.; Morgan Stanley & Co:; The First
Boston Corp. Bids—Tentatively scheduled to be received
up to 11 a.m.* (EDT) on Oct. 22.
■■■
'
Y
mined by
Calgary, Canada
4,851,810 shares of common stock (par
cents) to be offered in exchange for capital stock
of Canadian Export Gas Ltd. on the basis of 2% Cana¬
dian Prospect shares for each Canadian Export share,
subject to acceptance by holders of at least 80% of
Canadian Export shares outstanding. Underwriter—None
Stuart
16%
Caramba Mokafe Corp. of America
July 12 (letter of notification) 120,000 shares of common
stock (par 10 cents). Price—$2 per share. Proceeds—For
machinery, equipment, inventory and working capital.
Office—701 Monroe St., Hoboken, N. J. Underwriter—
Garden State Securities, Hoboken, N. J. Y
&
Consolidated Fenimore Iron Mines, Ltd. /
filed
27
Inc.
additional 750,000 shares
an
capital stock
common
Sept. 20 filed $60,000,000 of 30-year first and refunding
mortgage bonds, series N, due 1987. Proceeds—To repay
Underwriter—None.
Sept.
amendment)
(par $1). Price — At market.
Proceeds—For investment. Office—San Francisco, Calif.
of
For purchase of mortgage bonds;
—
Income Fund,
Commonwealth
(10/29)
Oct. 7 filed 84,000 shares of common stock (par $1).
Price—To
be supplied by amendment.
Proceeds—To
repay
bank loans; for capital expenditures; and for
increased inventory and working capital-.
Underwriter
—Lee Higginson Corp., New York.
Canada
Underwriters—The First Boston
both cf New York.
Corp. and Kidder, Peabody & Co.,
and
Inc., Houston, Texas
Cameo,
/Y;
;v':" ■ /'/"/■
working capital.
crease
for construction program. Under¬
writer—William R. Staats & Co., Los Angeles, Calif. /
bank loans
pay
Co., Inc., New York. Statement
effective Aug. 10.
\
Interstate Telephone Co.
&
Underwriter—Glick
filed
14
Oct.
shares of common
stock (par one cent).
Price—$2 per share. Proceeds—
For working capital, etc. Business—Spaghetti, macaroni,
etc. products. Office—2891-99 Nostrand Ave., Brooklyn,
N. Y.
Underwriter
Anglo-American Securities, Inc.,
;
Y
of notification) 150,000 shares of common
stock (par $7). Price—At market (closing price on To¬
ronto Stock Exchange as of Jun<=f 14, 1957 was $1.82 bid
June 26 (letter
asked, per share). Proceeds—For mining ex¬
Office—c/o Roy Peers, 9 De Casson Rd., Mon¬
and $1.85
penses.
treal, Canada. Underwriters—Thomason, Kernaghan &
Co., Ltd., Toronto, Canada, and R. P. Mills & Co., Ltd.,
Montreal, Canada. ■- Y
Y 5,
•
Y •
convertible debentures
being offered for subscription by common stock¬
Power Co.
Consumers
'
Sept. 24 filed $35,156,700 of 4%%
due 1972
25
1957 on the basis of $100 of
shares of stock held;- rights to
16,
Nov. 1, 1957. Price—100% of principal amount.
To repay bank loans and for construction
on
Proceeds
each
for
debentures
expire
Oct.
record
holders of
Caruso Foods, Inc. (10/29)
Oct. 3 (letter of notification) 150,000
—
program." Underwriter
York.-
•
*
* •'
—
Morgan Stanley & Co., New
"
" ■
*
YY'..;~
Y;Y"'
Y
—
New
York.
•
•
,
Carter-Jones
-
""
-
Drilling Co.,
,
.
Inc.
300,000 shares of capital. stock (par 10
cents). Price—To be supplied by amendment. Proceeds
—To repay bank loans and other indebtedness; to parti¬
cipate in the acquisition and exploration of oil proper¬
Sept.
27
filed
with other companies
retain more
in which the company does not propose to
a
25%
interest
or
assume
more
risk; and for general working capital.
Tex.
than
25%
of
the
Office—Kilgore,
Underwriter—None.
Central
Mor*gape &
mortgages
Insurance Co.
Oct. 10 filed 1,700,000 shares of capital stock (par $5) to
be offered in exchange for capital stock (par $7.50) of
Firemen's Insurance Co., Newark, N. J., at the rate of 17
A Continental
shares of Firemen's
which is subject to acceptance of not
80% of the Firemen's stock, will expire Dec. 2,
shares
of Continental for every 20
stock.
The offer,
less than
1957, but may be extended to Dec. 31, 1957. Underwriter
—None.
•
.
Continental
Screw
Co.
(19/21-25)
Sept. 24 filed 300,000 shares of common stock (par $1).
Investment Corp..
Sept. 12 filed $5,000,000 of 20-year mortgage bonds and
500,000 shares of common stock (par five cents) to be
offered in units of $100 of bonds and 10 shares of stock.
Price—$100.50 per unit. Proceeds—For purchase of first
struction
(Hljiratjo Unburn
Sanford, Me.
Co.
and Shields & Co. (jointly); Stone & Webster Securities
Corp.; Blair & Co. Incorporated. Bids—Expected to be
received up to 11 a.m. (EST) on Oct. 30 at 49 Federal
ties in joint venture arrangements
•
: ♦-/'/-;Y;.';.//
/-v:•./;;;;/
Colonial Aircraft Corp.,
Halsey, Stuart & Co. Inc.; White, Weld &
bidders:
than
Stockholders in Mid America
York. Y
acquire securities of Montaup Electric Co. Underwriter
be determined by competitive bidding.
Probable
Sept. 3 filed $1,000,000 of 8% mortgage bond trust cer¬
tificates.
Price — At par (in units of $250, $500 and
stockholders at the rate of one new share for
shares
trust bonds due 1987.
to
Proceeds—Together with other
at 100% for debentures).
:
■
—To
of
6% debentures due Feb. 1,
to
18 filed $3,000,000 first mortgage and collateral
Proceeds—To repay bank loans and
Sept.
(10/29)
Ship Corp.
(with warrants to purchase 80,000 shares of common
stock of Coastal, of which 60,000 shares are included in
the public offering and
exercisable at'$1 per share;
and 20,000 shares to be privately placed; and warrants
White, Weld & Co. and Shields & Co. (jointly);
Stone & Webster Securities Corp. Bids—Expected to be
Brockton Edison Co.
/'Y;;U
1968
:
bers:
on
Coastal
•
Sept. 13 filed $6,000,000 of
Sept. 18 filed 30,000 shares of cumulative preferred stock
(par $100). Proceeds—To repay bank loans and to ac¬
quire securities of Montaup Electric Co. Underwriter—
To be determined by competitive bidding. Probable bid-
to 11 a.m. (EDT)
•
(W. B.), Inc. r Y.y •-/ " ■
Y;Y -Y;; Y.V;
Oct. 3 .(letter of notification) 5,600 shares cL common
stock' (par $5) to be offered to stockholders of record
Sept. 26, 1957 on the basis of one new share for each
five shares held. Price—$20 per,; share. ^Proceeds—For
accounts payable; and drilling for oil and gas wells.
Office—272 First National Building, Oklahoma City 2,
Okla. Underwriter—Ncne. VYi'Y YY /,/:. Y;-Y.Y Y
:-Y
if Cieary
July 25 filed $360,000 of participations in
interests. Price—$10,000 each participation
—None.
' ;,Y;
Offering—Expected at any time.
Gould, Salem, Mass.
&
Corp.
shares of commori/
cents per share.
(U. S. funds). Proceeds—For exploration costs, etc.. Of->
fice—5616 Park Ave., Montreal, Canada. Underwriter—
Jean R. Veditz
Co., Inc., 160. Broadway, New York,,
capital stock
St., Boston, Mass.
Investors Corp.
Chess Uranium
May 14 (letter of notification) 600,000
stock (par $1—Canadian).
Price—50
15, 1972 and
(par $1) to be offered
in units of one $50 debenture and 20 shares of capital
stock.
Price—$90 per unit. Proceeds—To retire mort¬
gage notes and for working capital. Underwriter—Mann
received up
York.
-
Sept. 17 (letter of notification) $100,000 of
tures dated Sept. 16, 1957 and due Sept.
cents
(pari
Proceeds—For oil develri
opment operations. Office—42 Broadway, New York 4,j
N. Y. Underwriter—G. F. Rothschild & Co., Inc., New?
York, N. Y. :
V ' Y y
/Y i/; Y:":;/: •
V'
Price—$3 per share.
30 cents).
corporation and of certain of its sub¬
40,000 shares of
/
July 29 (letter of notification) 100,000 shares of 19
non-cumulative convertible first preferred stock
if Belden Manufacturing Co., Chicago, III.
Oct. 9 filed 10,646 shares of capital stock, to be issued to
officers and key employees ol the company under its re- *
stricted stock option plan.
; "
American & Foreign
★
_
Chatham Oil Producing Corp.
if Baxter Laboratories, Inc.
Oct. 11 filed 40,000 shares of common stock (par $1) to
be offered under Employees Stock Purchase Plan to
Blacksmith Shop Pastries
r
Office—Kansas^
working capital.
Proceeds—For
-
Underwriters—Paul C. Kimball & Co., Cni- j .
cago, 111.; and McDonald, Evans & Co., Kansas City,lVlo.
Oilering—Expected momentarily.
Y
Phoenix, Ariz. Underwriter—None.
employees of this
REVISED
City, Mo.
—
Allstate Commercial
Sept.
share.
if Azair Arizona Aircraft Co.
7 (letter of notification) 40,000 shares of class A
common stock (par $5). Price—$7.50 per share. Proceeds
For working capital, etc. Office — 216 Luhrs Bldg.,
ISSUE
PREVIOUS
ITEMS
•
Oct.
sidiaries.
Co.
SINCE
to make first mortgage loans and for con¬
business.
Office—Miami Beach, Fla.
Under¬
or
writer—Aetna Securities Corp.,
New York.
Centurv Acceptance Corp.;
Sept. 9 filed 100,000 shares of cumulative preferred
stock, 70-cent convertible series, (par $5). Price—$10 pei
Price—To
be
supplied
by
amendment.
Proceeds—To¬
gether with funds from sale of $1,500,000 6% bonds (with
stock purchase warrants), .to purchase_ assets of old
Massachusetts corporation and of Hy-Pro Tool Co. Un¬
derwriter—Lee Higginson Corp., Boston and New York.
Cooperative Grange League Federation, Inc.
Sept. 27
due
Jan.
ferred
$600,000 of 4% subordinated debentures
1966; 10,000 shares of 4-% cumulative pre¬
par $100;
and 150,000 shares of common
filed
1,
stock
stock (oar $5>. Price—At principal amount or par value.
Proceeds—Tp finance inventory purchases,, to makeYap-
Volume
18(5
Number 5682
..
.
The Commercial and Financial Chronicle"
.
(1719)
ital loan advances to retail subsidiaries; to reduce bank
loans; and for working capital. Office/— Ithaca, N. Y.'
Underwriter—None.
r:
;/ > >•,;• •..*;> - -
Daybreak Uranium, Inc., Opportunity, Wash.
7 filed 631,925 shares of common stock (par
May
10
cents). Price — At market (approximately 53 cents per
share). Proceeds—To selling stockholders. Underwriter
Herrin Co., Seattle, Wash.
/''v'
t] Dayton Power & Light Co.
.
:
.
.
^
.
(11/6)
~
Oct. 8 filed $25,000,000 of first
mortgage bonds due 1987.
Proceeds—To repay bank loans and for construction
pro¬
gram.
Underwriter—To be determined by competitive
bidding.
Eastman
Bros.
W.
&
E.
Probable bidders: Halsey, Stuart & Co. Inc;j
Dillon, Union Securities & Co. and Salomon
Hutzler (jointly); Morgan
Stanley & Co. and
Hutton
&
Co.
(jointly); Blyth & Co., Inc., The f
Corp. and Harriman Ripley & Co. Inc.
(jointly); Merrill Lynch, Pierce, Fenner & Beane and
White, Weld & Co. (jointly); Lehman Brothers, Bids—
First
Boston
Tentatively expected to be received
oh Nov. 6.
DeLuxe
:
up
to 11
(EST)
a.m.
\
Check
Glore,
Forgan
Aug. 28 (letter of notification) 25,000 shares of common
stock (par $1) to be offered to
employees and present
stockholders. Price—$11.80 per share. Proceeds—To ac¬
quire new machinery and equipment. Office — 530 N.
and
,
•
development of
real
••
i
General Automatics
May 23 (letter of notification) 100,000 shares of common
(par $1). Price—$2 per share. Proceeds—To es¬
tablish production facilities for
manufacture and assem¬
bly of controls; and for other corporate purposes. Ad¬
$5) to
Corp. to its
employees. Proceeds—None, shares to be purchased on
the open market.
working
capital.
Business
Building
Underwriter—American Underwriters, Inc.,
—
General Telephone
Corp., New York
May 24 filed 1,480,787 shares of common stock
(par $10)
and 170,000 shares of 5.28%
convertible preferred stock
(par $50) which were offered in exchange for common
tures and 40 warrants.
Price—$500 per unit. Proceeds—
For expansion and
working capital. Underwriter—None
named.
Offering to be made through selected dealers.
Application is still pending with SEC.
Parking, Inc.
June 18 (letter of
notification)
stock (par $1).
Price—$1.25
—
For public offer, John
(Offering
17
Debentures
18
iOffering
to
of
Peninsular
of
Peninsular
extended
Continued
$1
pre¬
to
Oct.
14.
page
on
40
First
National Life Insurance Co., Phoenix, Ariz.
July 29 filed 106,500 shares of common stock (par $4),
of which 90,000 shares are to be offered publicly and
16,500 shares to employees pursuant to stock purchase
options. Price—To public;1 $12 per share. Proceeds—For
expansion and other corporate purposes.
<Offering
to
(The
None.
Milwaukee
underwriting)
Co.)
October 21
Florida
Trust, Pompano Beach, Fla.
Mgrch 4 filed 850 certificates of beneficial * interest in
Price—$1,000 per certificate. Proceeds—To
acquire by purchase, lease or otherwise, and to hold,
own, subdivide, lease, mortgage, exchange, bargain, sell
and convey lands and every character of real
property.
Debs. &
Co.)
October 22
Williams
11
Brothers
(Reynolds &
Forest Laboratories, Inc.
Aug. 28- filed 200,000 shares of capital stock (par 10
cents). Price—$2.50 per share. Proceeds—For sales pro¬
of
company's products, working capital, addi¬
tional inventory and accounts receivable, for research
and development and for other general corporate pur¬
poses. Office—Brooklyn, N.» Y. Underwriter—Mortimer
B. Burnside & Co., Inc., New York.
(Bids
23
400,000
shares
Ritter
Norfolk &
Finance
Pierce,
(Bids
(par $1).
Price—Ta be supplied by amendment. Proceeds
—
Beane)
EST)
11
Corp., New York
99.195
Roach
Common
25
The
First
(Friday)
3,533
Halsey,
.(Lee
29
& Co., Lehman Brothers
Stuart
EST)
Higginson Corp.)
Standard Oil Co.
Debentures
Victoreen
&
84,000
Pierce,
(Saunders,
Inc.)
&
150,000
Co. and
11
11
Co.)
$1,000,000
Equip. Trust Ctfs.
$2,600,000
EST)
&
Bonds
October
Diego Gas fk
Inc.)
Southern Pacif'
Co..
200,000
Inc.)
rv
to be
$2,000,000
Debentures
invited)
S40.000.000
Bonds
H#
'nvHeri>
$3 500,000
(New Jersey)
19
Common
EST)
noon
11
451,894 shares
EST)
sjn
11:30
a.m.
December
$28,000,000
(Wednesday)
EST)
3
*
•
(Tuesday)
Co..
to to invited)
Bonds
$20 000.000
.Maryland
—Debentures
11:30
am
December
EST)
10
S30.000.000
'Tuesday)
Indiana & Michigan Electric Co.
Bids
11
EST
sm
December
dp. Trust Ctfs,
Bonds
$40,000,000
December 9
(Monday)
Chesapeake & Potomac Telephone Co. of
11
Bids
Suburban
to
Electric
to
Bonds
$20,000,000
(Wednesday)
Baltimore & Ohio RR
$7,500,000
$6,000,006
Stanley
(Tuesday)
shares
—Preferred
Common
rwruten by Morgan
6,565,000 shares
Co.)
Virginia Electric & Power
(Thursday)
(Bids noon EST)
(Monday)
Invited >
300,000 shares
Electric Co
(Blyth &
be
Houston Lighting & Power Co....
(Bids
Common
Inc.)
31
shares
Bonds
(Bids
Common
Co.,
.Common
735,000
Ohio Power Co
$3,000,000
Chemicals, Inc
(Blyth
San
(Bids
'Bids
(Wednesday)
Hewlett-Packard Co.
(Blyth & Co.,
18
November
155,000 shares
Debentures
&
invited)
am
Corp.)
Common
Brockton Edison Co
Bids
Bonds
$6,000,000
Middle South Utilities Inc
(Bids
Co
be
tc
$384,450
Bonds
'"o
shares
3,600 shares
Baltimore & Ohio RR.
Bids
Securities
White, Weld & Co.)
Fenner & Beane)
30
Common
Inc.)
EST)
a.m.
November 20
EDT)
Stiver
(Thursday)
shares
Common
Instrument
$65,000,000
(Offering to stockholders—und
$250J)00,000
Simplicity Pattern Co., Inc
(Merrill Lynch,
14
Securities
'Bide
Johnson Service Co
a m
Inc.)
Michigan Bell Telephone Co
Common
Debentures
11
(Wednesday)
Debentures
& Co.,
November
$6,000,000
Bids
Bonds
$12,000,000
Lawrence Gas Co
Corp.) 185,000 shares
Common
'
$1,125,000
Mystic Valley Gas Co
Inc
(Eastman Dillon, Union Securities
•
Co.)
United States Coconut Fiber
Corp
(Bids
Tuesday)
Coastal Ship Corp
<
&
EST)
noon
Allstate Commercial Corp..
Common
Caruso Foods,
shares
Common
November 13
Bids
Cameo, Inc.
(no par)
Pro¬
Blyth & Co., Inc., and The First Bos¬
shares
Common
a.m.
Common
150,000
Caterpillar Tractor Co
Debentures
by
Corp
11:30
Co.)
(Monday)
Telephone & Teiegraph Co
(Bids
(Thursday)
&
.
(Bids
Common
(Lazard Freres & Co. and The First Boston
American
Bond*
$20,000,000
Savannah Electric & Power Co
Inc.) $5,220,600
October
Co
7
Fuller
'Midland
(Kidder, Peabody & Co.) 130,000 shares
(par $1)
bidding
Boston
$300,000
stockholders—underwritten
Parker-Hannifin
$25,000,000
invited)
November
Power Co._
Co.
be
Staats
D.
(Southeastern
&
Bonds
EST)
Electric
(Blyth
(Offering to stockholders—no underwriting)
October 28
150,000 shares
(Wednesday)
a.m.
to
((Bids
shares
Co.)
11
R.
<8.
Common
by
Woodbury Telephone Co
to
Inc.)
San Diego Gas & Electric Co
(Thursday)
&
f
Class B Common
(Hal) Productions
Bonds
Common
October
Reichhold
Attorney General of the United 'States.
(William
$8,000,000
stockholders—unuerwritten
shares
Common
.1
$200,000
Debentures
Co.,
November
$4,110,000
EDT)
a.m.
October 24
(Offering
Co.)
200,000
California Interstate Telephone Co
$15,000,000
Equip. Trust Ctfs.
.
noon
Corp.)
For
expansion program and working capital. Office — Leo¬
minster, Mass.
Underwriter — Wertheim & Co., New
York.
Offering — Indefinitely postponed because of
present market conditions. ;
&
'Bids
Debentures
&
Taylor Instrument Companies
Otter Tail
Sh»rry
Co., Inc._
(Bids
(Kidder, Peabody & Co. and Blyth & Co., Inc.)
262,890 shares
'
underwriting)
$50,000,000
Public Service Co. of New Hampshire
to
No
Dayton Power & Light Co
Peabody & Co.)
Fenner
(Monday)
Common
Merrimack-Essex
Public Service Co. of New Hampshire
(Offering
4
Co., Inc
(Stroud
Notes
Western Ry
.v.
Burr,
shares
General Portland Cement Co
Lynch,
$750,000
Debentures
&
Co
Ritter Finance
Commercial Credit Co
(Merrill
Inc.)
& Co., Inc.)
(Stroud & Co., Inc.) $900,000
EDT) $3,000,000
(The First Boston Corp. and
Kidder,
C. Allyn
Empire Sun Valley Mining Corp
(Wednesday)
a.m.
A.
Corp
Chemical
Preferred
11
October
ton for FRASER
Digitized Corp. (jointly); Kuhn, Loeb
Finance
November
Dow
$60,000,000
Inc.)
and
November 6
October
Inc.
Underwriter—To be determined by competitive
Time
Common
Co.,
Debentures
Sweeney & Co.. Inc
(Coffin
Co
(Anglo-American Securities,
A stock
Com.
(Tuesday)
EDT)
a.m.
Common
$9,000,000
shares
100,000
-v
.Debentures
(John
*
B stock
(Snow.
Common
&
>•'
•
.
stockholders—underwritten by
Brothers) $6,050,900
(Offering to employees.
(Emanuel Deetjen
..
Southern Union Gas Co
$247,500
300,000
-
common
Lehman
$490,000
Reading Tube Corp
Trust.
common
(Offering to
(Monday)
Corp.)
•»
(Friday)
Pierce, Fenner & Beane and Kidder,
Peabody & Co.) 50,000 shares
Common
Higginson
'
*
(Merrill Lynch,
$2,496,900
American & Foreign Power Co. Inc
*
common
by
Common
stocKholuers—no
*"i.'»
Smith-Corona, Inc.
Standard Steel Products Mfg. Co
Underwriter—
Sept. 20 filed 300,000 shares of common stock
CALENDAR
Common
stockholders—no underwriting)
Intra State Telephone Co
—
Probable bidders
share
Maine Public Service Co
(Friday)
Federation Bank & Trust Co
(Kesselman
capital and surplus and for first year's deficit. Office—
3395 S. Bannock St., Englewood, Colo. .Underwriter —
American Underwriters, Inc., Englewood, Colo.
'
v
the
each
November 1
common
stockholders—to be underwritten
Morgan Stanley & Co.) $35,156,760
Aug. 26 (letter of notification) 100,000 shares of common
(par $1). Price — $3 per share. Proceeds
For
ceeds—To
stockholders
(Thursday)
Co
Strato-Missiles, Inc.
stock
sharp? of
for
re¬
ISSUE
to
(Bids
First International Fire Insurance Co.
1.537.50O
share
ferred, $1.30 preferred and $1.32 preferred. Offer to
pre¬
ferred stockholders expired on
Aug. 14 and that to com¬
"
Power
—None.
Jan. 14 filed 426,988 shares of
preferred
'
Consumers
„
Co., Colorado Springs, Colo.
Aug. 23 filed 500,000 shares of common stock (no par).
Price—$2 peV share. Proceeds—To pay off note, pur¬
chase equipment and milling facilities, for
development
work, and for acquisition of additional property, work¬
ing capital and other corporate purposes. Underwriter
General Aniline & Film
and preferred stocks of Peninsular
Telephone Co. on the
basis of 1.3 shares of General common
for each share
of Peninsular
common, and one-half share of General
common
Proceeds—To
NEW
October
Fall River Power
and
share.
Under¬
Lynch, Pierce, Fenner & Beane, New
—
mon
240,000 shares of
per
Brockton Edison Co
Foster Grant Co.,
$15,000,000 subordinated debentures due
1977 (convertible on or before Oct.
1, 1967).
Price—To be supplied
by amendment.
Proceeds—To
material.
Empire Sun Vally Mining Corp. (11/4)
Aug. 9 filed 340,000 shares of common stock, of which
200,000 shares are to be publicly offered at $3 per share
and 140,000 shares to stockholders of Sun
Valley Mining
Corp, at $1, per share. Proceeds—For exploration and
acquisition of mines; and for working capital. Office—
•
(10/23)
1,
General Credit, Inc.,
Washington, D. C.
Aug. 17, 1956 filed $2,000,000 of 6% subordinated sink¬
ing fund debentures, due Sept. 1,
1971, with detachable
warrants to purchase 160,000 shares of
participating
preference stock, to be offered in units of
$500 of deben¬
Englewood,
motion
Oct.
Portland Cement Co.
filed
York.
'Bids
Colo.
Underwriter—rNone
3
Consolidated Edison Co. of New York, Inc.—Bonds
Inc., Denver, Colo.
Sept 23 filed 750,000 shares of common stock (par
$1)^
Price—$2 per share. Proceeds—For capital expenditures
the
General
Oct.
Ga.
(Lee
Oct. 9 fileck 20,000 shares of common stock
(par
be offered for subscription by Dow
Corning
''
Ave., Youngstown, Ohio.
Underwriter—L. L. LaFortune &
Co., Las Vegas, Nev.
retire bank loans and for
construction program.
writer
Merrill
Continental Screw Co
Jerome, Idaho. Underwriter
Sherry Co., New York.
tire outstanding
debt; for expansion of subsidiary cor¬
and for working capital.
Office—c/o Edwin
F. Clements, 5312 Glenwood
poration
dress—c/o Positronic Corp., 2572 Ridgemore
Road, N. W.,
Atlanta, Ga. Underwriters—Armstrong & Co.,
Atlanta,
Underwriter—None.
ic Dow Chemical Co.
Durox of Minnesota.
been
on
Corp., Atlanta, Ga.
October
.
and
(EDT)
stock
'"v"•
/Dow Chemical Co.. (11/4)
/
Oct 3 filed 200,000 shares of common stock
(par $5).
to be offered for subscription
by employees of the com¬
pany, its subsidiaries and certain associated companies.
Subscriptions will be accepted by the company from
Nov. 4 through Nov. 22.
Price—To be announced by
company on Oct. 22.
Proceeds—For general corporate
purposes.
Bids —Had
Underwriter—None,
property,
and acquisition of stock of business
enterprises. Und rwriter—None.
Irving Lichtman is President and Board
Chairman.
(jointly).
May
Ave., N. W., Washington 25,
D. C., but bidding has been
postponed.
jlr Disc, Inc., Washington, D. C.
Oct. 10 filed 400,000 shares of class A common stock
(par
$1). Price—$2.50 per share. Proceeds—For investment.
Business—Purchase
C6.
&
scheduled to be received up to 3:45
p.m.
13 at Room 654, 101 Indiana
General
Printers, Inc.
Wheeler St., St Paul 4, Minn.
and
-
39
Equip. Trust Ctfs.
invited)
Co.
<Bkto to to invited)
S2 600 000
Bonds
The
Commercial and Financial Chronicle
Thursday, October 17, 1957
Contvnued from page 39
Jackson & Curtis and
Dealer-Managers—Paine, Webber,
6tone & Webster
Securities Corp.
Corp.
Genie Craft
-
6%
(letter of notification) $100,000 of 10-year
,
convertible debentures and 120,000 shares of common
«tock (par 10 cents) to be offered in units of one
debenture and 20 shares of common stock. Price—$100
8
Aug
Proceeds—To discharge short term obligations;
uurchase merchandise inventory; and for working cap¬
ital
Office — 1022 18st St., N. W., Washington, D. C.<
Underwriter—Whitney & Co., Inc., Washington, D. C.
unit.
outstanding debt and for working capital. Office—
St., New York, N. Y. Underwriter—A. G.
Bellin Securities Corp., 52 Broadway, New York, N. Y.
• Great Lakes Natural Gas Corp.
July 15 filed 779,393 shares of common stock (par 50
cents) being offered for subscription by common stockholders of Great Lakes Oil & Chemical Co. on basis of
one share of Natural
Gas stock for each four shares of
Oil & Chemical stock held as of Oct. 14, 1957 (with an
oversubscription privilege): rights will expire on Oct.
29, 1957. Price—SI.25 per share. Proceeds—For explo¬
Co., Hutchinson,
Minn.
Inland Western
^
Oct.
Office—Los
Underwriter—Dempsey-Tegeler & Co.,
improvements, expansion, etc.
Offering—Temporarily postponed.
operating companies; to repay bank loans and,
corporate purposes. Underwriter—To be de-,-*■
by
competitive bidding. Probable bidders^
Blvth & Co., Inc.; The First Boston Corp.;"Kidder, Peabody & Co. and Merrill Lynch, Pierce, Fenner & Beane
(jointly); Lehman Brothers; Eastman Dillon, Union Se¬
curities & Co. and Equitable Securities Corp. (jointly).
Bids—To be received up to noon (EST) on Nov. 19 at
Room 2033, Two Rector St., New York, N. Y.
Oct.
,
18, 1957;
if Great Northern Life Insurance Co.
7 (letter, of notification) 44,400 shares of common
(par SI). Price—S6.75 per share. Proceeds—For
capital stock and unassigned Surplus. Office — 119 W.
Kudisill Blvd., Fort Wayne, Ind. Underwriter—North¬
western Investment Inc., Fort Wayne, Ind.
if Group Securities, Inc., Jersey City, N. J.
9 filed (by amendment) 500,000 additional shares
of capital stock (par one cent). Price—At market. Pro¬
Oct.
investment.
ceeds—For
Inc.
if Growth Industry Shares,
Baltimore, Md.
Guardian Insurance Corp.,
of common stock, of which
Aug. 16 filed 300,000 shares
200,000 shares are to be publicly offered and the
ing 100,000 shares reserved for issuance upon
of warrants which are to be sold at 25 cents per
remain¬
exercise
warrant
organizers, incorporators, management, and/or direc¬
tors. Price—$10.per share. Proceeds—For working cap¬
ital and general corporate purposes. Underwriter—None.
to
Gulf States Land & Industries,
ctanding $4.50 prior preferred stock on the following
basis: For each preferred share (a) 11% shares of com¬
stock,
mon
or
$100 of bonds, plus 1% shares of
conditioned upon its acceptance by
of the 27,549 outstanding pre¬
Exchange Agent — Howard, Weil, La(b)
The offer is
ferred
least 85%
shares.
Orleans, La.
bouisse, Friedrichs & Co., New
•
Sept. 12 filed 9,365 shares of 5% preferred stock. Price—
($100 per share). Proceeds-—For working capital.
Business—School supplies.
Underwriter—None.
Sales
fire to be made through directors, officers and employees
At par
of
company,
to preferential
-subject
writer—None.
Janaf, Inc., Washington,
stock
if Johnson (F.
4 (letter of
Oct.
a
rights of existing
Palo Alto, Calif.
which
Price—To be
tificates of
of
two
account
stock
selling
ing capital.
of
(10/30)
stockholders
Maine
,
,
,
;
^
Holy Land Import Corp.,
remaining
Houston, Texas
Price—At par ($3 per share).
ventory, working capital, etc.
& Co., Houston. Tex.
Horace Mann Fund,
June 27
filed
Price—At
Proceeds—For in¬
Underwriter—Benjamin
—First
Manager—Horace Mann Investors,
Martin is also
Monroe St., Springfield, 111.
Trading
DigitizedOffering intostockholders of ("Hudson's Bay Co."). is "at
for FRASER Hudson's Bay Continental Oil Co. The
td
M.
National
—
Harland W.
f
Inc.
100,000 shares of com¬
stock (par 10 cents). Price—$3 per share. Proceeds
—For cost of plant and inventory and for general cor¬
porate purposes. Office—Room 202
Houston, Tex. Underwriter—Scott
New York, N. Y.
National Cylinder
Houston Title Bldg.,
Taylor & Co., Inc.,
Gas Co.
Aug. 28 filed $17,500,000 of subordinated debentures due
Sept. 1, 1977 (convertible on or before Sept. 1, 1967).
Price
To be supplied by amendment. Proceeds — For
—
expansion and working capital. Underwriter—Merrill
Lynch, Pierce, Fenner & Beane, New York. Offering—
Indefinitely postponed.
-
National Lithium Corp., New
Feb. 19 filed 3,120,000
York
shares of common stock (par one
per share
Proceeds—For aemitui¬
properties; for ore testing program: for assess¬
ment work on the Yellowknife. properties; and for cost
of a concentration plant, mining equipment, etc. Under¬
writer—Gearhart & Otis, Inc., New York. Statement ex¬
pected to be amended. >
*
/_ .'■■
:
Price—$1.25
cent).
Cross,
tion of
.
National
Sept.
Beane and Kidder,
mon
Valve & Manufacturing Co.
»
(letter of notification) 142,620 shares of com¬
(par $1) to be offered to stockholders of rec¬
16
stock
ord Sept.
Kellogg, Idaho
"Fresideht.? UnderwHtet—
Biochemicals,
Advisor
mon
1957 at the rate of 1% shares for-each
stock owned.. Price — $2 per share.
To enlarge plant and for working capitai.
20,
share of common
June 3
Idaho,4 MalPolm' C. Brbwir is
Corp.; Lehman Brothers.
Nov. 18.
(letter of notification)
Sept. 10
'
'
Boston
on
Princeton, N. J.
May 8 filed 250,000 shares of common stock. Price—At
market.
Proceeds—For investment. Office—10 Nassau
subscribed for
(letter of notification) 800,000 shares of common
stock;
Price—At par (17% cents per share). Proceeds
—For mining expenses.. Office—Sidney Bldg., Kellogg,"
opened
Fund,
Nassau
St., Princeton, N. J. Investment
Hoisington, Inc., same address.
Peabody & Co., all of New York.
Mascot Mines, Inc.,
The First
(jointly);
Bids—To be
•
Inc.* Merrill Lynch, Pierce, Fenner &
Bay Oil & Gas Co. Ltd.
Aug. 27 filed 1,744,592 shares of capital stock (par $2.50)
being offered for subscription by stockholders of Con¬
tinental Oil Co. and by holders of ordinary shares of
The Governor and Company of Adventurers of England
-^Mystic Valley Gas Co. (11/18)
16 $3,500,000 first mortgage bonds, series B, due
1977. Proceeds—To repay bank loans and for construc¬
tion program. Underwriter—To be determined by com¬
petitive bidding.
Probable bidders: Halsey, Stuart &
Co. Inc.; White, Weld & Co., and Kidder, Peabody & Co.
Oct.
if Maine Public Service Co: (11/1)
Oct. 9 filed 50,000-shares of common stock
(par $7).
Price—To be supplied by amendment. Proceeds—To re¬
duce bank loans. Underwriters—A. G. Becker & Co.
Inc., Des Moines, la., of which Charles F
Hudson's
New York.
Ltd.
Burton
Fund, Inc. (N. Y.)
Municipal Investment Trust
Inc.
additional 750,000 cer¬
Price—At market.
Me.
j
May 9 filed 5,000 units of undivided interests in Munic¬
ipal Investment Trust Fund, Series A. Price—At market.
Proceeds—For investment. Sponsor—Ira Haupt & Co.,
Portland, Me.
Portland,
by stockholders.
100,000 shares of capital stock (par $1).
Proceeds—For investment. Distrib¬
Office—216 E
Corp.,
is President.
man
42,500 shares are to be offered to directors,
Maine
Charles Hersh-
—Springfield, Mass. Underwriter—None.
4
President, will purchase any shares not
Inc., Springfield, III.
market.
utor and Investment
President.
America, Inc.
of participation units in second
mortgages of real estate to be offered for public sale in
units of $100, plus a sales commission of $10 per unit
to the company. Proceeds—To be invested in small loans
secured by second mortgage on home properties. Office
Mortgage Clubs of
Aug. 19 filed $1,000,000
employees and agents of the company for a period of
14 days at $5.62%
per share.
Price—$6.25 to public.
Proceeds—To increase capital and surplus. Underwriter
Feb. 27 (letter of notification) 100,000 shares of common
stock
Philadelphia, Pa.
Aug. 22 filed 53,500 shares of capital stock (par $3), of
which 11,000 shares, at $5.31% per share, are to be of¬
fered for subscription by stockholders of record July 1,
1957 at the rate of one new share for each share held. The
Underwriter—Blyth & Co., Inc., San Fran¬
■
shares of common
itock.
Proceeds — For
capital expenditures, including construction of motel,
roadside restaurant and gas station. Business—Has been
processing and selling of gravel. Office—203 Broadway,
Monticello, N. Y. Underwriter—Walnut Securities Corp.,
participation, series k-1.
Insurance Co.,
t
of notification) 300,000
Price—At par ($1 per share).
Office—Haifa, Israel. Underwriter—None.'
programs.
the company to
Under¬
1 >'
Feb. 18 (letter
Aug. 26 filed 30,000 shares of 6%% cumulative partici¬
pating preferred stock (par IL 180—$100). Price—$100
per share (payable in cash or up to certain limits in
State of Israel Independence Issue Bonds and State of
Israel Development Issue Bonds). Proceeds — For ad¬
vances to subsidiaries in connection with their expansion •
(par $1), of
Bldg., Pittsburgh, Pa.
Monticello Associates, Inc.
Proceeds—For investment.
option plan.
cisco and New York.
program. Office—Grant
writer—None.
amendment.
"Koor" Industries & Crafts Co.,
(par $1)
to buy an addi¬
being offered for
subscription by common stockholders in units of one
share and one warrant for each seven shares held as of
Sept. 27, 1957; rights to expire on Oct. 18, 1957. Price—
$21.25 per unit. The stock purchase warrants will be
exercisable at $30 per share. Proceeds—For expansion
Inc., New York City
if Keystone Custodian Funds,
Oct. S filed (by amendment) an
196,994 shares of common stock
six-year stock purchase warrants
tional 196,994 shares of common stock
and
and 167,000 shares for selling stockholders.
supplied by amendment. Proceeds — For
To be named by
Un¬
Molybdenum Corp. of America
Aug. 14 filed
general corporate purposes, including carrying of larger
inventories. Business—Wholesale drugs. Underwriter—
and 50,000 shares
employees under a
Price—To be supplied by
amendment. Proceeds—To company to be used for work¬
the
restricted
& Co.,
the company
300,000 shares are to be publicly offered for the
Eccount
for
Bellefontaine, Ohio. Under¬
used to retire bank loans ;
for property additions and improvements.
derwriter—Edward D. Jones & Co., St. Louis, Mo.
and pay
Sept. 27 filed 210,000 shares of common stock (par $1),
of which 43,000 shares are to be offered for account of
,
shares of capital stock
miles northwest of
Ketchum
1982, of Connecticut Power Co. on a par-for-par basis.
350.000
share. Proceeds—For construction of an addition to
warehouse in Beliefontaine,
Ohio. Address—Route
•
7 filed 25,135
mortgage bonds, series C, to be
writer—None.
A, due Aug. 1, 1967, to be offered in exchange for 3%
first and general mortgage bonds, series D, due May 1,
9 filed
N.) Co.
i
notification) 25,000 shares of common
(par .$1)
No. 33, 4
Electric
if Hewlett-Packard Co.,
shares;
to be offered to stockholders of record
Oct. 15, 1957 on the basis oi one new share for each six
shares held; rights to expire on Nov. 9, 1957. Price—$10
stock
Light Co.
Oct. 8 filed $2,400,000 of 3% secured debentures, series
Oct.
Price—Par for debenture, plus
per
provements; for retirement of present preferred
and for working capital, etc. Underwriter—None.
Office — Suite 607, 320 Bay St.,
Underwriter — H. J. Cooney & Co.,
Underwriter—None.
stock.
share for each 10 shares of Stock. Proceeds—For
construction of a shopping center and other capital im¬
$2
blew York.
Hartford
(par 20 cents) to be offered in units of a $1,000
10 shares of stock, or a $100 debenture
and one share of
purposes.
^Toronto, Canada.
D. C.
July 30 filed $10,000,000 of 5y2-8% sinking fund deben¬
tures due Aug. 1, 1972 and 100,000 shares of common
Hampshire Nickel Mines Ltd.
•
Aug. 23 (letter of notification) 600,000 shares of common
«tock (par $1-Canadian).
Price — 50 cents per share,
proceeds—For development of property and for general
corporate
Miami, Fla.
(letter of notification) 300,000 shares of com¬
mon stock (par 10 cents). Price—$1 per share.
Proceeds
—To purchase a ship and for working capital.
Under¬
writer—Anderson Cook Co., Inc., Palm Beach, Fla.
Statement effective Oct. 3.
preferred stockholders.
Steamship & Salvage Co.,
Isthmus
May 21
per
Co., Cambridge, Mass.
(J. L.)
Hammett
Proceeds—For explora¬
development of presently licensed acre¬
and for acquisition of additional acreage. Under¬
Stock Exchange.
the American
debenture and
Inc.
Sept. 25 filed 316,814 shares of common stock (par 50
cents) and $2,754,900 6% first mortgage sinking fund
bonds due 1972 to be offered in exchange for the out-
tiolders of at
Sept. 27 filed voting trustees covering 1,000,000 shares of
common stock (par one cent).
Price—At the market on
age
amendment) 200,000 additional shares of
capital stock (par SI). Price—At market. Proceeds—
For investment.
Office—Chicago, 111.
ctock.
Inc. of Panama
:
■
shares of common stock (par $1) to
be offered for subscription by common stockholders at
the rate of one new share for each 12 shares held. Price
—To be supplied by amendment.
Proceeds—Together
with funds from private sale of $800,000 5%% first
Underwriter—None.
Israel-Mediterranean Petroleum,
tory drilling and
Oct. 8 filed (by
•
16, 1957. Price—At par
share). Proceeds—To reduce bank loans. Of¬
rights to expire on Dec.
($100 per
fice—Galesburg, 111.
Utilities Co.
Missouri
Oct.
Sept. 27 filed 4,900 shares of common stock to be offered
for subscription by common stockholders on the basis
of one new share for each two shares held of record Oct.
stock
other
tcrmined
(10/18)
State Telephone Co.
(par $10),f
stocks of ,
system
for
$1.50 per share. Proceeds—For operating capital for two
subsidiaries and to finance expansion program. OfficePhoenix, Ariz. Underwriter—None.
Intra
I
4
Proceeds—For further investments in common
Loan & Finance Corp.
Aug. 16 filed 2,500,000 shares of class A non-voting com¬
mon stock
(par $1) to be offered for subscription by
holders of special participation life or endowment con¬
tracts issued by Commercial Life Insurance Co. Price—
*
1987.
if Middle South Utilities, Inc. (11/19)
9 filed 451,894 shares of common stock
(letter of notification) 1,697 shares of common
be offered for subscription by common stock¬
holders on the basis of one new share for each five
shares held as of Aug. 20, 1957. Price—At par ($10 per
share). Proceeds—For expansion of plant. Underwriter
—None.
,
/ //-■
'
stock to
pay
Angeles, Calif.
St. Louis. Mo.
Hudson's
Aug. 21
225 East 46th
ration costs,
will expire on November 1, 1957.
(Canadian funds). Proceeds—For
development and exploration costs. Office — Calgary,
Alta., Canada. Underwriter—None. Continental Oil and
Hutchinson Telephone
'■
•
of first mortgage bonds, series B,
Proceeds—For redemption of bonds of
Lawrence Electric Co., for payment of three-year deben-.i
ture bond dated March 30, 1956 of Lowell Electric Light
Corp.; and for payment of short term notes. Underwriter
—To be determined by competitive bidding:
Probable
bidders: Halsey, Stuart & Co. Inc.; Lehman Brothers;;
The First Boston Corp.; Merrill Lynch, Pierce, Fenner
& Beane; Eastman Dillon, Union Securities & Co. (joint- y
ly); Kidder, Peabody & Co. and White, Weld & Co.
jointly). Bids—To be opened on Nov. 6.
Bay Co. have agreed to purchase«75% and
respectively, of the shares which shall not be sub¬
scribed for by the stockholders of the two companies.
Financial Adviser—Morgan Stanley & Co., New York.
Corp.
Giant Petroleum
(ll/O
Oct. 2 filed $20,000,000
due Nov. 1,
25%
July 22 (letter of notification) 150,000 shares of common
ctock (par 10 cents). Price—$2 per share. Proceeds—To
'■
Merrimack-Essex Electric Co.
Sept. 3, 1957; rights
Price—$11 per share
$50
per
Idaho.,
Oil stock
Kellogg,
Spokane,- Wash., and
' • • ' "
'
Standard Securities Corp:,
share for each 15 shares of Continental
held of record Sept. 16, 1957, while the offering
to holders of ordinary shares of Hudson's Bay Co. Ltd,
is at the rate of 11/6 shares of Hudson's Bay Oil &
Gas stock for each 15 ordinary shares held of record
the rate of one
;
...
(1720)
40
-
Proceeds
—
Office—3101 Liberty
t
LsNouejs
s
-i - ?*•
v
Ave., Pittsburgh, Pa.
!.♦
r-
>
Underwriter
Volume
5682
Number
186
.
.
The Commercial and Financial Chronicle
.
if North American Planning Corp. (N. Y.)
Oct. 9 filed (by amendment) an additional $1,000,000
Single
Ramapo Uranium Corp. (New York)
Aug. 13 filed 125,000 shares of common stock (par one
cent). Price—$5 per share. Proceeds—For exploration
and development of properties and
completion of a ura¬
Plans and' an additional
$24,000,000* Systematic Investment Plans and Systematic
Investment Plans with insurance, each for the accumu¬
lation of shares of Boston Fund, Inc.
•
Payment
Investment
Nuclear Science &
nium concentrating pilor mill. Office—295 Madison
New York 17, N. Y. Underwriter—None.
Engineering Corp.
tions.
May
stock
(par $2.50),
which
of
17,932 snares
are
ing offered to present stockholders and 9,000 shares are
Price — $11 per share. Proceeds
capital and surplus. Underwriters—John¬
son, Lane, Space Corp. and Varnedoe, Chisholm & Co.,
both of Savannah, Ga.
Power Co.
.
The
First
Boston
Corp.;
Union
Hutzler
(jointly). Bids—Expected to be received
(EST) on Nov. 19. V
11
a.m.
Securities
Co.
&
Salomon
and
Bros.
up
units
of
one
share
common
per
unit.
and
Proceeds
Otter Tail Power Co.
Oct.
4
class
A
of
Oct.
25,
1957
on
if Reichhold
Under¬
writer-—Halsey, Stuart & Co. Inc., of Chicago and New
York.
•A'Pacific Petroleums, Ltd,
Oct. 11 filed 1,603,998 shares of common stock (par $1),
of which 1,588,998 shares are to be offered in exchange
for outstanding Merrill Petroleums, Ltd/common stock
at
the
rate
of
one
Pacific
share
for
each
two
Merrill
shares; the remaining 15,600 shares are to be issuable
upon exercise of presently outstanding options granted
by Merrill, which options will be assumed by Pacific.
Office—Calgary, Alberta, Canada. Underwriter—None.
Palestine Economic Corp., New York
Sept. 26 filed 130,000 shares of common stock.
Price—
At par ($25 per share). Proceeds—For participation in
further development of Israel industry; for capital im¬
provements; for extension of cooperative and other
banking credit; for financing of export to Israel; for
investment in stock of two companies; and for working
capital
and
other 'corporate
purposes.
Underwriter—
Chemicals, Inc. (10/30)
200,000 shares of common stock
shares
of
common
:if Rio Tinto Co., Ltd. of England
Oct 14 filed 60,000
American depositary receipts for or¬
dinary registered stock. Depositary—Guaranty Trust Co.
offered
(11/4-3)
Sept. 27 filed voting trust certificates covering 1,000,000
common
stock
(par one cent). Price—At mar¬
ket on the American Stock Exchange.
Proceeds — For
exploratory drilling
and
development
of
presently
licensed acreage and for acquisition of additional acre¬
age. Underwriter—None.'
•
warrants.
Productions
per
Underwriter—S. D. Fuller & Co.,
«
shares
be
Sept. 30
on
the basis of
one
held; rights to expire on Oct. 31, 1957. Price—$15
per share.
Proceeds—For construction program. Office
—125 West Church
Ave., Roanoke, Va. Underwriter—
if Pivot Rock Mining Co.
(letter of notification)
None.
128,175 shares of
common
stock. Price—At par
($1 per share). Proceeds—For ex¬
ploration, development and mining; also to acquire such
further holdings of mineral, oil and gas
properties as
advisable.
Office—780-37th
St., Los Alamos,
N. M. Underwriter—None.
Rockland Light & Power Co.
Sept. 18 filed 28,096 shares of convertible cumulative
preferred stock, series C, being offered for subscription
by common stockholders of record Oct. 9, 1957 on the
basis of one preferred share for each 60 common shares
held; rights to expire on Oct. 23, 1957. Price—$100 per
shaTe.
Proceeds
To
reduce
bank
loans.
Underwriter
Pleasant Valley Oil & Mining Corp.
Sept. 30 (letter of notification) 2,000,000 shares of com¬
mon stock.
Price—At par (five cents per share).
Pro¬
ceeds
For geological studies, reserve for contingent
liability, for machinery and equipment and other re¬
serves.
Office
616 Judge Bldg., Salt Lake City, Utah.
Rose Records, Inc.
July 22 (letter of notification) 11,022 shares of common
stock. Price—At par ($1 per share). Proceeds—For work¬
ing capital. Office—705 South Husband St., Stillwater,
Underwriter—Steven Randall & Co., Inc., New York.
Okla.
—
—
Public Service Co.
of New
Hampshire (10/23)
Sept. 24 filed $8,000,000 of first mortgage bonds, series
J, due 1987. Proceeds — To repay bank loans and for
construction program.
Underwriter—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; The First Boston Corp. and Coffin &
Burr,
Inc.
(jointly);
Equitable
Securities
Corp.;
Lehman
Brothers; White, Weld & Co. Bids—To be received up
to 11 a.m. (EDT) on Oct. 23 at
Boston, Mass.
Public Service Co. of New Hampshire (10/23)
1 filed 262,890 shares of common stock
(par $5).
Oct.
be
supplied by amendment.
Proceeds—To¬
gether with other funds, to repay bank loans and for
construction
program.
& Co. and Blyth &
Underwriters—Kidder, Peabody
Co., Inc., both of New York.
Putnam Growth Fund, Boston, Mass.
1 filed 500,000 shares of beneficial interest in the
Fund. Price
At market. Proceeds
For investment.
Oct.
—
Underwriter
—
—
Putnam
Fund
Mass.
Distributors, Inc.. Boston,
.
»
.
—
com¬
'
(par $10) warrants to
pur¬
-
\
(par $1).
Beane, New York.
(11/1)
filed $6,050,900
be
$100 principal amount of debentures for each 14
shares held; rights to expire on Nov. 18. Price—
supplied by amendment. Proceeds—For expan¬
working capital and other corporate purposes.
New York.
Southern New England Telephone
-
Co.
Sept. 25 filed 1,358,300 shares of capital stock being of¬
subscription by stockholders of record Oct. 7r
fered for
1957
the basis of
on
one
new
share for each four shares
held; rights to expire on Nov. 8, 1957. Price—At par ($25
per share).
Proceeds—To repay advances from Ameri¬
can
Telephone & Telegraph Co., which owns 1,173,696
'shares
(21.6%)
—None.
••
of Southern capital stock.
•;
>
Underwriter
■.
.
'•
share for each five
supplied by amendment.
Proceeds—To
repay bank loans and other debt and for working capi¬
tal.
Underwriter—-Kidder, Peabody & Co., New York*
Oct. 7
' v"
Underwriter—Lehman Brothers,
Office
Roanoke Gas Co.
Price—To
B
common
To
sion,
Sept. 18 (letter of notification) 19,160 shares of common
(par $5) being offered to common stockholders of
record
11
basis of
'
City, Calif.
on
the
shares of
class
of convertible subordinated de¬
bentures due May 1, 1978, to be offered for subscription,
by common stockholders of record about Oct. 31 011 the
(11/7-8)
capital. -Business—Produces films for television.
—Culver
1957)
or
Price—To be supplied by amendment. Proceeds—To two
selling stockholders. Underwriter—Merrill Lynch, Pierce,
Oct.
duction of filmed television commercials and for working
New York.
19,
Underwriter—None.
^Smith-Corona, Inc.
stock (par $1).
Proceeds—For expansion of pro¬
share.
held.
Ltd., Regina, Canada.
Fenner &
Price—
stock
Price—To
»
Pa.
Parker-Hannifin Corp., Cleveland, O. (10/28-29)
Oct. 7 filed 130,000 shares of common stock
(par $1).
seem
;
150,000 shares of class B stock will
publicly and the remaining 90,000 class B
(Hal)
Sept.
class A
^ Simplicity Pattern Co. Inc. (10/29)
Oct. 10 filed 155,000 shares of common stock
be
Roach
effective
each White
stock for
share
curities
supplied by amendment. Proceeds—For working
capital. Underwriter—Strpud & Co., Inc., Philadelphia,
<•
Corp.
share of preferred stock and IV2
one
unit. Warrants are to be initially exercisable at
$1 per common share. Proceeds—For distillation equip¬
ment; cost of building and land; and for working capital
and other corporate purposes. Underwriter—Regent Se¬
stock, of which all of
stock
con¬
per
the debentures and
To
cumulative
chase and 250,000 shares of common stock to be offered
in units of one share of each class of stock. Price—$10
Oct. 11 filed $900,000 of 6% debentures due 1977
(with
class B common stock.warrants
attached), together with
shares reserved for exercise of
5%
of
Sept. 27 filed 250,000 shares of 7% deferred cumulative
of New York.
be
Schering
redeemable preferred stock
Price—$200 per unit.
Proceeds—For equipment, working capital and inven¬
tory. Office—7962 S. E. Powell Blvd., Portland, Ore.
Underwriter—Campbell & Robbins, Inc., Portland, Ore.
common
shares
Signet Distilleries Ltd., Regina, Canada
stock.
if Ritter Finance Co., Inc., Wyncote, Pa.
278,983
writer—None.
convertible debentures and 12,500 shares of common
stock (no par) to be offered in units of one $100 debenture
ten
noon
Shacron Oil Corp.
Sept. 11 (letter of notification) 40,000 shares of common
((par $1) to be offered for subscription by stock¬
holders; then to public. Price—$1.25 per share to stock¬
holders; $1.37 \k to public. Proceeds—For expenses in¬
cidental to drilling of oil wells.
Office—Suite 14, 1500
Massachusetts Ave., N. W., Washington, D. C. Under¬
if Research Instrument Corp.
7 (letter of notification)
$125,000 of 10-year 10%
and
to
up
stock
Oct.
Price—$3
Pan-Israel Oil Co., Panama
may
mon
(par $1).
Price—To be supplied by amendment. Proceeds—For
expansion program and working capital. Underwriter—
Blyth & Co., Inc., New York.
,
filed
common
Aug. 8 filed 375,000 shares of common
v:
shares of
filed
240,000 shares of class B
,
None.
10
19
basis of
—
of
To repay bank loans and for new construction.
with
—
the basis
$100 of debentures for each 14 common shares held;
rights to expire on Nov. 12. Price—At par. Proceeds—
•
Oct.
Bids—Expected to be received
Nov. 7.
vertible preferred stock (par $30) and 418,475 shares of
common
stock (par $1) to be issued in exchange for
stock of White Laboratories, Inc. (which is to be merged
,
shares.
Co.
on
Sept.
Reading Tube Corp. (10/21)
Aug. 30 filed 155,014 shares of common stock (par $1),
subsequently amended and reduced to 100,000 shares.
Price
To be supplied by amendment. Proceeds
To
repay bank loans and for working capital. Underwriter
—Emanuel, Deetjen & Co., New York.
For working capital
Underwriter—None.
Probable
Sobering Corp., Bloomfield, N. J.
to all
•
—
bidding.
and for construction program. Underwriter—Dean Witter
& Co., San Francisco, Calif.
"
\
be
Underwriter—None.
to
by competitive
if San Jose Water Works, San Jose, Calif.
Oct. 14 filed 40,000 shares of cumulative convertible
preferred stock, series E (par $25). Price—To be sup¬
plied by amendment. Proceeds—To repay bank loans
Electrotype
f
&
(10/28)
record
as
&
(EST)
or any lesser number of such
already
owns
125,787
shares
(52.66%) of the outstanding Colortype common shares.
shares.
determined
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;
Bros. & Hutzler; Lehman Brothers; The Ffcrst
Boston Corp.; White, Weld & Co. and Shields & Co.
(jointly); Eastman Dillon, Union Securities & Co. and
Merrill Lynch, Pierce, Fenner & Beane (jointly); Kuhn,
stock of American
common
be
bidders:
afore¬
Loeb
declared effective
of 5^4% convertible debentures
1, 1967, to be offered for subscription by com¬
stockholders
Salomon
the
may
filed $5,220,600
due Nov.
mon
three
due
shall become effective whenever it has been
accepted by
holders of 40,000 Colortype common shares, but
Old American J.ffe Co., Seattle, Wash.
July 22 filed 15,825 shares of class A stock (par $10) and
3,165 shares of common stock (par $10) to be offered in
Price—$260
of
Colortype Co. at rate of
$40 of debentures for each Colortype common share. The
offer will expire Nov. 14,
1957, unless extended, and
;
and other corporate purposes.
stock,
Diego Gas & Electric Co. (11/7)
i
$12,000,000 of first mortgage bonds, series G,
1987. Proceeds—To repay bank loans. Underwriter
Oct. 8 filed
—To
for
bidders:
Dillon,
San
common
Rapid Electrotype Co., Cincinnati, Ohio
Oct. 2 filed $6,500,000 of 7% sinking fund subordinated
debentures due Nov. 15, 1967, to be offered in exchange
(11/19)
Halsey, Stuart & Co.. Inc.;
Blyth & Co., Inc.; Eastman,
of
otherwise.
Sept. 30 filed $25,000,000 first mortgage bonds due 1987.
Probable
shares
—
Proceeds—To repay bank loans and for construction pro¬
gram.
Underwriter—To be determined by competitive
bidding.
136,485
and
Price—To be supplied by amendment. Pro¬
bank loans and for new construction.
repay
Underwriter—Blyth & Co., Inc., San Francisco and New
To selling
security holders. Underwriter—None. Said securities are
to be sold by holders thereof in the
open market or
be¬
offered to employees.
1958;
(10/31)
Yrork.
58,645 shares are issuable in conversion of
mentioned $656,250 debentures.
Proceeds
—To increase
/Ohio
(par $20).
which 37,840 shares were issued upon conversion of
debentures and 40,000 shares on exercise of
option, and
Oglethorpe Life Insurance Co., Savannah, Ga.
Sept. 13 (letter of notification) 26,932 shares of com¬
mon
1,
Diego Gas & Electric Co.
ceeds—To
Ave.,
-Sept. 20 filed $656,250 of 5Yz% two-year debentures due
*
-
San
Oct. 8 filed 375,000 shares of cumulative preferred stock
Rapid Electrotype Co., Cincinnati, Ohio
Sept. 20 filed 100,000 shares of common stock (par 25
Price—To be supplied by amendment. Proceeds
—To prepay indebtedness to Norden-Ketay Corp., to
purchase additional equipment and for working capital.
Underwriter—Hayden, Stone & Co., New Yorit. Offer¬
ing—Temporarily postponed because of market condi¬
cents).
41
(1721)
—The First Boston Corp.. New York.
^Southern Union Gas Co.
Oct.
(11/1)
10 filed
$9,000,000 of sinking fund debentures due
amendment. Proceeds—
bank loans and for property additions and im¬
provements. Underwriters—Snow, Sweeny & Co. Inc.,
New York; and A. C. Allyn & Co.
Inc.,-Chicago, 111.
1982.
Price—To be supplied by
To repay
• Standard Oil Co. (New Jersey) (11/18)
15 filed 6.565,000 shares of capital stock (par $7)
to be offered for subscription by stockholders of record
Nov. 8, 1957, at the rate of one new share for each 36
shares held; rights to expire on or about Dec. 18, 1957.
Price—To be supplied by amendment. Proceeds—To in¬
crease
investments in subsidiary and affiliated com¬
panies. Underwriter—Morgan Stanley & Co., New York.
Oct.
•
Standard
Steel
Products
Manufacturing Co.
9
(10/18)
Oct.
3
Sept. 25 (letter of notification)
$165,000 of 7% 10-year
debentures and
11,000 shares of common stock (par
$2.50) to be offered in units of $30 principal amount of
debentures and two shares of stock. Price—$45 per unit.
Proceeds—For equipment and working capital.
Office
stock (par $1) to be offered to
—2836
Oct.
Milwaukee Co., Milwaukee, Wis.
Underwriter—Richard B. Burns Securities Agency,
Stillwater, Okla.
Rotor Tool Co.
1,278 shares of common
stockholders of record on
10, 1957 on the basis of one new share for 30 shares
held; rights to expire Nov. 9, 1957. Price — $38.50 per
share. Proceeds—For general corporate purposes. Office
—26300 Lakeland Blvd., Cleveland, Ohio. Underwriter—
None.
Rule
(C. F.)
Construction Co.'
Sept. 13 filed 127,289 shares of common stock (par $10).
Price—$13 per share. Proceeds—To retire outstanding
loans
tional
and for
working capital and investment in addi¬
equipment. Office—Nashville, Tenii. Underwriter
—None.
'
S.
16th
St., Milwaukee, Wis.
Underwriter—The
.
Steadman Investment Fund, Inc.
May 10 filed 100,000 shares of common stock (par $1)
to be offered in connection with merger into this Fund
of Fund of Fortune, Inc., Fortune II, Inc., Fortune III,
Inc. and Fortune IV, Inc. Underwriter — William Allen
Steadman & Co., East Orange, N. J. Statement effective
July 24.
•
Strato-Missiles,
June 7
Inc.
(10/24)
(letter of notification) 300,000 shares of common
stock
St. Louis Insurance
Corp., St. Louis, Mo.
1,250 shares of class C cumulative pre¬
ferred stock (par $57).
Price—$97 per-share.
Proceeds
—To R. M. Realty Co., who is the selling stockholder.
Underwriter
Yates, Heitner & Woods, St. Louis, Mo.
March 27
(letter of notification)
filed
—
(par 10 cents). Price—$1 per share. Proceeds—To
develop Hatfield propulsion system, and other projects;
for purchase of additional facilities and for working
capital.
Business—To
produce
machinery
Continued
and
on
equip-
ppge
42
f
42
The Commercial and Financial
(1722)
Continued
Saile
La
N.
New York, N. Y.
derwriter—Kesselman & Co.. Inc.. New York.
(Republic of Panama)
Corp. on the basis of one new share for each
on the basis
share for each option to purchase four shares ol
of Ogden
four shares held and to holders of options
of
one
Ogden common stock; unsubscribed shares to be offered
to certain employees and officers.
Price—$2 per share.
Proceeds—To pay outstanding obligations to Ogden Corp.
Underwriter—None.
Bond Fund, Inc., Washington, D. C.
shares of common stock. Price—$25
per share.
Proceeds — For investment. UnderwriterEquitable Securities Corp., Nashville, Tenn.
Tax Exempt
June 20 filed 40,000
Taylor Instrument Companies
(10/23)
Oct. 1 filed 99,195 shares of common stock
be
(par $10) to
by common stockholders of
offered for subscription
Office
—
Rochester, N. Y.
America, Portland, Ore.
Offering—Expected late in 1957.
supplied
by
expansion and working capital.
Cleveland, Ohio.
•
Walworth
Proceeds
Texam Oil Corp., San Antonio, Texas
May 29 filed 300,000 shares of common stock (par $1),
to be offered for subscription by common stockholders
on
basis of two
a
—To
new
shares for each share held. Price
Co., New York City
be
supplied by amendment. Proceeds—To repay
indebtedness, for acquisition and exploration of oil and
gas leases, for drilling and completion of wells, and for
other corporate purposes.
Underwriter—None.
Texas Eastern Transmission Corp.
July 22 filed 1,000,000 shares of common stock (par $7)
being offered in exchange, on a share-for-share basis,
for capital stock of La Gloria Oil & Gas Co. of Corpus
Christi, Tex. The offer was conditioned upon deposit of
at least 81% (810,000 shares) of outstanding La Gloria
stock prior to Sept. 6, 1957, and it was announced on
Aug. 8 that in
Offer
may
excess
be extended from time to time but not be¬
yond Dec. 5,
1957.
fective Aug. 6.
•
of this amount had been deposited
Underwrite*—None.
Statement ef¬
"
Time Finance
,
^
Corp., Norwood, Mass.
(11/1)
Oct. 8 filed $750,000 of convertible subordinated deben¬
tures, series A, due Oct. 1, 1969./Price — At 100% of
principal amount. Proceeds—To reduce bank loans and
for general corporate purposes. Underwriter—Coffin &
Burr, Inc., Boston, Mass.
Titanic Oil Co.
Chrome, Inc., Salt Lake City, Utah
shares of common stock (par $1).
be supplied by amendment.
Proceeds — To
filed 300,000
10
—
To
develop chromite mines in Siskiyou County in northern
Underwriter—None. J. Bracken Lee is Presi-
California.
•
ident.
Oct. 3 it
Copperada Mining Corp.
(Canada)
Williams
ment
Ulrich Manufacturing Co.
Sept. 24 filed $600,000 of 6% sinking fund debentures
and 30,000 shares of class A common stock
(par $1) to
be offered in units of $500 of debentures and 25 shares of
stock. Price—To be supplied by amendment. Proceeds—
To reduce
bank
loans, to
all
part of an$ out¬
standing 5% term loan and/or provide additional work¬
ing capital. Office—Roanoke, 111. Underwriter—White
& Co., St. Louis, Mo., on a best-efforts basis.
Offering
—Expected this week.
repay
or
Sept.
12
filed $15,000,000 10-year external loan bonds
1, 1967. Price—To be supplied by amendment.
Proceeds—For transportation development
program. Un¬
derwriter—Dillon, Read & Co. Inc., New York. Offering
—Postponed temporarily.
due Oct.
United
States Coconut Fiber
Corp.
(11/14)
Sept. 30 filed 735,000 shares of common stock (par $1).
$4 per share. Proceeds—For expansion program
Price
and other corporate purposes.
Office—Washington, D. C.
Underwriter — Southeastern Securities
Corp., New York.
★ United States Sulphur Corp.
Oct. 8 filed 1,500,000 shares of common stock
(par one
cent). Price—$1 per share. Proceeds—For plant
rental,
etc.; to retire corporate notes; for core drilling; for
working capital; and for other exploration and develop¬
ment
work.
Office—Houston, Texas.
Underwriter
—
Woodbury Telephone Co. (10/25)
Sept. 23 (letter of notification) 3,533 shares of common
be offered for subscription by common stock¬
stock to
holders of record Oct. 25, 1957 on the basis of one new
share for each three shares held; rights to expire Nov. 22,
Connecticut
(letter of notification) 12,500 shares of common
stock (no par), with common stock purchase warrants.
Price—$10 per share. Proceeds—For water treatment,
drilling,
four
test
wells,
four
water
injection
wells,
1977.
due
'
,/
Underwriter
The /First Boston
—
////; V../,/,'"/
Ljght & Power Co.
//>
1
sell not lest
possibly, thig
Fall, depending upon market conditions./ Proceeds—Fox:
program,Underwriter — Putnam & Co.,
Conn.; Chas. W. Scranton & Co., New Haveiv
Conn.; and Estabrook & Co., Boston, Mass.
,
• v///
Cook Electric Co* V-
/
v
.
- v.«
J
r
Judy 15, it was reported that company is planning some
; jequity financing. (Underwriter—Probably Blunt Ellis &
Simmons, Chicago, Jll... '"jPS
/
;
: v
..
Conn.
Teden
&
Co..
Inc.,
New
Crucible Steel Co. of America /
!
program.
;
•.
j
' *, v
announced company plans to offer to its
common stockholders the right to subscribe for 101,153
shares of cumulative convertible preferred stock on the
Sept. 18 it
Underwriter—None.
Wycotah Oil & Uranium, Inc., Denver, Colo.
July 29 filed 375,000 shares of common stock (par $1)
Price—$4 per share. Proceeds—For acquisition of prop¬
erty and for other corporate purposes. Underwriter —
basis of
was
one
share of preferred stock
approving financing. 4; Price—At par
York.
for each 36 shares
7 on
stock held.- Stockholders to vote Nov.
of Common
($100 per share).
Proceeds—Together with funds from sale of
additional
Un¬
mortgage bonds, to be used for expansion program.,
derwriter—The First Boston Corp., New York.
Prospective Offerings
Aircraft, Inc.
July 9 it was reported company plans to issue and sell
up to $12,500,000 common stock, following spin-off by
California Eastern Aviation,
Inc. of its subsidiaries,
Land-Air, Inc. and Air Carrier Service Corp. into Air¬
craft, Inc., a new company. Underwriter—Cruttenden,
Podesta & Co., Chicago, 111.
All States
Freight, Incorporated, Akron, O.
June 21 it was announced company plans to offer public¬
ly $2,250,000 of 15-year 6% debentures (with commoE
stock warrants).
Proceeds—Together with funds from
private sale of 425,000 shares of common stock at $4 per
Darco
Cleveland, Ohio.
Industries,
.
;
.
Cp;,jLos Angeles, Calif.
„/>
/ Eastern Gas & Fuel Associates
/
/ April 3 it was announced company may need additional
capital of between $25,000,000 and $35,000,000 during the
Underwriter—For any bonds to be de¬
competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; White, Weld
& Co., and Kidder, Peabody & Co. (jointly).
next two years.
termined
{■
by
Eastern Utilities Associates
Date indefinite.
April 15 it
Electric Co.
and
April 9, Bayard L. England, President, announced that
year the company will probably issue about
$5,000,000 of convertible debentures. Proceeds—For con¬
Inc.
Sept. 23 it was reported registration is expected of ap¬
proximately 275,000 shares of common stock, of which
about 225,000 shares are to be sold for account of com¬
pany and 50,000 shares for selling stockholders. Business
-^Manufactures products for commercial and military
aircraft and missiles. Underwriter—William R. Staats &
share to pay part of cost of purchase of an operating car¬
rier truck line. Underwriter—Fulton, Reid & Co., Inc.,
sell
^ Proceeds
announced company proposes to issue
of 25-year collateral trust bonds.
For advances to Blackstone Valley Gas &
was
$3,750,000
—
Electric
Co., a subsidiary. Underwriter—To be deter¬
mined by competitive bidding. Probable bidders: Hal¬
sey, Stuart & Co. Inc.; Kidder, Peabody & Co.; Blyth
later this
struction program. Underwriter—May be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
&*
Co.
curities Corp. and
Inc.; Kuhn, Loeb & Co., American Securities Corp.
and Wood, Struthers & Co. (jointly); White, Weld & Co.
and Shields & Co. (jointly); The First Boston Corp. and
Drexel & Co. (jointly); Eastman Dillon, Union Securi¬
ties & Co. and Smith, Barney & Co. (jointly); Lee Higginson Corp.; Blyth & Co., Inc.
Baltimore & Ohio RR.
Bids
expected to
(10/30)
|
600,000
Co.
on
Dec. 11.
be
Federation Bank & Trust Co.
(N.
Y.j (10/18)
»
stockholders will be given
118,900 additional shares of
one new share for each three
shares held of record Oct. 18, 1957; rights to expire on
Defe/6, 1957./ Price—$21 per share. Proceeds—To in12
it
was
announced
the right to subscribe for
.capital stock at the rate of
(12/11)
,
jicrease capital and surplus. Underwriter—None.
received by
^Florida
Power & Light
Co.
Sept. 30 it was reported company plans to issue and sell
/about $15,000,000 to $20,000,000 of new securities some¬
time in November or December of this year.
Class of
Probable bidders: Halsey, Stuart &
Inc.; Salomon Bros. & Hutzler.
Caterpillar Tractor Co.- (11/13)
was announced company plans to issue and sell
$65,000,000 of sinking fund debentures. Proceeds—To
finance plant expenditures and increase working capital.
Underwriter—Blyth & Co., Inc., New York. Registration
—Expected Oct. 23.
Co., Inc.; White, Weld & Co.; Stone & Webster Se¬
Estabrook & Co. (jointly).
/
Sept.
the company on
Oct. 30 for the purchase from it of $2,600,000 equipment
trust certificates, to be followed by an additional $2,are
Oct. 9 it
3
bonds
mortgage
Co., New York.
construction
•
★ Universal -Oil Recovery Corp.
first
&
.
1957. Price—At par ($25 per share). Proceeds—To repay
None.
Oct.
•;\
Hertford,
Atlantic City
Union of South Africa
Corp.
Feb. 18, it was reported company plans to
than $20,000,000 of first mortgage bonds,
New York.
proprietary development.
Office — 4932 St.
Elmo Ave., Bethesda 14, Md.
Underwriter—Whitney &
Co., Inc., Washington, D. C.
writers—Blyth & Co., Inc., San Francisco and New York;
and The First Boston Corp., New York.
Offering —
Temporarily postponed.
$25,000,000
publicly'or privately,^
Corp., New Ybrjk.
and
• Tucson
Gas, Electric Light & Power Co.
Sept. 25 filed 200,000 shares of common stoek (par $5).
Price—To be supplied by amendment. Proceeds—To re¬
pay bank loans and for construction program.
Under¬
Iron
was reported'company plans to raise $20,000,000
pfior.to Dec. 15, 1957,: probably through the sale of an
issue
of
convertible. /Subordinated / debentures, either
Co., Tulsa, Okla. (10/22)
Sept. 25 filed 400,000 shares of common stock (par $1),
of which 100,000 shares are to be offered for account of
the company and 300,000 shares for selling stockholders.
Price—To be supplied by amendment. Proceeds — For
working capital. Underwriter — Reynolds & Co.^ Inc.,
Office—Woodbury,
Tripac Engineering Corp.
Feb. 27 (letter of notification) 100,000 shares of class A
common stock
(par 10 cents).
Price—$1.50 per share.
Proceeds—For working capital; machine tools; equip¬
about
&
reported company now plans to issue and
Commonwealth Oil Refining Co.
Brothers
First National Bank Bldg., Denver, Colo.
Wayne Jewell Co., Denver, Colo.
(12/9)//
Oct. 7 it
and for working capital. Office — 1205 Phillips
Square, Montreal, Canada. Underwriter—Jean R. Veditz
Co., Inc., New York.
•
Fuel
was
Underwriter—Allen
vey,
all short term bank notes and for construction
Underwriter—
Colorado
sell
Western
Aug. 30 (letter of notification) 300,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For de¬
velopment and exploratory work, drilling costs and sur¬
May 6 (letter of notification) 6,000,000 shares of common
(par one cent). Price—Five cents per share. Pro¬
ceeds—For exploration of oil properties.
Office — 704
6tock
Chesapeake & Potomac Tel. Co. of Md.
July 30 if was announced company plans to issue and
sell $30,000,000 of debentures.
Proceeds—To repay ad¬
vances from American Telephone & Telegraph Co., the
parent. Underwriter—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
White, Weld & Co.; Morgan Stanley & Co.; Kuhn, Loeb
& Co.; The First Boston Corp.; Harriman Ripley & Co.
Eric. Bids—Expected to be received up to 11:30 a.m.
(EST) on Dec. 9. v ..r-vi, •':
-/ =
/' >
conditions.
Price
debentures
placement of an issue of $5,000,000 series G first mort¬
gage bonds.
'
*
r v
loans and for expansion
corporate purposes. Underwriters—Paine,
Webber, Jackson & Curtis, New York; Butcher & Sherrerd, Philadelphia, Pa.; and Townsend, Dabney & Tyson.
Boston, Mass. Statement withdrawn because of market
Western
jjlr
v
bank loans and for, construction program. - Underwriters—Kidder, Peabody & Co. and White, Weld &
Co. about the middle of last year arranged the private
general
Oct.
■-f
Inc.
repay
Proceeds—To repay bank
ment.
/
•'
.
Together with $4,500,000 of 4%% 12-year
placed privately, to be used to
—
convertible
Sept. 25 filed $8,000,000 of 6% convertible subordinated
debentures due 1979. Price—To be supplied by amend¬
and
.1:\
April 8 it was announced company plans to issue and
sell late this year $6,000,000 of first mortgage bonds.
Proceeds—For
Underwriter—Saunders,
ic Tex-Star Oil & Gas Corp., Dallas, Texas
Oct. 14 filed 600,000 shares of common stock (par $1) to
be offered in exchange for leases on certain properties.
'■
'
--
Central Louisiana Electric Co.,
amendment.
Underwriter—The First Boston Corp., New York.
Underwriter—None.-
Service Co.
Public
Illinois
and sell
$10,000,000 of 1st mtge. bonds.Proceeds—To reduce bank
loans and for construction program./Underwriter—To be
determined by competitive bidding.
Probable bidders;
Halsey, Stuart &:Co« Inc.; Salomon Bros. & Hutzler*
Equitable Securities Corp.; Eastman Dillon, Union Secu¬
rities & Co.; Blyth & Co., Inc.; Kidder, Peabody & Cfe;
and Merrill Lynch, Pierce, Fenner & Beane (jointly);
Kuhn, Loeb & Co. and A. C. Allyn & Co., Inc. (jointly).
Stiver & Co.,
general corporate purposes.
the tall, approximately
probably in
year,
April 9 it was reported company plans to Issue
ic Victoreen Instrument Co., Cleveland, O. (10/29)
9 filed $1,000,000 of 6% convertible subordinated
debentures due Nov. 15, 1967 to be offered for subscrip¬
tion by common stockholders at the rate of $100
of
debentures for each 100 shares of common stock held.
be
bpr
plans to issue and
'/,,
Oct.
Price—To
supplied by amendment. Proceeds — To
retire short term bank loans and for working capital and
Electric Corp.
company
$7,finance
Kidder,
this
Central
April 30 filed 1,250,000 shares of common stock (par 10
cents). Price—To be supplied by amendment (expected
to be $1 per share). Proceeds—For exploration purposes.
Underwriter—To be named by amendment. Graham Al¬
bert Griswold of Portland, Ore., is President.
Price—To
be
Thursday, October 17, }957
Peabody & Co.; New York.
Underwriter—None.
Oct. 22, 1957 on the basis of one new share for
each four shares held; rights to expire on Nov. 7, 1957.
record
.
500,000 of sinking fund debentures. Proceeds—To
construction program.;; Underwriter—Probably
sell
$300,000 of 5*/fc% sub¬
ordinate convertible debentures to be offered for sub¬
scription by common stockholders of record Oct. 4, 1957,
on the basis of $100
of debentures for each 100 shares
of stock held.
Price—At par.
Proceeds—For working
capital. Office — 1655 Elmwood Ave., Cranston, R. 1.
(letter of notification)
Uranium Corp. of
.
Central Hudson Gas &
Universal Winding Co.
July 24 filed 1,165,750 shares of common stock (par $2)
to be offered for subscription by common stockholders
.
April 22 it was announced
Un¬
Sept. 25
Syntex Corp.
operational expenses. Office—30
St., Chicago 2, 111.Under writer—None.
leasehold, and general
jrom page 41
Office—70 East 45th St.,
ment.
Chronicle
financing not yet determined.
1
Underwriter
—
(1) Fpr
bends, to be determined by competitive bidding. Prob¬
able bidder$f ijalsey, Stuart & Co. Inc.; White, Weld>&
*Co.; Merrill Lynch, Pierce, Fenner & Beane and Kidder,
Peabody & Cd. (jointly); The First Boston Corp. (2) For
common stock: Merrill Lynch, Pierce, Fenner & Beane
Vblume
186
5682
Number
.
.
The Commercial and Financial Chronicle
.
and Kidder, Peabody & Co. (3) Preferred stock may be
placed privately.
*
,
•
->.'/•
"'
Gulf
Michigan Bell Telephone Co. (11/18)
Sept. 11 company applied to Michigan P. U. Commission
for authority to issue and sell $40,000,000 of debenture.
Proceeds—To repay advances from parent. Underwriter
—To be determined by competitive bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Morgan, Stanley &
Co. Bids—Expected to be received on or about Nov. 18.
Interstate Gas Co.
_
May 3 it
was
announced
company
plans to issue
some
additional first mortgage bonds, the amount of which has
not
yet been determined. Proceeds — For construction
Underwriters—Carl M. Loeb, Rhoades & Co.
program.
and Merrill
Lynch, Pierce, Fenner & Beane.
Montana
\
will offer to its
announced Bank
was
was reported company may issue and sell in
the fall about $20,000,000 of debt securities. Proceeds—
For construction program and to reduce bank loans.
stock¬
holders of record Sept. 25, 1957 the right to subscribe
on
otl before Oct. 15, 1957 for 73,000 additional shares
of
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Eastman
capital stock (par $10) on the basis of one new share
for each 14 shares held. Price—$25 per share. Proceeds
-VTo increase capital and surplus.
Dillon, Union Securities & Co.; White, Weld & Co.; Kid¬
der, Peabody & Co.; Smith, Barney & Co., and Blyth &
Co., Inc. (jointly); Merrill Lynch, Pierce, Fenner &
Beane and Stone & Webster Securities Corp. (jointly).
Underwriter—None.
*
Hathaway
June 24 it
to: its
(C. F.)
Co., Waterville, Me.;;
;
company plans soon to offer
announced
was
stockholders
common
stock.
some
additional
W
.f-•.
-,'Yi .V.i'V
.
Sept. 26 it
:
Underwriter—^May be Blyth
Co., Inc., San
Francisco,/Caiif: /''
• Houston
Lighting & Power Co.1 (11/20)
V"
.
•
&
Co.: and
7
Northern
Blyth &.Co;,
Inc. i(joihtly);; Kidder,
Peabody & Co/: Bids—Tentatively scheduled to be re- >
cefved up to 11:30. a.m; (EST) on Nov, 20C Registration—
Expected. Oct. 24. >; .-y'-n- .1 mht-/uiV't: xy.Yzv
Idaho
Power Co.
was
company
$15,000,000
Boston
Tentatively expected to be received
"Johnson
Sept. 23 it
shares of
to il
up
Service
was
Co.,
reported
common
a
stock is
sell
-
V
;-v
~
(par $5) of this company,
one-half of 1% of the number
Z
'Lawrence Gas Co.
Aug. 21
sell
and
1977.
bank
it
was
& Gardner
(ll/*18p-"'N*'-*-.
announced
the
$2,000,000 first mortgage bonds, series A, due
bidding.
by com¬
bidders; • Halsey/ Stuart &
Corp.; Kidder, Peabody & Co.
(jointly). Bids—To be opened
Probable
Co. Inc.; The First Boston
and White, Weld & Co.
on
Nov. 18.
v-.;:".r
.
Long Island Lighting Co. ^
April 16 it was announced company plans to seR later
this year $40,000,000 of rist
mortgage bonds, series J.
Proceeds—To refund $12,000,000 of series C bonds due
Jan. 1, 1958 and for construction
program.
—To be determined
by'
Underwriter
competitive; bidding. Probable
bidders: Halsey, Stuart & Co.
Inc/; The.. First Boston
Corp. and Blyth & Co. Inc. (jointly); W, C.
Langley &
•
Co. and Smith,
Barney &
...
Co..
(jointly).,;
'iT
-
Bids
are expected to be: received
by the: company some
time in the Fall for the
purchase from it of $14,400,000
of equipment trust certificates.
Probable bidders: Hal¬
sey,
Stuart & Co. Inc.; Salomon Bros. & Hutzler.
.Mangel Stores Corp*.,
June
19
it was
v.
;
reported company plans registration of
an
issue of
.$3,0*00,000 of convertible debentures due l^72.
Underwriter—Lee Higginson Corp., New York.
****
Brothers
(jointly);
Kidder,
Peabody
Eastman Dillon, Union Securities & Co.
&
Co.;
Bids—Not
ex¬
pected to be received until the Fall.
Southern Pacific Co.
Bids
(10/31)
expected to be received by the company at 165
Broadway, New York, N. Y., up to noon (EST) on Oct.
31 for the purchase from it of
approximately $6,000,000
are
Halsey,
Stuart & Co. Inc.; Salomon Bros. & Hutzler.
Suburban Electric Co. (12/11)
Aug. 21 it was announced company plans to issue and
sell $4,500,000 of first mortgage
bonds, series B, due
1987.
Proceeds—To repay bank loans and for construc¬
tion program.
Underwriter—To be determined by com¬
petitive
bidding. Probable bidders: Halsey, Stuart &
Kidder, Peabody & Co. and White, Weld & Co.
(jointly). Bids—To be opened on Dec. 11„„
Co. Inc.;
^
Superior Tool & Die Co.
July 26 it was announced company plans to issue and
sell
150,000 shares of 70-cent cumulative convertible
preferred stock (par $10). Price—Expected to be be¬
tween $11,121/2 and $11.50 per share, depending upon mar¬
ket conditions. Proceeds—To discharge a note of $4,160,500 held by City Industrial Co. in connection with ac¬
quisition of Bethlehem Foundry & Machine Co. common
stock and for working capital and general
corporate pur¬
poses. Underwriter—Van Alstyne, Noel & Co., New York.
Toledo Scale Co.
Sept. 26 it was reported that, following merger with
Houghton Elevator Co., Toledo Scale Co. plans to issue
some
additional
common
& Co., Cleveland,
vember.
Ohio.
stock.
Underwriter—McDonald
Registration—Expected in No¬
Transcon
Aug. 12 it
.'1
,
,
Lines, Los Angeles, Calif.
reported company plans issue and sale in
shares of common stock (par $2.50).
Underwriter—Cruttenden, Podesta & Co., Chicago, 111.
October
was
of 40,000
Transcontinental Gas Pipe Line Corp.
Sept. 4 it was reported company plans to sell $30,000,000
of pipe line bonds and about 750,000 shares of common
stock about the middle of November
(method of sale not
yet determined). Underwriters—White, Weld & Co. and
Stone & Webster Securities Corp., both of New York.
additional capital needed in
(11/14)
plans to file shortly
registration statement with the SEC covering $20,000,-
Oct. 16 it
a
announced corporation
was
000 of debentures due 1978 and
stock.
mon
1,000,000 shares of
com¬
Proceeds—For construction program. Under¬
writers—White,
Securities Corp.
Weld
&
Co.
Stone
and
and
vWebster
for
Basin
Pipe Line Co.
20
common
stock.
Proceeds—To repay advances
it
1
was
.stock.
Electric & Gas Co.
announced
company anticipates it will
in 1958 $25,000,000 of preferred
or
Proceeds
For construction program.
Under¬
writer—May be Merrill Lynch, Pierce, Fenner & Beane,
New
*
—
York.;
Quebec Hydro-Electric Commission
Oct. 7 it was reported that the company may be consid¬
ering a proposal to raise between $30,000,000 and $50,000,000 additional funds this year. Underwriters—The
First Boston Corp. and A. E. Ames & Co., both of New
•
'
-
Oct. 3 it
was
announced company
between
Fls.800
million
Ryder System, Inc.
Aug. 28 it was announced
the
stock.
Fall
Fls. 1,000
company
7
plans to sell publicly
additional 200,000 shares of its common
Proceeds—For expansion program. Underwriter—
Savannah
Oct.
it
was
was
common
Associates
its
the
paragraph.
also announced Blackstone plans to offer
stockholders (other than Eastern Utilities
the
and to common stockholders of
$2,500,000 of common stock of Valley
Gas Co., it is to receive as part payment of-certain
Blackstone properties. Dealer-Manager—May be Kidder,
Peabody & Co., New York.
latter
parent)
Virginia Electric & Power Co.
March 8 it was announced
(12/3)
company
plans to sell $20,-
000,000 of first mortgage bonds. Probable bidders for
bonds may include: Halsey, Stuart & Co. Inc.; Kuhn,
Loeb & Co. and American Securities Corp. (jointly);
plans early in 1958 to
and
an
Blyth & Co., Inc., New York.
•
to its
rities & Co.,
Weld & Co.
million
(equivalent to $211,000,000 and $263,000,000) through a
"rights" offering to stockholders.
Price — To be gov¬
erned by market conditions prevailing at time of issue.
Proceeds—For capital expenditures. Underwriter—Mor¬
gan StStttteyTSc Co. in U. S.
'
in
of Blackstone.
The latter, in turn,
dispose by negotiated sale the first three
assets
to
securities mentioned in this
Salomon Bros. &
.
Royal Dutch Petroleum Co.
raise
certain
proposes
new
April 15 it
'Public Service
Aug.
Blackstone
-
Electric & Power Co.
(11/14)
reported company plans to issue and sell
Hutzler; Eastman Dillon, Union Secu¬
Stone & Webster Securities Corp.; White,
Bids—Expected to be received
on
Dec. 3.
ic Washington Water Power Co.
Oct. 8, Kensey M. Robinson, President, stated that the
company will come into the market early next year,
probably in January, with $30,000,000 of new public fi¬
nancing, mostly in bonds, but
include
some deben¬
Underwriters
—Kidder, Peabody & Co., Blyth & Co., Inc., White, Weld
may
tures. Proceeds—For construction program.
&
Co. and Laurence M. Marks &
Wisconsin
Public
Service
Co., all of New York.
Co.
Aug. 27 it was announced company plans to issue and
sell about $7,000,000 of first mortgage bonds late in
1957. Proceeds—For construction program and to repay
bank loams. Underwriters—To be determined by compet¬
Halsey,
Stuart & Co.
$6,000,000 of first mortgage bonds due 1987.
itive
To repay bank loans and for construction program.
;
Louisville & Nashville RR.
Lehman
^-Transcontinental Gas Pipe Line Corp.
Corp.
new
York.
issue
Proceeds—For construction program and to
repay
loans.
Underwriter—To :be determined
petitive
f
Co., New York.
(joint¬
to
/
reported company plans to issue and sell
was
$10,000,000 of first mortgage bonds. Underwriter—To be
determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; The First Boston Corp. and
600,000 of
con¬
'
South Carolina Electric & Gas Ca.
Jan. 14 it
.
announced company plans to issue and
sell in the Fall of 1957
7-
company plans
Service Co,
Proceeds—For
$154,000,000).
Co.
of $9,300,000 from parent, and the remaining $16,000,000
for new construction. Underwriter — Glore, Forgan &
Underwriter—For bonds, to be de¬
termined by competitive bidding: Probable bidders: Hal¬
sey; Stuart & Co. Inc.; Lehman Brothers, Merrill
Lynch,
-
was
capital stock (equivalent to $112,000,000
Price — To be governed by market
conditions prevailing at time of issue.
Proceeds—For
capital expenditures. Underwriter—Morgan Grenfell &
Co., Ltd., London, England.
Pro¬
Halsey, Stuart & Co. Inc.; The First
Gas
additional
it was announced company, a subsidiary of
Gas Co., may issue aboift $25,300,000
securities, in the following form: $15,000,000 of
mortgage bonds, $3,700,000 of preferred stock and $6,-
struction program.
Pierce, Fermer & Beane and Reinholdt
ly).*
by
stock.
Underwriter — For
competitive bidding.
publicly $60,000,000 of convertible subordinate de¬
prior to end of this year, subject to market
May
...'
Proceeds—To repay bank loans and for
determined
common
Northern Natural
Aug. 5 it was announced company' plans to raise up to
$11,700,000 new money this year through sale of new
securities.
decision
43
Valley Gas Co.
April 15 it was announced company, a subsidiary oi
Valley Gas & Electric Co., plans to issue,
within one year, $4,000,000 of bonds, $1,100,000 of note*
and $900,000 of preferred stock to its parent in ex¬
change for $6,000,000 of notes to be issued in exchange
of
shares
.
be
Natural
Permian
outstanding.
Business—Manufactures automatic tempetature and air
conditioning' control systems.
•>;.* '>. • " Yr
;
Laclede Gas Co/
No
with development of corporation's business
during next few years. Underwriters—Dillon, Read &
Co. Inc. and Eastman Dillon, Union Securities & Co.
(representing less than
of
between
fall.
connection
Johnson Service Co.V Milwaukee, Wis. (10/29)
Sept. 30 it'was announced bids will: be1'received up to
11 a.m. (EST) on Oct. 29 at the Department of
Justice,
Office of Alien Property,'101 Indiana
Ayd/, N. W., Wash¬
ington 25, D. C., for the/purchase from the Attorney
General of the United States of 3,600 shares of
capital
stock
this
program.
Mathieson Chemical
19 it
conditions.
.
.
early
bentures
secondary offering of 100,000
planned for November, with
Co., Milwaukee, Wis.
deferred
Corp.; Glore, Forgan & Co.; Blyth & Co., Inc.
Olin
Sept.
registration, about mid-October. Underwriter—Robert W.
Baird &
has
raise
weeks.
1
■
it
to
—
"
Milwaukee, Wis.
that
plan
Sept. 26 it was reported company to issue and sell in
November an issue of $1,500,000 convertible subordinated
debentures./ Underwriter—McDonald & Co., Cleveland,
Ohio.
Registration
Expected in about one or two
(EST)
a.m.
to
Ohio Water
Bids—•
:
construction
Northern
#
on-Dee. l:0r
its
Sept. 9 it was reported company plans to issue and sell
$25,000,000 of debentures due 1977. Proceeds—To repay
bank loans and for construction program. Underwriter
—Blyth & Co., Inc., San Francisco and New York. Offer¬
ing—Expected in November.
Underwriter—To be determined, by competi¬
tive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Harriman Ripley & Co. Inc.; The First Boston
& Co:
1958
securities convertible into
or
bonds,
any
program.
Dtfion, Union Securities
no
Probable bidders:
Electric Coih (12/10)
M$y 20 it was reported company plans to issue and sell
$20,000,000 of first mortgage, bonds due (1987. Proceeds
-f For reduction of bank loans and■? for construction
Corp.; Eastman
of
to the form of the proposed financing,
consideration is being given to sale of common
ceeds— For
Michigan
,
half
$10,000,000
but
(1) For bonds—Halsey, Stuart & Co. Inc.; Salomon Bros.
& Hutzler and Eastman Dillon, Union Securities & Co.
(jointly); Blyth & Co. Inc., Lazard Freres & Co. and
The First Boston Corp. (jointly);
Kidder,/ Peabody &
Co. and White, Weld & Co.
(jointly); Equitable Securi¬
ties Corp. (2) For stock—Kidder, Peabody &
Co.; Blyth
& Co., Inc., and Lazard Freres & Co. (jointly).
&
announced
company
first
Co.
as
stock
first mortgage bonds after Nov, 1. .Underwriter—To be
determined by competitive bidding: probable bidders:
Indiana
Gas
has been made
plans to issue and seU
•
the
Ry.
$8,000,000 "and
around 200,000 to 225,000 shares of. common stock in the
Fall/in addition to between $10,000,000., .to
29 this
until
r:—;,/..*?'■
reported
Illinois
Aug.
"
May 16 it
(jointly).
(10/23)
Bids are expected to be received by the company up to
noon
(EST) on Get. 23 for /the purchase from it of
$4,110,000 equipment trust certificates. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.
determined. ley. - competiti ve- bidding.r
Probable bidders:
Halsey,; Stuart & Co: Inc.,- Equitable SecuritiestCorp.;
Lehman Brothers, Eastman Dillon,^ Union" Securities &
Cor and-Salomen Bros...'& Hutzler:: (jointly)Lazard
Norfolk & Western
000
and
equipment trust certificates. Probable bidders:
was
ard & Hart and Salomon Bros. & Hutzler
Oct. 14 it Was. reported company plans to offer
$40,000,000 first- mortgage bonds due 1937. Underwriter—To be
Freres
Metropolitan Commission
reported an issue of bonds
may be pub¬
licly offered in the United States. The Commission re¬
jected a bid of 92.64% for an issue of $6,376,000 of 20year bonds with an interest rate of 5Vi%.
Underwriter
—May be determined by competitive bidding. Probable
bidders: Lehman Brothers/ White, Weld & Co., Eastman
Dillon, Union Securities & Co.; and Blyth & Co., Inc.
(jointly); Shields & Co., Halsey, Stuart & Co. Inc., Sav-
Hewlett-Packard Co., Palo Alto, Calif.v
Sept. 23 it was reported this company expects early in
November to do some additional financing:
Business—
Electronics:
Montreal
'
common
Underwriter—Probably H. M. Payson & Co., Port¬
land, Me.
Power Co.
May 20 it
'J Hartford National Bank & Trust Co..
Sept. 3 it
(1723)
Inc.; Kidder, Peabody & Co.; The First Boston Corp.;
Merrill Lynch, Pierce, Fenner & Beane; Salomon Bros.
& Hutzler and Eastman Dillon, Union Securities & Co.
Proceeds—
Un¬
derwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; The First
Boston Corp.; Merrill Lynch, Pierce, Fenner & Beane;
White, Weld & Co. and Kidder, Peabody & Co. (jointly).
Bids—Expected to be received uo to 11 a.m. (EST) on
Nov.
•
14.
Shelf
Oct. 3 it
Transport & Trading Co., Ltd.
announced company plans to offer to stock¬
was
holders early in 1958 between £40,000,000 and £53^000,-
bidding.
Probable bidders:
(iointly); Dean Witter & Co.; Lehman Brothers; White,
Weld & Co.
Zale Jewelry
Co., Dallas, Texas
Sept. 24 it was announced that a full registration will
be made of a new issue of securities/the amount and
other details not yet available. Underwriter — Eppler.
Guerin & Turner, Inc., Dallas, Te»
Financial Chronicle
The Commercial and
Thursday, October 17, 1957
..
Retail Spending
Business
the
recent
economic
sharp
recovery
1956.
quarterly period marked
beginning of the fund's 20th
The
The report
operation.
of stock¬
showed that the number
from 911 in
of Sept. 30, 1957.
has 'grown
holders
1938 to 43,657 as
fund
reported a substantial increase in
the holdings of durg stocks. This
group accounted for 23.2% of total
During the past year, the
end
the
at
assets
period,
of the
compared with 17.8% a year ago.
One of the more recent pur¬
chases, according to the report,
involved 12,000 class C common
Lubrizol Corpora¬
The
of
shares
privately owned chemical
company operating in the field of
tion,
a
lubricating
additives.
oil
National
Shares
closed-
Corp.
managed
net asset value as of Sept. 30,
a
of
1957
$21.13
per
share
the
on
of capital stock
outstanding, after deducting the
1,080,000
dividend
shares
of
cents
12
per
share
share on June
strongest forces in our economy," but added that
April consumer spending had been "relatively
of
Sept. 30, 1956.
the
year
The
report
Product,
an
•
April and July rises in
billion in the next nine months.
retail
by the automobile,
sales
should
reach
an
apparel and home goods industries,
annual
rate
of
nearly
$94
billion
$94,880,798 at
by climbing personal incomes," the Slayton report
"In
went on.
high annual rate of $347.3
billion, $13 billion above August, 1956, and $1.1 billion, higher
August personal incomes reached a new
than the July, 1957 rate.
"And home
rise
building, too, has finally turned upward with a
applications indicating a further increase
in FHA mortgage
-
-
These
as
a
of
cents
20
on
per
Sept. 30, Mr.
Randolph pointed out, was Broad
Street
Investing's 111th consecu¬
quarterly payment from net
investment income
and
brought
tive
total dividends for the year to date
to 60 cents per
share. This meant
gain in income of 6.6% for those
a
and
projected gains
regarded by Slayton
are
"strong case" for continued faith in common stock
investing.
;
/
;
"v
••
,
'
-
'.
•/
They called the current market drop another in a series of
"reactions"
which
have
occurred periodically
since President
Eisenhower's heart attack two years ago, and dismissed shortterm market forecasts as "usually futile."
"These attempted forecasts are often
the result of hasty ap¬
praisal of day-to-day developments rather than sober evaluation
of long-term factors," the report concluded.
"To the astute in¬
vestor such recurring periods of market weakness represent op¬
portunities for accumulation of stocks for long-term investment."
investment
taking shares in
the December 1956
distribution from realized gain on
payment
by
of
investments.'
Mr.
that
to
-
Randolph
the
final
went
to
on
dividend
net asset value
a
$45.19, per share, according to the
company's report for the quarter
ended
for
say
1957
be
paid in December is ex¬
as is usual, to be the larg¬
est payment of the year, reflecting
year-end special or extra divi¬
dends received
on
portfolio in¬
pected,
that
on
set value
835
1957
This
share
a
M. I. T. Growth
vestment
made
of
a
Hardv/ick
Stires,
of
President
the Fund, stated in the report that
the aggregate, the value of
"in
Canadian
production
be
will
higher than in 1956, but the rate
of increase this year will be con¬
siderably below that ol" the past
two years. Employment is higher
in
than
larger.
1956
and
incomes
are
On the other hand, some
individual
industries, notably
non-ferrous metals, are
paper and
experiencing
difficulties
out of current
overcapacity.
"Since
the
arising
-
tions of Canadian stocks have
formed
r
.
price fluctua¬
war,
con¬
closely to the general pat¬
tern of U. S. markets- Due in part
to the weakness of the paper and
non-ferrous metal groups, the re-.
action which took
place'; in the
past
quarter - was .-moderately
greater-, than the v corresponding
in'
decline
stock
prices
the
in
United States."
>;
r
The net assets of $52,086,695 on
Aug. 31, 1957 comprised
stocks appraised at
distribution
from
investments,
on
purchases
May 31,
$47.47
or
vestments. He stated that the fund
a
Fund
as¬
Aug. 31, 1956.
also expects in December to make
the
net
on
$56,343,409
and
on
date.
compared with $59,422,t-
$51.41
or
fchare
Investing shares increase
by almost 8% in the first nine
months of 1957i to 22,239. Accum¬
ulation Plans in use increased by
almost 30% in, the same period to
5,341.
' ■ '
dividend
*
Ltd.
Canada
of
$52,086,695 in Canadian dollars,
equal in United States dollars to
Street
share distributed
Fund
Aug. 31 had
on
shareholders who maintained their
current
Associates
30.
The
probability of a rise in retail sales is further supported
net in¬
from interest and dividends
Net assets totaled
Sept.
by the second quarter of 1958, they said.
"The
With Market
Scudder
of
performance."
the number of investors in Broa
-
.
/
that
noted
National
retail sales, Slay ton Associates
said, amount to an annual rate of over $7 billion, and there are
many indications that sales will continue to grow by about $4
stocks, 1%; and net cash and re¬
come
investment
J
Assets Decline
the fund's
Randolph
factor in the better-than-market
a
above a year ago. Be¬
is volume-wise the most important component
indeed."
The
9.4%;
.
on
until last
"sales have risen
however," it continued,
Commenting
investment results, Mr.
though less than 3 months earl¬
ier. According to Mr. Randolph,
Gross
Scucltler-Caiiacla
pointed out that "senior security
holdings lent stability to the port¬
sluggish."
Electric
and
was
Stores.
re¬
increase here could easily offset
of
corporateJ bonds, 5.2%; preferred
'
fund,
ported. This compares with $21.95
$21.85 at the start
of 1957.
the common
in
Gas
eliminated by the
Holdings were
reduced by the sale of 2,600 Cen¬
tral Illinois Light; 8,000 Iowa Pub¬
lic
Service
and
4,300
Safeway
folio in the third quarter and were
the
comprised 83.2% of
ceivables, 1.2%.
mutual
diversified
prospective decline in defense spending. And, if capital goods
expenditures remain high, it could make 1958 a very good business
retail trade
cause
<,
obligations,
In¬
This was moderately
more than the $94,518,508 reported
at the beginning of the year, al¬
company's total assets; U. S.
Government
time
Street
"one
steadily and are now running about 7%
Holdings of common stocks on
Sept. 30, 1957
that
"Since
1957 and $23.09 per share as
30,
report called business spend¬
ing for new plant and equipment during the last two years
of the
net asset
This compares with a
value of $24.61 per
of
shareholders
16,000
investment counselors to the
Prepared by Si ay ton Associates,
soon."
payable Oct. 15, 1957.
over
Broad
of
30, Francis F. Randolph, Chairman
of
the
Board
and President of
this
Pacific
of
Company
at June 30 and
$52 million mutual fund group, the
reports
by Dominick & Dominick,
to
spending, according to an
Managed Funds, Inc.
Led
end investment company
retail
in
mailed
being
report
"Enhances Market"
and
Power
sale of 5,000 shares.
vesting Corporation were equiva¬
lent to $20.34 per share at Sept.
1958 are "considerably enhanced" by
prospects for
assets
Net
on
totaled $136,271,014,
equal to $15.72 a share, according
to the quarterly report. This com¬
pares with net assets of $129,269,345. or $16.26 a share on Sept. 30,
of
stock
By ROBERT R. RICH
Fund's net assets
Sept. 30, 1957
the
fund's investment
In Year
3129 Million
year
Utilities;
Montana
Assets Gain
Mutual Funds
Assets Now
Chemical
4,000 shares of
3,200 shares
of Rochester Gas and Electric. The
South
Broad Street
Chemical Fuml
..
.
(1724)
£1
in¬
realized gain
*
,
common
$48,792,714, or
93.7% of net assets;-Government
of Canada securities. $990,950 or
L9%; corporate bonds and
notes,
Commenting on the business sit¬ $908,515, or 1.7%:
other than
and adjusted
U. S. Government securities, of uation, Mr. Randolph noted that
cash balance, $1,394,516 or 2.7%.
after expenses and reserves, was
$14,584,855, while investment se¬ during the closing weeks of the
In excess of the 41 cents per share
Net additions to the portfolio
curities sold totaled $2,625,426.
third quarter, there appeared to
dividends
declared
during
the
Initial investments were made develop on the part of many ob¬ were; 10,000 shares of Premium
Record
Iron
Ores,
Ltd.;
2,400
shares
during
the
quarter
in
Carter servers a keener interest in the
period.
Massachusetts Investors Growth
French Petroleum Co. of Canada
Products, Inc.; Kerr-McGee Oil near-term outlook for the econ¬
Stock Fund reports for the three
Ltd.; 1,200 shares British Colum¬
Ind., Inc.; and Min. & Chem. Corp. omy
than
in
its
longer-term
months ended Aug. 31, 1957 net of
bia Telephone Co. Ltd.
America, while additional in¬ growth aspects. He stated that no
assets
of
$136,538,456, a record vestments were made in 14 other positive evidence of a marked
Increases in holdings were made
A MUTUAL
high for the end of any quarter, portfolio companies.
The Fund change in business conditions has as follows: 2.400 shares Bank of
compared with $110,279,579 on the reduced or liquidated its
INVESTMENT
holdings appeared as yet but that many Montreal;
2,000
shares
Canada
same
date
a
year
ago.
Stock¬ in five companies.
crosscurrents are in evidence and Cement
Co., Ltd.;
3,000
shares
FUND
holders as of Aug. 31
had in¬
that it is difficult to locate any Hollinger Consolidated
Gold
Petroleum Corporation of Amer¬
creased to a new high of 45,690, a
strong forces likely to restore the Mines Ltd.; 1,000 shares Consoli¬
gain of more than 54% over the ica announced that the net asset
upward thrust which the economy dated
Paper
Corp.
Ltd.:
8,000
29,526 stockholders at the same value of its 1,970,400 shares com¬
shares Home Oil Co. Ltd. "A";
appears to have lost at least for
mon stock on Sept.
time last year.
30, 1957 is es¬ the
present.
In Mr. Randolph's 18,400 shares Western Leaseholds
Net
assets
on
Aug. 31 were timated at $18.18 per share com¬
\V
opinion, the situation is such as Ltd.; 5,000 shares Canadian Inter¬
equal to $10.61 .per share, which, pared with $20.25 per share at
to make it seem prudent to regard national
Co.
Ltd:
950
Power
Naticnat
together with a capital gain dis¬ Dec. 31, 1956. The asset value at
moderation in the current rate of
for
the
nine months to
Sept. 30,
securities,
.
Assets At
New
,\N^
.
Divide/id Seiiei/
WRITE FOR
tribution of 50 cents in December,
is equivalent to $11.11 compared
with $11.26 per share at this time
FREE INFORMATION
FOLDER AND PROSPECTUS TO
YOUR INVESTMENT DEALER OR
last year.
NATIONAL SECURITIES &
RESEARCH CORPORATION
a
Shares
outstanding on
12,865,656, also a
high, compared with 9,790,784
Aug. 31
new
Sept. 30, 1957 is after the payment
of 20 cents per share in
capital
gains dividend in June 1957.
At
year
Sept. 30, 1956 the asset value was
$19.67 per share.- Capital gains
totaled
activity
being
as
more
Water
and
Union
During the three months period
Mr.
I,135
dor
third
ATOMIC
11111111
^
—
per
elOCK
Payable
on
shares
&
Parke,
Central
South
&
-shares
2,600
shares
of
15,
Ltd.;
41/2%
9,600
1966;
2,000
shares
Ltd.;
Mines
Nickel
Smelting Co.
Ltd.;
Power
450
&
shares
Paper
Co.
from
the
J
deleted
Completely
West, and 2,000
portfolio
Public
South-Western
of
were
Ltd.
15,000 shares of Arkansas
Gas;
holdings
Sept.
MacLaren
of
shares
of
II,200 shares Hudson Bay Mining
positions
established with the acquisi¬
Louisiana
in
Zellers
of
10,000
Ltd.;
Co.
sales of: $75,000 Abit-
"A,"
conv.
tion
Davis;
Foundation
Falconbridge
stock
common
Howard
shares
10,000
were:
Smith
Ltd.;
Paper Mills
shore (new)
November 4, 1957
to ntockholders of
record October 7, 1957
A
stock
shares
of
2,000
shares
2,000
Ltd.;
Delaware
Price
shares
20,000
ternational
Power
Light;' 6,700 shares of' Middle
i
4
•1 i
..a
■-
'
D
"3
j
!
..
c
.
I
.i,'
?
1
C-'J| 3 .t
.
«
3'o
TsL'6 r q >. T*
&
Co.
Quebec Tele>
Power
*"
and
Bros.
phone; 3,750 shares Canadian-In¬
Circuit Breaker;
of, I-T-E
shares
common
included
holdings
'9,000
in
Increases
Service.
,
3,000
Canada
ibi Power & Paper Co. Ltd.
were
FUND, INC.
Canada:
of
Mining & Exploration Co. Ltd.
effected by
quarter.
New
Regular Quarterly Dividend From Investment
Income
primarily the de¬
common
stock prices in
in
Co.
Reductions
general and that there was no
significant change in the fund's
investment
emphasis during the
MUTUAL
of
Co.
Steel
Canada Ltd.; 10,300 shares Labra¬
Randolph noted that this re¬
cline
DEVELOPMENT
Co.
shares
5,000
earlier.
three months
78.4%
shares
duction reflected
DIVIDEND NOTICE
Power
Gas
•
with
Broadway, New York 5, N. Y.
&
Rubber
susceptible to decline.
aggregating $0.81 per
Common stock holdings made up
share were paid in the interven¬
j76.6% of Bro.ad Street Investing's
ing 12 months.
net assets at Sept. 30 as compared
ago.
shares
Shawinigan
Co.; 2,500 shares
of Canada Ltd.;
shares
Goodvear Tire
&
1,050
Co.;
a renewal of the boom
give close attention to those
areas of the economy that may be
likely than
dividends
Established 1930
120
shares Lower St. Lawrence Power
business
preferred!
ID
;
r i
i
/,
"
Co.
' ~'
*
: c
.
.
Ltd.
6%
•
•
v
•-
t
.>
,
Volume 186
Number 5682
>
.
.
The Commercial and Financial Chronicle
(1725)
Continued,
from
6
page
experience
ergy
made
Investments in Latin America
more
income.
these
of
Yet
countries
even
some
suffering
are
have found
we
rates
and
from inflationary pressures, indi¬
cating that their savings
power
still
are
inadequate in relation to the very
high rates of investment which
they are trying to maintain. ;
One
thing
there is
the
have found is that
we
close relation between
no
level of income
of
savings.
and
Figures
the rate
show
that
of
inadequate
insufficient
nancing.
Power
power
fi¬
power
rationing
failures take
and
terrible toll
a
of power is not available.
source
But
production
is
the
savings and the enemy of infla¬
tion. Again cheap but inadequate
poor
,
question of the determination with
which
the
been
-
,
allow them to charge rates which
a
I
!
.
Pas As You Go Utilities
.
savings
vestment.
for
To
believe
productive
take
one
in¬
example,
ment.
But
this, I be¬
lieve that public utilities, partic¬
ularly in the field of electric
should be turned into
power,
ac¬
tive generators of additional sav¬
ings.
be
This
means
permitted
to
that they must
fix rates which
produce
We
the
and
of
other
velopment,
analysis of the problem.
•
•
'
!
•*
,
J'
Loans Are Not All
It
was
that
the
years
ago
Bank made its first
de¬
loans
to
Chile
development
we
for
time,
an
than
more
double
the
pre¬
power
agriculture.
have made 65
and
in Brazil and
development loans in 15 different
participated
Latin American countries
totaling
in amount more than
$700 million.
more
Reporter
in
Chile
we
projects
than 50% to the
have
adding
previoully
Governments
on
The Government bond
market, at least the longer end of it,
according to most money market followers, is not
yet competitive
with corporates or
tax-exempt bonds and, until this position is im¬
proved, there is not likely to be very much of a
pick-up in the
investment demand for the most distant
Treasury issues. This is
given as an answer to the
inability of long Goverment bonds to
hold rallies.
However, there is real evidence of a lessening in the
liquidation of Government bonds as quotations are being moved
ting
properties
or
the
for
public
utility
financial basis
them
to
to
that would
their
on
a
enable
way and
needs and markets
pay
expand
services
as
own
basis
raising
There
are
many
of these utili¬
fresh
as
re¬
in the capital market.
sources
analogy the
where
By
principles apply
same
in the field of
grow.
be utilized
may
highway financing,
charges
be
may
It
is
a
these
characteristic
common
utilities
that
of
they
provide
essential and indeed indispensable
services
at
prices
which
are
closely regulated and almost al¬
far below their real value
ways
by
measured
what
the
would pay if he had to.
these
at
utilities
all, but
Others
have
permitted
rate
a
to
base
insignificance
has
as
re¬
currency depreciation.
The
argument
is
made that it is
shrunk
result
a
argue
of
dogma
matters
them
argue
avoidable
loss.
limited
that
not
of
a
turns, but often returns calculated
on
Unavoidable Necessity
do
earnings
at
of
sometimes
in the interest of
ex¬
pansion of the highway network.
Many of
no
are operated
are
as
customer
maintenance but also needed
I
these
of
as
I
un¬
The growth
is
America
on
ideas
doctrine.
or
matter
a
necessity.
Latin
pendent
as
vitally de¬
the continuing expan¬
quired for these services will
of
ample,
electric
for ex¬
the requirements in most
power,
Latin American countries
development,
panding at the rate of last least
provide
utility
services at artificially low prices;
is
it
argued that these low
constitute a brake upon
even
prices
inflation.
The
But
costs
this
is
an
illusion.
of
utility services are
inescapable. If they are not met
from charges to consumers, they
usually become a drain upon the
national budget. Here they absorb
savings which might otherwise be
available
ment;
or
10% per annum.
icit is partly
covered by borrow¬
are
ex¬
that
means
installed capacity must be doubled
every seven years to keep pace
with the demand. I simply do not
see any practical
way to raise all
of the capital that will be neces¬
sary for this purpose unless a sub¬
stantial part of it is generated
by
the utilities themselves.
have
I
for
productive invest¬
when the budgetary def¬
This
desire
no
to
embarrass
Dr.
Campos by giving him too
prolonged
an
"abraco,"
but
I
should
like
to
quote
once
the
to
inflationary
For
that
to
have
it
process.
matter, what good
is
cheap
service if the
inadequate? In
practice this is almost universally
service
the
an
is
totallv
result.
To
example;
take
almost
railroads
all
of
as
them
in Latin America lose money; they
are
not adequately supported by
their operating or other revenue;
and
hence capital is not available
for
their
pansion.
modernization
As
and
ex¬
result, the trans¬
portation service they provide is
antiouated, inefficient and even
dangerous.
a
Because it is
so
inade¬
quate, no matter how cheau it
be, it is likely to cost the user
more than efficient transportation
may
would.
T^e
case
can
be
repeated
through the whole range of public
utilities.
Whenever we have en¬
countered
serious
electric power
shortages
of
in Latin America,
what
he
called
the
"disequilib¬
rium in the basic services," he
stated that: "This disequilibrium
is due to prices and tariffs fixed
by the authorities without taking
into
inflationary
to
infer
rate
the
account
effects
process.
that
of
the
It is fair
...
the
adoption of a
capable of covering
system
the
operating cost of the sectors
overhead, an even
allowing surplus resources for ex¬
of
economic
pansion, produces
a
not too large increase in investment de¬
a
more
favorable effect
on
the trend of
slightly longer
maturities.
-
guidance
in
achieving this objective.
exempt bonds constantly coming into the market are being
digested.
Of course, some of these offerings have gone better
than others, but as a
whole, the placement of bonds, according
to reports, is
being done in a quiet substantial way, with these
securities
going into strong hands. The institutional interest in
bonds is still selective and
adequate call features must also be one
of the provisions of these
acquisitions. Nonetheless, it is possible
to get the issues that meet the
approval of the buyers and they
New
making sizable commitments in such
Municipal Issues Expected
offering of corporate, state and local municipal bonds is
but there are indications that the flotations of cor¬
porate bonds will tend to taper off in the future. This, along with
a lessening in the demand for loans from
the commercial banks
is
believed
market) should
will
be
mean
the case in some quarters of the money
that the demand for fixed income bearing
issue will
eventually have to expand further. It is realized that
the first thing that will be done
by those who have money for in¬
vestment will be to
improve their liquid position. This most likely
purchases of Treasury bills, certificate and to some ex¬
tent selected intermediate term Government securities of not too
will
mean
long maturity.
As
j■
1
Trend
investment
in
the
American,n'countfies;'
as
measured by the net disbursements
make
we
has
loans
on
continued
year
by
rate.
In the year
at
year
to
in
that
increase
accelerating
an
ending June 30,
1957, gross disbursements reached
nearly $100 million and since
payments
net
still
were
disbursements
quite
re¬
small,
amounted
about $80 million.
to
While it is al¬
ways hazardous to forecast future
loan operations, I have no hesita¬
tion
in
and
variety
saying
that
the
of -Latin
projects which
number
American
presently
are
un¬
der consideration in the Bank lead
the expectation that this trend
It also
like¬
seems
ly that in the coming fiscal year
fresh
loan
commitments
World Bank to
countries
can
by
the
the Latin Ameri¬
will
achieve
new
high levels.
The International Finance Cor¬
poration, which is closely affili¬
ated
with
the
operation for
The
still sizable,
(as
Bank's
will continue.
The demand for fixed income bearing obligations continues to
expand, which means that the new issues of corporate and tax-
Decline in Corporate and
to
Bank, has been in
little
a
Corporation
further
over
economic
a
year.
established
was
development
by investing—without government
guarantee
—
enterprises
in productive private
in ° association
private investors who
competent
early
can
management.
the
years
In
its
Corporation will
invest in projects which
dominantly
with
provide
industrial.
Continued
on
are
pre¬
While
in
page
46
.
matter of
a
record, there are indications that some institu¬
tions are now starting to
carry out programs which are based
pretty much along the aforementioned lines. There is some evi¬
dence
to
made
in
the effect that larger commitments are
already being
Treasury bills, along with selected purchases of other
near-term
Specialists in
-
Government securities.
U. S. GOVERNMENT
Poor
Equity Market Helps Government Issues
and
The defensive action of the
equity market has not had an un¬
the demand for fixed income issues and
reports show that the purchase of the recently offered 4% notes
favorable
has
effect
upon
FEDERAL AGENCY
been
accelerated in many cases by the trend
It is evident that money is
being put to work
of common
in the 2x4s
and the 2V2x5s by those who have not
only sold equities, but also
by those who are not inclined to make purchases of common
stocks. There are reports that money which had been
temporarily
invested in Treasury bills is now
being largely reinvested in the
new money 4% notes.
Also, the questionable trend of economic
stocks.
conditions
issues
is
means
SECURITIES
that the demand for the optional maturity 4%
likely to increase, in the opinion of not
a
few money
market specialists.
doubly favor¬
Bright Outlook for 12-Year 4% Issues
able effect
on the level of
savings
in the country. On the one
hand,
the elimination of the burden of
The 12-year 4% bond moved up in price, due to a combina¬
tion of not too
heavy investment buying and some quotation
subsidies
mark-up by the trading fraternity. This rise
intended
rendering
increase
the
of
the
to
these
saving
Government; and
the
ensure
services
will
canacity
on
of
the other,
the fact that these sectors will be
able to finance their own expan¬
sion
either
in
whole
or
thereby ceasing to draw
in
on
part,
public
resources, will free funds for in¬
vestment in other economic de¬
velopment projects.
The
painful
•
tion because there
was
and
still
is
a
was not
fair amount
of long dura¬
these bonds
Aubrey G. Lajnston
of
6c Co.
held by the so-called "fast
moving group", who were just waiting
they could get out with at least a sem¬
blance of a profit.
In addition, there was some selling by those
banks that were getting
ready for expected calls from the Treas¬
ury for cash. Although this bond may still be subject to some
for bids
to
improve
so
further "free rider" and tax
and loan account selling, it is
being
well digested, which means that investors are making larger
purchases of this security. Eventually a better price pattern will
evolve, because this bond is going into strong hands.
very
a
been told that
technical assistance had been
just as valuable as our loan funds
to
have not been backward in
interest bearing obligations.
on
-
Fixed Interest Issues Well
Digested
more
ing from the central bank—as is
from his remarks at the recent
commonly the case — these sup¬
ECLA meeting.
In speaking of
posedly anti-inflationary services
in fact become direct contributors
a
short-term sector of the Government market has a
vdry
heavy demand and no important let-up in this type of buying
seems to be in immediate
prospect. This is in spite of reports of a
rather persistent shift from
Treasury bills into
run
into the equivalent of
many thou¬
sands of million of dollars. In the
field
and this along with
The
sion of public services.
Over the
next decade, the expenditures re¬
the public, and an aid to economic
to
up,
imposed
ties, both public and private: elec¬ upon consumers through gasoline
tric
power
systems,
irrigation and other user taxes in amounts
works, rail services, and the like. sufficient to finance not only
and
our
area,
prices of these securities.
erating
advice
which
provement and expansion of their
many
nical
existing installations.
By JOHN T. CHIPPENDALE, JK.
mand should in time have
great
a
policy, and the provision of techwide range of particular
develop¬
ment
problems.
In
every
way
Latin
Our
on
matters of economic and financial
The
an important opportunity to mo¬
bilize capital is being overlooked.
I refer to the possibility of put¬
that, in
countries of Latin America today,
missions
Increasing Investment
a surplus above their op¬
costs, thus creating net
revenues
which may be applied
directly to investment in the im¬
We
resident
to be available for consultation
open to us, we have tried to help
viously installed capacity in those
our
member countries
in Latin
countries. In Mexico^and El Sal¬
America to accelerate their eco¬
vador the Bank's assistance has
nomic
progress,
and
on
many
raised power capacity by
80-90%; occasions we have
and
Since that
important but
a
decisive role. Power projects
which the Bank has helped to fi¬
nance in
Uruguay and Nicaragua
have
just about ten
velopment loans in Latin America
—two
and here the Bank has
able to play what might be
been
convincing called not only
very
than
more
<
.
countries."
a
which might-Ptherwise: be
available for productive invest¬
hopes that it will be
able to find opportunities for ad¬
vising its member countries re¬
garding the methods by which
they might more effectively mo¬
bilize
this
sums
The Bank
.
that
grave obstacle to economic
find
objective of saving is will cover their
costs. This would
pursued. Here is the first task of
tit least* eliminate the
subsidies
economic leadership in the coun¬
to
those
services
which
drain
tries seeking economic develop¬
away from the public treasuries
ment.
Loans are only a
part of the
record. We have, in
addition, been
development of the area, particu¬
carrying out an extensive tech¬
larly because they have been di¬ nical
assistance
program.
That
rected toward high
priority in¬ program
has
consisted
in
the
vestment objectives.
Perhaps no preparation of comprehensive eco¬
single sector has been more im¬ nomic
surveys, assistance in de¬
portant in Latin American during
velopment programming, the es¬
the past decade than
power de¬ tablishment
of
development in Brazil
of
source
countries,
in
Latin service works for inflation, not
America and elsewhere, have been against it.
able to save proportionately more
A minimum objective of sound
than relatively more
prosperous economic
policy must therefore
ones.
The rate of savings is hot
be to put public utilities, whether
nearly so much a question of na¬
public or private, on a financially
tional income statistics as it is a
self-supporting basis, that is, to
some
application
production, not to mention the Latin American
in'which productive enter¬
prises are never launched because
These funds have made an
impor¬
tant contribution to the economic
en¬
subsidy
prices to inflationary conditions
characterized by bottlenecks has
cases
a
realistically.
convinced
now
erroneous
national
in
and transport has gradually
us
appreciate the problem
much
are
of bottlenecks
45
INCORPORATED
20 BROAD STREET
NEW YORK
☆
CHICAGO
☆
☆
BOSTON
46
The Commercial and Financial Chronicle
(1726)
latest week
week
Business Activity
or
Dates shown in first column
month available.
or
month ended
on
that date,
in
or,
of quotations,
cases
Previous
Week
AMERICAN IRON AND
Week
Oct. 20
Oct. 20
§2,092,000
Year
Month
101.4
BANKERS'
ACCEPTANCES
DOLLAR
Month
Ago
2,495,000
2,101,000
OF (NEW YORK—As
Imports
$242,622,000
$230,647,000
$271,475,000
507.145,000
258,778.000
OUT¬
RESERVE
STANDING— FEDERAL
*2,105,000
Previous
Ag'
82.1
6,807,350
7,021,650
7,918,000
6,811,550
4
6,820,800
•
8,270,000
7,697,000
4
117,779,000
4
4
27,793,000
28,428,000
29,457,000
26,687,000
1,651,000
1,572,000
1,952,000
2,096,000
12,305,000
12,288,000
13,107,000
7,919,000
8,294,000
BANK
of August 31:
—
—
U.
Total
'
177,430,000
177,383,000
4
35,775,000
36,331,000
34,827,000
33,243,000
4
171,291,000
169,265,000
159,886,000
58,103,000
57,716,000
54,019,000
47,299,000
5
5
747,647
739,266
646,118
815,193
620,045
605,969
560,906
681,577
$333,358,000
$262,045,000
$390,230,000
150,417,000
148,442,000
130,365,000
—Oct. 10
Oct. 10
°ct*10
184,916,000
131,680,000
211,356*000
178,874,000
120,251,000
169,513,000
121,248,000
151,207,000
53,206,000
15,403,000
10,432,000
27,667,000
*10,255,000
8,580,000
556,000
532,000
464,000
5
127
130
113
(tons)
•—
-
195
181-
204
97
74
93-
538
570
567;.
155
153
146
91
1,059
.-$12,847,000
95"
81
1,145
number..—
Wholesale
Retuil
1.101.
DUN
11,564,000
11,709,000
Commercial
11,300,000
•
*
i'
244
261
237
Total
10,426,000
7,629,000
7.507,000
2,331,000
5,024,000
4,127.000
$43,514,000
$44,299,000
$55,040,000
$1,805,460
$1, 480,492
——
8
5.967c
5.967c
5.967c
5.622c
8
$66.42
$66.42
$66.42
liabilities
$39.33
$40.83
$48.50
$56.17
-
CONSTRUCTION
ENGINEERING
NEWS-RECORD
(000's omitted):
State
EN-
—
Month
—
of
Y.Y .!
'
Y -YY
•
.
construction————_—„
!
construction
Private
$63.04
8
liabiliti6fc_——.
and
644.028
•
2
.
892,662
955,017
587.830
791,840
452,074
76,459
v
:
850,443
603,068
526,609
2-———~
municipal—
L—
Federal
$1,247,096
————_J-
Public construction _4__.
259
Oct. 10
10,606,000
,» 14,772.000
.
service
September
11,947,000
&
INC.
$17,828,000
4,892.000
12,715,000
.
._
liabilities
Construction
$14,039,000
3,158,000
14,752.000
:
liabilities
liabilities
GINEERING
Oct. 12
—
—
-—.—.—
—
liabilities
Manufacturers'
Total U. S.
INDUSTRIAL)
J*)
~4(S'
.
—
-—
—.
number
127
INSTITUTE:
(in 000 kwh.)—.
T
$772,472,000
BRADSTREET,
Construction number
CIVIL
b
163,177
135,756
AGE COMPOSITE PRICES:
IRON
Oct.
Oct.
Oct.
(per lb.)
steel
Finished
iron (per gross ton)
Scrap steel (per gross ton)
Pig
<E.
PRICES
METAL
,
M. J.
&
QUOTATIONS):
Oct.
9
26.325c
26.350c
26.475c
39.450c
Oct.
9
9
23.850c
24.225c
23.275c
14.000c
14.000c
14.000C
16.000c
at
Oct.
9
13.800c
13.800c
13.800c
at
Oct.
9
10.500c
10.500c
10.500c
10.000c
10.000c
13.500c
(East St. Louis)
Aluminum
(New York)
14.000c
Oct.
Oct.
at
9
10.000c
9
26.000c
26.000c
26.000c
25.000c
Oct.
at
(primary pig. 99%) at
tin
Straits
9
92.375c
92.875c
93.000c
104.000c
MOODY'S BOND PRICES DAILY AVERAGES:
Oct. 15
Government Bonds
S.
86.77
86.94
85.96
Oct. 15
89.64
89.64
89.92
99.04
95.01
94.86
94.56
BALES:
MERCE —RUNNING
92.20
92.35
i
89.51
89.37
89.92
98.88
Oct-.
!i
82.77
83.28
93.67
Oct. 15
87.99
88.13
88.40
98.25
Oct. 15
—.-—Oct. 15
89.23
89.23
89.64
99.88
91.62
91.48
91.62
Oct. 15
3.75
3.65
3.64
3.18
Oct. 15
4.44
4.44
4.42
Oct. 15
4.07
4.08
4.10
Group
686,428
637,345-
666,549
:
993,041
1,151,207
798.103
9,326,843
31—
9,775,678
12,417,4§6
August-'—104,455
_JS--—__
624,454
month.of
156,333
79,390
798,203
756,471
18,079,000
18,067,001
18,912,060
Spinning spindles in place on Aug. 31
——
<
21,192,000
Spinning spindles active on Aug. 31—;—:
18,079,000
Active spindle hours (000's omitted) Aug. 31 ;
8,368,000
Active spindle hours per spindle in place Aug, 2,
418.4
21,196,000
21,709,000
18,067,000
18,912,000
8,481,000
8,849,000
339.2
442.5
88
*96
Stocks
Cotton
'
31
Aug.
—
spindles active as of Aug. 31——_
COTTON
SPINNING
DEPARTMENT
OF COMMERCE):
(DEPT.
4.26
4.25
3.69
ERAL
SALES
STORE
RESERVE
BANK
RESERVE
DISTRICT,
FED¬
FEDERAL
YORK—1947-49
NEW
OF
3.82
Stocks,
unadjusted
Stocks,
100.00
SECOND
Average=100—Month of August:
Sales (average monthly), unadjusted—
Sales (average daily), unadjusted
Sales (average daily),-seasonally adjusted
3.56
4.28
-
of Aug.
as
Linters—Consumed
3.81
Baa
Railroad Group
Public Utilities Group
,
'
!„
public storage
100.98
Aa
.
Y
consuming establishment as of Ahg. .31—-
103.13
91.91
82.65
—
Aaa
Industrials
COM-
91.60
Oct. 15
corporate
Average
OF
15.800c
Louis)
(delivered)
(St.
Zinc
DEPT.
—
Consumed month of August
37.050c
Oct.
Export refinery at
(New York) at
tZinc
LINTERS
AND
In
Lead
Lead
COTTON
In
Electrolytic copper—
Domestic refinery at
A
124,172,000
168,532,000
———
647,000
5
5
U.
—"
number
Commercial service
r
*
-Oct.
Oct.
BR AD STREET,
&
INC.—Month of August:
Manufacturing
10,399,000
$323,874,000
STORE SALES INDEX—FEDERAL RESERVE
SYSTEM—1047-49 AVERAGE —100
-Oct.
AND
"
—$1,227,394,000 $1,000,108,000
Wholesale number
173,457,000
Oct. 10
—
(COMMERCIAL
182,267,000
————
FAILURES—DUN
BUSINESS
151,805,000
4
DEPARTMENT
Electric output
—;
176,000,000
173,552,000
9,900,000
FAILURES
20,730,000.'^
shipped between
and
—^.i."
—
(U. 8. BUREAU OF MINES):
Bituminous coal and lignite (tons)
ELECTRIC
13,361,000 C
83,956.003;
35,209,000
•
Tofal
COAL OUTPUT
EDISON
countries
foreign
L
—
goods stored
on
Total
——
anthracite
exchange
Based
|
,
Pennsylvania
13,701,000
44,874,000
66,385,000
'
ENGINEERING
—
and municipal
State
Federal
14,012,000
138,1x0,000
—
*
.
Oct. 10
construction-
S.
Private construction
Public construction
Dollar
Retail number
*
„
.
:
credits—1——
warehouse
7,718,000
4
(number of cars;
Oct.
freight received from connections (no. of cars)—Oct.
CONSTRUCTION
shipments
Domestic
■
freight loaded
Revenue
Domestic
-13,268,000
7,659,000
4
4
ASSOCIATION OF AMERICAN RAILROADS:
CIVIL ENGINEERING
NEW8-RE0ORD:
of that dates
are as
Latest
Year
Ago
*82.2
881.7
INSTITUTE:
Crude oil and condensate output—daily average (bbls. of
42 gallons each) —
_
—
—*—Oct.
Crude runs to stillfe—dally average (bbls.)
Oct.
Gasoline output (bbls.)..,——
—Oct.
Kerosene output (bbls.).-,.—.——.—„
——-—Oct.
Distillate fuel oil output (bbls.)
Oct.
Residual fuel oil output (bbls.)——
i
Oct.
Stocks at refineries, bulk terminals, in transit, in pipe lines—
Finished and unfinished gasoline (bbls.) at
Oct.
Kerosene (bbls.) at——
—„—_,——
Oct.
Distillate fuel oil (bbls.) at
—
Oct.
Residual fuel oil (bbls.) at
Oct.
Month
AMERICAN PETROLEUM
Revenue
either for the
are
523,998,000
Latest
STEEL INSTITUTE:
Indicated steel operations
(percent of .capacity)
Equivalent to—
Steel ingotB and castings (net tons)
production and other figures for thf
The following statistical tabulations cover
Indications of Current
Thursday, October 17, 1957
...
seasonally adjusted
103
.97
126'
131
•86
90
117"
*120
124
*126
134
136
*129
13,031,000
—
-
—...
MOODY'S BOND YIELD DAILY AVERAGES:
U.
Government Bonds
S.
corporate
Average
—
Aaa
A
.r~
Baa
Oct!
I
15
4.45
4.46
4.42
Oct. 15
4.97
4.96
4.92
Oct. 15
Oct. 15
—Oct. 15
4.55
4.53
3.86
4.47
4.47
4.44
3.82
4.30
4.31
4.30
3.75
Oct. 15
387.5
391.6
411.0
Railroad Group
Public
Utilities
Industrials
Group
Group
COMMODITY
MOODY'S
INDEX
NATIONAL PAPERBOARD
received
Orders
-
Oct.
of
Unfilled
(tons)
at
end of
period
5
403,701
295,363
339,419
5
298,603
300,659
214,792
Employment
5
97
99
72
547,046
444,626
540,109
manufacturing
1949
AVERAGE
Oct. 11
ACCOUNT
FOR
OF
All
110.21
110.13
110.17
Total
purchases
Total
Other
—
Total sales
Total
off
Total
Total
sales
237,430
1,224,830
1,227,810
1,102,150
l,476,|l50
of
SPECIALISTS
by dealers
ON
EXCHANGE
(customers'
Number of
81,700,000
$551,200,000
$515,600,000
$469,600,000
$3,659
$2,851
492
521
521
43,800,000
79,100,000
OF.
277,970
INSTITUTE
(000,000's omitted):
—
;
263,280
375,045
419,400™
611,563
395,600
65,290
84,020
93,230
64,720
367,065
391,459
415,215
INSURANCE
LIFE
Month
—
of
July
'
<t
:
Industrial
531,835
'
432,355
475,479
508,445
1,844,405
1,975,850
2,309,053
Group
_
1.090
1,365
935
$5,281
$5,545
$4,307
$31,703
*$31,436
$29,004
22,402
*22,415
21,033
$54,105
—
*$53,863
$50,037
,28,917
*28,142
26,825
$30,933,000
$31,082,000
$30,604,000
$2,917,369
$2^18,531
_
Total
596,555
1,635,640
336,020
396,170
365,720
i—_
1,678,829
1,888,445
2,078.285
1,802,785
2,074,999
2,254,165
2,406,735
N.
MANUFACTURERS' INVENTORIES AND SALES
328.450
1,466,765
(DEPT.
Month
Durables
OF ODD-
Y.
OF
of
COMMERCE)
SERIES—
NEW
(millions of dollars):
July
Inventories—
——.I
—
Nondurables
STOCK
—-
——
1
.—
COMMISSION:
"
Sept. 21
1,066,245
Sept. 21
$48,894,082
1,177,189
$55,038,913
1,390,126
1,326,602
$68,839,507
^
Total
^
—
—
—_
MONEY IN CIRCULATION—TREASURY
sales
Sept. 21
852,235
782,621
'
$72,812,006
(customers' sales)—
912,652
918,082
Customers'
short
sales
Sept. 21
9,074
11,539
16,631
other
sales
Sept. 21
773,547
840,696
896,021
911,800
Sept. 21
$36,867,319
$41,053,335
$45,343,110
$47,355,344
186,480
186,440
184,990
228,610
Short sales
Sept. 21
Sept. 21
Other
Sept. 21
186,480
As
of
.DEPT.'
!
July. 31 (000's omitted)
6,282
Customers'
Dollar
value
Round-lot sales
Number
of
,
by dealers—
shares—Total
sales
sales
Round-lot purchases by dealers—
Number of shares
TOTAL
ROUND-LOT
STOCK
EXCHANGE AND
FOR
Total
ACCOUNT
round-lot
OF
MEMBERS
ON
THE
N.
LABOR
All
647,980
604,320
margin
carrying
Cash
Total
extended
accounts—
on
hand
banks
in
and
of- customers'
Market
free
of
listed
value of
listed
value
$2,862,412
customers
to
-32,145
33,167
326,982
335,580
816,374
829,251
872,188
217,897,831
229,923,607
221,159,683
98,529,855
in U.
credit
98,351.019
93,974
101,565,726
Y
S
balances
shares
x
bonds
other collateral-*
borrowings
on
-
331,684
29,749
Member
,
139,053
'
2,164,355
48.590
2,224,551
2,209,693 '
sales—
—II—
II
—
518,890
Sept. 21
1
PRICES, NEW SERIES
U.
S.
I
DEPT.
446,520
543,740
.Sept. 21
Sept. 21
8,103,190
8,948,240
9,940,350
10,768,540
8,549,710
9,491,980
10,459,240
11,187,480
418,940
OF
<1947-49=100);
Group—
117.5
117.5
118.1
115.0
91.2
90.5
92.5
88.1
104.9
—
commodities
other
than
farm
and
Oct.
foods
105.2
106.7
103.3
91.6
foods
91.4
97.6
84.8
125.5
125.6
125.8
123.0
PERSONAL
fllncludes 1,048,000 barrels of foreign crude runs. §Based
of Jan. 1, 1957, as ag#inst Jan., 1, 1956 basis
ly Investment Plan.
pound.
of 128,363,090 tons.
fPrime Western Zinc sold
on
on new
annual capacity of 133,495,150°tons as
tNumber of orders not reported since introduction! of
delivered basis at centers where freight from East St. Louis exceeds
.
IN
INCOME
(DEPARTMENT
OF
THE
UNITED
STATES
COMMERCE)—Month
of
August (in billions):
Total personal income—
1
Service-industries
Government
Less
contribution
special
*64.5
60.5
33.4
3L5
40.2
for
98..6
65.0
-
employees'
228.8
*103.0
40.0
38.2
$347.3
•
„
$329.3
240.9
102.7
:
*$346.2
241.5
33.6
;
Wage and salary receipts, total
Commodity producing industries
Distributing industries
in¬
*
s_!
surance ,:
Other
•Revised figure.
a
firms
Credit
(SHARES):
products
one-half cent
Aug.
Total customers' net debit balances
Member
—
Processed
Meats
531,570
228~610
of
(000's omitted):
Member
STOCK
commodities
Farm
448,610
31
EXCHANGE—As
STOCK
U. S. Govt, issues
sales
Commodity
All
Sept. 21
184~,990
YORK
Member borrowings on
Total sales
WHOLESALE
Y.
186,440
NEW
STOCK TRANSACTIONS
Short sales
Other
*
;
SALES
ROUND-LOT
*
Mont
PURCHASES
INSURANCE
LIFE
26,300
344,940
purchases)—t
total
106,000,000
$3,699
——
318,640
shares
orders—Customers'
102,200,000
99,500,000
——
——
269,570
value
purchases by dealers
45,000,000
107.500,000
—
311,300
Sept. 21
AND
9,300,000
9,600,000
46,500,000
-
21,170
Sept. 21
SECURITIES
56,700,000
54,700,000
—
of members—
STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT
Dollar
214,170
Sept. 21
—
7,255,000
LIFE
•.
248,400
sales
Number
;
46,550
;
DEALERS
$204,700,000
51,000,000
9,300,000
9,780.000
TO
1
—
231,420
Short sales
EXCHANGE
—
dividends
Policy
31,900
Total sales
Odd-lot sales
230,010
193,650
Sept. 21
account
OF
J
Surrender values
Total
Sept. 21
for
INSTITUTE
:
231,380
:
—
17,035,000
1,465,240
Sept. 21
purchases
Odd-lot
1,386,190
251,320
1,055,950
1.321,550
—Sept. 21
Sept. 21
round-lot transactions
LOT
—
Ordinary
sales
Other
1,342,280
265,600
868,320
purchases
Total
1,239,350,
238,830
the floor—
Short sales
Other
I
1,046,390
-Sept. 21
initiated
transactions
Other
PAYMENTS
INSURANCE—BENEFIT
Sept. 21
-
16,698,000
9,752,000
6,946,000
-
_
goods
Sept. 21
;
sales
16,949,000
9,807,000
7,142,000
■
"
Sept, 21
purchases
Short sales
161'. 5
$233,400,000' $196,400,006
■
—,
goods
Disability payments
Annuity payments
the floor—
on
r
Matured endowments
Sept. 21
transactions initiated
*160.4
employees in manufac¬
Death benefits
Sept. 21
Total sales
Other
107.2
164.4
—
INSURANCE—Month of July:
V
.Sept. 21
—
sales
Other
*103.3
Average=M00)—All
manufacturing
Durable
109.18
Sept. 21
Short sales
5,684,000
105.4
—;
of
number
Nondurable
LIFE
MEM¬
7,572,000
5,356,000
Avge.—100)—
(1947-49
2
POLICYHOLDERS
1(H)
=
TRANSACTIONS
13,256,000
7,427,000
—
turing industries—
503,380
BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists in stocks in which registered—
12,783,000
7,481,000
5,550,000
'
—
goods
indexes
manufacturing
Payroll indexes (1347-49
95
5
of
All
OIL, PAINT AND DRUG REPORTER PRICE INDEX—
ROUND-LOT
goods
Nondurable
280,809
Oct.
Oct.
activity
orders
Durable
376,835
Oct.
(tons)
Percentage
SERIES—Month
manufacturing (production workers)
Estimated
ASSOCIATION:
(tons)
Production
'
.DEPT.
S.
August:
417.3
—
PAYROLLS—U.
AND
LABOR—REVISED
OF
All
4.16
4.56
EMPLOYMENT
labor
Proprietors
income.
and
rental
1
L
'
~
5!8
*6.9
6.9
7.9
7.6
52.0
*51.6
50.1
31.5
*31:4
29.9
8.0
s_
income
-
*
Personal interest income
and dividends-
'
Total transfer payments_*;_i
Total
nonagricultural income-
'
-
331.3
18.7
*21.3
21.2
*
"
*
330s 6
;
314.1
■
Volume
186
Number
5682
.
.
The Commercial and Financial
Chronicle
.
(1727)
Continued
from
45
page
servative. I finally offered her
outright. speculation at $1.00
share.
Investment in Latin America
the
nature of. venture
capital,.-its merits
investments take the form of loans
combined
tures of
with
of
some
the
there
area,: at
fea-
in
equity investment. The-. i
Corporation-now has 50 meihhefs^^ji^.Vi
an
'V#
:
.
the
-
ih
equivalent
dollars
Engranes
of
half
and
in
pesos)
ever
before.
The
Bank
is
privileged to have been associated
with this forward movement
The
which the movement
con-
pace at
tinues is dependent
on
tors.
Productos Industrials,
y
advanced faster and farther
than
in
SEC
and
tect
people
don't know
ment
I
have
taken
the
Undoubtedly
many
fac-
most
im-
If
these
efforts
efforts
made
are
cour-
and determined, there are
far approxi- .external collaborators,
including I
ageous
proposals
re-;.assure you the World Bank, willhave
the
Corporation
related to projects in Latin America, and it is likely that the Corporation will make more invest-
;
d
.
t
®,
.
in
common
stocks,
and
that
the
are
now
on
convinced
that
the writer of this
masterpiece
the
knows
his
about
I
run,
am
position to work out coupon
price in keeping with
a
and
that score for the
reason
sponsoring
bankers
are
pre¬
vailing market conditions.
But where competitive
sets
the
ultimate
bidding
offering prices,
things frequently get
little
a
too
anc* investors become balky,
hufnan
-
.
.
.
-
—
.i
.
.
_
perts
these
for
when
I
professional
traders
that is
—
be
can
valuable to people
who know how to use them.
But
fall
so
I
ance
come
across
make
of
some
the
such
glowing
advertising and
their
far short in their performam
"Where
do
tempted to ask myself,
they get a new crop
rageous and sound
even
cou-
DIVIDEND
NOTICES
though it
is unpalatable to them,
I'd like to hear some
answers
to this $64,000 question. The
prize
for
the
best
letter
will
be
one
slightly deflated soap bubble, a
hypodermic needle filled with
giggle water, and
paid for
corner
lot all
number
seven.
a
cloud
on
AIRCRAFT RADIO
CORPORATION
further
6
■
'
.
selves.
by
we
extremely bullish, and
are
going to see the "third
on
the
in
^
in
"tved
is
cern
that
_
that
so
so.
and, since the
phase" of this great bull
market,
that you should
stay fully invested
aro
claims
the
advice
event
an
every so- psychology.
Obviously, there are The hope is that these conditions
called investment advisory serv- always more who
want to hear will be averted
ipp nver
in
the
f»nciii3
W1"
dvcueu
111
tIie
ice over the venrc Thece are the optimism,
the years. These
ensiling
encouraging predictions fortniffht
Thereafter nnn+w i„ii
letters that interpret the market, for the
future, and who wish to
eaiier anotner lull
tell you when to buy, what to buy, live in
hope that there are those 1S
prospect.
jy"hen to sel?» etc- Some .few of who will face facts, evaluate them,
them are written by technical ex- and make a decision
others
half of
I
Everything Is Just
Hunky Dory
by the developing countries them-
be said that
do
can
scientific method of determin¬
that
pro-
but
i«s
competitfvrwddin!
is concerned
(I received such adIn the case of
negotiated opera¬
just this week) I can come
tions there is never too
much con¬
only one conclusion. There is
to
ing such
invest-
or
reception provided the Dririni?
where
right
vice
no
Tell Me
expansion program in the produc-
mately
this,
as
broker
who
can
wise in 1959
bears
portant will be the
may
NASD
/mch
any
dealer
S". A., a Mexican company, for an
tien of automotive parts and other
industrial components. In fact, it
the
of gullible suckers
continually?"
When these letters
go so far as to
predict what will happen market-
_
have
(half
5,000
shadow
ever before; living standards
throughout most of the region
investment:
$600,000
into
.than
for expansion of the Brazilian
company
to
manufacture
heavy electric generating equiprqcnt.
The Corporation has just
the
cast
those of any previous generation,
Thev benefits of more production
have been shared by more people
many,
announced its second
have
a
Maybe
the
.
,
decade
buy
an
Since her funds were limited
I
told
her that
1,000 was
enough. She bought it, then turned
capital of $92. milT^e achievements by the Latin
lion; all but three of the American. American countries in the last
Republics are members.
—; tin June, the Corporation made
its first transaction, a $2 million"
investment in Siemens do Brasil,
a
subsidiary of Siemens of Ger-
to
shares.
Conclusion
/
wanted
other -around the next
day and gave anearly other broker an order for 3,500
shares more of the same.
any
during
of its operations.
years,
and subscribed
than
least
She
47
Boonton
.
.
impetus to the development of the
New
now
willing to look at corporate
bonds, in lieu of real estate mort¬
Hemisphere.
Jersey
Dividend No. 99
the prospect for favorable
reception of corporate offerings is
On
proportionately
tion
gages,
October
tors
improved.
Stock
Two
Securities Salesman's Corner
faced
with
I
going to
am
and the
the
will
you
bit of activity next week when
investors will have an
opportunity
to look over two
very substantial
that
salesman
securities
every
must
is "What
is the best policy to follow in most
instances?" I
answer,
referring specif¬
ically to the failing of many soam
called investors to face
act
as
of
mature
a
the
mistakes
commit
alone,
due
are
but
not to
also
and
is
ignorance,
may
1
'
typical.
; Since people do
up to
to
truth that
be
not like to face
may
inconvenienced,
Who calls attention to
ant " fact
is
popular.
When
hardly
the
man
unpleas-
an
going
call
them'
cause
be
to
money
was
going at 20% to finance specula¬
tion in the stock market just be¬
crash, our then Sec¬
retary of the Treasury tried to
fore the 1929
warn the nation
that the best buys
longer inflated stocks
not
were
but good bonds.
sible
chorus
of
manded
was
Even the respon¬
and
press,
articulate
his
critics, de¬
They said he
scalp.
detrimental
a
nationwide
a
influence
undermining
the
nation's
prosperity. Millions of people
went
right on buying common
stocks
their
at
ridiculous
sorrow.
I
was
prices
then and my commission
every month before the
hit
was
would
have tried
so-called
account
big crash
substantial.
very
clients
If
I
to
convince my
that Mr. Mellon
right I would have earned far
was
less;., and
lost
customers
my
they wished to hear. As it
lost
them
some
brawl
to
else w^o told them what
someone
had
to
—
in the business
anyway
but
I
was,
at
I
least
good busineses while the
was
rrua„
on.
TkiA
They Dd
to
ant
sion.
I
don't
case
know
day and this
think of
you
and
mine.
buy and
you
You
They are all good sound
dividend pavers and, as you
know,
we have been over
your list
many
You did not sell when
they
high and you won't sell
too
were
J!?w 01 later- Just quit watching
the
and
newspapers
time
any
know
you
and
are
ready let
join you."
I'll
I
their
and
securities
that
on
was
far
was
new
better
rently.
many
cur¬
some
too
of
low,
any
conservative
securities
about
little
a
things
would
if
there
million
cur¬
But the present period of
inactivity is not unwelcome
considering surrounding circum¬
stances.
in
loans and to
Co.,
funds to
reason
is
corporate
and the fact that the issue will
be
noncallable for the first 10 years
should make this one
attractive
investors.
inveterate
are
security,
or
on
by greed, in-
of others,
envy
they
want the earth, the
moon, and their
private
cwn
example
ship. Here's an
type which you
space
of
this
pending
Million
for
A.T.T.
following week, on TuesAmerican Telephone & Tele-
Telephone
The
the
have
of the Big
out
of
the
its
a
who
woman
had
the
same
"growth
name
now
units
and
by
everything
everyone
to
dignify
from
overpriced stocks of sound companies
to rank
gambles). She told
would need
and
more
and
I
me
income in
wanted
was
tried
to
a
nies that had
some
up
ob-
show
New
Market observers
Five,
told
me
stocks
I
flatlv
not
interviews
that
advised
the
were
take
she
common
too
December 3,
con-
27,
as
-
1957
that
com-
impending
will
new
Quarterly dividend of $.25
per
share
1957
to
stockholders of record
close of business November 4,
as
get
a
.satisfactory
the
1957.
ANSLEY WILCOX II, Secretary
HOOKEK ELECTROCHEMICAL COMPANY
Kiagara Fails. N. Y.
R. J.
Reynolds
Tobacco Company
Priaca
Albert, George Washington
smoking tobacco
QUARTERLY DIVIDEND
A
AMERICA'S LEADING TRANSPORTER OF
NATURAL GAS
quarterly dividend ol 93
per share has been de¬
cents
clared
HOUSTON, TEXAS
on
the
Common
and
New Class B Common stocks
of
quarterly dividend of 35c
share has been declared
on
per
the Common
Stock, payable December 16, 1957
stockholders
22, 1957.
of
make
confident
TRANSMISSION COMPANY
NO. 41
on
the Common Stock, payable November 27,
GAS
DIVIDEND
busi¬
past
corporate of-
ESSE E
The regular
stock¬
to
of the close of
1957.
cigarettes
TE
progress.
safety.
several
ness
Stock,
Issues
are
her
great risks I tried to stay within
limits of relative
After
December
holders of record
share
per
the $4.25 Cumulative Preferred
payable
15,
follows:
Makers of
chance at least to
a
October
on
as
ties.
few
a
build
worthwhile
The Board of Directors
1957, declared dividends
CmmI, Cavalier, Wiaston & Solem
well entrenched situations
that had promise, all good
compa-
show
Dividend Notice
purchases of their equity securi¬
of
DIVIDEND NOTICE
she
sound
to
in
to
buy
(fancy
stocks"
used
Secretary
HOOKER
small
a
KINGSLAND,
Assistant
line-ups
as
estate. She said she wished to
some
HERBERT M.
in funds for advances to
affiliated
petitive market for several years, ferings
constantly encounter in sell¬
ing securities. Some years ago I
on
offerings.
Pricing
some
been
with
financing will put the big
company
funds
offerings.
And with
who
issue,
will
met
v
on
The
being much the
lull in
resumption
3957.
heen organized to compete for this
and
means
30,
dividend
Quarterly dividend of $1.0625
$250
huge
in the hands of major institutional
new
gamblers. Egged
the prevailing
borrowings
accumulation of substantial
investors
people
certain
this
close
finance? construction.
years.
seems
of
on
Stock¬
the
bank
Two formidable syndicates have
vides investors in that area with
a liberal
supply of new issues.
thing
to
at
repay
short-term
walk which will be
One
1957
October
the
that
interrupted by
several large offerings next week,
the municipal market still pro-
business
13, will make a total
of Ninety Cents (90c)
per share
paid in 1957.
For
stocks chiefly for the
payable
record
of
November
$50 million of 20-year notes
market through a large
banking group. Both its maturity,
one
thing, the investment
world
generally has been disturbed by the recent behavior of
13,
of
to put
to
both
November
Moving by the negotiated route,
Commercial Credit Corp., is due
on
activity
more
Edison
per share, making
thirty cents (30c)
of
share,
holders
slated, on Tuesday, to open bids
for its $60 million of
30-year first
and
refunding mortgage bonds
$43
year-end dividend of ten
(10c)
Payment
Consolidated
moved which will put it in
Naturally those who make a
business of underwriting and dis-
some
how
doldrums
Quickly to investors,
that is that
He
Want More Income
Some
jective
of self delu-
on
into
,wel1. received and
me
laughed and agreed.
the
vield
fishing
go
though they agreed that the
tax
don't
don't want
Realizing that she could
after
he
the
income.
times.
a
total
per
offerings.
to sel1 a"d 5™ are °n>y making it has no way of knowing what graph will make one o£
,tg
conversation No matter what is the sharp decline might portend frequent sorties into the
money
"Sht, no matter what you and I for the near-term future.
market, this time through the
might think is advisable, you will
While the corporate end of the medium of a
straight debenture
!lold y°ur stocks and obtain your new issue market has slowed to a issue to mature in 26
times during the past "bull mar¬
ket" that I have discussed
profit
taking with investors
and
al¬
rent
were
finally feel
worried voice
a
principal. This
Pay the Tax
Take another
want to
years
ot
In
time
and
was
other
market,
should
I
sell
now?"
Knowing this man well and liking
him very much I said, "Joe, quit
kidding yourself and wasting your
own
Mr. Mellon Was Most Unpopular
the
me
said, "What do
to
come
grips with simple truths that
be unpalatable to them.
* '
fallen
#tributing
called
investors
to
the
through the past week after a
fortnight in which new emissions
One of these individuals
Most
their
refusal
has
cn"
inability to
romanticising a simple
desist from
situation
that
gener¬
issue end,
new
fact and
a
individual.
market
ally, including the
finally ended up by saying, "I
just don't see any percentage in
paying that capital gains tax and
then turning around and reinvesting the amount I have remaining
in something else, I'll just hold
type ol situations
relate this week,
sixty four thousand dollar
question
investment
evaluation they should take prof¬
its on some of these stocks,
they
be
and
a
1957, the Direc¬
of the Company a divi¬
of twenty cents (20c) per
for
the
fourth
quarter
cents
a
The
again
dend
Due
The
prevailing
dullness
will
give way, at least momentarily, to
Sell Me What I Want
and
Issues
share
By JOHN DUTTON
Time
Large
8,
of Aircraft Radio
Corpora¬
declared on the Common
of
record
,
c
J. E.
on
.W.L.c
to
November
c
IVINS, Secretary
the
Company,
December
5
1957
payable
to
stock¬
holders ot record at the close
of business November 15,1957.
W.J.CONRAD,
Secretary
Winston-Salem, N.C.
October 10. 1957
The Commercial and Financial
48
Chronicle
.
.
Thursday, October 17, 1957
.
(1728)
two-fifths
However, more than
BUSINESS BUZZ
the increase
of
due to the
was
savings
of 11 mutual
admission
banks to FDIC supervision.
on.
Bekind-the-Scene Interpretation!
Capital
from the Nation'!
'.
And You
•
United
States has been placed in re¬
ceivership thus far this year.
There were only two failures in
1956. Should the year end with
a
single failure, it would be a
new low since the Federal De¬
the
insured bank in the
one
Wolcott at Helm
_
■
Mr.
dropped
a
1934
an allquarter of a
of 640
age
ago,
year,
a
all of this dif¬
to
the influence
of
due
insurance," said re¬
deposit
tiring Chairman Cook. "Doubt¬
less, the major part of the dif¬
ference should
be credited to
less
—
the number has been
would
it
than
smaller
much
hand
Neverthe¬
developments.
other
half
About
hanks
of
FDIC
once a
year
examiners.
The
During its 24 years existence,
losses,
the FDIC has provided funds so
deposits of 432 closed
810,000
of
quished
the
said
posits
Jesse
to
closed
nearly
of
Of this amount
lion
has
been
had
banks
In his
of
de¬
bankers
to
than
to
the
recover
of these Tailed
4.000
the
full
said
Capital Urged
valedictory talk, before
do not
bank assets.
of
amount
inroads
funds,
more
their deposits. All deposits were
ancl
to
for
There is
competition
capital.
As
a
more
and
savings
result banks
for.
half
first
and
banks
banks. About nine-tenths of
deposits
banks
were
billion
need
any
sell depre¬
to
ciated securities. Sour loans and
sales
of
depreciated
quickly impair
margins, he said.
can
securities
capital
Essential
•
says
capital, Mr. Cook
that seldom has the situa¬
as conducive as
it is
tion
been
now
for floating new issues.
contends
that
banks
could
He
im¬
their attractiveness of its
by paying out a larger
earnings.
"I
Universal Match
feel,"
he
said,
"that
any
lion.
FDIC
The
said
that
changes in deposits, including a
further decline of $3 billion in
deposits, reflected in
interbank
part
a
sharp increase in
bank
borrowing.
of
Assets
mutual
6,
than
Canadian
Health:
Economic View of Welfare
An
the
insured
234
banks
on
June
exceeded 5*523 billion.
$0.7 billion greater
the beginning of 1957.
Associates, Temple Building,
Toronto, Canada (paper).
Report
D.
C.
\
--
m
1
firms associated
manufacturers
Trade, Industries Division, Com¬
of
Australia, 83A
monwealth
Queen's Road,
stralia.
Varicose
(paper).
at
:
/
i Carl Marks &
20 BROAD
SECURITIES
STREET
•
TEL: HANOVER 2-0050
QqInc.
4
Fashion Park
Riverside Cement
TELETYPE NY
GArfield 1-0225.
LERNER & CO.
1-971
Investment Securities
•*
1,1
issKSi?■
^
SPECIALISTS
NEW YORK 5, N. Y.
10 PosMMfice&iuaro,
Mo.
,
Flagg Utica
Member Midwest fitock Exchange
2.
Botany Mills
Campbell Co. Com
Morgan Engineering
National Co.
-
Louis
-
«
United States Envelope
Sulphur
FOREIGN
St.
44 East
York 10, N. Y.
Indian Head Mills
SCHERCK, RICHTER COMPANY
456
Association,
TRADING MARKETS
A. S.
Bought—Sold—Quoted
i
Veins—Booklet—Ameri¬
Heart
:
320 N. 4th St.
Melbourne, Au¬
„
23rd Street, New
Old Ben Coal
BellTeletype
—
"
Lone Star Steel
/,/
American
with Australian
Department of
listing
—Booklet
Koehring Co.
Pan American
(paper).
States Investment in Au¬
stralian Manufacturing Industry
*
-
Congress—U. S. In¬
Agency, Washington,
to
United
Delhi-Taylor
-
8th
Agency:
Information
S.
U.
was
Northwest Production
:
Lougheed
Programs —William
can
savings
1957,
form of dividends would attract
Gas
Anheuser Buscli
The principal decrease
demand deposits
from
switching to time accounts,
which advanced almost $3 bil¬
request.
1, Ohio (paper), on
formation
deposits were down $11
from the beginning of
resulted
This
increment
bus
Inc.,
Colum¬
Underwriting
this year.
of earnings
paid out to shareholders in the
given
of
of
Institute,
Research
492 West Sixth Avenue,
about
1957,
but $9 below January
the year.
Declaring that the sale of new
remedy
6.
Institute
Research
Tin
of
Tin
,—
<
insured
of
$3 billion greater than June
1956,
Y., $6.50.
Tin and Its Uses—Quarterly Jour¬
held by commercial
$207
June
on
Total
bank shares is the only
to attract new
N.
hanks whose assets totaled
billion
Larger Dividends
the
New York 36,
West 42nd Street,
are
commercial
234 mutual savings
struc¬
asset
the
13,211
and
whose
Hill
nal
tions,
be no cause for concern
bankers
of
drop
calendar
Science—Tjall-
Koopmans — McGrawBook Company, Inc., 330
ing C.
13,445 insured institu¬
assets
to
be¬
recent pattern of a
Of the
share of their
& Gas
Olin Oil &
30, 1956, but 3%
New
—
State of Economic
year.
that there
however,
added,
should
greater
new
a
problem for some banks with
fixed-income-bearing securities.
He
1957.
6,
2%
Smoking—Eric
at
Coward - McCann,
York, N. Y., $3.00.
Northrup
.
beginning of 1957. The
the
to the
the
market
invoked
has
June
or*.
were
Looks
Science
FDIC said the decline conforms
banking
,
fluctuating
The
months
stock
Oil
our
June
low
hausting them, would do irrep¬
harm
billion
Wash,
Tacoma,
Bank,
(paper).
reported at the be¬
assets
than
these
falling short of ex¬
even
prove
Colorado
$233
The
substantial
capital
any
upon
306,
Sound Na¬
Odlin—Puget
Reno
ginning of this week that assets
of
the
insured .-banks totaled
avoid
Mr.
that they have
depositors. The number-of de¬
positors was about
1,400,000.
Bess
alert,
agree, but feel
solved the prob¬
lem. However, he maintains that
in a growing economy there is
need for continuing growth of
all but $3 miltrestored
of them, in a
tended to keep
turning the reins over to1 Mr.
Wolcott, Mr. Cook declared that
the
paramount
heed
of
the
banks, is
more
capital. Many
million.
S600
Furthermore,
303,
N. Y.
Problems of the Fir Plywood In¬
accounts."
tional
The FDIC
deposits.
or
Suite
Ave.,.
New York 22,
"Insured"
tures feature
Bank
More
Wolcott,
P.
the
Cook.
who has relin¬
Chairmanship
the
FDIC
the
pay
de¬
per
assets
bank
total
by
13,211 Commercial Banks
not
should
add
dustry: An Economic Analysis—
said
be
misled or unduly encouraged by
that large figure. For one thing,
it is only a small fraction of
billion,"
$20
"We
Cook.
Mr.
high quality cred¬
its scheduled to mature, so as to
examiners
the
positor or transferred in full to
another insured bank.
H. Earl Cook,
most
or
bank failure, has
could be paid to the in¬
limit
must
FDIC
that
Investment in Jamaica—
an
Madison
than it
being re¬
capital
tained in capital
"Capital accounts of all banks
almost
new
itself
would
tional capital.
insured
the
examined
are
the
by
fact
sured
of
Jamaica Industrial Development
maica, British West Indies; 527
in
more
addi¬
need to attract sources for
system."
.
the
tight
Corporation, 4 Winchester Road,"
P. O.
Box 505, Kingston, Ja¬
posit insurance."
is tax money. While it is
a guaranteed Federal agency, it
is self-supporting.
j
that
money
arable
penny
banks
with YOU for thirty years a
policy is nothing new to me!"
"After living
have been in the absence of de¬
represents funds collected from
the
13,445 banks, and not a
Develop¬
Industrial
for
ment; also Income Tax Aspects
total
"Of course, not
ference is
interest.
Therefore, the $1,700 billion
that the FDIC now has on
suspended because of fi-'
nancial difficulties for an aver¬
$80 million it owed in
*
nities
includ¬
gress
banks
Wiley &•
Fourth Avenue,
York 16, N. Y., $7.50.
440
Jamaica, B. W. I.: New Opportu¬
both insured and non-in¬
sured banks, have been closed
because of financial conditions
since FDIC was created by Con¬
in banks
2960
Beach—John
Inc.,
New
in 1934. This averages 23
banks a year. Prior to 1934 the
records show that nearly 16,000
—
Press,
Models—An Exposition
F.
Sons,
ing
when they were
closing their doors and being
placed into liquidation, Con¬
gress created the FDIC. Origi¬
nally it was capitalized by Con¬
gress
for
$289
million. The
FDIC has paid that off, plus the
century
E.
Insurance
of 540 banks,
total
A
probably
to
low about
time
Deposit
Closings Since
Bank
540
$1,700
government
confidence
way,
Corporation.
Government Repaid
Because
Federal
the
Columbia
Broad¬
New York 27, N. Y., $5.50.
Zupnick
Economic
is
.
Postwar Dollar Problem
University
succeeding the late
Maple T, Harl, as a member of
banks.
the respective
7, N. Y.
—Elliot
-
De¬
New
Broadway,
(paper).
270
partment,
York
banker, who only recently com¬
pleted his tenure as President
of the American Bankers Asso¬
ciation,
ex¬
State Banking
.New York
Ga.,
Atlanta,
Cocke,
Erie
law
of
cerpts affecting bank directors—
Britain's
has been accumu¬
lated through the tariff placed
on
compendium
page
member of
and Cur¬
Committee, until he
retired from Con¬
in 1956.
gress
All
money.
a
was
Banking
High Public Service with a 50-
term.
voluntarily
of "insurance" funds on
hand. None of it is
House
rency
wholesale
lias
FDIC
Wolcott
the
Responsibility: A
Directors'
Bank
reap¬
pointment for a six-year
proved supervision, tighter
chartering policies, a steadily
rising
level of economy and
depositor confidence.
the
Presidential
for
didate
depression years
of the early 1930's.
The
FDIC this week attri¬
buted the extremely low number of receiverships to a series
of
things. These include im¬
Today
Chairman of
corporation pn Sept. 12. Mr.
Cook, who completed 10 years
with the FDIC, was not a can¬
closures in the
billion
Massachusetts, was admin¬
istered the oath as
corporation heads to¬
ward
its
silver
anniversary,
with 13,445 insured banks under
its supervision, no one questions
that* it
has helped to restore
confidence in American bank¬
ing institutions after
Conservative
Republican
from
be¬
Man's
Wol¬
Representative
Former
cott,
the
As
**
Business
banks.
posit Insurance Corporation
gan 24 years ago.
the
of
three-fourths
in
paid
D. C.—Only
WASHINGTON,
[This column is intended to refleet the "behind the scene" inter¬
pretation from the nations Capital
and may or may not coincide With
the "Chronicle's" own views.] " ♦
Telephone
tlThbx'-A 3-1990
-
*
Boston 9, Mass
*
'
1
Teletype
@FedFRASER