Full text of Commercial and Financial Chronicle : October 2, 1952, Vol. 176, No. 5156

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

t

*

university
OF michigan

ESTABLISHED IS39

6

OCT

a

1952

ABMIHISTRATIOH

SIHESS

1WII

The Commercial

Financial
Reg. U. S. Pat. Offioe

Volumel76

Number 5156

New York, N. Y.,

Thursday, October 2, 1952

Price 40 Cents

Copy

a

EDITORIAL

Pension Funds and Their

As
For

We See It

long while past repeated demands for

a

reduction in Federal
met with

since most

of

current

for debt interest
of

outlays

or

at all events

be

or

little

By ROGER F. MURRAY*

for defense.

were

Mr.

either

were

types
the story went,

such that
very

public questions have

never

of

in recent years for trusteed pension funds to rely
heavily on equity securities, with greater fluidity and
flexibility thereby being provided to the capital markets.

been satisfied with

investing some $3 billion a year.
course, that they have become an im¬

for two

they knew that

more

One

reasons.

if

should

functions

have

and

been

activities

v/hich

not

of

never

for

dissatisfaction

found

in

the

as

inquiry discloses that that belief is
Americans, even though not coin col¬
lectors, may hold gold coins, although
they cannot get such coins from the
Treasury Department. The holding

the

on

capital

necessary

markets,

to

view

of

it

aggregate sum but in terms
three major
components, the

its

revision

governments, insured pension plans,
and trusteed plans.

ulations

viction that substantial
in what

million this year to

savings could be effected
known as defense
programs if the
task was approached with a
will, and with under¬
standing of the real needs of the situation, and
with good sound business sense in
giving effect
are

to such defense
programs as were

$7

10

years

U.

S.

in

State

Government

bonds

But though feeling certain that
really important
savings could be effected in defense outlays, very
few if any of those who demanded
general re¬
trenchment by the Federal Government felt them¬
selves qualified to
say just how these reductions

an

securities,

however,

still

have

been

on

to

the

about

$1

of

reserves

remain

the

a

32

17,

ac¬

coin."

principal

is

being

Whether you may hold, transport or
import gold coin
on the definition of "rare and unusual."
That
term is not explained in the
regulations., It means what

added
under

on

page

♦Remarks of Mr. Murray at a round table
discussion at
the National Industrial Conference
Board, New York

of

be

may

subsequent to April 5, 1933, is presumed not to be of
recognized special value to collectors of rare and unusual

stocks.

cafripanies

year

insurance

Continued

could be effected.

coin

depends

billion

life

unusual

therefor,

increase

common

outlet for these funds.

Currently,

and

necessity of holding a license
Herbert M. Bratter
(b) Such coin may be ex¬
ported only in accordance with the
provisions of §54.25. (c) Gold coin of foreign issue made

Roger F. Murray

inclination to look with favor

Public

reads:

out the

and

ingly important. The most recent development has been
a growing interest in
corporate bonds and a few instances
of

page

Historically, these funds

invested

securities, but during the last

largely

promulgated

was

quired and held, transported within
the United States, or imported with¬

local

upon.

on

rare

were

finally decided

Continued

billion.

which

coin, (a) Gold coin of rec¬
ognized special value to collectors of

total of almost

a

of

"Rare

It has been reliably estimated that

con¬

gold coins is covered in the De¬

in the "Federal Register" of
Aug. 29,
1952. Sections 54.20 of the new
reg¬

local

the assets of State and local
pension
funds will increase by some
$800

was

erroneous.

partment's gold regulations, the latest

an

retirement funds of State" and

undertaken

by government
(least of all the Federal Government) were
dropped as expeditiously as possible. The second

basis

funds

however, it is

still

and

Recent

probably less than $600 million.
appraise the impact of this flow

of

only busi¬

applied

more

was

To

coins.

worn

recently the writer shared the general belief that
gold hoarding in the United States has been illegal since
1933, with the exception of gold in its natural state.

of

means,

portant factor in the capital markets.
the comparable figure

tlgh admitted could be

taken from nondefense
expenditures if
ness-like administration was

(2)

A decade ago,

that

was

This

or
mint, in any quantity, with the exception
(1) foreign coins minted after April 5, 1933; and

Until

collecting

and

reasoning, which usually shaved possible re¬
duction in expenditures down to
hardly more than
relatively trifling proportions. They were dis¬
with it

nomination

of

Pension plans, exclusive of Federal
programs such as
Railroad Retirement, Old Age and Survivors
Insurance,
and Federal Civil Service
plans, are currently

current

this

satisfied

1933 of

ency

little could

students

developments in the legal status since
holdings of gold coins, and concludes, despite
rulings and official regulations, anyone in the United
States may hold, sell and import
gold coins of any de¬

Murray discusses rapid growth of Pension Funds and
on the capital market.
Finds a strong tend¬

more

pared from them.

Thoughtful and realistic

Mr. Bratter reviews

their impact

Both these

so

By HERBERT BRATTER

Vice-President, Bankers Trust Company, N. Y. C.

possible

was

expenditures

untouchable,

were

Impact on the Capital Market

a

outlays have been regularly

assertion that
very

an

Americans May Hoaid
Gold Coins

the government itself interprets it to

mean.
In practice
today any genuine gold coin of vintage earlier than
April,
1933, provided it is in good condition with the design,

31

date and the like clear, passes the
government's test

a
meeting
City, Sept.

1952.

Continued

on

page

as

32

ABA ISSUE NEXT WEEK—The "Chronicle" of Oct. 9 will
include many of the addresses
made at the 78th Annual Convention in Atlantic City of the

DEALERS

tion, along with related

news

American Bankers Associa¬
developments at the Convention.

State and

in

U. S.

WESTERN

Government,

Stale and

Securities
telephone:

»

SECURITIES

Hawaiian Securities

HAnover 2-3700
Direct Private

Wires

Coast

DeAnWitter
14 Wall

COMPANY

Street, New York, N. Y.

Members of Principal
and

bond department

30 BROAD ST., N. Y.

San

Co.

&

•

•

OF NEW YORK

•

Chicago

Bond

Honolulu

Telephone and Telegraph

of INDIA, LIMITED

Company

Dept. Teletype: NY 1-708

on

Government

&

in

Request

and

Husky Oil
Refining, Ltd.

Office:

26, Bishopsgate,
London, E. C. 2

,

land

Members

Members

New

Y&rk

New

Stock

Exchange

York Curb Exchange

30 Broad St.
Tel. DIgby 4-7800

New York 4
Tele. NY 1-733




Paid-up
Reserve

Protectorate.

Capital_I.L_£4,562,500

Capital-

1

Fund

The Bank conducts

£2,281,250

every

description of

also undertaken

Denver

^

JWfe.

Spokane
Cities

NATIONAL BANK
OP THE CITY

OF NEW

YORK

Puget Sound

BONDS & STOCKS

Power & Light Co.

Banff Oils, Ltd.

CANADIAN

DEPARTMENT

Goodbody
ESTABLISHED

&

Co.

Analysis

♦

Pomdooh Securities
Grporatioti

1891

upon request

ira haupt & co.
Members New
and

MEMBERS NEW YORK STOCK

EXCH.

business,

Trusteeships and Executorships

CHASE

Bough t—Sold-" Quoted

£3,675,000

banking and exchange

THE

NEW YORK CITY

other Western

10

•

in India, -Pakistan, Ceylon,
Burma, Aden, Kenya, Tanganyika,
Uganda, Zanzibar, and Somali-

Authorised

•

'

Branches

Hardy & Co.

Bond Department

1915

CANADIAN

Shefritt Gordon Mines, Ltd.

Kenya Colony and Uganda
Head

Circular

the

50 BROADWAY

Salt Lake City
Los Angeles

NATIONAL BANK
to

Coast

Members of All Principa I Exchanges

American

Bankers

ESTABLISHED

¥

Commodity

Los Angeles

Boston

to

J. A. H0GLE & CO.

THE NATIONAL CITY BANK

Security Exchanges

Francisco

Bonds

Direct Private Wires

Chemical
BANK & TRUST

Municipal

OIL & MINING

Pacific Coast &

Municipal

115

BROADWAY

NEW YORK

1

NORTH

40

Exchange Place, New York b, N. Y,

LA SALLE ST.

CHICAGO

111

WHitehall 4-8161
Boston

Stock Exchange

Exchanges

Broadway, N. y. 6

WOrtb 4-6000

Teletype NY 1-702-3

York

other Principal

Teletype NY 1-2708

Telephone:

Enterprise

1820

MM. AOM.

LIBRARY

f/&
' *

I2

The Commercial and

Financial Chronicle... Thursday, October 2, 1952

(1214)

WE

The

POSITION and
IN

TRAOE

week, a different group of experts
in the investment and advisory field from all sections of the country
participate and give their reasons for favoring a particular security.

1/8/82 and Rignts

(The articles contained in this forum

Socony Vacuum

they to be regarded,

are

Rights

and

Stock

Senior Partner,

Rights

Stock and

Jacques Coe & Co.,
York

New

stocks

tobacco

market

all

5%/52 and Common

turn in

reach the

New York Hanseatic

to

certain

at

Corporation

;

critical

Curb Exchange

York 5

120 Broadway, New

Teletype NY 1-583

BArclay 7-5660

stment

cycle

ist"

tobacco

shares

of

in¬

A

70%

advance

1927

to

vanced

|fcpONNELL&rO.
Members

York

New

Exchange
Exchange

Stock

York

New

120

Curb

Tel.

10%.

at

ing

space

Dan River Mills

recent

Handley Hardware Co.

we

study

again

Chemical Corp.

In

dustry,
the

Telephone
FRanklin 2-1150

Inc.

Mackie,

Beane

thinking.
the

situa¬

selected

was

1947,

Bayuk

of

dividends
thereafter

—

earnings

present dividend
in

is

annum

that

the

60c

so

per

rate of

line with

last year's

earnings.

We would expect divi¬
dends to be on the upgrade again
the earnings warrant.

soon as

Numerous trade factors

tributing toward
of

profit.

better

a

margin

Leaf

Havana

Tobacco

and

particularly

companies

the

in

among

field,

these

themselves

keep

Tobacco

about

costs

in

strong liquid financial con¬
dition, because of the necessity of

lower.

The

OPS

ceiling

prices

a

cigar manufacturing in¬

leaders

Leaf

has

been

lifted

10%

cigar

on

and

last

month Bayuk increased the price
its

on

principal product "Phillies"

from

$75

thousand

a

This price
followed

$77.50.

to

carrying and curing leaf tobacco tically no sales resistance has been
takes from a minimum of encountered because' of the ad¬
to two years.

result, the
net quick assets of most of these
companies substantially are in ex¬

Established

1856

cess

H. Hentz & Co.
Stock

York

New

York

New

New

Exchange

Exchange

Board

Orleans
And

Curb

Inc.

Exchange^

Commodity
Chicago

Exchange

Cotton

York

New

,

i

of

Cotton

other

\

;Trade

Exchange

Exchanges».

market

stock.
•

Members

the

of

Bldg.

NEW YORK 4, N. Y.
CHICAGO

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND




a

price

of the

Bayuk, for instance, the net
quick assets as indicated by its
last annual report, were in excess
a

share

every

kind

of

term

and

$17

one

has

even
as.

this

bring this
or

figure
net

However,

believe

The

that

to

!could

$20

a

price of the stock.

year

Bavuk,

as

Figures

year.

popular

priced

whole

a

ahead of last

published

increase

total

as

.{■'

-

for

the Julv,

pared- with

of

6.63%.

1952

July,

How¬

output

1951,.

the

show

months" of "1952

seven

ever.

•

com¬

19V?%.
This stock, which sold as high as
$32

in

by'

1950,

1946

the

a

declined

and

has

been

one-point price

last two years,

period

we

imagine

and discouraged

$10

to

fluctuating
ranee

or

taken

buyin<*

has

bee^

disgusted

tax

losses.

cigars, ple who

were

1c*rgeVv

willing to

by

Rights

on

request

Gersten & Frenkel

Edward F. Hayes

Tel.

sum¬

10

Refractories Company.

calendar

The

good

1951

year

was

fractories

COAL STOCKS

a

North American Re¬
Company earned $4.65

year.-

BOUGHT

share. It paid dividends aggre¬
gating 90 cents and ended the

per

with

year

share of
duced

asset

an

over

$35

its funded

per

—

QUOTED

request.

on

value per
share. It re¬

debt to $700,000

size.

The

-^- SOLD

Letter

George A. Rogers & Co., Inc.

nominal figure for a company

of its

Leading

Over-the-Counter

North

the

particularly

more

New York 7
Tel. NY 1-1932

Dlgby 9-1550

been going on

has

what

§pcurity Dealers Assn.

Broadway

view

this

briefly
marizes

Y.

Members N.

Our 25th Year

120

WOrth 4-6930

Broadway, N.Y. 5

1952 started off aus¬

year

piciously with favorable net earn¬
ings for the first quarter. In the
second
quarter operations were ;
adversely affected by strikes and
threats of strikes in the steel in¬
started

virtually

lasted

This

strike*

June

1

about

or

on

steel

major

The

dustry.

seriously

and

A

and

Producing, Refining

Sioux Oil Co.

August 1.
curtailed all op¬
until

COMMON
Inquiries

erations in the refractories indus¬

■imim

the

third

mmm

1

•

"

I

1

t

■».

•

business

quarter

picked up substantially in August
and
September.
In .September

contracts were concluded on
industry wide basis resulting
settlements following closely

JAMES M. TOOLAM & CO.
67 WALL STREET

wage

in

STOCK
Invited

.

In

an

'

Distributing Company

;■

NEW YORK 5, N. Y.

HAhover 2-9335

Teletype NY 1 -2630

the

pattern of the steel industry
contracts. Price increases of 5%
have been authorized by the OPS
effective immediately. This is not

adequate

but it will

increase

offset the higher cost of
operations.

help to

for the fourth quar¬
deliveries are good with pros¬

Bookings
ter

Over-the-Counter

.Quotation Services
for 39 Years

industry con¬
for tinuing at capacity operations. The
question of a coal striktMias been

holders have liq¬

uidated

&

♦Prospectus

150

pects

of the steel

during which

many

Rights

in¬

suming that

an

up

was

The

one

leading domestic manufac¬
of

cigar industry

is understated
within
quick assets in

accounts

figure closer

Early this
turers

short-

aonroximatelv twice the

current market

of the

to

deducting

both

long-term.

reason

additional

share,

after

debt,

,i;!

is running about 7%

a

In

of

vance.

first

\

unconsolidated
N. Y. Cotton Exchange

As

&

Foote Mineral

As¬

industry.

increase promptly was
try.
most of the other

which
one

Common

have

within

by

competitive companies, and prac¬

f

Iowa Public Service

Adjust¬

companies
a given"

to

—a

are con¬

teletype BS 259

Telephone WOrth 4-5000

Long Island Lighting

future

between

American

.

.

paid

$1.75 per annum

out

not

'

;

.

dividends gradually were reduced

tobacco

outstanding

Cigars

In
of

as

very

&

York

New

would

and recently has developed

In the

,

to Singer,

cur¬

indications of entering
period of vigorous revival.

CHICAGO 4

Wire

This

over

an

sev¬

being the

end of the

'

this along with

strong

SOUTH LASALLE STREET

Direct

draw

one

share for 1953 is

a

line.

Boston 9, Mass.
:

Rgts. & Conv. 3% %—1982

$2 let us examine how it would ap¬
estimate of $2 to ply to the refractories industry and

gone

years

Securities

CG 2197—CG 1614

for

$3

7-0425
Y.

^Standard Oil of Indiana

approximately

an

18%

dustries and as

Earnings for the

several

had

Republic Investment Company, Inc.

<

could
—

my own

Bayuk

and

1929

of

rate

CA

N.

been uneven

somewhere between

share, and

Recent Price

Earnings $1.47

of busi¬

ments

important reasons. It is plentiful and costing about 20%
through a period of less than the average cost of the
five
great hardship during the last six last
years — Pennsylvania

Request

Teletype

"index

same

From

an

looking

tion,
for

231

annual
a

market

Dividend $2

10.5%
Earnings $4.01

Common

com¬

last quarter alone could be at the

Tel.

oper¬

the

to

course
ness.

making earnings for

$1.20.

6 Mos.

•

uncertainty as

that earnings for th^

year

1951

•

ating costs and

consid¬

well

writer's

the

of 90c,

the

to

market.

with

group

i

i

in%a

1937.

one

bull

agree

Investment

Inc.,

October,

probability of
rent

on

in

conclusions

eral

r

creased

months, i.e., in the neighbor¬

hood

of tobacco stocks to

April,

in

sik

relationship

the

on

at about the

observation

Nuclear Instrument &

is

$1.10 and

whole, suggests that currently
are

^prevailed

LD 33
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii

Circular

Group,

stocks

relationship

Lynchburg, Va;

It

Yield

•

high taxes, in¬

pany's earnings.

the the full

to

the general market" as that which

Tele. LY 83

prices in
been reflecting adjustments due to
the impact of

opinion

the

for

now

article
the stock market have

earnings and

point

turning

ered opinion

of other shares.

tobacco

of

in

•

Report available

preceding the date of this

resisted

Distributors

as a

[

some-

level

low

•
—V
TEXTILES, INC.

148 State St.,

weeks

of

number

a

y

going contrary

down trend

,

the

the tobacco group has

advanced,

American Furniture Co.

the

is

the first favorable breath¬

but

Trading Markets

Scott, Horner &
Mason, Inc.

been

For

the earnings have
until
last
year
'they
74c. Earnings for the first
1952 (already published)

of

v

Refractories Go.

American

North

markets, not
stocks

branch offices

our

Stock Exchange

New York

Members

when we are in last six
months of 1952 stand an
only have to¬ excellent chance of
being as much
the decline,
as
three times those of the first

Conversely,
bear
bacco

to

New York City

year,

amount to 29c. This in my

ing like 70%, while tobacco stocks

ftiiiiiiiiiiiiiiiiimiimiiiiiiiiiiiMiiH'

Moore

about

4%. Since 1949, the all over mar¬

have declined

wires

Direct

& Co.,

Glore, Forgan

Partner,

Since

half

stocks declined

tobacco

and

Mobile, Ala.

return

•

Bayuk earned $2.96 a
then in every sub¬

1947,

earned

Again from 1934

only 1%.

2-7815

REctor

In

while during this
declined,
tobacco stocks ad¬

ket advance again has

YORK 5

NEW

BROADWAY,

70%

v::

''

share.

from

stocks

1937 all stocks advanced

to

NY 1-1557

current

FRANCIS HAYES

EDWARD

show

items

These

cigars.

sequent

all

in

1929,

6%
at

the

also,

—

sale of "Medal¬

being handled by the same dis¬
tributing organization.

striking example was the

period

same

sellers

priced, and high priced cigars, all

ever

ket.

Since 1917

;

Jacques Coe

do tobacco stocks
rise substantially in a bull mar¬

Rights & Scrip

minimum

a

investment

Exchange

York 4, N. Y.

NewOrleans, La.-Birmingham, Ala.

opinion that in ad¬

why I consider Bayuk Cigars
"the security that I like best" in
the market at the present time.

Bayuk now has a "complete
line" covering low priced, middle

vestment.

Rarely if

States

and

power.

de-

fensive

Specialists in

to

the

Curb

HAnover 2-0700

the cigar industry.
of the

am

is

promise of adding substantially to
the
company's
overall
earning

are

without ques¬
tion the best
kind

United

the

in

manufacture

|

time was

at one

of the largest 5c cigar

one

the

in

i

n v e

"Cinco," which

r

riods

1920

Established
Associate Member N. Y.

privilege to manufacture and sell

{?;

pe-

.

York

25 Broad St., New

inevitable

and more so next year.
levels,
the; purchase of Bayuk
Bayuk's principal and largest Cigars holds excellent promise for
selling brand is "Phillies." How¬ a good-sized capital gain during
ever, in taking over the Webster the next' year or two—risk on the
brand,
they
also acquired the downside appears negligible. That

f

t

a

the

for

year,

it

elusion * t h

I

on

,

con-

obliged

wait

and

dition

|
ft

is

trend,

Members New York Stock Exchange

factors contributing to a
substantial
increase
in Bayuk's

jg

over-

Steiner, Rouse & Co.
Members New

earnings for the remainder of this

market

Hayes, Part¬

Glore, Forgan & Co., New
York City. (Page 2)

many

action

with the

Central Public Utility

Francis

Co.

ner,

realized, and should be one of the

cigar and

both

—

their

pared

Refractories

merman

—Edward

late

cigarette companies—and has com¬

& Light

Puget Sound Power

4

economies
running into
many hundreds of
thousands of
dollars are
in process of being

has studied the behavior of

years

Conv.

and

Common

Bought—Sold—Quoted
Nort'-'

sition,

Anyone who during the past 50

Assoc.

Eastern Utility

Partner, Jacques Coe &
Co., N. Y. City. (Page 2)
4

million annual
$37 million. In this acqui¬

sales to

Bayuk Cigars, Inc.

Coe,

Cigars, Inc.—Jacques

Senior

nor

increasing its $30

City

Alabama &

and

Selections

Louisiana Securities
Bayuk

acquired the business of the Web¬
ster
Tobacco
Company, thereby

JACQUES COE

Iowa Public Service

intended to he,

not

are

Participants

Their

offer to sell the securities discussed.)

as an

Week's

This
Forum

A continuous forum in which, each

Standard Oil of Indiana
3

Security I Like Best

neo-

accumu-

eliminated
appears

should

and- therefore

that the
come

fourth

through

it

now

National Quotation Bureau
Incorporated

quarter

on

Established 1912

some

46 Front Street

thing approaching

a

normal basis,

Continued

on

page

25

CHICAGO

New York 4,

N.Y.

SAN FRANCISCO

Number 5156

Volume 176

.

.

.

The Commercial and Financial Chronicle

A Look at the
By

(1215)

^

Economy

INDEX

SUMNER H. SLICHTER*

Lamont University

Professor, Harvard University

Prof. Slichter discusses various phases of

Pension Funds and Their Impact on The Capital Market

—Roger

forced

goods

draft
on

a

to

seems

producing defense
This
large and increasing

—

scale and, at

the

same

time

expanding in¬
dustrial

and

plant

rate

is

have

—A. Wilfred May

World War

increase

been

about

other

in

recent

be

some

our

sad.

prices

happy!

5

WALL

STREET, NEW YORK

Telephone: WHitehall 4-6551

Babson_.l___

IH—Roger W.

Obsolete Securities Dept.
99

6

_

_

___

6

Savings Bank Approach to Equity Investment
7

___

The Tax Picture and the Mining Industry

L

—Hon. Thomas E. Martin.

5%.

Federalism and Future of Savings

double the average
increase that has been

of

happy and

everybody who gets

4

*

—Alfred C. Middlebrook

in

about

achieved

some

But

will

Point of Low Return—Ira U. Cobleigh

two years

over

3

Bankers' Parley Pervaded by International Factors

the economy output per manhour in private in¬
has been operating under a sort of dustry during the last two years
For

Economy—Sumner H. Slichter

will make

<

The
of

rate

THE WORLD SERIES

.Cover

_

Industrial Applications of Atomic Energy
—Alfonso Tammaro

and demand has not been solved.
annual

Murray

A Look at the

effect, and concludes: (1) the capacity of the economy to
grow has been accelerated; (2) the money demand for goods
is also increasing, thus creatittg markets for the expanded production; (3) investment opportunities are now developing at
more rapid rate than savings; while
(4) the policy of fighting
recessions by government deficits keeps up consumer demand.
Warns, however, problem of a permanent balance of supply

The

AND COMPANY

Cover

econ¬

operating under "forced draft" of defense produc¬
Sees both deflationary and inflationary influences in

omy, now
tion.

Page

Americans May Hoard Gold Coins—Herbert M. Brattsr.

the national

LicHTtnsTfin

B. S.

Articles and News

*

3

8

Reeves

Banks

*

j

—^Robert M.

Catharine.

'___

r

9

Soundcraft

Challenges Confronting the Nation's Savings Banks

years'.

—Raymond

These figures are so startling that
one cannot avoid asking whether

Rodges———

10

-

Corporate Tax Savings Through Profit Sharing Trusts

equip- satisfactory measurement of pro¬
ductivity has been prevented
a rap¬

■>

—James W.

Bridges

11

ment at

either

(1) by drops in the quality
of many goods or (2) by changes
turning out
in the kinds of goods produced,
other
goods
particularly by the large increase
needed
for
a
in the
Output of defense goods.
high level of
The rapid rise in the efficiency
consumption.
vith
wnich
defense
goods
are
The peak of
id

rate

and

defense spend¬

made

as

Our Propaganda

duce?

The

economy

answer

is that

to

thjs

H. E. Humphreys, Jr

volume goes up may cre¬

14

How High Can Taxes Go?—Walter W. Heller—

15

Reserve

Banking in

—M. S.

of the

enormous

J.F. Reilly&Co.
Incorporated

Dynamic Economy

a

17

Szymczak

Conservation of Oil Essential!—Hori. Allan Shivers

61

Broadway, New York

BO 9-5133

46

6

Teletype NY 1-3370

Direct Wires

Philadelphia
Fall Outlook for Industry and Trade Promising

16

SEC Adopts New Registration and Prospectus Rules

Chicago

•

16

General Business Conditions Favorable

Los Angeles

18

National Bank Earnings Up in First

21

Yes, But

.

.

NYSE Now

(Boxed)

.

Six^Months

25

?.

Associated Development

L_ 27

5%-Hour Trading Session

on

and Research

Corp.

Energizing Effect of Public Money Is Now Failing,

Harold X. Schreder

says

About two-fifths of the fixed cap¬
ital of manufacturing enterprises

ca¬

14

Agricultural Control in United States—42. G. Nourse

Cinerama, Inc.

34

;

Pan American

Sulphur

Regular Features

pacity has been growing rapidly. and 30% of the fixed capitaKof
The total output of private indus¬ nonmanufacturin^ concents is es¬
try of all kinds (including agri¬ timated by the Department of
culture), expressed in constant Commerce to have been added in
prices, increased by $42.4 billion, the six-year period 1946 to 1951,
inclusive. In the second place, in¬
or
over
12%, between the first
half of 1950 and the first half of dustry has been able to an in¬
1952.
This increase in output is creasing extent to take advantage

As We See It

Bank

and

27

Stocks.—

29

Coming Events in Investment Field.

——

Dealer-Broker Investment Recommendations

!

19

From Washington Ahead Of the News—Carlisle Bargeron

39

Mutual

40

Exchange PL, N. Y. 5

34

Funds

NSTA Notes

Teletype NY 1-1825 & NY 1-1826

•

8

*

30

News About Banks and Bankers

scientists since 1929.
In the
put per manhour is over five times
third place, productivity has been
as large, or $35.6 billion.
increased by the rapid improve¬
It is important and, indeed, sur¬
ment in the art of management.
prising to observe that the rise in
During the last 20 years manage¬
output attributable to greater

HA2-0270'

10

Indication of Current Business Activity

three- fold increase in the number

Singer, Bean
& MACKIE, Inc.

5
8

Einzig—"Sterling's Fluctuations"

rou?h indication of the enormous
per manhour. The increase in out¬
put attributable to the growth of research boom which the country
been
experiencing
is
the
employment is $6.8 billion; that has

Southwest Natural Gas

48

Bookshelf

Canadian Securities

increase in tech¬

Reeves Soundcraft

____Cover

(Editorial)_1_

Insurance

Business Man's

partly attributable to growth of
employment in private industry nological research in industry, in
from 52.7 million to 54 million government, and in the universi¬
A
and partly to an advance in output ties during the last 20 years.

attributable to the advance in out¬

13

Failures in Asia—Fleur Cowles__

Roadblocks to Nation's Continued Prosperity

ate the illusion that

pro¬

I

Inc.

12

<

capacity of Ameri¬ about the precise amount of the
can industry; what has happened
growth in productivity, it seems
to the standard of consumption of clear that the growth has been
the people; what has happened to rapid—more rapid than any one
the volume of investment; what wpuld have dared predict. - The
is the balance of inflationary and explanation is three-fold.
In the
deflationary influences in
the first place, industry has been able
economy; and what is its capacity to an increasing extent to take
to grow.
advantage of the enormous amount
II
of new plant and equipment in¬
What has been happening to the stalled during the last six years.
the

12

_____

The Federal Fair Trade Law—Hon. John A. McGuire.

the productive

capacity of

Cinerama

Liberties Against Ourselves

—Benjamin H. Hazen

industry as a
whole is gaining in efficiency far
more
rapidly than is really true.
but it will
Prof. S. H. Slichter
probably be Changes in the kinds of goods
reached by next June or July. It produced during the Second World
War made it impossible satisfac¬
is a good time to take a look at
torily to measure changes in pro¬
the economy—to
ask what has
ductivity during that period.
happened since war started in
Korea two and a half years ago to
Whatever doubts one may have

ing has not yet
been reached,

of Defending Our

Task

of

Wilfred

Observations—A.
Our

May

5

Reporter's Report--

TRADING MARKETS

47

—

■

productivity

have

ments

manhour is

per

had

to

wrestle

Our Reporter on Governments

Prospective

with

Public

one-

enormously tough and difficult
problems.
First, thrre was the
great depression itself ; then there
in dollars of constant purchasing
was the rapid rise of powerful and
power) between the first half of
immature unions; then there was
1950 and the first half of 1952. In
the war with a large and sudden
other words, the gain in industrial
increase in tax rates, with acute
efficiency has more than paid for
shortages of men and materials,*
all of the goods going into defense.
and with the sudden necessity of
""An address by Prof. Slichter before
having to learn quickly how to
fourth greater than the increase in
defense expenditures
(expressed

the

Mortgage Bankers
Association
America, Chicago, III., Sept. 29, 1952.'
5

f

*'

►;

•;

of

Continued

page

Utility

Railroad

1

Securities

31

:_

Washington

and

specialized in

(Walter Whyte Says)____

PREFERRED STOCKS
™
f

Twice

Weekly

1

Drapers' Gardens. London,
land, c/o Edwards & Smith.

WILLIAM

B.

DANA

Spencer Trask & Co.

Reentered

COMPANY. Publishers

•

Chicago

HERBERT

WILLIAM

ary

DANA

SEJBERT.

•

Glens Falls

•

Schenectady

•

Thursday, October 2,

Worcester

CROWELL, WEEDON & CO.

'

as

1942, at the post office at New
N. Y., under the Act of March 8,

Publisher

President

records, corporation
and

Other

"t^-v

new®

Offices:

Chicago 3. 111.

135

news,

1952

bank

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and

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Record — Monthly,
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Note—On account of the fluctuations in

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TELETYPE N. Y.

•

LOS ANGELES, CALIFORNIA




Y

"

Stat"

v

N.

D. SF.IBEKT, Editor &

Irie'e

Private Wire to

York 7,

ST., NEW YORK 4, N. Y.

TELEPftONE HAnover 24300
Boston

New

Eng¬

Company
*

REctor 2-9570 to 9576

Members New York Stock Exchange

BROAD

Place,

Park

C.,

Copyright 1952 by William B. Dana

CHRONICLE

Reg. U. S. Patent Office

k

E.

and

York,

•,[.

BOENNING & CO,

48

COMMERCIAL

FINANCIAL

25

•

33

You__

Philadelphia 3, Pa.

The

I

Albany

Keyes Fibre Co.

5

Not Available This Week.

22

Published

25

2

State of Trade and Industry.

Tomorrow's Markets

Parchment

42

:_____

The Security I Like Best.
The

Kalamazoo Vegetable

23

Corner.

in Registration.

Now

Bag & Paper

Grinnell Corp.

*

Salesman's

Securities

Southern Advance

44

—

■

For many years we

have

25

Offerings

Securities-

Securities

*

on

Security

Samuel K. Phillips &
Members

Phila.-Balt.

Pennsylvania
Teletype
PH 375

Stock

Co.;

Exchange.

Bldg., Philadelphia *
N. Y. Phone!
COrtlandt 7-6814

»«*.«■»

4

,m -mmmm

The Commercial and Financial Chronicle

(1216)

Industrial

perimental Breeder Reactor which
has been in operation since Au¬

Applications

gust, 1951. This reactor is farther
advanced than any of the other

Of Atomic Energy
By ALFONSO

electrical

TAMMARO*

some

as

been declassified, I would

cently

like to discuss some of the salient

Energy Commission official

Discusses also experiments in

with nuclear reactors,

central station

power

inasmuch

Now,

power.

o;f the details of its con¬

struction dnd production have re¬

describes nuclear ship
propulsion program now under way, comprising a nuclear
operated submarine and nuclear propelled aircraft carrier.
Atomic

the

demonstrated

Manager, Chicago Operations Office,
United States Atomic Energy Commission

and has already
production of

reactors,

power

points which I feel will be of in¬
terest to you.

like

generation

W.

H.

the fact

that Dr.

Zinn, Director of the ArNational Laboratory, has

gonne

which has already produced electricity.

At this point I would

mention

to

the

directed

effort

the

on

Ex¬

Say problem now is to generate electrical power economically
by atomic means. Lists as major factors in feasibility of

prepared

nuclear power:

subject
Review

of

(1) lowering of its cost by disposing of nuclear
fuels, such as plutonium, to government; (2) the successful
development of new processes to lower productiojpcosts, and
(3) the convenient use of nuclear fuel for power plants remote
from other fuel
Having
point out

already

attempted

of the

some

reasons

and

development

effort,

and

monetary

shall

take

in

has

problem

stalled
built

I* VrT
yy

accomplish¬

% ,-Mz/-

te J:

ments that

in¬

be

in

land

order

iron

to

"bugs." Using the experi¬

out the

"

will

the submarine, is being

on

on

most respects

in

which

one

gained with the land-based

ence

been

models, other plants will be built

made

in the

for

the

industrial

constructed
actor

ap¬

atomic energy.

of

One

the

Tammaro

Alfonso

the

Station

Re¬

Arco,

near

land-based

is

SIR

West

important potential uses is the
production of power with a re¬
actor heat

The

is being

National

the

at

Testing

Idaho.

of

plications

themselves.

submarines

the

The STR land-based plant

directed

toward

Genera¬

Power

Reactors."

Nuclear

being

plant for
constructed at

Milton, New York, about 18

miles north of Schenectady.

keel

The

source.

into

of

which

the

the

USS

Nautilus,

will

STR

be

called

actor,

electrical

excess

EBR for short,

was

kilowatts per liter and the neutron
flux

the

section

that

This reactor is

purpose.

experimental model which

ti°n

was

the

term

explain

breeding and why this
so important. Unfortu¬

is

nately, all the atoms of uranium

they

as

occur

in

nature

not

are

tend

may

nf

In

underway at this time is

stalled,

laid

was

to

make

po

A secondary sodiumpotassium system removes the
heat from this shielded heat exchanger and carries it out to a
some secondary heat exchanger. The

J
f

ents.

com-

this

in

of

blanket

not

The

by

the

material

cylindrical

a

operates

Since

high

on

tern to produce

in

the

a

neutrons

into

ship
propulsion
program, which is being carried
forward jointly by the Navy and
the

Atomic

consists

the

naval

The

large ship

naval

consists

of

each of

submarine
two

nuclear

as

and

sub¬

powered

the

actor

Submarine

Thermal

such

aircraft

as

carriers.

gases
as

Re¬

the

discharge of hot stack
presents a complex problem

in the

flush-deck carriers

new

of the FORRESTAL

(STR), which is being de¬

class.

A

nu¬

clear power plant would eliminate
the
by
Westinghouse
Electric Corporation and the Ar- both. Furthermore, the space nor¬
gonne National Laboratory. The mally occupied by large quanti¬

veloped

on

thermal

ties of fuel oil could be devoted to

heat

transfer

medium will be water. The second

making the ship a more effective
weapon.
A program leading to

submarine

the eventual application of nuclear

reacfor

will

neutrons

marine

(SIR)

.

operate

and

the

11

11

Sub¬

Reactor

*

■.!

address

by

Mr.

Tammaro

at

A

a

to

Atomic

an¬

Energy

Aug. 1 of this

year.

the

on

handling

of

more

interest

engineers is

the

to

Ex¬

TAKE

PLEASURE

THE

IN

extraction

re-

in

was

of heat from

useful

a

not

APPOINTMENT

OF

VICE

rather to provide a useful tool for
carrying out such experimental,

uranium

of lead and concrete to absorb the

to

an

the

to

small

of

extent

Surrounding the

blanket, and reflector is
which

consists

of

shield

a

thick

a

core,

if you

Visualize

in

as

breeding.

its low melting

can

the

a

Fur¬

process.

compared

burned. This

the

a

EBR is

is, in effect, what is
breeding reactor, and
being studied to

now

determine how much fuel

produced in
burned.

In

excess

can

be

of the quantity

' addition

like to emphasize that
comparison should be made of

the

power from conventional sources,

Cost of producing power

in

economically from a nuclear source. The technical information gained, however, will be
useful in the design of future repower

y a

in

the

source

was

achieved

when

lighted. The fol¬
lowing day, the external electrical
supply to the building was discon¬
were

b^Thas'

natem?hPe°
mmfom

n

'TKn

ed

^7

hi.-rv!

means. The probis to do it economically
an(^ as a parj. 0f the program to
stU(jy ways of doing this economi-

moved

nln
volume
as

matenal

ganizations have been making eco¬
nomtcs an(j engineering studies of

t

nuclear power production for the
Past year- This has been d0ne at

is

^

must

re-

their

rapidly
that

neutron range.

<>f industrial or-

1 ilo

2 1?
be

fW
that

noW

7ed eal*' four teams

—

The high specific heat

in

^ J

atomic

ra^ed

when

Phe reactor is shut down. A high
system.

compet t

Consideration

lem

system

a

General Nuclear Power

.pre,Yent

as possible.
A
does
not
possess

August, 1951. On Dec.
moderating properties
world's first produc¬
tion
of
significant amounts of
electricity from a nuclear reactor
four bulbs

is

^

tions
are

own expense.
The organizaparticipating in this program

commonwealth

Edison, Pub-

essentia^ Jic gervice ,„0f Northern Illinois;
°perril? Monsanto Chemical, Union Elec-

trie;
The heat very,
available«»

Pacific

Gas

and

cluded all electrical

=r

I

We

are

lighting, elec¬

pleased to

announce

that

MR. ARTHUR R. ROBINSON
formerly
of

of

manager

FIDELITY

UNION

Unclassified Data: Inasmuch

FREDERIC H. HATCH ( CO., IHC.
J

MEMBERS N. Y„, SECURITY

63 WALL STREET

October 1, 1952

•




DEALERS

ASSOCIATION

NEW YORK

5, N. Y.

COMPANY, Newark,
.

to

in

our

Anderson

&

but

now

recently declassified, it
possible to provide some

details of the construction and op¬
eration of piis reactor. The heat
energy

is removed from the

ma¬

a tem¬
perature of 350 degrees C or 625
degrees F. Super-heated steam of

400 psi pressure is generated. The
power

the

;

has been admitted

■

N. J.

1

general partnership

load

reactor

required

to

operate

is' approximately

85

firm

\

Strudwick

INVESTMENT SECURITIES

alloy leaving the system at
j,

Municipal ;Bond" Department

TRUST

interesting information has

chine by liquid sodium potassium

Established 1888
t

as

the

807 East Main Street

/RICHMOND

Ak 4*

V

T

5
1

•'

Electric,
-•*

Continued on page 24

from nuclear fuel is limited only

carried by the reactor-boilerturbine-generator system. This in¬

is

not

feasibility of producing electrical

other liquid
melting point is

20, 1951, the

heat

was

essential factor in the power
phase and the experiment is in
no way intended to establish the
an

many

low

coolant

small

power.

Operation: The EBR began op¬
eration

of producing electrical
from this reactor with

cost

power

point, high boiling

this

to

phenomenon, this reactor is gen¬

erating electrical

to

A

metals.

the

but

1 should
no

conven¬

ther, more of this fuel so created,
would be produced, than the coal

possible in

power

studies.

section

point, high specific heat, nonmodtional power plant that not only erating properties, and because of
burns
coal
to
nature
is
modest
ashes, but also its corrosive
fuel

electrical

of

bewuse^of «*>«

is burned is known

some

PRESIDENT

system

designed to generate large^

amounts

been

AS

reactor

and be lost.

process

'1v

MR. S. CHARLES ROBINSON

a

The

manner.

appreciable extent.
Only the isotope U235 does this
and this isotope is contained in

capable of undergoing the fission

auxiliary
equipment
such
as
pumps, fans, etc., and the power
requirements
for
the
machine
shop.
; 1
•
V

ANNOUNCING

liquid

re-

trical power requirements for all

WE

informa-

of

re-

a

the

nected and the entire power load

Breeder Reactor

Perhaps
landlocked

-;v

.

the
on

was

experimental

secure

was

of
the
American
Society of
Mechanical Engineers, Chicago, III., Sept.
1952.

vessels

*' i«

meeting
8,

by

Company at the Commission

m'

*An

such

to

power

nounced

is being developed by the

General Electric
■

the

program,

Intermediate

generation phase is

actor that would otherwise escape

creates

For example, the bringing in of
large quantities of air to the boiler

efforts,

its goal an

marine. The first will be powered

by

refuel-

advantages
of r nuclear
also be applied to large

vessels

program

distinct

which has

operating

for

knots

power can

reactor program.
The

20

over

ing is necessary.

submarine

program and the naval

at

thousands of miles before

Commission,

Energy

of

travel

power

incidental but is being carried out

in¬

periods of time. It will be able to

electricity.,

metals at high temperatures under
radioactive conditions and on the

material that

back

Steam,

secondary heat

de-

to

Surrounding this tank is
flector. This is

fleets

The

the

energy

tank

is
not

Power Generation in the EBR

the energy.

crease

through the reactor.

moderating material tion

no

contained

does

this

in

tank.

it

exchanger and flows through the
250 kilowatt turbo-generator sys-

U238

blanket, like the fuel, is suspended
in the sodium potassium coolant
in

then,

system,
since

js produced in the

the

produced by absorp-

is

neutrons

this

ra(jioactive

f jow

uranium.

where

[n

coolant

Surrounding this small
is a breeding blanket

core

which consists of natural
is

o

+h

central

special
electromagnetic
designed at Argonne.

sh™-

by

operating submerged for extended

nuclear

de-

marv

.

"The

is

ex-

"if. c00lant l?ae°T "dipactive.
Toolant svstemenmustP be

1 part in 140. The other isotope, radiation given off in the fission
President
process.
a
large program whose objective Truman on June 14, 1952. The U238, however, can be bombarded
with neutrons and transmuted to
Also contained in the core and
is to utilize this heat source in
land-based
prototype
of
this the element
are
plutonium. Plutonium blanket
unique mechanical
power plants for ship propulsion.
power plant is scheduled to op¬
is a fissionable material and can and nuclear devices for controlThe power requirements of ships
erate at Arco soon. The SIR will
be used as a fuel. This
is the ling the chain reaction so that a
and of naval vessels, in particular,
also be installed in an operating
process
that takes place in the reactor runaway cannot occur and
are high. A large carrier, for ex¬
submarine.
Hanford production reactors. Re¬ so excessive temperatures are not
ample, may well have a propufThe application
of nuclear cent advances in Reactor Tech¬ permitted—that is, temperatures
s.0.1
plant capable of producing
power to a submarine will greatly nology indicate that it is actually
that would cause the fuel and
approximately 140,000 kw. So the
improve' its
performance
char¬ possible to produce more fuel than fertile material and the tank to
progress made in this program can
acteristics. No
longer being de¬ is burned and at the same time melt.
be expected to contribute greatly
pendent on oxygen from the at¬ obtain useful energy. This proc¬
Qnrii,,™
tWocc,*,,™
to the technology of power pro¬
mosphere, it will be capable of ess of producing more fuel than
chosen
toe coolant
ducing reactors in general.

Well

It

flowing through the reactor,

of

core

regula-

picture of
other required

fho

by

pumps

nnearHn"hi

s?mn,e
heart oTP»h;
m.fttlrH +!t Lf !

Let

process

as a

verv

is

to

small

nuclear

a

neutrons,

minute

air.

or

con-

tor

as

football

study the possibility of breeding.
a

machine

The fact that the active

the reactor is

built primarily to demonstrate and
take

the

Description of the EBR System

EBR

me

of

metal circuits.

atoms.

for

water

The coolant flows through the
taming the fuel, is approximately react0r tank
by gravity. It is then
the size of a regulation football.
pumpe(j through a special primary
Electromagnetic pumps and flow heat
exchanger and back up to
meters
are
used
m
the
liquid the storage tank above the reac-

significant

an

with

contact

approximately 1014 neu- this property that calls for
per square centimeter per treme care and
engineering
second. The reactor core, that is,
sign in the Coolant system.

tion

not built primarily

it

be removed from the system,

is

plutonium

was

with-

which

trons

Laboratory. Although it generates

elec¬

can

at

rate

building service or dissipated to
Tjie principal disadvantage of
atmosphere by electrical sodium-potassium
alloy is its vioheaters. The power density is 250
ient Veaction
when brought
in

operated by the Argonne National

tricity, it

can

the

the

It

of

and

stand

re-

quired by the reactor is used for

designed, constructed, and is being

quantities

not

power

It

Laboratory.

have

past

in

operate on

been the same in
prototype
power

identical
the

with

some

A

case.

plant,

many

Problem

provide you with a far more
comprehensive discussion of its

engineering approach to the

each

now

up

the

will

reactor

The

business.

ergy

Basic

the

100 kilowatts size and

over

has

will

transfer agent.

the atomic en¬

of

by the temperatures that the fuel
and structural material

a very

with

tion

he

and

details
and
appeared in
"Nu¬
cleonics" on Sept. 11. I recom¬
in¬
mend, this article to you.
termediate energy neutrons and
will use liquid metal as the heat
The Experimental Breeding Re¬

This

expenditures
necessary

Breeder

Station

Central

sources.

Knolls Atomic Power

to
for

and the magnitude of the research

I

kilowatts. The generator is some-

thing

fine article on the
entitled "An Elementary

perimental

Thursday, October 2, 1952

...

12, VIRGINIA
' i J'1'

Number 5156

Volume 176

.

..

The Commercial and Financial Chronicle

Steel

The

(1217)

Bankers'

Parley Pervaded
By International Factors

Production

Electric Output

Carloadings
Retail

State of Trade

Trade

Commodity Price Index
Food

Industry

ATLANTIC

Business Failures

for the

nation the

past week

are

as

phrases, re- national
cently
said quisite.

preceding week and many plants endeavored to reduce order
backlogs accumulated during the last few months.

door."

expected,

"The

states

weekly, in its current

paperwork is putting

own

Iron

summary

Age,"

national

staggering burden

a

Office of Price Stabilization.

people

metalworking

of the steel trade.

At the

same

on

Weight of its
budget-trimmed

time its profit-squeeze

policy toward manufacturers is bringing an avalanche of com¬
plaints. Lack of support from public builds growing suspicion it
be politically expedient to jettison the whole

may

program. "

Crux of the

industry problem rises from OPS's pass-through
allowance for higher steel costs, but not for higher labor, freight
and other material costs. In most manufacturing plants the latter
increases amount to much more than steel price rises. This hits
manufacturers where it hurts most—profits—declares this trade
journal.
Continuing, it states, labor costs of
or

steel

many

consumers

have

will advance in line with labor cost advances of steel producers.
of companies, under contract with the same union as

A number

steel

firms, have not only been forced to grant the same wage
increases, but also have had to give workers one more month retro¬
activity. Freight rates have advanced and cost of materials other
than steel

is rising.

Of

ton may be passed

per

higher steel costs averaging $5.20
in higher prices. But in many manu¬

course

on

factured articles this increase is slight.
Of far greater importance,
to manufacturers are cost increases other than steel which cannot

be passed on.

rapidly

turning

its government

spending implica-

and

July, is now fully recovered. For the second week in a row
industry hopes it will be able to operate at 104% of rated
capacity.
.

.

Barring unforeseen trouble, it looks
fai

one

as

if the industry will be

all-time record during October for steel produced
month. Previous monthly record was hung up last March

able to set

tion's

102.2% of rated capacity, before
labor trouble started affecting operations. March production was
little over 9.4 million net tons of raw steel; by holding its present
rate, the industry could turn out close of 9.6 million tons in Oc¬
a

The auto makers last week wheeled out their three millionth
of the year,

but the 1952 total still was more than 1,200,000 cars
comparable period a year ago, according to "Ward's
Automotive Reports."
car

below

the

Auto output last week totaled about 106„499, compared with
109,196 in the previous week and 79,966 in the like 1951 week.
"Ward's" said

the week's decline stemmed from plant recon¬
Chrysler} Corp. The rest of the industry operated at
high rates for the yeari;and the} estimate of September production
was pushed to 442,000 cars and 112:,000 trucks.
The combined total
versions

of

at

554,000 vehicles

would

be

the

highest monthly output

since

head of the First

Cocke,

agency

estimated, however, that only 839,000

cars

will

be

produced in the third quarter due to the July-August steel strike.

Continued

on

page

40

with

banker

here

questions

from the

way

that

representa-

Sunday

to

course

small

bank

future

and

are

pleased to

announce

earnings, the fu-

Direct Private Wire to

S. R. Livingstone, Crouse & Co.
Members Detroit Stock

busi¬

the course of de¬
fense
spending inevitably
and
recurrently emerged as the key
influence, and as the immovable
block

to future

planning.

Likewise

throughout
conference with

Exchange

press

a

of the Treasury
lowing day, did the amount and
course

of

defense

ably emerge

as

outlays inevit¬
This

the X-factor.

controlling the duration of deficit
financing (although receipts can¬
not be assumed

in

stant

the

sured

continuing

as

the

speakers

The; Secretary's

as¬

at least

two years

ernment's

as
.

.

Direct

Wires: Los Angeles,




Philadelphia, Chicago

(Hollywood, Fla.)

wen

as

Annuai Convention at the Holly-

bank manage.....

..

_

-

Investment Bankers Association

wood Beach Hotel,

..

ment to, take the difficult economic steps to ameliorate the ef
fects

armament

needs.

is

of

intention

to

merely

Black Heads Dept.

of
Winslow, Douglas Co.

Our

show

in

A1

mother major economic area the
of

120

defense

our

Douglas

Winslow,

all-inclusive extent to which the

McEvoy,

&

City,

York

New

Broadway,

program

members of the New York Stock

permeates conduct and calculation.

and Curb Exchanges, announce

FULL TEXTS

of the princi-

the course

vention,

as manager

with

formerly manager of the municipal

other

department of the New York office

pertinent material, will ap¬
pear

in

of

"Chronicle's"

the

Convention Issue

of the firm's municipal

bond department. Mr. Black was

of the ABA Con-

along

L.

R.

thereto

of Oct. 9.

Co.

&

Day

with

was

prior

and

Merrill

Lynch,

Pierce, Fenner & Beane.

Until the gov¬

receipts catch

up with
important¬
"war-temperature"

ly premised on
assumptions. As
plained,

in

Mr. Snyder

his

making

We Announce The

of

must

A Direct Private

project 18 months in advance, and
hence

take

into

account

Opening

ex¬

budget

the President

Trading Wire To

defense

;

,,

.

,

-«

,

i

.

• -

-

v

outlays for that lengthy period—

whereas, in the Secretary's opin¬
maximum

the

'

to kind

as

in

of Taxation

Determinant

The

White/Noble & Company ;

foreseeable

as

well

DETROIT, MICH.
as

1

quantity, will likewise be largely
governed by the temperature of
the Cold War.
For example, the
fate

.^EMBERS

Midwest Stock Exchange

of the Excess Profits Tax at

—

,

'

v

Detroit Stock Exchange

York Curb Exchange (Assoc.)

New

its

prospective
expiration
date
(whose abuses are now acknowl¬
and

its

extinction

surrounding

atmosphere

J. Arthur Warner &

Co.

Incorporated

120

Broadway

" l;'*

war

"New York 5, N. Y.

cer¬

tainly depend largely
state

when

the

new

on

the

Telephoite: WOrth 4-2300
Philadelphia

Congress de¬

Utica
Direct

turn

of the

year.

And the possi¬

bility of relief from other abusive
taxes,

as

the double taxation im-

**

Boston
Portland

private telephones between New
Portland,
Direct private

Me.,

the

appointment of Edward L. Black

pal addresses made during

liberates its continuation after the

YORK, N. Y.

oy

the

6,500 in attendance, for the government

Incorporated

NEW

Nov. 3»-Dec. 5,1952

bv

of

its outlays is, of course,

popular

-

exnressed

others

and

expectation th£t it will be

its faulty nomenclature, will

■

As-

Traders

Security

was

unanimously expressed

urged, by Mr. Snyder along with
Secretary Sawyer), because of the

Reilly & Co.

National

.

On Homestead.

extravagance.

the dire need

'ouSlv

,,nani

con¬

face.,oft expenditure

curtailment).

edged

DETROIT, MICHIGAN

J. F.

of

contrary>

course

.

length.y
Secretary
Snyder the fol¬

Taxation,
a

large—

outlook;

ness

ion,

the installation of

dis-

all the
of loans to

ranging

period is 12 months.

We

*

account of the sociation Convention tour,
the
banking com-

the

Exchange Bank of Roanoke, Va. At an informal press

estimates

June, 1951.
This

reactions

obviously is the decisive element

tober, concludes "The Iron Age."

*

foregoing

outgoing President, Mr. C. governmental

Francis

an

.when steel companies averaged

*

*

munity does not by any means Oct. 31, 1952-Nov. 2, 1952
pervasiveness of the inter- impiy the existence of its justifi(Hot Springs, Va.)
national political course is typi- cation of the use of the armament
Fall
Meeting of Southeastern
cally and auspiciously evidenced and war needs as an alibi for inGroup of the Investment Bankers
in the thinking of the Associafiation and unsound practices, as Association
of America at The

ture of interest rates to the

the

d

This

at the

time restore depleted inventories. But steel
production
which has been gaining steadily from the disastrous strike of June

Fvrhanw

c*nMr

"Ons-

business—both

same

'

problems
will be the
temperature of the Cold War with

True, most steel items are still hard to get in
.quantities large enough to support high-level manufacturing, and

brighter, it reports.

^

(Los Angeles,
,

,

business

tive

is

HoteA*

—

cussing

consumers

JL®*

Fir™ Board of Govern,ara FaU
meeting at the Mark Hopkins

—

others, this trade authority points out.
for

Association °pf

course

run

»

interview

outlook

to

long

FlrnJ?

National

supply

it of

system,

take

ing the integrity of our fiscal
™ nf Governors Fall
American, system by entirely extinguishing
03
°. ,
«
Hotel
Bankers As- the
national
debt
via
25-year meetmS at the Ambassador
sociation amortization instalments, or any
Qct 20_23> 1952 (Miami, Fla.)
A. Wilfred May
here, well moderated version of such plan,
w
cpriiritv Traders Assokeynote
the must depend on defense demands
at the Roney
tenor of the thinking, the deliber- on the budget.
ciation Convention at the Koney
ations, and the forecasting of the
Even senator Willis Robertson,
bankers and government officials
0f Virginia, midst his lengthy ex- Oct. 23-24, 1952 (Pinehurst, N. C.)
in their formal talks, press conhortations to follow the honestSecurities Dealers of the Caroferences, and lobby and boardmoney precepts of Jefferson, Wil- linas—: North Carolina Municipal
walk brain-trusting. They reflect
son? and carter Glass, paused to Council —South Carolina Municithe fact that surpassing all other
recognize the importance of the pal Committee joint meeting at
elements
including even our
impact
of war factors
on
the Mid-Pines Inn.
Election outcome
bearing on
Treasury's
debt-managing
perpresent and future banking and formance
Oct. 24-27, 1952 (Havana, Cuba)

Preliminary work toward applying the earnings standard is
in a number of steel consuming industries including
fasteners, forging, internal combustion engines, metal laths and
steel

not

talk before the

underway

The

banking

did

Likewise, appraisal of the daring 0ct 8_10 1952
rency Preston proposals of Joseph Earl
Perry,
Calif.)
Delano in his New England banker, for restorA
. '

This-

had

the

ler of the Cur-

steelmaking operations have risen

The end of price controls may come sooner than most

trap
These

a

into a
words, quoted, stone wall in the absence of foreby Comptrol- knowledge
of
defense
activity.

year ago.

steadily and for the past week output reached 104% of capacity.
was equivalent to approximately
2,160,000 net tons of steel
for ingots and castings.

Essex County Country Club, West
Orange, N. J.

prere-

A

upon

With respect to employment,
claims for unemployment insurance benefits continued above the
of the strike

a

Similarly,
in discussing with 0ct> 5-7> 1952 (San Francisco,
to Mr.
Snyder the possibility of getCalif.)
dancing ting the government debt out of
.
\.
,
ir|v^or.ap

peak reached during World War II.
one

as

seems

be

recorded

emergency

civiliza-

that

tion

Aggregate output continued to remain slightly higher than the
level of a year ago, but it was still about 10% short of the record

Since the end

Field

Investment

CITY, New Jersey posed

of the

number

In

all groping

of over-all industrial production
output maintained its high level

course

EVENTS

on
corporate income
to
9
T
.
for a stable which impost the Treasury Secre- ucl* A' 1304 twew Jersey;
footing in this violently swaying tary is opposed, would, because of • Bond Club of New Jersey, memworld.
Mr. Churchill, that arch- the public's political psychology, ber-guest Dutch treat Golf Day
coiner
of necessarily require the absence of and
Beef Steak Dinner at the

—"We

J)
Stability marked the

COMING

By A. WILFRED MAY.

Price Index

Auto Production

and

5

Jersey City
Hartford

*■'
,

Albany

Clearfield

York, Philadelphia, Boston,

Hartford,

Providence and Jersey City, N. J.

lines to Los Angeles, Chicago and

Cleveland.

6

The Commercial and Financial Chronicle.:.

(1218)

return

Point oi Low Retain

without any in¬
Mississippi Fuel was earn¬
ing 9% on its common, and 6%

Recent decisions of Federal Power Commission

shares

transmission

a

spent

over-all—so

Here

have

we

perfectly

a

pipe¬

gas

line—going its

merry way bring¬
ing the economy and efficiency of

natural gas to

of

90%

the questions,

our

the fact that Northern Natural

as

and

owns

supplies 25% of its gas
requirements; and that this cozy

calculation
its

own

jc

and

p r

for

mortgage

reasonable

1951;
fact

s

t i t

in-

t i

ns,

u

good

o

fer reds

for

Commission

and
that

being
the

pre¬

minimum

took
the

paid

In

by

the

in

February
note of the

no

price

then

actually

by other pipelines

Hugoton Field

11c!

for

value

the well head,

at

Kansas

bond invest¬

Northern

gas,

gas

ments

for

allowed

much less than the
Mcf. authorized as the fair

per

pop

ulation;
o viding

(Kansas)

other words,

even

in

was

though

indP

mission

and

alized.

viduals
U.

Ira

investment

Cobleign

trusts, when

needs,

it

be

to

was

pe-'

have

must

hopes

some

of

improving its rate status, even in
mite
of
this ruling,
as
it has
right smack in the middle of the, just filed a request for
building
game.
Big rule changes in fact, $70 million in additional pipeline
in a very big game.
facilities.
This would, on com¬
Let's

back

go

11,

Commission
to

crease

to yield

just

bit.

a

On

1952 the Federal Power
allowed

Northern

rate

a

in¬

Natural

Gas

Until

this

emanated

baffling

asked

decision

allow

"an overall return

high

-as

In

the

as

6%%,

rates
of

Northern

case,

6%

the

for

was

funded

debt

$78 million of

place

and

noted

that

stocks had sold,

period, at
earnings-price
ratio
From

turn

to

mon.
care

56%
at

FPC

an

over-all

would

at

to

to

5%%.

es¬

fcjLj-tcuve

in

at, a

and

it

outlay.

"costs

xacer

runbea

of projected

pension

an

waxes

from

Just

on

the

of

allowed,

to

$2,-

which

I

Line

income

tax

with

the

million

$3

was

less.
Deple¬
$141,000.
The

seemed

reduced
bent

on

arriving at

users.

Mississippi

River

Fuel

the

decision

of

Commission

Aug.
denied

4,
a

company request for increases to¬

$3,100,000

would have

After

annually.
This
brought about a 6]/2%

Trading Markets

that

the

for

and

just.

that

stocks

could,

primarily

increasing

gas.

and

Canada

in

vast

via

us

pipelines;
get the

for

here

pushing

are

of

These

year.

won't

and

demand

Oil companies

billions

new

each

big

a.

consumer

natural

entirely

or

There's

up

cubic, feet

billions
and

reach

simply

we

lines

we need
unless the investor return is made

and

kept

mission

new

attractive.

has

The

appeared

not

be

the

Com¬

offer

to

point of low return.

it

But

a

may

sticking point

higher taxation and

mean

after

than

was

com¬

worried about World War III.

is

developed

was

told

of

will

return

to

its

on

of

the

in

Transcontinental

natural

able

to

with
for

and

15^. in

preferred

a

6%

return
would

share

in

n

farms

building

little

depressed
raised

in

Assuming
in

of

about
of

the

up.

Earnings

of

the

in

equity,

penalized;

Third,

suggest

units,

done

in

has

as

the

Natural

Gas

all

Fourth,

a

is

to

because

once,

the

the

(and

lower

cost)

when

because

and

gas,

Finally,

will

stick?

Commissioners

they

may

this
I

two

are

new

don't
may

change

and

So

big cities

our

few

a

million

being

now

cannot
or

present
last

the

Korean

indefinitely;

other

issue

may

United

must

Korea

cause

a

an

States

quit.
more

on

ultimatum

giving

us

a

in which to get

"o|r else."

—

severe

would

fool himself that

break

be

to "make

This

in the

and

reader

no

tne next World

in

War he will have

opportunity

an

money."

What Shall We Do?
The

above

does

not

mean

we

panicky
today.
nevertheless, does mean that

we

should

get

ultimatum

after

could

elections

pecially

come

in

time. Even

ultimatum

an

by Rus¬

sia would give our markets

a great
though Russia might
try this only as a bluff. If Russia

scare,

even

decide

to

strike

without

did the Japanese,

as

III

will

have

then

started

its fury.

..In view

of
to

readers

out what

and

the above, I appeal
take time to figure

they would be obliged to
how

they

World

come—no

lines

be

III

if Eisenhower should

war.

gasoline, standing

happened

to

and all our boys
Think back to what

during

you

World

War II, and multiply those incon¬
veniences
now

live

city, get

a

by several times. If
in

•

a

large

small place in the

coun¬

LAMBORN & CO., Inc.
9 9

WALL
NEW

STREET

YORK

5, N. Y.

SUGAR

be
Raw

—

Refined

—

Liquid

What World War III Would Mean

Of course, Russia may

rate

the

adopt
or.

gram
on
-

suddenly
Farbor" pro¬

"Pearl

by dropping

one

cr

without

a

more

of

prior

atomic bbmb'
our

large citie

ultimatum.

Al-

you

vulnerable

try before it is too late.

es¬

elected.

af¬

should

foods

for

gone to

would

War

directly

November,

It,

should not forget the possibility of
World
War
III
coming at. any

soon

the

killed,

stock market and in business. Thi

the

minds.

bombed

were

ever.

this might be

true; but if some of

Experts,, World War

somewhere

of

so.

-their

III.

should quit, this would cer¬

the

could

own

change,

us

Moscow.

side

we

out

and

think

this

that Russia

me

Conference

certain time limit

again

in

from damage,

mune

fected .if

to

markets

taken

and

country remains im¬

our

do

Chinese,

con¬

public interest.

theory

or

War III

else; while if
the Chinese should quit, it could
result
in
Russia
losing all her
Asiatic gains. Therefore, the fear
is
that
Russia,
through the

r

presumably

the

recover

heights than

as

to

trouble

decline, gas rates will go up. This
is
surely a baffling result for
action

market—after

long

oppor¬

an

tainly result in bringing

Commission

security

in

go to greater

ma¬

believe

to

War

World

one

twice;

discourages the production
delivery by pipelines of their

stock

in all

If

Pan¬

would

suffer

big drop—would

notice,

situation

gas

companv

followed,

stands

sumer

the

should

Obviously,

(Southern

stock

common

that
first

during the

held in

already
of

case

result

lar, its value perhaps falling to 25
Hence, some people believe

Chinese

return
of

would

cents.

pecially disturbed by the Russian-

they'd

this 5V2%
divestment

War III

supply
of
atomic
bombs „qnd
supersonic airplanes; they are es¬

selling to

money

World

much further deflation of the dol¬

however,
insist
that
Russia
is
waiting only to build up a greater

Second, com¬
enough to ob¬
production facilities of
more

year

hard

is

It

start

provident

far

world.

past six months if she wanted to

a

are

war

World

would have attacked

form of lower rates.

own,

producing
This gives me

because it seems to

certain level, will
be apparently drained off in the

gas

"City of
of the chief

the

say,

prospects for

time.

loused

common

on

to

tunity to get some inside informa¬
tion. Experts there tell me that

draw?

is

taken

by 90% taxation; and in 30
would be living in a new

panic would reign. Let

Me

per¬

growth

commons

J they exceed

Tell

Experts

of

we

ap¬

business.

be

we

exchanges
the

for

terials.

gas

FPC

can

horizon

pipeline

why

"so

—,

Brotherly Love" is one
centers

determinations,

conclusions

First,

years

greater than ever. They claim that
this' Russia is now
putting us to sleep
tecnnique to its and-may jump upon us At any

rate

gas

20

or

during the next
the

of

largely

the stock
closed and

10

Strange

the

the

kinds

be

very

be

children—were

have,

equities,

application

money"

leisurely
what

tnat

its

is

all

and

would

women

What

invested assets.

sists

now

immediately

session,

controls

would

of

case,

Americans—including

form,

industry, which fo¬
accounts for over $3V2 billion

"cost

in

either

for

transmission
ray

by

boys

worry!"

pipeline

questions

lines,

millions

In

that World War III will not come

$1.80

outline

expansion

continued

have

sentiment

General

Korea.

recent weeks, discmieted inves¬

tors,

along

these

who

families

those

$249

about

very

except

in

common.
of

Today

hear

we

Roger W. Babson

common.

merest

or

cellars.

of the rulings that

some

small

buying

bomb-proof

10%

base

equal

the

on

These,

its

on

away

days

were

kill

would

into

Profits

"hide-away"

re¬

and

people.

stringent
plied to

families

calling

bonds,

of

marvel¬

a

through during the first

hours

Congress

.other

program

in

24

American

cities; while

leveraged

75%

could get

called

the

American

comnar-.

heavily

financial

a

about

«re

is

inflation,
heights

building

we are

of

destruction

Transcontinental." Trans¬

continental

me

descrip¬

stocks

and

companies

gas

maga¬

probable

on

a

common

more

greater

radar system, yet experts tell
that
some
Russian
planes

ous

tions

of that required by

excess

investors

equity,

to

ever.

though

gory

in

Transconti-;

common

defense

zines printed

service its outstanding
preferred stock and al-.

debt and
low

permit

the

ment;

the opin¬

there

"go

recovery,

almost everyone

reasonable

was

evidence

regard,

reasoning

LANCASIER

those

intra-state."

By ROGER W. BABSON

demonstrate;

to

I quote from

Production).

9

and

World War III

Two years ago

theoretically be granted the high¬
est rates. Fifth, if present FPC

PITTSBURGH

than

—

BANK STOCKS

.

hot

as

cooked, it does not seem
logical to, consider liquidation of

total.

with

Incorporated

eaten

it's

as

Pipe

rates

annual

failed

"What

been

STROUD & COMPANY

that

however,

never

affected

but

PHILADELPHIA

a

theory,
is

less

are

year

A

Gas

higher
in

increase

Southern

PHILADELPHIA

the

soup

panies

others, particularly those with big
industrial (i.e. non-utility) sales,

own

handle (Hugoton Production) and




On

the

World War III would

'producing

Philadelphia Banks

zone

plans being made by the govern¬

selves.

Maintained in all

5V2%

bitrary?

outsiders than using the gas them¬

ALLENTOWN

the

the

somewhat capricious and ar¬

seem

depar¬

a

item.

more

had

pany

may

.

into

this,

of

application, stating that the

make

YORK

Commission

basis

excursion

pipeline securities
simply because they've suffered a
regulatory gas attack. Some com-i

Asserting fear exists that Russia, through the Chinese, may
issue an ultimatum for U. S. to
get out of Korea, Mr. Babson
says this could cause severe break in stock market.
Holds

maximum of deliberation,

a

their

NEW

the

this

fair

Newspapers

tain

Send for comparison
of II largest

On

not

gener¬

the FPC quite recently denied the

panies

Active

of

does

cus¬

Commission's

million

company

service

taling

valuations.

would

profitable, is
the

asked

$13.6

be¬

figure how much

Federal

be,

when

ignored such things

on

justify
the pipeline in the
Restricting the basic

one

million

taxes

Another straw in the
regulatory
wind is found in- the

mirrors.

alone

Transcontinental

ago,

A

but $186,000. Then the de¬

potential

Practically

telephone utilities geared
ally around a 6% return

simply because intermittent

load
ture

service"

the expansion of service to
eager

com¬

that

place.

The company

of

cost,' regardless
of
what impact that determination
might have on security holders, or

2.55%.

mathematical

blithely

isted

low

a

re¬

give

Northern's

on

6V2%

$343,000;

item

FPC

44% eauitv
8.75% '(really 9.25% with */2%

It

of

tion

7V2%.
out

the return

$670,000 off allowable

utCOaic-

grossing

The actual equation, if you
for that sort of
thing, was

with

from

FPC sliced

an

accounting theory, principles,
precedents, and law in rate mak¬
ing, for railroads, electric, gas and

inter-state

serve

the existence of those

was

tomers

turn in

roughly $57 million, the deci¬

sion whittled down

much

body of

up a

the building of

nental

would

average

of

Gas

$3,000,000

lower

rea¬

off for finance
cost) averaged in¬
to •' 5 V2 %
over-all.

done

Interstate

cision went

common

worked

5V2%

a

Northern

return

debt

the

lieve,

in the preceding

five-year

8.75%

seven

similar pipeline

that,
theory that

reduced

date)

to

«We've

and

building

examinationrelative
to
by cross
initia-. eafnings-price ratios' which indi¬
wholesale cate that a 5V2% or 6% rate of

Colorado

out

line

a

tinge.

years

own

it

(including, 307,000 Federal
according to their the Commission

cost)

its

of

to

of rate making, the
of

costs

brain power

or

stressed

many

offered

was

on

averaged

slide rule, 2.55%. Then the Com¬
mission peered into the market

sonably

when,

and welfare

the pitch:

finance

problem

operating expenses, including

reasoning.
Here's

rate

timated wage and salary increases

sufficient rate;
and arrived
at
this-conclusion by a novel course
of

slightly different approach do
FPC

v

had

for

steady customers with fuel, since
it

ion:

Colorado

a

industrial

to

Commission

purposes

basic

of

to

FPC, however, se¬
load period when
went to utility outlets

balance

the

to

on July 31
of this
While the company and the
Commission both used a rate base

Corn-

emission decided that oV2%>
.

A

by

creating

from

companies

year.

net nro"Qrtv,

on

utility

to

feet

resale.

rates

principle and precedent
to

cubic

tive,

transmission lacinues and

been

million

the

from

the basic

1.1

principally

its daily capacity

up

the

FPC, the proper¬
ties which actually produced the
gas,
owned
by
pineline.
wpre
treated, for rate purposes, just the
same as

about

for

$5,100,000—less than half

of what the
company had
for, roughly $12,200,000.

had

pletion, jack
to

on

peak

a

the

and

output

orthodox

more

tradition.

all of a sud¬
den the rules appear to be
changed

June

its

"interruptible customers." Hither¬

Northern Natural Gas Co., how¬
ever,

of

only 56%

rates

ties

89%

company

The

resale.

first

growth

The

days went to utilities for

lected

many,

of management had been farsighted
and enough to assure itself of a par¬
equi¬ tial supply of its gas for trans¬

it.

that

said

coldest

when is peak load,

takes

who

the income

for

weav¬

here presented.

are

and

beautiful industry—the

The

dice!

no

ing of the argument in this in¬
stance was a kicking around of

on

the courts

always

are

remedy, and the outcome on Nov.
4 might give our economic climate

crease,

pipe line
aspects of their effect on

some

There

FPC argued that

"Expanding Your Income"

charges rate comment; and

the

Here

money" gimmick
as
a
guide.
The

of

invoked

was

By IRA U. COBLEIGH
Author of

valuation.

on

"cost

same

Thursday, October 2, 1952

Exports—I mports—Futures

DIgby 4-2727

Volume 176

Number 5156

.

.

.

The Commercial and Financial Chronicle

(1219)

DURHAM#
FAYETTEVILLE #

\

GREEHVILLC

GREENVILLE

•

HARTSVIltl

NEWNAN#

LAGRANGE•

We purchase
INVESTMENT

all

BANKERS

Established 1925

or

the

majority shares

in sound So.Calif, firms

Members New Yqrfc

Stock Exchange and Other National Exchanges

UNDERWRITERS and DISTRIBUTORS

Harry

&

Myron Kunin

PRIVATE

INVESTORS

403 W. 8th St LOS ANGELES




of INVESTMENT
BROKERS of BONDS,

Private Wires

•

SECURITIES

STOCKS, COMMODITIES

Home Office: Atlanta •

Phone LD-1 59

7

B

(1220)

The Commercial and Financial

Chronicle,..Thursday, October 2,

The Tax Picture and
The Mining Industry

Dealer-Broker Investment
NSTA

Recommendations & Literature
ft

is

understood that the

Notes

By HON. THOMAS E. MARTIN*
U. S. Congressman from
Iowa

Congressman Martin traces de¬
velopments over past few years
in Federal
spending, debt and tax

firms mentioned

will be pleased
the following literature:

send interested parties

to

AD LIBBING

Air

For the

Conditioning—Analysis with special

reference

to

& Co., 15 Broad Street, New York 5,

New York.

America's 23 Top Favorite
Hutton & Co., 61

the office of President of

Investments—Survey—E. F.

Stocks—Bulletin—Laird, Bissell

Coal Stocks—Letter

This letter

members and

leading over-the-counter coal stocks
—George A. Rogers & Co., Inc., 120
Broadway, New York 5,
New

Fire

York.

and

Casualty

Insurance

Stocks—Bulletin—White &
506 Olive
Street, St. Louis 1, Mo.

Bros

&

Co.,

Broadway, New York 5, N, Y.
Low Priced
York
60

Beaver

Natural

Gas

Exchange)—Bulletin—Bruns,

Nordeman

&

Industry—Review—Stern, Frank, Meyer

and

Aircraft

—

Securities

America—Analysis—Hill Richards
Spring Street, Los Angeles 14, Calif.
Public

&

Co., 621

Sand

&

Stone

bulletin
Golden

on

&

Goodall
465

Co.,

Sanford,

&

Associates,

is

'

Securities

231

&

Mexican Gulf

Company, Inc., 231 South

Pugct Sound Power &
Central

on

Circular

La Salle

Maine

Power

and

Cement

1:00

Gas

Co.—Analysis—Raymond

Street, Boston 9, Mass.

Trans Mountain Oil
Pipe Line
Securities Corp., 40
west

leave

for

p.m.

National

is

a

111

9:30

&

a.m.//

New

11:00

a.m.

.

9:00

a.m.

Motor

"Highlights"
-.

:

-

,

'

•

»•

'* *

p.m.

7 30

North¬

some

p.m.

,

The

Y.

the

brought

realization

that

creating
vate

severe competition to pri¬
industry for such materials
thereby also extend some sta¬

tax

difficult

more

industry.
legislation is made
because

of the tax

situation

confronting our Nation
today. This tax situation now con¬

Golf Tournament

fronting

us

stems from

excesses

Breakfast for Men

kl

Financial Outlook."
Cocktail Party
Dinner Dance, Informal Dress.
at

Incorporated,

314

N.

The North Carolina Mu¬

& Co.

Security Dealers Association

,

,

Club

is

located

in

the

midway between Pinehurst

Sandhills
and

section

Southern

of North

■
t

Continued

on page

33

and

Federal
totaled

Federal taxation will reach

and

our

Federal debt will

creased

another

increase in

debt

be

in

will

1933

to

from

year

be in¬

$10,000,000,000.

The total

our

Federal

$18,000,000,000

$275,000,000,000 at the

end of the present fiscal
year. The

enormity of this Federal debt
a

is

dire warning to us, because the

indebtedness of all organized gov¬
ernments in the world

Pines

(about
A majority of those attending the
meeting
prefer to make the trip by automobile on the good
roads which lead to Southern Tines from all
directions.11 Those
making the trip by rail from North or South will find excellent

Deal

$75,000,000,000 for this fiscal

three miles from each).
will probably

1/

New

spending, the
budgets
have

$792,000,000,000 and the annual
spending budget has now reached
$85,000,000,000 for the fiscal year
alone.

of the Carolinas is

Federal

of

years

Deal

spending
John W. Bunn,

nicipal Council and South Carolina Municipal Committee
gather
and disseminate financial information on
political subdivisions in
their respective states. The
membership of these two organizations
is composed of
banks, insurance companies and securities dealers.
Carolina

20

Fair
to

of

levels of Federal debt.

in

spending
which have! given rise to large
'deficits, exceedingly burdensome
taxation,
and
all
time
world
In

once

Company,

years

record

j

composed of 42 firms in the two states.

on

Trinity Place, New York 6, N.
Y.




us

laws, and

bilization to the mining

membership of the Securities Dealers

Mid-Pines

Members: N.

to

tax

have

military stockpiles could be built
up in periods of surplus without

National Committee Meeting and
Election, of Offi-

&

it

given rise to the need

surpluses

home

Tour, Fashion Show and

joint meeting of the Securities Dealers of the
Carolinas, the
North Carolina
Municipal Council and the South Carolina Munici¬
pal Committee will be held on
Thursday and Friday, Oct. 23 and
24 at Mid-Pines
Inn, Pinehurst, N. C.

Central Public
Utility

74

circumstances

favorable

Favorable

Secretary, Stifel, Nicolaus
Broadway, St. Louis 2, Mo.

'

Troster, Singer

is basic

increasingly impor¬
we
develop tax laws

have

more

and

Reservations should be forwarded

York 5, N. Y

' **

No. 19

these

that

erals

for

Speaker: Raymond Rodgers, Professor of Bank¬
ing, New York University, "The Economic and
6:30

a

efficient

recent

•

..

and

attracting capital
mining industry. Severe
shortages of some metals and min¬

Thursday, Oct. 23—

.

"

recognizing that

the

to

A

.

in

prosperous

become

tant

SECURITY DEALERS OF THE
CAROLINAS
;

But

that will aid in

p.m.'I Tennis Tournament

Co., 148 State

Co.—Memorandum—Pacific

<

law.

such responsibility.
itself has been exceed¬

Under
has

cers.

of

this

domestic mining industry
the national security.

Wesnesday, Oct. 22—

memoran¬

of

any

slow

strong,

Amateur Show

Co., Exchange Building, Seattle
4, Wash.

On the Press

ingly

Se¬

Cocktail Party

p.m.

Company—Analysis—Dominion

Exchange Place, New

Washington Water Power

Ladies

6:30

Textiles, Inc.—Report—Raymond &
Co., 148 State Street, Bos¬
ton 9, Mass.
>

the

Beach, Fla., Oct. 20-23, 1952

McGregor Smith, President, Florida
Power & Light Co.; Jerome
Fischer, Traffic
Engineer Specializing in Turnpike Issues.

7:15

Service

of

Congress

Men's Luncheon—

p.m.

within,

build up our domestic mining in¬
dustry and they have washed their

Past Officers Breakfast
National Committee Meeting

Street, Chicago

,

&

_

Tea.

Analysis and review of the Cement
Co.* 10 Post Office
Square, Boston 9,

&

administration

of

materials

the Munitions Board has not spon¬
sored
any
program
whatever to

Speakers:

—

Mass.

Taylor Oil

a.m.

3:00

Co.

Industry—Lerner

Public

Program

Miami

and

of strate¬

sources

to

Republic

—

Light—Review—Ira Haupt & Co

Hampshire.
Riverside

a.m.

9:30

B. Wallace & Co., 15

Broadway, New York 6, N. Y. Also available
dum

p.m.

Street, Chicago 4, 111.

—

at

conservation

the United States, and the Muni¬
tions Board is charged with the

Tuesday, Oct. 21—

& Co., 115 Broadway.

Sulphur—Analysis—George

Convention

Thos. E. Martin

of

development of
gic and critical

Reception, Host's Florida Security Dealers
Florida Nights, Outdoor Steak Roast
Water Aquacade

Co.—Memorandum—Lee Higginson Corp..

William Street, New York
5, N. Y.
Nuclear Instrument &
Chemical Corp.

Investment

p.m.

12:30 p.m.

South La Salle

Congress,

importance

Convention Special Arrives Miami
Motor Boat Cruise, Miami Beach
Waterways

p.m.

7:30

a

8:00

Aircraft—Bulletin—Goodbody

Field

a.m.

p.m.

6:00

Co.,

available is

Annual

follows:

11:00

Street, New York 4, N. Y.

Marshall

as

9:00

New York 6, N. Y.

Public

recognizes the

Monday, Oct. 20—

Ilarris-Seybold Company—Analysis—B. W.
Pizzini & Co., Inc.,
25 Broad
Lockheed

19th

4:00

Also

79th

registrations and also

Advertising Committee

curity Traders Association

a

Keyes Fibre Co.

on

Law,

NATIONAL SECURITY TRADERS
ASSOCIATION

Co., 404 Mont¬

Inc.—Memorandum—Maine

Congress Street, Portland 2, Maine.

memorandurh

additional

our

country.
Stockpile

Law 520 of the

Pershing & Company
120 Broadway, New York
5, N. Y.

74

j
&

The

HAROLD B. SMITH, Chairman

South

Newport Steel Corp.

Co., Ltd.—Analysis—J. Barth
gomery Street, San Francisco
4, Calif.

own

May we suggest members of our National Advertising
Committee incorporate some of the above ideas to
increase our
gross advertising.
Our gross to date is $20,668.50.

—

Also available is

State

healthy mini n g
industry

costly undertaking.

a

a

and

within

ads.

The

Co.—Bulletin—Gartley

Inc., 68 William Street, New
York, N. Y.

are

to
es¬

sentiality of

hands

Utility—Bulletin—Troster, Singer

Trinity Place, New York 6, N. Y.
Colonial

Association

Harry's letter has produced

NSTA

of

Central

of our

stockpiling

been

vigorous

all pos¬

The activities

National

Corp., 1060 Broad Street, Newark 2, N. J.
Bank

traders and partners of firms
whom we do business—
finding an opportunity to establish

are

we

has

failure

realize the

many

in

Even

ing

as a means

watched

alarm¬

the

share of the income from the Convention issue of
the 'Chronicle,'
your help will be greatly appreciated."

*

—

Harold B. Smith

meet

parts of the country with

equally important,

new

Memorandum

rials.

so

and

Corp.

and

■

mate¬

more

Besides

Frequently because of limited resources, activities are
hampered,
which if carried out
completely, would be good for the public, our
industry and ourselves. Our income is derived from
dues, plus a

of major companies.
#

hear

have

the feeble efforts and
progress made by our Fed¬

critical

...

of Natural

Atlantic

distant

sible.

Telegraph Company — Circular
Hardy & Co., 30 Broad Street, New York
4, N. Y.

to

I

years

Government
strategic and

mutually profitable connections.
I also urge you to
coopperate by taking an ad in the Convention issue of the 'Commercial
and Financial Chronicle' and to secure
additional ads if at

current issue of "Market
Pointer"—Francis
Co., 1 Wall Street, New York 5, N. Y.
Also in
the same issue is a brief
discussion of Lower Priced Rails,
Chemicals, and a list of companies which
anticipate higher
earnings. In the current issue of
"Gleanings" is a brief anal¬
ysis of Standard Coil Products and a tabulation

Telephone

opportunity

13

eral

new

I. du Pont &

American

an

getting acquainted with

from

& Fox,

Steel—Analysis in

reserves

For

our

great value

Building, Los Angeles 14, Calif.
Philadelphia Banks Stocks—Comparison of 11
largest Phila¬
delphia banks—Stroud & Co.,
Inc., 123 South Broad Street,
Philadelphia 9, Pa.

Gas

sessions

these men, those of us who have attended these
conventions in the past have found them of
of

Union Bank

en¬

exploration and develop¬
ment work in
mining.

with alarm

business

Securities and Exchange Commission.

120

Co.,

Street, New York 4, N. Y.

Calls for tax relief to

30

are
addressed by the country's
top men in business and finance, and are usu¬
ally attended by one or more of the Commis¬
sioners and some of the key staff men of the

New

on

tion.

courage

slow

affording

Speculative Canadian Oil Shares (traded

Curb

approximately

conventions

—

Guide—Monthly bulletin—Sutro

.

addressed to

be
are

to

In addition to the usual

let—The Wellington
Co., 1420 Walnut Street, Philadelphia 2,

Pennsylvania.

was

these

out

build the strength in our min¬
ing industry needed to support
our
expanded industrial produc¬

1953,

National

convention will be held this year at the
Roney
Plaza Hotel, Miami Beach, Fla., Oct. 20-24.

Co.,

How to Save Administration
Expenses and Estate Taxes—Book¬

Investment

for

our

affiliated groups from every
section of the United States. The 19th annual

ten

on

NSTA
of

300 partners of New York firms and we
quote:
"NSTA is made up of over 4,000 individual

& Meeds, 120 Broadway,

New York 5, N. Y.

the

Chairman

STANY

points

challenging problems must
met
straightforwardly if we

Advertising Committee.

Broadway, New York 6, N. Y.

Bank

also

and

Share

and

matters,

the attention of

Corporation, Servel, Inc., York Corporation, Tecumseh Prod¬
ucts Company, Trane
Company and Copeland Refrigeration

Corp.—Eastman, Dillon

outstanding performance this past week

we bring to
our members a portion of a letter written
by Harry
Arnold, President of the Security Traders Association of New
York, member of the National Executive Committee, nominee for

Carrier

1952

today, out-

"

Continued
* An

address

page

47

Mr.' Martin at tbe
1952
Metal
and
Nonmetallic
Mineral
Mining Convention and Exposition, Tbe
American Mining Congress,
Denver, Colo.,
September 24,-1952.
/

i

by

on

.

,

Number 5156

Volume 176

.

.

.

The Commercial and Financial Chronicle

(1221)

9

v

is amplified

Federalism and the Future

tions.

We

by reasonable regula¬
be glad to live

should

with
ance

Oi Savings Banks

the

Corporation.

Savings bank executive, in outlining encroachment of Federal
legislation in savings bank field, lists: (1) establishment of
Federal Savings and Loan System; (2) extension of Federal
deposit insurance to savings banks, and (3) making mutual
savings banks subject to Federal income tax. Says creation of
strong competitor, represented by Federal Savings and Loan
System, is a potential threat to State savings banks and means
possibility of Federalization of savings banks. Reviews argu¬

It

is

bank

from

the

on

with

direct

Federal

matter

and

tion

through
Insurance

problems, both for
the Federal management and for
supervisors.
the mutual

on

savings bank
system

and

particularly on
the regulation
of that system.
are

mutual

savings

banks

in 17 states of

,

.

Now, to

.

,

•

.

mind at least, none
of these aspects of Federal influ¬
my

ence

upon

need

constitute

savings

continuance

of

a

bank, affairs
threat

the

state

to

super¬

well for

years.

the

We

our

can

Federal

imposed

on a

institutions in past
doubtless live with

income

tax

if

it

is

reasonable basis and

savings

upon

competition
loan

and

poten¬

a

supervisory

had better get

in the open

here
threat

potential

is that of federaliza¬

state-chartered

in

of

the

same

savings
that

manner

state-chartered savings and

loan associations have been feder¬

alized.

the

I realize that such a
step
this would require major legislation—Federal and state—but if

under

the

Bank

Board.

attraction

of

the

clearly desirable.

the

time should

be

ripe and the

support should be strong, it is
less

to

use-

Already the possibility of feder¬

been
As

a

ship
Bank

of

savings

banks

brought forward in

our

has
state.

preliminary step, member¬
in

the

Federal

tutions

Home

Loan

System has been discussed.

Federal

Home

This

are

where

mined to

a

tion

Loan

to

powers

the

of

Board.

supervisory

subject

their

Home

Loan

Therefore, they

number
188

Catharine

in

increased powers without resort to

institutions, which

Congress.

organiza¬

to

supervise.

It

thus

could

give its single-minded attention to

desired

the

the

promotion

of

tions, especially
lation for

thrift

institu¬

balance

who

the

obliged

are

interests

of

0f

argument

support

various

consists

of

'those"'v^uT^eneraTitie?
than the concrete. It
is

of

exercise

the

to

authorize

Home

Total

deposits are
billion and the total

number

approximately

is

depositors

In New York State,

million.

one

thrift institutions.
However, it will be borne

any

properly integrated
banking system with various types

they

of

be

a

are'.used

general powers

too

freely.

of this

mutual

All

banks

savings
and

all

are

having

Bank

least the advantage of
preventing

Board have its way in these mat¬
ters. Finally, this argument laus

supervisors from adopting restric-

will

let

the

Home

Loan

Continued

on

offer to sell nor a solicitation of an offer to buy
offer is made only by the Prospectus.

any

of these Shares.

3,180,188 Shares

Socony-Vacuum Oil Company, Incorporated

are

Capital Stock

under

supervision of state banking
Twenty years ago they
stood clearly outside the sphere of

the

Fights, evidenced by subscription warrants, to subscribe for these shares have been issued by
the Company to the holders of its Capital Stock, which rights will
expire at 3:30 P.M. Eastern
Standard Time on October 14, 1952, as more fully set forth in the
Prospectus.

Federal influence. Since that time

three

of

things

have

portance

($15 Par Value)

A)'<

authorities.

highest im¬
occurred to alter
the

this picture:

First, the Federal Savings and
and

Loan System has been set up
fostered

the

by

Federal

ment.

associations

Subscription Price $31

Federal govern¬
savings and loan

a

Share

supervised by the
Federal Home Loan Bank System
are

The several underwriters may offer shares of Capital Stock at prices not less than the

and their powers are to a
tent

large ex¬
subject to contraction and ex¬

Exchange, whichever is greater, plus an amount equal to the applicable New York Stock
Exchange commission.

The creation of

Loan Bank Board.

Subscrip¬

tion Price set forth above (less, in the case of sales to dealers, the concession allowed to
dealers)
and not more than either the last sale or current
offering price on the New York Stock

pansion not by law but by the
regulations of the Federal Home
the federal

savings and loan sys¬
provided savings banks
powerful competi¬
tor in the field of private institu¬
tional saving.
Second, the Federal Deposit In¬
surance Coroporation has been es¬
tem

has

with their most

tablished.

savings

Many

Copies of th e Prospectus

be obtained from only such of the undersigned as may legally offer
compliance with the securities laws of the respective States.

may

these Shares in

banks
be¬

have joined it and have thus
come
subject
supervision.

Third, savings banks have be¬
subject to the Federal in¬
come tax.
Fortunately, the drastic
effects of the original tax proposal
were avoided through the effective
aid of members of your associa¬
come

tion, but the tax
will

doubtless

now

exists and

continue

to

it will continue

to

do

DILLON, READ & CO. INC.
BLYTH & CO., INC.

THE FIRST BOSTON CORPORATION

GLORE, FORGAN & CO.

HARRIMAN RIPLEY & CO.

KIDDER, PEABODY & CO.

GOLDMAN,SACHS & CO.
LAZARD FRERES & CO.

Incorporated

exist.

Already it has presented major
problems for state supervisors and

Federal

MORGAN STANLEY & CO.

directly to Federal

LEHMAN BROTHERS

MERRILL LYNCH, PIERCE, FENNER & BEANE

so.

SMITH, BARNEY & CO.

Government Creates

STONE &

WEBSTER SECURITIES CORPORATION

Strongest Competitor
To

sum

up

the

situation!

to

date, the Federal government has
brought its influence to bear upon
the savings bank system by estab¬

lishing

UNION SECURITIES CORPORATION
DREXEL & CO.

strongest competitors,
the Federal savings and loan asso¬
ciations; by providing many of us

WHITE, WELD & CO.

EASTMAN, DILLON & CO.

F. S. MOSELEY &

our

•An address by Mr. Catharine at
the
Annual Convention of the National
Asso¬
ciation of Supervisors of State

Baltimore, Md., Sept. 25, 1952.




Banks,

WERTHEIM & CO.
September

1952.

can

boomerang for they can be
differing
used restrictively as well as expowers. It assumes that Congress,
and those banking interests which Pansively. The statutory method of
have an influence in Congress, defining powers and duties has at
institutions

highest.
state-chartered

Also,

kind

a

sav¬

interest in their manage¬
supervision is of the

in

mind that Congress can limit the
exercise of these broad powers if

of

and

ment

an

The

of

~out ria7d"t^Itatriaw"go7e^ng

that

20

ings banks have aggregate deposits
of almost $13 billion.
These in¬
stitutions, as a group, are there¬
fore of great importance and the

public

This announcement is neither

and

the

Bank

branches

from

Minnesota.
now nearly $22

inOregon

of

Loan

savings and loan associations with-

one

assumes

ready to disregard

the

of

Board

that the Federal Home Loan Bank
Board

in

power

J£VetheirappLfintheabstract
more

legislature, where their

can

undoubtedly
appeal and it finds concrete

some

to

types of organizations under their
supervision.
This

state

This argument has

this, it would be said, with state
supervisors

to

be successfully blocked
by adverse interests.

regards legis¬
benefit. Contrast
as

their

this

must seek any
in powers from

increase

state

efforts

Contrast

Massa¬

chusetts to

each

Bank

obtain

can

Union,
ranging in

M.

deter¬

large extent by regula¬

the

Robert

system

a

are

tions

ideals

pretend that such legisla¬

tion is impossible.

alization

A second argument for Federal
charter would be that thrift insti¬

agency would have no commercial
banks or other banking

as

the

visory system which has worked
so

There
now

XT

we

The

see

of

banks

with all of its

government

sphere

savings

out

now.

which I

the
Federal
Deposit
Savings Banking. By Fed- Corporation;
and
by
imposing
eralism, I mean the increase of the upon us the Federal income tax

of

influence

system. I think
this

lure of

influence

third

tial threat to the state

supervision

matter of Federalism and the Fu-

is

bring all major thrift institutions

associations—that I find

Federalization, and upholds principle
local control of banking.

briefly

the

affairs—that of

many

talk

in

Federal

for and against

to

want

What

obtaining

expanded powers for thrift insti¬
tutions
when
such
powers
are

Question of Federal Charter

state

our

members.

come

I

often taken the lead in

join this system. Subsequently, Federal charter? Those who find
under the leadership of our
State. it attractive would doubtless raise
Banking Department, all the sav- such points as these:
ings banks in our state have be¬
First, the Federal charter would

President, National Association of Mutual Savings Banks
President, Dollar Savings Bank, New York City

of

to note that state authorities have

ignored.

Deposit Insur¬
My bank was

of the first banks in

one

The problem is real. It cannot be

to

By ROBERT M. CATHARINE*

ments

Federal

DEAN WITTER & CO.

CO.

page

46

10

The Commercial and Financial Chronicle

(1222)

Partly because of higher prices,

*

and

Challenges Confronting the
Nation's Savings Banks

ical

indebtedness

porate
creased

U.

have

point

where

the

to

challenges confronting savings
(1) the competition of the new Treasury H bonds;
(2) the social security pension funds; (3) the heavy taxes
on savers;
(4) higher bank operating costs, and (5) difficulty
in obtaining adequate and efficient personnel. Says all these
challenges can be successfully met.

Challenge of

banks:

In

long
of

savings banking
challenges of its
honorable career. Part

and

these

and
in

challenges

political

are

faced

are

c o m m on

all

with

America; part
are
economic,
and
in

with

and, part

ness;

of

are

dis¬

a

tinctly savings
charac¬

bank

ter,

and

thus

should

faced

sav-

an

On

interruption

Raymond Rodgers

Political

Challenges

international

political

side, Korea continues to demand
men, materials and money.
And

Europe, so far as mutual security
is concerned, is not making the
progress that was originally an¬
ticipated.
On the national political front,
the "made-in-Washington" char¬
acter of the current high level of
business activity is becoming in¬
creasingly apparent. In addition to
government purchasing of practi¬
cally everything under the sun for
■our military forces, our allies and
our
bureaucrats, the accelerated
depreciation provision of our tax
laws also has undoubtedly caused

to

creased
The Economic Challenge
On

is

growing

serious

in

character.

increasingly
Despite the

outlook for the months im¬

rosy

to

about

mediately

tees and subsidies of

sort and

one

another have induced

a

volume of

private home building which may
prove to be beyond our needs, or,
at least, means to support, in more
In similar fashion,

normal times.

public
real
are

♦

housing

estate

adding" to the
pressures which
irj -the economy

present
lower

up

Address

by Dr.VRodgers at the 29th
Meeting of ffte""Savings Banks
Association of Maine, Portsmouth, N. H.,
Sept. 22, 1952.

today's

high

tire

overhead.

and
fewer durable goods manufactur¬
are

ers

balance

sheets

been

population

of

bonds

cash

to

and

current

sharply dropped.

1955

government

liabilities

the

group

of

2,247,000, or 6.3%.
This shrinkage has: caused some
for
population experts to place the

have

becoming
less
liquid
months; in particular, the propor¬
tion

in

came

at

has

no

increase

in

households

new

than one-third that of

more

1948!

-

It would show forceful

•

in

need

for

new

sharp decline
housing, the fi¬

>

of carrying exist¬
housing is steadily getting
heavier.
Outstanding
mortgage
debt on 1- to 4-family houses in¬
creased $3.2
billion in the first

This

announcement

appears

NEW ISSUE

for

of record only.

purposes

'-hO-.y

■

half of this year to $57 billion on
June 30.
When, to the interest

charges

$6,000,000

the

this huge debt is added

on

amortization

payments

re-

.

.

Ike and Nixon

,

*r.

convention.

Company,

pursuant

has' soldr

$4,000,000

of

to

such

sell

to

the

to an

agreed

or

agreement

to

sell'

above-described

investor

up

to

an

toi

It could

enthusiasm

wonder just what
ernment
want

1972

In

negotiated

Notes'

by

the under¬

institutional
and

additional

has

an

$2,000,000

real

and

estate

payrolls

when

begin

connection with

current

ban real estate prices, it might be
well to keep in mind that over¬

within

option

the

last

like

happen to like.
have of

men

You

our

gov¬

are trying to bring about.
Do they
the strength of his popularity, or do

on

have

we

been prone to scoff because they go for personal
At that, I have little doubt that our voters in the mass

leadership.

would like to go for personal
see

of

some

leading
opinion advocating it.
our

leadership but it is disappointing to
other moulders of public

newspapers and

it turns out, the Nixon incident boomeranged and
being a liability to the ticket he has become an
asset, the first time in history, to my knowledge, a Vice-Presi¬
of

as

his

dential candidate has become

On

one.

occasion in the 1944 Presidential campaign I sought to
draw attention to the Vice-Presidential candidacy of
Harry Tru¬
one

to ask about him, to suggest the voters should know

man;

thing about him because
the United
I

States.

dead.

was

But

he could

become

the next

to know anything about him;
trying to bury the Great Roosevelt before he

;•: '*■

■

this

some¬

President of

Nobody wanted

denounced for

was

..

^.

the Vice-Presidents

of

•

both

parties are very
much at issue. Nixon, because of his tremendous breast
exposing,
has come to be, at least temporarily, a national hero and is draw¬
ing crowds all out of proportion to the usual Vice-Presidential
year,

candidates.
There

has, however, developed a lot of cleverness, or so I
the other side. Stevenson is caught in something which,
my mind, is far less explainable than the Nixon fund.
Thus
caught, though, Stevenson goes in for the baring of all income tax

think,

on

to

returns of the

income

own

candidates:

tax returns

Ike has accepted the

Stevenson's

with

considerable

available and

challenge.

move

was

gusto, he makes his

invites Ike to do likewise.

.

primarily

arrangement by which Eisenhower

to

focus

attention

the

on

permitted to pay a capital
gain, instead of the regular income tax on his book, "Crusade in
Europe." Congress subsequently removed what was described as
a loophole in the tax laws which
permitted this. The removal came
to

be known
as

as

was

the Eisenhower amendment.

well

as was

However, the book

expected and there is

a

question whether

the Treasury didn't get more out of Ike than it would have other¬
wise.'
,

But

than

Stevenson's strategy,

focusing

attention

on

his

income

and

his

I am convinced, goes

.this

attention from the real issues.

matter.

He

even

deeper

is

trying to divert
get people to talking about
and Eisenhower's income and

If he

can

income taxes,

Eisenhower's income taxes, he will have got. them to quit
talking
about high prices, inflation, Korea, Communism, etc.
Stevenson's

strategy in this respect would be to render passive
are angry
and indignant, who want a change.
them to get so tangled up in a maze of the
personal finances of the candidates as to end up in a daze, and
with a feeling of futility. That would be bad for the Republicans.

those
is

It

voters

who

possible

for

American

Optical Go.
3%% Notes Placed

Kuhn, Loeb & Co.

American

sale

of

Optical

that

nounced

through

it

Kuhn,

has

of

&

has

vestor,

as

the American economy

has become

increasingly dynamic

Continued

on

page

18

the

to

Co.

amount

of

$2,000,000

an

additional

notes, not exceeding
Oct. 1, 1953.

on

Proceeds

of

the

$1,000,000

construction

plant

and

of

its

of

ap¬

for

the

Keene,

N.

H.,

research

a

the into long-term indebtedness.

an

investor

expenditures

its

$2,000,000

same

capital

proximately

an¬

institutional in¬
thereof to be
sold Oct. 1,
1952 and $2,000,000
Savings - banking
faces
many
to be sold on Oct. 1, 1953.
The
challenges of a direct character in
its own field.
This is to be ex¬ company has an option to sell to
pected

be used to reimburse the
company
for

laboratory
in
;Southbridge,
Mass.,
and
to
negotiated convert current bank
borrowings

Co.

Loeb

$4,000,000

.1972,

1,

Savings Banking

Challenges




conception these brilliant

just what they

others don't

it, and he should kiss off this

see

20-year
3%% sinking fund notes due Oct.

generation!

*,

Direct

October 2, 1952

they

as

Ike, just Ike, to win

whom

ur-

capitalization of farm real estate
brought disaster to farmers twice

investor

thereof.

and

Republican Party

a

they want the Republican Party to win?
I should hate tremendously to see Ike
Eisenhower, the great
military leader, win the Presidency of this country, personally and
because of sheer idolatry for him.
If such as that can happen,
then we ought to go back and apologize to those
Europeans at

to decline.

an

the nominees of

as

influential editors and

our

easily affect public

for

employment

>

signed.

running

are

A lot of

*

dent.

The

If he moved

and that Senator whom these influences don't
,

l quired in most modern mortgages,
the depressing effect on the family
pocketbook
becomes
quite evi-

Twenty-Year 3%% Sinking Fund Notes
Due October 1,

influ¬

the time

was

leadership; increase his

that; just Ike is running,

"

•any

Eisenhower,
several

Carlisle Bargeron
Now, the facts are that if Nixon had been
unwilling, Ike could not have fired him. To
get rid of him would have taken another Republican convention.

nancial burden

ing

and

stature.

didn't sell

In addition to this

M

with

argument

quickly to cut off Nixon's head, he would show
was a very
strong man, and not one to
tolerate any deviation from political honesty.

group there was an actual drop in

producing at full volume.

Industrial

increase

below 10 and that above 25 years,
whereas
in
the
10-to-25-year

Yet, few non-durable goods

is

Annual

some
analysts
to overlook the
preferred
to
which will not striking economic fact that the en¬

is

prices
volume,

support

value

building

are

who

that he

instead

ahead,
dangerous
developing in the
economy. The steel strike delayed
the business readjustment which
some corporations to overexpand
was in
the making in most lines,
production facilities.
Also, the but it only delayed it—it didn't
powerful pressure of the Excess eliminate it. Already that ironic
Profits Tax toward overexpansion
have now entered a period of low
phrase, "profitless property," which
and a scale of living beyond cor¬ characterized
another period
of family formation caused by the
low birthrate of the depressed 30s.
porate means is well known.
unhappy memory, is being used
Artificially low interest rates, to describe conditions in several The great increase in population
direct loans, government guaran¬
in the 1940-50 decade has caused
industries.
Profitless volume
at
stresses

Lis¬

Eisenhower

commentators

around him

men

However,

are

weighed against the present rate
of construction, the present rate
of family formation and the pres¬
ent carrying charges on real estate
already financed, the inevitable
conclusions are disquieting, to put
it mildly.
Housing construction this year
apparently will exceed 1,000,000
units, although family formation
will probably be little more than
one-half of this total. In fact, we

business

in

downturn

which

cost

When these real estate costs

side, savings
banking faces the challenge of an
eventual

in

$26,000 b,y June of this year.

economic

the

further

editors and

ential newspapers, was that here
for him to be firm and decisive.

the

since

late
'30s, except for about 10
spending will be very
its peak; and, consumer months at the end of 1938, and in
goods lines will be going strong part of 1949. In fact, on the basis
because of the
increased wages of the average costs of wages and
and decreased inventories flowing materials in 20 large cities, E. H.
and
Associates, as re¬
from the steel strike. In short, by Boeckh
by the Cleveland Trust
election day, on Nov. 4, unemploy¬ ported
estimate that a brick
ment will be practically non-exist¬ Company,
house which cost $10,000 to build
ent, and output, employment and
in the 1935-39 period would have
income will be at record-breaking
all-time levels. The political im¬ cost $23,460 to build toward the
end of 1948, and would have in¬
plications are obvious!
close

organ¬

the

without

virtually

defense

industry.
The

continued

has

the

the

on

this

from the

As the dollar increases in value,

costs

and

the Nixon incident.

was

mourners

this country.
A
forceful

prices of the

spot primary market
28 sensitive,

the substitu¬

of

payments
will be rolling out of Washington;

ings banking
ized

instance

the

mourning, Nixon had to be got
rid of. This, to my mind, was dangerous think¬
ing and ail too symptomatic of a trend in

material prices

raw

to

reflected

internationally traded
commodities dropped from a peak
tion of politics for economics.
It
of 392 on Feb. 16, 1951 to 293.8 in
can only further contribute to the
artificial character of the Ameri¬ August of this year, a decline of
nearly 100 index points!
can economy.
:
another

increased social security

be

by

train

dropped precipitately; in fact, the

dispute is

wage

period,

same

price distortions will tend to be
that is, prices which
nomic cards appear to have been corrected;
stacked against the Republicans. went up the most tend to fall the
most. If this should happen, real
As
the
Prentice-Hall
Economic
estate will be in a very vulnerReport puts it, "the business cycle
able position. This is true because
seems to be playing on the Demo¬
the rise in housing construction
cratic side."
Starting on Oct. 1,

busi¬

all

steel

the

First, there
tening

prices. Since March, 1951, whole¬
sale prices have slowly, but stead¬
ily,
declined.
And during the

uncon¬

opinion

of the Washington professionals—that is to
those who make their living out of politics—and they are
legion—and those semi-detached political minds, this has gotten
to be the screwiest campaign that was ever had.

Dollar

interfer¬

governmental

the

say

More Valuable

a

Now, to this capital weakness is
added the problems of declining

Looking at the political chal¬
lenge in terms of votes, the eco¬

faced

are

in

ence

and

unwarranted

scionable

By CARLISLE BARGERON
In

;

common

as

The

sober truth,

in¬

i

they

line with owned

to be out of

capital in some enterprises.

Professor Rodgers lists among

faces the greatest

Washington
Ahead of the News

capital, bank loans and other cor¬

seem

School of Business Administration, N. Y.

From

of the preferen¬

because

mostly

Professor of Banking

Graduate

partly because of larger phys¬
volume and inventories, but

tial tax treatment given borrowed

RODGERS*

By RAYMOND

Thursday, October 2, 1952

...

financing will

Westheimer Co. Adds
*
„

(Special to The Financial Chronicle)

CINCINNATI, Ohio—Robert A.
Harrison

is;

Westheimer
Walnut
New

now

and

Street,

York

and

Exchanges.

i

affiliated

with

Company

members
Cincinnati

of

326
the

Stock

Volume 176

Number 5156

Commercial and Financial Chronicle
.The

.

.

(1223)
course always been
appealing, but
the past ten years of rising income

Corporate Tax Savings Through

taxes

and

worked

Proiit

Sharing Trusts

hardship

General Manager, Frank D. Newman

& Co.

;

mon

Investment Securities, Miami, Fla.
1

'

Asserting

*

substantial

^sharing trusts

through

savings

tax

corporate

profit

.describes principal features of tax savings plans and

substantial
still

are

think—but

you

corporate

tax

in

savings

1952.

porations wishing to tane

Cor¬

advan¬

Failure

plan, due to

eliminate
to

ble under Sec¬
165A

the

year

or

all

Internal

benefits

recent

mount

of

the

years,

or

even

accrued

up

that time.
in

years

of

other

has

been

type of plan

permitted

have

°lan of which some five thousand

little

time

left

them.
d

d

e

to

un¬

this

sec¬

going

are

be

ng

tions

u c

der

ire

the

If

permitted
tion

to

already
to the

in

Profit

Sharing

existence

accord-

Internal Revenue De¬

partment.

Many companies which

.ad been

unwilling to assume the
term commitment involved

'ong
in

taken

from

the

—

the creation of

Pension Plan

a

turned to the Profit

ave

Sharing

year's income,

This type of plan not only
offers definite advantages in
pre¬

action

serving the financial

be

Bridges

this

must

completed

nrior

.

the

to

end of the company's fiscal year.
As
the
majority
of businesses

operate

the calendar

on

the procedures necessary to

lish

clear

and

with

the

Internal

partment
two

too

these

months,

it

estab¬

deductions

Revenue

De¬

is,

begin the necessary
analysis of the earnings and tax
picture.
the

plans

This article

summarizes

principal features of such
and the procedures neces¬

entire
is

Sharing Trusts—Any

Business Can

Afford

Retirement
Both

have

labor

contribution to

a

Plan

and

management

portion of the profits of industry
to provide financial security for

less

burdensome

not

to

exceed

15%

Such

deductible

porations

reported

in

the

as

with officers

number

well

as

authorities

of

cor¬

investment

as

Boston

and

New

high,

per¬

York.

of

such

a

combination

of

sonal

income

The

"tax

drag"

estate.

such

on

small

amounts of

savings

person

accumulate makes the

can

building of capital
ficult.

*

as

the average

even more

dif¬

•_

Code

have made it possible

for

savings to be accumulated free

of

tax—either

income

or

are

into

put

a

plan

officers

caoital

and

also

are

offi¬

and

free of tax

are

Two

basic

contribution

a

not. In

or

two

shall

permitted
The

under

better

time

is

Such

a

known

the

typical

may

years'

contributions, the
being deductible in
the
second
year.
Conversely. a
company which had made no con¬
second

retirement

fixed

dollar

vidual

pension

fat,

plans
through
in

Because

of

amount

to the

his

a

indi¬

estate.

usually carr^d
insurance annuities

are

very

large

companies.

the

plan ,, requires the
payment of a fjved number of
dollars at some distant date, the
considering such a plan
be
preoared
to assume a

company

must

fixed annual liability




it

that

should

pension

be

kept

benefits

when

years'
ab^

profits asain
the

uo

back

by contributing
contribution in

necessarily established in the
becoming light of today's price levels and

is

the
major source
to
which they can turn to maintain
retirement benefits is the com¬

benefits will not be paid to bene¬
until 10, 20 or even 30

ficiaries

years from now.
A pension plan
Any guaranteeing a life income, which
plan, therefore, which may threat¬ might be more than adequate byen
the solvency of the company today's standards, may prove to

pany for

is

which" they work.

unsound

and

In

Trust

requires

destruction

own

the

contrast

ultimately

may

bring about its

Profit

that

Sharing

contributions

provide

less

even

income

ence

The best

20

than

years

subsist¬

a

from

to

poses

of the plan.

available

from

for

investments

pension

a

plan

accumulations may be made up at
the rate of two years' contribu¬

The

Company Viewpoint

While management and labor
have been frequently pictured as
.securities which
have sufficient
natural antagonists in recent
years,
capital growth possibilities so that tory of business indicates that fat
their
community of
interest
is
the development of capital gains years usually follow lean years it
substantial.
is quite probable that over a pe¬ nevertheless
In the
is a reasonable
possibility.
The
riod of time the contributions will first place neither can function
Profit Sharing Trust in the hands
without the other.
In the second
average out at the full rate called
of competent
professional invest¬ for in the
both
as
regards
current
plan. It is important to place
ment managers may well be ex¬
note in this connection, that un¬ earnings and ultimate retirement
pected to outstrip the investment
like the pension plan, the failure protection both look to the same
results
obtainable by a
typical to maintain the
contribution source, namely, the company for
pension trust over a reasonable
which they work.
schedule in no way
Such quarrels
affects the
period of time.
'
as have arisen stem more from the
benefits previously accumulated
A second source of benefit to
They continue to earn and com¬ question of what is a fair division

•and, in addition, to

the Profit

called

use

classes of

Sharing Trust is the

forfeiture

credit.

Any

ployee who resigns from the
the

feits

trust

that

becomes

interest,

vested

which

much

as

the

is

of

to

the

such

to

the

purposes

reduce

equitable.

pay a
<

credit

benefit

established

Profit

no
as

a

stitution

Inas¬

those
com¬

and

in

Boston

any ideological conflict. Both sides
would be less than human if
they

of

a

the

large publishing

in New York

are

not

own

Sharing

financial in¬

created for the benefit of
ees

of the profits of the business than

other

employ¬
concern

trust

ples.

excellent

exam¬

In both instances the combi¬

tend

to

over-value

the

most

It so happens, in the division of
responsibility, that planning the

operation of the company, first
that

it

will

continue

strong and second
be

as

the

profitable

so

as

shoulders

question

Trust

as

is

tion

of

a

contrasted

that

far into the

it

management.
turnover, nation of income earnings on in¬
perfectly vestments held in the respective Among these responsibilities is
trusts plus the effect of forfeiture determining to what extent profits
If the employee stays

is created

for him

or

why the

company

his
no

should

Credits has resulted in
rate

an

earning

of

approximately 10%
pounded annually. - This is
spective of gains

on

com¬

irre¬

security trans¬

actions for the trusts.
considered

premium to him.

When it is

that the type of secu¬

The payments required to main¬ rity income which a conservative¬

T/us announcement is not an

be

can

employed

tirement

to

provide

security for both

ojjer ojsecuritiesjor sale

or a

and

management, Without running
risk

in such
'

of

a

1

putting the

company

weakened condition that

Continued

on

page

solicitation ojan ojjer to buy securities.

$35,000,000

Anheuser-Busch, Incorporated
3%% Debentures, due October 1,1977

Price 100%%

two

plus accrued interest from October 1, 1952

t^at
f«r

except

tV

romoanv

r^pkmg

in

those

has

may

be obtainedjrom such oj the undersigned (who
prospectus) as may tegally ojjer

the underwriters named in the

are among
* t

i

these securities under applicable securities laws.

no

contribu¬

a

years

Profits reach the stated

Copies oj ihc prospectus

when

level.

Dillon, Read & Co. Inc.

The Emnlovees' Viewpoint
In
of

a

the

considering

the

advantages

Profit Sharing Trust it is
utmost

importance

The First Boston Corporation

Kuhn, Loeb & Co.

of

that

the

personnel of the organisation

Glore, Forgan & Co.

Blyth & Co., Inc.

Goldman, Sachs & Co.

un-

defstand the possible greyer ben¬
efits which may accrue from this
tvno

Of

p<5

contrasted

nrdjnarv Pension
bor leaders
to

the

modest

at first

Pension
but

Trust.
w*»re

Tru«t

gnar-ntced

to the

Most, la¬

Harriman Ripley & Co.
Incorporated

Lazard Freres & Co.

Lehman Brothers

Smith, Barney & Co.

Merrill

Lynch, Pierce, Fenner & Beane

Stone & Webster Securities

Corporation

m"lin°d

with

its

annual

rpvjr>pnt to t^c rptiri»-»cr o^r»lovee

The idea of fixed security has of

Union Securities

Corporation

White, Weld & Co.

re¬

labor

the

October 1,1952

Pension

a

will

possible, falls

of

important

to

so

financially

is

tax-

considering
Profit charing

their

importance in the picture.

on

of the

heirs but if he leaves there is
reason

to

Trusts—one that of

with the company until his inter¬
est becomes vested, a substantial
benefit

forfeiture

personnel

provision

a

di¬

trust, and

the

:

did

Two

bene¬

employee has paid

and

continued

pany.'

for¬

is

among the surviving
ficiaries under the trust.

factor

employees who stay with the

com¬

vided

one

pound,

em¬

prior to the time his interest

pany

in

so-

tions per year until the deficit is
cleared up. Inasmuch as the his¬

year.

Perhaps

on

this subject are those people who
have been living on fixed dollar

become

each

now.

of information

source

be made only in those years where
Being freed of profits are sufficient to support pensions for the last 20 years and
who have been fighting a
these
steadily
requirements the trustees them. If two or three lean years
losing battle with rising taxes and
are at liberty to take
advantage of result in inadequate earnings and
substantially higher rates of in¬ thus no contributions, these back rising living costs.

still adequate to meet the pur¬

are

contribu¬

uo

in

must

recognizing the today's cost of living although the

half

make

tions

plan.

death,

or

Finally

present

or

employee

Such
out

the

in

hard

be

tribution, because of failure of
profits to reach the required level,

plan provides for payment,

upon

except

at

today

in ' prior

be

unusually good
set aside up

an

year a company

1:°bilitv

of plans are
this legislation.

types

made

factthat

establishing a formula
be
applied to each
business
to
determine

whether

the total amount shall be taxed at

long-term capital gain rates.

Labor
realistic

more

will

the

finally distributed

payments

com¬

afforded

is not

in

ooint to remember in

are

protection

any

New Issue

certain

cumulations

mind

wipe out

deter¬

contributions

sharing trusts

understand.

consid¬

gains resulting from

have further provided that, under
ac¬

pletely

ibility in
which

gain—under approved plans. They

conditions, when such

by the

to

to

developing the plan the cor¬
poration is allowed complete flex¬

may,

Provisions in the Internal Rev¬
enue

total

trust.

to

worthwhile

In¬

provided

expense,

submit

profit

In

difficult for the individual to
a

the

to

to three and one-half
percent the
reason for the
growing interest in

employees. The money in
the Trust may be invested and all

made

cumulate

of

Sharing

to

-i

ered as

income taxes and high liv¬
ing costs has made it increasingly
ac¬

required

annual

contributions

the

contributions

cer-stockholders

year's

The

corpora¬

of

irrevocably

are

the

substantial

the

dealing with
Profit Sharing Trusts permits any
company, in any taxable year, to
set aside from profits an amount

is

a

to

ternal Revenue Code

the investment

of

tax

within specific limita¬
tions, has made the real cost far

the retirement of personnel. This
result of discussions

plans

for

trust fund for the benefit of quali¬
fied employees. For the purposes

highly conscious of
the necessity for setting aside some

conclusion

such

expense

purposes,

they

become

the

advantages

The fact that the

deductible

a

a

Profit

employee.

payroll.

to carrying them out.

sary

to the

substantial

as

to

soon

promises

strength of
in
addition

but

company,

much as tion.
Briefly, the section
therefore, not

require

may

and

year

Trust.

he

of

sharp

is unable
i L

4-

in the plan
being abandoned. This
in turn could even

years.

distant

some

Profit

Department

the

if

increasing mot-suitable

an

attention

the

to

rawn

at

The

not

the plan for annual review

Revenue Code

W.

is

come

plan which could impair

savings possi¬

James

date.

Trust

maintain

bad

a

types

as a result of a

earnings,
««

from

avail¬

rates

dollar

payments

-future

force tne abandonment of the

...ay

tage of the tax

tion

to

interest

fixed

.Treasury

future.

in¬

The Profit Sharing Trust is un¬
no burden to provide for fixed

mine

possible

the

from

dollar

and economical."
than

depended

type of retirement

in

""(•r f

der

>

advantages in preserving the financial strength of the corpo¬
and also gives substantial advantages to employees.
Concludes "creation of a profit sharing trust is both
simple

later

decline

investments.

ration

is

in

able

proce¬

dures for carrying them out.. Prefers the Profit Sharing Trust
to the Pension Retirement Plan, since former offers definite

It

who

corporation,

thou¬

of

The increasing use of com¬
stocks in pension trusts re¬

cline

still possible in 1952, Mr. Bridges lists and

are

people

year

tragic

even

flects another phase of the prob¬
lem—that is the substantial de¬

*

«

.

this

come.

and

hundreds

on

of

upon

By JAMES W. BRIDGES

pension plan must be met ly operated
pension trust might
in order to keep the hope to achieve is more
likely to
plan functioning properly. If the be in the
neighborhood of three
a

each

rising living costs has

serious

sands

tain

11

Dean Witter & Co.

20

12

The Commercial and Financial Chronicle... Thursday, October 2, 1952

(1224)

idle rich In America is so

Task of Defending Our
Liberties Against Ourselves
HAZEN*

By BENJAMIN H.

President, United States Savings & Loan

right to

from human

impaired by "our

very own

inflated the

is

indi¬

for

difficult

Everett

the

crowd—and he included in that
classification

a

crowd

such
groups

re¬

as

ligionists,
cial

so¬

reformers

various

of

kinds, political

and

parties

associa¬

trade

tions—

number

large
of

"a

as

people go¬

wrote

a

H. Hazen

of crowds with
the

symptoms of insanity. Speak¬

are
about

we

calamity

the

are

Individual Leadership

thrifty

It is well

in

of

which

its

regard¬

leadership,

individual

less of

at the
encouragement

but " marvel

cannot

One

manner

us

origin, has resulted in

than

ment

But

that

do

a

job by govern¬

by private enterprise.
isn't the whole story.

Even if the Government

actly the

That is because

an

no

of more,
extravagance.

leader of men

made

have

profit,

ex¬

instead

same

it would still be

would

spent

no

profit.

a

per

No

reinvestment. No free
equipped by experience

cerned, only another government

enjoy better housing, better
appropriation can now move our
today is the right to own prop¬ clothing and better food than the
economy off dead center. Multiply
erty. You and I are deeply con¬ lowest one-third of any nation in
such an example by hundreds or
cerned in it because our whole the world. Today American man¬
by thousands and you see the
lives are built around it. We rep- agement is striving to teach Euro¬
deadening,
initiative-destroying,
fcrrent and serve property owners. pean management that the way to
heavy hand of government when¬
Some of them own personal prop¬ earn profits and justify them is to
ever we vote more government in
erty in pass books, and others own reduce unit costs, increase volume,
the tasks of our private citizens.
lower
sales
prices, and
profit
rpal property in titles.
The
ease
with
which
crowdthrough widened service
to
a
[It is impossible to dissociate the
thinking - may be influenced by
maximum number of consumers.
right to own property from human
well meaning or
self-interested
That
outstanding achievement citizens is
freedom. Nothing could arouse the
just as great today as
of all history was made possible by
resentment
of
our
members
so
it was in those years which fol¬
the substitution of machinery for
Effectively as the arbitrary as¬
lowed the signing of the May¬
sumption of government that it animal power and human^power. flower Pact and the landing on
had the right to reduce their pass¬ Today's production takes less than
Plymouth Rock. It sounds so sim¬
book balances or divide their real 4% of man labor, and less than
ple and so virtuous when a glib
property with others. The right to 12% of animal labor. More than political candidate proposes fur¬
personal achievement,, to accumu¬ 84% of it is machine labor, and ther debt for social reform. To
late its rewards, to spend or invest machines are nothing but yester¬ vote
against reforms which we
thrift invested in today's cannot afford seems
those accumulations according to day's
downright
capital. Your business and mine selfish and heartless. To blame
me

concerns

comes

'

jyour individual choice and to be
protected against their seizure by

is

one

by the U.

S. Supreme

that fair trade seemed to

been vanquished

by

tech¬

a

nicality. The Supreme Court did
hold

not

that

fair

non-signer clause

trade

the

or

process

of the cradles of tomorrow's

capitalism

for

the

among

census

interstate

crowded it out of the curriculum.

is

The

is

rating of greater importance
mine

not

citizens

good

is

but

that

with

of

whom

many

I

dis¬

left in lower income brackets

are

commerce

involved

was

a

successful venture

ness

of

others benefits

I

the consumer, but

and

the

value

of

our

the

passbooks
real

estate

underlying
our
mortgages
been depreciated by actions

proved

and over again by the
holders of those passbooks

very

over

and titles. Values have been low¬

ered by our very own people who
have thought they were acting in

self-interest

by the
policies which have
expanded

currency,

approval

inflated
our

of
our

Federal

debt and purchased present bene¬
fits on the cuff to be paid for or
not by our grandchildren. We have
even

the

as

a

people

assurance

succumbed

to

that it doesn't mat¬

ter about the size of the debt be-

64th

an

address

Annual

by Mr. Hazen at
Convention
of
the

Massachusetts Co-operative Bank League,
Swasnpscott, Mass., Sept.* 18, 1952. * 4 *




system, and its formula is to

likewise, not only

his fellow

em¬

lously

thrives
ments

cannot

must."

Our cost of

leadership is ridicu¬

low—less

by

in

far

those

such

on
as

"If

do
Its

successful.

fallacious

Private

it,

leaders

then

ultimate

It

argu¬

Enterprise

Government
result

is

the

transfer of the freedoms of prop¬

per¬

erty ownership to
government
give for
control. That results in subtle de¬
carrying our luggage or serving
our meals.
Wipe out all the big preciation of the value of prop¬
centage than the tips

incomes

in the

we

country, and

you

would not have enough to pay our

government cost for four months.
The Americans of modest

spend

income

erty by excessive taxation and by
inflation.

more

erty

money

lars although possibly low priced

productive

cluded

in

value.

that

figure

I

have

all

in¬

of the

owners.

are

trustees for prop¬

Ours

is

a

responsi¬

four in the lessons of
"To

liberty

conserve

for

the

liberty:
blessings

ourselves,

we

of

must

idle

rich

•may

I* remark that the number of guard it against our own actions."

of

large incomes;

and

portant

This

well-meaning
Department
Federal

is

which

fact

a

hope

in

the

and

the

gentlemen
of

Trade

im¬
the

very

I

Justice

Commission

bear in mind. You may have

will

heard

legislation

reflecting

socio-eco¬

nomic change. These very people,

however, display a similar inflexi¬
bility insofar as fair trade is con¬

in

the

Miller-Tydings

Act.

In

short, the Supreme Court's posi¬
what isn't in the

was

law

is

•

•

Well,

Congress has now made
clear on the nonclause. The McGuire Act

itself perfectly

signer

because they hold obsti¬
nately to their doctrinaire views
on competition
despite the reali¬
cerned

ties

the

of

Congress Upholds

spells out the non-signer clause as
in the state fair trade

it appears

pose

Act

textbook

by

overwhelming majorities

both houses—196 to

in

10

the

that
not

signed

the

fair

ber that

House and 64 to 16 in the Senate.

President

Truman

economic

State Laws

I hope these gentlemen

laws. Congress passed the McGuire

in

changing

needs of today's marketplace.

trade

who op¬

the

on

economics

of

basis

will

remem¬

Congress has recognized

fair

trade

ciphers

on a

people,

concerns

graph. In passing

McGuire Act. The President's sig¬
nature on the McGuire Act com¬

the McGuire

pletely dissipates

Government, has clearly spoken.
has said that it will,

namely,
Act

of the tired

one

against

arguments

that

the

"second-class

legislation" because it
as

rider

a

therefore
or

to

not

bill

be

vetoed separately

passed

was

another

could

trad£, Congress

Miller-Tydings

so-called

was

fair

and

approved

by the Presi¬

dent.

through the enabling legislation of
the McGuire

bill. It

any

was

was

rider

no

passed

on

its

Act, help the states

which have passed fair trade laws,
to make these laws

is

That

fully effective.

precisely

Congress

why

spelled out the non-signer clause
the

For without

McGuire Act.

in the

The McGuire Act
to

Act, Congress, as the
our Federal

legislative branch of

merits after fair trade, as an
issue, had been intensively exam¬
ined by no less than five com¬
mittees of the

in

clause

non-signer

McGuire Act,
state

the

fair trade in inter¬
would have con¬

decision.

own

of

less

Congress in

than

a

a

period

These

commerce

tinued

be

to

non-existent,

following

was,

We

the

as

it

Schwegmann.
■

j

justifiably suspicious of
Senate
and one who says, "The idea of fair
House Committees on Small Busi¬ trade is all right but I am opposed
ness; the Senate and House Com¬ to the non-signer clause." Such a
mittees on Interstate and Foreign
person is basically opposed to fair
Commerce; and the House Judi¬ trade. He does not really want un¬
ciary Committee.
fair competition restrained, which

mittees

year.

com¬

are

the

were:

Thousands of pages of testimony
and the days of exhaustive debate

is

'all

that

seeks to

fair

every

do.

trade

act

Let it be understood

on the floor of the House and of that the State fair trade acts estab¬
the Senate gave every member of lish and enunciate a policy of un¬
fair competition insofar as each
the Congress full

thousands
that

of

poured

nessmen

individual

in from

throughout

the

showed Congress more
than

anything

else

done

that fair

petitions

small

trade

busi¬

country

effectively

could

have

was

vital

a

issue to millions of human
These

human

beings

necessarily made applicable to all
who
handle
fair-traded
goods,

provided they have knowledge of
the existence of appropriate fair
trade contracts covering their re¬
The

sale.

fair

trade

contract, it
not the

understood, is

should

be

State's

system of unfair competi¬

tion.

It is the means by which the

system is put into operation. In
respect, the fair trade con¬
tract is
not unlike the
electric
this

light switch which is, obviously,
not the electrical system but only

beings. the
depend on

small business for their livelihood.

That policy is

State is concerned.

into

means

for putting the system,

operation.

The non-signer
clause is the
and your fa¬
heart of the State fair trade laws.
employees and
their families. They include most The first fair trade law passed in

They include
milies

and

you

your

California

of the other

had

1931

in

no

non-

1,776,000 retailers in
Only those who
country with their families signer clause.
and employees. They include the voluntarily signed fair trade con¬
tracts were required to observe
thousands
of
wholesalers
this

and

You and I

for tobacco
and liquor than they spend for all bility to understand what is
hap¬
of the high priced leadership in
pening to our members and to
industry — and I am considering
find ways to warn them.
anybody who makes $25,000 or
The issue of today is number
over as high priced in total dol¬
in

♦From

the

busi¬

a

ployees.

has
ap¬

into

improving the service to

agree.

Yet the value of

hate

Every

of Americans.

cally include the non-signer clause

has in fair trade. The hundreds of

leader who cast suspicion on
benefits himself and his family by who
have
been
reduced.

up with the lives
hopes and futures of millions

and

because Congress did not specifi¬

mem¬

the number of families who

tricably bound

that there are thoughtful people,
In a 6 to 3 decision, the in
government and outside of gov¬
simply held that the non- ernment, who have berated in¬
signer could not be bound where flexible
attitudes
toward
new

P' ret to say that some of the

important concept of social
Welfare which has occasionally

abstract legal
and economic
theory but rather that it is inex¬
an

Court

bers to whom

more

here to stay.

tional.

opportunity to
leadership in private achievement
for not having achieved more than weigh the merits of fair trade and
we teach thrift to¬
to
exercise
his legislative
pf law was taught as fundamental
pre¬
the greatest improvement of any
rogative in the light of his own
to the older men in this group day are tomorrow's customers at
nation in the world seems to be
conclusions. In addition to his own
when they attended school. I re- banks, leaders of enterprise and
purchasers of the machinery which attractive to crowds. Union leader¬ examination,
every
member
of
makes American production the
ounger men have escaped that
ship resorts to it. Political aspir¬ Congress had abundant evidence
wonder of the world. At
of the stake which small business
every
teaching by what seemed to be a
ants use it to advantage. It is the

without due

government

are

unconstitu¬

was

not law.

recognized that it costs

to

more

half ago the fair

a

Schwegmann decision. The

was

have

bers of savings

and

Prosperity

and maybe I am hours

liberty which

tion

people who are the mem¬

common

individual liberty for the social good.

most ironic thing about the situa¬

po¬

week have been reduced
citizen
not.
from seventy to forty. National
and a profit to tackle another jobIt is my humble opinion that incomes in terms of equivalent
prospect.
The
endless
before many years we shall look dollars have increased more than making
chain
of
private initiative has
back and wonder why we did not sixteen times.
Ours is the best
been broken. It has found an end.
sooner start defending our liber¬
standard of living in the world,
Insofar
as
that project is con¬
ties against ourselves.
and our lowest one-third of in¬
The

Court's

tion

as a

what I shall say,

that the suckers from such a
tential

and

year

weakened

endeavoring to make clear

am

competition or result in higher
Holds such legislation is in line with

trade laws, passed by the legisla¬
tures of 45 states were seriously

Private Enterprise is Cheaper

trade association member the spread of American prosperity
to my fellow members, I give you throughout the population. In the
that warning. Maybe I am right in century
just ending, the *work
ing

A

sonal freedom.
I

free

restrict

consumer.

Concludes "fair trade" laws

cripple it that it cannot carry the
load of social experiment and gov¬
ernmental interference with per¬

pursuing.

book

characteristics

.

which

tradition of tempering

handicap and

ourselves may so

or

prices to the

and loan associa¬
in the name of the common peo¬
tions. We are crippling the efforts
ple, and they are our best cus¬
of individuals to achieve by usurp¬
tomers.
Very few capitalists of
ing their prerogatives in the name
great wealth have entrusted their
of government. Without realizing
funds
to
us.
We represent the
it, the American people are under¬
capitalists of modest wealth and
mining their own prosperity by
of tomorrow's achievement. It is
spending for social experimenta¬
they who are the great victims of
tion at the expense of government
present socialism and the ultimate
debt or, in other words, future
dictatorship which is inevitable
generations.
under the course which we are

comparing the
Den

for

property

of property

ownership

laws lessen

we

the value ot

custodians has been brought

to¬
He

ing crazy
gether."

upon

Congressman McGnire, author of recently enacted Federal "fair
explains its provisions and asserts it is an adequate
and necessary protection to small business. Denies "fair trade"
trade" law,

ship is moving rapidly in the right
direction. Its only handicap is that

This

it to ourselves.

we owe

cause

encroachment

by crowds.
Dean Martin once defined

daughter chooses to distribute his
wealth by hiring other people to
do his thinking and his working

encouragement of individual
initiative backed by such owner¬

purchased present benefits "on the cuff" to be paid for "or
not" by our grandchildren. Points out, without realizing it,
American people are undermining their prosperity by spend¬
ing for social experimentation at expense of government debt.
Thinking

U. S. Congressman from Connecticut

and

expanded Federal debt and

viduals and far more so

By HON. JOHN A. McGUIRE*

occasional millionaire's son or

an

Private

own

people" who have approved poli¬

currency,

if

stop worrying about it

should

The Federal Fair Trade Law

rich in

for him.

property
freedom, Mr. Hazen contends the right has been

Asserting it is impossible to dissociate

cies which

League

far less
that we

income

of

classes

other

idle

of

number

the

than

manufacturers

who

sell

their

products through these retailers.
The individual action taken by
all these human beings to restore
fair

trade

was

members

an

of

education

Congress.

fair trade

fornia

prices.

Fair

petition at which it
Why?
Because the

♦An address

ing

of

Greater

1,1952.

the
New

was
very

aimed.
price

for tricksters who used unfair meth¬
ods
to
deceive the

It
destroy
their
proved that fair trade is not just thumbed their

many

The first Cali¬
Act dismally

Trade

failed to restrain the unfair com¬

by Rep. McGuire at meet¬

refusing

tracts.
Pharmaceutical Council
of
York, New York City, Oct.
'

to

publijfe

competitors
noses

sign

and

just

at thd Act by

fair trade

con¬

The California Act needed

Continued

on

page

3&

Volume 176

Number 5156

.

.

The Commercial and Financial Chronicle

.

Our Propaganda

in Asia

discouraged because after 50 years the Asian backdrop. I want to see
of American tutelage, the Philip- our
advertising talent harnessed
pines don't seem to be doing bet- and poured into the needs of the
ter.

By FLEUR COWLES*
Associate

Mrs. Cowles, reporting
its

people's

together

with

on recent tour of Orient, calls attention
glaring misunderstanding of our intentions,
fear and contempt for our size. Says the

T
I

tu

the

m

been

last

ttca

twice

to

Three times

•.

I've

years

South

to

cently

two

America.

e

to

Far East. I
and

Europe.

And

re-

see

talk

leaders

to

te

n

and

personalities

to

whom
revert

I

through the front lines in Korea
and

to the Truce Conference.
I sat in on off-the-record sessions

sign

when

all

in

else

And

I flew

I

the

world

thinks of

Why

us

better selling job?

don't

deem it so
important we give bigger budgets
and bigger brains to the task?

why

It

is

the

in

we

Orient that

the

find

I

most

embarrassing form of
polite fear and contempt for our

size.

It

glares at you. I admit that
coV.
such a worldly nllPO as
place
France, the propaganda job is still
o

in

even

no

sticky I have yet to discover

so

to

Chiang side

the story.

From there I went

to

Fleur Cowles

don 'twedoa
And

Formosa

of

that tense

city

think how lit¬
tle

to

hear at first hand the

I

wince when

up

Japan.

and TOcks.ia
°f the worlds
sPehctacul,ar harbors Hong
Kong (the only important free
nnr

p0ld;
a

or

sibTvacan° affect
sioiy can aiiect

nurchases —or
or
purcnases
-

a

left

the

in

British

colony
the

under

mouse

",nr

n

world

like

of

rv.,,1

a

Chi-

a

o

+

Communist swords and scabbards

hidden

this

in

starving

many

corners

dung-ridden

cattle

of

finest
'

an

on

political

jf n0f biggest

es{our

of

city—

or

and

clean-up jobs in

they

make it
can>

clear

that

efforts

to

found

inadequate.

be

Magsaysay told me one of his
anslfS armiesn overtb* Islands.
18
teacher-corps all
the

and

repeat

our

SteytheaprincipleJeof

toward the

ur'gent

effort

selves

but

we've

.

,

.

repeat

democracy

children

and tbeir parents (at
village level as well
as in the cities).
They are spread|ng
j£acj. ^ba^. Magsaysay has
-

-

-

^be

to

got

media—not

terms. I

own

start

them

repeat:

using

their

"shot-gunning"
ones.

The

our

Asiatics

the gun

tbat be
bosses

pojsed against corruption
intends to force political
t0
give way to honest

eiections

s™d

fa

orosnect

requireP

that

on re

attitude

have

4U~

4

J

—4111

'

thousands

of

dedicated

our

a

school-

propaganda corps
experts ought to

information

embrace

t hoDe

P

*

we

were

wclc

SDent
apcxil

in
111

of

years

The

sooner

learn

we

®hare

advertising
dUVCHWHlg

the

on

our

this

on

one

in Asia.
takes

tion look

paramount

,

interest

as

the

on

all whites with

hes the

give

any

from

culture

im-

the

outside.

Our

technical assistance must be prof-

proof of Russia's

prime

sus-

with people — and
impression of seem¬
ing to "order" them to graft our
technological efficiency upon their

not

shifted from "old power" to "new ^^^nSnSom
Power " In this one failure alone mu6st be Unked
tient

an

propaganda

delicate

"work"

must

,

new

a

Work

picj0n, we must learn to give our
beip a better complexion.
We

under-

overcome our bad record
The Eastern world mis¬

our

to

where

Asia,

color-question makes the popula-

Everywhere I went, I got
opposite impression: we

haven't

before
UC1UIC

woman's as well as

Made

efforts
be

ones.

the Communists,

to

In

point.

publishing. I respect its
and salesmanship—and its

eye

farmers

our

Rehabilitation Program Can Be

JaUing We deserve
lnto the hands of landlords.

I entered
power

of

f
of

instead

preventing a disproportionate

ln

life

my

—

over

stood

many

we

promptly.

Our Propaganda Efforts in Asia
A good

unfamiliar

Wherever we can teach illiterates
^
to read simple truths in their own
devices and dialects, we can hope
to have these illiterates all - to
ourselves instead of handing them

to

do

"

beset the wretched millions who
are Prey to Communist promises.
Tbe tirst job — in using each
country's familiar symbols—must
be to make it clear we want to
see *and reforms take place—and

^

miracle

a

in-

propaganda

plays, story-tellers, and mystical
soothsayers, even if we are not
quite as enthusiastic about them.

how to do this the sooner we will
most Filipinos)( He promises that §et credlt> as Americans, for being
Iand reform
m be increasingly opposed to any unfair system.
enforced. xhere _ in a massB/f And the more effective we'd be
to

fascinating

struments; they love their shadow

— We should employ them, and
tbey are Iew but terrible—which should use their local artists
1

I

can

show

must

we

how in their

We

problems

,,

,

for

more

another

show
the Far East how to keep them-

using
each
country's
own
technique
(though improving them as we
do) but we should use them to

„

to

Americans

we

produce

themselves

misunderstood

only

divided,

are

and wm support the Asiatics'

own

audiences.
not

Any

to land reform, the

^

using

should

the

"
propaganda.

of
~

In addition

strip in India? Another instance
pf transplanting rather than re-^

We

this,

overcome

words-^are

other" big "propaganda ne^^ is"

He

time.

editor's

°Yet ^ it extended "£he Kiyg and r' set:
iet 1 if
not.
Here lies the most

hacks

"mink-coaters."

form
~

WNIT; when
they wilt.

items as Christianity and
space cadets) but can we.be serious when we unleash the comic

verse

appointed

was

To

only

prpgress we make counts: after
ap, the Communists function as a

native films with native
actors who speak not only the
was hardiy
a political asset.
Yet language of the localities but who
Quirin0 gave him one of the hard- look disarmingly familiar to their
war

Philippine

Slaf, 8eeiaed too ornate and vertising
less

peaceful for trouble—more

deeds—not

i^terpreting-for-the-market is in
the use of American made films
?ent into backward places in the
omen' He's fiShting an undeclared interior — when we should be

teachers—is

dragon. In Calcutta, the dying man on the street still dies
without a passing glance in a
world too terribly
unchanged.
are

instead

he

That

av

today)

perched
paws

is much

He

villains

nese

a^utaMaersh^n°AM Mutual'AM

or?heoffshorn^
the
oil-shore

the islands

on

fig-

a

po-

tQ

language
fails.

UP with the fact that even
sorely debated foreign policy

My journey to the Orient took
me
e
to
diverse
places.
I went

can

to

•

thII^tlLtfc1th^nthe ^picufcC'°SS
Atlantic than the Pacific.

hand, with

fact that

our

thieves.

the

at

anyone

of our motives.

to the second most important post
in the Philippine Islands is a good
,

his

mere

like

litical

on the other hand, making
policies by staying home from the
Far East doesn't impress me at
all. It troubles me that Acheson

this

resting

corruption cold propaganda war—but I seri-

the

cowboy heroes—rushing after

during his service was one short
trip to Hawaii. Can't we connect

wherever I go,
but I also talk

.

4.

The

significant.

has gone to Europe six times, but
the closest he s ever been to Asia

g overnment
i

u

that

faith

like Magsaysay can emerge is

ure

trying to influence.

trayel outside the U.S.A. quite but

lot:

a

the

between the desperate need of us
and the fear of us—the suspicion

is certainly diminishing)

have

eration.

"eye-dropper" attention U. S. gives to crucial Asiatic problems
is sheer folly. Warns against
distributing "big phrases" about
wonders of capitalist world, and holds we must abandon dream
of transplanting overnight our
glorified notion of 20th Cen¬
tury civilization. Urges we learn more about the people we
are

despite

is against us. The conflict is tense

ously question transplanting the
Philippine exact sophisticated approaches.
people have learned the rudiments
Comic books sell many products
of democracy and that their prog- and have explained
many an idea
ress can be rapid in the next
gen- to Americans (including such diI

to

But

(and it

Editor, "Look" and "Quick" Magazines

13

(1225)

nroiects

like

}

universities

efforts in Asia- 1 was disappointed diabolical immensely success laboratories hospitals, exchange
cunning and complex
was
and our
tempting loot of all for the Com- to see
gnisitrevmustarailimaf
our
propaganda pr0blem. It d be,
mUnists, because Siam is fat with devices used there, where they shouted that the Russians lie—yet mote V0catl0nal training to turn
Despite the fact that most of the rice. As a food-surplus
country, neither fit nor fare well against our job is devilish because history
Continued on page 20
misconceptions of us are concen- she trembles at her own
think

the

life
me.

misunderstandings

the Far East

trated

his
nis

of

public

This is pure

^ynnf?nc\heJcfrt.EXt<FiS^nn1n1H
cl

an*

"

aii

AnH

'

*

tho

winHH

has

one

.

*

of

India,

Asia's

greatest

Communists

rice-

need'it.

In the Philippine Islands I discussed the food problem — and
agrarian reform—with President
I also got to know quite

This announcement is neither

an

offer to sell

nor a

solicitation of

The offering is made only by means of the Prospectus,

any

offer to buy securities.

which describes

'

the Debentures and the business of the Company.
NEW

ISSUE

well the intrepid Magsaysay, their

,

influence

of

bowls.. The

Quirino.

alone, Minister of Defense, who is slowly
killing off the Communist Huks
right in the very jungles which

the vast chain of countries bor-

on

tiering Russia, for instance, is beyond compare. The whole Asian
continent

is

openly haunted by
competing furies as tense as any
in a Greek drama. In India, the
devil is hunger.
In China, it is
the lust for power over all agrarian Asia. Each spectre stimulates
the other to action—setting off a
dreadful dance of incipient revolution and never-ending nationalistic

quarrels.
And Russia has
planted so gigantic a cultural offensive
can

on

this stage that

longer say
be immune to

no

one

he doesn't

any

or

A

like to state promptly that
journey this year to Asia was
brief. I have only the most personal of impressions-backed by
ever

I went

on

our

people

American
are

doing

about information and propaganda.
lot of what I have to report

A

may

be old

news

to those of you

who've had long-term assignments
in Asia.
But

I

would

was

in

twice

New

like

to

point

York

recently,

and

had

long talks with him about enforcing land reform. Magsaysay
knows this would
litical

teeth

remove

from

the

the po-

Huks'

I

matter

tion

make

the

same

Cal weapon.

And he is helping to
accomplish this by the bold stroke
0f

land "to

giving

the

captured

Price 99%

Communist Huks'

Magsaysay's

meeting

of

war

out

six-

in

traordinary cultural and political
military offensive against the

and

?"um™7 ufxcumvc ^11*1 uxe

Upon request,

^mmwunlsDHe invi^d el?PieS
m

Baraeo>

^a*.ay States, Indonesia, the Phila
Indo-China to come
*° this secretly planned session to
pool their experiences (in psychol°£ical as well as in military warfare) m dealing with the Commumsts.

from any

.

To keep this conference

a copy

of the Prospectus

Underwriter who

may

may

be obtained within

any

State

regularly distribute it within such State.

Merrill Lynch, Pierce, Fenner & Beane

Goldman, Sachs & Co.
The First Boston Corporation

Drexel & Co.

Blyth & Co., Inc.

from beinS snarled by politics and

°f Staff.

termed

sians stage
to

see

Glore, Forgan & Co.

Eastman, Dillon & Co.
o.

Kidder, Peabody & Co.

so well.

the

I

technique

.^ov^tTpbrL,Mciuk° nVwand ad°pted
Some Americans,

am

Lazard Freres & Co.

Salomon Bros. & Hutzler

pleased

Union Securities Corporation

introduced
October

sideI know,

are

1, 1952.

Harriman

Ripley & Co.

Incorporated

This is the kind of cold

war propaganda-setting the Rus-

The result might be
10-minute expertizing—




(Plus accrued interest from September 1, 1952)

from the Philippine Is¬
neighbors—which started
Baguio yesterday—is an ex¬

weeks' visit.

City, Sept. is, 1952.

3%% Debentures due September 1,1962

bite

Soveronient, Magsaysay called it
name of veterans of the last
war-. Ye*, in four instances, the
came
away wishing
as Veterans Organizations sent deof fact, the Administrafense ministers as well as Chiefs

would

Company

couldn't even hold their
rankS together without this politi-

that even a six-weeks' journey is
long enough to blot up intuitively
what a country's feeling is for the

U.S.A.

Associates Investment

—they

inquiry wher-

what

foreign service

Magsaysay

$30,000,000

refuge.
I saw
again when he

lands'

I'd

endless

their

were

veterans

Journey to the Orient

direct and

once

see

its danger.

my

a

,

it gets eye-dropper tially lush value to the Reds. Siam
the matter

in

relations with U.S.A.

it

,

poten-

there,

attention

The

.

in

far more critical.

are

F. S.

Moseley & Co.

Stone & Webster Securities Corporation

White, Weld & Co.

14

The Commercial and Financial Chronicle... Thursday, October 2, 1952

(1226)

with the economic health

cerned
and

prosperity of our country and
power to support righteous¬
ness throughout the world.
It is simply this: shall we have
more
government in business or
more business in government?

Roadblocks To Nation's
Continued Prosperity
HUMPHREYS, Jr.*

By II. E.

Agricultural Control in U.S.

our

I

By E

Former Chairman of President's Council of Economic Advisors**

this because I can see
major road-blocks in the
path of continued prosperity of
our
country. I'll mention seven.
These
are
the road-blocks
that

President, United States Rubber Company

say

reviews

many
"

roadblocks to prosperity: (1) unnec¬
essary government intervention in private enterprise; (2) tax
policies which destroy incentive; (3) government's failure to
recognize true role of profit; (4) instability of dollar; (5)
failure of people to accept truth that full production benefits
all people; (6) monopolistic union practices supported by
government; and (7) widespread misunderstanding of our
Mr.

Humphreys lists

as

contribute

young

at that crucial
must decide for
we shall speak

we are

where

point

we

whether

all

time

up

and stand up for freedom

and

opportunity,
or

whether

i

Security

President,
the

s

Mr.

desirable,

where

ly

up

point

How
travel

for

than

more

our

what

shall

sons

will

we

socialism

total

toward

are

they

age?

our

think

by

of

which

could

in

end

com¬

we

think it is

;ime you

I

ill,

am

father.

a

businessman.

I

You

also

am

will

the

need

fathers and all

elp of all

a

busi¬

oppor-

two

are

Tnere

business, Mr

anti-trust

proper

desirable, but contends, because farming
political power, the price, income and
allotment provisions of the Agricultural Acts will
prevail.

is

the

unnecessaiy

prevents business from

that

people to the best of its
The only time the gov-

serving

should

ernment

business

* take ^
the program mak- to run as long as that of a doctor's
this conference thought it dissertation, I have condensed all
important that we in the Umteo these facets of national policy with
view

our

re- reference to the economic nhase
reference to the economic phase

to

attempt

con-

all-out

is during an

when scarcities keep competition from exercising its effect
on supply and demand.
Under our competitive system,
war,

own

linking

as

national
cupuraj

of

agriculture
"Agricultural

agri_
poi_

[pipe and

^

regulations.

other

The
kind

that

the kind

is

including

necessary,

trol

kinds of govern-

relations with

President.

is

is

States should at this time
,,

...

Tnere

ability.

surely by this
must know that first of

President,

--

(bur private

of

_

us

leading them down this road—

Mr.

operation

income

hold balance of

states

free ?rs

tunity system.

Fed¬

munism?

gain. But, don't
you

each

pay

farther

much

road

a

intervention to

extent in the

unnecessary

an

ment

time

And

to lose

gin

of

out

eral taxes.

be¬

we

day

one

day out of four to

one

the

socialism.

was

the

ago,

years

United
mean

put

analysis

the

we

real¬

ized that

com¬

nessmen

in

—

all

fact,

thinking

the

must

customer

boss.

the

be

i.urai

pro_

business

perience;

h

settled

con-

n

s[miiar

not

of

the

tnrough pub¬

institutions, evolved and
out of practical
set

a

of

more

ex¬

less

or

and

accepted practices of
with and through these
institutions; and, finally, the self-

by

working

jess

or

more

the

does

organization

still evolving

j.r[es wh0 have
e

This

prutc

-m 0ther coun-

e

phrase
in

lic and private units—some large,
some
small.
It embraces a set of

gramsof those

fronted

the

mereiy

u

•

fhe t h [
anc(

States."

'economic

vile

against
n k[ng

0 v e r

into

Control

restraint, stimulus,
and direction by official govern¬
ment
agencies,
it means rather

orac—

and

jhis

to

-

time

or
Proprie¬
Holds neither an

Planning.

road-block to prosper¬

The first

This year we shall work near¬

11.

we

shall settle for

to

figure

10

tional

gether to remove them.

„0

By

trend from Voluntarism

aggregative approach to national guidance of agriculture or a
centrally-determined allocation of the farmer's part of the na¬

un¬

business must work to¬

ity is government

spending.

a

tary Management toward Central

which
share today. Govern¬

men

ment and

developments relating to agricultural control in U. S.,

and finds there has been

certainty about their future

business system.
At home,

of

feeling

the

to

G. NOURSE*

Formerly Chairman, Council of Economic Advisors

prob-

control of individuals who, under
Edwin G. Nourse
a
system of
basic voluntarism,
and how many, and as phrased in
i s
something stand ready to help you face the
joined with necessaiy discipline,
how much he shall pay for them, the letter inviting me to appear on make
that money
the managerial and domestic
H. E. Humphreys Jr.
challenge of true leadership in
Under
government control, the your program was "The Logic of choices for the rural segment of
can't buy?
this time of decision affecting all
customer loses his voice in busi- National Policies for the Promo- our
Moreover, in our frantic scram¬ our sons—affecting our nation's
society.
ness;
Prices are set at an arbi- tion or Regulation of Agricultural
ble to do everything for every¬
it seems
to
me
necessary
to
destiny for decades to come.
trary level and quantities
pro- Production." I have availed my- make some such statement of the
body, we are being forced to give
Today, as a start, let me remind duced no
longer bear a relation to gdf of a speaker's privilege to re- concept of workable control or
up more than money. We are giv¬
you of the threats to the country's
the demand.
■■;,/•
phrase the title. I have intended organizational efficiency in a free
ing up, piece by piece, the hardcontinued prosperity which must
won freedom to get ahead,as indi¬
The
second road-block in the to preserve fully the spirit and society before I can explain propbe faced by government and busi¬
viduals. This is the freedom which
ness
if we hope to maintain our tray of continued prosperity is tax general objective of your program erjy the significance of the final
our
fathers handed down" to us.
policies which destroy incentive, makers. But at the same time, I qualifying word which I have ineconomic
strength for the next
If we fritter it away, what shall
Todav the government is drain- h.ave
thought certain modifica- troduced into my title. This word
generation.
we
say when our sons ask what
ing
away
the
money
business tl01r}filin the tltJe Y°u
"Vacate is "ambivalent." If my remarks
In case you are tempted to dis¬
we did with it?
needs to build for the future.
a httle mor? clearly my line of are to give our members from

security

plete

Americans.

that

you

I believe I

American

can

assure

businessmen

products

what

decide

should

He

The title

lems

shall be made,

o

^

•

-

what

count

Furthermore,

if

we

strive

too

hard for collective

security, it will
slip through our fingers entirely.
If we spend too heavily to guar¬
antee health, employment and old-

v

comfort,

then

inflation

and
economic collapse will make those
age

far

we

have

each

when

of

amount

toward

look

the

income

that has been going into taxes, it
becomes clear

moving rap¬
idly in that direction. These fig¬
ures

show

worked
to

are

that, 20

only
for

pay

we

one

an

to examine

you

years

ago,

I ask.

low

point in

leader

feels

We have

history if

our

he

come

must

to

any

appeal

hate to have my boy think I had
to. It is long past time that.we all

tegrity, his dignity and his moral
courage.

address

me

that

tell you

most

keep

incentive to invest enough to

businessmen

some

courage
-

ur

o de

businessmen

x

other

with

p -OP

ToTtykDend[ng8anotheyfew
spending anothei lew

milm

about

dollars; it we try to hang onto

lion

it,

will

onwrnmpni

fho

n

the

tak<*

all

government will ta e a
but 18% of it anyway." This con-

important

question

con-

s'anrem^Vees^

e
ciana

to

buy

any

of

these

neither ,an

shares.

offer

The

to

offering

sell
is

nor

a

made

solicitation
only

by

the

of

an

offer

Prospectus.

after

should col-

Snce

to

cutting

all

out

the budget,
unnecessary

let's not kid ourall taxes are paid by the
And

spending
selves*

customer in the

450,DC 0 Shares

AMERICAN METALLIC

CHEMICALS CORP.
COMMON STOCK

is

a

big

third

the

The

profit
in

Prospectus

may

others

as

be

Dobbs & Co.
Ill

Broadway, New York 6, N. Y.

Telephone HAnover 2-0007




obtained

may

talk

in

any

State

these

M. S.
Ill

only

shares

from
in

of

the

United

in

jn

*rr

direction

one

?

nnnthpr direction

'

r

,

expana 111 ano\ner direction jt seems to me we must begin by
the tltle as proposed by y°ur pro" clearly recognizing that there are
m

committee>

Jefinitelv
aeiiniieiy

■

,

divergent

some-

what competitive but—let

us hope

two

First,

then,

seemed

it

to

me

aiveigem,

sume

™u^h,to° ambitious in any author- —ultimately complementary , philfor me to undertake to expound
of

how the

agricultural

the logic of national
COntrol or direct the

industry of the United States can
poi[c[es t0
perform its distinctive functions
agr[cultural industry of a coun- most efficiently as a segment of
°
try—any country and at all times, our total economy.
way

As an economist- 1 am "<* very.
favorably inclined to
«gpnprni

theorv"

§enerai mcory

a
^

economic

life.

the

for

idea of

anv

,

ohase

pr?dbL

I shall therefore

rpmflri«

pvrlnsivelv

to

to the character and trend of our

On the one hand, we have the
iog[c

pc0

individualism

economic

0f

•?Vol ,7?/♦

i•*

u

embodied

trie

in

family

fmrntionire

omic

Af
of

unit

and

the

re¬

ec0"o™lc iunmiomr.g ana uie re

"arUffdaf'uSucKi ent

in

^ a°ffrai?srt^KrSSfSSi®
ijrp

the

Qn

other

hand

we

economic thinking during the last have the iogic of government reth''ere fr ^decades.
sponsibility for assuring, a satis-

Wlth mY topic thus narrowed factory level of farm incomes,
in time and space, 1 then proceed This involves (a) the erection by
do broaden it a bit as to its func- government of productive ar.d discoverage.

The

proposed tributive structures and practices
that would regulate or heavily
condition the individual farmer's
business activities in conformity
with a pattern of economic security, and (b) acceptance by the
farmer of this guided way of economic life in lieu of the more
venturesome but less secure pattern of life enjoyed or endured

^tior^^miomis^" ^but§fo^

some

yearsspeciahzed in the field of
distributive institutions and
prac-

government's

about

public.
Surely

lawfully offer

the

.

bor and customers and the

the

pvnanfj

exaggerated tices, rural and urban, as they afprofits has stirred up jfect the farmer's real income. I
resentment against business by la- have
been
concerned
with
the

PRICE $3 PER SHARE

of

insight into the

life

agricultural

.

difference

obstruction

rath oj piosperuy.
pain of prosperity

undersigned and

.

tional

end.

makes

recognize the -true role of

the

overseas any real

topic mentioned "National Policies
how
taxes
are
applied
Heavy for
Promotion or Regulation
taxes cn profit work against themAgricultural Production." I feel,
selves
They
penalize
success, however, that agricutural producThey
discourage
business
from tion> agricultural distribution,
serving customers better and pro-.-agricultural
finance, and farm
viding more and better jobs. Tfiey family consumption constitute, in
dry up this source of taxes
a famous Ameripan phiase,
a
Failure of the
Government
to seamless web-" 1 have .never made
it

But

Copies

circumscribe
H

,

the United States and primarily

'

enipiu.>ee&.

fecfenough
is

~

thought in mind, let dition works against the interests
agricultural policy and practice in
what I believe is the
-o^s

announcement

a

not dQ better, it seems

osophies

on
Heavy taxes on corporations one -

den?X?he Government
This

lo

itative

.

extravagant

can

to me, than just how Iremarks by statesto and perhaps contribute a
begin my undertook uttle better mutual understandexplaining

the

and

means

j

that

hedvily

so

both the

lose

industry expandmg.

man's selfishness

or to any
other
human weakness to get ahead. I'd

investors

taxes
thev

to

appealed to man's nobility, his in¬

Government

ihflaUohAnd it
times of inflation. And it

in

appeals to special interests
country.

down
If
to de-

prices

amniintQ fnr dcnrpciation

?nth^
these

in this

hold

to

attack and the jC0£e,,
ygis

while
wi

a

That is all aV,r>+

we

Federal

82?e of^ accompany'sS prof if
ol
company s prom,
tries

in

this
tnis

does
does

cmvprnment
government

Thp
The

does not allow corporations

people.

day in every 23

by Mr. Humphreys
before the Fifth Avenue Association, New
York City, Sept, 30, 1952.
an

as

proposal in the light of what
it
believe is best for

With
*From

ask

me

the American

meas¬

at

national

our

say

There have already been far too

gone

we

to

honestly

you

a

But

have

82 /o

many

total socialism is difficult to
ure.

let

ness,

guarantees meaningless.
How

I

appeal for special favors for busi¬

such

such

of

dent

general

•,

State.

Gerber, Inc.

and

income
as

most

build

make

plants and

more

jobs.

111

that

and

-i

Continued

The

Of
renr\

we

may

on

page zy

1 d'd "0t W31lt my tlUe
*A.n address by Dr. Nourse at the inConference
of
Agricultural
Economists, East Lansing, Michigan.

ternaiional

which

on+prnriop

t;onai
fill

[n

has

United

the

,

.

been

American

bv

bv

way

tradi-

States and is

oervice

a-

gHPvotion

manv

of

all

and
"the

lTfe7

as

Managerial Freedom

The Logic of

recently, in the problems of,

:great objectives enunciated in the
The purpose of Employment Act of 1946.

spending all they mcke.
..

of

.

by examining the

logic of the system of individual

interrelated

economy

way

S tcGinvest .more,"instead
^

relations

an

segment of the total

ity and efficiency.
realizing as fuily as
to

Broadway, New York 6, N. Y.

Telephone COrtlandt 7-299S

prices

agriculture

realize, Mr. Presithat profit is the incentive
you

byI hlS fatherS*
shall begin

outstanding feature of the

The

^^hpr^ivp

[

.

f e

anywhere

enterprise
or

as

that could

existed
well be

^e. -t^in

that it has been pu

Continued

on page

37

Volume 176

Number 5156

.

.

.

The Commercial and, Financial Chronicle

(1227)

statistic,

How High Can Taxes Go?

Clark

fully

Professor of Economics, University of Minnesota

at

Contending U.

S. and Canada

the economic

limit

of

neither at, nor

are

10%

You may be
wondering whether
the title of this
paper,, "How High
Can Taxes Go?" is
addressed to
the right question.
In the
rosy
glow of the

Canada
the

tion

may

that

the

Dr. Walter W. Heller

Finance

of unexpectedly

Minister,

large

taxpayers

so

1953

billion

and

expire

unless

am

high

as

had

me

off

the

easily,

so

political

imagine

Program Commit¬

intention

no

of
a

And

not intend to let you off so
either. And you are, quite

When

easily
right.

looks beyond current
surpluses
and
United

one

Canadian
States

I

afraid that I do

are

you

mere

politics to the

lems

that

minds,

basic prob¬
occupying men's
in lay
circles and

are

both

among the

derstand

"experts,"

one can un¬

why the Program Com¬

mittee felt the subject of taxable

capacity

to

be

so timely.
Taxes
States, Canada, and
are at their highest
in
history, barring only
War
II; and we in the

in the United

Great Britain

levels
World

States, at least, still face substan¬

past,

—

January, at the close of
on

the

limits

that

may

they

in

to

are

taxation

20

years

who

ago,

not

no

stubbed

his

toe

tive

to

$60,

and

bankruptcy

at

that,

in

as

the

of

case

the

limit, the limit is much

remote and of

nature

than

a

Congressional
the

on

Joint

Economic

Re¬

The

discrediting

government

25%

a

income

to

limitation
be

on

diverted

by

not

supported by this
panel." There was no dissent from
the panel of eight, which included

the

of

the

-■

•

The

of

the

of' the

thirties

Clark's

on

and

the limit of taxes at
of

the*less

dollars

or

income

x

of, national

percent

In

in

satisfying

of

the

these

factors

adequately.

Tax

not

President

Shoup,

yesterday's Round
Table participant Richard
Musgrave, and the present speaker.

tax

a

traffic

switches from
red

light

green

with

to orange

to

few

considerations

which

specified

centage

levels,

dollar

but

or

of

per¬

the

the

his

guarded and-- qualified type of ap¬

can

position earlier in the hearing by
stating, "Certainly we have not

especially relevant to
problem of how high taxes

Buehler

reached

had

the

taxable

underscored

economic

capacity."

limits

to

Mr. Musgrave

referred to Clark's thesis in terms
of "some imaginary notion of tax¬
able

capacity

limit to

or

tax

our

25

a

missed it with, "There is

thing."

30%

or

efforts" and

mittee

such

no

spent wearying them
point-by-point rebuttal

was

,

the

from

which

Just

to

Throop

Smith,

cent

tax

creases

increases
up

to

$5

further

or

or

$10

the

the

in¬

billion,

Let

a

few

5 Dan

Throop Smith, "Note on Infla¬
tionary Consequences of High Taxation,"
The Review of Economics and
Statistics,
August 1952, p. 245.
6 Lewis

and

H.

Kimmel, "Our Tax Burdens
Capacity," Annals of the
Academy of Political and So¬
Science, November 1949, p. 154.
Taxable

re¬

longer,
less,

or

his

funds

or

from

decide that since

reduced

the

accept

income

price of

more

an

of

it

lower

even

(coupled

perhaps
saving out

reduction in his

a

to

current

tige

recognition in his

profession, for pres¬
community. In this
taxes are not likely to affect

in

case,

or

the

his productive efforts either
way.
Let
of

me

the

say

in passing that

answers

incentive

to

Colin

arguments

is

one

Clark's

found

in

preceding paragraph.

payers

words

about the sixth factor in the above

4

Joseph
A.
Pechman
and
Thomas
Mayer, "Mr. Colin Clark on the Limits of
Taxation," The Review of Economics and
Statistics, August 1952, pp. 232-242.

start with

me

to

previous

he either has

he will take

thus

the

Taxpayer Reactions

the

ness
Administration, to wit: "In
general, I do not believe that re¬

whole

If tax¬
respond to increased taxes

by working harder, saving harder,
risking more (the so-called

and

"income

effect,"

a
function of
rates), they
output, not reduce it.
Only if they decide that the added

average

will

tax

or

add

tips

more

effective

to

the balance in

leisure

and

less

favor

work

of

(the

American
cial

Continued

on

page

28

thing
These Notes have

family, Richard Goode,

to

of

try

sparing you.3

am

keep

within the

nominee

I

Dan

Harvard Graduate School of Busi¬

dis¬

My time before the Com¬

with

sor

today.

go

-

three

consume

may

has

occupation

either

praisal recently made by Profes¬

Mr.

rather

of

its

to

and

of

of the game, or

a

to be

be-

was

income). A third pos¬
sibility, of course, is that he is
working, saving, and risking not
mainly for money but for the love

appear

seem

off,

worse

high-yielding investments.

tax

with

»

at

Since

directly

one

case,

and

some

money

to have been neglected in
previous
discussions
or
which

Past

-

low-yielding investments

leisure,

There¬

President Buehler of the National

don't

may

harder

Second, he

and

he

this

more

riskier

of

fore, I shall select for comment

Association,

In

switch

and

enduring appraisals in terms
ofr^it depends." What we get is

appear

taxes.

in

income

work

Safer

limitations

pays

react

First,
his

save

time, I can hardly hope to cover
all—or, for that matter, any—of

but

more

view

always

lower

he

may

level.

measures.

analysts avoid the
satisfying manifestos setting

of

looking

individual, than he

store

;

art

him)

than

ways.

the

state

out

always leaves him

an

He

ticular taxes.

(5)

point

^

The composition of the tax
system and the structure of par¬

fiscal

individual's

fore.

(6) The degree of taxpayer re¬
sistance to, or acceptance of, tax

<

(on

taxes

tax
as

flexibility of
'

the

community's

affect the quantity of services he
gets from government the higher,

economic

private economic action.

ad¬

eyes

the

on:

a
trend toward appraisal
capacity in relative terms.

with

favor

and

its

pressure it

taxes

composition
expenditures.

of

between

the

worse

and

nature

of

of

to

The

motivation

Increasingly,

x

in

theory fit

attacks

more

of

in

ca¬

tion of contractual claims
against

it). •
(3)

the

and

problem primarily through
of the individual tax¬
payer. From where he sits, higher

science of tax administration and
its translation into practice.

Savonarolas
the

level

in

system

tax

even-handedness

the

qualitative factors.

The

confidence
the

at the

quantita¬

depend mainly

of

generates—arises

(4)

The Nature of Taxable Capacity

Federal fiscal policies

other

govern¬

tax struc¬

pacity—the high blood

nation's income and wealth
(as
related to the size and distribu¬

had

we

and

a

point

only

of

administration in terms

taxpayer

a

25%

thought.

deter¬

increasingly

assessed

several

policies

view. A lot of the emotional con¬
tent of the subject of taxable ca¬

(2) The size and distribution of

more

considerably dif¬

a

is

of

and

and

and

is

or

Executive

testimony

on

article

appear

been and

are

not

being offered to the public,
of record only.

mittee, is reviewing the foregoing

Congress, after

not

This advertisement appears as a matter

Com¬

tial deficits and the threat of fur¬
ther inflation.
At the same time

effort in

$15

a

billion

tax

1950-51, rebelled at fur¬

ther increases. Moreover. 17 states

have

valH

gress

caHmo

petitions
for

before

Con¬

constitutional

a

amendment to limit the top peace¬
time rate of income and estate
taxes

25 %J

to

25% Limit

concern

of taxation is the

over

the

level

warm

reception
in many quarters of Colin Clark's
25% limit thesis. The core of his
thesis is that further tax increases

become self-defeating when they
exceed
roughly 25% of the na¬
tional income.

ing

the

invest

Chiefly by impair¬

incentives
and

ployers'
creases

by

to

and

work

weakening

resistance
and

to

in¬

wage

wasteful

limit

and

promote

*An
45th

Tax

10,

undermine

business

address

Annual

by

Prof.

Conference

Association,

production

inflation.

Mr.

Heller
of

Toronto,

1952.




the

Clark
at

the

National

Canada,

NEW

ISSUE

Last,

$12,000,000

least, another participant

yesterday's

Pechman,

Round

has

just

Table,

Mr.

published

demolishing,

an

statistic

by

According to the staff of the House
Judiciary Committee, 29 state
have
acted
favorably on this proposal,
but
owing
to
rescissions,
vetoes,
and

legislatures

defects in

petitions

Journal,

Sept.

of

some

remain

the

measures,

ef ccf.

in

Aug.

stitutional

Seaboard Finance

Company

13, 1952.
Limitation

Wall

See

also

September 1,1964

c**-eet

"Con¬

Federal

on

4/4% Subordinated Notes due

only 17

In¬

Estate, and Gift Tax Rates," Print
of the Congressional Joint
Committee on
the Economic
Report, Washington, D. C.,
come,

1952:

and

and

L.

tb-

r>«— evs

of

Car*— *«*»

L.

Ecker-Racz

in

Tax

tional

Association

Proceedings,"

the

1951

Lircct placement

of the above Notes has been negotiated by the undersigned.

H*»er
"Na¬
pp.

283-297.

em¬

spending, taxes beyond this criti¬
cal

in

not

an

in the Septem¬

1

indicative of

even more

Clark's thesis in

ber "National Tax Journal."
but

article

The Colin Clark

Perhaps
the deep

to

2

Clark

thesis

in

ethers:

develops various aspects of his
the following writings,
among

"Public Finance and

the Value

of

Money,"

Economic
Jou nal,
December,
"The
Danger
Point
in
Taxes,"

1945;

Horner's
a

letter

the

Magazine, December, 1950; and
published in the Hearings before

Joint

C^mmitfc

on

the

The First Boston Corporation
New York

Economic

Report, January, 1952 "Economic Report
cf
the
President," Jan. 31, 1952, pp.

;

Philadelphia

Boston

Pittsburgh

Cleveland

Chicago

San Francisco

315-3*7.
3

Ibid,

qu...v

358,

pp.

a^.ve

320-325.
w.il

328, and 311,

oe

The
found

statements
on

so

several

limiting factors. For

It is also tied to

conflict

the

"It

out¬

Beyond this, the problem of
taxpayer resistance is largely a

capacity would

It

be

can

of

(1)
of

$70 billion of public debt.

or

taxable

taxation

$50,

jectives

the

ac¬

of

adds,

with

ministration.

By
way of summary of the major fac¬
tors, one can say that the limits

an

confident predictions of economic

collapse

operation
then

exceeded."5

pacity

specificity. You may re¬
hope not painfully—those

call—I

the
and

simply

purview, since it is

other

fairness

extreme

productive

possible, however, to

terms

of

excess

without

with

this

factor falling

interrelated

ment.

"it

recognized, then, that taxable

the

on

and

which

be

of

has

the

by
objective
tests
mathematical formula the
at

answering the ques¬
tion, "How high can the debt go?",
he

of

mine

and

made

not

which

one

"The capacity to

as

revenues

tivity

Perhaps, like the fiscal prophets
mistake

capacity,

would

the

name

representative

economy"

be found far¬

not

he

sure

nor

estab¬

there

to

interference

ther along the trail he has blazed.

of fiscal

Carl

with

economic

ferent

total

letting

observation.

authority

participants in the program
Forty-Fifth National Tax

taxation is

as

Ooing to go" and having
this, quietly sit down. But 1
afraid

will permit

you

does not follow that

theory

«it

tee

hope

of

succeed

way,

data

taxable

our

am

capacity

raise

adding, by the
neither his

arguments

port,
Senator
O'Mahoney,
its
Chairman, stated it as his under¬
standing that "the Colin Clark

over

reenacted.

are

you

the

Committee

the title question

answer

by saying, "Taxes
tney

I

before

Perhaps, having pointed this out,
I should

weary

if

to

Last

Federal

emergency

critical

point-by-point rebuttal

a

hearing

likely to forget

1954 when well

of

United

this

Conference.

far—promises which

are not

al¬

to

our

dismiss

example, it is closely related to
government spending in terms of
whether taxpayers accept the ob¬

ture

Also

able

even

his

turned

political

a

activity."5 closely
hedges, though of the

depends" approach is an artfele
by Lewis Kimmel of the Brook¬
ings Institution who defines tax¬

.

,

cannot

as

side of

would.

lishing the 25% rule-of-thumb, it

of

his

to

that

be

more

One

personal

exhaust

presume

University, we can expect
insight, logic, and rhetoric

once

tax

of

being wooed with both Repub¬
lican and Democratic
promises of
budget cuts — $40 billion is the

said

sound

attention

the

he

and

with

surpluses in

are

$5

intend

mpeachable

Treasury. On the
hand, we in the United States

highest bid

After

his

^resent, and future officers of the
National Tax Association, together

Dominion

taxes

and

6 percentage points

or

not

in

unimpeachable

dispose of it largely by The fact that the debt swept right
reference, especially since, in do¬ past these limits to a level several
ing so, I am relying on what will times as high does not
prove that
certainly be accepted here as un- no limits exist—it merely suggests

Can¬

in

by 5

do

..is thesis.

hand,

great

other

exceed

with

Douglas Abbott, suffering an em¬
barrassment of riches in the form
the

now

—I

from_

leaves

will

gained—and

taxes

me

find

wide

total

limit

go?"

we

ada's

has

re¬

duction

the

states

feel

question is,
"How
high

one

idea

one

though I

that his

Finally, he cites

though

more

tax

of

spite

Clark's

pertinent

On

the

hardly

incen¬

on

Notice the careful
notice also that he had
the cour¬
age to cite a figure which
would

some

takes up his new research post at

infla¬

at

is

for

not

even

Oxford

business

leaders

tives

or

temporary refuge in Pakistan

pinnings for his theory.3

States,

you

can

allegiance" to
part of

through adverse effects

not-too-distant

Clark

authorities.

a
vast array of tax and income
data for many countries in an ef¬
fort to provide statistical under¬

the

reduced activity in this
country under existing conditions

ion,

cam¬

in

United

of

of the 25% gong.

and

in the

Mr.

in

judiciously made, would signif¬
list, namely, taxpayer resistance.

icantly

to succumb to the weight of
opin¬

nebulous

the

on

in

paign

rather

a

resurrection,

its reincarnation

problem.

government

current

political

cites

"transfer

in

its

It is worth

also

fiscal

current

situation

least

future.

15% and still keep within taxable bounds.

or

if

which

support his thesis.4

expect

other form

perilously

taxable

capacity, Prof. Heller
stresses factors which are
expanding the borders of tax limits.
Holds it is
inherently not possible to establish the quantity
of * taxation which
represents the economic breaking point.
Points out, under
heavy government spending, the resulting
full employment increases
taxable capacity and, because of
this, Canada and U. S. can increase national tax levels as much
as

evidence

to

Having read the obituary of the
25% thesis, I hasten to add that 1

By WALTER W. HELLER*

near,

the

uses

15

September 29, 1952.

pages

respectively.
OB

16

The

(1228)

falling off among

Fall Outlook for

Industry
And Trade Promising

Most

business

indicators

Expenditures for new construc¬
to rise stead¬

look viewed

,

favorable.

as

University,

Correspondence Institution, Chicago]

a

Industrial production is increas¬

ing

rapiaiy aiter toe slump during

the

summer

in

steel

when the interruption

output

reduction

of

brought

close

to

about
in

15%

a

the

general level.

If the present trend

continues

a

for

few

weeks

more

to manufacturers' sales for

three

over

months.

significant has
in

the

Especially

extent the

con¬

a

Orders

for

durable

course, because they represent not

prevailed

but also

year

toward

a

earlier

in

the

be moving steadily
peak which may be

new

reached before the end of the year.
The vigor of the rebound
has

given

convincing demonstration

a

to the strength of the

as

demand

for products and the extent of the

productive capacity
anuwnt of

to

as

the

materials that

raw

available

well

are

as

meet

that

demand.

Most of the major trends are up¬
ward
and
appear
to be
strong

enough to continue for
—at least

time

some

throughout the remain¬

der of this year
of next year.

and the early part

Strong

has
has

haH
had

sprinuc
serious

industries

offonto

will

the

future,

the

w,™.,

m

many

continue

hamper operations for
in

4^.

effects

and

some

to

time

effect

net

is

proving to be less disturbing than
was generally
expected. Changes
have been greater in inventories
than in the rate of industrial
production and more of current steel

output will go directly into manufacturing
than
was
the
case

throughout much of the last
or

Unless

more.

work

in other lines such

chinery

should

present
be

adequate

high

as

level

to

of

stoppages

coal

or

interfere

schedules

industrial

ma-

with

materials

maintain

tion.

year

a

will
very

produc-

supporting inindustry

fluences for business and

powerful

are

and

some

of

them

becoming stronger. The major
are!
m sradnaiiv in^cinq
are:
(1) gradually increasing

ones
ones

demands

by

whose

domestic consumers
incomes
are
rising and

whose

attitudes

are

showing

a

greater

inclination
to
buy
in
volume; (2) expenditures
by the Government are steadily
increasing at a more rapid rate

larger

of

o{

also

the

^

due

One aspect
to

orders

caution for the distant

while

suggests

4%.

future, al-

close

for

machine

40%

to

tools

years

outlays

to

24%

was

cieg reiating to

transactions affect- tifying
j

private

spending

accounted

for

"waiting

its

less than they1 were

for

this

1UX

a

"
About

purpose.

year ago, even though they have
recently been increasing to the
highest amount of this year. The

the

private

of

housing.

index of orders, as reported by
the National Machine Tool Build¬

reported

construction

Total

construction

of

consists

engineering

far

so

this

the

by

-half

year,

as

^En^ineerins

that

to

cilitate
Donald C. Cook

the

distribution of
securities

v_,

V„FWIU.VU1M

shipments abroad which conitnue
to

well

run

above

$1,000,000,000
monthly; and (5) large volume of
construction of all
_• x

_

e

_

i. .•

kinds, whicn

i_

—,

•

•

in
,,

spite of high costs, is running well
above last year and
establishing
new

level
sured.

other

record.

with

100

business activity is
Any shortages of steel

raw

materials

are

as¬
or

likely to

of very limited and.temporary
on the level of total indus¬

effect

requesting them,

those

public dissemination

foster

«t0

ProvidinS timely information to 0f the registration d i s c 1 o s u r e s
investors while awaiting the
through distribution of the identlv® date of ^pectus. Thus, ti£ying statements and the reduade.r the n?w V0}}0? oi tj1®, C°m~ herring prospectus, the Commismission, underwriters snd dealers sjon slso will decline to sccelerste

News-Record " has been about 2%

com¬

as

higher than it

was

during the

cor-

the

for

_

for

ders

machine tools

are
equal
shipments at

The

number

of

dwelling
been
steadily
although activity Commission issued the
were
equal to about two
, as been iower than u was duri
were e(llial to about two
has
lower
it
during statement.
statement*
^P61"3"0118 a* the lower rate which
corresponding period last year.
"The adoption of these new
L}en Prevaded. A falling off in rp^ ninthly average has been rules constitutes a step of major
? orders *or machine tools mdi- jusj. un(jer 100,000 units, a decline importance in the administration
to

about

12 months'

the current rate.

nnnrntinnc

es

of

A year ago

thA

IAttrA*»

VIAfA

they
years'
years

nrhmh

a substantial part of the

.

e*PaasiC)n program for additional
if
\s being ,c0m"
,

units

started

rising this

a

r-w

new

_

following

,

°

_

0f

was

year

larger than in any

except 1951. Additional stim-

ulus to residential

building

resuii from

the

capital expenditures is less distant
than it was previously. A slowing
dowa in the rate of business
sPer}dinS for new plants and

credit

financial

nearly

is

always

ac-

and

removal

large

and

remain

yet demand

some

housing is

vacancies
far

of

will

restrictions,

Demand for additional

cities

in

below

most

normal,

//mi

^

_

.

be

kept

mind

in

range business

planning.

long-

in

the

Hence

tbe Securities Act of 1933, and governing the acceleration of the

•"CTtfof
citoi

thei

same

the distribution of securities regis-

bas

tered with the Commission.
"The fundamental objective of

make

registration

securities

is

to

pro-

becoming less in-

backlog of demand

iL

.

,

a

equipment.

comPleted have been about the tivity was high
same.as last year and production has there been

in peacetime

nor
a

period of

pros-

fective date of the statement, prior
to which time no offers or sales

enoiith Vn mltntafn perious conditions when building of the security

^ Lfge enoutoh to maintain

,,

,

tno

nroeont

,

rifn

.j

r\t

a*

tr\-~

r^uG 0 productlon f°r
ab°ut 15 months.

Some time within the next year a

activity
u,

low.

may be made. In

A marked de- fact, the law specifically prohibits
cline in building has often been a any 'selling activity' during the
..

.

was

.....

reliable indiwtor of

spread falling
of

business

pected

as

off

but

long

a

in

none

as

later wide-

other fields
can

be

ex-

construction

is

waiting
attempts

fbe statement,
<«rbe

period
by

encourage a

Despite

the

the

o

the prospectus during the waiting

probiems
"

weu

as

in-

here
_

extended

as

con-

sultations with industry represent„t:vps

d;rpctG(i

of

to

the

pro-

formed the basis for

which

rules

^resent

were

nnwi;Piv announced last Julv

^

rpv:-snT1rilipc

were

mnre

which

of

rpsult

made

within

make the

We shall do

our

power

to

smoothlv—

nnpratp

thpm

10th

numerous

to

workable

pvprvthinff

de-

criticisms

and

soecificallv

no_ais which

Commis-

benefit

had
comments

ta:lpd

the

addition

In

h'

.

wft^mp^lmu^be^efits^^investorg

an(j

a

hiinimum of interfer-

with the

to

wider distribution of

result

the

are

years'experience in deal-

.

previous

Commission

rules

new

of many

A

„

iThe volu™e of construction is tory prospectus persons receiving
to purchasers of
most significant indicator securities and to

a]so

a

the

viae

is

.

tlfat"of^railroad

bone fide effort to
prospectus 'reasonably
concise and readable, so as to facintate an understanding of the inbeen

disclosure to investors of formation required to be contained
many pertinent financial and other in- jn ft,' the Commission will decline
being formation
concerning securities f0 accelerate the effective date of

is

formed
judgment
as
to
their
being reduced even though no worth. To that end, the law reJnllTTAVITr
IK
situation
surplus is in sight for some time, quires the delivery of the statu-

industry that of railroad
industry,

registration

of

dates

fits both to the investing public statements, to wit: unless the
smd to those who participate in Commission is satisfied that there

__

Somewhat

«For the prospectus best to serve
* be its intended purpose, it must - a
and understandable document. To that end, the Commission bas adopted a new policy
brief

should result in substantial bene- effective

companied by at least a moderate tense than it has been for
d.ecdine lrj- general business ac- years an(j new houses are
tlvlty'fl
,.£u? that time is ap- put up jn larger numbers than being offered for public sale, so
PaJenhy still tar in the future it new families are being formed, that investors may reach an inwill

the prospectus to meet reasonable

°f„S demands therefor

has

P.*:.or that the time of reduced

As

of

copies of the prospectus will
available promptly to

made

be

will be permitted and encouraged the effective date of registration,
to give out certain information in statements unless it is satisfied
average
responding periodlas? year
In a brief "identifying statement'* to that there has been timely disof the years 1945 through
1947. the field of public construction, prospective customers by adver— tribution of the identifying state—
tlle peak las* year ^ was over State and municipal spending has tisement, by newspaper, postal ment to each underwriter and
^90. In 1949 before the defense been laecrin^ behind last vear. card or any oiner meamiii. The dealer who may be invited to parlagging behind last year, card or any other medium. xuc dealer who may
program was started it was at a while that of the Federal Govern- riew rules become effective Oct. 27.
ticipate in the distribution,^ sup—
low of less than 50. Unfilled or¬
ment has greatly increased
lo connection with the new pigmented by sufficient copies of
Association, is at 350

These two examples may pro¬
long as these
conditions prevail in the demand vide a fairly reliable clue as to
for
goods and services a high possible future trends in business.

a

sufficiently

b y

Unfilled orders^ for 0f general business trends, both written offers through the mails.
locomotives and freight cars have because the amounts involved in It also provides a 'waiting period'
deen declining for considerably building are large, and because between the filing of a registrathan the rise in the amounts re- mora than a year and new orders
money spent on this purpose af- tion statement
and its effective
ceived from taxpayers; (3) record cordinue to be less than current fects
large numbers of other busi- date,
the
primary
purpose
of
spending by business concerns for Production. The number of loco- nesses
directly
and
indirectly, which is to permit widespread,
new plants, additional
equipment, mp
put lr}to service this year Never has the country had a seri- public dissemination of the regisand
machinery;
(4)
enormous and
number of freight cars ous recession while building ac- tration disclosures before the ef,

out persons

seek

can

statement. It is intended of course

are

tended

others

'screening*

a

of which dealers

device by means

fa-

and

effective

rules

This statement is

provide

to

in-

-

filing of a
registration

date. The

intended

-

—

new

p e

between

statement

information

to the security.

and

giving certain
certain
with respect

statement'

,imited

interested in the security to request a copy of the
prospectus. It can bfc used either
by the issuer or underwriter, or
by dealers who expect to participate in the offering of the securities; and its use will be permitted
either during the waiting period
or after the effective date of the

the

000.000, as compared with $6,000,000,000 spent by the Government

remain

Commis-

riod"

was

$12,000,-

with

sion, which
provide for a

their

as

regis-

the

the

total

issues

tration

declined

spending

Two-thirds of the

ge_

under

ag0

by

new

curity

greater,

spent by private builders

though it is not likely to be significant for many months.
New
orders

and

Oct.

last year was

over

entirely

construction

of the situation with

new

on

Government, whose spending for

plies and equipment.
regard

fi

„

The increase

expanding

defense program for military sup¬

equipment

-

The predominant

are

but

sumers

pared

Although the loss of close to
20,000,000 tons in steel production

high,

only the increased buying by con¬

ers

Supporting Forces Still

remain

goods

Securities

declines. Last month
expenditures were over $3,000,000,000, an increase of 10% over
those of a year ago. For the first
seven
months,
they
were
5%
larger than in the corresponding
period last year and equal to those

expansion in

buying.

consumer

Exchange and in fact foster, the advertise1, released ment, by newspaper, postal card
and
the texts of certain rules and poli- or other medium, of a brief 'idenThe

Commission,

temporary

non-durable

for

goods which represents to
siderable

little

a

the rate of industrial activity will

only be brought back to that

in
in

impact of the interruption
ot tne

production will be felt this
month and there may be some

been the increase

orders

before

414, and 431 relating to identify¬
be used in distribution of new issues
release of the prospectus. Donald C. Cook, SEC Chair¬
man, issues explanatory statement.
may

_

tne
the

steel

not

which

ing statements which

in

by using stocks of steel which had
been built up previously.
Unless
inventories can be replaced soon

[From "Business Bulletin" for September issued by LaSalle
Extension

Publishes text of Rules 132,

spite of restrictions on
credit, high costs, and reduced
supplies of steel.
Recent heavy
construction has been kept going
ily

soon be surpassed.
gradually rising. Crop out-

Adopts New Registration
And Prospectus Rules

tion have continued

pre-steel strike levels of production will
or

SEC

Construction Remains at Peak

rising sharply with prospects that

Commodity price trends stable

other in¬

some

dustries.

October 2, 1952

Commercial and Financial Chronicle.. .Thursday,

process

securities distribu-

With

the

full

co-

operation of issuers, underwriters,
dealers we have every expec-

establishing a new record as it is period, underwriters and dealers
tation that we shall be successful."
now
doing. At the present time have been fearful that their efforts
the high level of construction is a in this respect might be
regarded
Rule 132
^
equipment and plant expan- significant favorable sign pointing as violating the prohibitions
The text of Rule 132 is as follows:
sion will have been completed, toward
good business conditions against selling activities. This has
Rule 132.
Definition of "Offer
and not so much stimulus can be for some time to come.
tended to defeat one

considerable

part

contemplated

of

the

spending

present

program

*

trial activity.

of the

pur-

to Sell," "Offer for Sale," "At¬
related to new con- poses of the waiting period. As a
tempt or Offer to Dispose ofr" and
capital expenditures consequence, all too often an in"Solicitation of an Offer to Buy"
is the volume of new financing vestor becomes committed to the
cially those
manu¬
as Used in Section 2
(3) in Conspending for these purposes refacturers, is an excellent indicator
by corporations. This financing so purchase of the security, through
retain 'identifvTnr
which reflects the attitude of bus- mam8 large, of course, and esti- far this year has been larger than personal interview, telephone coninessmen toward the future con- mates made by the Securities and it was last year, even though cor- versation or otherwise, before he &
ditions in their industries.
Al(a) General provision. For pur¬
Exchange Commission
and
the P°ration
profits have declined, comes into possession of a copy of
though these orders have been TTnitpri Qtatoc TWart™or>f
poses of Section 5 only, sending or
pa™
Corporations have raised more the prospectus,
copiing in at a slightly lower rate
states Department oi com- than/ three times the amounts
"In the rules announced today, giving to any person or publishing
identifying
statement,
and
th$n tne very large amounts a merce indicate that expenditures which they did during the prewar we believe we have evolved a an
year ago, they have been
rising will be over 5% higher this quar- years. Not only are these sums practical solution to these prob- communications: between underrpa«?onablv
in recent weeks and again are ter
than they were a year ago. larSe in amounts, and thus stimu- lems which should both facilitate writers
antb dealers rea o amy
running ahead of current produc- rn.rpacnC 4n OVnqnc4nn
.late business when they are spent, the distribution of securities and related to the contemp
a use
New

Orders Again Rising

Volume

...

of

new

orders,
received by

espe¬

expected from that

ing

,

the

last

two

dur¬

source as

years.

Total

Closely

struction and

.

,

.

.

tion.

Unfilled orders have, there-

fore, reached
total amounts
with

sales.

a

new

and

They

peak both in

in
are

comparison
now




equal

*

,

y

U1

* e

P

P

gf ^

Pubbc utilities; and by

but also

ment

are

expected

to

offset

the

•*

of
tatement- andr prop

they reflect the wide- further the objective of providing and distribution

spread confidence which corpora-

companies making military equips tion executives and boards of di-

Continued

on page

timely information to investors. ;
''In the first place, the new rules

41 —for the first time—will permit,

^
*
prospectus^shait noi. consi ixe an
.

,

.

Continued OTl page oo

Number 5156

Volume 176

.

.

The Commercial and Financial Chronicle

.

(1229)

As

you
know, the most recent
authority of the Board of Gover¬
nors to regulate this type of credit
lapsed on June 30 of this year.

Reserve Banking in
A Dynamic

Economy

In

1950,

mentary

third type of supple¬
instrument was

a

credit

reserve banking practices,
Szymczak points out for more than two decades we have
had varying degrees of financial abnormality to which reserve
banking operations had to be adjusted. Finds readjustment to
postwar conditions entailed carrying over war-emergency bank¬
ing practices, particularly in field of credit restraint. Says res¬
toration of flexible reserve banking has not been easy, but
much has been accomplished under a high level of industrial
output and employment.

residential and nonresidential

Reviewing recent basic changes in

construction.

Gov.

estate

basic changes in reserve bank¬

you

ing practices. The past two years
have

provided

reorientation of

a

these

practices
has

that

been

of

matter

a

terest

had

rates

anchor

%%

a

its

as

rate

bonds. Working

the

Federal

3-month

to

during

war

considerable

years

public inter¬

command to facilitate the Govern¬

Since you

est.

responsi¬

are

ble for

super-

the

vising

char¬

State

units

tered

in

commer¬

our

cial

banking

system,
have

you

special

a

interest in

re¬

ment's

and

Szymczak

s.

monetary

policy because
financial institutions in

it affects

State whether

your

Federal Re¬

the

of

members

are

not they

or

System.

serve

Decades of Financial

Two

Abnormality
For

more

than two decades, our

has experienced varying

economy

of financial abnormality.

degrees

The credit crisis of the late Twen¬
ties

the

and

followed

Thirties

early

was

prolonged depres¬
unprecedented severity. As
a result of this background, lend¬
ers
and
borrowers
during
the
by

a

sion of

latter

half

timid

in

the

into

large flow of gold

very

this

combina¬

This

country.

in the

by

reserves

substantial

of

cumulation

a

excess

be

involved

discount

adjusted

desirability

of

well as to the
reestablishing a
as

favorable

climate

there

to

a

volume of open market

olthe

Systeip

as were

period

were

the

a

minimum

operations.

Federal

Reserve

undertaken in this
mainly
associated
of

maintenance

orderly

conditions in the market for Gov¬
ernment

securities

and

with

ad¬

justments in member bank reserve
requirements
tive

under

legisla¬

new

authority enacted in the early

Thirties.

open-market
operations to support the estab¬
lished pattern of market interest
ing

extensive

on

Readjustment to postwar condi¬
tions entailed
of

the

ushered

half

of

in World

Forties

the

War II with its

problems of financing huge Gov¬
ernment

deficits.

The

financial

headaches created by the wartime
deficits

carried

During the

over

into the last

war

primary consideration at the cal¬
culated

emer¬

war

public

this

year

and

pattern

first

the

be

to

orderliness

of

stability,

and

into

the

persisted

The nature of the in¬

emergency.

posed
by the
emergency ultimately

threat

defense

brought about

a

the Treasury and
conduct

joint decision by
Federal Reserve
banking and

reserve

debt management
to

risk

operations

so as

monetization

minimize further

substantial

of

war¬

that

the

banking policy

reserve

maintenance

of

a

stable

was

in¬

terest rate structure for the public
debt. The market structure of in¬
address

by

Annual

Mr. Szymczak

Convention

of

tional Association of Supervisors

before

the

Na¬

of State

£anlcs, Baltimore, Md., Sept. 24, 1952.




of

the

express

both these
These

only

credit areas and,
only partial supple¬

selected

hence,

were

ments

to

instruments

which

af¬

fected the

availability and supply
of credit generally. These limi¬
tations of application and effec¬
tiveness

led

during

considerable

to

the

decade

past

the

authority to change member bank
reserve requirements. During war
changes in

years,

related

ments

period,

require¬

reserve

primarily to war
In the postwar

they

used

were

both

bank

on

positions of reserve banking sup¬
port of the Government securities
and to affect

directly the

liquidity position of banks.
You may

of

use

the

requirement

reserve

accompanied

was

by

extensive study and discussion

supplemental

of

excess

a

specified

amount, and still another for in¬
in

loan

related to bank

reserves

expansion. While these

posals
torical

pro¬

be largely of his¬

may now

interest, they represented

efforts to find substitutes for tra¬
ditional methods of

ing at

time when these methods

a

not

were

bank¬

reserve

wholly effective because
the

of

for

market

Banking
After

period

the

of

Federal

Reserve

System. To prevent the
development of inflationary pres¬

pansion,

credit

excessive

from

sures

it

became

ures

of

of

meas¬

for

War II, the

purchasing and

carrying stock exchange securities
was

closely watched.

Margin

re¬

quirements, which had been sub¬
ject to regulation since 1934 with
a

view to

lessening the impact of
credit

stock market speculation on

banking

conditions,

were

eventually increased substantially
above

1949

75%

level

during
postwar period.
a

terms—both

maturity of
was

to

as

credit

amount

and

credit contracts—

new

use

of

the

^ring
past
in

a

substantial part

decade.

1941,

the

First

regulation

credit under

applied

during

intro¬

of

Regulation

the

war

to

charge accounts, instalment sales
of a comprehensive list of con¬
sumer

^goods, and instalment and

these

have

enough,

have been
should have
There are others

that

been

we

portion

instalment

of this

segment.

has

techniques

and

discount

mine

how

necessitated
of

the

of

the

market

open

functions
credit

running.

effectiveness

of

the

deter¬

to

market

can

operate

smoothly with minimum
intervention by the Federal Re¬
serve System and
without mone¬
tization

of

the

public debt.

This

in

action

of such questions as: What are the

rules

stage for

banking

During the first half of

market?

to set the

1950, recovery gained full

momen¬

tum.

of

the

reserve

flexible

a

Giving

generally

for

game

in

credit

account

accepted

the

to

goal

of

eco¬

nomic

stability at high levels of
output and employment, how are

Impact of Korea
The final stage

tion of

reserve

in the readapta-

banking operations

precipitated

was

tionary

defense

Korea. The

of time

required

review

of

period

plied

held

in

check,

to

policies.
Of
prime

long

War

II
of

financing.
a

Government's

balance
cash

accounts

this

year

shut off what

have otherwise been
source

a

could

substantial

as

borrowers—are in the

adjusting their

opera¬

self-sustain¬

a

ing credit market. They must re¬
acquire a body of market experi¬
under

ence

demand

varying

conditions

supply
which

on

announcement

buy

to

is neither

of

any

made

only

The

Open

Secretary
Market

Riefler,
that

of

Federal

our

Committee,

W.

reserve

pointed out
banking experience

during the Twenties indicated that
a

combination

of

responsive dis¬
operations

count and open market

effective means of regulat¬
ing the availability and supply of

■

Continued

on

page

an

ofjer to sell,

the

nor a

The

securities.

solicitation of

offering

is

Offering Circular.

NEW ISSUE

and accomplishments to
restoring responsive credit
monetary operations along

step

SOUTH TEXAS OIL AND GAS CO.

date in
and

traditional
the

have

lines

expectations of

many.

of the major difficulties

One

making
caused

the

(A Delaware Corporation)

exceeded

transition

has

748,000 SHARES COMMON STOCK

in

(Par Value

been

has

10c

Per Share)

by the size and composi¬

another

the

"

period

40 CENTS PER SHARE

1

•

#

economic

delicate

of the postwar

balance

OFFERING PRICE:

consideration

important

been

These

'

.

shares

are

offered

as

a

.

*

.

speculation

in

which there have been substantial
risks that abrupt and

tions
in

your

investment dealer or from the

might tip the scales too far
direction. Finally, there has

one

been

obtained from
undersigned.

Copies of the offering circular may be

far-reaching

changes in reserve banking opera¬

the

problem

market

money

changed

reserve

of

credit

reorientation

banking

and

HUNTER SECURITIES CORPORATION

to

Member:

proce¬

dures.
52

^Discontinuance
to

of the wartime

member banks secured

by short-term Government securi¬

Broadway

National

W.

has recently

adjustment has gone forward step
by

to

base operating decisions.

these

by

and

was an

of inflationary pressure.

offers

a

of

tions to the fact of

In March 1951, the Treasury and
the Federal Reserve took a major

This

bor¬

well

as

of
the

Government's

process

The

in

the

can

banking houses, security dealers,
savings institutions and investors

on

mistake

fundamental

a

require¬

stock market loans?

on

All those connected with finan¬

basis, thus avoid¬

pay-as-we-go

and

With respect

reserve

cial markets—the Reserve System,
commercial banks,
investment

this

possible

as

market

open

in

flexible market?

maintaining the de¬

as

com¬

rowing be best accommodated in

monetary

in

changes

How

reliance

importance

program was

fense effort

and

of

use

quirement

This approach in¬

credit

and

of

ments? With respect to margin re¬

creasingly involved a coordinated
program of fiscal, debt manage¬
ment,

the

to

the

meet

needs

discount operations?

curbing inflationary pressures
source.

credit

and

industry? What does
objective mean with respect

this

would have to be placed on meas¬
at their

the market to

changing

measures

primary

to

merce

thoroughgoing

a

financial

all

in

garrison

a

extended

an

after

upon

hostilities

of

prospect of

for

economy

which

program

embarked

outbreak

infla¬

new

inherent in the

pressures

full-scale

the

by

funds most effectively sup¬

reserve

which

steps

have been taken. Nevertheless, re¬

a

methods

who have doubted the wisdom and

vances

volatile

the

It

review

and

economic

recovery.

we

preferential discount ratg/"dn ad¬

—

operations.
full-scale

a more

banking

com¬

the

most

normal pattern of reserve

easy.

single-payment loans. During the
postwar period, 4t was limited to
credit

by

market operations

monetary

and

of

sup¬

review has involved consideration

and

tion of the Government debt. Still

consumer

another supplementary device

in

W

of

of the

most

to

been

who

some

crawling, when

T

and U governing
margin requirements have been at

are

to

monetary

not

has

later

and

requirements and

helped to cushion

ures

in

bonds

plained that the pace has not been

levels. The Board's

prewar

Regulations

There

banking

earlier

and

readjustment

procedures

of

decade

a

developed

problems,

by

throughout 1951 and the first half

reserve

credit

with

fast

banking policy.

reserve

credit

to

necessary

Throughout World
use

ex¬

from

procedures
deal

than

more

departure

the

instalment and

credit

recession

World

many

during the for¬

Federal

of credit

use

on

open

Credit

ing

support

in¬

accordingly.

a

Government securities.

of such

dis¬

Reserve

velopment in reestablishing

inflationary forces. It was obvious
that, if these pressures were to be

another for holding reserves equal

creases

the

In

of

in

short-term Government securities,

deposits in

con¬

increase

to

reserve

adjusting

Federal

Banking

which could be brought to bear on

reserves

of

mar¬

for

way

Emergence

plan for hold¬

as a

supplemental

of

requirement

reserve

proposals, such

to

market

this country

recall that the postwar

instrument

ing

stock

and

easing

pressures,

moved

reducing

the

port of their prices.

infla¬

satisfied.

been

relaxing terms

to

reserve

paved

resulting

business

availability and

needs.

offset the effects

market

Reserve

use

of

and

of a
flexible and
from self-sustaining market for Govern¬
beginning to lessen. ment securities was a vital de¬

had

flationary

Regulations.

particular devices affected

that

fact

recognition of this

departures from operating proce¬
mative

the

both

sumers

the

reserve

major portion of pent-up de¬
of

offer

for

Primary Instruments of Reserve

to

finan¬

brought

dures worked out

war

The

time

of Government bonds in the
ket

By 1949, economic developments
up

conversion

to

the

of

substantially reduced the amount

func¬

requirements.

mand

Restoration of Flexible Reserve

abnormality

higher

to

time

longest-term restricted bonds

purchases

adjustments

appreciation of the Board for your
splendid cooperation in helping us
introduce, explain, and enforce

to

to assure

same

that

at

Government securities market,
also served to facilitate banking

were

weeks

two

should like to

two

A

out

continuance

maintenance

These periods of extreme

addition

the

suspended

was

I

ago.

close

and at the

debt.

carried

As I observed

pressures

Restraint

cial

in

tionary

lation

public

re¬

market operations in

open

period,

pointed

Congress, this regu¬

monetary

a way as

financing by the Gov¬

tioning in general support of the

ing

duced

recall

will

mandatory provisions

earlier,

ernment

in

reserve

tightened

were

to statutory limits.

this

raised

was

steps; and

quirements

of the necessity for reserve bank¬

of the public debt.

consumer

You

31st

focus

maintenance

of the current defense

flationary

to

dominant

the

debt,

continued

$57
In

time.

present

economy

sheer size of the war-accumulated

time credit and monetary expan¬

pivotal

war

a

operations could take place only
gradually. In the Government se¬
curities market,
because of the

sion.

the

practices

required
many adjustments but reorienta¬
tion of discount and open market
peacetime

a

Regulation

period, Treasury
requirements for money to finance
global war deserved and received

*An

the

meet

to

over some

banking

The transition from

gency.

half of the Forties.

the

carrying

reserve

adopted
to

of

financing

rates.

and

first

The

bank

member

by

changes in the open market adopt various supplemental

account

with

was

disappearance of member

bank rediscounts and

Such

re¬

preferential

short-term
Government obligations, and carry¬

this abnormal

to

In practice,

virtual

for

secured

operations had

credit expansion and economic re¬
covery.

reserve

setting

rates

advances

This

market.

adjusting

quirements,

the

through

money

Supplemental Measures of Credit

banking liquidity
financial

and

its

at

means

system

banking

our

ac¬

whole.

Reserve banking
to

At

credit.

reexpanding

a

tion of factors resulted

as

were

time, international forces

same

caused

Thirties

the

of

every

financing

credit

viewing credit
M.

used

the

at

with the Treasury,

Reserve

approximately

billion to

and

minimize the monetization

rate

last session of

long-term Treasury

on

has

credit

successful

gradually lowered;

were

discount

Production Act adopted during the

the structure graduated upward

21/2% rate

which

debt

and

securities

certain amendments to the Defense

Treasury bills and from that rate
a

of

form

of
II, rising from about

War

billion
view

real

of

the

tripled since the end

roughly

principal

on

in

is

mortgage

World

bulk

The

credit

home

$19

finance

to

ment

policies in such

successive

loans

on

step in coordinating debt manage¬

Then, in combating postwar
inflationary pressures, support
prices on short-term Government

credit

terms

beginning

banking transi¬

tion.

the

new

to review with

of postwar reserve

authorized, namely, regulation of

By M. S. SZYMCZAK*

Member, Board of Governors, Federal Reserve System

It is my purpose

ties in 1946 marked the

17

Association

of Securities

Dealers, Inc.

DIgby 4-2785

New \ork 4, N. Y.
Office open evenings until 8:30

P. M.

^

18

* I

»

Financial Chronicle

The Commercial and
18

♦
V

*

V

Thursday, October 2, 1952

...

(1230)

General Business Conditions Favorable

from page 10

Challenges Confronting the
Nation's Savings Banks
form

or

some

of these challenges.

bankers

savings

Most

The challenge

of ever higher op¬

insurance erating costs is an old one. Un¬
level-pre¬ fortunately, little can be done to
mium,
endowment and annuity control most of these costs; but
policies, are the largest single de¬ the rate paid on deposits, which
positary of the savings of the pub¬ may be viewed as a cost from an
Yet, the fact is that the
companies, because of

the life
companies are in excess

insurance

competitive

billion; moreover, in recent
years they have grown at a very
rapid rate.

of $70

of

months
rates

of the II Bonds

sacrifice
of

sale

bonds

E

to

warrant

to

help win tne

able.

the sale of H bonds, and
any other bonds that the Treasury
may decide to issue to secure the
very
savings that savings banks
were designed
to attract and in¬
vest. This direct government com¬

H

it

As

of the many

of

known to

better

it will undoubt¬

savers

con¬

of

port

semi-annually

2%%

pays

for

3V2 years, and slightly more than
3.4% for the five years and eight

the

months

follow.

that

will

This

rates

be

interest

medicine" when
start
to
decline,

"strong

they

as

surely will in the future!

in

savings

mind,

directors

and

trustees

banks

carefully

should

the

estimate

of

greatly

was

pated. Forty
few

if any

than

weigh salary scales—and where
they find savings bank officers

first

antici¬

seven per cent report

current steel difficul¬

by

the

end.

42%

last month, visualize critical

to

shortages running into the second
quarter of 1953.
items

now

selling below ceiling prices, con¬
sidering
defense
production
is
its

near

maximum

rate

that

and

basic commodities,

many

includ¬

ing steel, are in easing supply,
less than truck drivers Purchasing
Executives
express
something had better be done the predominant opinion that the

Funds

serious

The

Security

about it!

offers

savings

banking

has been largely obscured

by the

great monetary and credit expan¬
sion

has

that

been

under

way

greatest chal¬
lenges of its long career of serv¬
ice in the cause of thrift.
Only
banking

faces

organized

inal legislation was passed in the
'30s.
More recently, private pen¬

find

and

profit-sharing plans and

various

the

methods

of

compensation
been
inaugurated,

have

challenge

banking. As
and

you

employees

aside

pose

a

know, employers
are

now

setting

year

from

Old

Age

Federal

for

pensions, and the private pension
and

profit-sharing plans add

other

of

$2.5 billion,

some

so

that

a

an¬

total

$6 billion is being saved

through

non-savings-banking

channels.
The Callenge of the Heavy
on

heavier

Taxes

Savers

The serious challenge
and

taxes

on

of heavier
has

savers

been

largely hidden by an ex¬
panding economy of recent years,
with its succeeding rounds of wage
increases

and

its

escalator

pro¬

visions and high

levels of employ¬
the fact is that the

ment.

banking

savings

But,
burden, particularly the indi¬
rect, hidden burden, has become
so heavy that saving now requires
tax

savers

may

not

"Why

ask,

may

know that,

In

acter—as

warned

may

I

the

old

saw




in¬

that

the

goes,

fore¬

is to devise

a

socially

defensible, economically
program of action.

find

prices

their

middle of

the

business

remain

to

thing is courage, dil¬
igence and competence in execut¬
ing the program.

is

ex¬

December.

Beyond

that, there appears to be no over¬
definite pattern.

Commodity

Prices

(Special

SAN

Walston, Hoffman

price movement

is

up,

compared to the sharp upswing

in

August. Seasonal changes and
allowable

OPS
for

though at

of

most

a

creeping

increases

pace,

account

it—considered

to

be

only slightly inflationary. Sellers
of
fabricated
materials, testing
the

markets

to

determine

an

ac¬

ceptable

Calif.—

Robert Dopyera is now with

ston,

Hoffman' &

Montgomery

Wal¬

Goodwin,

265

Exchanges.

members

of

San Francisco

of

their re¬

Whenever open
witndrew re¬

operations

banks
tended to become more restrictive
in
their
lending
policies even
market,

the

from

serves

make

though they could, and did,

The

discount

of

window

Reserve

the

interest rates were

Banks. Further,

volume of
borrowing and by

influenced both by the
member

bank

the

in

changes

rate.
difficult
tightness or easi¬
discount

flected
and

market was re¬

through banker sentiment
attitudes of many busi¬

the

all picture

is one of decline, more
leveling off at the low goals

duction
steel

report

filling

in

spots. With defense pro¬
near
its maximum rate,

recovering

at

a

and

The

months have pro¬

18

past

experience sup¬

additional

vided

plementing that of the Twenties.
As there has been more frequent
resort to the Federal Reserve dis¬
it

window,

appears

that

member banks have not been un¬

mindful of the substantial shifts

their

of

volume

the

in

indicates,
will

teristics

other

borrowing

has; risen.

frequent

deposits. They
used

be

to

stances for

ing

earlier experience would indi¬
that open
be

crease

used

market operations
increase

to

the dependence of

or

de¬

member

are a measure

unusual

in

and

credit

bank

of

bank

contracting

circum¬

expand¬

or

the liquidity position of the
banking system. This was

entire
the

original

conception

their

of

use.

General

Observations

flexi¬

The development of more

management, credit, and

monetary policies over the past 18

by

months has been accompanied

economic

stability

at

a

high level of output and employ¬
ment. The economy has been able
absorb

program

words, recent as well

charac¬

essential for
influencing the

in

use

volume

to

other

effects
institutions.

boiard

-

devoid of the element

are

changes.

can

the

-

of flexibility which is

in

the level of discounts

operations.

individual

across

Interest rates have reflected these

cate

secondary role

they have disproportionate

relative

as

more

Changes in reserve requirements
are
a
harsh instrument because

reluctance to enter into new com¬

In

that
requirements

banking

reserve

ble debt

as

The

opinion,

my

reserve

resume a

in

in the availability
of reserve funds, there is evidence
that banks have shown increasing
mitments

severely

time.

at that

use

present increased emphasis on dis¬
count and open market operations

borrowing.

With tightness

and

were

money

in

limited

total

nessmen.

now

more

runs

billion

at the same time has

duced

defense

expanding

an

which

rate of over $50

actually pro¬

other

for

at the
and

a year

purposes

than it did before Korea.
While

financial

measures

have

primary in

borrowing; and further,
that because of the natural hesi¬

been indispensable and

tancy of bankers to carry exten¬

I do not want to

other than a

sion that I think they alone were

temporary basis, the total of mem¬

responsible. Nor do I want to give

banks

a

bit in September. While the over¬

Some

credit

of measurement,

in the credit

the

largely because

sive

heavy industrial inventory
trend reported in the

soft

case

among

ness

Economy

System's older instruments for in¬
fluencing
the
total volume
of

Their

ber

the

the

was

Finally, although it was

reduction

are

of

age

portance as a reserve banking in¬
strument. As I said before, this

deficiencies at the changes in

up any reserve

keen

attained.

Street,

source

reserves.

market

past four months has eased up a

to The Financial Chronicle)

FRANCISCO,

decisions to varia¬

the

in

count
The September

Inventories

Joins

sensitive

were

through

good

price level, are finding
competition. Viewing the
large number of items selling be¬
low
ceiling
prices,
Purchasing
As it
is in these very things Agents are of the opinion that all
that savings banking has always price controls
should be elimi¬
excelled, I am confident that these nated. Believe a resulting realistic
challenges of today will be suc¬ price structure, based on supply
cessfully met, and that savings and demand, would be most ben¬
banking will go on to an ever eficial to all business.
greater future of service to all.
The third

Stock

taxes

say

is forearmed.

The second thing
sound

both

controls—let

as

reply,

thing to do about any prob¬
lem is to recognize its true char¬

there

different

pected

you

first

according to the Tax Foundation,
150

do

and

ditions. Industrial

all

You

the New York and

are

can

chal¬

lenges.

dedicated effort and real sacrifice.
Your

these

to

answers

material

levels under free competitive con¬

point them out, if you don't have
which the answers?"

savings

to

$3.5 billion each

earnings

the

the

business

release

to

come

and

deferred

executive

further

price

My conclusions are that savings

nearly continuously since the orig¬

sion

has

time

Conclusions

Social

challenge

passed away at the
a long illness.

after

17

and investment

quired

condition

Only 9%, compared

year

many

70

Constable,
associated
& Co., New York

Ira Haupt

City,

period, bankers
in their lending

that

In

credit.

timate

easy

with

Reserve Banking in
A Dynamic
tions

making

The Challenge of the Pension

Continued from page

ties. Forty four per cent more es¬
an

of the newly opened

second

as the recovery from
is
progressing much

rapidly

in

Peet

William Constable
William

brackets. Lack of
prices, availability

60-day

to

Edwin

sup¬

con¬

first

be-

resi¬

Montreal office of the latter firm.

within the "hand-to90-day
range,
with
more
falling into the

confidence

steel

Pointing to the

imperative

economic

this

30-

pro¬

to

and

more

the

shortages

strike

more

noble.
With

mouth"

operations,

the

the

dent partner

production and order
pickup, the policy of for¬
commitment continues pre¬

dominately

in

of

a

of

mem¬

of

Toronto Stock

Buying Policy

exaggerated,

how

or

that

extended

to

meritorious

effect

their

on

clude

young men

how

the

at

bers

easing

view

ts/king

ronto,

a

Despite

/

buyers,

strike

other

matter

cautious

the

look

to hold its own in the competitive
edly prove a powerful magnet in
attracting time and savings depos¬ struggle, it must have its share of
the available brains.
Any other
its. Although it carries a penalty
for the first six months, thereafter policy dooms any undertaking, no

it

and

Burns Bros. &

Company, To¬

comes

90-

short-range

schedules

partners

the firm of

Exchange. Mr.

de¬

a

wage

result of
adjustments.

ad¬
gen¬

Turner

even

confidence

as

as

ing of national importance.

book

within

Little

eral
in

have

been

Many strikes are noted, but noth¬

up¬

ward

is

coal

and

uneasi¬

Labor

items.

increasing

is

is

policy

pressure

related

recovery

steel

markets.

Personnel

ability

are

availability of most materials

facing savings bank¬

sufficient

Prices

merchandise

structure;

duction

and women
meet the
challenges I have outlined.
Obviously, if savings banking is

to attract

exceed

Employment

Buying

range.

price

ing today is that of personnel,
particularly at the executive
levels. Salaries must be adequate

com¬

becomes

day

outlook is for eco¬
and declining

Challenge of

steel

conservative,

more

uncertainty

The

are

ness

1.

rapid

holiday

mands.

Probably the greatest challenge

underestimate the

don't

bond.

this

with

connection

In

such

circum¬

any

of holiday goods
usual seasonal pick¬
up
in
employment.
Increasing
steel receipts are creating demand

orders

to

point.

to

Steel

tions.

petition,

due

up,

interest rates.

institu¬

the interests of your own

low

course,

under

the long-term

nomic

encourage

and subsidize it at the expense

permit,

at

and

stances. This is doubly true when

system and you will have to live
with it.
But, it seems highly un¬

to

off

bank¬

competitive

for

sacrificed
siderations

petition for savings has become a
permanent fixture of ou^ financial

you

of

are,

The

and

also

is having the

swing, considered only slightly
inflationary. Inventory trend is
changing from decline to leveling

justifi¬
But strength should not be

increases

mitted

busi¬

after the August

up

Den¬

months.

for

new

2^

creeping

earnings

long-term

considerations

ing

tion,

expect

sound

on

that

extent

the

To

based

Now, it seems that they are ex¬
pected to continue the sale of E
bonds indefinitely and, in addi¬

and

declines

interest

banks made in some states.

Then, they continued to push
their sale to "help win the peace."

to

did

again

up

concern.

capital and money
not increase enough
the
boosts
savings

the

markets

war.

fair

in

rates

with

&

Turner

tion is sharply

areas

Direc¬

Limited,

ton,

required for the upswing in new
business- during
the
past
two

good. Produc¬

interest

many

underlying

Certainly,

selfpatriotically pushed the

Savings bankers with real

in

viewed

be

should
The Challenge

savers

elected

Mr.

condi¬

ness

Robert C. Swanton

been

Burns

Mr.

is that

tions

recent

and

dividend

paid

in

increase

have

of

Peet

are

increased

Haven,

Conn.,

as

of

Denton, Inc., New
Gould
and
E.
W.

Toronto.

Inc.,

general

operating standpoint, can be con¬
trolled.
With this in mind, the

of

assets

total

The

lic.

New

Jay

Bros.

again,

up

President

&

recalled to man the
production
schedules

of Olin Indus-

tries,

is

Employment
layoffs

Division

pany,

York,
Turner

tors

Com¬

Arms

apparent

now

end.

Peet,

Bros.

Employment

Repeating

Operating Costs

companies.

insurance

Higher

of

Challenge

The

F.

Burns

commodities would result.

Chester

is

year

Directors of Firm
Edwin

speculation in

no

are

very

Peet, Gould, Turner

Win-

chases,

ing.

stitutions, but very few give much
consideration to their competition

high prices and short-range com¬

Di¬

Swanton,

easing availability of many
materials, purchasing men
about
unanimous
in
their

mitment policy,

rector of Pur¬

and, thus, directly hits sav¬

power

C.

pattern

beyond the

opinion that material controls do
not serve any good purpose and
should
be
released.
At
present

is

Robert

This tax

goes!

money

are

whose

mittee,

Chairman

reduces consumer buying

squeeze

ex¬

are

tremely conscious of the competi¬
tion with the savings and loan in¬

the

the

know

basic

Business Survey Com¬

ing Agents

of

heading

and

pur¬

Association of Purchas¬

National

taxes

fall under the
competition of one wrapped up with each man's suit
of clothes, and so on, but they
another. Let us look at
would

challenges

with

different

116

and

hat

of

comprise the

causes

definite

orders exceed declines by 2% to 1.

new

opinion

composite

chasing agents who

woman's

the price of a

cluded in

of these

all

Nearly

1933.

since

September, and

this

of

cautious
buying policy. While good busi¬
ness is forecast into December, no

sharply in

reports industrial production up

chasing Agents

A

the

close

the

and

of production schedules

range'

Committee of National Association of Pur¬

Business Survey

materials

most

of

Continued

rapid

pace

on

borrowings
bank

on

indebtedness

determining

will exert

influence

on

the

availability and supply of credit.
Role of Reserve

Requirements

Earlier

postwar

in

the

period,

attaining this degree of stability,

the
we

impression
have found

nomic

give the impres¬

that
a

at

long

last

formula for

eco¬

stability and that

our

job

is done.
In

a

truly dynamic economy, the

changes in member bank reserve

job of maintaining economic sta¬

requirements assumed unusual im¬

bility is never done.

Volume 176

Number 5156

.

.

The Commercial and Financial Chronicle

.

(1231)

authorities

Sterling's Fluctuations
By

realize

the

persistent

So

long

PAUL EINZIG

Einzig discusses the

and

pros

within which

sterling exchange is allowed to fluctuate. Says
proposal for wider limits is distinctively tempting and should

_

!

British Government decide
than

on

change "it could do

a

anticipation of

the

remain

ing that $2.80

Should

Eng.—Agitation in Britain in favor of allowing
sterling to find its own level, having reached its climax towards
the middle of 1952, now appears to have subsided somewhat. Those
supporting the idea have come to realize that there is not the least

Fu

d.

do

are

notes due

now

widened

to

of

sterling

not

are

likely

to

be

the

depreciation of sterling.

or

'thirties

official

parity.

Once

sterling

Stock

is

Exchange,

partners in

assum¬

have any meaning for

52

pany,

decide

on

will

Ackerman

Wall

of

the

Exchange,

as

(October 2).

become

and

Com¬

Street, New York

members

Stock

change it could

a

adopting the suggestion of widening the official

of

Both

New

York

of

today

formerly

were

partners in Gamwell & Co., which

intervention

The

so

was

eifective

that

was

First

3%%

g.oss

Co.

has

group

a

of

issue

of

an

subordinated

on

Sept.

dissolved.

will

to

oil

Prescott & Co. Branch

and

from

SANDUSKY,

an

Ohio—Prescott &

Co.,

members

and

Midwest

1,650,000,000 barrels at the end of

has opened a branch in the Feick

1951.

total

of

Building

In

addition, the company
has important sources of produc¬

Jack

ern

the

New

Stock

the

under

York

Exchanges,
direction

be

used

to

$6,240,000
notes

Hornblower

Venezuela, gross production
all foreign sources having

&

Weeks

in

Cleve¬

land.

67,356,000 barrels in 1951.
foreign reserves of crude oil

and
at

condensates

about

James C. Robinson

estimated

were

2,858.000,000

barrels

James

C.

Robinson, partner in

Foster & Marshall, Seattle,

at

Wash.,

remainder

reduce

its

the

current

borrowers

and

to

to

due

the end of 1951.

passed

Sept.

away

18.

indebted¬

line-of-credit

incurred

banks

lend

purchase

to
re¬

ceivables, either directly
through subsidiaries, in the
dinary course of business.

or
or¬

Exchange Equalization Fund

was in a position to bring about an
appreciation of sterling by 10% or more. As there was no limit for

Socony ¥cc"iini Oil

the fluctuations of sterling and the
Exchange Equalization Fund
possessed substantial resources, there was aiways a possibility of
"squeezing the bears" whenever bear positions assumed consider¬
able

magnitude.

Offer Underwritten

The

main

argument

against

the

of

proposal

widening

that

so

other

the

In

the

minimum rate.

new

to

stockholders
at

$31

Consequently, the argument

rights

188 additional shares of its
stock

at

the

rate

of

capital
share

one

Sept. 25, 1952. The rights ex¬
pire on Oct. 14, 1952. The offering
is being underwritten by a na¬
on

goes on, specu¬

Even

allowing for this argument, it must be admitted that the
proposal is distinctly tempting. It has great advantages over the

tionwide group of 216 investment
headed

suggestion that all limits could be removed and sterling should be
its equilibrium rate.
In prevailing circumstances
an
equilibrium rate simply does not exist and the removal of

&

Co.

by

of Condition, September Z0, 1952

sub¬

for each ten shares held of record

at say $2.60 as it is at $2.78.

Statement

offering
resources

share to 3,180,-

per

YORK.

un¬

Socony-

scribe

undermine confidence in the stability of ster¬
ling and in the ability of the British authorities to maintain it at

OF NEW

HANOVER SQUARE. NEW YORK.

industrial

operations

its

arrangement would simply amount to an¬
It is argued that a second devaluation within

lative pressure would be just as low

the largest

of

financing

dertaken in recent
years,
Vacuum Oil Co., Inc. is

three years would
its

one

equity

new

devaluation.

GRACE NATIONAL BANK

Morggn Stanley Groap

margin between the maximum and the minimum rate is that in
the prevailing circumstances the effect of such a
change would be
simply that sterling would depreciate to the vicinity of its lower
limit

by

By

announcing their intention to hold sterling
within $2.', 8 and $2.82 the British authorities have
undoubtedly
relinquished a very effective weapon in defense of sterling—the
weapon of the threat of bringing about an appreciation.

Morgan Stanley

Cash in Vault and with Banks

Demand Loans

v

yr.\,

official

of

•means

the

limits

to

the

fluctuations

accentuating the

establishment

of

sterling

would

of distrust.

wave

wider

of

limits

the

to

be

the

On

the

State, Municipal and other Public Securities
Loans and Discounts

38,931,864.24

Brokers, Secured .J"

U. S. Government Securities

.

Customers1

.

.

.

.

.

....

.

Stpck of Federal Reserve Bank

.

,

.

...

Liability for Acceptances

Accrued Interest and Other Assets

.

.

"

222,000.00

.

3,131,289.27

.

other

fluctuation

of

.

might inspire confidence provided that additional dollar

placed at the

are

the

resources

high figure of ap¬
$245,000,000. Of this

there

will

United

63%

for

be

expended

in

States

approximately
acquisition and de¬

the

widbned to, say, 20 cents on each side of the
parity of $2.80 then

velopment of crude oil production,
approximately 11% for the ex¬
pansion and improvement of re¬

those who

fining,

ties

its

to

enable

short of

are

of substantial

be in
the

to

limit of $2.60

new

sion

them

intervene

are

exposed to

to

a

loss of 40 cents.

if

allow

circumstances

subsequently

maintain

it

there

force

to

were

the rate to

a

operation

on

the

decline

another bear squeeze would always be
the

approximately
transportation facilities

In posses¬

proximately

solution

pared with

an

would

sufficiently

a

mately 13%

again,

present.
a

authorities

possibility

of

year

would

net

yield

would
1949

not

or

After

a

was

solve

anything

any more

limits.

A

year

before

the position

two

or

devaluation.

would be precisely the

as

the possibility

parity would be for all practical
.

abandoned.

purposes

encouraged

their

by

sterling after

Speculators

a

would

would

success,

take

resume

their

speculating

ciate

following

present

on

Such

a
a

parity and

be to
tion

allow
on

a

Indeed
it

to

would

would

put up a

to depre¬

its

own

assume,




level

be

consider

it

most

of

some

unpegging sterling would

and

any

persistent interven¬

contrary to that principle.

naturally

its

unlikely

determined defense at

the whole idea of

find

would

were

complete removal of the limits fixed for its

large scale would

speculators

against

change would imply the abandonment
speculators

that the authorities
lower level.

and,

while.

Nor would sterling inspire any confidence if it

fluctuation.

profit

enough,

that

whenever

The
the

$4,000,000.00

.

3,400,000.00
1,121,346.37

.

Undivided Profits

Deposits*

;

.

.

.

.

.

.

Certified and Cashier's Checks Outstanding

Acceptances
Less Own Acceptances in Portfolio
Reserve for

to

the

consolidated

was

$2.64

$84,060,000,
per share of

presently

a

_

directors
F. G. Kingsley

Robert F. C. Benkiser

Chairman of the Board,

Vice'President

outstand¬

•Mercantile

C. R. Black, Jr.
President

C.

R. Black, Jr.,

Hugh

Corporation

is

Honorary Pros'dcnt,
International General Electric

President, Oxford Paper Co.

B. H. Oehlert,

Jr.

Vice-President

Chester R. Dewey

domestic pro¬
principally

Grace & Co.

W. R.

President

William M. Robbins

David Dows

-

Vice-President
General Foods

Corporation

Robert E. Dwyer

Harold

President

Anaconda

Copper Mining Company

J. Roig

Director
W. R. Grace

John C. Griswold

Co.

James H. Si-iarp

President

Financial Vicc-Prcsidcnt

Griswold and Company,

Merck (i Co., Inc.

Incorporated

Andrew B. Shea

Cletus Keating

President

Kirlin, Campbell & Keating

Pari American-Grace Airways, Inc.

D. C. Keefe

Frank C. Walker
Chairman, Executive Committee,
Comcrford Theatres, Inc.

Ingersoll-Rand Company

obtained

Texas, Oklahoma and
has

Inc.,

Co., Inc.

J. Chisholm

President

company's

Stores Company,

Clark H. Minor
.

share.

fornia and its gross

Cali¬

domestic
from

The Grace

pro¬

name

has been identified with domestic and international

ap¬

increased

banking and
MEMBER

proximately 69,423,000 barrels
1947

856 589.72

•Includes U. S. Government Deposits aggregating $5,318,986.09

$775,689,000 and

practically,
every
foreign
country outside the iron curtain.

duction

3,309,380.75

901,682.51

$129,305,037.23

1952

of

and

from

.

4,214,063.26

Contingencies, Interest, Expense, etc.

its

The'

.

8,521,346.37

109,130,638.59
7,487,081.80

outside
of

income

was

stock

cents

duction

L.

.

in

of the largest companies
field, Socony-Vacuum con¬
ducts an integrated
business in
the production, transportation, re¬
fining and marketing of petrole¬
um and
its products. The principal trade marks identifying its
products are MOBILGAS, MOBILOIL,
GARGOYLE,
MOBILPEAT and the flying red. horse.
Some of the company's products
are
sold in all 48 states, Alaska

in

war.

same

approxi¬

One

than did the devaluation of

By devaluing sterling

of its appreciation above its new

of 50

.

ap¬

ing. The company is currently
paying a quarterly cash dividend

devaluation

.

marketing
or

months

its

and

equivalent

com

the repeated devaluation of the French franc since the

six

income

capital

advantages

and

Hemisphere

subsidiaries

The repetition of

for

Capital Stock
Surplus

States.

the

company

4%

be expended

operating

gross

outright devaluation and also compared with allow¬

ing sterling to depreciate without fixing

Western

United

For

to

the

for

will

the

long

cut their losses.

British

considerable

present

9%

facilities. The balance

considerable profit to the Exchange Equalization Fund.
This

it

is

the

for

large scale several times

a

margin

appreciation to the vicinity of

an

time to compel a large number of
speculators to
Even

the

the British authorities would always

resources

limit and

upper

If

sterling when the rate is in the vicinity of

position to bring about

a

effectively.

liabilities

record

a

total

time at the disposal of the British authori¬

same

$129,305,037.23

proximately

hand,

457,825.10

.

company

reach

sterling

'

.

-

estimates
that
capital expenditures in 1952 will

best

35,868,680.60

$

.

1,750,000.00
43,960,027.08
4,933,350.94

to

allowed to find

The

of

P.

Sharpe. In the past Mr.
Sharpe had been associated with

tion in the Middle East and East¬
from

of

totaled

outstanding

originally

the

crude

1,121,000,000

Its

I960 and

to

of

increased

barrels at the end of 1946 to about

estimated

Corp.

Boston

period domestic

same

reserves

condensates

negotiated

was

subordinated

15,

used

why during

reason

During the

Sept. 1, 1964, according

the

June

from

4%%

financing

ness

deterred

Finance

proceeds

retire

remaining short by the possibility of government intervention
causing an appreciation from $2.78 to $2.82. The risk involved is
negligible compared with the possibility of a profit in case of a
devaluation

The

The

a stance to intervene successfully in the for¬
eign exchange market.
Under the existing

short

The

by

suggested that this margin
to 10% or possibly more.

system the scope for such intervention is admittedly limited. Those
are

Government

announcement made

an

29.

its adoption would give the British authorities

who

British

than

worse

$12,000,000

'

Einzig

the

other figure would

any

placed privately with
institutional investors

The main argument for this solution is that

Dr. Paul

of

Hagen and William F.

Luce, members of the New York

City,

the

Seaboard

relation to the dollar, a margin of rather less
than 1% Gn either side of the official
parity
It is

maintenance

Notes Sold Privately

quarters favoring a widening of the range
witoin which sterling should be allowed to
fluctuate. At present this range is 2.78-2.82 in

be

or

Herman

The declared policy of the authorities

recovery.

Seaboard Finance So.

therefore, will¬

now,

of

2.80.

Ackerman Partners

widening of the margin between

has been

by the International Monetary

Most of them

she aid

the

limits to the fluctuation of sterling.

ing to compromise hallway between the rigid¬
ity cf sterling as established under the Bretton
Woods
Scheme
and
its
complete elasticity.
Suggestions have been made from a number

of

to

hs adoption by the government

lor

its approval

or

depreciation

the authorities.

LONDON,

pu^ibiiny

Hagen, Luce To Be

and lower level.

declared elastic, however, there ceases to be
any reason for

fluctuate."

to

a

would

worse

adopling wider official limits within which sterling is
allowed

a

a

against

pressure

maximum and minimum limits would leave the door
open for the

of widening the limits

cons

of
new

a

the parity remains fixed,

as

lower limit that would follow

Dr.

character

sterling they would allow the rate to find

19

in
to 86,691,000 barrels in 1951.

FEDERAL

commerce

DEPOSIT

for almost

a

century.

INSURANCE

CORPORATION

"

20

Continued jrom page

of the

plan.

plan has been drafted
to the Internal

Once the

it

Corporate Tax Savings Through
Profit Sharing Trusts
provided for any

is

security

no

the Internal Revenue

Department in Washing¬
As soon as ap¬
out, in turn, teachers for the mil¬
proval is received the instrument
lions who cannot earn a living.
is executed and the trust is in
Revenue

profit sharing trust appears presented and if the basic phil¬
provide some answers to these osophy behind the various Treas¬
problems. In the first place, and ury regulations is understood, this
most important, a contribution is is a relatively simple procedure.
In the last analysis management
required only when profits have
exceeded a definite level.
Thus, is primarily interested in the an¬
to
two
highly important
in the creation of a profit sharing swers
trust management need not face questions. The first is whether the
the heavy responsibility of under¬ plan will provide worthwhile ben¬
taking a future commitment of efits to all personnel on the pay¬
The second is whether the
unknown size and unknown du¬ roll.
The

is

if

quirement

essential

an

is

trust

pension

a

re¬

established.
A problem which bedevils the
managements of many companies
is
the
means
of
dealing with

and

employees whose age

senior

for approval.

We must make reference material

operation.

Department,

to

which

Our Propaganda

submitted

is

ton

properly prepared and

if they are

one.

ration

disapproval Continued from page 13

Treasury Department

11

available

the fiscal

As

of the com¬

year

pany draws to a close it will be
possible, in most instances, to de¬
whether profits justify a
contribution. If so, the contribu¬

who

those

to

million

(320

of

out

Orient cannot).

the

read

can

billion

a

in

And all this

help must be so firmly planned as
not to collapse with each new try¬

termine

ing problem, which it now tends
which is a deductible ex¬
to do.
for tax purposes, is voted
The Indians, by the way, have
and paid over to the trust.
Many
companies elect to use the services demonstrated, in one dramatic ex¬
of a bank or trust company to re¬ ample, in Faridabad, that they can
make
their
own
rehabilitation
tain custodianship of trust assets
and keep the necessary books and programs work—we don't have to

tion,

The services

records.

do

charged

are

the

job.

Faridabad

borrowed

fect modern town for 50,000 pen¬

trustees for the investment of the

ing the government already.

in

followed

a

retirement

trust

We should continue to back this
sort of

thing—do it jointly and

cheaply

them

help

we

net

and
addition
position to apply

the company's tax

on

income

In

picture.

on
morale
they will be in a
profit sharing plans indicate that an assumed investment experience
the profit sharing plan has def¬ to the contributions paid into the
initely proven the most stimulat- hypothetical trust, thus giving
i g.
The employee under a pen¬ the management some kind of pic¬
sion
plan
knows
that benefits ture of how such a plan would
usually do not become payable have functioned and the benefits

age.
once

"money in the bank."

For

exam¬

it

At

created.

have

would

position to make an informed de¬
cision in more specific terms.
If

under certain conditions the the plan is not feasible, no harm
trustees may vote a general dis¬ has been done and management
ple,

tribution to beneficiaries who have
been

for

past

measured

under the

trust for

suffi¬

a

cient period of time.

will

have

undoubtedly

some

to when and
under what circumstances a plan

pretty clear ideas

as

Such a dis¬
help to cushion a would be feasible.
salary reduction. If a vested em¬

tribution

against

Why Not Do
In

There

Payments

may

be made in

to approve, either by vote of the.
illness or Board of
Directors, or stockhold¬
disability. Thus, the profit sharing
ers, or both the creation of such
trust, by promising him immediate a
plan. Next a Board of Trustees:
possible benefits for the nearer must be selected.
Very often a
term and offering possibilities of
board of three consisting of one
substantially greater retirement
representative of the employees,

wealth

tive

as

have

proven

effec¬

more

representative of the manage¬

The creation of

a

profit sharing

For the small business having

perhaps only 20 employees on
concerns employing as high

to

Inc.

has

of

lot

in

had

be

it

Co.,

We
on

have

our

ef¬

the natives prefer

as

called).

vinced

been

the

the Island of Formosa (or

on

Taiwan,

on

Far

improving

Formosans.

successfully cashed in
forts

the

exploiting

of

we've

the

in

done a better job

we

success

W. H.

I

least

at

were

we

away

came

con¬

getting

to

credit with the Taiwanese for the

part¬

reversal in their welfare. Why not

admitted

general

firm
d

r

e

S t

An-

of
s

d

r u

,

&

n

o

wick,

up
as

Arthur

the

R.

Robinson

(helped
of

sus¬

the

by

American

the

officials)

farmer

cashier

in

of

1921

Ogilby

as

and

of his crop.

30%.

about

got

fertilizer

distrib¬

was

uted to make the land

ductive.

the For-

gave

62.5%

formerly

American

business

bond

breath

mosan

He

in

may

ney, an

"outside"

one

officer of the bank which

will handle the trust

who is

not also

company).
the

draft

person

be the company's attor¬

The

director

until

1931.

In

1931, he organized
and Company,
New York City, and in 1932 re¬
organized his firm to form Colyer,

Arthur

Robinson

Robinson

and

Co.

of

which firm he headed
when

he

accepted

in

mission

the

more

pro¬

We also helped

Stowell

as

1942,

direct com¬
S. Army Air

on

staff of Gen.

Air Inspector

(I.G.D.)

of North African Division

profit sharing trust requires which contributions shall be made New
Jersey.

very

modest

the creation

amount of

execu¬

sets

to

forth

the

trust

the

and

time, and its administration made to the beneficiaries.
Most
will
require only a nominal firms specializing in this type of
amount of accounting time.
For work have model trust agree¬
example, one
organization em¬ ments which can serve as a guide
ploying a personnel of approxi¬ and, thus, greatly simplify the
mately 160 people which has been preparation of the instrument.
operating a profit sharing "trust This instrument should be pre¬
some

eight

years

requires the services
in

the

payroll

advises
of

it

department

one

week each year to maintain all the
necessary

this

books

particular

and

records.

organization

trustees meet
quarterly for
view of the investment

pared

girl in

one

In
the

a

re¬

by the company's attorney

consultation

countant,

an

with

ac¬

officer of the bank

will

act

as

trust assets

and

an

which

their

custodian

of

officer of the

consulting firm which has devel¬
oped the plan. An important func¬

policy of tion of the consulting firm at this
point is to assure that the provi¬

the trust and the
management de¬

termines

semi-annually the

tribution

to

such

be

made.

plans must be

con¬

While all
cleared with




a

deeply-

mass

of peo¬

really expect

we

hungry

ple, living in dirt-floor shacks, to
cheer

about

skyscrapers

our

sions of the trust
as

are

to be considered

which, of

course,

not

so

over

Asia that this is

justice—that

idea

our

not sup¬

are

we

.

.

.

Schoellkopf Co.

the

Reds

class

us

silent partners of the

as

ghosts

the

of

which

still

Imagine what
would do?

members

of

the

New

crop

motorized

If India

can

Hoes

output.
tractors

raise her

production just 10% she can eat*
Intead
of vast projects based
our own needs and standards,
we ought to continue (as we have
on

started

in

successful

one

tools

test

in

hoes

those

—

rotation aids, new roads
and practical agricultural demon¬

techniques and

practices. And they ought to

be carried

by

on

foreign-service
willing to

a

really

force

dirty their hands, and be humanly
involved.

the Comthe soil."
They scatter and distribute leaf¬
Everywhere I found

mnists working "close to

lets,
canvass
peasants'
houses,
penetrate inoffensively into
unions and
meeting places and
religious societies—meet the com¬
in

people

mon

tions.

day situa¬

every

any obvi¬
less under
suspicion and less irritating as a

They play down

politics

ous

and

Soviets

giant

taneous

in

a

simul¬

cultural

inva¬

to be amateurs
too.) This fact shows

seem

at this game,
up

r

campaign"

other

to

(We

■

launched

have

"book

sions.

method makes

dangerous.

more

The

are

this

but

—

them

places.

curious

All

over

India, the Communists use their
membership as a human distribu¬
tion chain to pass out literature
from

emanates

which

Moscow.

sell for less than they

The books

They are cleverly printed—

cost.

Indian standards. They are
given over to glorification, writ¬
ten on an almost childishly read¬
by

the

people of

Asia.

of

our

wrote

Compton,

information
State
me

interna¬

administrator

Department, recently

that he

considered

his

job in terms of good distribution.

lished

were

about

Ameri¬

I hope he succeeds, for each

he

does,

disbelief and

I

York

think

the

he

cuts

even

down

the

the fear many

we

can

Joe"

"*big phrases"

written in Japanese

bookstalls

two-thirds

at

off

price—and selling like
Biographies of "Uncle

were

best-sellers.

Not all the cultural offensive is

waged through books; the Soviets
have unleashed a flood of films,

"The

too;

only do this if

Soviet-pub¬

Japan,

selling
list

him, that product is hotcakes!

TRUTH—the truth

time

in
books

nerable student

their

to

are

in the vul¬
university areas.
I visited shop after shop in Tokyo
where brand new bargain books
flood

getting the right prod¬

...

they

.cannot

subversive,
finding the

books hard to ban or control.
Even

Wilson

Dr.

tional

material

the

.

They

officials.

ernment
term

Empires, therefore

former

haunt

BUFFALO, N. Y.—Doolittle & backward people have for us.

Co.,

sticks.

raised the

makes it difficult for Indian gov¬

Otherwise,

we

continue, quite brilliantly, to

cans.

Over

primitive

using

bundle of

farmers who'd been

some

promptly

garden-va¬

common

we gave a

ourselves.
will

time

Doolittle & Co. Takes

our

as

them to

able
level, of Russia and the
blessings
of
Communism. Ther
very
nature
of their contents

policies in Asia, that

porting

He meant

most

Fall of Berlin" is the

notable

Stock Exchange, Buffalo, announce

we

that

about the specific wonders of our

capitalistic world

We

one.

of

And

all

the most
has

been

their "leaflet

Schoellkopf & Co. has been

merged with the firm and that the

Schoellkopf

hereafter

as

against their

as

a

Schoellkopf will be resident part¬
and

Frank

Walter

W.

Tindle

co-managers

success

really

penetration" of Asia.
stand convicted today

the "germ

warfare" we

peonage—and abandon the dream

on

conducted.

tury civilization.

constantly invited to China—to tour and see the "contagious
renaissance" there
(as they put

transplanting, overnight, any
branch of the Doo¬
organization. William glorified notion of our 20th Cen¬

operate
little

ner

stop distributing

diabolic

of

office will

B.

Brooks

and

drawn

discriminatory
would result in

plex

riety hoe till

uct to the right place at the right

distributions

tive

for

people

disapprove of in the U. S. A. for

A.T.C.

official of the

or

all
of

a

U.

Force. He served

Newark,
until

until October, 1945, and since that
next step is to time has been manager Municipal
agreement which Bond Department of the Fidelity
provisions under Union Trust Company, Newark,
an

trust

or a

treasurer of M. F. Schlater & JCo.

of

a

Do

wounded and

result

other

among

reform

Land

of Island

Robin¬

started

son

Island

Joint Commission down the backs

Street.
Mr.

the

warm

807 East Main

four

a

five hundred

and

(this

trust is both simple and economi¬
cal.

one

organization morale build¬ ment

than pension trusts.

ers

backward

that, too.

infantry

complaint shifts:

my

Asia

through

,

East?

place

one

why haven't

Vice-Presi¬

Morton &

is

Better Job

a

Far

where

East

the

assistant

may

event of prolonged

the

want

The

strations of better

Communism.

rehabili¬
Austin; later he served as cashier tate the Island's war-ravaged fer¬
ployee wishes to sever connection
and
treasurer of Austin,
Setting Up a Plan
Grant tilizer plants. The result is the
with the company his interest in
The actual setting up of a plan and Ogilby until its dissolution largest crop in Formosa's history.
the trust may be distributed to
is quite simple.
The first step is in 1926, and subsequently was
Somehow we must make it clear

him.

Mars.

on

new

year

dent of

let pro¬
openly

ceptible Orientals?

like

little planet—and not

our own

on

to sell

trying

as

like

off

more

much a fail¬
Americans
on a great new life on Mars.
We
all want and expect a better life
ure)

simple

investment

vested it is much

sardonic (and just as

with crop

Under a profit sharing trust point the directors; and the stock¬
the employees' interest be¬ holders, if required, will be in a

comes

is just as

Etawah, India) with

nership in the

retirement

this

mil¬

To

answer.

world

communities—to
ductive
democracy
be

Newark, N. J.,
and

These

start.

to

that

the

reaches

he

immediate

any

lions of the

the village of

Anderson Strudwick

effects

the Asians

so

pivotal

Robinson Partner in

until

distant

if they were

as

projects should be duplicated (and
then skillfully exploited) in other

a

the establishment of quite simple.
quarterly review of general policy
an
The management should ask a
orderly plan of retirement for
is sufficient.
senior employees. This would not profit sharing consultant to ,make
only
benefit
them
but
would a survey based on actual earnings
serve
to improve organization and income tax figures for a pe¬
morale by opening up opportuni¬ riod of five to ten years back. The
ties for advancement among the consulting
firm will first study
the company's income and payroll
younger personnel.
Because
the
annual contribu¬ records to determine a sound for¬
RICHMOND, Va. — Arthur R.
tions to a profit sharing trust are mula for these hypothetical con¬
Robinson, formerly manager of
based on profits every member tributions.
They will then create
the Municipal Bond Department
of the organization has a direct a theoretical trust allocating the
of Fidelity Union Trust Company,
financial interest in efficient and contributions and determine the

operation. Studies
comparative effects
of pension plans and

possible,

as

as

maintain for themselves what

can

would permit

the

the

about

of Iowa

corn

...

promotion because management trust might be expected to cost
periodically review the trusts in¬
recognizes the serious hardship and what it might be expected to vestments in the
light of changing
that would result from a sever¬ accomplish. Such a "preview" may
business and market conditions.
ance.
The creation
of a profit be had for the cost of a small
Normally, for the conservative
sharing trust immediately begins amount of executive and book¬
type of program which should be
to build financial security which keeping time.
The procedure is

of

tall

sufficient flexibility so for at a very reasonable rate and $5 million from the central gov¬ or the giant tractors
or the
that contributions are not required
provide a safeguard against the ernment and turned a desolate toilets, soft drinks, chewing gum,
under circumstances which would
distressed
rural
loss of valuable negotiable papers. and
village of cars and telephones—all of which
make it an unsound financial risk.
At the time the contribution is poverty and squalor outside New they've never seen?
It would appear that the answer
In an Indian community no one
voted
the
investment firm
will Delhi into a suburban industrial
to
both
these
questions is fa¬
had ever seen anything as com¬
submit
recommendations
to
the center in four years—a quite per¬
vorable under an intelligently

their effec¬ planned profit sharing trust.
niless
refugees. They now live
money. The services of a well or¬
tiveness.
an employee
ganized investment planning firm and work there with social and
"Trying It On" Your Business
who has long been tired of work¬
will be rendered on a continuing productive amenities of the sort
It is a relatively simple matter
ing hangs on because of financial
review basis. They will not only to which most of Western Europe
necessity. Too often younger and for the management of a company submit recommendations for in¬ would
aspire. And they're repay¬
deserving employees are denied to determine what a profit sharing vestment of contributions but will

made

talking

stop

golden wheat fields of Kansas and

has

plan

limited
Too often

economical

Failures in Asia

pense

have

health

October 2, 1952

The Commercial and Financial Chronicle... Thursday,

(1232)

will

serve

as

of the branch office.

ridiculous

thing

as

to be

hungry

The dream is

tragic.

The

so

one

millions yearn for
explicit certainty

is the direct and

of their next meal, and we must

"Cultural

never

missions"

are

it)

....

so-called
•and

to see for themselves the
"agrarian reform" . . ; „

nrnnf

nf

thf

SO-called

"he.»

Volume 176

Number 5156

nevolent

yearning

they

are

matize when

The Commercial and Financial Chronicle

.

expected to dra¬

they return

Communist bases.
do—and
tives

so

ask

eastern

off-

themselves

many

which

the

do
na¬

type

western

or

type, they prefer. Can
are doing as well?

say we

The

to

These they

effectively

democracy,

r

.

for
peace"
Communists.

Chinese

among

These

pf

.

Reds

skillful

are

in

we

other

They train their agents to
same food, talk the same
language, wear the same clothes,
the

and

endure

the

as

the

people

same

they

hardships

promise

to

rescue.
We, on the other hand,
attempt to permeate Asiatic coun¬

tries

with

ideas

tant,

by

using

think

we

impor¬

Americans

who

don't

know the country
they're
in, can't speak the language, and
never

leave the major cities. This
ditference symbolizes the truth of
comparative

our

failure.

I

found

information

our

people, too often
using
psychologically
unsound,
beautifully elaborate brochures to
make arguments above the ken of

the natives.
I'm

to

sorry

critical.

ganda

So

efforts

of

so

propa¬
out

by

who really
applause for their ef¬

our

the

Far East—for

a

for

them;

as

our

ical years of the

help

parade

India

will

of

the

men

tilizers,

increase

motives

off to

the

There is

litical

structure

their

are

but

ardor

the

would find

difficult.

willingness and
beyond question;

direction

they

given is quite another thing.
Position

of

aim

in

at

the

Communist

The Communists have

parliamentary figure
lative

battlefield.

India

has

ruled

speeches

in

time

a

the

poor

the legis¬

First

of

all,

limit

Lower

on

House

(something many Americans like
feel quite^ bitterly
about, I

me

add). Mob oratory has been

may

rather stifled
It's

have

the

Communists

overdone their ranting

even

and

raving in Congress by giving
openings for both the ministers
and back-benchers to

hits

by

ridicule.

think

our

propaganda experts might take up
the points so
conveniently raised

should

provided

provoked)

say

in

(or

I

debates in

defense of much we'd approve of
—first

of

all, for the Common¬
membership we will soon

wealth

hear

much

so

they

about;
the

for

argue

secondly,
(in¬

virtues

stead

of the evils, for a change)
English businessmen in India,
and, thirdly, they even praise our

of

otherwise often scorned American
aid. It's reassuring to know that
not

all

ideas.

India

of

western

is

world's

There

are

against

and

refreshing

and

adventuresome young

bloods
among the India politicians. They
have

skill.

attack
I

And

Indian

like

they

it

use

to

commies.

dirt

in

morning's
news:
Nehru shouting, "There's no room
in
India for
you." Heckling to
Communist
a

demonstrators

makes

good mental picture. He went

hope
as

Red
our

busy

ent.

flags

placards."

and

I

propaganda experts ah*

as

bees today in the Ori¬

India's

live

masses

but

are

rarely reached by faint echoes of
distant
debates
in
Congress.

Again,

I point

out,

this

level

to

anywhere
compare
with

in

ours

U. S.

A.,

over

India's vastness.

and

the

almost




least

con¬

middle-road

world
in
of

ley.

the
all

at

714

Mr. Kerley formerly was As¬
Vice-President

sistant

the

of

America. The firm also announced
the association with it in the Chi¬

office of Frank D. Foss, for¬

cago

in

the

of

Bond

Investment

Bank

the

of America,

Frank C. Pendleton, recently

and

graduated from the Northwestern

School

of

Commerce.

the

Far

—

how

feebly

propaganda
on

little

or
an

you

Only

will

you

information

about

the

We

you.

leading

so

East.

home

come

blind

know

infor¬

the

like

blind;

about

the

ing"

people

role

right

like it

we

or

people

not, "lead¬

happens

to

be

our

The United States

now.

has become the greatest
power in
the world, both

industrially and

militarily.

I think

we

New

York

and

Boston

Stock

Ex¬

that Ralph C.

announce

Draper and Stuyvesant Wainwright
are

now

$126 million, compared with

at

corresponding period last
Comptroller
Preston

Delano

national
States

of

Currency

reports

banks

and

the
in

that

the

the

principal operating
of officers and

employees and fees
to directors, an increase of
$34,000,000 over the first half of
1951, and $126,000,000 expended
for interest on time and savings

operating
earnings of

paid

$532,000,000
for

the

June
an

six

ended

deposits,

30, 1952,

increase

the

half of

of

banks

the
were

$1,319,000,000.
This

was

associated with the firm.

and

ation reserves)

an

increase

$12,000,000

loans

earn¬

of

increase of $22,000,000.

and recoveries on
investments, etc. (in¬
cluding adjustments in valuation
reserves) of $27,000,000, and de¬
ducting losses and charge-offs (in¬
cluding current additions to valu¬

first

1951.

Gross

ings

an

Adding to the net operating
earnings profits on securities sold

of

$59,000,00 0
over

taxes

of

on

net

of $69,000,000, and

income

of $223,000,-

000, the net profits of the

$131,00-0,000

before

Preston Delano

the gross

dividends

1951.

$279,000,000,

The

which

rate amounts to

at

an

the

world

such

resents

silly

a

it.

000 from interest

on

United States

formerly

were

partners

The annual rate of cash div¬

1951.

Gamwell & Co.

obligations and $80,- idends was 3.73% of
average capi¬
in
000,000 interest and dividends on tal funds and was
45.35% of the
other

securities, a total of $380,- net profits available. The remain¬
000,000, which was an increase of
ing 54.65% of net profits, or $153,$29,000,000 compared to the first
half of the previous year, and $67,- 000,000 was retained by the banks
000,000 from service charges on in their capital accounts.

Joins Waddell & Reed
(Special to The Financial Chronicle)

DENVER,
Waddell
States

Colo.

—

has joined

Cleveland

&

deposit
A.

accounts,

an

$3,000,000. Operating

increase

On

of

expenses, ex¬

June

30,

1952,

there

could

succeed, we'd have to know
than

Bank

do about

we

seek

the

world

would be to
If

of

haps

know

about

more

ARTHUR M. ANDERSON

of

some

local

wouldn't be
remind

tinguished

cultures

President

per¬

and

in

anyone

Cash
I. C. R. AT KIN

this

PAUL C.

than any in our western civiliza¬

When

learn

we

to

have

genuine respect and appreciation
many of their cultures (and,
I

may

know

add,

propaganda
be

when

do)

we

these

President State Street

Stock

Investment Corporation

President

Morgan & Cie.
Incorporated

information and
which

programs

effective

with

the

will

involved

populations.
All

of

who

us

members

are

the

of

com¬

munication,
can

ought to give a
thought to how better

lot
we

help Americans to understand
true

nature

the

over

feel

we

ought

is

to

focusing

There

peoples

Obviously,
do

some

the

on

much

so

other

of

earth.

scale

I

full-

Orient.

(as well

space

differing customs and ideas)
separating us from the Orient, I

wonder how the job of
know
it will
ever
be
seems,

today, like

getting to
done.

It

monumental

a

task just to get mass-America in¬
terested

in

educated

59,909,612.17

of the Federal Reserve Bank.

*

the

Orient—not alone

about

it.

It

has

to

be

1,650,000.00

(including Shares

of Morgan Grcnfell 4' Co. Limited
Morgan 4' Cie. Incorporated)...

and

Loans and Bills Purchased

11,922,814.72
282,318,295.11

''

Company

II. P. DAVISON

3,755,796.88

Banking House.

3,000,000.00

Liability of Customers

on

Letters

of Credit and Acceptances.

12,174,849.30

Vice-President

$770,140,855.22

RICHARD It. DEUPREE

the press, and in all media of

more

The B. F. Goodrich

220,180,226.50

Municipal Bonds and Notes

Accrued In terest, Accounts Receivable, etc...

COLLYER

Chairman and President

*

......

CHARLES S. CHEST ON
JOHN L.

$175,22),260.54

from Banks

Other Bonds and Securities

BERNARD S. CARTER

people

will understand

we

to carry on

Hand and Due

State and

CABOT

for

how

on

United States Government Securities

Vice-President

venerable

more

ASSETS

t

anxious.

so

•

tion.

Condensed Statement of Condition September 30, 1952

HENRY C. ALEXANDER

the

that many people in the Far
have a ,heritage more dis¬

East

YORK

Vice-Chairman

Chairman Executive Committee

intending to stamp out

needn't

room

NEW

It. C. LEFFING WELL

ten¬

our

everyone else like

appreciated the val¬

we

we

tNCORPORATED

EORGE WHITNEY
Chairman

One way to overcome

them.

J. P. MORGAN & CO.

•

•

&

we

to remold.

dency to make
us

DIRECTORS

more

Chairman The Procter & Gamble

Company
CHARLES D. DICKEY

LIABILITIES

Vice-President
N.D.JAY
Chairman Morgan & Cie.

Incorporated
DEVEREUX C. JOSEPHS
President New York

Life
Insurance Company

THOMAS S. I.AMONT

$ 74,882,743.06

Deposits: U.S. Government
All Other......

Official Checks Outstanding
Accounts

587$53,054.72

.

23,708,402.37

$686,444,200.15

Payable, Reserve for Taxes, etc....

5,301,390.73

•

Acceptances Outstanding and Letters of
Qredit Issued

12,246,809.30

Vice-President

Capital......

i

25,000,000.00

L. F. McCOLLUM
President Continental Oil

Company

Surplus

30,000,000.00

Undivided

Profits

11,148,455.04

G US TA V METZMAN

$770,140,855.22

Chairman Nc70 York Central
Railroad

Company

J UNI US S. M O It CAN
k ice-President

done.
ALFRED P. SLOAN, JR.

It

get
it

is the

it

done,
at

seems

and

you

me

to

Chairman General Motors

Corporation

however
the

impossible

moment.

then, do

chance of
and

job of

we

services

and

to

the

♦Krishak Magdoor Praja.

in¬

our

have

interpreting

aspirations

Then,

our

a

real

hopes

people

of

JAMES L.

United

States

to secure

securities carried at $88,118,915.78
pledged to qualify for fiduciary powers,
required by law, and for other purposes.

Government

in the above statement

public monies

are

as

THOMSON

Chairman Finance

Committee Hartford Fire
Insure

nee

Company

Member Federal Reserve

System

JOHN S. ZINSSER
Chairman Sharp & Dolime Inc.

were

4,932 national banks in operation,

Inc., United cluding taxes on net income, were which was a decrease of
Building.
$787,000,000 as against $715,000,- since June 30, 1951.

Reed,

National

Frank

the staff of

Before

notion

annual

8.22% of average

to want to make the world
in our own image—and most

even

six

principal item of operating earn¬
capital funds. Net profits for the
ings in the first half of 1952 was same
period of the previous year
$735,000,000 from interest and dis¬ were
$257,000,000, or 7.99%
of
count, on loans, which was an in¬
average capital funds.
crease
of
$91,000,000
compared
Cash dividends declared on com¬
with the corresponding period in
mon
and preferred stock totaled
1951.
Other
principal items of
$126,000,000 in comparison 'wnh
operating earnings were $300,000,$115,000,000 in the first half of

far too

are

banks

the

for

months ended June 30, 1952, were

prone
over

The

expenses were

$386,000,000 for salaries and wages

reported

net

months

year.

000 for the first half of 1951.

United

possessions

half of

$115 million in

Government

Both

we

seek to lead.

we

Estabrook & Co., 40 Wall Street,
New York City, members of the

changes,

put

results in the

over

Cash dividend payments in first

earnings for

East

are

Delano, Comptroller of the Currency, reports increase

the first six months of

Join Estabrook Go.

and

Earnings Up in First Six Months

operating earnings of $59 million

1952

over

Draper, Wainwright

Streets

two-way streets

to

and only

communication

network

are

If you think this is

you

formation

no

are

statement, I suggest

journey
when

Way

are

that

is

now

propaganda

me,

instead of
the city-level. We tend to forget
there

even

popularizing

obvious

requires

the men and women to speak the
language and to work at the vil-

lage-to-village

right of

as

on

to tell the Reds to "go back to the
native place of Communism with
their

shade to the

a

Most important

Two
To

all

this

office

under the direction of H. W. Ker-

parties.

the

projects

Coast

besides

India

spill-over from Congress be¬ University
it reaches
the
Communist
stage.
There's
democratic
pay-

I

Communist-theatrics
have

Pacific

a

fore

ues

Congress

of

West Olympic Blvd., Los Angeles,

templating an improbable alliance.
They are there, handy, to blot up

we're

there.

spe¬

build

parties—who

by these moderates in India's gov¬

The

Co., Chicago firm

T.

polit¬

merly

ernment; perhaps they do, but if
they do, no one claimed it when I
was

Calif.—W.

cializing in private placement in¬
vestments, announces the opening

Section

direct

score

I

ANGELES,

the Socialists and the
strong Praja*

of

by the stop-watch.

possible

LOS

to

left of Congress yet to the

Whether
a

in net

one

than

in

po¬

armor.

cut

on

interesting

political parties of

have worked

India

Asia.

the
remaining defenders of the Bishop National Bank, Honolulu,
L'mpire idea), but there are also and earlier was with the Bank of

and

India, I feel there is a very
political soft spot for us to

real

another

Communism. There are, of
course,
the right wing groups (who are

the

In

out

in India

alternative

often realize

are

an

more

Communists.

Preston

words.

upon

Opens
Los Angeles Branch

Grimm &

point

thing.

ical

depended

W. T. Grimm

village mud roads

to

on—there is

National Bank

has

first half of 1951.

car¬

yet beneficiaries.
like

The

It certainly does again, in

and hovels of people who are not

I'd

world

us.

history

of

course

often before

for

fer¬

simply must be

success

ried

mation

and

problems

Where

and

should be.

Their .will

the

by

farm-implement
projects succeed, the noisy news of

the average American

and

gotten

tenuous

better

and irrigation, loco-

power

They live (with their longsuffering wives and often with
babies) under conditions which
primitive

results

Communists.

forts.

cruelly

five-year plan to

well

as

any

sound

our

carried

are

dedicated young
deserve

to

seem

much

Information Serv¬

do in the next four crit¬

can

each

ways.
eat

Anything
ices

21

(1233)

1

'

!nV>!

Member Federal Deposit Insurance Corporation

21 banks

The Commercial and Financial Chronicle
22

Continued

jrom

expenditures which indicated that
the peak would be reached in the
fourth quarter of 1952, and would
be at tne annual rate of about

Economy

^'

118%, and the rise in the na¬
income between 1945 and

as

the

cause

the debts

Korean War and the defense pro¬

paid.

The annual repayments are

kinds of goods to

new

was

tional
1951

The great growth

52%.

was

deflationary be¬

of indebtedness is

gradually re¬

are

there has been a repetition a form of contractual saving. Most
considerably milder scale of of the repayments are re-invested.
Thus they increase the' ratio of
many of the problems of the Sec¬
ond World War.
savings to total incomes. This is
The rapid rush of tough and in¬ deflationary.
gram,

on

a

problems has produced

escapable

stomach ulcers and
downs

these

but

break¬

nervous

problems

have

managements to

also forced

scru¬

themselves

administrative

in

other

words, the

in which

turbulent

live

we

In

methods.

have

times
hard

been

but they have been
good for the art of management,
and, to that extent, for industrial

on

managers

efficiency.

they raise the ratio of sav¬

nence

ings to the income of the country,
fn the distant future, after the ac¬
crued

liability under the pension

the

has

been

happening to
standard
of
con¬

country's

sumption? Whatever questions one

have

may

amount

the

about

of

the

output

the

total

of

precise
in

increase

private

industry,
there is no doubt that the produc¬
tion of goods for current consump¬
tion has gone up.
of 1950 it was at
of $207.2

prices;

In the first half
the

annual

billion in terms of

in

the

*6.9 billion

first

half

of

rate

and

met,

after

has been time for many per¬

ccere

covered by

now

sons

been

has

plans

reached

have
What

Defense Mobi lzaestxmated that defense and

military

of

P'

ai

billion

fyea/or

little less at the end

a

1952, and would continue at
that
level through the calendar

of

the

the plans to
of

age

retire¬

ment, the payments into the funds
not greatly exceed the bene¬

may

This

disbursements.

fit

oetween

and

revenue

disburse¬

"Will

however,

ments,

balance

not

be

reached for many years. At pres¬
ent the

receipts of private pension
running roughly $2 bil¬

funds

are

lion

year

a

above benefit disburse¬

ments.

the

for

estimates

budget

fiscal year submitted by
President in August, 1952, in-

present
the

less

on

the

in

military, aid

and

defense

fiscal year
lion

total expenditures

that

dicate

will be about $6.8 bilthan estimates in the

President's budget message

of last

January. The Council of Economic
Advisers in July, 1952, estimated

of defense spending would be reached "some time
that the plateau

level

the

and that

1953

of

end

the

before

^would be between $60

billion. ...Remember
that only a year earlier the Counell had said that the peak wou
billion and $65

iqS>G My
m!

belief is that the plateau
of defense spending and foreign
aid will be around $60 billion a
1952.

larger,

In the meantime the popu¬

of the usual increase in its stand¬

year—probably

a

not

consumption, but they haVe

yet

at

rate

any

forced

little below.

program

be

the

check

a

on

inflation

for

the

of

ume

investment?

to

the

The

vol¬

rate

of

High corporate taxes,
less of a check on

reason.

-,ame

however,

are

to

ers

the f wage

unions.

demands

of

Since

employers know
increase in costs will re¬

investment in the plant and equip¬

that any

ment of

duce their tax

liability, they have
ess
incentive to hold out against
oressure
for higher wages.
Fur¬
than in the first half thermore, if employers expect

industry and agriculture,
1952
expressed
in
dollars, was
about one-sixth larger in the first
half of

1952

of 1950.
You will be surprised to
learn, I think, that the volume of
private investment, expressed in

to

1952

dollars, in the economy as a
whole was slightly less- in the first

make

half of

course,

of

1952 than

1950.

a

drop in the total
investment was due to

shift from

tories

the first half

This

volume of
a

in

in

increase in inven¬

an

the first

half

of

decrease in 1952 and to

ate

a

1950

to

moder¬

present tax rates

What
of

ance

ary

tant

an

reduced

now

in

the

economy?

interesting and impor¬

have

corporations

on

in

a

year

or

two,

incentive

an

to

kinds of expenditures
rather than later.
This, of
some

is

inflationary.

But

the

stiff taxes

on corporate profits do
greatly limit the tendency for in¬
creases
in profits to raise either
the expenditures or the dividend

disbursements

of

Revisions

(4)

defense

is happening to the bal¬
inflationary and deflation¬

influences

This is

be

employers

drop of investment in housing.
V

corporations.
in

the

expenditures

scheduled

and

date for the

in

the

peak level

flationary
There

then

new

in¬

ones.

are

fluences

the

at

deflationary in¬

have

recently

be¬
(1) the great rise

drastic revisions in the
of

defense

been

corporate

incomes, and (4) revi¬
timing of defense ex¬

sions in the

penditures

and

in

the

peak level

of these expenditures.

(1) The great rise

expenditures.

signs and specifications.

There

has been that

A second

industry has

had trouble in making production
schedules. A third reason has been

debtedness.
Both
corporate in¬
debtedness and personal indebted¬
ness have increased far faster
than
the national income since the end
of 1945. The rise in

corporate in¬

debtedness

between

the

1945 and the end of 1951




In

July,

end

was

of

85%,

the

Council

of

peak

of

defense

be

reached

expenditures
in

the

required by law seems

now

assure

holding

surplus

large

stocks of these commodities.

accumulated

government
several

stocks

bailed

out

by

the

was

Korean

just in time to
the basic

came

the public

from

the

in

weaknesses

large

and

ago

years

only

\yar> which
conceai

Tne

present farm

There is plently of trouble

p0BCy

ajjea(j jn

petition

the

has shown an ominous disposition to take, the control of in-

gress

the

frorh

nual

that

rate

of

defense

quarter would

billion.

an¬

spending in
about $64

be

Actually the annual rate
spending in that quar¬
$18 billion-less, or $46.0
In
January,
1952,
the

of defense
ter

was

billion.

credit

Council of Economic Advisers is¬

and

real

estate

banking authorities.

other words, Congress

In

has yielded

to

strong political pressures from
consumers, retailers, labor unions,
and real estate interests. Authority
of

the Federal Reserve

system to

regulate installment credit has not
been
renewed and its authority
real

estate

credit

has

intervening in the making of

In

credit

policy to make installment
credit and real estate credit easier,
has

Congress

undoubtedly

been

giving the people what they desire. This, however, does not make
intervention of

the
less

Congress

any

Depriving

inflationary.

the

Federal Reserve system of control
and

vir-

tually depriving it of control

installment

over

over

real

estate

credit

credit

means

that

the

tendency of prices to rise during

periods of boom will be stronger
than it otherwise would have been

—certainly stronger than it would
exercised

real

some

estate

control been

installment

over

and

both

causes

its
contract
in

long-term

union to

the

keep its members interested in the

organization. And the negotiations,
which

pretty much a burden

are

to the

busy operating officials of a

corporation, give the officials of a
union an opportunity to demon¬
strate their capacities to the mem¬
bers. .Just

the

as

income

annual

non«ense

^ £ side;ncy to a

Early

officers.

°*

o

this

the

the result of

the

vention.

wages
a

Consequently, union of¬

as

contract

than

crease

of

rise

in

factor.

other

bit

slightly

is

on

another

in

if

the Wage Stabilization Board

the

greatly spread the
0f contract by

0f

they

wage

the

automatic

to

wages

are

not ap-

to

that

question

depends

cessions
would

the

and

United Automobile Workers.
an

The

automatic adjust-

the

willingness of the union to
sign the five-year contract.
The
union

consider

must

whether

a

of

in

be

require

that

an

even

ag¬

to

ever

business.

for the

the

more

intervene

gressively than

these

otherwise
rise. Consider a five-year contract,
such as the
one
negotiated beMotors

would

government

slower than they would

provision for

dropping. Despite

enterprises. Hence the widespread
adoption of productivity wage in¬

ency

General

of

they

financial difficulties for many

ous

whether the4automatic adjustments
of wages
causes
wages to go up faster or

fn the main upon

tween

are

are

be .raised
recession

may

business

Of

prices

Hence

fact that output per manhour

creases

adjustment of

ductivity really inflationary? The
answer

regardless

of falling prices could creat seri¬

of

assumed rise in pro¬

an

year

method

as a

allowing

increases which

fhe

increases

is rising, wage advances in periods

provable under the present stabi-

js

quite

become

ever

These

wages

periods

factor

inflationary—at

conditions.

that

in

increases

of this form

use

using it

rationalizing

will

be

to

every

when

and

faster

respect

wage

improvement

an

likely

made

especially the oil industry. There is a possibility that

industries,

faster

prices.
automatic

mean

on a pro¬

likely to make

are

a

business

to extend

would

a

There is

into

to
in¬

automatic

rise

There

least

auto¬

wage

require

costs

to

widespread.

pressure

either
wage-

expected

adjustments based

labor

thus

is

Hence

ductivity factor

Nearly 1,000,000 of these workers
were in the
automobile industry,
contract

a

negotiations

yielded.

are

of

for
or

slightly larger

a

tomatic wage increases based upon

form

expected to ac¬

substitute

a

adjustment

based

tdnS

be

short-term

wage

Bureau

as

elec¬

an

cept the automatic adjustment of

under contracts providing for au-

some

jobs

kind of

some

ficials cannot

have

p ic

improvement

their

the votes of delegates to a con¬

or

which

annual

hold

tion—by vote of the rank and file

Labor Statistics estimated that
about 1,250,000 employees worked

an

that

remembered

be

officers

union

the yield

on

.

agricultural

year

v

must

It

matic

for

candidates

prpS.iaenrv f0 talk

halt

The

re¬

result

stronger tend¬

long-run movement

prices to be upward.
What

will

be

the

tionary influences
The

omy?
the

net

effect

of

deflationary and infla¬

new

the

econ¬

on

upon

repayments

debts,

growth of pension funds, and
on personal and

the stiff tax rates

corporate

incomes

will

limit

vigor of booms and will help
vent

booms

the
pre¬

from

becoming run¬
The effect of these three

away.

deflationary influences in limiting
the vigor of booms will be offset
to

some

extent

by

installment credit

uncontrolled

and

real

estate

series of shorter contracts would credit in times of boom and per¬
probably enable it to negotiate in haps also by the policy of support¬
the course of five years larger ing farm prices at high levels. The
wage increases than it would ob- parity levels are so high in rela¬
tain
from
automatic
increases tion to the cost of producing farm
based
upon
an
improvement products by modern methods that
factor. And the management must support operations may occur even
consider the same question. Hence, in periods of high employment.
is

it

not

would

that

true

accept

tract with

an

side

neither

long-term conimprovement factor
a

The

absence

of

effective

con¬

trols of installment and real estate

credit will tend to make contrac¬

which would yield results less fa- tions more severe because the lack
vorable to it than it estimates of controls will
permit a bigger
would be yielded by the usual
volume of debt to be built up
bargaining at the renewal of a during booms. The stiff
series of annual
tracts?

elude

credit.

A

it harder for

makes

union

the

interest

reopening clause unless, the

been

in that field.

affairs.

of

members

increased

an

Corn¬

farmers'

the

ment of wages to a productivity
virtually destroyed. Congress does'facfor (pius an additional adjustnot feel the same political presment for changes in the consumsures for cheap commercial credit,
ers' price index) is a condition of

consequently, it has not in-

the

when
take

votes

field, and the

for

lizationhules of the Board.

The development, of poli ical control of credit policy. Con-

stallment

operations.
Long-term contracts,
however, do not have an equal ap¬

that the government will

fc>e

soon

(1)

Must

that

progres¬

or

not

the

two-year
one

then

con-

sive income tax rates will have the

con-

adjustment

opposite effect since they will
of duce the cyclical fluctuations

re¬

in

rise

wages to an annual improvement

personal incomes after taxes.

during periods of boom is impor-

factor is likely to have a regligible effect on the movement of
wages?

policy of supporting the Drices of

The

second

quarter of 1952, and that the

in

increase

annual

output per manhour.

have been had

1951,

Economic Advisers stated that the
would

in private in¬

estimated

the

scheduling

important:
that Congress has refused to ap¬
in private
indebtedness; (2) the propriate money in the amounts
rapid growth of pension funds; requested: A fourth has been the
(3) the high level of taxation, es¬ loss of steel resulting from the reh
pecially taxation of personal and cent steel strike.
come

called

tervened

there

support to

more

based /upon a so"improvement factor" or

and,

so

and

(3) the spread of automatic wage

have

or

control

(2) the tendency

adjustments

During the

year

reason

four

that

more

the

prices of farm products; and

last

during the have been several
reasons
for
last six years important new in¬
these changes.
One has been the
fluences, some inflationary and fact that
the military authorities
come deflationary, have come into
were not ready to decide
just what
the economy. Let us look first at
they wished industry to produce
the principal new deflationary in¬
and were not able to settle on de¬
and

give

the

over

timing of

political

of

cf credit policy;
to

(1)

principal ones:

development

of these expenditures.

question because

fluences

three

are

country to accept a lower stand¬ inflation than high taxes on per¬
sonal incomes
because
ard of per capita consumption.
the high
corporate income taxes tend to
>
;V'..
>;.■
IV ^ V'V
V.'. weaken the resistance of employ¬
What has happened

levels

to

has been a powinflationary influence but

also

of

burden

World War I prices and the second report of the corporation reveals
the capacity of the management,
a so-called "modernized" formula)
so
the outcome of wage negotia¬
gives the higher result. Support of
tions reveals the capacity of union
the prices of farm products at the

defense program

„

ard of

when the rigid support of certain

tarm commoaitiea at 90% of par
*ty will be superseded by flexible

(3) The spread of automatic
(3) The high level of tax rates. erful
1952
wage adjustments based upon a
1952, The Korean War and the defense the changes in its timing and the so-called improvement factor,

rise of almost

a

third time has postponed the date

su"Ject
The p0llcy.

have caused tax rates to reductions in the planned peak of
substantially increased.
High
spending have made it substantilation of the country has increased tax rates on personal incomes are
ally less inflationary than it otherabout 3%.
Hence per capita con¬ a strong check on inflation be¬ wise would have been.
sumption has remained virtually cause they mean that a large frac¬
v
'
.
unchanged, increasing by a neg¬ tion of any growth in incomes will
ligible amount. Thus the Korean substantially raise the revenues of
What are some of the inflationWar and the defense program have the
government.
High rates of
ary
influences that have gained
deprived the country for two years taxation of corporate incomes are strength in the economy? There

3.3%.

the

of

extent

some

negotiations which take the time
of
busy
officials
from
routine

peal to unions. In fact, they have
important disadvantages trom the
union point of view. The expira¬
and more support to the priCes of
tion of a contract is always a time
(arm
products
Congress
for a

1953 and 1954. Congress in
its last session refused to make
defense appropriations in the
amounts requested by the President
The difference between the

The

to

(2) The tendency to give more

years

their

and

,

the

be

will

greater

P"ce supports which would take
account of changes in supply. Furthermore, Congress this summer
has extended for three years the
so-called "dual parity system"
(2)
The rapid growth in pen¬
President's requests and the ap- which requires that parity prices
sion funds. The growth of pension
propriations of Congress was about shall be based upon whichever of
funds is deflationary because the
$8 billion.
two formulas (one based on pre-

payments into these funds at the
ways present time substantially exceed
of doing
things and have thus cne benefit disbursements.
The
produced rapid improvements In excess of receipts over disburse¬
administrative organizations
and ments are a form of saving and
tinize

5Director

lion

the

boom,

long-run rise in the price level,
Both political parties seem equally
disposed to deprive the Reserve
SyStem of authority over instali-

On April 1, 1952, Mr. .ment ail^ reai estate credit.

$65 billion.

personal indebtedness

of

rise

exact¬
ing specifications; then there were
the postwar adjustments and the
necessity
of
suddenly
shifting
from
war
production to peace¬
time production; finally, with the
make

revised estimates of defense

sued

3

page

A Look at the

•

Thursday, October 2, 1952

...

(1234)

rate

at

which

prices

tant because it has great influence
upon

the long-run movements of

prices. The government
to

make

cessions

possible.
rise

of

every

in

business

Hence,

prices

is bound

effort to keep
the

during

as

mild

greater

periods

Such

a

conclusion

would

be

farm

The

products at high prices will

increase the outlays of the Federal

government in years of contrac¬
and thus will limit the con¬

tion

the

close to correct, but not quite correct.
Long-term contracts have
particular appeal to managements

of

because they relieve managements

ductivity

reas

traction of income in those years.

Wage

increases based
are

upon

pro¬

likely to impair the

Volume 176

Number 5156

.

.

The Commercial and Financial Chronicle

.

credit position of weak companies

portion of their incomes for

in

sumer

to

spending (or greater reduction in
to prevent the depression

taxes)

becoming

worse.

The total effect of the

booms

little

a

to

easier

control.

The economy is

rpup
The net effect nf the ripfiatinnnrv
of thp deflationary
arid inflationary influences upon

ilii? one$-

effect of

Vnng

Thp

to

Jhe long run 0f

(2)

rise

Hisrncqinn

more

than

the

pro-

w

icuutc

offer

to

...

What

investment

capa-

city of the economy to grow?

The

plained by the
sion

of

enormous

scientific

velopment of
cies

and

and

and

economic poli-^

new

policies.

credit

new

Let

instruments

look

us

first at the capacity

increase

to

omy

briefly

of the

the

econ-

of

supply

goods and second at its capacity to
increase the demand for goods.
The

capacity of the economy to

make
goods has
been
growing
Jl.T
rapidly because of the extraordi>J!

nary growth of industrial research,
I have expressed doubt that the

rise

apparent

of

about

5%

per

manhour in the output of the private economy during the last two
years

three

or

solely

gain

a

represents

years

in

efficiency.

To

extent it

some

probably reflects a
change in the kinds of goods produced. Nevertheless, one may conservatively estimate the growth in
true

2.5%

productivity at no less than
per year, and the country is

undoubtedly increasing its ability
raise

to

ciency

the

rate

grows.

growing

at

The

ability

which

basis

effi-

for

this

increase

to

created

both

by

increases

not

V

smaller

proportion

of

unrtmont

Krr

vestment

(2)

innrooon

n n

by

trial

Expenditures

research

rapidly.

Figures

not too

are

have

indus-

on

also

grown

expenditures

on

inaustry

are

large

they

as

six

times

as

twenty years

were

ihe expenditures ot the gov-

ago.

ernment
most

technological research,

on

of

which

plications,
the

around

by

has

are

industrial

larger

even

ap-

outlays of industry.

city

them

their

of

the

increase

.

.

to

spend
The

installment

and

payments)

&

the output of goods, the more 1m-

portant it becomes for industry to
the

raise

demand for goods. Does

industry

have

adequate

capacity

to increase the demand for

goods?

These will prove to be very practical questions when the volume of

defense
off
in

spending begins

some

time

after

the

to

slide

elections

the fall of 1954.
In

ments for

real

economy such as ours in
which wages rise even faster than

output
in

per

the

manhour

demand

take the form of

an

for

increase

goods

rising

must

money ex-

penditures. Since the expenditures
of a given year are also the inof that year, a rise in expenditures cannot occur unless some

comes

people

are

making

too

are

labor

costs.

goods

lieve

that

ances.

can

do

this to

some

drawing down idle bal-

In the main

they must do it

either

by-saving less or by borrowing from banks. If individuals
save

faster

Consequently,
the

Federal

and
than

I

be-

Reserve

The

^

-

rapjjj

creation

vestment opportunities.

The large

£Caie of industrial research

investment
created

causes

opportunities

rapidly.

in-

of

to

There is

less and spend

a

higher




pro-

Marshall

chance that the creation of investment

opportunities in
be rapid

enough

most

-that

is

by credit

expansion

the

of

The

adoption

of

the

fighting recessions by
;rjts rreaterl

nf

c^es

by tax cuts,
ehnulrt

he

policy

govern-

by both.

or

aHHcH

the

To this

aHHitinn

nf

a

few other arrangements for keep-

recessions

ment

mild.

compensation is

Unemployexample.

an

pension plans are also an example
because they permit contractions

be met in part
by retirements instead of layoffs,
and the

man

sicn has

who retires

lasting

more

a

income than

the

man

on

a

who

of

draws

of

Customers'

M.

Alfred
M.
Elsesser,
Albert
P.
Gross, Stearns & Co.; Allan Poole,
Hemphill, Noyes & Co.; Stanley
Graff, Foster & Adams, and Mrs.

Evelyn

Brant

Valverde,

Gruntal

& Co.

wolume

increases

need

to

of

return

good

a

given

number

Thus
of

it

invest-

incrfses the T"be', f lnves\
me

opportum

tractive.
ume

and

To some extent, the vol-

of saving is increased also but

pubHccondemna-

^ 30^ of

CommSn
anS

The

policeman

spots that crop up from time
People

busineT

Questionable

the

in

of

know

actions

Mutual

bv

a

Some

limited

T

the

was

~ted

on^ o'f

ma

tors buy only $2.40 worth of that

slightly

now

When

people

the

desirable

to

-An award of

a

gold combination

key, knife and pencil, donated by
Herbert

^

..

test

out

them

that

was

right. No one
of it.
But

part

never

They

but

later go-

or

trouble.

all

are

were

he/ge

to

into

run

bonds

they

Future Demands Caution

,

„

a'

find

they

sooner

are

criticizes

,

to

e

told

been

ing

„

then

left out of
story—something that should

have

remedied by sensible

oftodr

such

to

in

t[hat

which

something

was

not—you

be

invested

word

the

in

and

cajj attention to certain conditions
can

not

andvouput

'confidence

and

government

there

therefore

Ibefore

whole-

a

milltons o£

amone

have

who

this;

as.

out to do

iob

faith

great

rainbow,

shopworn

ea

vou

semre

sale

not make mountains out of moleis

of these
Now when

they are available, everything is
expensive that today's four dol-

hills>

It

an^

there

so

own

It is hoped that Mr# Cook wi]]

house

ever

First

for® many years®

mat fhef have

fund

o«PmPntc

the

.

in.

shortage

great

a

hems

get

move

than

gSts

the

were

and

away

bond

T-' L
for

ended

war

farther

of

All

money

dollars

saved,

you

jwrightnowarebeinTnri- Site
vatelv condemned bv the soundly

an

are

a

inflation
deflation

Those who have lived through hedge.
the past 25 years, and who have
been associated with the invest•

_

x

-

n

_

m.

n.

•

j

Mutual Fund idea could be seri-

Filer,

Filer,

Schmidt

who

Those

think

that

of

sort

pessimism is unwarranted will no
doubt pooh-pooh any idea that
people should be prepared for
eventuality.
sales

Sound

builds

ever,

jf

the

for

but

alone

any

how-

for
to

tomorrow

today

Is Not the Answer

Prohibition

Ohio

There

town.

was

local

op-

avoided

the

in

that may come—let us show the
way to the public.
Let us not
expect the government to do this

for us.

NY Bond Club to Hear

come,

business recession

severe

a

psychology

not

future

Charles E. Wilson

can

all

we

hope that it will be done.
one

does come, and

you

But if
have not

&

prepared your clients well in adVance
of the event so that they
wiu
not
be forced
to
liquidate
vnnnrmuin.-.
«,i+c.+o«riincf
in recognition of his outstanding their sound investments at panic
contribution of work on behalf of prices, because they have both the

Co., was presented to Thomas B.
Meek, Francis I. du Pont & Co.,

j

reserves

*n *939.

of

kt

V

1

I ork

I

Qi.

otock Lxchange

N

N

Stock

Ynrk

Why

Exchange

York btock Exchange

^na""0UnCed the followinS £irm
£

^

Transfer of the Exchange memb61,8*11?
Frank W. Tindle to
Albert W. Franklin will be considered by the Exchange of Oct. 9.
Gamwell & Co. was dissolved
,.

.

Partnership m Lamson Brothers &
-d

to call

them

carry

'

on

right,

in

a
my

limb?
Mr.
judgment,

attention to this matter of

selling

too

anyone

where

much

leaves

it

of

them

any

in

Charles E. Wilson

a

position that they might have to
^

Charles E. Wilson, former

_

,

dent of General Electric Company,

fQr

will

an

investments

They
have

Mutual

emergency.

are

Fund

for the long-term.

are

not suitable for primary
*
u~
Any one who does not

sufficient

primary reserves,

in addition to their common stocks

real

without
The

a

estate,

going

is

to

Cyrus Lawrence

One

Cyrus J. Lawrence & Sons, 115
Broadway, New York City, mem-

bers of the New York Stock and
Curb Exchanges, announce that
Joseph A. Beisler has become

as-

sociated

in-

vestment

with

the

advisory

fim

in

the

department.

•

of

soured

on

reasons

E
~

of

luncheon meeting

to be held at The Bankers Club on

October

16,

Joseph A.

it was announced by

W. Iglehart,

of The Bond

President

Club,

Same

Frederic H. Hatch
why

the

Frederic H. Hatch & Co., Inc.,

general public have become somewhat

a

Club

S. G. Robinson With

Made This

the

at

New York

Bond

sea

lifeboat.

Treasury

The

address

Mistake

With

Presi-

Seii out someday to secure money

and

u

out

go

is

reserves.
-----

«

William C. Karlson r^ir^d from

2r

Cook

fund

.

understanding
to

matters

gret it.

Weekly Firm Changes
Th

the

and

such

„4.„

through that period, you may re¬

k

IT

1

;

en-

in

investment.

the

that

earn

induce

ential sources of

do

™l"n

be

^ QP3g tFS30P 1

order to

'four

the

bend

bufa

to

your

„a

back
three"
was

be

the

the gadgets

was

save

uuu&u

was-

meeting
Sept. 24,

William H. Burnnam withdrew

of

LT

When

St

The

munity develops ways of limiting
the severity of recessions, it rethe rate

month

a

Si

with

bought

wuu

around

had to do

you

toat

critirism

CoTvice-Presi-

&

pen-

source

the Ihill

develonments within the industry

_

unemployment compensation.
At
any rate, in
so far as the
com-

duces

He also mentioned certain

home

with the Commission.

dent; Edward S. Wilson, Reynolds
& Co., Secretary; William Specht,
Jr., Hay, Fales & Co., Treasurer;

INew

either hv in

hvern^ent spendinl

Vn

Funds.

the Association since its founding

supply.

money

(4)

by

years

that they

so

procedure involving Mutual

little

who

There

Bonds.

Elsesser, Kid- ously retarded in the event that a tion. The liquor industry became
der, Peabody general business recession came so calloused to its responsibilities
& Co.
*
about. If the stock market some- that public clamor, during a peOther
of- day takes a tumble, and as a con- riod
of
war
hysteria, brought
ficers
and sequence it is necessary to liquiabout that sordid era when the
members of date large blocks of listed secu- government undertook to legislate
the Executive rities in order to redeem Fund the human appetite. Of course, it
Committee shares that might be unloaded by was a dismal failure, but it took
elected to the a
panicked
investment public, years to clean up the mess and!
1952-53 'ad- there could
be some red faces put the liquor business back on
ministration among those who have "oversold" the relatively high plane where
of
the
Asso- the admitted advantages of Fund it is today.
ciation
were:
investment, and meanwhile negIf we are going out to sell three
T.
A 1 v a li lected to prepare their clients for billion dollars of Mutual Funds,
Cowen
Peter such an emergency.
or six, or
ten billion more—and

Dunn

P. McDermott

be

good

a

abuses in the

some

uveidge

Savings

cooperative action within the
industry itself and in cooperation

Alfred

cause

supply

rise

duty

people

average

oi

ment business during this time,
When I was a boy I used to see
held
realize that the good start to- drunks on the street almost every
succeeding ward public acceptance of the pay day. We lived in an average

and

real estate credit.

terprises

They

extent by

outrun

economic

annual

and

attractive

system should have authority over
the terms of installment credit and

times in

comes.

to

prices

than their recent in-

more

the

Indeed, I be-

consumer

estate

willing to spend today

little

a

at

credit arrange-

new

still

are

i

Brokers

people to go into debt,
too rapidly, thus causing demand

jng

ex-

President

of

financing the purchase

durable

m

steady

our

eiec'ted

was
V

Association

recent

in employment to

an

q0

the
..

by modest annual

incomes.

lieve that the

hi's

doinc

I

™

saies

Marshall Dunn, Wood, Struthers

encourage

than their

and

XTthat
there

Elect New Officers

■

individuals
into debt and to spend more

to go

also

j^x

within

was

of his authoritv

was

Ex-

una

and

(particularly the long-term mortgage amortized

and

that

development

credit

of

Commission,

believe

proceed

interested in

are

than

more

could be obtained by the millions

Securities

the

scope

do not

we

exploration

and

improvements in real estate credit

.

right

Customers Brokers

the
t;

4
j
must u- r:
be financed in part

to

economy

the

system

+W/-»

in

•

incomes.

the demand for goods? The
greater
the success of industry in raising
,,

balanced

a

Offering individuals attrac-

duce

than

What is happening to the capa¬

rate. The

same

tive credit arrangements which in-

satisfactory, but,out-

lays on technological research

Perhaps

the fundamentals of

in-

in

increase

an

supply.

money

goods"

in 1929-30.

little.

of all those who

save

I have pointed out, increases
the necessity of financing some in-

for

increase in the number of natural

gets

„f the problem of how to
get and

many

scientists and engineers. They are
three times as numerous today as

important question of

economy

the

Cook, who is Chair-

n

change

growth-not too much and

too

keep

as

0f

product.

always

and more attractive goods,
helps industry reduce (or at least
hold down) the rate of personal
saving. The lower rate of saving,

likely in boom times to

called attention to the remarkable

the

at the

new

0f

nrovide
provide

demand and supply should attract the best efforts

their

are

already

the

for

to
to

and that the expansion of demand
and supply will

Technological research, by
helping business concerns offer

too

have

I

capacity to raise out-

i

sore

comes.

pro-

research.

its

0f

man

supply and its capacity to expand to time
demand will necessarily be equal
Fund

i

ductivity is the expansion of industrial

in recent years has in-

Spendmg' by.tax^vdr ^ pansion of both
'v

(1) Inducing individuals to
a

the

Mr. Donald

£° w,orry about that P™blem- there are times when it is necesNevertheless, one would be unsary for some "whistle blowing."
duly optimistic to assume that the jj0
business can be without some
capacity of the economy to expand

rap-

govern-

in

only to

larger

rate of

adopted the policy of fighting recessions by government deficits

expan¬

technologi¬
partly by the de¬

cal research and

.

thp

whether

to

as

and
and

how

nanced in part by the creation of
money; and
(4) because it has

opments of recent years and one
which has been greatly stimulated
so

so

relates

grow

related and

idly that these investment opportunities exceed the
current
How of savings and must be fi-

has been rapidly gaining
in its capacity to grow.
This is
one of the most important develeconomy

by the defense program. The gain
in capacity in grow is mrtiv
to
partly ex¬

opportunities

nf

i have not discussed the closely-

attrac-

better able than

...

Mnapitv

markets

thai everCatoSecreato
ever to create

hettL

.

happening to the

is

by calling

nut ner manhour
put per manhour

faster.

VII

tVin

question

creased

men

individuals

to

economy

induce

to

ever

By JOHN DTJTTON

nf

economy

capacity (1) because it is
able

Securities Salesman's Corner

the

in

discussion ol tne capacity ol tne

the

live credit arrangements which indUce them to spend
more
than

little

a

for

spending

attention to the fact that my

your

saving in order to buy goods;
because it is better aole than

ever

factor will be to make labor costs
prices

markets

^vmuaio

automatically increasing

hence

create

better

run

expand

of

j close ^ese remarks

better able to-

to

ever

volume

community.

demand for goods and thus

ductive

wages by an annual improvement
and

than

money

negligible—the effect of the stabilizing
influences
being
pretty

"

the

ecuiiumy ib ucilci duie iu

j

day

the severity of recessions wi l be

iin^tnhiTMm*

individuals,

of

Or

booms, will be to make

upon

savings

individuals
or
enterprises
might increase their spending by
directly borrowing .rom banks.

de-

new

flationary and inflationary influences

goods,

using the

,

'

23

con-

net effect of reducing the severity
they increase the 0f recessions is to increase the exnecessity of business concerns fi- ,tent to which credit neeeds to be
nancing some investment by bor-„;used to finance investment oprowing from banks
instead of portunities and thus to increase

periods of contraction, and thus
require
larger
government

from

(1235)

bonds

is

that

63

Wall

Street,

New

York

City.

pohinenn

they were oversold. First of all,
during the war, the Treasury
agents and their propaganda departments actually romanced the
so-called
postwar
future
that

announce thei

has become

b

associatedI with the

flrm as a Vice-Pr
.
Robinson f o r m erly was
Kidder, Peabody &
o.

.

wnn

24

Continued

from

not much

is

it

4

page

Industrial

to

sance

Chemical.

On

the

basis

their

of

of these organiza¬

some

have

tions

already expressed in¬
in proceeding further with

terest

naval

to

investments
Some

showing

their

of

of

the

interest in

an

funds.

own

organizations

are

for prompt clearance of the

range

program

a

partially by the government.
indicating
a
possible

Proposals
mutual

approach would have the

finance

AEC

the

of

construction

the reactor and chemical

process¬

ing plant, and the industrial firm
the

finance

cern

the

case

a

equip¬
AEC

furnish the industrial

would
and

such

In

ment.

plant

power

con¬

with unspent fuel elements
purchase from them the spent

fuel

elements

nium.

The

chemical

containing

AEC

pluto-

would

processing.

the

do

These

am sure, are still in the
tentative stages and are still being

studied and discussed by the Com¬
mission and the industrial con¬

might add

this, point that

at

in the last year or so several large
have
asked
the same

concerns

Commission has

a

of nuclear

number

pro¬

power

jects for the propulsion of naval
vessels and aircraft, it has no in¬
terest

yet in the particular

as

cerns.

ap¬

But the point
make here is that finally

plication suggested.
I want to

Feasibility of Nuclear Power
There

three

are

major

factors

to bear in mind in

considering the
feasibility of nuclear power.
(1)

As I mentioned

previously,

the

idea

them,
want

vital material in

you

At

weapons.

duced

the

that

appears

from

time
be

can

nuclear

power

conventional

of

to

the

at

is

cost

the sale of plutonium

a

from

provided

sources

it

pro¬

sources

cost

competitive
portion

present

power

borne

a

by

military purposes. If
requirements for pluto¬

military
nium

eliminated,

are

the

at this time would not be

ising.

picture

as

prom¬

However, there is probably
so readily
adaptable to

device

no

both

and

peace

war

a

nuclear

at

present
interest.

as

reactor.

should

economics

not

discourage
has been placed

Emphasis
recently

just
production of econom¬
All new developments

on

ical power.

expensive in their early stages.
are
many
new
develop¬

are

There

ments and processes

being studied

that may well lead to
very satis¬
factory results.
(3) Further, cost is not the only

parameter

involved,

should

lose

not

vantages
power

last

the

parade

but

from

to

icatch
the

and

sight

To

work, let

energy
swer

possessed

and

by

ad¬

nuclear

a

where

areas

transportation

conventional

expensive

fuels

because

be

of

from
on

impos¬

great bulk.
the

the

figures

available

pound.

tions,
this

and

fails

ular

while tomorrow will

other

ratories

bring forth

un¬

numer¬

industrial

the

of

applications
from the labo¬

Commission

and

industry, I feel that the most
promising industrial application
of nuclear energy will be in the
production of useful and competi¬
tive power.
In saying

counting
tion

of

this

I am not dis¬
important applica¬

the

nuclear

propulsion

of

for

power

naval

vessels

aircraft, for in this national
gency, the atomic energy
is naturally focused on

the
and

emer¬

project
military

application, and neither the
situation

world

the character of our
establishments indicates that this
nor

emphasis will be of short duration.
I

say

I

the

on

do my

simple

assure

to

best to helo

if

partic¬

your

problem,

or

an¬

ques¬

that

you

answer

question

this

because

I

feel

it

is

entirely feasible and possible to
design and construct a nuclear
plant which will produce power
and plutonium
at competitive

simultaneously and
prices.




work

in
the

There

its

I

will

at the con¬

you

Q.

program?

Government

of companies
of atomic

number

a

taken

advantage

also

to radiation, and it
commercial

that

production of large quantities of
such substances will be required.
is

there

Then

related
clear

the

reactor

companies

with,

technology.

materials

putting

to

work, such

own

or

nu¬

Many

already

are

radioactive
their

work

to, radioisotopes, and

in

use

radioac¬

as

that

to

is, al¬

type of industrial firm.

increasing

quantities, is
dium

substitute for

a

industrial

in

ra¬

radiography

where its penetrating gamma
diation

is used

ra¬

detect flows

to

in

engine

studies in

search, etc. Radioistopes for medi¬
cal

purposes;

tracers in

as

studying what types of

fertilizers
tain

radioisotopes

—

most useful for

are

cer¬

plants. For example, minute
added to fertilizer.

these

fed

The plants

fertilizers

of the

and

a

absorption of fer¬

tilizer by the plants is obtained by

varnishes by adding small amounts

by industry.

varnish

do to

plant. Measuring the durability of
different

of

types

paints

of

which

is

is

and

applied

rolled

to

with

a

to the surface is obtained

atomic

Operations

There

sion

are

in

inquire at the
Office

of

the

the

Commis¬

Operations

Offices:

are

eight

three

program?

energy

production

centers

for

235

measure

on

the rollers. There

to mention

other

applications

their

the

is

our

our

tory;

Hanford

Operations;

raw

materials; Sante Fe
military applications labora¬
Idaho

Station;

our

Reactor

Testing

Schenectady

Operations,
development; and
Chicago Operations Office, han¬
dles practically all of the research
mobile

and

and

reactor

on

stationary research and

mobile

reactors and accelerators. For spe¬

cialized contracts, the Commission
examines
many

the

qualifications
of
companies. Therefore, it is

imperative

that

we

be

aware

of

too many

number of

should

find

case

very

of reactors, in¬

surface of

the

nuclear

power

possibilities and isotopes produc¬
tion.

Q.

•

How

can

a

keep

company

abreast of the work in the field of
nuclear

if

energy

possible?

train

or

There

are

a

man,

several

ways:

of

is quite

the

of

whether

best

nuclear

Third,

you can

the Oak

in

course

Of

scientists to

to

take

uncleared

companies

ended

during the

summer

taken by 67 students.
38 were recent college

was

these

graduates, 23 were from indus¬
try, two from the Navy, and four
from the Air Forces.

You

know

might

be

the

course

are

to

is increasing, since 50
for the year begin¬

ning

in

September,

with

30

recent

include

Chemical,
trical

is

This

just

one

,

.If

looks

one

for

stitute

only

to

a

sub¬

fuels—there is

that is now ready and
to work—that is the

one

able

for

about

carbon

go

atom.

In view of the recent

in

vances

believe

engineers,

individual

try

utility

afford to negopportunities to keep
of developments in
the

companies
lect

indus¬

owned

privately

and

I

possibilities of
are very real and

the

that

nuclear power

that

rapid ad¬

technology,

reactor

cannot

their

field.

Milton Capper Forms
Own Firm in New York

The

and

in

Elec¬

engineering as well as a
physics and chemistry.

few

in

at

the

places emphasis
reactor

the extent
dents

to

laboratory

application,
is included to

upon

theory

for the stu¬

necessary

develop skill and

apply

to reactor engineering.
The re¬
quirements for admittance to the

school

at
Oak
Ridge are very
Therefore, it will be neces¬
that you select exceptionally
qualified
candidates.
The

high.
well

tained

you

bright

assign one
young
engineers
may

of

successful

for

candidates.

He
was
formerly a partner in
applications must be accom¬
Edelmann & Capper. Mr. Capper
panied by complete transcripts of

The

is

academic

obtain from

(2)

The

reviewed

told,

School.

Last

you

Ridge

a

I

am

take

a

a

man

to

four-week

Service

of

the

Commission will tell you how this

tion of

our

reactors. Some of these

These

but

are

the

known ways

today of getting into the nuclear

Mr.

Brayton

Francis

with

I.

was

duPont

S. K. Evans

Realty Co.

if it holds any
PATERSON, N.' J.—The S. K.
promise in your especial field of Evans Realty Company is engag¬
endeavor, and it does not mean ing in a securities business from
energy

that
not

field to

more

be

see

ways

opened

have

you

the

or

avenues

will offices at 563 East 32nd Street.

tomorrow;—so if
desire to explore,

John H. Harke

Opens

participate, or keep abreast in
this important field of work (and
MIAMI, Fla. —John H. Harke
you should) and have a problem has opened offices at 40 Southeast
Sixth Street, to engage in the se¬
or situation that does not fall into
any

one

of the categories I men¬

curities

business.

Harke

Mr.

was

tioned, the Washington Office, the formerly with Bonner & Bonner
Chicago Operations Office, and I and Francis I. duPont & Co.
the

sure,

other

Operations

Offices of the Commission will be

tion.

You

will

be

knowing that there
tablished

main

in

interested

has been

in
es¬

Washington the Of¬

function

of

this

With Carroll, Kirchner
(Special to The Financial Chronicle)

DENVER, Colo.—Sam Levy, Jr.
has

become

roll,

associated

Kirchner

Patterson

with

Jaquith,

&

Car¬

Inc.,

Building.

With Investment Service
(Special to The Financial Chronicle)

DENVER, Colo.
P. A. Miller is

Investment

now

—

Mrs. Marian

connected with

Service

Corporation,

444 Sherman Street.

office.

With Waddell & Reed

age

oper¬

Street.

& Co. and Bacon & Co.

of Nuclear Studies.

group

exception, but Laboratory at Bettis Field

FRANCISCO, Calif.—Har¬
associated
Co., Ill

old Brayton has become

with William R. Staats &

radioisotopes techniques
given by the Oak Ridge Institute formerly

to

A request to the Tech¬

Information

(Special to The Financial Chronicle)

Sutter

in

course

Brayton Joins

William R. Staats Go.
SAN

75.

send

can

to

year,

only too glad to
discuss your
keeping abreast of the particular problem with you to see
literature now being published in if we cannot help
you find a solu¬
nical

Harold

of

Committee accepted

Oak

by

approximately
which
the

were

applications

Fourth,

then

are

upon

Admissions for the

on

there

400

course.

acted

and

Committee
Reactor

the

applications

the task of

this field.

Security

the

of

member

a

records, references, and
Traders Association of New York
by the candidate and
and the New York Society of Se¬
employer as to what each expects
curity Analysts.
to
statements

atomic energy

no

has

nation.

the

in

along

graduates

Mechanical

Instruction
but

1952

graduates.

our

case.

enrolled

students

years

abreast

interested

that the number of experi¬
men
from industry taking

enced

wanting to work in the program? organizations I am sure you have
heard of, such
as
the Argonne
Secrecy is always a hindrance to
National
Laboratory,
the -Oak
over-all progress in any field and
Ridge National Laboratory, the

is

short

consumption

one-year

a

practically all aspects
technology. The course

of reactor

of 1952

one or more

or

Ridge School of Reactor

Technology

which

send

engineers

fice
of
Industrial
may be done.
Development,
concerns.
Second, you can, and probably headed by Mr. W. L. Davidson,
Frequently one can learn about
which reports directly to the Gen¬
equipment and supply and other should, farm out one or more of
eral Manager. A positive effort to
unique needs and about special your bright young engineers or
scientists for a period of a year single out ideas and techniques
engineering problems by contact¬
developed in the atomic energy
or two to one of the Commission's
ing an Operations Office.
organizations carrying out the re¬ program which might have in¬
Q. What about secrecy? Is it a
dustrial applications, will be the
search, development and construc¬
for

con¬

our

industry's power
jumped
from
nothing to the point that we are
the business the largest single power customer

the abilities of interested

barrier

and

stantly

are

has any application
to
particular field of endeavor.

of your

am

First,

your
power

a

up

dustry is just beginning to scratch

i

development work

meas¬

industry

into

way

ations

Operations Office han¬

are

here, but

shortly. In the

and

by

uring the radioactivity picked

and Pu; these are Oak
Ridge
Operations, Savannah River Oper¬

New York

roll¬

of the adhesion

in

a

a

surface

heavy

ers

the

and

radioisotopes;—for example,

find out if there is business for it

Your best bet is to

even

output

and lubrication by ra¬
Milton Capper
procedure is about like this:
dio tracer techniques. Tracers have
(1) By March 1 of each year
been used in following oil flow in
Milton Capper has formed Cap¬
you must submit applications. This
pipe lines.
In the rubber and
per & Co. with offices at 29 Broad¬
early date is important so that
rayon
industries, tracer isotopes
way, New York City, to engage in
security clearance
may
be ob¬ the investment securities business.
are being used in fundamental re¬

trial services and products sold to
the AEC are those routinely sold

a company

but

wear

measuring the radioactivity of the

Q. What should

432

mendous

energy
your

sary

metal casting and welds,

specialized projects a
specific type of experience may be
required, but many of the indus¬
large

was

cobalt, which is produced in the
principles of reactor physics
nuclear
reactors
in

measure

are

learn

to

tive

gram? The
For

for

antidote

an

conceivable

is

are

any

as

over-exposure

are

most

work

yielded results in producing

medication

eligible

answer

radiation.
has

nuclear

from

Commission-supported

quantities of radioactive materials

What companies

advantage

of action

course

apart

industry

own

several possibilities, for

are

instance,
have

of

of electric
billion kilowatt
with this tre¬

output

year's

power

expanding capacity, we
ob¬
just barely meeting the ever
vious, for your men will be right increasing demand. Look at the
on
the ground floor working on AEC as a power user. In a few
this

ways

Q. What opportunities are there
for a company to do atomic energy

to work in the atomic energy pro¬

dles

nuclear energy

of

these

extremely

even

their

seen

questionably
ous

of

extremely compact

earlier

per

is

perhaps

or

Nuclear fuel is

Now,

pro¬

ask and

us

rather

some

AEC.

heat

more

now

of

rhythm

get very elementary

able

can

is

rumble

The

drums.

yet,
begin

we

business of how to get into atomic

one

of' the

plant in remote

quoted

started

time

nounced.

nearest

as

not

to

distant

the

drums

either coal, oil, or gas is not avail¬

sible

has

time

processional
of

admittedly

November,

clusion of this talk.

The

(2)

the

Commissioner

As

starts.

don't

when

Glennan well put it in his talk to

to the gov¬

ernment for

knows

concern

behind

left

be

parade

producing atomic

the

on

apparently

they

but
to

plutonium, can be pro¬
duced concurrently. Plutonium is a
as

in

just what the atom will mean to

besides

such

"getting

No industrial

ble.

clear

producing heat in a nu¬
reactor, other nuclear fuels,

of

ground floor" is beginning to rum¬

The

Last

of hours,

construction
propulsion

the

frequently to save time when it hand knowledge of
which is really one
is imperative to move rapidly.

directly

in this field.

Now while the

and

for

vessels.

officials to carry out the specific projects of importance to
our program and our
country and
at the same time
reaping first¬

question and only two weeks ago
energy
development
and
have
a
representative of one of the
placed various devices on the mar¬
largest
industrial firms in the
ket such as the marketing of elec¬
country called me to find out how
tro
magnetic
pumps
and
flow
they should go about officially ex¬
gauges for handling liquid metals;,
pressing their interest to the AEC
the
marketing of a small cell
about a particular industrial ap¬
which
produces
accurate
volt¬
plication of nuclear energy to one
ages, since it is possible to gener¬
of their many fields of endeavor
ate small quantities of electricity
and how to keep abreast of the
progress

engineering

preliminary classified discussions.
This can be done and is done quite

from

I

pro¬

posals, I

to

industrial concerns.
"Hew do we get into this business
to see if it has any
promise in
our special field of
endeavor?"

supported partially by themselves
and

like

now

work,

classifield

do

which is often the case, we can ar¬

and

gineers

for the Commission by the
Westinghouse Corporation for the

reactors

company

spend a
few minutes on the kind of ques¬
tion
that usually comes up after
a
discussion of this kind by en¬
would

I

ated

working in the field. When it be¬
necessary for the Commis¬

company

and Dow

nui¬

a

company

comes

Applications

'Bechtel; Detroit-Edison,

than

more

individual

an

sion to contract with an uncleared

Oi Atomic Eueigy
findings,

October 2, 1952

The Commercial and. Financial Chronicle.. .Thursday,

(1236)

Conclusion
I

do

not have to

the
that

ATLANTA, Ga.—Ben I. Texler

real energy short¬
face in the future.

and Bernard M. Tesler have joined

very
we

(Special to The Financial Chronicle)

this

stress

to

the staff of Waddell & Reed, Inc.

Volume 176

Number 5156

.

.

The Commercial and Financial Chronicle

.

<

.

Yes, But.
"When he

[the consumer]

Phila. Investmeni
Our

high price at

pays a

the retail store, how much of that
price does the
retailer get? How much does the
wholesaler get?
How much goes for
transportation? How much did
it cost the manufacturer to
pro¬
duce

the

product and,

went

to

"In

the

The

tight money

the

.

first

place,

information to

estimates

own

of

help in set¬

how

much

costs,

profits and prices.
they they spend a lot of time
arguing about which estimates

the

switches
President

correct.

keeping prices from rising further.

"Powerful interests
vince the

at

are

work

.

.

trying to

food dollar and far less for other
and

where

tobacco.

the

of

rest

Let

the

President Truman in

a

us

of these

We

consumer's

an

bulk

of

the

attention

However, the really basic
higher income obligations

which

swops

to

has

minor

a

increased

pick-up in
and activity

volume

tight,

that

and

are

money

far

as

there

because

attractive to

more

equities

them

the

as

are

at this

deposit

other

many

time.; Private

that

are

There

concerned.

not

a

of

few

these

also

are

study

tinue to drift, because of the lack of
To be sure, they are

again

far

a

a

real

as

The

by the President.

at face

2

Security I Like Best

Treasury

that

announcement

there

would

available

be

heavily. I would expect therefore
a

ness

for the

share in
or

six

months

of

1952

$1.22

earned,

per

spite of strike conditions
than

more

enough to

cover

not

fourth

and

available

yet

quarters

but

it

are

seems

reasonable to expect that
for

the

higher

shut

wage

allowing
July, the
costs, etc., the show¬
down

in

ing for the second half should
proximate

that

of

the

first

ap¬

half

and could be better. The year 1952
a whole should be
regarded as

as

sub-normal

because

of

strike

the

sight

refractory industry is

for

the

foreseeable

fu¬

ture.
North

American

Refrac¬

tories Company will reduce its debt
further during 1952 and should in¬
crease the asset value of its stock

through retained earnings in spite
of having passed through a diffi¬
cult year. I continue to regard the
stock

common

under-valued at

as

its current quotation around
in view of its asset value of

$35

share,

per

its

earning capacity
current yield of

15V\
over

demonstrated

the years, a
almost 7%, the

over

conditions in steel and because of

essential

other conditions

agement had

no

man¬

of

control.

During the current

year

excel¬

lent progress has been made in the

the

character

company

struction

program

of

and
to

the

indus¬

its

con¬

strengthen

itself for the future.

gram

which

has

been

repre¬

sents

an
outlay of roughly $2,100,000, all of which has been ac¬
complished without financing of
any kind. This program is sched¬

uled

for

completion

around

end of the year and was
to

enable

the

the

designed
to

company

meet

competitive conditions better than
before.

ever

For the
can

only

pear

longer term ahead
generalize.

at this

It

does

Roosevelt & Gross

created

Roosevelt &

is

a

wide

those
the

range

heavy
defense

associated

of

they

used

are

diversified
are

Griffiths was formerly
Tilney and Company.

with

Mr.

in

program

on

bank

leans




so

upon

Elliot

The balance

by the Treasury, thus preventing

Holt, formerly officer of?

the

past

a

partner

gomery, Scott &
his

life

Vermont.

at

his

in

Mont¬

Company, ended
home

in

W.

Hall,

Trust

Fidelity-

the

Point

The

View

of

Trust Company."

,

subjects of the
will

tures

of

a

/

other

lec¬

be

of

Trading

Over-the-Counter

in

Market;

the
The

Cage—Its Vital Place in the Busi¬
ness;

A Further Discussion

on

the

The suggested time for the lec¬

Stowe,

tures—second and fourth Tuesday

evenings, between 5:30 and 6:30,
possibly two in October and

with
two

in

November.

For 1953, two
February and two in
March, conforming the time sched¬

lectures

ule to

in

the

speaker's convenience.

Henry Edelmann & Co.
Formed in New York
Henry Edelmann and Edward
W. Russell, formerly partners in
Edelmann & Capper, have formed
Henry Edelmann & Co. with of¬
fices

at 29 Broadway, New York
City, to engage in the investment

securities business.

L. R. O'Brien

is due
a

drain

Leo

R. O'Brien

is

Opens

conducting

a

securities business from offices at
39

Broadway, New York City,

der

the

firm

O'Brien Co.

viously

name

of

Mr. O'Brien

with

Brady

&

un¬

Leo
was

R.

pre¬

Co.

and

Cartwright & Parmelee.

they buy.

Corporations have in the past been large buyers of the tax

bills, because it affords them
money

Under the

opportunity to

an

they would normally put

away

interest

earn

on

for the payment of taxes.

U. S.

TREASURY,

government's accelerated tax plan for corporations in

the payment

of taxes, known

taxes will be due

March

on

as

the Mills plan, 40% of the

15, 1953, and another 40%

on

1952

STATE

June 15,

and

1953.
In

October, 1951, the Treasury put out an issue of tax antici¬

pation bills that matured March 15, 1952, and these
a

price equivalent to
of these

issue

1.497% basis.

a

ings.

push
of

an

yield of 1.55%.

average

bills, which

came

due

on

were

June 15, 1952, went

SECURITIES

realistic treatment than did the two previous offer¬

they did to build

these

MUNICIPAL

According to opinions in the financial district,

Commercial banks, it is believed, will not put
as

sold at

The November,

though the impending offering of tax anticipation bills

seems as

bills,

up

because in

on

the same

deposits created through the purchase

many

instances

deposits did not stay with them

as

long

they
as

found

these

out

they expected

they

\voultd. Ifowever, there seems to be no question about the offering
being

though the rate

a success even

may

have to be closer to the

going market rate in spite of the advantages of the tax and loan

ordinarily
there

the

be

appears

this will

take

believed

retained for

in
a

tightness in

favorable

to

an

the

money

increase

place.
a

some

markets,

in the

to be considerable question

this would not be
is

Aubbey G. Lanston
& Co.

Despite

Henry Holt & Co., publishers, and
in

Lincoln

which would result if the banks paid out cash

reserves,

for the bills

Elliot Holt

in¬

which

through the purchase of these bills.

account.

ap¬

essential in

industries

with

firm.

writing that the de¬

products

but

now

that Richard S. Griffiths

one

economy for a long time to come.

dustries

Wall

the

fense program looms large in our

Refractory

Cross, Incorporated,
Street, New York City,

The banks under such

put up only the required reserves against the deposits

will get more

40

be

will

Investment officer of the

but the

year,

again be allowed to pay for the tax bills by credit¬

only when called

it

Add R. S. Griffiths
announce

Tuesday, Oct. 7 at 5:15 in

room of the FidelityPhiladelphia Trust Co. The speaker

financing program.

probably be offered later in the

offering is not likely until sometime in November. Commer¬

1951

underway
This

step in the Treasury's Fall tax bill
bills will

on

modernization and expansion pro¬
for the past two years.

on

board

According to Treasury Secretary Snyder, this is

ing the government tax and loan accounts.

try, the strong financial condition

which

over

They will be dated Oct. 8, 1952, and will mature

cial banks will

on

profits taxes due

1953.

conditions

The

the

entire year's dividend requirement
of $1.00 per share. Estimates for
the third

in

next

substantial volume of busi¬

^xpected by the market. These bills will be acceptable

18, 1953.

the first

that

the first

the

time when these securities will be

value in payment of income and excess

Further

being the only quarter since the

company

season,-^

as

Corporations Welcome Tax Anticipation Issue

first that this would be true.
In

1952-53

sibilities.

they are concerned. Although it seems
to be rather well
recognized that the current course of events in
the money market is temporary,
nevertheless, a change is not
being anticipated in the immediate future.

March 15,

the

the

sponsorship
of
the
Philadelphia-Baltimore Stock Ex¬
change. The first lecture will be

investors

nonbank

buying interest in them.
watching the trend of quotations In Treasury

issues because there will be

March

The

for

the

Cage—Its Functions and Respon¬

appears to be the opinion of quite a number of
investors that the longer-term
Treasury bonds will con¬

nonbank

these—if any way can be found to
be useful of course, but we

page

under

preferred

more fitting to their requirements than
government secu¬
Likewise there seems to be no shortage of securities (in¬
cluding another issue of the World Bank bonds) that will be of
interest to these institutions in the immediate future.

Oct. 8) was

from

lectures

—From

$2,500,000,000 of tax anticipation bills (starting tomorrow through

Continued

the
Chairman
of
is Miss Marguerite Camp¬
bell, has arranged a series of eight

which

rities.

attractive

those referred to

Philadelphia,

consider

originally conceived by

as

of

Fundamentals

stocks

on

how foreign such

upon

Committee

Women's Club of

Philadelphia Trust Co., and his
subject will be "Security Analysis

v

in the money markets, and there ap¬
immediate change in this procedure.

no signs of an
Federal is keeping

Educational

Investment

held

reports,

trading issues in the list,

on

The
the

Security Analysis
(continued); The Art of Selling
Securities; Further Discussion ar*f
Selling Securities; Fundamental
of Trading in the Listed Market;

doubt if they would have much influence
upon the
behavior of politicians and others who control de¬
as

according

chases of these institutions

them—would

cisions such

the

deals, corporate bonds, the housing obligations and other tax
exempts appear to have the center of the stage, as far as the pur-'

as

President Wilson.
as

gets

issues.

some

been,

of the best

situations

dollar

extended

Exchange, te
be given in 1952-53 season.

w

longer term Treasury obligations

re¬

to the duties and functions of the Fed¬

Such data

still

Accordingly, it

Trade Commission

obtain

quotations of

sponsored hj

Stock

banks are concerned, it is the lack of nonbank investors' interest
that is mainly responsible for the ragged
performance that is being
made by the longer end of the list. Institutional investors have
been showing a great reluctance to make commitments in the

.

goes."—
letter
directing the Federal

hardly need comment
are

in

be

to

pear

questions.

matters

eral

products such

get the full facts

Trade Commission to undertake

that

Long Bonds Ignored by Non-Bank Investors

sponsible for the high cost of living. Figures of the
Department of Agriculture, however, show that the
farmer receives
only about half of the consumer's
cotton

indicate

to

seems

list

The pressure is still

con¬

that it is the farmer who is

consumer

the

of

made

and

Although

Eight lectures,
Phila.-Bait.

are

slightly. This trend, however, is still in the direction of shorten¬
ing maturities. As has been the case, the 2%s of 1958 continue

Truman

possible, we should have available a set of agreedupon facts. Such facts would also be useful in the
of

which

preference

has

to be one

task

the

for what is taking place in the

There

"Particularly in these days of preparedness, when
is essential to settle labor
disputes as promptly as

it

of

is the absence of buyers of these securities.

And

are

of

end

being

year

a

reason

labor

influence

is for liquidity. There appear to be no
sight for this condition. The intermediate
and longer term obligations continue to be on the
inactive side as
a
whole, and this makes them rather susceptible to the usual
quotation manipulations which has resulted in new lows for the

increase would affect

wage

the

immediate changes in

tling labor disputes. Both sides
in a
dispute usually present their
given

All

shorter

because

need

we

under

quite likely to remain on the defensive
if not most, of these depressants have been relieved.

until some,

.

.

Lecture Course

By JOHN T. CHIPPENDALE, JR.

Treasury obligations
The

Women's Club Offers

policy of the authorities, the refunding operation,
raising and nonbank investor preference for other

money
investments.

much

Governments

on

government market is still

new

labor, to materials, to

overhead, etc.?

Reporter
=

of those

manufacturing costs, how

25

(1237)

as

which

would

prime bank
to whether

rate,

or

not

quarters that

long period of time.

the

15 BROAD

ST., NEW YORK 5

WHitehall 3-1200

On the other hand, it

current

3%

rate

can

be

231 So. La Salle St.

45 Milk St.

CHICAGO 4

If it should be raised and not maintained,

desirable development.

INCORPORATED

BOSTON 9

ST 2-9490

KA 6-6463

,

•t

26

(1238)

The Commercial and Financial Chronicle... Thursday,
'

'

f

Continued

from

-v

to commend its

7

page

equity securities to

consideration by investors

serious

The Savings Banks Approach
To Equity Investment
has been inadequate and that lack
of such capital in desirable vol¬
has

been

factor

a

contribut¬

ing to economic instability.
of interest

to

observe

that

It is
the

in

arguments advanced in the debate
the

on

savings

bank

equity

bill

the

m

past
that

doubt

has

this

extent

some

a

but there
carefully

be

found

in

common

before the New York State Legis¬
lature early this year considerable

stocks

and

would

fit

emphasis

equity investment program
savings bank at this time.

the de¬
sirability of stimulating the mo¬
bilization of equity capital even
to the limited extent possible un¬
der the pending bill.
Within the
limits

of

banks

the

placed

was

upon

conservative

vestment

for

powers

such

equity in¬
the savings

those

provided in
enacted New York

as

recently

statute these institutions would -be

in

position to make

a

mod¬

some

erate contribution to the mobiliza¬

Stock

Added

£

That

risks

equity

in

narily

Involves

to

confronted

those

in

conclusion.
volve

no

fixed

ordi¬

bond

mortgage investment is

a

and

foregone

Equity securities in¬

rate

contractual .claim
of

return

nor

to

do

a

they

represent any obligation to repay
a

fixed

of money.

sum

The posi¬
tion of the equity investor is
pure¬
ly marginal representing a resid¬
ual

interest

assets

this

of

in

the

the

such

reason

earnings

issuer.

and

Largely for

securities

and

Common

investor.

features

approval

are

in

is

issue

the
o

issuer

at

sustains

the

while

periods of
and recession

earnings

are
marked
by falling or de¬
pressed prices. This radical char¬
acteristic of junior equities should

be fully recognized in

judging the

tain

such

without

market

sus-

fluctuations

embarrassment.

with

date,

capital

well
for

stocks
with

I cannot emphasize too
strongly
the exclusive
objective of

savings banks in seeking equity
investments should be higher
yields or, giving effect to the re¬
cently developed factor of Federal

taxation, higher after-tax yields.
Savings banks should have no pri¬
interest

either

as

income

capital
of

means

a

in

or

in

gains

augmenting

effort to provide
some compensation for the
forces
of inflation.
Our institutions are
no legal or moral
obligation
protect depositors against an

erosion

this

of

the

be

may

interests.
should
with

to

their

adverse

as

individual

Our role in this
respect
to influence depositors

be

all

dollar

the

command to

effectiveness

at

our

take appropriate po¬

litical action through communica¬
tion with elected officials and thus

attempt

to

source.

strike

the

evil

retirement

established

high

that

grade

fluctuates

various

ence

in

the

preferred
accordance

factors

which

influ¬

the investment bond market.

Thus

the

factors

nfluence

a

at

its

Savings banks seek only

and

entirely differ¬
market standpoint

at

stocks

time

a

when

higher

attractive

are

the

interest

with

an

ex¬

Observation
stock market
to

seem

mate

in

tween

the
a

preferred
period would

indicate that

minimum

points

yield

of

an

one

should

approxi¬
hundred
exist

be¬

industrial

an

stock and
same

of

over

preferred
long-term bond of the

a

company whereas a differ¬
of approximately one hun¬
and twenty-five basis

ential
dred
is

points

indicated

sues.
"ase

for

public utility is¬
The greater spread in the
of public utility issues re¬

flects

mainly the relatively heavy

debt

and preferred stock
capitali¬
zations of public utility
companies
and the characteristic absence of

capital

provisions.
differentials in the case of

These
new

retirement

issues

should

be

increased

somewhat
although,
of
course,
market
circumstances surround¬
ing a new issue would be largely

controlling. Furthermore, the ad¬
vantage of preferred stocks to
certain

institutional investors

un¬

higher yields from investments in
der present tax laws is
suggestive
equities with the objective of in¬
of an influence that
may tend to
creasing the over-all rate of re¬
reduce
somewhat
these
yield
turn from
earning assets.
spreads.
It

to me that under exist¬

In

ing conditions savings bank invest¬

field

seems

ments

largely
stocks.

in

equities

might

well

be

confined
to
preferred
Various analysts and stu¬

dents of the markets have at
times
criticized
preferred
stocks
for
their generally
amorphous nature.
It has been

lack

the

stocks

pointed out that they
of common
periods
of
prosperity

advantages

in

whereas in

periods

of

they

may
involve to
erable
extent
the

tages

of

junior

depression
a

consid¬

disadvan¬

equities.




To

pommon

priate

reserves

equity

investments.

with

respect

The

to

Invest¬

ment Committee of the New York

the
of

opinion

today

extensive
common

that

the

and

stocks

under

complex
it

is

conditions

my

of

so-called

"defensive"
issues of which the public utilities
are
the most prominent

example

should

constitute the bulk of
any
savings bank investment in junior

equity securities.
The outstand¬
ing stability which is character¬
istic of this

its
and

industry together with

long record of steady growth
indications

of

an

upward

trend in business and
earnings for
an

indefinite

period

general
20

last

vogue

during

*

among

so

or

years

of university, pension
and other institutional endowment
funds in connection with common
managers

stock investments.

The purpose of

plans is obviously to elimi¬
nate to a large extent the element

such

to

various states in
which savings of
course,
expediting purchases
banks are authorized to invest in in
portfolio for a savings bank.
corresponding areas of a de¬
Much emphasis has been placed stocks. It was determined that in cline.
*
upon the so-called "growth" stocks general the policy of periodically
The application of such a for¬
which over extended periods have writing down such investments to mula is intended to insulate the
produced both generous returns in market or providing adequate val¬ management from prevailing spec¬
dividends and substantial capital uation reserves
is
both favored ulative attitudes or mental fixa¬

private elements in a sound equity

gains.
In these
industries due officially and observed in practice. tions that may reflect popular
principally to intensive reinvest¬
Probably this matter should be thinking and may even have sta¬
ment of earnings dividend
pay¬ left to the prudent determination tistical justification but which are
ments are relatively low, the hold¬ of the individual management op¬ not in consonance with a
strictly
ers of such shares expecting ulti¬
erating under the supervision of prudent policy from the stand¬
mate benefit from market appre¬ the state banking authorities.
A point of the basic purposes and
ciation. To me it would not seem reserve of one percent of book
objectives
of
the
fund.
Such
reasonable to criticize a savings value annually covering both pre¬
formulary
plans,
however,
are
bank management for some invest¬ ferred and common stocks would
necessarily subject to alteration
ment in such growth issues with seem to be sufficient.
While this in reflection of changes in under¬
respect to which initial dividend rate may be considered somewhat lying economic and political con¬
returns would be small but which

in

due

course,

growth through

excessive with respect to preferred

with
expected stocks it is probably
re-investment of surately inadequate for

commencommon

stocks.

lower of book

would

seem

or

market values.

Importance of

Continuing Study
And Analysis

It

should

Aspect of

TimingbNJJ

A cardinal objective in the de¬
appropriately em¬
phasized in connection with equity velopment of an equity portfolio
investment that a thorough and is to accumulate Ihe stocks in¬
extensive analysis of all pertinent volved at the lowest possible aver¬

be

factors

bearing upon the position age prices and, of course, at the
industry and of specific cor¬ highest possible yields. Certainly
porations within that industry is it should be a fundamental con¬
unavoidably necessary in accord¬ cern to avoid the acquisition of all
ance with a prudent
policy.
Al¬ or even a substantial portion of
investments
at
though adequate analysis and in¬ those
relatively,
of

an

vestigation

obviously essential

are

elements in sound bond and mort¬
gage

investment

larly

so

in

residual
the

the

the

where

are

favors

and

strongly

stocks

preferred

unattractive
outlook

which

preferred

stocks

common

an

under

to

stock

long-term interest rates and

rates

that

mary

gives the
a
sinking

of

Preferred

issues.

is

narket

the

whole

a

usually command market
somewhat below those of

ither
It

obligation
as

pectation of lower interest rates.

Savings Bank Objective

,

cases

annually.

no

semblance

propriety of such securities for ent.
From
savings banks and, of course due investment

provision should be made to

most

shares

specific

any

yields

It is

declining

preferred

repurchased

redeem

ssues

stocks

of

This feature, despite the fact that

funds

earnings and dividends.
widely recognized that periods
of prosperity are marked
by high
prices and generous dividends for

the

which

be regarded as defen¬

...

stock

of future

of

stocks may

Covering both types of in¬
two - thirds,
of the
outstanding
vestment, therefore, it would
stock.
An additional feature that
vestment.
However, the require¬ probably meet the test of ade¬
ms
become characteristic of pre¬
ments of savings banks for ade¬ quacy.
Obviously
this
reserve
ferred
stock financing,
particu¬
should be credited with: profits re¬
larly in the case of industrial quate, continuous earnings would
seem
to assure that under a pru¬ sulting from the sale of stocks and
issues,
is the so-called
sinking
dent policy investments in growth should likewise be- charged with
fund or capital retirement provi¬
stocks
would
constitute a small losses. It would ^seem sound prac4 ;
sion under which, contingent upon
tice to report equity investments,
the
availability of earnings, a percentage of total equity invest¬
ments.
for
statement
purposes
at
the
fixed percentage of the original

usually reflects
appraisal of the value

at any given time

dustries

earnings, would probably produce
a
high yield on the original in¬

debenture.

common

factor

of

percentage,

the

current

is¬

incurring lunded debt with¬
the

issue

a

con-

in the power to prevent the issuer

fund

common

com¬

such

dividend

another

fluctuations in market price.
a

Most

strength is frequently to be found

characteristically subject to wide
The market for

a

Stocks

cumulative

while

the

of

characteristics

involve

lated

involve

securities

into

preferred stocks to the

ervative
sues

investments

stockholders representing a stipu¬

Risks

addition

mend

such

appropriately

Various

out

Investment

that

Preferred

.rom

tion of equity capital.

if

true

portfolio of preferred stocks of in¬
vestment grades will provide a
of protection greater than
to

generous

somewhat
the

sive, such as food and retail trade.
Investments in such issues subject Association in carefully consider¬ of
judgment in providing a me¬
conservative
limitation
and ing this subject pursued its inves¬ chanical determination for accel¬
is little proper diversification would un¬ tigation to the point of determin¬ erating the liquidation of stocks
selected doubtedly be considered as appro- ing currently effective policies in in advanced
phases of a rise and,

been

measure

that

Mutual savings banks in Maine
in the other New
England

and

yields and a States due to experience as in¬
vestors in bank stocks are keenly
strong element of protection.
There are, of course, other in¬ aware of the necessity of appro¬
seeking

ume

October 2, 1952

this

is

particu¬

case

of

equities

investor

the

.assumes

position of

an

owner

in

high

swings
of

Since fluctuating
occasionally wide
radically characteristic
securities—particularly

with

are

equity

common

stocks

—

prudent

proce¬

dure requires due care in the basis
of

enterprise.

prices.

markets

accumulation

to

avoid

unnec¬

Granting the experience of most essarily high book costs. This is
New
England
savings
bankers particularly so with the market
with commercial bank stocks, and for junior equities at a historically
to some extent other equity secu¬ high level.
-;v"; ■
rities,

I

question

whether

or

not

It

has

been

the

opinion of the

savings bank is prop¬ Investment Committee of the New
York Association from the begin¬
erly
equipped to
perform
this
vitally important function of in¬ ning that the sound accumulation
of an equity position would al¬
vestment management.
Common
the average

stock
has

investment

become

in

recent

years

a

progressively pro¬
fessional activity as evidenced by
the large proportion of transac¬

most

of

siderable

necessity require a con¬
period thus reflecting

different

market

levels

and

suc¬

cessive phases of the business

cy¬

cle.
The most basic approach to
exchanges
that are controlled through in¬ the problem for the average bank
is probably the operation known
vestment trusts, trust companies,
as
dollar averaging with which I
private pension funds, endowment
tions

the

on

funds

principal

well

as

other

as

organiza¬

tions

think there is general familiarity.
The investment of a specific sum

representing collective in¬
The importance of ade¬ of money representing presumably
a fixed
percentage of the common
quate
knowledge
of the
many
objective
over
a
factors that must be given proper stock
period
vestment.

consideration

in

reaching equity
investment decisions and, further,
the necessity for a continuing and

should

prices.

result

This

desirable

in

in

fair

is particularly
periods of declining

process

banks

management

could

solve

this

manage¬

result

is lower than the

arithme¬

They almost unavoidably

of

scope

which

defects

within

the

policy of prudent in¬

a

vestment necessitate the interven¬
tion of judgment.
"Do what you
willy the capital is at hazard," was
the profound observation of the
court in the celebrated opinion in
Harvard College v. Amory in 1830.

^ An Equity Statute—Prudent
iInvestment

A

statute

Rule

authorizing sayings
bank investing; in general equity
securities in my opinion should be
simple, brief and to a large extent
based upon the princfole of pru¬
dent investment. Qualifications by
»•

-

the mechanics of

a

standard

upon

based

fixed statutory

past

per¬

formance is in my

opinion funda¬
mentally unsound although it ap¬
pears
to
have
served
rather
widely a practical purpose in pro¬
viding
an
assumed
protection
against possible misjudgments on
the

part

those

of

responsible for

institutional and trust investment.
It has also proven a

useful work¬

ing instrument for the supervisory,
authorities
in
facilitating ready
determinations
not

a

To

as

to

whether

security conforms to

uisite

or

req¬

a

quality standard.
this approach to

me

of

striction

ment powers

consistent

the

institutional

re¬

invest¬

is unrealistic and in¬

with

prudent invest¬
procedure. It brings in its
illusory sense of protec¬
tion and it inevitably engenders an
ment

wake

an

unjustified

dependence
that

standards

little

ultimate

termining

upon

frequently of

are

significance in de¬

underlying

It is

values.

of

investment

noteworthy signi¬

ficance that

in

has been

impressive growth in

the

list

an

of

statutes

recent years

states

which

in

governing

there

trust

the

invest¬

ment

powers
have incorporated
principle of prudent invest¬
ment.
A signal example is the

the

State

of

York.

New

Investment is not

average

strongly prices since the specific amount
invested
will
pursuggest the desirability of a mu¬ periodically
an
tual investment company such as cnase
increasing number of
shares as the market declines and
that now being organized in New
the
York State through which savings therefore
weighted average

competent

ditions.

harbor

a

science de¬

an

occasional general state¬

ment to

that efect. Investment is

spite
a

dynamic art in which, in addi¬
to basic facts, pertinent in¬

tion

formation

relevant

and

interpre¬

tive data, the intangible factor of
human
judgment
is
usually
a

problem collectively at

very

radical

element.

Investment

is

small cost.

Valuation

and

Reserves

tic average of the prices paid.
Since
all
investment
is
ulti¬

in

mately

ment

jected to the Procrustean rigidity

not

matter of judgment it is
inconsistent with the funda¬
a

precautions mentally sound principle of dollar
that may be observed in connec¬ averaging to point out that there
tion with selection and timing of may be times/and conditions, jus¬
In

spite of

all

the

equity investments, the risk of loss tifying a prudent decision to de¬
from
market
depreciation is an part temporarily from a strict ad¬
ever-present possibility which un¬ herence to this principle; thus an
der
prudent procedure requires unexpectedly sharp "or extensive
adequate reserve protection. Re¬ decline in prices might justify
cently the National Association of some appropriate acceleration of
Insurance Commissioners recom¬ purchases
while,
by
the
same
mended

panies

that

set

life

aside

preferred

and

vestments

in

cent

of

reserves

amount

reserves

twenty percent.

com¬

against

stock

common

statement

until such
to

insurance

of

one

in¬
per¬

token,

a

extensive

comparably
advance

in

sudden
the

market

might furnish the basis for
dent decision to reduce

or

annually purchases temporarily.
Formula
equivalent
timing plans

or

a

pru¬

suspend

value
are

techniques which h?ve

involve

come

i'ntn

probably one of the last

processes

the world that should

be sub¬

of
a
statutory formula and, by
logical extension, equity securi¬

ties in which the investor occupies

the peripheral and sensitive posi¬
tion

of

subject to

owner

manifold

risks inherent

position,

would

last

the

seem

all

the

in such

to

be

a

the

group of securities to which
arbitrary standard of a for¬
based
upon
historic per¬

mula

formance should be applied.
more

dynamic the industry
sensitive

or

The

the

the

security the
applicable is the process of
qualification by formula and the
more
appropriate and significant
more

less

becomes
rule.

the

Equity

prudent

investment

investment

(of

all

Volume 176

fields of

Number 5156

.

.

The Commercial and Financial Chronicle!

.

investment) constitutes

dynamic,

sensitive and

a

intensive

most
management
investment
companies is ah important al¬

-

The

^

inherent

stock

relative

irivestments

in

risks

fied

market

to

as

Only

with

so,

professional

man¬

There

are

various demonstrable

advantages and economies in a
professionally
managed
invest¬

savings bank

tion
of

and

operation of

portfolio

a

stocks

comirion

strongly sug¬
gests that serious consideration be
given to the organization of a

banks

in

the

curities.
the

I

field

of

not

am

traditional

equity

se¬
of

unmindful

independence and

characteristic

individualism

o

f

savings bankers in solving invest¬
well

ment

as

but

submit that the

I

problems,

highly

spe¬

cialized

sector

markets

comprising equity securi¬

the

of

ties—particularly

constitute for many
justifiable exception to

a

well

established rule.

raise

I

whether
of

stocks

common

well

—may
banks
a

investment

the

or

question

not for

to

as

savings bank
to small size the cost

average

a
really adequate supervisory
background for a common stock
program
would
be
considered

feasible

in

relation

investment

gate

at

amount

to

ah

that

most

to

aggre¬

would

minor frac¬

a

tion of total assets of surplus and
undivided profits.

mutually owned in¬
offer compara¬
tively high yields and provide an
investment medium of particular
significance to savings banks of

sive,

supervision in the
form of competent analysis, exten¬
sive research and

informed inter¬

pretation
that

of all
pertinent data
investment company such

an

the

as

organization

being

now

formed in New York State would

significantly

serve
the interests
savings banks in the field of
equity securities. Thus potentially

of

serious

elements

of

loss

would

presumably be detected in their
incipience as a protection to the
fund

and

major

as

an

depreciation

terioration

in

that

assurance

due

quality

de¬

to

would

be

avoided.
A

mutually

investment

owned

of the type to which I
referred would be of the

company

have

open-end
ganized

management

the

under

type

or¬

Investment

Company Act of 1940, registered
with, and subject to the regula¬
tions

of

the

Securities

Ex¬

and

change Commission.

Presumably
such a company would be subject
to regulations of the banking de¬
partment of the state and it would
be qualified as a regulated invest¬
ment
of

company with the Bureau
Revenue
under
the

vestment company

Such

regulated

a

investment

from

such

interest

jf most

least

90

percent

of

such income. Capital

tained,

would

be

while

company,

the

ings bank managements would not
consider
the

fee

they

services

could afford
such
specially

of

qualified personnel in connection
with

investments

amount

only to

a

would

that

The management of such an in¬
vestment

would
b e
guided to a large extent, by con¬
siderations relating to the objec¬
tives of savings banks in equity
It

with

would

not

various

be

con¬

phases

of

stock investment which, while

major

importance

vestors,
to

The

to

signifi¬

directors

of

would

over, and hold responsi¬
bility for, the management of such
company.

Presumably this board

would consist largely of officers of
savings barks who by knowledge
and experience would be qualified
to
discharge this responsibility

and

who

would

versed

well

be

principles, prac¬
objectives
of
saving

and

banks.

The aitams

of

mutually

a

owned investment company

administered with

be

objectivity apart from
ences

in

would
detached

a

any

tually owned investment
from

the

standpoint

in

banks

curities.

the

field

company

of

of

savings

equity

re¬

the

to

re¬

Having attained

a

prac¬

ticable size the company should be
in a position to operate a signifi¬
cantly diversified equity portfolio

at

lower cost per dollar invested

a

than

an

individual

savings

bank

the

assumption, of course,
that the savings
bank were to
maintain adequate facilities in re¬
search and supervision.
upon

As

a

result of favorable provi¬
the

of

Internal

Revenue

Code and the appropriate regula¬
tions of the Bureau of Internal
Revenue

pertaining

to

regulated

savings banks the outstanding

tax advantages afforded by
investments.

a significantly diversi¬
position in a group of leading

stocks

charged by the company for this

common

investment service would presum¬

of

ably

be

which

in relation to
charged gener¬
ally by management organizations
for this purpose.
It is pertinent
to

exceptions,

with

the

benefits

note

are

that for

the average

1951

for
five
representative investment compa¬
management
nies

amounted

expense

to

.47

percent

of

continuous

expert

supervision

professional management its
legal, range of investments would

probably extend to all such se¬
curities, with certain appropriate

eligible for in¬
vestment by savings banks.
as

are

A
concluding
emphasis
may
its oroperly be placed upon the der
shares would probably be sold and -irsbility of equity securities for
redeemed
at
approximately net savings banks subject, first, to ap¬
asset value although there would
propriate limitations as to the
be a sMght charge to cover broker¬ total amount of such investments;
age commissions and taxes. Sale second, to intelligent original se¬
of the company's shares should in¬
lection
and
timing; and, third,
volve no loading charge which for prudent administration.
an

open-end

company




as

the

Ex¬

change at a
policy meeting

Funs ton

Keith

last July 17. At
the same time, they also
close the Exchange every

throughout the
The 10-to-3

voted to

year.

trading session

was

a solid basis in fact.
Indeed, over the next
three months it is almost certain that several institutions will take

change in 1873. In 1887, Saturday

instances, does have

either in the

action to increase their distributions to stockholders

sessions

payments or stock dividends with the pres¬
being maintained on the increased number of shares.

Much, of course, will depend upon the attitude of directors
they approach the dividend declaration date and as they view
the prospects for the coming year.
Nevertheless, the favorable
results achieved so far in 1952 and the outlook for the last quarter
as

will also

play

It is in this connection that some of the

the

months

nine

reviewed.

ended

30

Sept.

In

many cases
has been recorded both in

operating results for
being published may be

now

favorable improvement in earnings

a

comparison with a year ago and earlier
The leverage effect of higher interest rates and

quarters of 1952.
near record loan volume
is being
results.

It also

At the

points to

servative levels.
or

reflected in current operating
favorable period in the fourth quarter.

a

time banks have held dividend payments to con¬

same

For

example,

For the nine months there

dends.

the existing
Canital

should, be

*■.

With risk assets increased substan¬

tially over earlier periods, it is vitally necessary to add to capital
funds.
Retained earnings offer a ready source of such capital.
Thus some banks have retained a large portion of earnings in past
periods for this purpose which has kept dividends lower than
might have been justified on the basis of earnings alone.

desire

a

on

have the stockholders share in the

was

the part of most banks to

improyed earnings. Also, the

open

Satur¬

day, May 24.
Keith Funston, President of the

Stock
the

Exchange, said last July that

decision of

tend

the

Board

to

ex¬

trading hours "was based

on

the

recently completed national
siirvey of share ownership made
by The Brookings Institution at
request."

our

In

brief statement Mr. Funston

a

added:
"The

-

requirements, of course, present a problem for a num¬

Nevertheless, there is

which the stock market

sizable margin over

a

annual distribution rates.

of closing Saturdays
months of

summer

June, July, August and September,
initiated in 1946, was adhered to
this year. The last Saturday on

number of banks earned enough

a

enough in the first six months to cover full year divi¬

almost

the

hours—

for business this year was

strong role in determining distributions.

a

during

two

noon.

A program

form of increased cash
ent rate

cut to

were

ten o'clock to

action

Governors

the

of

last

July

Board

was

an

of

his¬

toric decision. It

was reached only
painstaking inquiry into all
pertinent information avail¬

after

the

able. I

pleased to

am

say

that the

wisdom of that decision has been
confirmed since then by communi¬
cations we have received from the

public
our

well

as

is

and

of

many

member

firms.

their payments. For these reasons, it
bank dividend distributions may be

from

as

members

own

psychological influence of the Chase National dividend increase
may be the spark which starts other institutions to thinking about

is likely that New York City
liberalized.

Although there is no official indication at this time of the
to be taken by the different banks, some of the rumors
which have been circulated include the following:
action

"The New York Stock

primarily

stitution.

We

search out
of

Exchange
public service in¬

a

will

continue

to

available means
and strengthening

every

improving

position as the nation's prin¬
cipal market place for securities."
our

The National City
shares outstanding.

Bank of New York has a total of 7,200,000

Thus,

a

stock dividend of one-for-nine bring¬

ing the number of outstanding shares up to 8,000,000, seems logical.
This would have the advantage of

capitalizing

portion of earn¬

a

ings which would be desirable from the standpoint of loan opera¬
If

tions.

a

stock dividend is not

declared, it

may

be that an extra

The next dividend meeting of the bank is the first

would be paid.

week in December.

The Guaranty Trust Company

ing
rate

dividend of $3.50

a

was

established

of New York is currently pay¬

quarter or

last

March

an

annual rate of $14.00.

when it

was

raised from

This
$3.00

Payments this year, however, were supplemented with

quarterly.
an

a

extra of

$2.00

a

share in January so that total payments for 1952

Mr.

Funston

July that

pointed

out

last

the

Brookings Sury£y
proportion of shareowning families to population is
largest in the Far Western States

showed

the

and that the North Central States

the

contain

largest

number

share-ownirig families in the
try. At that time he said:
"We
the

believe

facilities

we

of

should

of

coun¬

make

the

Exchange
available for a longer period to
people in the North Central and
Far Western time belts."

will be $15.00.

The earnings
so

that

a

showing of Guaranty this

sizable extra

tribution

to

year

have been good

similar action to increase the dis¬

some

shareholders is considered

.next dividend

There

or

a

likely possibility.

The

meeting of the bank is in December.

are

also

rumors

stock dividends

of

BANK STOCKS

Manufacturers Trust and

for banks such

as

Empire Trust.

mentioned

Others such

candidates for

as

Bankers

cussed

while

larger extra payments are indicated for Irving Trust and

a

year-end

Public National.
While

general

now

tion

the

dividend

banks,

a

distributions

may

become

fairly

changes.

May,

dis¬

1952, Bulletin,

operating. We direct atten¬
this group.

Laird, Bissell & Meeds

number of institutions, because of

New York Stock Exchange

Members

New York

ISO

Nevertheless, the actions to be taken by several

banks should prove

pleasing to stockholders.

Bell
<L

,

Curb Exchange

5, N. Y
BArclay t-3500

BROADWAY, NEW YORK
Telephone:

present payments or recent dividend increases, are not likely to
make

to

our

Members

increased

among

in

extra

have

as

making these securities

attractive for investment,

more

Trust

been

forces

The

A.

.^

Saturday1*

first established by the Stock Ex¬

are

Conclusion

of

Stock

the highest point since March, 1937.

are now near

net assets.
As

Board of Gov¬

This increased enthusiasm for New York bank stocks, in most

and

fees

moderate

have generated increased inter¬
in bank stocks with the result that shares have responded

-

provide

fied

other New York banking institutions in the

These developments, in turn,

favorably and

was

reached by the

ernors

period immediately ahead.

equity

While the basic purpose of such
an investment company would be
to

be

action being taken by

se¬

for

to

also

to

trading

hours

payment announced by the Chase
was'the most significant news development affect¬

ber of New York institutions.

savings bank.

a

Decision

Bank Stocks

—

to

a.m.

3:00 p.m.

JOHNSON

cn y did it center attention on the improvement which has
taking place in bank earnings in the current year, but it
stimulated interest in the possibilities of similar dividend

influ¬

Economy of operation should be
an
outstanding consideration in
judging the desirability of a mu¬

3:30

had been from

is

in the investment

tices

to

Heretofore,
week-day
trading session

Not

and

preside

a

Monday, Sept. 29th inaugurated
hour trading session when
the. market was open from 10:00
its 5%

p.m.

ing New York bank stocks last week.

of
in¬

some

would be of no
savings banks.

board

The New York Stock Exchange
on

a.m.,

surplus.

dividend

increased

National Bank

company

securities.
cerned

The

est

assets.

of

Sept. 29, trading extended
as
per schedule.
Keith Funston, President of the
Exchange, see public's approval
of extended trading.
one-half, hour

extend

This Week

small percentage

of

distributed,

management

that

total

they wculd be taxable to the
cipient bank.
The

sav¬

at

gains, if

taxable
if

off statistical and other in¬

formation; presumably most

to

distribution amounted

if

are

the maximum annual increment to

By H. E.

savings banks to draw to

greatest advantage upon available

investment companies such a mu¬
tually owned fund would provide

dividends

and

subject to Federal tax
from the standpoint of producing
ings

Bank and Insurance Stocks

position than that

.nore^iavoraoie

sions

company would be tax-exempt as
to
distributed
income
derived

which the undistributed net earn¬

and

supervision
through
trained personnel would be in a

Internal

Internal Revenue Code.

^management

continuous

through continuous, inten¬
expert

a

On

10:00

Professional

cance

It is

the

through

the

small.

a

of

investments

aaiu

size, and even for bariks
large size of which the equity
holdings
might
be
relatively

oq5i/rHr.
Trading Session

outstandingly

or

27

NYSE Now

to

of

sources

other

as

sniaa

available

medium

mutual investment company as an

appropriate device for the savings

oi

direct

of

shares

and expert guidance is ment
company to be owned ex¬ of mutual savings banks should
equity program, institutional or
clusively by savings banks and or¬ give thoughtful consideration to
otherwise, likely to prove consist¬
ganized for the primary purpose the various advantages, particu¬
ently fruitful and to serve those of
investing from the standpoint larly with respect to common
basic
investment
purposes
for of
savings bank requirements and stocks, of a mutual investment com¬
which it was designed.
objectives in a diversified port¬ pany to be organized and owned
folio
of
investment
common by, and to be operated in the ex¬
Mutual Investment Company
stocks.
Such a
company would clusive interests of, mutual sav¬
The desirability of professional
provide significant diversification, ings banks. A continuity of quali¬
knowledge and skill in the selec¬
oauKS

on an

stock

Finally,
whether

Despite their traditional inde-;
pendence of action managements

agement

ior

of

made

economical basis.

market depreciation or losses.

an

espemaiiy

field

thus be

could

this highly
investment

in

management

specialized

activity and should be based at all though varying element, depend¬ fluctuation can be significantly
times upon adequate factual arid : ing
upon the size of the purchase, diminished through reserves, ac¬
informational resources as well as in the
offering price of the shares.; cumulated from income, to absorb
competent
and
informed
inter¬
pretation
of
all
relevant
data.

(1239)

r

Teletype—NY 1-1248-49

Glbbs, Manager Trading Dept.):

Specialists in- Bank Stocks

28

(1240)

The Commercial and Financial Chronicle... Thursday, October 2, 1952

Continued

from

makes

How High
so-called

"substitution

function
will

of

marginal

society suffer

duction.

In

the

enlarge the fund of liquid assets.

rates)

The added taxes abate those pres¬

tax

loss of pro¬

a

third

pro¬

case,

duction is not affected either way.
We do not in fact know enough
about

economic

know

which

motivation

to

of the three

one

re¬

actions will predominate.
It

just

seems

that

suppose

will

first

predominate

ond will

reasonable

as

the

predominate. It

well

may

effort

great

mass

marginal
less

than

typical

50%.

bears

A

is

whose

taxes

of

study made at

that

suggests

reaction

motive

the

of

workers,

strongly

third

profit

of

ihcome

Harvard
the

is

—

where

—

the

subordinated

to

the quest for power, prestige, and
on—is typical of the executive,

so

managerial,

and

who,

groups

entrepreneurial
subject

are

high surtax rates.?

The net incen¬

tive effects of the present

3taxes
*

the

to

level of

(leaving aside the adverse
well

may

increase

to

rather

reduced productive effort.

look

at

your

emotional)

reactions

taxes—not

those

As you

to

of

be

than

economic

own

(not

higher
hypo¬

some

thetical economic man-—my guess
is that you will find them

higher

closely than they fit Clark's

assumed

pattern.

This

is

the

level

not

to

adds

This

in

the evils

avoid

the

■community's view of taxable lim¬
its.

The

highly

pains

of

personal

taxation

and

are

individual

and hence

keenly felt by the tax¬
benefits, in contrast,
largely impersonal and col¬
The

payer.
are

lective and hence only dimly
They either accrue to the

seen.
com¬

taxes as such

evils

alternative

we

imposing them. Addi¬
tional government spending in an
economy that is already stretched
by

tight

the evils of in¬
debt expansion and

intensifies

flation

and

the

increases

thus

it

benefits

that

able to provide.

Or to

different

are

it

in

terms,

in¬

the

penalties we pay for
taxing. By increasing the vir¬

creases

not

tues of additional taxes relative to

their

vices,

spending

added

the

increases the level of taxes which

the

economy

I have

stand.

can

been careful

in

point

in

both

wholly

sup¬

stable, highCertainly the facts

Canada

since

States

major

a

a

the

and

World

consistent

of

terms

to put

this
levels of

the

ly

at

point—not

some

much

a

hotter

than

war

engaged in today — the
of taxes to do good is out¬

are

power

weighed

harm,

by

even

their power to do
while taxes still fall

short of expenditures.
tions

will

make

Two situa¬

this

readily

ap¬

fair

prices

$22

billion

leaving $25 bil¬
for

game

additional

The. sudy quickly
point out that this

to

spending

power

was

went
excess

unevenly

distributed

and
could
by
no
captured in its entirety
taxation.
To cut all the fat
be

means

by

more

progressed
and cleaver

stage, but it

countries have

also

the highest levels of
real capital formation and civilian
far

in

situations?

ly qualify
Even

ignore
what

tax

have

we

output in the U. S.
by 70%, doubled our manufactur¬

ing capacity, and invested (gross)
almost $40 billion a year in 1951

prices, and still increased current
consumption
about

ing

50%

in

real

this

terms

by

1940—after

since

cit¬

stupendous

economic

achievement, one I am sure Can¬
ada
can
readily match, Hansen
went on to say, "Now this really
does

to be

seem

Alice-in-Won-

an

derland kind of economy in which
the more we spend for defense,
the

more

consumption."9 He went

since

1945

as

the

of

months

the

to

82

spring

months

of

rest were
or

even

of

one

inflation,

continuous

shows

record

from

that

mid-1945

1952, only
26
were
rising prices while the
months of pretty stable

falling prices.

income ^

and

has

the

spend

token,

left

take

in

to

same

example,

not

and other

the

he

differences

Canada

things which affect
by

For

does

to

the

pay

income

into

account

levels

of

rent

living costs in different
differences in imputed

nor

income

S.

taxpayer has

what

taxes.

derived

from

gardens,

farms, housing and other durable
goods; nor the larger expenses
borne

by households with work¬

ing wives;

differences in costs

nor

of going to and

from work.

important

more

factor
ments

Even

a tax-limiting
savings commit¬
mortgages, life insur¬

as

fixed

are

for

instalment

ance,

purchases,

and

How do

differences oper¬

ate to limit taxable

of the fat.

For humanitarian

we

each

income

which

is

well

level

In

pacity

translated

this

falls

at

the amount

by

the

taxpayers

level.

what

to

bearable

situated

terms

rea¬

tend to limit the tax

sons,

light,

least

at

that

taxable ca¬
individual

into

considerably short

may

to

appear

be

of

taxable

capacity in the aggregate.

These

the

hard

facts

faced

by those who would

reduce

taxpayer's

by

resistance

the

educat¬

ing him in the virtues of taxation.
War,
of
course,
educates
him

quickly because it dramatizes
makes

those

individual's
of

short

the

of

and

real the identification

more

the

of

-

interests

with

community.

war

But

its

threat, the
process of education, though
worthwhile,
is
slow.
Political
or

limits to taxation

ingly

are

correspond¬

slow to expand.

level

penditures

of

government

given

was

high

taxes

can

go

the
of

first

ex¬

place

in

order

to

an aspect to tax limits
often
misunderstood or

is

overlooked.

1944,
national

year

gross

United

States

Fundamentally, in

penditures

was

exceeded

tional income.

So

those

have

taxes.

been

The

total

a

;penditures,

not
taxes,
which
create the stresses and strains on

economy.
Additional
•abate them. The added

taxes

expendi¬

tures

generate

inflationary

pres¬

sures, add to the public debt, and

£
I

7 Thomas H. Sanders, Effects of Taxa¬

tion
vard
nis

on

Incentives

University,
study,

of

1951.

Sanders

Executives,
In

the

concludes

that

the

most
part, with considerable
tions, businessmen are
currently

as

hard

under

high

fd under low tax
«

tax

rates

rates. ..."




Har¬

course

of

"for

excep¬

working
they

as

gov¬

that

and

in

covered

for

100%

coverage
are

taxable capacity generally. I shall
come
back to them after one or
two

further

observations

on

ex¬

penditures.
The

created

by high
expenditures
have

pressures

another type of

ployed
cial

impact

economy,

on

one

taxable

we

have

fully em¬
added govern¬
a

spending expands the finan¬

tax

base

and

in

an

under¬

employment economy, it expands
the

real

that
8

tax

the

Als^,

base.

To

the extent

tax-expenditure
policy

a

of

process

matching

higher

expenditures with higher taxes (in times
of satisfactory levels of
employment) is

generally
virtue

thought

of

penditures,
effect

the

on

to
have the further
restraining
government
ex¬
largely through its sobering

the

taxing.

problem
increases

into
tax¬

the
result
that
economic,
equity, and technical limits come

directly into play.

more

War

brings not only equity lim¬

itations
into

but

also

economic

sharp focus.

Total

of production, and

that

interferes

with

ones

wars

wars

Second,
us

the

a war economy

permits

quantify the ex¬
margin which constitutes

or

happy hunting ground for ad¬

ditional

taxes

time enables

and

at

the

fullest

legislators who have

to

do

worker

fords.

ly the things which limit the
In

season.

examination

contrast
of

the

sidered

taxable

open

with

taxation-ex¬

40

hours

which

capacity

the

largely

or

of

model

considers

taxable

largely
source

examination

economic

follows

capacity
fund

when

and

when

in terms of the

available for taxa¬

tion.
In 1943, the U. S. Treasury De¬
partment submitted a brief study
to
Congress estimating that of
$135 billion of disposable income
9 Address
by Alvin H. Hansen, Uni¬
versity of Minnesota Conference on Sav¬
ings, Inflation, and Economic Progress,
May 15-17,' 1952 (to be published in a

symposium

volume).

closely

as

they have plenty

absenteeism

involves

As

a

result

economic

elbow

of the

additional

room,

opportunities to

put in

response

day

maintenance,

on

the

dollar

increase

improve¬

which

but

promise to

his

profits in the future
when taxes leave him, say, 50 or
cents

diture

the

dollar, he will of
to
spend
for the types of expen¬

on

be

But

now.

stimulated

which

counts

Such

high

the

like—the

difficult

more

ex¬

ac¬

expense

argu¬

fathom.

to

outlays promise

than

future

no

"loose-living"

of

and

is

ment

promise

the

—

penditures

little more

bloated expenditure struc¬
which
will
in
due
time

a

ture

weaken

the

position

competitive

of those who

indulge in such loose
living.
Moreover,
it

business

at least

seems

plausible that busi¬
rather than trying to

nessmen,

find

more

dollars

ways

the

on

ernment

spend

to

theory

more

that

gov¬

70 or 82 percent of
the cost, may instead focus their
pays

attention

that

the

on

30

cents

18

or

from

remain

dollar.

each

If they do,

they may strive
costs and increase output in
to

earn as

dollars

to cut
order

of these skrunken
possible and thereby

many

as

maintain profits after tax at more

satisfactory levels.
third aspect of

A

to

turns

the

sets.

taxation

the economic

on

which

war

spotlight is the declin¬

One

might argue that the
stock of assets is itself

growing
the

result

But

once

ance

fat

comes

less

of

not

taxing enough.
bal¬

the taxpayer's bank

store of savings bonds be¬

or

enough,

become

taxes

less effective in repress¬

and

ing inflationary spending. Here is
case where taxes approach their

a

vices

limit not

increase

but

because

their

because

their

virtues diminish.
A final

point which the wartime
highlights is that the eco¬
a badly structured
system will be reached at lower

model

nomic limit of
tax

levels of taxation than in the case
of

one

that is well structured. One

aspect of this is thaL taxes differ
in their effects on economic activ¬

ity.

Income

taxes

the

affect

re¬

ward for effort

to taxes

Second,
rates
are

to

of

high

very
tax on

typical of
mention
rates

wasteful

a

defense

a

are

income

not

said

to

this

has

argument

in

strings

Colin

close

on

out of each dollar
ernment

foots

of the bill

loosen

concessions as liberal percentage
depletion, capital gains treatment,

process.

Only if the tax subsidies

vate

a

allocation

process

could

fended from

All

apart

from

which

Committee

on

Ways and Means, House of Representa¬
tives, "Revenue Revision of 1943," p. 29.

resources

they

an

when,

cents

of

pri¬
and

not reduce total production in the

view.

the

channels

could be shown to improve on

(to take the U. S. situbefore

resources

his

In
10 Hearings

the

they would normally have flowed
into, the "natural" output pat¬
tern has been distorted, and total
output may be impaired in the

of

be

fully

de¬

economic point of

this,

spent, the gov¬

52, 70, or 82

with¬

from nonfavored
pursuits into types
of
production favored by such tax

in¬

that business

runs

are

routed away

Since the

defending

will

or

from

good deal less persuasive.
The assertion

Resources

resources.

diverted

spection, the argument becomes

purse

economic

the like.

other.

on

different types and
activity.
All
other things being equal, tax dif¬
ferentials can exert a strong pull
of

of

are

increasingly

25-percent idea. But

itability

forms

and

and

differ¬

impact of particular taxes,
notably income taxes, on the prof¬

stimulate

spending

the

on

relied

the

economy.

thus add to inflationary pressures
on one hand and misdirect scarce

Clark

the struc¬

of
is

ential

drawn

marginal

aspect

consideration

tural

on

war economy,

business

other

The

out¬

are

business

also be relevant here!

may

con¬

vary

siderably increased.

rescources

levels,
wartime

not

a

af¬

of opportunities to work overtime

These
con¬

in terms of the process which de¬
national
income
and

the

are

than

usually

economy

Workers

bound to the usual work week of

our

termines

price

flexibility

more

peacetime

same

to visualize clear¬

us

make

directly and obvi¬
ously, sales taxes somewhat less
so, death taxes only remotely so,
and poll taxes not at all. On an
his
effort
to
inferior uses
in incentive •
scale, the much ma¬
doing non-taxed work for him¬ ligned poll tax emerges as the
self. A war economy gives wider best wartime
tax—though the fact
play to this type of response to that
it
is
totally unacceptable
taxes
by giving the individual from an equity point of view

to define and

cess

future.

can

man

ments, and advertising which cost
him only 30 or even 18 cents on

are

anything

the

less risk of dismissal.

penditure relationship, which

government

ment

war

payer

full

stop¬

expenditures

war

economic

relief,

with

na¬

should

reasons

bold

or

or

believes

expenditures

could

by

official

the

ing

I know,

as

responsible economist

no

ernment

the study of taxable
capacity.
First, by
generating patriotism
and perhaps fear and by throw¬

for

acceptance and understand¬
ing of high taxes. It pushes out
the political
limits to taxation,

50%

far

full-employment situation, it is
capacity than the
jthe additional government ex- just examined. In

the

product of

purchased
government, and Federal ex¬

by

jemphasize
•that

peak
the

the

During
nearly half

persuasive, and they shed much
light on the nature of limits to

the list of determinants of how

•on

World War II experience.

of

Taxable Capacity

The

The other situation is the actual

ping far short of

Government Expenditures and

!

economy, we find
that it presents an excellent model

substance.

capacity to tax.

are

high-tax

lower-tax

business

economic

flation.

economic

taken
outlays

capacity? Sim¬
ing anti-inflationary force of taxes
ply in that to avoid cutting into
as
taxpayers build up progres¬
the lean, we have to leave much
sively fatter cushions of liquid as¬

munity at large impersonally in
output by with¬ more
consclusive
than
Colin
and
most
efficient
use
of
re¬
the form, for instance, of less in¬ drawing or misusing productive Clark's on
the 25% limit. But it
sources
is of the gravest conse¬
Or
they accrue to the resources, the hypothetical situa¬ sharply challenges the usual as¬
quence.
Taxes potentially inter¬
individual only in the collective tion would become a reality. Sup¬
sumption that taxes are guilty un¬ fere in
several ways. First, they
sense of, say, national defense.
Or, pose that $1 billion of new taxes til proved innocent and sets up
may reach levels where the tax¬
when they do accrue to him more were to cut spending only slight¬
the plausible alternative that taxes
payer's economic reaction is either
directly, they are only vaguely ly, say by $100,000, while cutting are innocent until
proved guilty.
(a) to withdraw some of his re¬
identified with the taxes that fi¬ output by $200,000. At this point
sources—some of his labor, capi¬
nance them.
Tax Limits in a War Economy
Small
wonder, then, —far above 25% of national in¬
tal, and entrepreneurship — from
that the political will to tax runs come, to be sure—Colin Clark's
Returning now to the example
production entirely or (b) devote
out considerably sooner than the economic
limit
would
take
on
of the total war
their

to

the

from

the

to

a

limits

these

well

"nest-feathering" expenditures to¬

the like.

have left for invest¬

we

ment and

affect

developed

personal
U.

many

which,

areas;

highly

the

the

and

our

of

hard¬

can

surgeon's scalpel.

a

the

as

taxes

spending and high taxes,

as

such

taxes

particularly effective terms.
After pointing out that since 1940,
side by side with huge military
increased

When

income

fortunately

history,
by

income

present

60

an

more

exposed
Our
tax
system has
beyond the meat-axe

had

ing

course

such

those

point is
applied

is

which have the effect of postpon¬

from

interpretation. Side by side with
the highest peacetime tax rates in
both

This
it

the lean of those in

The whole
parent.
One
is
a
hypothetical 2V2 years from January 1948 to
situation in which additional taxes Korea were a period of substan¬
tial price stability. In this
are no longer capable of abating
setting,
inflationary
pressures.
If
tax¬ high taxes are seen as a counter¬
payers
were
to
maintain their part of a complex including high
spending in the face of the tax production, high consumption, and
increases, * say
by
drawing
on relative economic stability.
liquid assets, and at the same time
The
evidence
is
perhaps no
curtailed

be saved,

as

consumer

then-prevailing
additional

an

lion

available

placed would involve cutting into

are

on to point out, that although it is
sight fashionable to speak of the period

in

and

on

by

at

II

War

with

goods

United

defense spending to date. Certain¬

we

the individual's and

of higher

the

against

short of

This brings us back tc the clash

of taxation

We have to balance

vacuum.

a

that taxes make

between

port is provided for

a

the level of tolerance

the

because you suffer, it does not fol¬
low that production suffers.

production, and through the sta¬
bilizing effects on prices of the

positive dimension consumption in history.
to
the customary
negative con¬
Last
May,, in addressing the
ception of taxable capacity.
It Minnesota
Savings
Conference,
suggests that we cannot judge Professor Alvin Hansen put this

On

you happier.
contrary. They dislocate
preferred way of life. But

higher

for

case

taxes.

say

your

the

is

stronger

fitting

the pattern I have just suggested
more

level.
And
the
government expendi¬
in'
this
setting, the

pay-as-you-go

put

incentives)

experienced, there¬

fore, the prima facie is for, not
against, higher taxes—up to and
perhaps somewhat exceeding the

ture

as

taxes.io

on markets and

corresponding taxes,

taxes

on

high expenditures

level economy.

effects of defects in the tax struc¬
such

retard the

or

might

have thus far

sec¬

be that the first reaction—to exert
more

prevent

when

growth of debt and liquid assets.^
At levels of defense spending we

ture

that the

as

to

third

and

and

sures

ation).

words,
through the stimulating effect of

a

in 1944, some $88 billion could be
absorbed

ductive incentives. In other

Can Taxes Go?

effect,"

possible the latter type of

increase, its positive contribution
to
production may vastly out¬
weigh any negative effect on pro¬

15

page

equity

of

course,

is

objections,

might be controlling.

short,

war

etches sharply the

nature of the limits to taxable

ca¬

pacity. These limits differ only in

Volume 176

Number 5156

*

degree, not in kind, in
or peacetime economy.

.

.

.

The Commercial and Financial Chronicle

defense

a

that further tax increases become

self-defeating.
(2) No

Conclusion

•

'

-

,

Let

close

me

•

,

,

with

now

general observations and
sions

the basis of the

on

analysis.
tion

where

one

conclu¬

foregoing

personal
the

quite

paper,

is

One
that

is

observa¬

subject

angels

the

absolute
taxation

of

economic

(3)

stitute, which will

closer to
it at a two-

come
on

in

Princeton

but

limited

observation

Another

on

my

is

this:

it will not have escaped you

that,

of

the

subject

re¬

taxes

can

judgments

are

reviewed, and I hazard the

Given

in

individuals
at

continuing

full

further

and

em¬

increases

public expenditures,

public

The

of

have

I

stressed

the

still

remain

taxable

factors which push out the bound¬
aries to tax capacity rather than

poses

those

on

which

them.

restrict

did

I

included

within

the

capacity.

here

largely

for

basis

of

close

a

taxes in both countries

ing

the neglect of the former, and
partly because I wished to under¬

stated

main

the

practical conclu¬
namely, that
we are neither at, not perilously
near, the
economic limit to our
sion

of

this

taxable

this is

paper,

capacity

and I believe

—

true for Canada

as

for the United States.
clusion

is offered

economic
States

in

score

of

tax

(This

it is
con¬

primarily

as

since

one,

tax

badly

as

equity

conclusion

are

near-

national

in¬

In other words, under the
about

$10

in the United States—and

about one-half billion
eral

taxes

beyond

dollars in

without

the

pushing

economic

us

limits

to

taxation.

on

emphasize

me

once

that the fundamental strains

tightly-stretched

a

economy

expenditures, not the increase in

several

(5) Finally, though we do not
appear to have reached the limits

economic

our

capacity to tax in either the

United States

or

Canada, it

seems

limit to

clear

that

limit

of

hypothetically and by reference to

countries.
If the cold war gets
hotter, if Communist aggression is
intensified, it seems reasonable to

taxation, few would deny
this paper, I have tried to es¬
tablish
its
general nature both

wartime experience. In terms of a

employed

described

be

which

taxation

the

as

limit

detrimental

the

duction

economy,

on

resource

are

so

beneficial

it can
beyond

effects

of

and pro¬

use

magnified and its

effects

weakened

so

have

we

will

our

reached

to

tax

expect that the will
rise correspondingly.

in

to

the

both

tax

from

crime against the

a

whole indus¬

a

within

this

Continued
profit is put directly
provide
products
and

better

and

new

equipment.
A

to

forced by the

operate

on

quate profit is living
time.

on

gov¬

inade¬

an

borrowed

I refuse to

would let the de¬

we

fourth road-block to

con¬

tinued prosperity is the instability

of the dollar.
The

the

union's

they

balance

to

create

our

of

the

budget, it has to
money through bor¬

new

rowing.

money

The

dollars added to

new

sented by the

have

been

The government can

discourage

than it takes in.

The best way to
do this is to eliminate non-essen¬
tial

actions

supply dilute the value
dollar.

fact that
to

number five

many

is the

people can't

seem

accept the basic truth that full

ment would

benefit all people.

Our great

standard of living in

the United States is based

on

people's ingenuity in getting
chines

to

do

most

of

our

ma¬

their work

for them.

Inflation

gnaws

emple,

suppose

in

bank

the

2%
six

a

ten

at

the

For

ex-

away *

man

put

years

$100

ago.

At

interest, compounded every
months, that $100 has now

grown

to

If today we had

the

value of people's savings.

$122.

But, because of
Inflation, that $122 will now buy
only as much as the man could

machines
in

vented

would

workers
the

the

take
as

things

to do without

that have
last

four
we

100

times

have

to

Americans

been

in¬

years,
as

who want to

their fellow

see

men

get ahead.

bought with $74

ten

it

turn

will

out

buy

this year.

misunderstanding

spread

business

of

our

system.

The

sad

means

off

Worst

of

all,

inflation

makes

people lose faith in their business
and

government

courages them to
for
government

leaders.
grasp

It

greedily

hand-outs,




en¬

be¬

help

prise"

and

"profit"

"free

enter¬

we

could

chines

But

all

too

often

persuaded they
producing less.

can

people

have

more

Some groups

are

by
can

the

Most
and

believe

men

for the time being at

seems,

least, the heavy flow
capital
into
Canada
down.

of

item

been

don't

I

to

in

freedom

how

see

free

while

more

and more the

you

make?

.

and believe

.

.

.

their
.

.

breath

and listen

.

and trust.

.

.

across

Kenneth C.

Hardy Now

With F. I. du Pont
(Special to The Financial

LOS

Chronicle)

ANGELES, Calif.

Ken¬

—

Hardy has become associ¬

ated with Francis I. duPont &
722

So.

Co.,

Spring Street. Mr. Hardy

was

formerly Los

ager

for Shearson, Hammill & Co.

Angeles

man¬

and prior thereto was with Merrill

Lynch,

Pierce,

Fenner

&

Beane

repeat,

me

briefly, these
the path of

road-blocks in

seven

continued

prosperity of the United

(1) Unnecessary government in¬

policies

(2) Tax
incentive.

-

.

that

destroy

(4) Instability of the dollar.

the fact
that full output benefits all people.
Failure

accept

to

is

apparently

diminished.
H.

Only

Adams,

little

very

Clar¬

recently

member of the

a

Association of Securities Admini¬

The

by

compared with out¬

as

strators

at

statistics

warned

that

most

of the Canadian

recent

Bureau of Statis¬

been

going

for three successive

on

purchase

resulted

balance

from transactions with the United

States.

Net repurchases from the

Portsmouth,
bars

set

securities
should
the

flow

into

in

be

the

of

not

United

H.,

Canadian

United

careful

legitimate

N.

to curb

up

offerings of fraudulent

States

to

hinder

States

Canadian

funds

enter¬

prise.

Recognizing
vast

that

Canada

has

of

mineral

resources,

Commissioner

Adams

declared

areas

that much of the

capital required
for the exploration and develop¬
ment

of

these

must

resources

come

from United States investors

and

he

warned

administrators

against the erection of
nomic blockades" which

United States in July amounted to

tard

$16,500,000 for Canadian Govern¬

"eco¬

any

might

re¬

opment.

Direct

ment

Bonds

$6,100,000 for Provin¬
Against this were net sales
the United States of only $2,-

cials.
to

in

900,000

Canadian

stocks

and

$2,200,000 in United States securi¬
Transactions

Kingdom

in

with

the

United

resulted

July

in

a

eight months. Net sales of Cana¬
dian

bonds

outweighed

chases of Canadian

ing

net

pur¬

stocks/produc¬

sales balance of $300,000. In

a

with

trade
was

mainly

countries

other

sales

a

balance

due

of

exploration and devel¬

The

Securities

and

Exchange

Commission, Mr. Adams revealed,
has

made

a

proposal

to

ease

the

raising of capital by small Cana¬
dian

exploratory ventures by ex¬
tending to Canadian securities the
same exemption from
registration
applicable to offerings of do¬

now

mestic securities in amounts not
to exceed $300,000 per annum. All
this indicates that Canadian eco¬

nomic
upon

for

expansion is
favorably as a

venture

of

still

looked

proper field

American

capital.

there

$1,100,000

transactions

to

such

Guaranteed

and

and

-

(3) Government's failure to
recognize the true role of profit.
(5)

border,
ence

sion, speaking before the National

securities purchasing

sales balance for the first time in

tervention in business.

J

trend

ties.

Let

in

Canadian stocks.
In the first

seven

months of this

Monopolistic union prac¬ year, there were purchase bal¬
ances
of
$26,800,000
with
the
tices, with support of government.
United States and $4,200,000 with
(7) Widespread misunderstand¬
the United Kingdom, and a sale
ing of the American business sys¬
balance of $8,900,000 with other
tem.

OPPORTUNITY

(6)

I

realize, Mr. President, that it
to remove these

will not be easy
road-blocks

will

to

take

prosperity.
The
patience and in¬

sight and courage.
Let

me

hasten to admit that

businessmen

do

not always

we

have

countries.
It must be
the

going data
eign

although

we

believe

example,

in

private

invested

in

Canada.

According to the most recent esti¬
mate

For

that

of the

U. S. Department of
private investment in

Canada by U. S. interests between

ownership of industry, the temp¬ January 1950, and mid-1952 to¬
about $1,400,000,000.
The
to accept government fi¬ talled
nancing is sometimes too strong department's report, an analysis
of U. S. investment abroad, said
to resist.
tation

Also,

ment,

against

know

of

some

that

our
us

union

yield
it

better
yield

un¬

demands.

We

even

will

judg¬

to

though

lead

to

we

more

need

of

Canada

the

was

new

in

estry but there
vestments

in

investment

in

mining and for¬
were

increased in¬

your

help^'Mr. Presi¬

dent. We need to have you set an

Canada's

NORTH!
growing

industry,

sound financial policies and
wealth of natural resources
offer unexcelled
for

opportunity

investment.

country, and

our

facilities

very

If

you

nadian
write

ties, despite the recent slowing
on

up

this side of the

are

investment

complete.
considering Ca¬
securities, why not

are

us

first?

obligation in

There

is

no

any way.

Ross, Knowles &Co.
(formerly Milner, Ross & Co.)
Members:
The

power.

of transactions

For
many years
we
have
been closely associated with
the
development
of
this

manufacturing and

The interest in Canadian securi¬

inflation.
We

much

LIES

are

capital

Commerce

preach.

we

mind

exceedingly small
when compared to the total for¬

of

all

borne in

changes indicated in the fore¬

the courage to live up to the letter

sometimes

of their friends and neigh¬

catch

son—

men,

Securities and Exchange Commis¬

The

have said
you believe in free enterprise.
Do you believe in it enough to
guard it in every decision you

And the temporary gains of

pense

—

whenever you speak

can

we

enterprise,

President,

long.

bors who work elsewhere.

earth

your

all

evi¬

siders.

of

they believe in America as a

reasonable

ex¬

the

may

son—and

dence of this is the recent reverse
of

One

foreign

has

land of

but not for

these wage earners are at the

President,

and my

By WILLIAM J. McKAY
It

of

a

while;

Mr.

better world.

a

Canadian Securities

people

role

—for

short

cour¬

to make

opportunity for all— and Schwabacher & Co.

mean

misunderstand tics, in fact, reveals that Canadians
profits, competition, are purchasing
more
securities
capital, incentive, stockholders, from other countries than they
management and other vital parts are selling in foreign markets, and
of our opportunity system.
this net outflow of capital has

American

task

part of it is

years

to people who must
savings, or insurance, or
savings bonds, or pensions.

live

make the words

us

Canadians

Opinion surveys have repeatedly
shown that large groups of the

turn out much more with the ma¬

educate their children. Think

what it

to

symbol of fine gov¬

a

"incentive"

slowed

The seventh road-block is wide¬

many

we now have, without em¬
ployees being overworked. Every¬
one would benefit. Everyone could
sgo.
buy more things, because every¬
Think
what
this
means,
Mr.
thing would cost less to produce
President, to people who have and
prices wouldn't have to be so
been saving money to buy a home
high.
or to

Slave

ready

by

States:

spending.

try and in their strength and
age

union.

irresponsible

unions, supported by government,
cannot be tolerated by honest men

Mr.

money

every

Let
and

particularly the employees repre¬

servants of the government.

penalized
trying to be self-reliant.

cause

for

coun¬

neth C.

ernment.

Meanwhile everyone suffers,

its actions make business and the

output from our production equip¬

government's

pol¬
icies -.have
encouraged inflation.
Every time the government fails
■

have

.

must take the lead.

you

more

faith

our sons a new

in their leader and in their

to try to force management's

sary,

v..-*.

The

.

.

make the word "politics"

us

once

give

us

Millions of your

stand

men

But

hand.

service

Prosperity

Road-block
'

fellow
you.

do it.

can

shall

man

find.

Let

rights. It will support the union.
It will seize the industry, if neces¬

inflation if it will spend no more

company

ernment

You

29

land?

boyhood faith burn again.

Let

disagreement about a
The
government

a

general public

of

that Tightness pre¬

see

our

You haven't forgotten

products.

expect people to understand if the

into the business to

vailed in

months, up to August of this year.
opportunity. Yet they are
According to the official figures
fense
of
our
pocketbooks take easily misled into supporting gov¬ the
July
purchase
balance
precedence over the defense of ernment planning and policies that amounted to $16,300,000, compared
work against free enterprise and with*
our freedoms.
$9;300,000 in May and $7,toward socialism.
400,000 in June.
believe that

Roadblocks to Nation's

back

pletely to

crack
today with your boy—and mine?
companies,
It is up to you to make that
rightly so. It

government continues to give lip

mainder

you

capable, the most esteemed

leader? Didn't you trust him com¬

would

increase?

considers

will

14

page

and

shuts down

And

Continued

most

only real security

ever

as

living
American?
believe him to be the

But do you think it is the same

crime against rubber

a

over

pay

taxes to match it.

way

In

fully

try

by

greatest

Didn't

Yet, what happens when a labor
union

untouched

fairness,

the

and
of

the

And

essential

of

example

President of the United States

the the

public for arbitrarily stopping the
flow

Such

Let

result from the increase in
public

of
an

workers

Canada—might be added to Fed¬

pushing

into

That there is

study;

By

specific propositions:

(1)

of

circumstances

creases

more

of summary, let me translate this

general

pur¬

billion of skillfully structured in¬

United

the

before
higher.)

come.)

(4)

structure, at least, is
of repair on the

much

rates

one-third

an

need

is

forthrightness

I haven't.

on

it?

be

of

courage—an

employees wouldn't
you?
increase in pro¬

government

wouldn't

of comparison rather than

the

this partly because the more cus¬

score

bounds

(Canada

tomary emphasis is on the latter
to

and

the

10%

a

fast

positive.

15%

or

—

and

duction.

would

10

as

everyone

employer,
whole.

their

to

agree

by

much

to

moral

complete

industry clubbed together and de¬
cided to close all their plants be¬

eliminating the nega¬
tive, I have been accentuating the

as

own

example

All ^Americans
need
our country favoritism.
right of all your inspired leadership.
Mr. President, when you were
as free
men
choosing. It a boy, didn't you look up to the

the

as a

down

not

mo¬

with

Just suppose, Mr. President, that
all the companies in the rubber

United States and you in Canada
could increase Federal tax levels

while

the

work

fair

be

worker,

in the

we

to

jobs of their

cause

following:
ployment

treatment

high

possible in the light of the factors

in

November.

practices,

the support of the government.

must

cannot

one

"How

a firm, single answer
only in terms of "it depends",

certain

meeting

the

go?" with

to

I have

day

quantity

represents

six is

number

union

preserve

breaking point.

spond

awfully big one to wrestle
with in 30 minutes. My feeling is
apparently shared by the Tax In¬
spending 30 hours

Colin

even

relative

or

which

Although

tread,

fear to

not

one,

being

an

Road-block

nopolistic

Clark, has established—nor is it
M The labor policy of
inherently possible to establish— should

this

of

from

apart

few

a

(1241)

Toronto

Stock

Exchange

The Investment Dealers'

Association

of Canada

330 Bay St., Toronto, Canada

30

(1242)

The Commercial and Financial Chronicle...

Frederick Gretsch, Chairman of

ant

Treasurer, 1928-1929, Assist¬

capital

of the Lincoln

ant

Treasurer and

the

the

NEW

CAPITALIZATIONS

with

of

The

National

City

ing

Sept. 30, amended the by¬

on

of

laws

announced
by N. Baxter Jackson, Chairman.
They are: Francis P. Beattie and
Walter M. Ross, both members of
the bank's National Division, and

the

bank

to

change

the

Pierce

who

Onthank

the

of

is in charge

office

bank's
Mr.

Avenue.

is

it

100

at

Beattie

Park

joined

the

Chemical three years ago and has

since

been

business

handling
in

states. Mr.

the

Beattie,

Massachusetts

nology,
with

the

bank's

northeastern

alumnus of

an

of

Institute

Tech¬

began his banking

the

Central

career

Trust

Company
Df Rochester in 1934, working up
to Vice-President. Mr. Ross joined
.he Chemical in July 1950, coming
New

to

York

from

Louisville

where he had been Vice-President
/

James S. Rcrkefe.Uer

DeWitt A. Forward

of

the

First

which
since

National

had

he
1945

Colonel.
Knox

Army
He

is

with

Mr.

Bank

and

the

Business,

he began

tional

Bank

1940, he

his

of

elected

was

of

banking
First Na¬

Boston.

In

June

Vice-Presi¬

dent of the New London

City Na¬
tional
Bank
of
New
London,
Conn., becoming President of that

Nathan C. Lenfestey

bank in

Leo N.Shaw

1941.
:J:

i'fi

Chairman

from

three

DeWitt

who will be
Forward, the senior
to

A,

one,

officer

credit

Board also

the

of

The

bank.

appointed three of the

senior officers of the bank to the

newly-created office of Executive
Vice-President.

S.

James

President
Trust

A.

of

Lockwood,

the

Vice-

Manufacturers

Company, of New York,

elected

director

a

of

E.

W.

was

Bliss

Company,

Canton, Ohio, Howard
J. Herrick, President of the latter
:ompany
has
announced.
Mr.
jockwood is in

Rocke¬

west business

charge of the Mid¬
of the

Trust

Com-

feller, formerly Senior Vice-Presi¬
dent,
becomes
Executive
Vice-

>any. He is a graduate of the Uni¬

President in charge of the domes¬

versity of Minnesota, 1920 and the

business of the bank.

tic

Leo

N.

Shaw, also a former Senior VicePresident, becomes Executive
Vice-President

and

Manager

Overseas Division. Nathan C. Len¬

becomes

festey

President and

Executive

Cashier.

received

ward

from

Colgate

his

Vice-

Mr.

A.B.

For¬

degree

University in

1916.

His

banking career started at Na¬
City in the Bank's College
Training Class that year. He was
appointed
a
Vice-President
in
tional

Harvard Graduate School of Busi¬
ness

Administration, 1927. He has

been

asociated
Trust

ers

twenty

with

Manufactur¬

Company

Group V Savings Banks Associa¬
tion of the State of New York,
having acted also as Chairman of
Group V Mortgage Informa¬

the

1945.

for

over

years.

Vice-President.
^service

in

He entered Army
and attained the

1942

rank

of Lieutenant Colonel, re¬
turning to the Bank in December,
1945. He was appointed a Senior

Vice-President in 1948. Mr. Shaw

graduated
in

1916.

as

He

Amherst

ice

Training

pointed

Foreign Serv¬

Class

and

he became

ager. and

in

Overseas

1848.

a

ap¬

Deputy Man¬

Division,

pointed

was

Vice-President in 1931.

a

1945

College

joined National City

member of the

a

In

from

1946 Manager of the

and

was

ap¬

Senior Vice-President in

Mr.

Lenfestey

tional City in

joined

1917, 3

years

Na¬

after

graduating from Dartmouth Col¬
lege. He

was

the Bank in

appointed Cashier of
1919 and Vice-Presi¬

the

longest tenure

!

as

Cashier

30, of $30,556,000 from undivided
profits to surplus, thereby making

Insurance

State

of

appointed Arthur L. Worthington
an

Assistant Cashier.
#

Chemical
pany

«

At

26,

Bank

of New York

&

of

Sept. 24, declared

Com¬

has promoted




of

The

a

quarterly
per

share,

both

payable

Nov.

1,

to

stock of record

Oct. 3. This action
stock on a $2 annual

places the
dividend basis, and payments for
the

1952

year

including the
declared.
dend

paid

of
on

In
20

Council

will

aggregate

$2,

extra dividend just
1951

cents

an

extra

divi¬

share

per

was

Dec. 24, making $1.80
per
that year.
It is added
order to place future di¬

First

Floral
N.

in

Nassau

County,

consolidated

was

of

Bank
with

the

Franklin National Bank of Frank¬
lin

Square,

nounced

Roth,

NV Y.,

was

an¬

Sept. 29 by Arthur T.

on

President

National.

it

The

of

the

Floral

Franklin

Park

bank

previously been known

the First National Bank & Trust

Co.

Floral

of

will

be

the

Floral

Franklin
latter

Park,

\

known

Park

will

office

have

capital
of

$10,000,000
of

000,000.

Other

funds,

and

brapch

National

$140,-

offices

of

located

are

in Franklin

action

*

*

The Bank ef
Osaka, Ltd., form¬

erly The Sumitomo Bank Ltd.,
nounces

149

the

an¬

opening of its agency

Broadway, New

York

on

is the New

York agent. The head
office of the

bank is in

New

Osaka, Japan.

Bank
as

'

N.

V.-

On

J.,

*

Sept.

is

now

Vice-President
rectors

in

Committee
All

remain

in

for

their

plans

the

the

other

of

invited

of

to

with

*

24,

employees

the

the

consolidate

lin
to

National

in

572

of

the

Trust

plans

Co.,

Trust

•

The

of the

the

West
Side
Trust Company, of Newark, N. J.
announces the following elections:

Thomas

Campbell

President

and

Officer

the

of

Feldman
Board.

bank in

Chief

as

Executive

bank; Morrison J.
Chairman

as

Mr.

Wallace

Wallace

of

the

joined

1920; he served
from

the

Comp¬
Treasurer
as

since

1939

1941.

He

1929-34;

and

is

Director

as

since

a

University.

For

Community

Newark

and

New

Jersey

to

the

Down

and

State

He

Town

be¬

Club,

Treasurer of Essex County Bank¬
Association and Director of

ers

Broad

Street

Association, etc. He

is Chairman of the Committee

Admissions

of

Newark

House Association.

became
in 1920

connected
as

Mr.
with

thus

announced

the

liabilities

of

Department. He served

as

Assist-

-

of

meeting of

the

American

Company of San Francisco
Sept. 23, James K.

Lochead,'

tirement

Oct.

on

27,

con-

for

re¬

at

vertible into

common stock share
for share. An
agreement has been
made with an
underwriting group

headed by Blyth &
Co., Inc., under
which it will
purchase sufficient
unissued common stock to
provide
the funds
required for the retire-.
ment

of

preferred

any

stock

re¬

the

re¬

maining

Alexander P. Reed

tirement date. It is
contemplated
that the next
step will be an offer-.
ing to be made to holders of com¬

Pa., ac¬
cording to the Pittsburgh "Post
Gazettee" of Sept. 12, which
quotes

ident,

Fidelity's Pres¬
saying "it is our desire

as

offer

to

Butler

the

fully inte¬

facilities for-banking

services
with

that

in

are

and

accord¬

Fidelity's tradition. We

propose to retain the present per¬
sonnel."

Fidelity has
assets
and

capital

a

in

$15,-

of

excess

trust

funds

of

$70,more

than

$297,000,000.
The proposed
purchase of the Butler institution
by the Fidelity Trust was noted in
our

issue of Aug. 28, page 751.

Donald H. Burch,

bank's

21st

and

Granby

man¬

Streets

banking

as

in

that bank

for the Fidelity
Durham, serving with
until 1939, when he be¬

National

Bank,

served

branch

as

1942 to

1946 he

the

where

Citizens
he

manager.

was

on

Navy, advancing to the
Lieutenant-Commander-.

the

he

war

manager

Trust

returned

to

of the Durham

«

stock

addition

dividend,

nounced

Bank

for

the

into

to

a

to

as

stock

any

rank

become
Bank

under¬

an

be entered

the

sale

of

for

by

subscribed
The

stated

Board

its

are

Before

of

Di¬

intention to

common

share

a-

&

to

an¬

National
and

its

from

$2.40

share

a

com¬

mencing with the quarterly dividend to be paid Dec.
10, to stock¬
holders of record Nov.
28.
The
board

has

mend

of

the

ary,

determined

to

that, subject to the
stockholders at

1953,

annual

recom¬

approval

the

Janu¬

meeting,

stock be split two for

the

one.

Robert H. White
Robert H.
in

ner

City, passed
a

White,

Asiel

&

a

limited part¬

Co.,

away

New

York

Sept. 22 after

long illness. Mr. White had
been

Edward Rotan Director
Edward Rotan,
Rotan, Mosle &

Moreland, Houston, Tex., has
elected
of

to

the

Wooten,

The

special meeting Sept. 22, is¬
sued a call for a
special meeting
of stockholders on Oct. 7 to
vote

-

the

,

in

of

been

directors

Brand

Rice

..

Joins Waddell & Reed
(Special

to

The

a

increase

board

River

Mills, Inc.

total

proposal. The

stock

$2.80

with Asiel & Co. since
1901.

been

First

the

on

After

capitalization
changes would increase the bank's

the

warrants

assure

not

stockholders.

$1,000,000

has

Dallas, Texas
shareholders by Ben H.

on

so

also

>.

•

in

President.

the

stockholders.

offering is made,
writing agreement will

capi¬

in

time
to

this

A capital expansion
plan which
would add $5,000,000 in new

tal,

the

From

Company in Mebane.
*

scription terms will be announced
at

duty with

the
of

stockholder will have the
right to
pro-rata for additional
shares of common stock.
The sub¬
subscribe

career

a runner

asociated with

came

con¬

increase the annual
dividend rate

formerly

in Norfolk, Va.
His new
duties became effective Oct. 1. Mr.
Burch began his
Bank

on

stock about Nov.
12, and

rectors has

office

in 1931

mon

unconverted

tinuing for 30 days whereby each

mailed

of

.

remaining

$55 per *
share plus accrued dividends.
The'
preferred stock is
presently con-r

the

at

Manager of its Foreign

*

special

a

Union Trust Co. of Butler

Feldman
bank

*

outstanding has been called

providing

working funds to more than
$37,000,000. Directors of the bank

the

Company of Dallas.
joint managers

4%

munities.

to

•

First

serve as

vertible preferred stock

indicated

Clearing

on

the

announced plans to in¬
the bank's capital
structure.;
As the first
step, all the

full banking facilities to New Pro¬
vidence
and
surrounding
com¬

assumed

and

offering.

directors

on

of Summit's oldest institution. The

many

Chest

Chambers of Commerce.

longs

is

it

once

Mr. Wallace has been active

the

Beane

President,

branch, will
by
Lawrence W. McGregor, President
at

plans

concerns,
is
Merrill Lynch, Pierce,

Trust

Co.'s New Providence

begin

securities'

underwriters,

Dallas

Following

Remodeling of 1308 Springfield
Avenue, site of the Summit Trus;

the

of

23

:

underwritten

of

crease

Company branch at Mebane, N. C.,
has joined The Bank of
Virginia
as Assistant Vice-President
at the

Directors

be

syndicate

a

They will

Co.

000,000

sit

working capital
$37,000,000. The new

will

Southwest

The

14, page
1048.

sit

issue

Summit's

ager of the Durham Bank & Trust

18, page

of-

total

.

Citizens

referred

sj:

surplus- fund

a

than

headed by
Fenner &

Borough, both
suburban
communities.

furtherance

In

es¬

were

Sept.

bank's

by

banking
offices
Berkeley Heights and

issues of Aug.

our

and

Bank

National

$15,000,000
$12,000,000 at

with

and

more

stock

New

J. institutions to

N.

growing

000,000,

will

compared

to

*

Providence

New

di¬

position.

First

common

branch

in adjacent

be¬

Park

the

Summit,
tablish

the

Advisory

Floral

present

to

of

and

other

The

been

members

office.

charge

office.

have

Director

a

institutions

give

firms. The group of

ance

Park

combined

effective,
capitalization

in

principally

formerly President of the Bank of
Floral

outstanding.
$16 to $10 a

becoming

Jersey
State
Banking Commission ap¬
proved applications for two of

grated

H.

of

from

capital stock, of

present,

Brunswick, N. J.

trust

Charles

Kiwanis Club of
Newark, of which
club
he is
a
former President;

*

State

3c

■

within

$15,000,000 as compared with $12,000,000 currently, which together
capital of $100,000 was placed in. with undivided profits of approxi¬
voluntary liquidation on Sept. 3, mately $4,000,000 and a reserve of
having been absorbed by The Na¬ over $3,000,000 for contingencies'
tional
Bank
of New
Jersey, at under a tax formula would bring
Metuchen,

Wheelock,

in

dividend

^

.

for

second

Bank

The Metuchen National Bank of

ingdale.

years

further

Jersey

stock

changes

would

Chambers of Commerce, etc.

Square, Elmont, Rockville Centre, Levittown and Farm-

payable

taken this year.

New

value

par

Upon

the

of

The Fidelity Trust Co. of Pitts¬

approxi¬
total re¬

approximately

Franklin

July and October, with dividends

February,
May,
August,
and
November. Accordingly, there will

and

Member

burgh has acquired the assets and

Rutgers

about the middle of

Banking;

the

declared

on or

of

The

the Chase Board also has
decided
that quarterly dividends
will be

no

tute

each.

as

of

Bank.

reserves,

sources

the

operated

National

including
mately

henceforth

and

graduate of the
American Institue of Banking and
the Graduate School of
Banking,

be

and Regents, Essex
County
County Chapter, American Insti¬

Sept.

business

National

Park

Y.,

of

1934-39; Executive Vice-President

early in January, April,

Gover¬

Springfield Avenue,
Heights,
when
alter¬
ations are completed, according to
Harry W. Edgar of the Citizens

that

quarter,

of

the

National

share by the issuance of additional
shares, and the sale of 200,000 new
310-par common shares at' $25

University;

Board

in

common

branch at 372

troller

vidend declarations and
payments
within the same calendar

tion

a

youngest bank, will open its new

share for
in

Rutgers
the

is

School

the

of

York.

close

the

The

Directors

Feldman

Graduate

nors

Floral Park bank with the Frank¬

Board

Sept. 25. Tokuo Morita
Trust

the

dividend of 50 cents per share and
an extra dividend of
30 cents

at
#

New

Vice-Presi¬

Berkeley

$100,000,000.

Chase National Bank of New York

in

history. The Board also

of the

Life

the

authorized the transfer, as of
Sept.

on

Gretsch served
Savings Bank

Mr.

trustee

come

dent and Cashier in 1940 and has

the Bank's

Banking,
a

nounces
that
the Board of Di¬
rectors of the trust
company have

The

the

of

member

Council
of the
New
Chapter, American Institute

York

Floral Park

the surplus

A

Advisory

Horace C. Flanigan, President of
Manufacturers Trust Comany, an¬

Mr.

Rockefeller, a graduate
University, has been with
the National City since 1930.
In
January, 1940, he was made a

Bureau.

tion

Mr.

the

of

Di¬

a

structure,

First

about two
years,
would be ac¬
complished by the transfer of $1,000,000 from undivided profits to
issue the stock dividends, a reduc-,

of years

number

a

of the Executive Committee of the

1927 and Senior Vice-President in

of Yale

past President of the
for

which had

'Is

of

Banking,

Brooklyn Chamber of Commerce,

as

Raymond

number of Senior Vice-Presidents

and

since

School

1927 with the

in

.areer

Harvard

a director of the Fred
Manufacturing
Co.,
a

Company,
leader

1945. A graduate of Williams Colege

in

part

rector of the Manufacturers Trust

of

Onthank has

Chemical

active

Gretsch

as

of

of

Member

Newark

capac¬

became

he

the industrial
development of the Williamsburg
section of Brooklyn. He was a di¬

discharge

alumnus

when

1950

Sec¬

Vice-President,

First

1951.

Board Chairman. Mr. Gretsch took
an

Lieutenant

as
an

College.

been

with

associated

his

upon

the

rom

Bank

been

until

ity

serving in that

in 1940,

dent

in

dent

1939-1945,

1941,
and

graduate

He

succeeded Charles Froeb as Presi¬

in

1945-1951

Bank,

Committee.

Secretary,

rector

1918. In 1930 he was

Finance

of

man

and

associated

elected Vice-President and Chair¬

Assistant Vice-Presidents to

„nree

Vice-Presidents,

Assistant

retary 1929-1934, Secretary, 19341939, was elected Vice-President

Fred

Savings

Lincoln

the

trustee in

as

Directors

and

the

became

Gretsch

Mr.

Bank of New York at their meet¬

of

Y.,

Manufacturing
Co:,
founded by his father, died at his
home at Forest Hills, N. Y. on
Sept. 27. He was 72 years of age.

Bankers

and

REVISED

N.

Brooklyn,

President

Savings

Gretsch

BRANCHES

OFFICERS, ETC.

of

former

CONSOLIDATIONS
NEW

board

Bank

News About Banks

Thursday, October 2, 15)52

HIGHLAND

Financial

PARK,

Chronicle)

Mich.

—

Harry W. Van Horn has joined the
staff

of

Waddell

&

Reed,

Inc.

i

'"■ft.--"

/

Number 5156

Volume 176

.

.

The Commercial and Financial Chronicle

.

(1243)

31

W
Exchange Service and other telegraph services of the Bell System,

Public

in the business climate

substitution

as

of

Western

Union

service

for

the

network

message

dence

with

dends to

Union

Western

for

(which competes
business), readjustment of
through action by Congress, etc.

government

the international cable business

Telegraph Company
In

article

the

Northern

on

in the previous issue of this

Indiana

Public

Service

Company

centages,

line

inferred.

The table

laws

1946 and 1952 should have been stated to be in
per¬
rather than in millions of dollars as might have been

to

and

his

this

an

attention

Mr. Fox made

estimated profit of $1

meteoric

According

company.

career

recently

was

Announcement of the sale resulted in

(out

magazine,

"Time"

to

the stock sold,
up in "Fortune."
decline of several points,

million
written

a

and the stock

recently has been around 38Vz
year's range of about 45V2-37y2.
Since Postal Telegraph was

Union

should have appeared

on

Mortgage Debt
Other

compared with this

July 31, '52

49.2%

_

Debt

Common

23.1

21.1

been

13.1

Equity

Stock

28.6

some

100.0%

System, Western Union is active in

designed to mechanize operations. This

program

Continued

includes

100.0%

A

subsidiary, Western Union Services,

new

was

Impact

formed in 1951 to

the company has been beset with labor trou¬
constitute a large proportion of expenses and

since wages

bles,
taxes

(about 65%

further along,

by $15.4 million

However, in the past two

(a little over

a

facilitated

were

posit

by

a

S.
billion.

40% reduction in the excise tax

demurred

occurred.

the unions

year

granting

at

Finally the

that

further

company

higher rates

however,

on

increases,

obtainable

from

the

as

an

ap¬

was

Share

Dividends

(Millions)

Earnings

Paid

$3.00
$202

2.00

!

1948

7.26

2.00

*2.73

Nil

24

-

13

192

__

*0.14

1.00

2-3

-

15

Nil

7.43

*9.01

Nil

1945

193

3.64

2.00

186

*0.29

2.00

1943

161

6.92

2.00

50-37

tions

1942

132

8.95

2.00

30-23

27-17
53-18
56

43

-

53-41

5

$3.17

1952

Western

Union

share, reflecting the long strike.

a

loss.

the

However,

rate

reported

July also showed

increases now becoming

a

and

earnings for the calendar year
(considering

a

may

small

tain

mortgage debt was only 16% and miscellaneous

obligations 9% of total capitalization.
and the

Plant is carried at original

depreciation reserve is 45% of gross plant.

debt has been cut in half during
cash accumulated from

retained

years.

record

prior to

three since 1857.

1932, having

with

of

earnings in pros¬

made payments in every

very

about 90%

year

but

(After 1932, however, payments became irregular.)

Nevertheless, Western Union remains
the

use

Moreover, the company had a wonderful dividend

perous

of

Funded

the past decade, through

depreciation and

in

high operating ratio
1942).

a

"cyclical" stock be¬

(96%

The balance of

in

able,

1951

revenues

compared

left for fixed

but

amount

might

changes in
ernment

taxation,

wages

use

etc.

so

small that it is sharply affected by

and rates, the impact of the business cycle, gov¬

of wire facilities

Until such

during wartime periods, changes in

time

as

this

expense

reduced the issue obviously must remain in

leverage

can

be

the semi-speculative

class, despite its sound set-up from a balance sheet angle.

Whether

the mechanization program can eventually stabilize earnings is, of
course,

the $64 question.

Other questions,

discussed in the 1951 report to stockholders,

include the clarification of Federal policy with respect to commu¬

nications,

acquisition




by Western Union of the Teletypewriter

in

45

income

on

close to $1.2
fairly good
but

the

on

very

question

best

the capital

mar-

Secondly,

are some

of the im-

,

.

Effects on the Flow of Savings
sound basis for

ques-

pension
least

at

amount

to

funds
now
$8 billion and
much

as

$10

as

billion.

It

trend for a higher proportion of
investments to be made through

intermediary institutions rather
than directly by the individual
saver.

Thus, it
the

funds

these

because

vested

to

each

the

continuing

is

by

of

to

availability

the

on

high and' relatively steady
fiow 0f savings.
There is reason

in-

generalize
are

character

markets

increased

be

being

of

companies

di-

well-

which

"prudent man" stocks,

as

However

should

he

reraeU

purchases

of

stocks

it

that'

a

speculative

more

greater fluidity and flexi¬
are

to believe that institutional inves-

a

being

provided

to

thr

capital markets.

If the flow oi
4,
no, reach and keer
afl°at new enterprises, which r
the common complaint, we should
Jl? r
source of! tnr
difficulty. The essential problem
is not impediments: in the flow
of capital, but rather the yoorly
conceived tax structure which,
so burdensome on the individual
anc*
new» growing corporation,
.

...

„

.,

„

...

,

..

.

Securities for the Institutional
Market
We are all familiar with the
growth of direct placements as a
'

means of facilitating
long-term
borrowing from life insurance
companies and pension trusts,
During 1951, it is estimated that
about two-thirds of the volume of
new industrial obligations werr
placed directly with institutiona'
investors. This is not, of course
the only evidence of tailoring se
curities to this market. Other e*
amples
are
turnpike
revem*
bonds, natural gas pipeline issu'
the subordinated debentures of f
nance companies, the sale ar
leaseback of business, propertm
convertible debentures, and sin'
ing fund preferred stocks. In the-

capital market has be^

that wa.ys<

be concluded

can

institutional

capital
of

difficult

is

how

contributed to the long observed

that

is

guess

qualify

usually

bility

.

a

established

is

securities

Thus,

plications for the kinds of securities to be offered by those seeking
long-term funds?
- '

There is

the

position to make

In the first place,
has the flow of savings been enlarged and stabilized by the oper-

Thirdly, what

tax

assets place those who sell in

worthy of special

are

estate

investments if they are so minded.

Three aspects of the influence
ket.of 1952

and

•;

10

the

a

estimate

our

to

adjusted to, the changing prefe
ences v°f the institutional mvesto
If experience and the record

the recent

past

mean

anythin-

they suggest that more such ,developments will occur in the in¬

individual

tors will be less volatile in their ture. Thus, as we look at the 195°
and policies and that the greater im- model of the capital market, wo
there is not necessarily any unip0rtance of professionally man- can be sure that it will, change
formity in the investment policies age{j savings will contribute to the its characteristics in
the years
followed.
However, it is safe to stability and continuity of the ahead. We can be confident that
say that currently
trusteed pen- capital markets. At the same time, the flow of funds generated bv

pension

trust

sion funds
most

are

is

different

being invested

al-

entirely in corporate bonds

and

stocks.

estate

Mortgage

investments

are

real

and

relatively

the three major types of pensior
plans will substantially excee-'
degree of flexibility and the current volume of $3 billiofluidity in these markets.
We can assume that the manage**
keen

competition

between

tutions should insure

a

insti-

highly de-

sirable

unimportant and net purchases of
securities

are

probably not substantial. The

pro-

U.

S.

Government

portion of annual additions going
into

common

stocks

is

also

very

difficult to determine, but it seems

doubtful

charges and dividends is

have

in

investors

20

10«

of the

large these funds have
No actual data are avail-

corporate
•

main¬

company's capitalization is not highly leveraged; at the

of last year

cause

can

of the labor unions earnings will be difficult to forecast.

The

cost

confident that it

$3 dividend, but obviously so long as it remains at the

the

mercy

end

per

special tax credit of $2.5 million), it is esti-

mated.. The company is reported to be

of

stocks

principally

evidence

grown.

effective will

perhaps equal $l-$2

individual

to

nized

rreierreaana com- stocKs. jju

Thus, insured
contributions have

this

for

deficit = of,.;^of -how

a

probably put the company in the black for the balance of the year

share

We

meagre

the first half of

cor-

purchases

running

are

basis
*Deficit.

In

mort-

acquire

less than 3%

plan

billion.

__

would

preferred

invested

183

1944

the

estate

to

Net

to

207

-

real

and

bonds.

1946

1947

..

make

sources
of equity
being enlarged to re¬

institutions

rected

may

tioning whether the operations ot
obligations of. industrial corpora- pension funds add to net personal
tions and in real estate mortgages, savings in the aggregate. There is
The lack of specific data on the little doubt, on the other hand,
trusteed pension plans of corpora- that the process of regularizing
tions makes it impossible to ap- savings
through such channels
praise
recent
trends
precisely, tends to have a stabilizing effect
Our
best
estimates, which we upon the volume of funds avail-have checked as carefully as pos- able to investing institutions. The
sible, indicate that annual addi- growth of pension plans has also

44-20

187
__

it

not

25%

ation of pension funds?

and

been

47-33

180

1950

1949^—

to

loans

pension

46-38

$4.85

1952

total

follows:

assets

additions to assets.

Price Range

__

to

what

over

amounted

Approximate

Dec. SI

as

consideration.

30%

porate

stock record in the past decade has

Revenue

billion

Corporate bonds

of these funds

common

Year Emlcd

$3

roughly

separate identity. The
life insurance com-

gage

follows (the class A stock corresponds to common stock):

—

add

insurance

new

order

not

immediately effective.
common

very

the

During the past 12 months, life how have these pension plans afinsurance
companies have con- fected the availability of risk as
tinued to sell public securities in contrasted
with
debt
capital?

However, since part of the rate increases were intrastate and

1951

no

about

offset to the 1952

required approval by local commissions, the full increase

of

pany investments each year, therefore, is simply being increased by

Federal

The FPC later

ings

sources;

volume of

increases and the $3.4 million increase granted in the fall of

as

«

they
are
pooled with other policy reserves,

strike

1951.

Western Union's

ahnnf

otherwise be.

in Washington.

rate increase of $13.2 million

a

lengthy

a

wage

been

life

other

irom

the com¬

as

tion

;
,
K
.' ? Mortgages and real estate..
contributions, preferred and com stocks

8

Al¬

The point is sometimes made
that the equity money from sav¬

type of investment, the distribu-

contributing be

simply

of

growth

agreed to grant increases to the

might be

Communications Commission

proved

back again, and

were

plans- and

aaereeate

Pension

and have

Early this

total, with de-

policies

nfais nL

offset by rate readjustments

annually.

extent

the

Public securities

expenses

telegrams, which saved the public more than $14 million in taxes

pany

of

savings

equities.

buyers to date, their

are

gressive

various

administration

individual

third of the huge original de¬
was

of

the labor-

years

In 1951 wage increases raised

Part of the 1951 increase

mands).

two-thirds

is

program

plans

mutual
in

buying power has been so dras¬
tically reduced by our highly pro¬

types, plans, and $1.2 billion by the trusGroup annuities account for about teed plans of corporations. By

the job of keeping the operating personnel satisfied

problem has been serious.

which

When the mechanization

in 1951).

be less difficult.

may

insured

recent years

during

the upper income brackets whose

the Capital Market

on

State

the

last

structure.

install and service television receivers.
In

and
invest

place the
page

of the "Desk-Fax" and other facsimile transmission devices.

use

to

capital

Pension Funds and Their

centers, the ex¬
pansion of "carrier" circuits and radio beams, and the extension of

Changes in the

York

capital is likely to be appreciable
the years. It appears that at

research

a

program

the completion of a series of high-speed message
the

from first

*

over

part in the telephone field.
Like the Bell

New

active

long

Total

It also has extensive cable and radio
systems, financial quotation and news reporting services, etc.

stride.

contribution to the supply of risk

5.2

has been dominant in the telegraph field

although it competes to
extent with American Telephone & Telegraph, its counter¬

in

though these institutions have

5.3

__,1

Preference Stock

acquired in 1943, Western Union

of

banks

47.8%

6.6

Preferred Stock

-

past two years, for example,
have
authorized
life
insurance
companies

31, *4(»

taken

be

can

the

follows:

as

Dec.

the continuity of divi¬
interrupt this flow. Minor

of importance.

ers

column, the table showing the capital

structure for

shares of Western

100,000

of confi¬

Trusteed plans are not, of course,
the only new common stock buy¬

of
about 180.000 shares held) by John Fox of Boston has drawn head¬

The recent sale of

,

drastic

so

loss

in

prices
CORRECTION

Northern Indiana Public Service Co.)

on

real

a

fluctuations in earnings and stock

By OWEN ELY

(Correction

cause

operated by the General Service Administration

Utility Securities

Western Union

to

that it amounts

to

more

than 20%.
In

general terms, these are the
growth and

facts about the rate of
investment

outlets

of

the

three

Influence

on

the

Availability of

Equity Money

*

of these funds will continue to h
alert to new fields of investme*-'

and that they will be willing

provide equity as well as de'
capital where long-term inves'
strong tendency in recent years to ment characteristics are preser'
rely more heavily upon equity The primary motive is, of courw
securities.
Because
these
trusts the search for sound
long-ter
*

Notably in the

pension funds,

case

of trusteed

there has been

growing rapidly and have

are

need
ties

for
have

a

no

liquidity, equity securibeen

attractive

as

a

in

the

cost

principal components of the flow means of improving the rate of
of savings through pension funds., earnings on invested assets. As
To summarize, we can identify a long as a substantial differential tives
$3 billion rate of growth in pen- exists between the rate of return fund
sion funds other than those oper-

on

ated

yields, pension trusts

Of

by the Federal Government,
amount, about $800 mil-

this

lion is accounted for by State and

local

funds, $1 billion by insured

common

pected

to

^stocks

continue

and
may

their

bond

be

An increase of Vt of V
rate reduces th*

yields.

earnings

of

pension plan by abor'
,

operating to keep pensiomanagers

investment

ex-

buying

tn

®

quality common stocks. ^or greater
It would probably take a change markets.
of

good

,

Tilus' we have strong incqrreceptive

to new

opportunities. It is
~nrvpv

re-

tWe nr—^

...

,J:

~

fluidity in the capital

32

(1244)

The Commercial and Financial Chronicle... Thursday, October 2, 1952

Continued from

first

use it. Stranger than this is the almost inevitable
demand of each service to do the research,

As

Obviously,

right to

page

See It
We

Their conclusions were of necessity based on a priori
reasoning. They merely concluded from the record of the
spenders in Washington in many other connections, and
their observations of the waste and apparent lack of in¬
terest in economical operation in the armed services, that
too much was being spent for too little.
It is for this
reason that the
analysis of this situation last week by Mr.
Eisenhower assumes such primary importance. Here are
carefully reached conclusions of an obviously qualified
individual.

development
and production work on new weapons. Each believes that
it can do the work best.
In this matter prompt
adjudi¬
cation among the services is
mandatory--otherwise you
will find all three engaged in
spending your money for
a single need.
"Second: To

save

and increase efficiency we
must emphasize simplicity in
design. Back in February,
1948, when I left the office of Chief of Staff, I wrote as
follows: 'A program for research and
design of new equip¬
is

ment

necessity, but simplicity should be
our
practice. We Americans
confuse the biggest, most
complicated and

than has been

more

inclined to

are

most durable with the

Real

best." Whereas in
war, the simple
expendable weapon, may, in the light of time and
production facilities, be the most satisfactory.' Unfortu¬
nately, ladies and gentlemen, I could write the same today,
with perfect truth.
and

Saving

His emphatically spoken assertion not only that really
Important savings can be effected in defense outlays, but
that the major economies which must come can and must
be made in the defense program—and be made without
impairment of the effectiveness of that program—is not
only heartening, it is confidence-inspiring as well. Lest
some of the
significance and the force of some of these

"Modern

war

teaches

best weapon is out of
science

one

lesson:

sure

date tomorrow.

that

The

today's
of

progress

warns

against putting too much confidence into
today's best weapon, for soon it may be obsolete.

present-day

a

of

old

an

re¬

coin

can

hardly qualify

as numismatically
presumably can coins of
recent
mint mark, such as
the
Peruvian pieces in the foregoing

rare; nor

Customs list if minted in quantity.
Gold Hoarding Since 1933

The

money

obvious

an

stressed

production

citizen's

above-described

privilege of holding gold coins of
numismatic value is
to

an exception
provision of the Gold Re¬

the

Act of

serve

the

1934, which vests in

Government

States

title

to

of

all

in the country.

the

United

monetary

gold

It will be recalled

that,

by
Executive
Order
No.
6102 of April 5,
1933, the hoarding
of gold coin, gold bullion and
gold
certificates was made

illegal, with
exceptions, and holders of

certain

gold

called

were

to

upon

deliver

it to the government
through the
banks.
The exceptions
referred
to

four, of which three (gold
industry, etc.; gold ear¬
marked
for foreign
official ac¬
were

used

in

count; and gold licensed for other

•

*

statements be lost in the scuffle about other and far less

important matters, we venture to set forth certain pas¬
sages of the Republican Presidential candidate. First, the
vital general aspects of the current situation as seen
through this ex-soldier's eyes:
"The critical fact

must face is this:

we

The cost of

security today amounts to 75% of our enormous national
"budget. This means high taxes. Beyond this, the Admin¬
istration finds in this fact its alibi for inflation and defi¬
cits and for the strain

put

"Can this burden be
.national

whole

upon our

economy.

lightened without endangering

security?
❖

"Our

*

unity

have achieved is too much form

as we

and too little substance.

With three

services, in place of
the former two, still
going their separate ways, and with
an
over-all civilian staff
frequently unable to enforce
corrective action, the end result has been not to remove
duplication, but to produce triplication.
"All this must be

brought to an end.
however, goes still further. We must
critically review the political policies governing our mili¬
tary program; and we must review that military program
"Our

itself in all its

significant details.
*

is:

us

*

*

"My sober conviction is that action along the lines
I have indicated, in the absence of radical
change in
world conditions, will soon
begin to reduce expenditures
and

eliminate

the

Federal deficit.

This

is

first

a

step

without reduction
what I

am now

Then
out in

few

a

of defensive

power.

That is exactly

proposing."
graphic examples of how things work

practice:

"We have

been

Now let him who

dares,
outlays!

reduce defense

military-minded people. In
have always cut the military establish¬

time of peace, we
ment to the bone, then to the marrow.
In time of war,
we have said, let the
professional soldier take care of it.'
This attitude has

famine

encouraged the military, accustomed to
feast, to try to take advantage of crisis.

or

,

from first

say we must not even

try to

coin

collector

in

It has meant our Army buying enough front-axle
gaskets for jeeps to last one full century.

^pnee.

*

*

*

meaning of the term.

If the coin

muster,

hold

passes

you

may

legally hold.

terpreting its

no

in¬

tention of

bases of

letting the world return to real peace. To build
this type, economically, takes two to three
years.

Likewise, one may buy
coins from coin dealers or

numismatists

without

limit.

Im¬

ported gold coins, of course, have
to be examined by the Customs,
that the government may make
sure that they are of numismatic

so

are

not

on

the

pro¬

list.

at the time

until

we

do?

We did not start

on

Soviet intentions became clear.

1951, six months after the

war

these bases
We waited

in Korea broke out.

After all this foot
sisted

on

the cost.

a

dragging, the Administration then in¬
'crash program'—get it done fast whatever

The result:

we

In

the

American is

pre-1933 American

or

coins—provided he
pay
the premium
such

coins

bring

a

per¬

trunkful of

foreign gold
willing to
price which

is

on

the

world's

gold markets—without
any

duty

or

pay¬

running afoul of

Prohibition
of

certain

of

the

gold

coins

United

States

Bureau

of Customs

is

and

to

others

heading,

by

Circular

were

tightened.
The
Executive Order No. 6260 of
Aug.
28, 1933, did not change the above
provisions. But an order of the

Secretary of Treasury of Dec. 28,
1933, "requiring the delivery of
gold

coin, gold bullion

$100

exemption

visions

being reproduced and that

new

Denomination

.100 Franka
.

got two bases for the price of

1

4

five."

20

gated

concerned

Importation

of

Cutoms

under

of

are

coins
being issued

Mintmarks

and unusual coin

ing

promul¬

Therein

the
was-

(but not includ¬

quarter

known

eagles,
otherwise
$2.50
pieces,
unless

as

held,

together with
coin,

and

rare

part of

as

un¬

collection

a

historical, scientific

matic

numis¬

or

purposes,
containing
not
than four quarter eagles of

more

date

same

by the

and

same

This constituted

design,
mint);"

and

liberalization

a

of the

to

previous order with respect
quarter eagles.

Finally, there
tions

of

the regula¬

were

the

Secretary of the
Treasury, Provisional Regulations
Issued

Act

under

of

the

1934.

30

Gold

These

by

approved

the

Reserve

regulations,

President

on

and

31, 1934, contained
language which was to be carried
forward

unchanged

in

all

sub¬

sequent revisions of the gold reg¬
ulations until that of August 1952.
Its
language
pertinent
to
the

holding of gold coin read:

1926-27

"Sec. 20.

1915

Ducat

foregoing

was

1934.

"Gold

Jan.

1915

Corona

15,

coin having a
recognized
special value to collectors of rare

the

Foreign

The text reads:

gold coins

Ducat

Jan.

the

28,1933,

language as to coin holding
changed to read:

Let¬

coins under the provisions of section 54.20 of the Gold Regu¬
lations (31 CFR 54.20):

.

excluded

(but not includ¬

supplement to

struck

rare

Austria

and

made to read:

was

order of Dec.

the

"Accordingly, it has been determined that the following gold
do not qualify for importation into the United States as

Country

gold

Thus, the excep¬
surrender-of-gold pro¬

unsual coin

the

abroad in substantial quantities.

Albania

and

certificates to * the Treasurer of
the United States" eliminated the

the

25, 1952, ad¬

Collectors

Gold Coins.

into

covered

ter No. 2798 of June

dressed

importation

"The Director of the Mint advises that old foreign gold
are

of time the regu¬

course

lations

for

coins

"What did

a

usual

quality and
hibited

Gold Coins You May Not Import

regulations in

own

recent years, an

We have needed them

since the Soviet Union made clear that it had

ever

law.

gold

As the government has been in¬

ing

"We need bases in Morocco.

it.

the

Nor is there any maximum amount

free

,

acquire,

numismatic

fectly free to import

a

coin."

the

chairs at $10 above the standard model

Navy laying in

col¬

transport, import or hold such
gold coin, that one be himself a

you may

our

$100 belonging to any
person; and gold coins
having
recognized special value to col¬
lectors of rare and unusual coins.""
one

quarter
eagles,
otherwise
known as $2.50 pieces)."

language that it is

not necessary, in order to

in

the

ing

to

and unusual

certificates

exceeding in

aggregate

A

rare

the

having a recognized
special value to collectors of rare

page

possessing "special value

and

not

in

as:

"Gold coin

Americans May Hoard Gold Coins

"Resulting frenzied expansion has meant disorder,
duplication and waste. It has meant an attempt, for ex¬
ample, by our Air Force to buy 20,000 super-deluxe desk
price. It has meant
fifty-year supply of anchors all at

coin

amount

and

Continued

Note from this
a

"Gold
an

not

remaining

defined

was

tion to the

lectors of
never

category

need

The

us.

quarter-eagles.

toward tax reduction."

"But the

big spending is, of course, the $60 billion we
pay for national security. Here is where the largest sav¬
ings can be made. And these savings must be made

transactions)

concern

Executive Order

task,

*

Yes, much can be done.
begin with the fundamentals of the budget.
Out of the $80 billion our Government is
spending this
year a few items like the $6 billion for interest on the
national debt can't be reduced. From the other $14 billion
for nondefense purposes, real savings can be made
by the
use of business-like
practices under a clean administration.
"Let

answer

proper

here

"Such

Rare coin.—Gold coin

1915

of recognized special value to col¬

lectors

of

and

rare

unusual

coin

100 Corona

Now what

fessional

are

soldier

the remedies?

of

demonstrated

Here is what

ability,

now

a

100

pro¬

civilian, thinks:

France

"First: We must
press for a weapons program that is
We cannot pretend to do
everything in every
field all the time. Our
judgment in

Hungary

must be

sure

and

.

_

professional fighting man requires the advice
knowledge of both industry and labor.

"Whenever

a

new

weapon comes from the laborato¬

ries, all services—sometimes understandably—demand the




1923-24

otherwise known

Franc

1892

unless

Korona

.

20

Sol

50

Peru

(8 Florin)

20 Franc

.100

weapon development
and sound and related to tactical needs. To

do this the

Kronen

20

turned

realistic.

1908-14-15

(but not including quarter eagles,,

Sol

100

Sol.

1901

and

through 1921

a

1907-08
1950 and subsequent years
1950 and subsequent years
1950 and subsequent years

held,

uunsual

collection

tific,

or

and

$2.50 pieces,,

coin

for

and

not

eagles

design,

with
as

more

of

and

the

purposes,

than

four

same

date

struck

"In view of the

foregoing, you are hereby instructed to deny
entry into the United States of any of the above-described coins,
unless the importer desires to offer them for sale, pursuant to
section 54.40 of the Gold Regulations

States Mint

or

Assay Office."

(31 CFR 54.40), to

a

United

same

held,

mint)

in

may

transported

United

States,

rare

part of

historical, scien¬

numismatic

containing
quarter

as

together

by

the

be acquired and

within

imported,

custody for domestic

or

the

held

account

Volume 176

Number 5156

Without the necessity
jicense

tnereior.

.

.

The Commercial and Financial Chronicle

...

pf holding

a well, was an avid buyer of the 5, 1933 and of

.

of American dealers in

wares

Administration of the Regulation

terests of legitimate numismatists,
But it does not say that

gold

one

_

the

words

the

bona fide numismatists
may hold

gold coins, although a quick reading may give that impression. In-

of course
amend its gold regulations without notice. But, as matters stand,
an
American willing to pay the
high premium which gold coins

depart from their standards of
recent years, anyone in the United

deed

1933

to

or

be

no

States

may

hold

denomination

any

gold
or

coins

with

at home where he can count them

from

Continued

from

page

8

have

may

no

European

your

be

government

NSTA Notes

over

trip

and
The

would

have

hard

a

New York-Florida trains

on the Seaboard and members from the
Middle West coming by train can make connections with the Sea¬
board at Washington, Richmond or

time proving
that you are not.
Moreover, the language of the

»

regulation does not limit itself to

by Piedmont Air Lines.

collectors

for

the

of

the

gold

the

gold

American

the

coins.

of the

passage

of

bulk

by

only

years

coins held

public

in

1933

is believed to have been

acquired
by the government, gone into coin
collections
or
otherwise
disap¬

Also, with the passage of
gold coins which were not

Petersburg, Va.

time

in

rare

1933, have

be considered
that

the

the

Thus it happens

so.

government has become
in

lenient

more

to

come

acknowledging

"rarity" of gold coins.

In

the

early years of the gold
regulations, citizens holding gold
coins

and

keep

them

seeking

required

permission to
"rare coins" were

as

to

the

send

pieces

Washington for inspection.
Washington

sequently

to

coins concerned:

of the

their de-

nominations* dates and condition
from
a
numismatic
standpoint.
The ultimate arbiter whose word
is

by the Treasury De¬

accepted

the

partment

is

vision

the

of

tution.

gold

numismatic

di¬

Smithsonian

request, arrangements will be made
meet trains and planes for all members who notify
of the time and place of their arrival at Southern Pines.
Present plans are to convene the meeting at 10:30
a.m., on
Thursday, Oct. 23, at which time reports of the North Carolina
Municipal Council and discussion of North Carolina activities will
be considered.

coin that is not

worn

com¬

pletely
smooth
is
considered
"rare," within the meaning of the
gold regulations. So, too, are for¬
eign coins of pre-1933 mintage.
The

practice

during

full-content
has

dates

of

recent

has

importer

is

5:30 o'clock and

Lounge

on

Thursday after¬

this informal gathering will be open to

members, their wives and their registered guests. Due to inade¬

quate facilities for private dinners, no banquet will be held and the

evening will be

open to informal activities.
Friday session (Oct. 24) will convene at 10:30 a.m., for a
meeting of the South Carolina Municipal Committee and for re¬
ports on its work. Immediately thereafter Dr. Jos. A. McClain, Jr.,

The

Dean of the Law School of Duke

All sessions

groups.

will be

University, will address the joint

open

to

all

members

of the

three

and full attendance at all meetings is urged.
Members are encouraged to bring their wives to the meeting
and special entertainment is being planned for them.
groups

All

accommodations

at

Mid-Pines

Club

have

been

reserved

but it is desirable that members make reservations in advance

so

that the accommodations desired and the

probable time of arrival
may be known. All reservations can best be made through W. Kel¬
vin Gray, P. O. Box 1029, Raleigh, N. C., and should be made as

early possible.
they desire.

Members

may

send

as

many

representatives

...

„

,,

lower than the

ll(

It looks like the

wil1 movewhenHdoes

TRADERS ASSOCIATION

OF

DETROIT AND

At

and

meeting of the Securities Traders Association of Detroit

a

Michigan, Inc., held

officers

were

on

Thursday, Sept. 25, 1952, the following

elected for the fiscal year beginning Oct. 1, 1952:

W

an

French

origin.
in

ments

known
coins

have

in

been

The

is

gold

lately struck in

exclusion

the

such

of

United

States

criticism

of the Treasury
meeting of the Amer¬

recent

a

it

"rare"

ican Numismatic Society.
Not all international coin move¬
ments

through

course,

are

that

since

Some

think

gold coins have left the

more

United

inward.

of

ports,

our

States

the

than have entered,

nationalization of

1933.

It is only

natural to suppose that
coins which were deliber¬
ately retained by non-numismat¬

gold

ists

and

not

government
would
way

into

the

where

usually

also,

lectors,
of which

was

paper

.

per

a"d

in

foreign

black

or

be

may

coin

col¬

example

Farouk, when King

Farouk; whom

stories have described

international

their

$35

outstanding

an

Egypt.

of

Mention

of

ounce

obtainable

more

markets.

made,

an

unscrupulous jew¬
pot or
abroad,

legally

much

the

to

later find

minimum

a

is

in

$20.67

or

melting

ounce

of

at

sooner

eler's

free

turned

gold

as




an

as

Tex —The

business'

in

Texas

securt-

has

been

.

xt.

v

speeches

all

are
*

You're

so

*

much wind.
*

said

probably

thinking

what all this has to

do with

the stock market. The
is that whatever

answer

policies the

Federal Government will fol¬
low in the next few years will
have a tremendous influence

price trends.

on

jnc

in

an-

"®uJlciAn£^^t
Associa¬

the
tion

is

ing

open¬

branch

a

office

in

Dallas

on

Oct. 1.
Mr.

Paul J- Pagan

Fridley,

senior partner

of the Houston investment firm of

*

*

Q Q D f I t ICS

j}eaiers

Fridley

*

is Chairman of:

Hess,

&

the NASD District Committee No.

All

this, however, is prema¬
At least the
of those

one

market is

Association

The

6.

enforces

business

securities

the

for

code of:

a

periods where ethics designed to insure the sale°t investment securities on a high*

it is saying little. The obvious

procedure

plane of commercial honor.

such circum¬
The new Dallas office will be
nothing. Ac¬ in the charge of Paul J. Faga®,
tually this shouldn't be too who has been employed in the
hard to do, because two weeks New York and Washington offices*
ago when the market seemed of the Association. Mr. Fagan wiR
well on its way to perdition,
that »
in

stances is to do

advice

here

feTtime

to

was

re-

Secretary has operated in;

from figures supplied

by Wallace-

Fulton, Executive Director of

For the next few

days it is the Association, who has just comgoing to make much dif- pleted a series of meetings with.
fprpnpp what vnn Ho
T think Texas securities dealers. Mr.Fndlerence what you do
l think
not

McDonald, Jr.

prices will go up a bit,
basic action will be

Bertrand Leppel

Herbert

Schollenberger, Campbell, McCarty & Co, President.
Harry A. McDonald, Jr., McDonald-Moore & Co., Vice-Presi¬

dent.

Bertrand
The

Baker, Simonds & Co., Secretary.

Leppel, C. A. Parcells & Co., Treasurer.

following individuals will

serve on

the Board of Directors,

along with the above officers: Edward J. Miller, Smith, Hague &
Co.; Leslie C. Muschette, First of Michigan Corp.; Harry B. Buckel,

of

one

.

•

,

Team—

Points

Whiting, O'Connor, Rappa, Seijas__

14

Murphy (Capt.), Manson, D. Montanye, O'Mara, Pollack, Gavin

13

Serlen

11

Capt.), Gersten, Krumholz, Rogers, Gold, Young
(Capt.), Ghegan, Jacobs, Gannon, Cohen, Strauss
(Capt.), Smith, Valentine, Meyer, Farrell, Brown___

(Capt.),

Greenberg,

Tisch,

Werkmeister,

Lytle

*

*

(Capt.), Growney, Craig, Fredericks, Bies, Lyons
(Capt.), Klein, Weissman, Sullivan, Murphy, Searight

Mewing (Capt.), Bradley, Weseman, Hunt, Gronick, Huff

11

"This

Fridley

again. As a matter of strict
trading technique, and assuming that commissions
taxes
other

and
,

,

.

extras

don't
t

ui

too

take
ij

big a chunk, any further
rally might be a good place to
use

10

get back again.

7
5

Casper,

Nieman,

Bass,

Krassowich

the

subsequent reaction to

9

9

*

*

The

growth,"

Mr.

of the

one

ideal.
,

be

the

Unfortunately the ideal
,

.

.

,

.

J

Ernie Leinhard

213

factors

that

Jack Sullivan

201

such

ideal.

an

win have his
Loan

£

Ljffi Buiw_

^

,
Com_
"
ni
Q<wv
mittee of which he will be Sec,.

,

.

,

.

t0 Mr.

^

Fri<Hey,

Russe]1 R Row,es> Row,es>

Winston &

c0>, Houston; James F-

First

Jacques,

Southwest

,

seriously affect
What these

are

Com-

and Hugh D. Dunlap, Biii.-

ford, Dunlap & Reed, Dallas;

sjs

would

above

"pagan

pany,

has to take into account many

200 Club

unusual

went on, "is

little advance,

get out of long stocks; then

Meyer (Capt.), Kaiser, Swenson, Frankel, Wechsler, Barker__

Frankel,

the^

sidewise, followed by a compelling reasons for establishthen down }n£ a full-time Association office

will be

10

Bean

(Capt.),

in

dealers

ployees registered last year against
on the rolls in 1946.

*

10

(Capt.), G. Montanye, Voccoli, Siegel, Reid, McGovem

Hunter

11

Leinhard,

Lopato
Burian

securities

+

+

Failing to get such outside

Security Traders Association of New York (STANY) Bowl¬
as of Sept. 25, 1952 are as follows:

Leone

by

the vol_

1946

corporate

underwritten

stimulus the immediate trend

ing League standing

Goodman

new

the 324

SECURITY TRADERS ASSOCIATION OF NEW YORK

Krisam

0f

possibly even in- State has nearly quadrupled. Itdifference.
A spark of some went
$12,145,700 to $45,505,^
157 in the six years. At the samekind is now necessary to set
time the num£er of NASD mem_
prices in an upward groove, ber-firms has increased 25% to
Where such a spark will come nearly 100, while employment has*
more than doubled, with 720 em¬
from is anybody's guess.

Manley, Bennett & Co. (Immediate past President.)

Donadio (Capt.), Demaye,

ume

dullness and
,

William P. Brown,

but the

gince

^

gaid

H. A.

H. Schollenberger

news¬

smuggler

t~\

H.

"pre-

coins of
advertise¬

newspapers

various

from

evoked

gold
From

Swiss

that

Austria.
coins

r-I"

a

>

'

into the United States.

1 d-W

HOUSTON

coming weeks, will be growing faster than in any other
the election campaigns and section of the country, Earl Gk
their
attendant
hoopla.
If
r .* d 1 e y'
Chairman o f
you re a Democrat then every- Texas District
thing the Republicans say is Committee,
distorted. If you're a Repub- National Aslican
then
the
Democratic sociation of

such

of recently-minted

case

o r

Office in Dallas
ties

on
the long
side. If the Southwest,
you've done so, then sitting
in disclosing the rapid growth,
back and awaiting
develop- of the securities business in Texas
ments shouldn't be too hard, since the war, Mr. Fridley quoted

For instance, this has happened in
the

NASD Announces New

enter

of the

it denies

recently,

,

.

for the

the

Where the

knowledge that

.

*

R

in

MICHIGAN

*

The major news these days,
and for that matter, probably

ture.
SECURITIES

complica¬

some

*

as

bringing in numis¬
coins actually manu¬

gold

coins entry

all

at

gold coins bearing old

caused

Treasury

factured

noon

foreign mints
of minting

gold regulations.

matic

a brief recess, the Securities Dealers of the
business session.

years

in the administration

tions

a

A Social Hour will be held in the

States

any

After

Carolinas will hold

Insti¬

United

Today

a

carry any

previous lows
made two weeks ago. So inrbig thing stead of trying to trade in and
this week is the longer trading
out it would be more
practical
day that the Stock Exchange t0 sit
tight with long positions,
has begun. Outside of that the
market is slumbering
doing ort[ic!(? do Tot ZclZsZrilyrt
little but occasionally stirring time coincide with those
of the!
in its sleep. In the meantime, Chronicle. They are presented tm
scores of traders are
standing those of the author only.]
by its bed, betting on which
_

_

On

to

cars

Sub¬

contented

itself with receiving a description

*

will

reaction

new

By WALTER WHYTE =

=

T.

Regular air

the group

peared.
at all

*

Actually I don't believe

Says—

line service is available from Cincinnati direct to Southern Pines

With

income

££

more

collector.

coin

a

Whyte

rmi_

coin collector and who

You

claim to

—

-

few foreign coins left

a

rainy evenings,

on

Walter

bother

Montevideo, if he prefers to have them

govern-

Actually there
to determine who is a

way

not.

the

time to make out your
tax statement.

can

of to hold them in Tangier or

mint in any

feeling themselves quantity, with the exceptions of
Some, in fact, foreign coins minted after April

so

knowledge.

bona fide

than

on

since

Treasury

command abroad need not

criminals.
done

ment's

is

gold coins

more

without

have
is

persons have held

many

one

Markets

The

dictionary says they mean and
if the numismatic experts of the
Smithsonian Institution do not

only

easily tell when yon
get your monthly brokerage
statement, and when it comes

Tomorrow's

ning afoul of the law.
what

mean

33

you can

them within

import them freely without run-

.

Conclusion
If

coins. Any-

worn

transport

may

the Umted states; sell them; or

c0*ns_

The above regulation
obviously
was
intended to protect the in-

to

(1245)

John.

Williamson, Dittmar & Companyr

and Edwa"d K A"s"n'

c]aude
Co

_

T

Crocketti

Houston, is

ernor

of

San

Parvis,

&

Hart

a

Antonio.

Crockett &

national Gov-

the Association.

34

With Westheimer Co.
(Special

to

dersheimer

is

and

with

now

Company,

Mutual Funds

West¬

30

East
RESULTS of

b,y Distrib¬
Group, Incorporated, dis¬
close a wide ownership of mutual
fund
shares
by "the men
and
a

survey

utors

who

women

sell

The

them.

per

of ownership increases with
proportion of his time a sales¬

board members held

industrial

the

the

fairs

man

devotes to

ing.

Of the full-time fund sales¬

92%

men,

mutual fund sell¬

shareowners, the
Of those giving

are

found.

survey

of

Right

the principal speak¬
118th annual meeting

dinner

fund

Ownersmp ranged irom
hundred

dollars

to

few

a

hundred

a

from shares of
of 13. A high
volunteered

dollars,

fund

one

to shares

proportion of

owners

comment that fund

ownership has
helpful in making sales.
To date 452 completed question¬

proved

naires have

been

received,

return

mail

survey.

A

on

a

100%

STOCK

declared

Fund,

payable

to shareholders
25,
1952.
One

share

of

Fund

was

for

Oct.

of

share

the

effect of

split and

tax¬
two-

a

will reduce

by

half the net asset value per share
of Diversified Investment Fund.

Stockholders

■M a

prospectus on

will

as

weekly

index

completed
the effects

from

covery

steel

reached

strike

its

re¬

of

the

has

and

now

prevailing
throughout most of the last win¬

at,

ter

and

spring.

The

survey

re¬

ports that retail trade has shown
substantial

from

recovery

the

moderately

depressing effects of
the steel strike, and some of the

variety chain stores have reached
new

The

:ystone

high sales records for August.

expansion

favorable
tories

Custodian Fund;

retail

in

because

of

during

trade

retail

non-durable

creased

the

is

inven¬

in¬

goods

late

spring

and

early summer, creating a need
higher sales to prevent a rep¬
etition of the inventory problems

COMMON STOCK FUNDS

of

"the

he said.

progress,

the

assets

Fund

made

has

are

versified

substantial

Over

General

invested

now

of

83%

Canada

of

in

di¬

a

section of Canadian

cross

1951.

Mr.

Vance

Keystone Company

SO Congress

your

describing
Organization and the shares of your

Funds.

ten

Bullock

Street, Boston 9, Mass.

Please send

me

prospectuses

firm

invested
the

some

initial

manages,
four

"85%

as

months

public offering

after

of the

shares."

list

The

in

first

quarterly report
Oct. 25.

due

to be issued
assets invested

of

Canadian

industries

Mining,

products,

security holdings will

the

percentage

follows:

of

at

financial,

4.3;

vari¬

is

present

oil,
7.0;

14.3;

pipelines,

12.3;

in

13.1;

7.5;

as

forest

utilities,

3.2;

electrical

equipment, 2.1; agricultural equipment, 1.0;
steel, 3.1; chemicals, 4.2; banks, 0.8; auto¬

mobile,

1.6;

building and construction, 2.3;
miscellaneous, 6.9.
In

addition

of Canada

F.

O.

are:

New

Co.;

Mr.

to

Vance,

the

General Fund and

affiliations

holdings of oil and
24.37%, non-ferrous metals
13.97%,
and
pulp
and
paper
11.59%

State

Gty

group
on

were

holdings of

Aug.

nadian

the

31.

three

L.

Mutual

Isaacs,

Life

Insurance

trustee,

Investors Trust;

Vinton

Massa¬
C.

John¬

trustee, Century Shares Trust; William

Morton,

Vice-President, State Street In¬

vestment

Corp.;

President

and

Edward
Fund

Fund, Inc.

assets
now

stocks
of

total

Ca¬
over

Fund, after
months

operation,

has

two
total

net

assets

of

$14,700,000, Henry
Vance, President of the Fund,

excess

ported

at

the

first

of
in

T.
re¬

combined

the

at

1952

as

can

and

I

and
of

Institute

Shelley,
Joseph

Treasurer,

partner,

J.

Snyder,

Massachu¬

tions stand

He

any more

next

pointed

NATION-WIDE

Securities

Com¬

reports that principal

pany

stock

mon

com¬

The
200

a

Parker

out

that

the
to

all-time high currently—an in¬
crease of nearly 50%
since 1946.

purchases

during the
months ending Aug. 31, 1952

tnree

included

2,500

Diamond

5,006

Company,

Alkali

Empire

District

Electric Co. and 2,000 Kansas Gas
& Electric Co.
Eliminations in¬
cluded

Corp.,

Niagara

Mohawk

Southern

baker

fund

and

Power
Stude-

Corp.

The

Co.

of

cause

of

the

the

security
the

that

substantial

amount

dividend

profits,

be¬

is

part

from

of

the

in

requests
Nation-Wide

cash.

income

and

net securities

on

DISTRIBUTORS
Blue

Ridge

search

22c

per

profits.

the

shares

and

Re¬

Corp.

ceding

157
1952,

fiscal
took

collected

in

Federal

about

22%

the

all

pre¬

combined!

years

taxes

of

our

In

alone

national

income. Add state and local taxes
of the national income.

"As

the

days—but

big

spender
doesn't seem

it

these
be

to

currently
of

profits

lowest

profits

ratio

to

salesj,

this

year

about 3.3%

average

of

corporate
since
1938;.

sales

American

industry cannot afford
to get caught with its plants down
A small drop in business
volume could prove embarrassing.
toaay.
"In

short, all the fantastic govr

ernment

much

spending

in

flation
the

terms

that

average

individuals

it

"With

has

cost

taxes

and

has

not

VALUE' LINE
has

as

the

offering

at

1

p.m.

prices

of

and

3:30

one

hour

The first

computed

effective

price will

be

a

increased

whole.

burden

of

prosperity

proof for

shifting

and

p.m.

the

second

price will be effective until 2

following business day.

Income "Fund

upon

Inc.

especially to the consumer
(you and me), it is quite apparent
one

must

care

the

factors

watch

with

and

great

indices

toward

spending.
of

course

pend

business

largely

future

well
whether or

and

tapers of. The most practical and
certain way to encourage private

spending would be to lower
eral

income

ment

taxes

(and

Fed¬

govern¬

spending). If this should
likely prospect, main¬

appear as a

of

and stock
for

high

a

activity,

ness

busi¬

dividends

prices might be assured

protracted

a

level of

profits,

period."

May

15

last,

p.m.

the

was

of

similar

serve

growth

first

American

in¬

invest

the

of Canada.

par

outstanding.

are

1MI1

According

Calvin

ports

l'UNI).

Bullock

that

curities

tota|..'assets,

valuedTi^

Fund's shares

10,000

end

re¬

with

the

^wned

The

by more

stockholders residing

t$hited

Funcfclnc.

investment

folio

in

International
Canada.

an

open-

^company
fe' ■

since

Ltd.;

of

percentage

Nickel

Co.

Canadian

Bros.

American
Co.

&

Oil

Co.,
Co.;

Ltd.;
Powell

British
River

Ltd.; Consolidated Mining &

STOCK FUND

FROM

TWO INVESTMENT FUNDS MAT

YOUR

eaton

Corporation

INVESTMENT

DEALER

OR

& howard
BOSTON




24 Federal Street

BOSTON
At lanta

—

533

Montgomery Street

SAN FRANCISCO

Los Angeles
>

of

Pacific

EATON & HOWARD

ES OF THESE

of

were:

Hudson Bay Mining
Smelting Co. of Canada, Ltd.;
Consolidated
Paper Corp., Ltd.;

ARB

OBT.

recent

&

FUND

PROSPEC

most

Railwav Co.;

Price

States.

order

total net assets

se¬

market,

$26,000,000.
are

throughout the
Canadian

under

ifhianagement,

exceed

now

Inc.,

the

portfolio, the 10 largest common
stock holdings in the Fund's
port¬

■

OPEN-ENDJjjEPORTS
CANADIAN

to

in

request

Lord, Abbett & Co.

and

companies

INCORPORATED

—

not

spending by the gov¬
private
business

as

ernment

share
shares

i

Chicago

de¬

decide to increase their

consumers

spending

on

The
may

seeking to

or

—

re¬

lating to the consumer's attitude

vestors

capital stock, $1 per
vame; of vvhich 23,000

BE

New York

to

omy,

Chemical Bank & the largest
transfer; agent for 823,- designed to

Trust Co.

than

4.30

Fund

32

so

in-

the private segment of the econo-

appointed..

be obtained

1925

-

purchasing power of
or the net
earnings of

corporations
continued

of

Berkeley St., Boston, Mass.
•FOUNDED

of

all-

net

percentage

corporate

tenance

result the government has

a

become

an¬

later each business day.

of the

billions

corr

tnan

high

Yet,
aie

200 shares of

Fund's

to become effective

until

(194-J-52) Federal tax col¬
lections amounted to $308 billions.
This is 21% more than the $254

this week that they will

determine
their

GROUP

Mutual

Distributing

nounced

fiscal

seven

and all

shareholder

declared 23c per share on net in¬
vestment

during the last

years

and the total tax load is over 30%

announced

current

payment

Also

a

probably

net

$325

over

all-time

an

that

an

Prospectus
may

in¬

or

living index has risen

BALANC

from investment dealers

taxes

economist.

EATON &

Prospectus

corpora¬

the query put by the

was

INVESTORS

A Mutual

The

economy.

business

fund's

of

cost

Technology.

business

however, continued
easily be disastrous.

the

and

the

for national
more

billion.
profits

As

the

spent

have

will

will

"Government spending must be
paid for either through taxes or
inflation. The question is, can you

mutual

F.

Co.;

the

'

Investment Fund

whole

a

of high

year

crest,

of

at the lowest level since

running
1946.

being pushed up a
hill. It is helpful on the
way up;
pushing

cor¬

benefited

been

since 1946,
to

man

a

flation,"

&

setts

p.m.

approximately

Schreder

relationship
of government
spending to private enterprise is

William

F.

Sanders

Vice-President

$20,000,000.
CANADA GENERAL

X.

spending appears to have reached
that point where it no
longer is a

Robert L. Osgood, Vicedirector, Boston Fund Inc.;
Ryan, Vice-President,
Boston

Inc.;

largest

common

Net

Harold

to

"The

billion

sales

$500

over

activity," he added, "government

stimulant

net

sharply-in¬

government

has

($161

net

another

More¬

person's

segment

not

greatest

corporate

to

"that

like

this

has

defense)

serious

of their

some

Kelley Anderson, Presi¬

England

Kenneth

directors

be

the

porate

of

open

$7/9.

to
less

remarked:

that

oillion

—

Fund's

share

gas
Addrtu

ing is

$861

average

(assets

government

spend¬

feels
The

u-ou

Portfolio

the

by

Though Mr. Schreder stated he

unless

the

from

basis is

capita

spending program of all time. The

question."

industries,

Canadian

which

down
over,

economy

govern¬

ment

living

of

cost

per

a

on

doubled

vast

stated.

net

Inc.,

and

reveal

million
Americans

ferent

distribution will be made in stock

Fund,

all;

Schieder

158

our

and

taxes

porate profits figures also clearly

'bene¬

very

CALVIN BULLOCK describes the
The

Vice-

Group,

fits' to

Fund

bilLons

$90

over

debts) has declined.'
:
Continuing
his
analysis,
Mr.

declared

the

for

BOND, PREFERRED AND

tors

Inc.

trend

declining

a

creased

Director

states. The investment program of

Vance,

level

a

Fund

new

already has over 10,000 sharehold¬
ers
living in over 30 different

chusetts

AXE-HOUGHTON

recent

JUUrass.

and

American

average

in

we

purchasing

'real income' has not increased at

Research

son,

business

ad¬

and

-

1945, aiter it is adjusted lor

X.

Schreder, Ex¬
ecutive

situation,

actual

increased

worth

Distribu¬

dent,

twice

own

shares.

Canadian Fund, Inc.
THE

Harold

of

railroads,

stock dividend is not

many

Vermont,

of

ous

for-one

directors

reported that the

published

Investment

Sept.

"American

Symposium,"
University of

the

also

shareholders,

will

has

joint

to

month.

obligation please send

the

At

be

next,

It

Hotel

at

Speaks
by

the

been

since

on

contrary).

Income

of

power

has

President,

record

owned

This

Ex¬

Stock

Monday

Somerset.

20,

be forwarded to stockholders

able.

Boston

held

additional

Diversified
each

the

of

Marketing
sponsored

enterprises, comprising approxi¬
mately 50 companies in 15 dif¬

dividend

Sept.

1952,

14%

a

today by Diversified In¬

vestment

Mr.

the

at

the

the

rising

keynote address

a

presented

visory board meeting, Mr. Vance

shares.

thousand

Minister,

was

the

at

er

In

30,

to

since 1945. While Personal Income

ernment Budgets

af¬

is headed by
Arthur
Meighen,

Meighen

change

of

financial

and

Prime

while 72% of those
devoting less than one-fourth their
time to fund selling are owners
owners;

consisting

Canada,

Hon.

That

Not

prominent in

former

one-fourth to half their time 84%
are

board

Canadians

seven

(despite the political

that

has

Have

Responded to Huge Gov¬

day and today.
The advisory
of

find

Warns

Profits

of

segment

private

"Specifically,"
Mr.
Schreder
contended, "when we analyze the

Failing

Corporate

here yester¬

the

economy

observations

Money

Economist

Fund

our

Personal

Is Now

meeting of directors and advisory

cent

no

Of Public

By ROBERT R. RICH

Broad Street.

GENTLEMEN: At

helping

Energizing Effect

The Financial Chronicle)

COLUMBUS, Ohio—Allen Gunheimer

October 2, 1952

The Commercial and Financial Chronicle... Thursday,

(1246)

1

.Volume 176

Number 5156

.

.

The Commercial and Financial Chronicle

.

(1247)

jSmelting Co. of Canada Ltd.; Gulf
-jOil

Corp.;
jCo., Inc.

815,000, in shares outstanding to
Oil з,087,151 and in number of share¬

Socony-Vaccum

holders in
increases

IE
IJthj

GEORGE PUTNAM Fund of

|;Boston

reports

for

the

points

three

A

The

balanced fund.

there

ago

were

standing and total net
$51,727,000.
the

past

three

the

and

the

reduced

in

from

rails,

of

mining

and

common

largely

utilities, and
Holdings of

metal,

reduced

were

steel

and

slightly.

As

of

Sept. 30, the Putnam Fund's
largest common stock investments
in

were

the

railroads,
oils,
chemicals
and
drugs, electric utilities, and insur¬
on

prospectus

request

from your investment

dealer

63 Wall

will

Street, New York 5, N. Y.

tence

of

in

the

Harcxord

chas.

и. s.
^

following

Fire;

ablej?y,v^irst

Illinois

central;

Air'

Fidelity & Guaranty and Utah

Line;
Power

^

Continued

Vice-President and

tor

the

of

firm

of

ident.

describing the Com¬

T.

direc-

a

Investment

Douglas

Counsel

Johnston

is

available upon

of

Inc.,

fund

request.

EBERSTADT & CO.
39

Broadway

The

Fund

has

also

&

Mr.

New York City

the

&

by

a

Mutual

open-end

an

mutual

Douglas

T.

Co.

Johnston

also

announced

election of Pierre

until the

York to Equity.

from

La Tour

as

uw
Following
g

his
xu&.

ru

offer

or

to

dispose of,"

as used in Section 2
Act.

number

a

graduation
gxduuduun

from
uorn

of

years

domestic

in

and

foreign banking, in New York
and Tientsin, China.
Since 1931

he

United

has

ment

been

engaged

management.

sides

in

invest-

Farr

Mr.

re-

Wilton, Conn.

in

SCIENCE

statement

is

not

used

Dealer

Investment

office,

WADDELL & REED, INC.

,M

40 Wall St..

"LWifvi™

*

,1

means

munication
meetin£,

the

vfelow-

fh

f

a

reauirements
the

term

Rule

as

ap-

Memphis

divisional

Vice-President and

as

zone

a

Texas,

business

manager

Winters

career

sev-

as

in

began
news-

a

weekly in Savonburg, Kansas, later publishing and
paper man on a

operating
Moran

CHECK LIST

weekly
Osage

set

?i

u

a

LIVING

New

SMALL

FEASIBLE—

York

attorney

discusses how Mutual Funds make
it possible to have a small

living

trust.

Contains

case

histories.

Q THE BUSINESS SITUATION—An
>

invaluable study of the general
business outlook for the remainder
of

.

1952
by
corporation.

a

leading research

For your free copies of this literature
—check items you wish—mail this

advertisement with your personal or
business card.

Kidder, Peabody & Co.
Founded

as

for

Exchange

Uptown Office 10E.45thSt.,N.Y. 17

MUrray Hill 2-7190




United

a

Divisional

sales

of

and

mutual

shares

in
of

the
the

joining

States

Navy
the Pa-

Manager

face-amount

repre-

office

during

by

jn t

la

as

eral^

in the

T.

e

thaf

Uged gen-

ai?

f

oner

n

t0measured

sales
X.

n

u.

D.

S.

third

the

by

income

(1J)

con-

Ine

^ °r

title

7

and

which
must be given to the buyer."
(2)

The

identifying

shall include
use

statement

detachable form
in requesting such copies:

Provided

that

this

there-

,

,

number

01

n.<:ed n°l be included in the iden"The registration statement cov,^lag statement as fljcd, in erjng these securities is not yet
which event it must be added by effective. No offer to buy or sell
the person who sends, gives or the securities should be made and
pu ,r}es
statcment. The de- no 0ffer t0 purchase the securities
-

service
•

*

•

1

divisional

distributors in

will be accepted until the registration statement has become effectiVe.
The publication of this
notice is
the

any,

amount

of

or as

securities,

if

that will be available for dis¬

(16) Any

Address

iaw of

0ptioIlaI information.

The

a

will

supervise

operations

of

j

office and

zone

A-febama, Arkansas,

in

is available elsewhere

as

tif/yiag„staute^e"t is, [° be "seCL

of

(d)

paragraph

in

the registration statement, to¬
gether with the legend specified
in paragraph (c) (1) of that Rule.
Text of Rule

The.; text

■.

amended,
Rule

---

of

is

431

Rule

431,

as

follows:

as

431.

Prospectuses

Preliminary

menting

Supple¬

Material

A prospectus meeting the re¬
quirements of Section 10 may con¬

sist

of

a

of the latest

copy

pro¬

the requirements of Rule 131 and
document containing such ad¬

a

ditional

information

together

contain

that

all

both

(e) Trohibitcd statements. The
identifying statement shall not
contain any information other

which need not follow the

in¬

the

of

formation required to be included
in a prospectus for registered se¬

curities:

Provided

that—

*

pro¬

spectus, is incorporated by refer¬
ence into and made a part of the

document;
(2) Where

the proposed form
prospectus has been sent or
given before the effective date of
of

the

registration

document

is

sent

(3)

the
not

later; and

Where the proposed form of

prospectus is
the

statement,
or
given

than 20 days

more

sent or

effective

stration

date

statement,

is attached

given after
the
regi¬
the document
of

thereto.

South Texas Oil & Gas
Common Stock Offered
Hunter Securities Corp. of New
York City are offering "as a spec¬
ulation" an issue of 748,000 shares
of

South

Texas

Oil

&

Gas

Co.

stock

(par 10 cents) at 40
cents per share.
t
The net proceeds are to be used
common

required by
state in which the idenlegend

identifying statement as used may
briefly state any or all of the following
items
of
information,

.

to

drilling expenses, for
and
extension
of

pay for
acquisition

than that specified above,

numer-

.

The

est

(f)

of this paragraph.

Variance between identify-

title of the security*

debt security with a

Sales

which

Rule 132

pro-

tribution by this firm."

Name

(d)

that the

posed offering will be made
to

——

no assurance

form

a

statement

(1) The proposed form of

information thereof):

tachable form shall be substantially as follows: Please send me
a copy,of the prospectus [or proPosed form of prospectus] relating to

statement

exhibit

as an

posed form of prospectus meeting

(15) A legend in substantially
the following form (or any part

a

registration

identifying

states briefly such of the informa¬

,,

(12)^Whether the issue repre,
?ents new financing or a refund-

Information about the

(5) The yield? in the cage of

1951.

Regional

Winters

and
c

b.

,

fol¬

as

Supplied Previously.

f

tottjWtaation and^pros^u.
Act.

,.

,

414

tion .listed

<") The extent to which the

.

hese securities. They are subject

for

Every
of

-

ls?"er has affdPay a"y tax
wlth respect to the security or

thereof:
ft

lills ls .Z?01

.,

as

ebody

.

?

.

of Rule

shall include

•

/11N

Text

sections.

such

of

any

Rule 414. Identifying Statements.

.

.

f ld^ntl|ying .statement from specified taxes;

shall contain the following legend

is

proceedings
pending under Section

are

,

when!
the

apply

statement

public

of

lows:

an/ state or territory o

ing statement as filed and as used,
(2) The name of the issuer; '
The identifying statement as used
(3) The general type of busi- shall be a copy of the identifying
"ess of the issuer;
statement as filed with the Com(4) The price of the securityi missl0n' provlded-

I.

ranted

1950 and

southern

Manager,

"

ical sequence

among all national offices> in total
g a 1
offices in

As

in

investment

leadership the Memphis

divisional

sales

a

certificates

fund

distributed

Under his

t

CF-8

Kansas,

senting I. D. S. in Memphis, Winters^had been among the company's national leaders in area

1865

Members New York Stock

in

four years in
cific theater and rejoined I. D. S.
after his discharge.
As

in connection with

or

not

The text of Rule 414 is

(10)
Whether, in the opinion
of counsel, the security is exempt

'

prior to World War II. He

served

MAKE

TRUSTS

Prominent

con-

District of Columbia,
.

his knowl¬
prevent

to

as,

shall

rule

-

■'

informatinn

'

cor¬

con¬

registration

under

warrant

counsel> the security is a legal investment for savings banks, fiduciaries, insurance companies, or
other similar investors under the

"m-onoser!

the I. D. S. securities distribution

officer

□ MUTUAL FUNDS

newspapers

and

City,
He
later
was
employed
advertising
department
Kansas City "Star" before
Rirce

SERIES III

or

(14) The amount of securities
being offered;

years

Houston,
his

right

such

offered

131.

RP«..irP^

xm

Winters, Man-

Associated with I. D. S. for
eral

INVESTORS1

of

southern regional Sales the prospectus or proposed form
it was announced by of prospectus may be obtained and

the

F.

has

and

General Sales Manager of I. D. S.

|!j

Kansas City, Mo.

%

or Warrant Or is Offered by
of a right or warrant, the

or

g™ * wosD^iis"
£
'ZZCmMthe "ements
of

therein

such

(b), 8 (d), or 8 (e) of the Act,
or
of
a
public
order
entered

is reasonably expected to be, listed

advertisement

or

make

information

the

8

admitted to unlisted trading
<MHPn£fvinP privileges on specified exchanges;
written com(9) whether> in the opinion of

thp

staement'»

shall

in

subject

shall indicate from whom copies of

Lloyd

Grady Clark,

1012 Baltimore Ave.

>| New York City

has

rections

the

<8) whether the security is
traded over the counter or is> or

(b) definition of identifying
»?nL I! nllnc?!

,

using

person

of

date

statement,
any
the
identifying

edge, may be necessary to
it from being misleading.

securlty nolder or pottl>

be used

mav

statement

the effective

registration

tained

shares or other units or (in the
case of debt securities) principal
amount 01 eacn class 01 outstanaing securlties>

Memphis

Manager,

Principal Underwriters

being closed

are

(7) V^hether the security is be—

earlier

ritL

Minneaoolis

(4) After
the

Continuing Corpora¬

or

fies the issuer that it

person

any

identifying

will

common

ditions and time of exercise;

its'southern regional'sales tained in the prospectus

of

ager

|

of

to

pointed

or

of

m^nt unler tL'slcuritie? Acf of distrib"tion by the issuer
Tmf unless tt Smm^on notU f°eS\Xer boSt

cumstances of the offering is

office
your

First York

Prospectus Rules

terms

until

ices

moved

Prospectus from

of

shares

day of the meeting.

issuer, the securities and the cir-

Inc

the

means

identify-

INVESTORS DIVERSIFIED Serv-

Fund

using

shall incorporate the amendment
pre¬ as
promptly as practicable, ex¬
Continuing
cept
as
otherwise
provided in
each share of
clause (2) of this paragraph;

(3) of the with respect to price and the

Provided that the

to

(g) Proceedings under Section 8.

or "solicitation of an offer to buy"

J

1920 Mr. Farr spent

in

with the Commission,

16

page

amendment

an

the

Transfer books

pay¬

the

in

filed with

as

identifying statement is filed

statement

to sell>" <<offer for sale " ri2ht

Investment Counsel firm.

Princeton

1%

contained

convertible

and

stock

the

Adopts New Registration

"attempt

Assistant Vice-President of the

an

of

receive

in

though such

even

Commission;

(3) Where

tion.

other

means

INC.

the

any

specified

identifying statement
the

omit

may

information

paragraph (d),
information is

filed with

as

using the iden¬

person

statement

of

which

been

and

Johnston

managed

Johnston

F.

Farr

Vice-President

a

director

the price and terms of offer¬

ing,

Mr.

elected

shares, including

$2

of the

And

Co, Inc., 247 Park Avenue, New
York City, was announced
yesterday by Douglas H. Johnston, Presand its

of

stock

will

item

one

of

preferred

$2

York

(2) Any

tifying

This

ing

a

share

stock

of

First

receive

ten days, after ^ ^as p.een fded ing

PROGRESS

ELECTION ol James M. Farr 3rd
as

share

of

common

corporations
among

taxes,, the. tax on dividends

common

seaboard

Pfizer;

PERSONAL

pany

two
large
eliminate,

will

common

stock

common

Corporation;

operating

increased during the quarter:
American Stores; Draper Corp.;
Power;
Florida
Power
&
Light;

Lta^cmS 'm'-PM:PrrJa$rMpla!11*& vB1nedel

A Prospectus

corporation

necessarily involved in
maintaining
the
separate
exis¬

ce;f^imbe 11Bmthe^rs;S'Great Ffortlfern U$ 6 "offer
trai";

Each
stock

ferred

one

of

Equity will receive

of

one

general

share

Continuing Corporation.

expenses

and

of

share

the

were

preierrea;

stock

the

of

Continuing Corpora¬

and each

in

company

Aetna Life;

Florida

stock of the

Furthermore,

decrease

SEC

Holdings

Group,Incorporated

holding

identifying statement
the
Commission;

of

one

Continuing Corporation; each

tion;

The proposed merger

group.

receive

each

stock

share of class A stock of Equity
will receive one share of class A

which Equity will be the con¬
tinuing corporation will eliminate

ance.

stocks

Distributors

The

in

another

preferred

following industries,

in order of current market values:

a

First York.

elimination

of

concentrated

chemicals,

the

on Oct. 31, 1952, to act
upon
proposed merger of Equity and

a

terms

merger

$2

share of
$2 convertible preferred stock of

NEWS

Equity Corp.
and First York
Corp. on Monday
announced the calling of a special
meeting of
stockholders
to
be

Equity

insurance companies.

oil,

to

holdings

purchases

were

stocks

63%

equivalent.

New

stocks

Group Securities, inc.

fund

stocks

CLOSED-END
of

the.

of

Equity will

held

increased

and

casn

OF

were

percentage of assets invested
common

t0%

STOCK FUND

assets

months,

management of the
in

Under

share

Missouri.

Directors

16,900
shareholders, 2,722,800 shares out¬

THE COMMON

Kansas and

new
high
history of this 15-

the

year

In

Tennessee, Louisiana, Mississippi,
Oklahoma, Texas, and part of

represent

in

year-old

jmonths ended Sept. 30, 1952, in¬
creases in total net assets to $57,-

of 20,000.

excess

35

a

fixed inter-

(1) Th(?
identifying statement
used shall include the state-

ment and form specified in para-

provision;

(6) The

as

price

at

which,

the graph (c) (2) and may include the

?onditi°ns Ufu0n whicb> and tbe 1/!gend?,fpeCi£ied,^ ParagraPbs

time when, the security may be
redeemed

changed

or

or,

converted

or

if the security

ex-

is

a

(d)

(15)

though

and

such

and forms

are

(d)

(16),

statements,

even

legends

not included in the

leases

and

for

other

corporate

purposes.

With Waddell & Reed
Chronicle)

(Special to The Financial

GARDNER, Maine
is

Mooers

now

—

Eugene L.

connected

with

Waddell & Reed, Inc.

A.

Joins
(Special

C.

Allyn Staff
Chronicle)

to The Financial

Mass. — Winsor Gale
has become associated with A. C.
BOSTON,

Allyn
Street.

&
In

Co.,
the

Inc.,

30

Federal

past he was with

Ballou, Adams & Whittemore.

**'

•*

■>"»«

"ft .*/

-

n.n;

36

The Commercial and Financial Chronicle

(1248)

Continued

jrom

ditions

12

page

tion.
fair

The Federal Fair Trade Law

full

of

Fair

and

to cope

were

with jun¬

their

and

competition. It got them in victory fair trade has just won has
clause. Without the not deterred those who prefer to
business
non-signer clause, then, fair trade conduct
by methods
is as meaningless as any law which which 45 States have defined as
applies only to those who will vol¬ unfair
competition.
They
are
untarily observe it.
How would gathering their forces together for
gle

the non-signer

like to have traffic laws which

we

do not

a

apply to hit-and-run driv¬

How would we like

ers?

to have

criminal code which doesn't ap¬

ply to housebreakers

murder¬

or

the

courts^-in

the hope that those who
bench

undo

will

the

sit

Like

the

laws,

then,

trade

laws

Fair

petition.

trick the

yet fully understood by the gen¬

price

no

bed of roses, no chance

challenge

tailers'

brands.

the

of

store-controlled

The

giant

re¬

brands

is

on

the

un¬

pocketbook.

facturer

tion?

resale

for

prices

their

our

is

sale
safe¬
guard for the property value of
clearly
to

condition

a
the

product,

the

manufacturer's

The

retailer

of

a

trade-mark.

is

perfectly free to
sell that product at any price he
chooses, even to give it away, if
lie

that trade-mark.

removes

He

lias certainly bought the individ¬
ual product. But he has not bought
the

trade-mark and he does not,
by any stretch of the imagination,
have the right to debase it or to

it

use

as

a

to put other

weapon

retailers out of business.
•

The

United

States

Supreme

Court has said all this of the

non-

signer clause in its best judicial
style.
The Supreme Court said
this in 1936 in

decision the op¬

a

ponents of fair trade like to forget
about.

It

was

unanimous

a

deci¬

whole economy.

"Fair Trade"

One of the most

Competition

best

peal of the anti-trust laws

the

frequently

re¬

peated charges against fair trade
is

that

it

is

restraint

a

upon

our

system of free competition. I often
wonder

whether

this

tack

and

blind

those

bemused

are

who

take

by theory

on

kind

of

competition,

fair, where the efficient little
man gets a chance to stay in busi¬

ality must take into account this
1936

decision.

Here

is

what

the

Supreme Court said of the nonsigner clause in that decision:
*The challenge (against the Illi¬
nois State Fair Trade Act

in

the

Old Dearborn case)
is directed
against Section 2, which provides
that willfully and
knowingly^ ad¬

vertising, offering for sale or sell¬
ing any commodity at less than
the price stipulated in any con¬
tract

made

under

Section

1,

whether the person doing so is or
is not

a

party to the contract, shall
constitute unfair competition, giv¬
ing rise to a right of action in
favor of anyone damaged
thereby.

*Tt is first to
Section

2

be

observed

reaches

not

the

that
mere

advertising, offering for sale, or
selling at less than the stipulated
price, but the doing of any of these
"things willfully and knowingly.
We

are

mine the

not called
case

of

upon

one

to deter¬

who has made

Ms purchase in ignorance of
contractual restriction upon

celling price, but of

the

the

contractual

who,

with

re¬

such

Jaiowledge, nevertheless, proceeds
willfully to resell in disregard of
it."
me
a

stress these final words

retailer

knowledge,
willfully to
it."

tion

This is
of

"who, with such

by

a

that hasn't

enacted

strain

what

very

precise descrip¬

some

nents of fair trade

of
are

the

oppo¬

today do¬

ing in the marketplace. They are
deliberately seeking to get a day
in court in the
hope of

found

that

the

human

results

of

unbridled

competition, with no
holds barred, were sadly different
from

the theories about how free

They




would

have

been

do

with

brute

brands

eco¬

me,

painfully, of the totalitarian credo
—the

end

justifies

the

means.

Fortunately, the American people
will not buy this kind of false
philosophy. They insisted that re¬
straints be put upon the forces of
brute competition so that the hu¬

factor would not be
trampled
The
Sherman
AntiTrust Act of 1890 was such a re¬
man

underfoot.

straint.

The Federal Trade Com¬

mission

Act

and

Patman

Act

and

Exchange

straints

the

Robinson-

the

Act

Securities

are

all

re¬

competition; these
laws are now universally
regarded
as
enlightened restraints, although
they were bitterly opposed by
upon

when they

many

introduced.

were

The fair trade acts

are

similar

re¬

concern for

the social

good.
Let

me

broad

be

more

purpose

is

to

of

specific.
the

The

anti-trust

prevent the growth of

monopoly power and the evils it
produces. As a means to this end,

price-fixing,

—

squeezed out of existence despite

would do

well

take

to

look

a

at

mously in scope and in complex¬
ity. They will find giant retail¬
all

ers

ped

over

with

the

landscape, equip¬
dollar resources

huge

and vast
are

trade

ufacturer's

trade-mark.

Consider!

how this brand-name economy

hasj

vital part in the develop¬
production sys¬
tem which has given us the highest*
standard of living in the. world.
played

a

ment of our mass

The mass

production of consumer
a mass market for

goods requires
these
the

goods, if the economics of]
assembly line are not to clog

and break down, with conse¬
quent
business chaos.
Brand
names and trade-marked products
up

built

have

this

mass

market

tribution of national brands.

Exclusive of

The

trade-marked

in

lion

other than fair trade.

and magazine

Newspaper

publishers, through

consignment selling, require every
newsdealer to sell their publica¬
tions at prices established

by the

collusive

broad

purpose

of

the

fair

laws is also to

prevent the
growth of monopoly power. As a
means toward this same
end, the

do. He cannot sell unknown mer¬

chandise
because

capital,
research

on

he

the

his

reputation'

own

does

not

have

merchandising

resources

and

the!
and

the

ad-|
newsdealer were to
vertising budget to compete on
below the pub¬ such terms with the
giants. He can
lisher's established price, he would
and does sell advertised
national^
immediately find himself with no brands where the trade-mark de¬
papers to sell. Automobile manu¬ notes
that
the
manufacturer's
publisher. If
sell

a

a

newspaper

now

ufacturers'

which

trade-marked

brands

not include the additional billions

the bread and butter of

are

represented by sales of the price-

guarantee of quality stands behind ]
every

sale.

Without

national

brands, without the trade-mark
protection at the retail level pro¬
vided by fair trade, small business1
would wither away.
"Fair Trade" Does Not Mean

Higher Prices

—

;

The opponents of fair trade are

still making and will continue to
make a false hue and cry that fair
trade

means

have

a

higher prices. They
$2 billion lie — a real
They claim that fair
store-controlled brands, which are
It should be noted that fair trade whopper.
trade costs the American people
as national as any manufacturer's
is the only form of resale price
about $2 billion a year. I arti going
brand. The interest of these stores maintenance which specifically
to give you the answer to this lie
in
their
own
store-controlled requires competition in the very
so you will be prepared
the next
brands is reflected ijp the fact that language of the fair trade statutes.
time you meet it. The lie is based
the store-controlled brands of one Both the state statutes and ' the
on
spurious figures obtained by
giant retailer account for 90% of McGuire Act stipulates that no
that store's total annual sales vol¬ product may be fair-traded unless shopping around for loss leaders
the small retailer, but all of them
also
have
their
own
powerful

ume

in a

i

e

brands of me

d,

store-controlled

giant retailers.

offered by certain stores at certain

of $2.6 billion.

it is in free and open competition
times.
This is hardly scientific.
trade, at the first with articles of similar class pro¬
You can always find what you
breath of a price war, these giants duced by others.
want when you start out with an
would not hesitate to drive wellThere is nothing complicated or
angle. If these same stores had
known national brands down to
sinister about price maintenance. been
shopped at the same times
bankruptcy levels — bankruptcy In whatever form it is
used, it has for the worst bargains, the highfor small business.
It is signifi¬ the
same
purpose,
namely,
to profit merchandise that they push
cant, however, that the giants
guard a producer's trade-mark and with their offer of loss-leaders, the
have absolute price control over
his distribution system from the conclusion would have been that
their own store-controlled
brands, disintegration
caused
by
price these stores are mulcting consum¬
without
any
reference
to
fair wars. A manufacturer's
right to ers every day.
trade. The giant retailer sets the
safeguard the property value of
Those
who
fabricated
the
$2
price arbitrarily at which all his his
trade-mark, the symbol of his billion lie compared the loss leader
outlets will sell a specific store
business reputation, is at the very prices and the fair trade
prices of
brand.
core of the philosophy of fair trade certain,
highly
selected
items.
In this context, if fair trade
just as it underlies all other sys¬ They found that at the time these
were
outlawed, national brands tems of resale price maintenance. loss-leader items were purchased
and the independent retailers who
Indeed,
the
whole
controversy from a few stores, their prices
carry them would be exposed to about fair trade is essentially the averaged
15% below fair trade

Without fair

new

lows

gling.

of

scathed.
of

fair

price

the

nesses,

the

trade

the

are

vicious

price-jug¬

what prices. They then assumed that all
in retailers in America could and
the giants would be un¬ his trade-marked
product after would sell all fair-traded mer¬
Thus, if the opponents that product has passed into the chandise at all times at 15% less

wars

leave
with

of

But

price-fixing between competitors. brands
The

-

of

com¬

This whole approach to the
nomic side of life reminds

and

again, through the identifica-

tion and endorsement of the man¬

giant retail¬ through nation-wide merchandis¬
J
ers.
The twenty top giants alone ing and national advertising.
At the same time, the brand-name
did $15 billion in sales last year;
the majority of these sales were economy has helped small business'
to exercise a significant and in¬
accounted for by their price-con¬
dispensable function in the dis¬
trolled,
store-controlled
brands.
controlled

operating facilities. There
some 400 giant retailers
facturers, through exclusive
in the United States, with 100,000 dealerships, can and do suggest
petition. It becomes gang rule outlets. The
top 20 of these mam¬ resale prices to their dealers—and
where might makes right. The lit¬
moths—just 20—will this year sell these suggestions are acted upon.
tle fellow is ruthlessly
disregarded 25% of all the merchandise sold
Roughly speaking, for every dol¬
and sacrificed to the mythical idol
over the counter in this country.
lar of vertical resale price main¬
of unrestricted competition when
Most of these giants are bigger tenance in America based on fair
any business method, foul or fair,
than 99% of the manufacturers of trade, there are five dollars of
can be used without
regard to its national brands.
maintained prices not based on
effect in society.
These giant retailers carry man¬ fair trade. And this estimate does
competition becomes

killing fair fair trade laws permit vertical re¬
defying sale price maintenance between
Congress, the U. S. Supreme Court seller and
buyer only under con¬
trade for good.

America

happened to the Ameri¬
growth of monopoly power. The can
marketplace in the last two
fact is that the
people of our decades.
They will find that retail
American
democracy
long
ago competition has increased
enor¬

nevertheless proceeds the anti-trust
laws prohibit hori¬
resell in disregard of zontal
a

retailers,

many

manufacturers—

to

and

what has

hypnotized

economy

really existed since the first laws
were

laws

Let

about

and

the backbone of small business in

nothing

possible for the consumer to buy|
goods of a standard quality again]

re¬

are
an

liberty with

such
and

trade,

wholesalers

has

makes;

it

the

of

Could it be

respecting
striction

without fair

country

fair trade. I have cited the store-

century.!

by Congress to

they

model

reality.

who has had definite information

purchaser

trade

last

the

brand-name economy

This

this, at least $30 bil¬
giants of the retailing world, as
goods are
we
have seen, can develop their
the extraordinary rise in U. S. na¬ sold every year through forms of
own
store-controlled
brands
asj
tional income.
resale
price maintenance which
keen contenders for the customer's!
The opponents
are
based on legal
of fair trade
frameworks
favor. This, the small store cannot

to

straints and they are in this
great
tradition of tempering individual

a

fair

no

laws, is a matter for speculation.
The spectacle of the price wars
las year, however, provides ample
justification for the belief that

since

America

unfair competition and

that

sion upholding the constitutional¬ competition should work. In prac¬
ity of the State fair trade laws. tice, in the marketplace, unbridled

Any future test of the McGuire
Act before the high court of our
land on the issue of constitution¬

been

I

..

State fair trade laws recog¬

Tne

ally, fair trade is an indispensable!
fierce part
of
the great brand-name!
economy
that has grown up in]

but

had

distribu-|

It is the

consumer's best interests.

re¬

there

honest

nize
this
problem and offer a.;,
competition is good practial solution for it. The U. S.
economy.
It Supreme Court and the Congressenergizes industry and serves the has upheld this approach. Actu-|

opponents of fair trade for the

if

Restrain

Not

his

to be guilty of extor¬

American

opponents

Does

the|
rnanu-|

kind of

the

for

Actually, no re¬
required to handle any

It

and

tors appear

products

willing retailer.

attached

pric

while

public eye, making both the

here to stay and must be met. So
it is clear that fair-trading manu¬

This

Competition Has Increased Under

public.

the

by

helplessly

jugglers debase his product in

facturers must establish minimum

I recognize too that theory that they restrict free com¬
of fair trade are petition. Consistency would seem ness for himself if he has what it
trying to create a general bias to require them to do so; instead, takes. It is competition with fair
tailer is
against fair trade. The numerous they condemn fair trade, appar¬ trade and fair play.
fair-traded merchandise. The most
supporters of fair trade must be ently because it is a similar re¬
generous estimate shows that fair
Fair Trade Not "Price Fixing"
prepared to meet this challenge. striction. Yet under fair trade, in
trade accounts for less than 10%
The facts on and the philosophy
the past 21 years, the number of
It is indeed ironic that fair trade
the total retail sales volume in
of fair trade must be brought to
competitors and, therefore, the is singled out for the "slings and
America.
Accordingly, there
is the American people—just as they
extent
of
competition, has in¬ arrows" of distortion and misrep¬
plenty of non-fair-traded mer¬ were
brought to the Congress. The creased. The Department of Com¬ resentation. It is called "price-fix¬
chandise available to any retailer
opponents of fair trade will con¬ merce shows that the number of ing" because it is based on resale
who does not like the fair trade.
tinue to do everything possible to retailers in this
country has in¬ price maintenance. Opponents find
If a merchant chooses to stock
throw fair trade out of focus in creased
by 300,000 since the ad¬ it convenient to ignore the fact
a
fair-traded
product knowing the
public mind. It is up to all of vent of fair trade. This increase that fair trade is one—and only
that it is fair-traded, however, the
us
to put fair trade in focus for
has taken place concurrently with one legal framework for resale
non-signer clause requires him to the
public, so that they will be a great and unparalleled growth
price maintenance. The fact is that
observe that product's fair trade
able to see fair trade in its true in
giant retailing. What might the greater part of legally accepted
price. This is a part of his State's
perspective as a tested benefit to have happened these past 21 years, resale
price maintenance in this
system against unfair competition.
kind of handcuff

some

seal of

which will meet this competition.

I do not hear outcries from the

recognize that fair trade is not

eral

the

curbs

the

on

legislation

serving as a

stand

without bene¬

consumer

with his trade-mark

tributors of national

competi¬

inate

fit to her

Fortunately, we have fair trade
safeguard fair competition. But

merchandising, to the point where
it wins wide customer acceptance,

it offers

superior dollar power to elim¬
small competitors and who

use

American

to relax to manufacturers and dis¬

ruthless behavior of retailers who

enacted by those who sit in Con¬
I

trade

the

and

State

unfair

curb

of

fair

anti-trust

the

to

detriment

1952

Thursday, October 2,

quality. Must he be forced
to risk the irresponsible destruc¬
tion of all he has built up, must he

tion in order to promote fair com¬

gress.

ers?

The non-signer clause has been
distorted and misrepresented
as

battle—in

another

the

consumer.

competition by insuring that
be plenty of competi¬

tors.

The

laws.

State

own

competi¬
promotes

there will

other
teeth if it

fair
thus

trade

...

of

store-controlled

had

their way,

the

future

marketplace

wrecks

while

would march

of

the
on

to

strewn

small

giant

the

would

busi¬

retailers

monopoly, to

very

rights

simple
a

question

of

manufacturer retains

hands of distributors. In the final

than

fair-trade prices—if the fair

analysis, the manufacturer has the trade laws were repealed. They,
greatest stake in his trade-marked further assumed that fair trade
product. He has developed
the accounts for $15 billion of annual
product, through years of hard retail sales volume.
mese assumptions
work, research investment
and

are

patently

Number 5156

Volume 176

.

.

The Commercial and Financial Chronicle

.

(1249)
unwarranted.

knows

Nobody

what

actually
figure for fair

this

;trade sales is, but the most in¬
formed guess is that it is about
$6 billion. As to the ability of all
retailers

sell

to

fair-traded

mer¬

chandise for 15% less, the fact is
that

America's

.pay

out of their

actually
pockets about
$4 billion for the fair-traded goods
which they sell for about $6 bil¬

to

sustained, all America's re¬

tailers would have to go broke,

selling all fair-traded goods for
exactly what they paid for them.

[There would be no money left for
rent, salaries and the thousand and
other items that enter into the

one

cost of

running a business.
penalizing the con¬
sumer, fair trade prices, very im¬
pressive evidence has proved, ben¬
Far

from

the

efit

Nation-wide

consumer.

research shows that in the 13 years
from 1939 to 1952, the prices of

in

goods

the

case

of

the

by

sold

out-of-State

an

than

Continued from page 14

In

floor

debate

Senate

the

on

was

passed, Senator Schoeppel of Kan¬
said:

sas

"The

Wentling

terated economic laissez-faire but
rather that it has been character¬
ized

the day the McGuire Act

the

decision

almost

by

complete

enforcement

fair trade act

of

a

in

follow the line

The

merce.

Wentling decision's
practical effect is to permit mail¬
order

houses

who sell

and

sovereign States
R.

would

retailers

State lines to dis¬

across

the fair-trade

regard
of H.

other

laws

of

45

Paragraph 4
(the McGuire bill)

5767

.

.

.

the

overcome

Wentling

these features made up its essen¬
tial pattern. In order to make this

most

have easy access
suitable for agricultural

believe

established

policy

live

in

without

areas

paid for the

fair

trade

products.

same

shown

in

practical
trade
of

prices.

most impressively
that they like fair
In the past 20 years

fair

trade, they have consist¬
ently
bought
more
fair-traded
goods when they were quite free
to

buy other competing, non-fairtraded products.
It is clear, on

the basis of this

record, that fair trade prices have
in

no

way

inflation. All

caused

last year, when fair trade was vir¬

fair

Federal

a

that

language

trade

Con¬

it

require

policy,
single cent

a

Federal money or a

or

single iota

of Federal enforcement. It does not

force

laissez-

fair

trade

enable

on

State. It

any

those

ex¬

which

treme

convenient

are

The first

principle of this

that

is

individual

sys¬

farmers

Fair trade plays a

ciety,
has

a

the

our society an open so¬
society in which everyone

chance

to

should

to lands tive
and

use

that

efforts

by
standardizing
breeds or types of livestock, field
crops, or horticultural products.

to

or

lands

improve

the

manager

already appropriated, Gov¬

ernment

variety

has

stepped in with a
reclamation works-

of

has

been

the

through
credit

strongly

bulwarked

perfection

institutions

of

their

in

our

rural

some

combination

a

both.

of

In order to facilitate farm pro¬
duction and to ameliorate rural

upward,

move

guards freedom of opportunity in
land

our

because

it

helps

small

include

even an

of huge retail organi¬

age

with

vast

both

roads

automobile age and

mail and express.

Likewise in the interest of mak¬

aggregations of

tually inoperative because of the
capital. By restraining the unfair
Schwegmann decision, the cost of
.competition of price-juggling —a
living continued to rise. When the
powerful weapon by which the
Supreme
Court
weakened
fair
giants of retailing can destroy and
trade in May, 1951, the cost of liv¬
eliminate their small rivals—fair
ing index stood at 185.4. One year trade
ensures the continuing exist¬

an

Pr°vide rural free delivery of

business to survive and thrive in

zations

farm-to-market

suitable to

the farm both
place to work and
ing

a more

efficient

point where the market
mechanism affects the determine—
tion of prices, that led—23
years
ago — to the adumbration of a

logic of government control within
the agricultural
industry distinct¬
ly at variance with the American
farm system up to that time. With
the

accumulation

decades and

market and the comparable
provision of short-term produc¬

money

exercise

cient

his

of

of

these

two

of practical ex¬

more

perience with

system of positive
regulation for the agricultural in¬
dustry, it should be possible now
a

to set forth with some

clarity the

reach

managerial

freedom.

Finally, in spite of the in¬
herently small-scale character of
farming, the development of the
institution of the cooperative as¬
sociation under legislative spon¬
sorship has enabled farmers to
secure
group or large-unit effi¬
ciency
in
the performance
of
many functions of the farm with¬

a

reasoned

basis

for

con¬

cluding that such positive control
presents

better

a

lural economy or
our

Sixth, during the last three de¬
proprietor cades, the
efficiency and security
usability of of the individual farm

land for the individual

boss. This free¬

own

reaching of an ap¬
on the ability of

ceiling

older, looser system. We need to

tion
and marketing credit have
life,
public monies have been
given the farmer access to the
spent, often disproportionately, to sources of
dom of opportunity is one of our
capital in ways that
enlarge the highway network to are essential to the full and effi¬
proudest
traditions.
Fair
trade

to become his

the

was

of

suc¬

quite

tary limitation of private produc¬

want effective fair trade to have it.

keeping

It

sense

toward volun¬

some

cessful movements

And

large, some
small; some department. The long-term am¬
Federal, some local—designed to ortized
mortgage at rates as low
furnish irrigation or drainage or
as are consistent with the general
vital role in
which

States

unduly our traditional
personal freedom.
parent

farm

infringing

logic upon which it proceeds and
to compare it with the
logic of the

illustrations.

have been

there

ownership should be in fee
The McGuire Act does not simple. To enlarge this supply of

does

nor

"assisted

of

one

faire."

the

establish Federal fair trade

the
way

that

rejected by the

was

gress.

does

Consumers themselves have

significant

through

wide surveys in 1949 and 1951, by

leading national brands of
drug products than consumers who

is

every amendment proposed for

the

pay less, over-all, under fair trade

been

it

an

in
the interest both of farm producer

problem

."

.

managerial freedom to

productive,

Further, two six-month, country¬

I

.

of

infringes the rights
neighbors or jeopardizes
the welfare of the community.
and town consumer, Government Weed
control,
the
compulsory
has, however, been' active in sev¬ vaccination of animals, sanitary
eral ways.
In the cogent phrase standards of dairy production, and
of John D. Black, this system has uniform
spraying of fruit trees
life

of

way

tem

for

convenience.

or

establishing of these stand¬

individual

without

individual
proprietorship, even
Freedom of action ards
constrains his own action
family farm proprietor in only to the extent that it prevents voluntarily associated in coopera¬
tive
organizations, to be effective
moving wherever he liked, buying him
from
indulging either in at the

McGuire bill to meet the Wentling

largest independent
research
agency,. A.
C. Nielsen
Co., has revealed that consumers

?

The

freedom.

decision.

world's

agents according to his
Th

to

the

of

7,000 fair-traded drug store
products rose only 16.4% while
the over-all cost of living index
soared 90.2% in the same period.
over

mana-

down

components

holds whatever equipment and
supplies careless or in fraudulent practices
State he
thought needful and could af¬ which would demonstrably harm
any other State ford,
producing whatever seemed the consumer, the distributor, or
having a fair-trade law constitutes most
promising, and selling his his fellow producers—eventually
an unlawful burden
upon, and an produce wherever and
however himself in the collective sense.
interference with, interstate com¬ he could net
the "high dollar"— He is not free to

that

machinery which shall be ef¬
in breaking these aggre¬

gates

Agricultural Control in U.S.

prices in the

State where the mail-order opera¬

on

tive

fective

lower

buyer

minimum

tion is located."

lion. For the $2 billion indictment
to be

business

mail
order, by prohibiting setting prices

retailers

own

small

to

fair-traded

31

logic

times, it presents

vincing logic.
To such an end

and

us

less

a

the

for

that, for

con—

must first set

we

out the basic thesis of the central-

direction theory. Since it did not

"Proot the old practice

^fopos^
of

family farm management and
supersede it with a wholly differ¬
ent pattern of collective
farms, we
need to

see

step by step how the

approach1

fgffegate

^

was

plder disparate prac-

tice

The
decade 1922-1932 was a
transition period of great historic
importance
in
the
history of

American agriculture. The drastic
conditions of a severe and per-

agricultural

depression

persuaded

many
farmers
that
managerial freedom within a set¬
ting of facilitating institutions—

a more pleasant
live, Government has
educational, advisory, credit-sup¬
plying, and market-improving ■
progressively
provided for
the
was
not adequate to meet their
widespread distribution of elec¬
needs. They read the
tricity for light and power and
history of
later it stood at 188.7. So the ab¬
their times as
of telephone service for business
ence
of
small
indicating that they
business.
Unless
out sacrificing basic freedom of
sence of effective fair trade did
and
could not prosper
pleasure
to
farmers
who
small business is kept in the run¬
except as they
managerial choice. In the agri¬
not
ease
the heavy
elected to settle and work in areas
burden of
gained control of aggregate sup¬
ning by fair trade, all those Amer¬
cultural depression of the '20s, ef¬
inflation.
so remote or so thinly
ply and manipulated
populated forts were made to
it to get
icans who have the unquenchable
give national
urge
to
work
for
themselves
A. private
enterprise was not, cooperative associations a monop- significantly higher net prices for
Law Covers Mail-Order Business
at the given time, ready to extend
rather than for others, will find
oloid character which would make
X would like to clear up one im¬
sold an<i/or
them
these services on a
comsufficiently lower prices for the
the door of opportunity slammed
them a position factor in deter¬
mercial basis. It is now estimated
portant point with respect to the
things farmers buy so that their
tight against them. The American
McGuire Act and the problem
that 85% of our family farms have mining the level of farm com¬ real
income
position
would
be
dream of the right of the little
raised by the Wentling decision of
been enabled to avail themselves modity prices.
materially improved. They sought
fellow to
achieve independence

to

place

*

™ffi^r°fiUCtf they

the

Third

U.

S.

Circuit Court

of

Appeals. Under this decision, mail
order

houses

Who sell

and

across

other

retailers

state lines

and other states. The McGuire

an

empty and mock¬

ing delusion.
and

of

this

ui

able,

dream

specific provision
designed to meet the Wentling de¬

comes more

cision. In paragraph 4, it says that
neither the making of fair trade

and

this

vital than

contains

contracts

clude

a

or

agreements, which in¬
non-signer clause, nor

the

their enforcement under state law
"shall constitute

an

unlawful bur¬

den of restrain upon, or interfer¬
ence

When

ever.

examine the history of the rise
totalitarianism, we find that
people turn to it when their lives
are
without hope, when a bleak
we

future

of

poverty

and

economic

practically

standard

a

farm

any

fore

them.

seems

is

This

when

bread

important than free¬

more

But

when

These

features

seven

cover—I

completeness—the

ot

of

tern

agriculture
in

evolved

economic pat¬

which

United

the

had

States

up

pioneers
system
from privation. It had not given
by which managerial freedom was
rural people a protective armor
preserved by helping it to rise to
a
high level of efficiency was against any exploitation by indus¬
through an elaborate system of trial, commercial, and financial
educational aids. This educational groups as the latter from time to
complement of

the

time

kept

developed

vices

individual

means

no

of

their

the

power

new
own.

Nor

de¬

had

it

proprietor's traditional
began with the agri¬ provided an economic stabilization
against cyclical de¬
cultural college almost 100 years mechanism
technique

with all the provisions of the
McGuire Act, paragraph 4 simply
recognizes the rights of states to
establish and carry out policies to
restrain unfair competition within

of pressions following war or break¬
experiment sta¬ down stemming from some other
work their own land—and when tions,
flexibly coordinated through cause. By the 1920s, public opin¬
those who do not are guaranteed a Federal
office, a far-flung sys¬ ion was ready to make a break
the chance to rise into these eco¬ tem of extension
specialists, scien¬ with the old logic of institutional

their

nomic

voluntarism

cure

to

borders,

tions

in

including transac¬

which

the

snoved in interstate

goods

have

commerce.

Whether the McGuire Act's pro¬
vision to meet the Wentling bar¬

own

their

millions

business,

of

own

citizens

It should be clear that whether
or

not small business

tact is

more

than

a

remains in¬

matter of

adequate from a judicial nomic
preference. It involves
standpoint, only subsequent court
of

sidered

experts
vision

can

reveal. It is the

con¬

judgment of many legal
on

is

courts in

fair trade that this pro¬
adequate. Further, the

interpreting the McGuire

Act, will have before them the

pressed

intent

of

the

ex¬

Congress

with respect to the Wentling prob¬
In

lem.

floor

debate

the

on

McGuire bill, the day the House

passed

it, Rep. Robert T. Ross
(Rep., N. Y.) said in a speech
strongly endorsing the McGuire
bill:
"It

♦-.

.

.

provides further protection




agricultural

and
groups—they are then se¬ tific
practical
agricultural
against the blandishments of curnculums in the high school,
the false messiahs of collectivism. boys' and girls' farm
clubs, and

rier is

decisions

It expanded into a system

property, 48

our

some

most cherished institutions.

For small
our

eco¬

business is essential to

political and social democracy.

Fair trade is essential to the

con¬

tinued existence of small business.

That

fi why the Congress of the

United States passed the McGuire
Act to restore fair trade to full

effectiveness.

That

is

why

I

am

satisfied that fair trade will with¬

stand
and

the

that

firmly

current

attacks

it

emerge

secure

will

than

ever

as

on

one

the major bulwarks of fair

petition. Fair
here to stay.

trade

is

it

more

of

com¬

definitely

adult

study

Bureau and

other.

local

the

end

groups, Farm
All this is to

making factual infor¬

of

for

agriculture

and

seek to develop a new way of
economic life so basically differ¬
ent

that

tive of
it

in

the

historic

perspec¬

foday, it seems fair to call

revolutionary.

marketing agencies, processors
products, and the manu¬

of farm

facturers
farm

The

From Voluntarism to Central

business

The

decisions.

Advice

new

trol or even

commanded the allegiance of an
increasingly
potent
ideological
group is based on the proposition
that locally autonomous solutions
of managerial problems cannot, in

this

Fifth,

we

velopment

ar<^S
and

constraint

are no

part

picture.

as to
as

may

of

mention the de¬

government

stand-

&rade, as to package,
trade
practices.

By

which from 1921 forward has

the nature of the

solution

case,

add

up

to

them, the individual farmer is
protected against exploitation and

a

helped

inde¬

start at the other end of the line

choose

by computing national aggregates

processors,
com¬
dealers, and other dis-

(within the international setting)

pendent

freely

mercial

to

continue,
proprietor,

among

as

an

to

gate

ana

It

then

correct

proposes,

devising

in

the

aggre¬

therefore,

an

of

associations.

step

taken
central

The

in

this

through the
cooperative

logic

economic

process
of adjustment
supply conditions to gen¬

of local

eral demand and should

interpret

general and special demand situa¬
tions

to producers of the various

commodities. That is, like the in¬
farm
manager,
they

dependent

sought to perfect rather than to
supplant the apparatus of the
autonomous commercial market as
the

mechanism for

income

stream

productive

the
time—and

during

the

years

al or
Marketing Act of
centralized

associations

perform

rent

guiding
In

^ War 1 and before

-

operative
to

distributing the

and

process.

actively

not

competitive

of

co¬

undertook

merely

adjustment

the

cur¬

supplies

demands

to

but

sought
also to equalize
supplies between

producing

years under a more
interpretation of the
concept of "orderly
marketing."
ambitious

At

this

to

administra¬

of

and

of
the
earlier local and overhead
co-ops
was that
they should improve the

i oon

life

supplies,

small

1929—federated

philosophy of economic

available if it is sought, but con¬
of

merchandisers

was

formation

fhiGA

Planning

is

first

direction

more

constantly available and
giving the farmer better an¬
alytical tools for using it in his

and

equipment,

services.

mation
of

to organize their group
against the organized power

way

power

by

our

a

think with essential accuracy and

to the end of World War I. It had

box.

A fourth feature of

subjection stretches endlessly be¬ and research

dom.

with, oommerce."

and

right be¬ erecting

of

Act

?£JTu ch01lce of electricity, nearly
e telephone service avail¬

this present time of trouble
family can get rural free delivery
insecurity, the preservation of mail and parcel post by merely

At

dis¬

can

regard the fair trade laws in their
own

will become

point

we

see

the

alle-

fllnC^e °/ .American agriculture to
the doctrine of
managerial

vidualism

giving away to

Continued

on

a

indi¬
new

page 381

f

38

(1250)

The Commercial and Financial Chronicle...

Continued from page

material

37

There

position

ferences in

of

efficacy

the

in

larger

a

fective

over

period

a

of

of

production

issue in two parts.
the

cerns

concerns

the

means

tion

for

reaching it.

that have been adopted

Under the

older

years

than

has for

The "commodity been achieved so far. In a few
marketing"
associations of the limited and specialized lines, co¬
20's undertook to pool the selling operative associations have made

themselves in

putting

vorable

part.

compliant

the way

fa-

as

price

The

second

subtle

more

The

two

stated

under
are

Will

may

prices

intervention

be

aggregative

in

th

througi

through subventions

or

lated to supply operations.
ham Lincoln

the

and

re

Abra

proposi

tion that you cannot have

try half slave
the

Veither

process

argued

thus:

(I)

governmental

ques-" income

system

questions

fected by ukase or
by actual gov
ernment
operation
but
throug

con-

signifi-

our
economic actions
organized and conducted,

income position as pos-

an

change.

the

the

of

The first

technological

the

of

cance

which

system, the objective was to give
definite iarmers the best possible facilities

unless it provides a more

plan of organization in which the
farmer
would
be
a control

individual

farmer,

in which the
objective has been defined and in

Agiicnllmal Control in U. S.
faith

the

of

however, marked dif-.

are,

Thursday, October 2, 195

a

coun

half free.

Ex

perience indicates that the samt
self-sustained. proach to rational
guidance of ag-' proposition applies to a
price sys
structure of prices, farm and nonriculture bring about better allo- tern.
When
government
inter
operations of considerable groups progress toward such control. For farm. Under the newer system, a cation of resources within
agricul-' venes to set certain prices, it dis
the great staple products,
however, price or Income target is set under ture and between
of producers, who made firm and
agriculture and turbs a net of cost,
the problem still remains for fu¬ some kind of ethical standard
profit, capital
and other
legally enforceable contracts for
uses, and promote sustained forming,
ture solution."
and spending
relation
the exclusive distributive service
government undertakes either to high general
productive activity? ships which must then be com¬
Within
of the overhead marketing agency.
less
than six
months, adapt farm operations to the at(H) will the centrally-deter-' pensated or the economic
proces;
These agencies sought to admin¬ Congress
had enacted
the
first tainment of this figure or to make mined (or
formula) allocation of is impeded. These
changes are to<
ister or manipulate the total sup¬ Agricultural Adjustment Act.
about
the the farmer's
In payments that bring
part of the national complex and subtle to be
corpply to the greatest advantage of it the Federal Government boldly stipulated income without adjust- income stream produce a better¬
prehended in their entirety or rethe group and to have all mem¬ accepted
the
responsibility
for ing the farmer's operations. As to maintained and more
technically uuceq to any formula. The verj
bers or all of a particular category setting production totals of stable method, the older system relied correct
expression of the great idea of a formula
stultifies th<
the
educational
of members share equally in the /arm products and administering on
process
and economic motive
forces, to wit,' need for universal and cor.stan
series of devices designed
return rather than have their re¬ a
flexibility
of
"spot" the propensity to
to complete
produce, the flexibility which is the essence o
ceipts differentiated according to jause the individual farmer to judgment by the administrator of propensity to spend, and the
pro- market guidance.
individual
luck, shrewdness, or lave his productive and market- each firm. The new system starts pensity to save-invest?
We could even concede the con¬
with a legislatively set formula of
strategic position. Generally ng operations become a consistent
Now yQu may feel ^ thege ceptual possibility of a formula¬
over-all distributive relationships
speaking, also, these large coop¬ part of this national managerial
tw0 jssues should have been stated tion which would make all
thes<
time
to
than to be guided (amended from
eratives expected to derive some plan rather
time), as affirmative
propositions in my relationships definite and consist¬
merely by his personal preferences provides a legal apparatus of supmarket advantage from the build¬
ent.
But its rationale would b<
introductory
paragraphs
rather
ing up of a monopoloid position in md judgment. During the 19 years ply controls for reaching oi ap- than being posed as
questions now some ethical or aesthetic absolute
the market. Almost never did they since that time a series of Agri¬ proachmg that relationship,
and and that
j sh0uld then have pro- As such, there is no assurance tha
■onfers
administrative discretion
acquire or seek to exercise quan¬ cultural Adjustment Acts, Market¬
ceeded to a powerful argument in it would evoke the
response oi
titative control of supplies though ing Agreement Acts, Conservation
furnish the motivation to the va¬
and Domestic Allotment Acts have
nterprexing tne tormuia ana inin
they did develop qualitative regu¬
—or perhaps a
negative one. Per- rious
spenders,
producers,
anc
lations which might limit total nought to perfect a system of gov¬
sonally, however, I am neither a savers that would cause the eco¬
enaum).
market supply or limit supplies in ernmental gauging of farm sup¬
master nor an admirer of that sort nomic process to
go forward ef¬
Now within the rich
particular segments of the market plies to market demand at a de¬
variety of of dialectic. I believe it is nec- fectively.
Even the scanty evi¬
nned price level or, to a limited iiuman
behavior many different
through grade or delivery-time
essary to see in perspective the dence that seeps around or undei
extent, an desired income level.
patterns of economic organization
regulations.
way in which a new element has the Iron Curtain gives abundani
The advent of the Agricultural are workable. But the change in been
introduced in the evolution evidence of that fact. A markei
By
1929, farm demands and
Adjustment Administration, fol- basic logic which has here taken of our institutions and our
group system must by its fundamental
public acceptance moved a step
awed
by
the
Production
and place is so fundamental that we behavior
if
we
are
to
judge nature be pragmatic, not categori¬
further. In the Agricultural Mar¬
marketing Administration, repre- need to face frankly the question whether the newer logic will
sup- cal.
keting Act of that year, a distinc¬ ents an
acceptance in a major whether we will follow the new plant the old or will
prove to be
But there is a third
tive change was introduced into
difficult}
egment of our economy of the lead or whether known economic but a
passing experiment,
in the way of the formula
our
agricultural institutions. Its
ap¬
political)
principles
raise
jgic of national economic and so- (and
In thiq POntpvt
thpn
T will ~jvp
proach
to price-making or dis¬
logic rested on the premise that jial
planning. It is not authorisible

parts of

as

a

!0me referendum*)0 S

it

desirable to have

was

a larger
arian planning such as we see in
marketing"
Jommunist countries or even So¬
or supply
equalization, both areal cialist planning such as the Labor
and
temporal,
than
any
con¬ Government of Great Britain has

scheme

of

templated

"orderly

attainable by private

or

cooperatives.

Thus

Government
the

the

Federal

undertook

to

carry

national

surplus in several
major products and to administer
it

under

eight-man

an

board

of

the period of assisted laissez faire.
major
portion
of
American

agriculture followed and still fol¬
lows the pattern of independent
managerial decision, with volun¬
tary use of privately organized
commerical

and

financial

facil¬

ities, of cooperative facilities
der its

ment

own

fields.
cise
and

control,

facilities
It

in

continues

few

of

use

limited

also to

this free choice

un¬

of govern¬

or
a

of

facilities

exer¬

activities

under

the

advisory educational guidance

of

srsstir? •ssss*
fufded
dUterently questions

It is democratic

used

je

of

orms

nd,

to

in

experiment
economic

the

light

with

new

organization

of

ment.

we

economic

paratus

of American farm
policy and practice. I answer both

„

economists

are

course

be

profes- questions in the
negative. Merecrite\y stating the premises from which
riori
tnat of
efficiency or of get- j arrive at these conclusions
will,
ling
the maximum
amount
of n0
doubt, start off a spirited dis-material return from the use of
cussion, and such discussion is
given, i.e. limited resources. It is
the major value of these sessions.,
sometimes
said
that
as
social in
spite of my conclusion that the

sionally

committed

to

one

scientists

we
must
subordinate
this materialistic objective to another objective that lies

deep

our

and

mores

indeed

in

macrocosmic factor in

agement

in

duced

hu-

our

is

It

future

Criteria and Evaluation
As

tributive intervention

as j have set them up
and my prognostication as to the

svstem
system.

g

,

toying with.

/fanning, in which the machinery
1 representative government can

experience,
economic strategy — the Federal
j
introduce
perfecting amend¬
Farm Board.
ments into that organization.
It
The Agricultural Marketing Act
iffers
distinctively,
however,
the
certainly did not mark the end of rom
traditional
American
the period of assisted laissez-faire.
ystem in that it moves from deA

2

.

been

ap-

0dd

which

has

through

the

farm

man-,

intro-

been

in

that

the

formula-making
hands

of

ap¬

shall

technicians

competence is adequate tc

the task.

In

the

of

issue

is

comes

fact, however, wher
prices and in¬

farm

withdrawn

economic

process

from

the

suffrage

or

ol

the market and transferred to the

political

process

the

legislative

the

technician

twenty-, back

last

of agricultural legisla-

planners

of
the

whose

by govern¬
assumption oi

the

tion

seat.

in

is

In

suffrage

or

and
the

party

oi

system

forced

into

present

a

situa¬

United

States, in^which
planning man constitution. That is the in- t]0n
constitutes
retrogression farm-state Senators hold the bal¬
Economy. sistent demand for freedom. We rather
than progress,
my
prog- ance of power in Congress and the
Once
a
Congressional
majority clemand the most efficient econostication is that it will persist. rural vote holds the balance oi
las enacted a law and
participat- n(?™lc or^er that we can have for
the discernible future,
power
in Presidential elections,
ng farmers have by majority vote without sacrifice of the freedom
and with the philosophy of pow¬
Turnine t0 thp first Question
decided to pursue a common ob¬
er
struggles
between
interest
jective through, let us say, acreage
groups so strongly established, it
allotments or marketing
quotas, it
seems
certain that the price and
Decomes
incumbent on the indilogic of. income adjustments written into
/idual farmer to comply
rather viouslv mean
central control or ' implemented laws or
administrative orders will
han
being guided by his own Or we mav state our criterion planning' The nature of operative
show little conformity to the find¬
nanagerial discretion.
Further¬ as
maximum
efficiency of the
ings of technicians even under an
more the
producing group is contrained by financial rewards and
ing are such that the '"dividual aggregative planning concept. The
ind vidual freedom.
more
reliance we place on thjs
>enalties to vote themselves into
manager is the best, indeed the
jentralized

i;o

educational

centralized

years

Planned

^statement of"he

prenSse 'of^fre'edom'^must ob?
reasonableTeedom

fo^of^Tnrifvkfuaf ^eedomUndUe:

^"erativt problemfof1 far™

,

a

competent and comprehensive
system of agricultural education

he

The

The

Farm

however,

Board

represent

episode
a

did,

quite noval

extension of the Federal Govern¬
ment into

rather

a central
operative role
than the decentralized ad¬

visory

and

facilitating role of
independent entre¬

service to the

What is most important,
however, is the fact that the Farm
Board
experience
itself became
preneur.

the most

important factor in

ing

Federal

take
tous

the
the

sion

more

of linking
supplies with

production.
of

the

early

caus¬

Government

next and

step

market

farm

As

to

momen¬

control

of

control

of

the

30's

depres¬

continued,

the Federal Farm Board
found its
ability to sustain prices

governmental

for

em

volved

and

diversion

operations

quite inadequate in the face of the
continuing weakness in consumer
demand due to industrial
depres¬
In the Board's
third annual
report (December,
1932) a section
entitled "Surplus Control
Meth¬
ods '
closed with
the
sion.

control

sys-

it

has

agriculture
under

as

series of statutes

a

ic

I shall not attempt to ar"rule of reason" for econom-

freedom.

this is

an

.spects: (1) It undertakes through

purchase,

oan,

storage,

/ersion operation to
he market,

di-

modities

remove

from

temporarily or
supplies of farm

nanently,
irices

and

per-

whose

below

pressures

some

com¬

hold

predetermined

Nor

do I

admit

to

by

some

ficient.

by the market is,
official standard, insuf¬

Such subsidies have gone

sometimes
and

income

payment

to

the

sometimes

producer

to

him

direct

of available

This

proposition

conditions,

reveals

the

basis

for my obiter dictum that,
whatever
the
theoretical
argu¬
This. ments against government inter¬

operations apply.

self-expression
source

free

own

the

fountain

-

rising effici-

individual

interest

as

must

well

the criterion

freedom

as

for

his

thus

of

economic

reconciled

with

or

economic

efficiency

we

may

proceed to the task of evaluation
of

built

by

nicians

on

the

recent trends

agriculture

indirectly question:

in

our

by asking

Do

these

advance

society's, tion.

indeed absorbed into the criterion
of

models

The minor premise is that knowledge

ency.

the

is

of progress or

With

raise the level of farm

when

use

these

under

It
is the major premise of our-is not to
deny the very great use-. vention in supply determination
intellectual world that freedom of fulness
of
projections made or as a means to price or income

interest express an informed self
by the naming of volume through
orderly
and
peaceful
price goals, or restricts pro- channels. This is the basis
of our
luction by naming lower
goals, by reliance on a system of universal
withdrawing price supports, or by education and our basic
rejection.
imposing acreage allotments to the of indoctrination and the centralend that prices shall be
sustained; ization of decision-making.
(3) it provides for payment of
subsidies

the greater its powers of mischief.

constitute the best

that

3ffort

cash

approach

will

what

booby trap resources in the actual situations
inherent conflict-to which the decisions and the
freedom and efficiency, subsequent

and

indirect

and

of

adequately

competent,

an

level; (2) it stimulates productive

or

informed

judge

only,

intellectual

there is

and

beginning in 1929 has three general between

through direct

storage

Now

control scheme.

gue a

and research.

American

the 'simple*

of

Such

prints

can

as

competent
basis

of

tech-, adjustment, we shall not soon re¬
such verse the steps we have taken in

is available long in

the

time

of local

estimates
take

blue-

and

broader

a

ac-

view

of national and world affairs and
of

the

contributory
farmer

can.

or

conditions
any

local

this

during
the
last
century.
The
practical
problem for the agricultural econ¬
omist, therefore, is to make it
little

our

as

as

possible.

With Ball,

agency

policy analysis
and
hypothetical projection have been
advanced to a high state of com-

under;-

harmful

than

Such

Petence

direction

quarter

Agricultural

Burge

(Special to The Financial Chronicle)

CLEVELAND,

Ohio

—

,

Gordon

Allen, Jr. and Harold K. Hutchin¬

Outlook procedures in this coun- son have become affiliated with
try an.d can go to continued and Ball, Burge & Kraus, Union Com¬
enlarging usefulness. But when merce Building, members of the
these hypothetical projections become

the

basis

for

a

centre1

formula - to which imolementinp

New York and Midwest Stock Ex¬

changes.

Mr.

Hutchinson

was

for a season previously with Prescott & Co.
or
toward
greater
government
in* PS-even, a longer period in adfollowing consumers.
comment:
tervention in the operative proe- .X3AP&-- tkey_ impede rather than
Joins Bache Staff
All these programs of
centrally esses
of
agriculture
make -Lor
a
functionally correct
(Special to The Financial
"Experience with stabilization planned agricultural
Chronicle)
supply have higher efficiency and surervpreg*- allocation of Resources.
thus
demonstrates that no measure had
one goal in common with the
CLEVELAND,, Ohio—Ralph E.
ress?
In the light of my previousfor
-The second • issue ic. of course.
improving the price of farm older
through processors, distributors,

developmentsgeared

..

products other than
increasing the
demand of consumers
can
be ef¬




system

of

favorably-condi¬

tioned voluntarism.

That is, they
have been designed to
improve the

description of how these controlslinked to the first since the

oro-

modify the old system of proprie- 'motionr restrictipn, or rrdirection
tary management, we may put the of agricultural supply is not ef¬

String is

now

with

Bache

National

City

East

Sixth

ing.

&

Co.,

Build¬

Volume 176

Number 5156

The Commercial and Financial Chronicle

.

The

Indications of Current
Business

(1251)

following statistical tabulations

latest week

Activity

week

or

or

month available.

month ended

Latest
4MERIC*\

IRON

Indicated

Steel

Crude

and

and

gall»ns

Crude

castings

to

fuel

Residual

Oct.

.

Week

Ago

.1.

tons)

103.7

"104.0

98.9

(bbls.

average

2,160,000

2,055,000

(bbls.)

6,514,250

6,460,500

6,283,600

Sept. 20

_.

117,060,000

7,059,000

7,174,000

23,980,000

24,132,000

23,904,000

21,752,000

sales

gas

oil

fuel

oil

ASSOCIATION

OF

(bbls.)

BUSINESS

2,728,000

2,512,000

2,573,000

2,393,000

UNITED

10,278,000

10,388,000

10,359,000

9,547,000

8,523,000

9,161,000

AMERICAN

CASH

118,315,000

117,296,000

116,393,000

123,120,000

Revenue

freight received from connections

CIVIL

(number

ENGINEERING

of

DIVIDENDS

BY

U.

S.

CONSTRUCTION

of

(no.

33,724,000

30,814,000

35,888,000

108,641,000

99,085,000

102,334,000

53,484,000

53,274,000

52,104,000

6,428

$542,000

$215,000

$550,000

$539,000

$366,000

354.2

354.0

333.7

BRADSTREET,

PUBLICLY

—

873,559

831,218

834,120

863,690

ERAL

719,769

691,166

674,279

692,405

As of August

REPORTED

PARTMENT

August

OF

(000's

U.

—

COMMERCE

S.

DE¬

Month

—

of

omitted)

PAPER

RESERVE

OUTSTANDING—FED¬

BANK

30

OF NEW

YORK—

(000's omitted)

ENGINEERING

—

"7,819

*

THE

48,724,000

Sept. 20

cars).

&

CORPORATIONS

34,680,000
112,472,000

COMMERCIAL

cars)

106,700

$231,000

STATES—DUN

Sept. 20

freight loaded

2,872,700
104,400

141,835

8,358,000

RAILROADS:

Revenue

IN

INC.— Month of July

8,525,000

Sept. 20

at

therms)

INCORPORATIONS (NEW)

Sept. 20

at

(bbls.)

(M

sales (M therms)

Sept. 20

fuel

Residual

89,257

118,935

therms)—j.

sales

bept. 20

3tocks at refineries, bulk terminals, in transit, in
pipe linesFinished and unfinished gasoline (bbls.) at
Sept. 20
Kerosene
(bbls.) at

Distillate

3,083,800

3,039,460

7,549

(M

gas

Sept. 20

(bbls.)
(bbls.»

3,270,552

73,137

therms)

Sept. 20

output
output

Ago

month

6,550,000

bept. 20

average

(M

gas

Mixed gas

6,297.950

Year

Month

2,954,966

For

—

Previous

3,147,038

ASSOCIATION

July:

Total

2,051,000

GAS

Manufactured

Sept. 20

of that date:

are as

Latest
AMERICAN

ol

:

(bbls.)

oil

2,153,000

either for the

are

Month

102.6

Natural

output—daily

(bbls.)

oil

fuel

5

of quotations,

cases

Kvo

5

Oct.

shown in first column

that date, or, in

on

INSTITUTE:

stills—daily

output

Distillate

(net

condensate

output

Kerosene

capacity)

each)

runs

Gasoline

Week

INSTITUTE:

Dates

Year

of

IFlKOLEUM

ol

42

-

STEEL

operations (percent ol

Month

to—

ingots

tMfcRiCA>

F

AND

steel

Equivalent

<

Previous

production and other figures for the

cover

NEWS-RFCORn

Total

S.

U

Private

CONSUMER

construction

Sept. 25

and

municipal

Federal
COAL

OUTPUT

(U.

coal

S.

BUREAU

and

lignite

anthracite

Beehive

OF

SYSTEM—1941-49
ELECTRIC

output

66,288,000

134,783,000

43,465,000

25,045,000

COTTON

41,164,000

11,530,000

♦11,850,000

11,085,000

878,000

000

925,000

951,000

833,000

93,300

♦86,300

90,700

136,500

Sept. 20

112

114

100

111

Sept. 27

INDUSTRIAL)

—

DUN

7,624,747

7,724,664

7,646,253

(per

Sept. 25

156

145

Sept. 23

4.376c

4.376c

4.376c

$55.26

$55.26

$55.26

$52.69

Sept. 23

$42.00

$42.00

$42.00

$43.00

132

154

ton)

COTTON

Lead

(New

(New

Lead

(St.

Zinc

(East

Louis)
St.

MOODY'S BOND

SEED

Received

at

24.200c

24.200c

24.200c

Crushed

34.900c

27.425c

Stocks

Sept. 24

121.500c

121.500c

121.500c

103.000c

.Sept. 24

16.000c

16.000c

16.000c

17.000c

.Sept. 24

15.800c

15.800c

15.800c

16.800c

.Sept. 24

13.500c

14.500c

14.000c

17.500c

at

Sept. 30

95.91

Sept. 30
Sept. 30
Sept. 30

Stocks

Shipped

Group

96.42

97.28

98.08

109.24

109.42

109.79

111.62

Produced

113.50

113.89

114.08

116.22

111.62

111.81

Consumption

112.00

115.24

109.06

109.24

110.34

Stocks

103.47

103.97

105.00

Produced

106.21

106.39

106.74

108.16

Shipped

109.24

109.42

111.25

112.75

112.93

115.24

Sept. 30

2.78

2.75

2.69

2.63

Sept. 30

3.21

3.20

3.18

3.08

2.98

2.96

2.95

2.84

Stocks

3.07

3.06

2.89

Group

3.21

3.15

Sept. 30
Sept. 30
INDEX

Unfilled

orders

(tons)

AND

AVERAGE

3.21

3.51

3.37

V

3.02

of

period

3.02

£

Stocks

sales

by

Number

dealers
of orders

Number

of

Dollar

EXCHANGE

Linters

3.45

58,946

69,588

68,762

220,691

July
(tons)

88

31

24,615

(running bales)

July

30,676

394,190

475,903

Stocks

35,883

16,963

34,355

26,130

—

31

107,226

148,066
1

35,565
76,405

(l,00p-lb. bales)—

July

20,157

27,196

f

38,205

46,053

21,308

98,374

22,083

..

.

31

a

136

a

a
;

a

441

a

90

488,931

32,880

51,002

33,257

Motes Grabbots, etc.
Stocks July 31

214,310

S3

71,645

69,838
'

(tons)

Hull Fiber
J

155,900

233,756

93 V"

467,535

(1,000 pounds)—
4,353

5,976

4,037

786

COTTON SPINNING

(DEPT.

1,074

374

2,409

1,901

857

23,183,000

Shipped

23,204,000

OF COMMERCE):

June 28

on

109.48

109.36

19,453,000

19,513,000

23,183,000
20,871,000

Active spindle

hours,

June-

8,102,000

7,532,000

9,241,000

Active spindle

109.21

hrs. per spindle in place June

435.0

415.9

410.8

78

70

76

69

Spinning

116.2;

spindles active

DEPARTMENT
ERAL

Sept. 13

27,361

18,965

23,130

35,640

Sept. 13

shares

760,597

532,684

1,077,194
$46,l48,y„i

Sept. 13

$35,564,700

$24,707,669

657,240
$29,995,478

17,577

20,392

June

on

28

(000's omitted)

Sept. 13

252

other

sales

Sept. 13

'

106

22,199

17,471

20,300

sales

Sept. 13

637,791

470,226

other

567,002

sales

8,926

3,649

2,985

8,183

564,017
$23,602,149

DISTRICT,

OF

100

$40,475,280

—

Y.

N.

FEDERAL
1947-1949

—

Month of

102

95,

84

80
106

107

102

125

111

116

129

1,009,067

Sept. 13

BANK
=

August
Sales (average monthly), unadjusted
Sales (average daily), unadjusted
Sales (average daily), seasonally adjustedStocks unadjusted

34,813

short

SALES—SECOND FED-

RESERVE

RESERVE

252

22,451

sales

STORE

AVERAGE

35,065

92

Sept. 13

short

Dollar

shares—Total

of

Sept. 13

Short

Round-lot
Number

TOTAL

213~,390

1~4~2~870

305,890

201,730

ROUND-LOT

STOCK

Round-lot

Short

Other

of

July

178,616
250,050

295,190

$1,571,000

$1,683,000

$1,467,000

442,000

464,000

424.000

306,000

442,000

244,000

$2,319,000

$2,589,000

$2,135,000

$1,338,244

$1,387,103

$1,260,404

Total

372,730

NEW

YORK

As of

STOCK EXCHANGE—

Sept.

ACCOUNT

OF

124,940

Sept.
FOR

139,470

6

4,410,560

4,578,730

5,542,270

6

4,550,030

4,703,670

5,728,910

Total

7,568,740

Sept.

TRANSACTIONS

6

7,832,670

186,640

263,930

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS
of specialists in stocks in which registered—

extended
hand

6

409,430

450,960

527,240

value

Market

Sept.

value

free

48,188

credit

balances—

on

U.

Member

borrowings

on

other collateral

sales

Sept.

6

75,540

72,510

Other

sales

112,130

142,610

Sept.

6

365,150

336,350

422,660

6

691,949

Govt,

issues—

41,079
370,710

115,824,575
-

816,311
108,306,539

100,273,060'

99, 271,015

103,577

307,021

61,697

959,518

1,156,400

.643,941

$563,630

$557,269

$461,147

670,400

Sept.

674,753
100,536,928

borrowings

S.

335,336

114,506,240

bonds

825,680

Member

Short

66,759

342,050

shares—

listed

of

balances

customers

in banks in U. S

listed

of

debt

net

to

and

of customers'

Market

Transactions

carrying margin accounts—

customers

on

Total

MEM¬

purchases

of

Credit
Cash

(000's omitted):

August 31

Member firms

sales

Total

Month

Group

295,190

sales—

sales

ROUND-LOT

—

omitted):

Ordinary

SALE$ ON THE NEW YORK

sales

Total

PURCHASES—INSTITUTE

INSURANCE

LIFE

(000's

adjusted

Industrial

178,010

dealers—

shares

seasonally

INSURANCE

OF

1,000,884

EXCHANGE AND ROUND-LOT STOCK TRANSACTIONS
FOR ACCOUNT OF MEMBERS (SHARES):
Total

LIFE

Sept. 13

1

purchases by
of

142,870

Sept. 13

sales

$19,269,163

213,390

Sept. 13

sales

Other

466,577

$26,648,150

Sept. 13

by dealers—
shares—Total sales

628,865

Sept. 13

sales
of

Stocks,

sales

value

Number

Total

Other

sales

534,790

813,010

86,400

83,430

226,420

sales

;

7,400

5,200

6,600

10,700

the

sales

Other

—

LABOR—(1947-49
All

=

NEW

Savings and loan associations
Insurance

173,320

26,070

177,770

205,385

374,700

16,460

31,470

201,075

198,690

264,120

343,180

227,145

215,150

295,590

U.

S.

DEPT.

663,160

715,130

816,055

94,170

150,200

191,260

650,525

605,170

772,300

1,209,860

759,535

699,340

922,500

1,401,120

figure,

Sept. 23

•

RECT

OF

111.1

111.3

105.3

♦106.2

112.0

215,033

221,865

$1,511,488

$1,422,262

S.

A.—Month

of

$1,404,350

$4,651,800

$1,162,300

$1,190,000

836,000

860,200

894,449

SECURITIES

August.
—

STATES-

BUREAU. OF

EXPORTS

CENSUS

—

AND

IMPORTS

Month

of

110.0

110.9

112.9

116.0

Exports

Sept. 23

112.7

112.7

112.9

Imports

runs.

July

'

109.8
112.5

crude

DI¬

purchases

UNITED

108.8

GUARANTEED

AND

U.

IN

TRANSACTIONS

sales

Sept. 23




233,659

$1,012,900

institutions-

212,713

$1,877,150

lending

MARKET

Net

flncludes 611,000 barrels of foreign

228,999

$1,512,734

TREASURY

Net

Sept. 23

—

293,514
90,919

1,426,800

109,010

OF

foods

139,784

90,375

211,291

—

Miscellaneous

100):

foods.

banks

savings

114,293
303,179

96,141

companies.

Individuals

Sept. 23

♦Revised

trust

381,130

Group—

All commodities other than farm and

107,882

304,791

companies

and

Mutual

37,950

Sept.

Sept.

Sent.
—

products

Processed

196,280
206,980

Sept.
SERIES

commodities

Farm

85,520

Total

fi

PRICES,

SAVINGS

omitted):

92,120

Sept.

1l

__

sales

Commodity

(000's

70,130

Sept.

sales

sales

June

of

NONFARM

CORPORATION

75,330

Sept.
—

Total

IN

FEDERAL

—

84,300

Sept.

sales

WHOLESALE

S.

INSURANCE

91,700

Bank

Total round-lot transactions for account of members—
Total purchases
Short

—Month

floor—

sales

Other

U.

Sept.

transactions initiated off
Total purchases

Total

OF

LOAN

AND

Sept.

,

sales

Other

Short

FINANCING

ESTATE

AREAS

sales

Other

REAL

the floor-

purchases

Short

Total

408,360

80,410

—Sept.

on

440,690

Sept.

transactions Initiated

Total

.v

63,465,000

45,104
55,746

Produced

purchases

Round-lot

r'

24,446,000

113,260,000

460.3

Customers'

li

147,024,000

79,578,000

90,150,000

a

Customers'

v

401,400,000

54,023,000

a

234,715

24,271,000

COMMISSION:

value

Number

■it

361,320,000

July 31

(pounds)

Shipped

431.2

Customers'

-X'.J

27,101,000

2.89

187,012

Customers'

-tj.

20,121,000

86,788,000

Produced

purchases)—

by dealers (customers' sales)—
Number of orders—Customers' total sales

,.t

56,602,000
52,822,000

3.27

426.5

68,052

41,143,000

Spinning spindles in place

-

Odd-lot

41,077,000

31

3.10

241,601

Sept. 26

(customers'

66,281

13,725

58,454,000

(tons)

Shipped

INDEX—

—

EXCHANGE—SECURITIES

71,661

176,112

Hulls-

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT DEALERS AND SPECIALISTS ON N. Y. STOCK

Odd-lot

152,799

3.20

427.6

Sept. 20

PRICE

78,225
117,439
136,898

31

3.01

»■

215.865

Sept. 20
at. end

of

3.35

3.21

Sept. 20

DRUGREPORTER
100

=

3.38
„

Sept. 20

(tons)
of activity

PAINT

1949

3.54

Sept. 30

NATIONAL PAPERBOARD ASSOCIATION:
Orders received (tons)

Percentage

3,640,946

PROD¬

Shipped

i

3.53

Sept. 30
Group

Group

Production

SEED

July 31
(tons)
l
(tons)

Produced

_

COMMODITY

20,809,000

to

Produced

3.22

•

AVERAGES:

3.23

MOODY'S

prior

(tons)

109.24

sept. 30
Utilities

linters)

(pounds)

112.75

3.08

OIL,

(pounds)

Sept. 30

Baa

Industrials

./

Cake and Meal—

Stocks

Sept. 30

Public

34.806

Oil—

Sept. 30

Group

Aaa

Railroad

85,954

143,768

198,406
20,000,000

COMMERCE):

(pounds)

Sept. 30

Group

Average corporate

"

(tons)

(pounds) July
(pounds)

Produced

103.64

BOND YIELD DAILY
U. S. Government Bonds

of

July

108.88

MOODY'S

Aug. 30—.

OF

COMMERCE—Month

mills

(tons)

Refined

j

Industrials

47,325
217,317

30

Crude Oil—

AVERAGES:

Aaa

Utilities

of Aug.

as

(tons)

34.550c

Average corporate

Railroad

of

as

COTTON

OF

34.950c

Government Bonds

Public

1,516,982

3,334,045

AND

24.200c

at.

Aa

1,050,468

Cotton Seed—

at

DAILY

753,621

848,819

Aug. 30

(DEPT.

(excl.

Sept. 24

PRICES

744,383
1,826,967

May:

,

at.

Louis)

COM¬

16

_Sept. 24

York)

York)

bales

UCTS—DEPT.

(E. & M. J. QUOTATIONS):

copper—

refinery at
refinery at

tin

GINNING

September

Domestic

Export
Straits

OF

BALES:

of

as

active

sp.naies

Running

4.131c

Sept. 23

gross

public storage

COTTON

-

PRICES

Electrolytic

RUNNING

—

DEPT.

—

7,101,794

In

&

ton)

gross

LINTERS

In consuming establishments
•

lb.)

(per

(1935-

In consuming

Couon

kwh )
AND

BRADSTREET, INC.
of August

of August
establishments as of Aug. 30
In public storage as of Aug. 30
Linters—Consumed month of August

10,995,000

RESERVE

100

=

AND

MERCE

COMPOSITE PRICES:

steel

METAL

U. S.

92,259,000

&

COMMODITIES

1939—100)—Month

INSTITUTE:

(in

steel

Pig iron (per

/1 r'

86,344,000

DUN

—

OF

Lint—Consumed month

BRADSTREET. INC.
Finished

Scrap

54,880,000

Sept. 20

INDEX—FEDERAL

AVERAGE

(COMMERCIAL

AGE

107,452,000

Sept. 20

(tons)

DEPARTMENT STORE SALES

IRON

227,640,000

117,304,000

MINES):

(tons)

(tons)

coke

Electric

$335,092,000

236,594,000

Sept. 20

Pennsylvania

EDISON

$353,898,000

130,686,000

129.809,000

Sept. 25

Bituminous

FAILURES

$260,495,000

127,486,000
189,663,000

Sept. 25

construction

State

$317,149,000

Sept. 25

Sept. 25

construction

Public

PURCHASES

(000's

a

Not

omitted):

a

shown

-

to

—

avoid disclosure of

*

individual operations.

39

40

The Commercial and Financial Chronicle..

(1252)

Continued from page

gregated 106,499 cars compared with 109,196 (revised) cars in the
week, and 79,966 cars in the like week a year ago,

10

previous

according to "Ward's Automotive Reports."
Total output for the past week was made
up of 106,499 cars
and 29,521 trucks built in the United States against
109,196 cars
and 29,194 trucks (revised) last week and 79,966 cars and
27,340
trucks in the comparable period a year ago.
Canadian plants turned 6,170 cars and 2,303 trucks
against

The State oi Trade and Indnstry
would

This

be

the

output

three-month

lowest

since

January-

March, 1947, when 820,052 cars were made.

labor shortage in casual semiaskilled and skilled categories. Cadillac, on 8 xk -hour work days, is
preparing to hire and train women—for the first time since the
war—for light jobs now being handled by men. A lack of help has
€iaused Dodge Truck to abandon temporarily its program of a sec¬
ond shift for a nine-hour day. Studebaker plans a partial second
shift instead of a full turn because of lack of workers.
"Ward's" reported an industry

6,404

Commercial

Business failures rose to 594 in August, a

year

and

in

occurred in machinery and textiles.

retail

and

Casualties

wholesale trade

heavier than last year
commercial service.
Re¬

were

and

moved

prices at the wholesale level.

a

wheat

making

good headway in filling the orders accumulated during the work

stoppage. As mills get nearer current on deliveries, consumers
.show increasing interest in buying from the source that will result
two

22.7 million net tons, continues "Steel." The consensus is that
foot-rolled bar capacity is about the same as it was in 1945. Pro¬

duction in 1951

only half that amount, 10.8 million tons. That
there is capacity not now being utilized fully is borne out by re¬
was

ports that some bar mills are operating only a part of each week.
If that is because they lack steel, they should get some relief in the

expansion of the country's
magazine.
American Iron

The

ingot capacity,

and

Steel Institute

concludes this trade
announced

that

operating rate of steel companies having 93% of the steelmaking
an average of 103.7% of

beginning Sept. 29, 1952, equivalent to
2,153,000 tons of ingots and steel for castings. In the week starting
Sept. 22, the rate was 104% (revised) of capacity and actual output
totaled 2,160,000 tons, a new high record.
A month ago output
for

capacity

the

week

«tood at 98.9% or 2,055,000 tons.
mated at

One year ago the rate
102.6% and production at 2,051,000 tons.

was

esti¬

lElectric Output Reacts to Lower Level in Latest Week
The amount of electric energy

distributed by the electric light

«and power industry for the week ended Sept. 27,
mated at

1952, was esti¬
7,624,747,000 kwh., according to the Edison Electric In¬

stitute.

put reported for the corresponding period two

Car

years

revenue

•

new

all-

time record.
The week's total represented an increase of 9,869 cars, or 1.1%
above the corresponding week a year
ago, and an increase of 3,030

0.3% above the corresponding week in 1950.

Affected by
Chrysler

car

production in the United States last week ag¬




prior
a

year

goods

week

more

were

in

the

or

There

year ago.

for

to

for apparel
before.

more

widely purchased than

was

fair

with

declines

West

for

the

week

ideal

as

weather

prevailed

for

selling induced
grain handlers at

on

week, particularly the
Spring wheat varieties. Although many of the mills offered pro¬
tection against
these advances, bakers and jobbers generally
showed extreme caution in making new commitments.
Shipping
directions were slower and export flour business remained
very
dull. The cocoa market displayed a somewhat steadier undertone
as

the trade

crops,

awaited the first estimates of the Accra

with fears that the latter

expected.

Warehouse stocks of

down from

bags on the

114,070
same

Strength in
pect of

a

week

date

a

crop

cocoa

Bahia

would be much smaller than
were

reported at 99,157 bags,

previous, and well below the 205,092

year ago.

raw sugar

prices

tapering off in demand

a

and

was
as

maintained despite the

the threat of

a

pros¬

dock workers'

either
similar

avid

was

television

in

sets

Lard advanced

steadily during the week, reflecting firmness
in vegetable oils and improvement in live
hog prices. Market re¬
ceipts of hogs were down slightly from the previous week and the
week

decline to

a

Cattle and sheep prices continued their
low ground.

year

new

ago.

After trending downward most of the
week, spot cotton prices
recovered in final sessions to close slightly
higher than a week ago.

Firmness in late dealings was attributed to
fairly active mill

price-fixing and

a

Department of

Agriculture report that

the like week

station in the area and the nation'3

the

week earlier, and 220,600 in
There was increased activity in cotton
a

a year ago.
textile markets last week, with prices
demand for spot and nearby delivery.

In other

parts

buying of television sets
above

the

Increasingly popular

was

level,

year-ago

wash¬

were

cleaners, freezers, and

ers, vacuum

incidental furniture.
The recent rise in order volume

a

There
orders

slightly higher than
earlier.

year
was

for

a

steady flow of

Fall

many retailers

re¬

merchandise

anticipated

celeration in selling.
Department store

country-wide basis,

as

an

sales

ac¬

on

a

taken from

as

the Federal Reserve Board's in¬
dex for the week ended
Sept. 20,

1952,

1%

rose

above

the

level of

the

preceding week. In the previ¬
ous week no
change (revised from
—1%) was recorded from that off
the similar week of 1951.
four weeks
sales

ended

reflected

For the

Sept.

20, 1952,

increase of 1%.

an

For the period Jan.

1 to Sept. 20,

1952, department store sales
istered

drop of 2%

a

reg¬

below

the

like period of the preceding
year.
Retail
trade
volume
in
New
York the past week dropped to an

estimated

11%

behind

the

parable period of 1951,
to trade observers.

consecutive

combined
stores

It

week

to

was

the 24th

wherein

volume

failed

com¬

according

of

the

the

equal

or

large
exceed!

the 1951 weeks.

According to
Board's

serve

the

Federal

index,

Re¬

department

store sales in New York
City for
the weekly period ended
Sept. 20,
1952, decreased 7% below the like
of

last

ceding week
reported

In

year.

a

from

the

pre¬

decline of 6% was
that
of
similar

week of 1951, while for the four
weeks ended Sept. 20,
1952, a de¬
crease of 7% was
registered below
the level of a
year ago. For the

period

Jan.

volume

1

to

Sept.

declined

10%

like period of the

20,

1952,

under

preceding

the

year,

pink

bollworm damage to the crop this year has been severe.
Trading
in the 10 spot markets was active with sales
totaling 346,900 bales

week, compared with 309,800

Oregon, following the
broadcasting by the first

of

period

strike became less acute.

same

start

edging higher under steady

Oliver

Realty Co. Formed

JOLIET, 111.—The Oliver Realty
Company is engaging in a securi¬
ties business from offices in the
Rialto Square Building. Partners
are J. B.
Anderson, Sr., J. B. An¬

derson, Jr., and Donald E. Harper.

Slightly Under Impetus of
Buying

Shoppers in most parts of the nation increased their purchasing
slightly in the period ended on Wednesday of last week as sliding
temperatures called attention to the arrival of the Fall

during the last six months, shoppers spent slightly
comparable week a year earlier.

more

season.

than in the

The practice of extending
shopping hours from one to two
more nights a week spread to
many communities; in Detroit
group

of merchants planned evening hours for six days

As

a

K. H. Raef
SPOKANE,

formerly

The rise in

was

estimated by Dun &

Building.
He
partner in Preston

a

The total dollar volume of retail trade in the nation the
past

week

a

& Raef.

week.

easy credit in an attempt to sustain vol¬
shoppers' interest, which was largely centered on
apparel, spread increasingly last week to household goods.
ume.

H,

is conducting his own in¬
vestment business from offices in
the Empire State

was

or

Opens

Wash.—Killian

Raef

I. D. Pilla

Many stores stressed

United States Auto Output
Adversely
Plant Reconversions at

Passenger

children's

continued

Fall

below the
a

a

unsettled the past week.

Trade Volume Lifted

freight for the week ended Sept. 20, 1952

roads, representing a decrease of 7,65&-cars, or 0.9%
preceding week, but ore loadings advanced again to

date

Canadian lakehead ports.
Domestic flour prices moved higher last

ago.

totaled 873,559 cars, according to the Association of American Rail¬

cars, or

were

Loadings Ease Slightly in Latest Week

Loadings of

corresponding

principally to Great Britain. Oats weakened
by the settlement of a threatened strike by

last

The current total was 99,917,000 kwh., below that of the pre¬
ceding week when output amounted to 7,724,664,000 kwh. It was
522,953,000 kwh., or 7.4%, above the total output for the week
tended Sept. 29, 1951, and 1,121,739,000 kwh. in excess of the out¬

the

corn,

the

Capacity for the entire industry will be at

on

substantial quantities. Most of the
crop was already said to be safe
from frost. There was a fair amount of export business in

an

was

with 300.28

and

maturing the Crop and shipments from the country continued in

things: Hurt the

inch in cross section. Frequently it's
said that the country needs more hot-rolled bar capacity. But do
we? In 1945 when the American Iron & Steel Institute reported
steel finishing capacities on a maximum annual potential basis,
without relation to available supply of ingots or to actual per¬
formance, it showed that this country's hot-rolled bar capacity
over

previous,

sharpest

premium price sellers, and cause consumers to buy close to home.
Of all steel products none is in any tighter supply than bars,

particularly those

the lowest in three months and compared with 292.24

Germany the principal buyer. Sales
under the International Wheat Agreement for the current
crop year
to date were reported at 71,400,000
bushels, compared with 91,300,000 for the same period a year earlier. Corn registered the

temporary one resulting from

This will do

Household

and remained

Prices generally
worked moderately lower although wheat showed relative firmness
at times. Marketings of wheat continued to decline due to increas¬
ing quantities being tied up by CCC loans. Export business in

.steel under the Controlled Materials Plan.

delivered cost.

week

was

Grain markets

"Steel," the weekly magazine of metalworking. They have
tickets, but no takers. Tickets in this case are permits the govern¬
ment issues authorizing consumers to buy a specified amount of

in the lowest

slightly
they did a

that of

year ago.

says

are

spend
than

and

women's

Consumers

continued in many of the nation's
wholesale markets the past week

daily wholesale commodity price index
irregularly downward last week to close at 290.83 on Sept.

This

23.

Many steel consumers are in the same position as a Broadway
a flop play the morning after the reviews come out,

Mills

in

wear.

well

Wholesale Commodity Price Index Irregularly Changed
In Latest Week

producer of

a

ring

first UHF station.

The Dun & Bradstreet

problem is only

Shoppers' interest in apparel
continued to climb last week with
the most pronounced gains occur¬

week

centered in the New England and

Scheduled to Approach Last Week's
New High Record

for

Portland,

trend of food

Casualties in the South Atlantic and
lightest in six months while those in
the lowest in 18 months.

during the
demand

The

foods and oleomargarine
increasingly popular.

were

April 22, and the high was $6.70 on Aug. 26 and Sept. 2. The
current figure at
$6.45, compares with $6.78 on the corresponding
date a year ago, or a drop of 4.9%.
The index represents the sum total of the
price per pound of
31 foods in general use and its chief function is to show the
general

Among retailing estab¬

The

prices of
some fresh produce
edged upward
as
supplies
began
to
decline.

four cents to stand at $6.45 on Sept. 23, the lowest in 13
weeks, or
since June 24, when it stood at $6.39. The year's low was $6.31 on

•

East North Central States.

This ticket

the

poultry.

the

in

1951.

rises

in

were

and

in

chalk

to

than

week

price index, compiled by Dun & Bradstreet, Inc., went moderately lower the past week following sharp
declines registered in the two preceding weeks.
The index fell

industry and trade

the steelworkers' strike, states this trade paper.

week

demand

The wholesale food

,

East South Central were the

Steel Output

continued

receipts

noticeable

the

Weeks Show Abatement

-casulaties in two years.

ths Pacific States were

stores

larger

Frozen

Wholesale Food Price Index Declines of Previous

Increases, however, were noted among eating and
drinking places and drug stores, the latter experiencing the most
of the August upturn

148, but they remained considerably

levels

suffered the fewest failures so

lishments food and apparel stores

in

tailing had the sharpest rise from 1951. Declines from last year's
prevailed in manufacturing and construction.

it

far this year.

All

both

in

lowest level
group

156

+5; Northwest

4-5.

pork

failures fell to 24 from 35.

except manufacturing in which failures dropped to the
since November 1951. Most of the decreases in this

.groups

to

to

+2 to -f-6; South
+7, and Pacific Coast 4-1

to

most

totaled $16,000,000,

E

Casualties increased during August in all

+3

+3; East —2 to +2;

-fl

Southwest

the

a

liabilities of less than $5,000.

to

Trade and service accounted for the week's
upturn in mor¬
tality. The only marked decline occurred in manufacturing where

half. The sharpest decline in failures
was among
establishments with $100,000 or more in liabilities.
Most of the increased failures occurred among businesses with
a

increased

involving liabilities of $5,000 or more rose slightly
previous week, but failed to reach the level of the similar
week a year ago. Small casualties rose to 37 from 28 and exceeded
last year's total of 33.

slight 2% above the

Liabilities involved in the month's failures

and

comparable

Failures

stood at 27.

the smallest in

failures

to

Midwwest

in the

Casualties were the lightest for any August in

yearly rate of 29 failures out of every 10,000 businesses listed
the Dun & Bradstreet "Reference Book."
The month before

Slightly

below of the prewar level of 264 which occurred in the
comparable

12% less than a year ago. Dun's Failure
is corrected for seasonal fluctuations, rose to the

which

land —1

up

week of 1939.

the last four years and
Index

industrial

and

1951 and 1950 totals of 154 and

Board.

low level of July.

following percentages: New Eng¬

week ended Sept. 25 from 14^1n the
preceding week, Dun & Bradstreet, Inc., reports. This rise brought casualties slightly above the

Monday

promptly signed by its authors—John L.

was

a
year ago.
estimates
varied
from
the levels of a
year earlier by the

Regional

Food

Business Failures Rise

Lewis and Harry
M. Moses, President of the Bituminous Coal Operators Association.
The above action does not bar the possibility of a strike, since the
new contract has
not been approved by the Wage Stabilization
It

and only 2,964 trucks last week, and 4,640 cars and 2,027

higher than that of

trucks in the like week of 1951.

of this week the United Mine Workers' policy
makers ratified the new contract with northern soft coal producers.
On

cars

.Thursday, October 2, 19521

Bradstreet, Inc., to be from 1 to 5%

I.

D. Pilla is

curities
1805

York

Opens

engaging in

business

from

Williamsbridge
City.

a

offices

Road,

se¬

at

New

Volume 176

Number 5156

.

.

The Commercial and Financial Chronicle

.

(1253)
Continued

from

characteristic of the latter phases

16

page

of

in

rise

a

business

the

cycle.

They do not, however, affect busi¬

Fall Outlook for

Industry
And Trade Promising

alter

changes

fields

Last month dividends of manufac¬

high level of

business

ac¬

tivity.

manufacturing.

turing corporations

Last

quarter

fered

more

since

corporations

of

1929.

received

money

than

have

previous quarter

any

the boom

of¬
than

securities

new

they did for
the

than

of

Most

will

to¬

go

ward

a

year

been

Other variations
significant. Dividends
ago.

in

down

are

the

tobacco

and

They

food,

fields

in

lower

are

beverage,

of

industry.

corporations

expansion, with about 20%
added to working capital. Of the
money which is being spent for

producing textiles and leather.
They are also lower in some of
the transportation equipment in¬

expansion, 41%

dustries. In

will be used by
manufacturing
plants.
Electric,
gas, and water companies will use
31% of it and railroads 7%.
forms

Other

have

most other

lines they

been

increasing. Gains have
in oil refining. Cor¬
porations in the automobile indus¬
been greatest

of

transportation account try have also increased dividends
for 6% and commercial companies even though the output of auto¬
are using the remaining 15%.
mobiles
and
trucks
has
been
drastically

Financial Factors Moderately

these

Optimistic
are

significant indicator for
trends in business.

work

For

short

may

be influenced by fluctuations

in

the

of

time

of

psychology

they

investors

earnings through their
military equipment and

on

Present

securities

prices

aver¬

about 12 times current

age

earn¬

ings
lower

higher

in

Average yield

industry and trade. Yet these

considerably in

move

advance

business

curity

of

prices

from

the

is

than

it

was

a

ago.

year

share is around

per

Se¬

6%, although many stocks pay
larger dividends, some as high as

the

rise

10%. Yields of 7 and 8% are fairly

earlier

this

copimon, but they are offset by an
increasing
number
of
dividend

trends.

continued

low

figure

than normal, although it is

quite apart from basic conditions

prices often

This

share.

per

point

and during the first part of
August surpassed the high of last
year

paying stocks which bring in

At that level they were the
highest in 22 years. During the
last

stocks

a re¬

turn of less than 5%.

year.

weeks

reactions

from

point,

but

have

there

some

two

declines

been

the

high

far

have

so

been relatively moderate although
the

total

amount

of

dollar

value

of all securities has been at times

considerably reduced.
Some

reaction

The

long

a

of

yields
bonds

on

been

narrowing

combination

because

the

of

of

spread is

security

The

prices.

less than three

now

per¬

period of rising prices is normal

centage points and lower than it

and1 need not indicate

has been in many years. The ratio

a

change in

the general trend. Securities have

in

been rising without a major inter¬

with

since

ruption
advance

three

1949

which

lasted

prices close to 80%
down

and

clines

can

after

an

than

more

raised

and

years

and

average

slowing

some

possibly moderate

de¬

be expected. So far in¬

of

favor

stocks

bonds

is

compared

as

becoming less but

it is still considerably higher than
it

has

been

at

the high

peaks in
previous markets. It does not yet
point to a sustained reversal in
the trend of

should

be

dications do not point to a major

interest

reversal in trend even

security prices but it
with

watched

special

months.

rise

has

extended

though the

longer

than

usual.

is

suggested,

however,

by the fact that the rise in prices
of securities during most of this
year has taken place while cor¬
poration profits were declining.
Average earnings of a large group
of leading corporations have de¬
clined

13%

and

below

in

many

those

last

of

fields such

as

Another

business.

they have changed very little al¬
though they are still 7% higher

industrial,

mercial,
tural

Many
corporations
have
been
caught in the squeeze between
higher costs and buyer resistance
advances

to

compared

ships

in

selling prices. As

with

relation¬

normal

to

earnings, however,
curity prices are still low. The

certainty

as

tinues

be

to

the

to

future

whether the

se¬
un¬

con¬

normal

relationship will be restored by
higher prices or by further reduc¬
tions in corporation earnings.

Much

of

the

stimulus to

security prices

has

been

Federal

Reserve

rising
in¬

crease ^

in dividends which have
been paid out of profits of pre¬
vious

Also larger percent¬
ages of current profits are being
distributed to stockholders. This
years.

been

further

money

will

provements

that

be

not

needed

so

much

for

im¬

and

Changes

corresponding period of last year.
Most of the increases have been in




rise

long-term

a

expected
year

bank

credit

in

the

level

taken

place. Retail prices and the

cost of

Another

is

and may
to

change

a

taking

provide

financial

place

gradually
further clue as

a

higher than they
although the

are

ago

year

changes during the last 12 months
have been much less than in pre¬

vious years. Recent changes have
been greatest in the prices of farm

products due to the drought which
reduced

production in several

sec¬

conditions

weather

favorable

and

became

later

more

reports have

indicated that the damage was less
than

generally expected. The

was

rise
has, however, pushed food
prices in the wholesale markets
to the highest level of the year,

although they are still lower than
a

ago.

year

Even

91-day

even

-

of 1.9%. This rate

the

March,
1933
and
with this high rate the issue
undersubscribed

uas

Government
been

below

selling

close

to

many
years.

the

low

Interest

almost

higher

the

case^

,

a

97,

which

point

type

year

of

is

the

by banks
of loan is

ago

and

the highest in

in

many

Rising interest rates have
past

been

a

predominant

ex¬

orders

fore.

strong in other
public
utility
field, especially in natural gas
where
expansion
continues
steadily. Large amounts of new
capital are being raised to increase
of

capacity
both

for

the

production

of this

kind

Improvements
in

of

some

these

is

Rising consumer incomes aie
being spent in larger amounts foxgoods that are used in current

consumption, and prospects are
improving most for businesses im

of

these fields.

rise unless there

be

sustained

a

the

low

point

the

two

such

of

wave

took place

as

ago. Supplies of most
large in spite of inter¬
ruptions in production, stocks of
goods have declined somewhat,
especially in factories, but they
are
as
high as last year and far
above
those
in
previous years.
years

goods

are

There

is

sumers

evidence

no

that

con¬

fear shortages and people

generally have confidence in the
capacity of industry.

productive
Consumer

attitudes

buying

constructive

also

and

there

are

signs of resistance to

more

many

are

prices
anticipation
high

than
of

of ^buying in
higher
prices.

that

Prospects

agricultural pro¬
will be the third
achieved also tends

duction this year
ever

hold

to

down

Trends

price rises.

rapid

Leading Industries

of

rise

has

been

taking

close to capacity and weekly
of

restored to

has been

over

the

out¬
total

a

2,000,000 tons. Because of

interruption in opera¬
tions supply will not catch up with
demand as soon as was planned,
long

but

production has already be¬
come large enough to sustain fac¬
tory output at peak levels during
the

coming months. Many manu¬

facturers still have stocks of steel
hand

few

a

the

levels

of

continue

to

last

ton

has

been running

about

year

and

.j Cotton

last

is

15%

becoming

textile

ing

for

more

fall

has been

winter

operations

industry has
severely handicapped

most

by the shortage of steel.

Weekly

output has declined to the lowest
level

in many

during

the

but produc¬
pick up rapidly

years,

tion is expected to

last

quarter

of

the

year.

Output for the entire year
the lowest since

but

not

far

below

demand.

the industry is
being suported by the shift to the
production of military supplies
and equipment.
in

Employment

Production

of

electricity

weekly
6%
ago. The cur¬

rising steadily
continues

output

higher than

a

year

and

at

about

rent trend is upward at
more

has

a

slightly

rapid rate than usual, and
that a new peak

the prospects are

will be established before the end
of

the

about

year.

4%

Current

output

is

below the peak which

by

an

investment

banking group headed by Dillon,
Read & Co. Inc., at a price of
100 y2%, plus accrued interest.

markets

vigorous. Prospects
Of the proceeds, the company
for the cotton crop this year have
will apply $15,000,000 to pay ofl*
recently improved although the
its outstanding bank loan and the
drought during the summer has
balance will be added to the

reduced

output.

that

crop

the

Indications

will be

above

3%

average.

Wool mill

ing quite

activity has been ris¬

steadily

tion of wool

consump¬

by the mills has risen

to almost the

year

and
level

same

Civilian

ago.

it

as

was

demand has

risen to supplement the large buy¬

ing for
The

by the military forces.

use

of

use

with

in

wool

other

fibers

somewhat

comparison
has

become

favorable,

more

though for several

al¬

the out¬

years

com¬

pany's general funds.

com¬

are

about

lower than last year but consider¬

is currently engaged in an
expansion program designed toincrease its present shipping ca¬
pacity by 18%. In February, 1953,
the company plans to start con¬
struction
of
a
new
$15,000,00$
brewery at Los Angeles, Calif.,,
with a shipping
capacity of 920,000 barrels, to be completed by
mid-1954.
The
Newark, N. J~
brewery completed in 1951 with
a capacity of 1,380,000 barrels is fn
bp enlarged at a cost of $5,000,00$
to add 460,000 barrels of capacity

put of man-made fibers has been

by next
also

with the prewar years cotton con¬

yeast plant

sumption has increased about 35%

an

that

of

rayon

wool

20%,

300%. The

that

and

Production

holding

of

quite

10,000,000

coal

has

steady

tons

at

weekly,

1951

priced

beer

around

through

last

of

year.

and

The

which

Even that reduced out¬

stocks

much

of

larger

mates

are

coal

hand

on

than

normal.

these stocks

are

Esti¬

equiva¬

are

lent to

over S3 days' consumption.
Many factors account for the re¬

duced

demand.

Smaller

amounts

being shipped abroad. Use has
declined
through the shifts to
sidered

are

convenient.

more

con¬

Espe¬

cially significant has been the
rapid rise jn costs, which have led
to higher prices. Coal
has been
priced out of a number of former

by the steady increase in the

pro¬

most

of

kinds

of

durable goods has been

increasing although output in most
lines is still
year

for

lower than it

Many

of

of

some

the

field have

the

companies

shifted

company's other products^,
for 15% of sales,
yeast
and
bakery

account

bakers' yeast and
ducer

of

the largest pro¬
pharmaceutical yeast in.

the United States.
The

debentures

was

000

principal

debentures

The

ing fund

sumer

to

the

produc¬

normal reaction

buying

large

spending
last

tionally large

two
year

as

years
was

option of redeeming
up to'the
required for the sink¬

on any

Trends
consumer

in

the

of

(Special to The Financial Chronicle)

Callaghan

ago.

>

&

cott

York

— Ralph M.
Jack P. Sharpei
associated'with Pres¬

and

Co.,
and

National City Bank
of the New

members

Midwest

Stock

Ex¬

changes. Mr. Callaghan was pre¬
viously connected with Morrow
& Co.

excep¬

production of
goods are

non-durable

redemption date.

CLEVELAND, Ohio

>

companies built
shifting to

inventories before
military production.
up

at

Two join Prescott Staff

this

these products during the periods
of
extraordinarily
heavy
con¬

Production

callable

debentures

full amount

decline.

in

has the

additional

Building,

very

are

30, 1967. They are redeemable for
the sinking fund at prices scaled,
IOOV2 to 100%. The company

been

the

semi¬

company option at prices ranging
from
103% to 100% after Sept

have become

from

amount

annually and approximately 98%
of
the issue prior to maturity.

of
military
supplies
and
equipment. Consumer demand has
as a

entitled to*

a

tion

lagging

are

sinking fund, commencing Oct.,
1, 1954, sufficient to retire $754,-

a

and restrictions

count

wholesalers,

cabinets. The company believes it
is the second largest producer of.

Shortages of materials
on production ac¬

ago.

900

products, pharmaceutical yeasts,
corn
products and
refrigerated

also

Production

nation-wide basis

from

duction of petroleum.

consumer

a

bakers'

are

are

other forms of fuel that

on

some

was

aries.

than

put has been greater than demand

company's

sixteen branches and two subsidi¬

corresponding period

the

Miches-

packaged!
beer
is

The

marketed

that

and

19%

beer.

stoppages which have kept
output from rising faster. So far
lower

under

Budweiser

sold

premiumthe
trade¬

beer and 81%

work

10%

of

draught

there have been interruptions and

about

$3,000,000.

Anheuser-Busch

barrels

of

names

a

the West Coast at

lob. Of this total, about

been

although

on

estimated cost of

5,479,314

recently been lagging behind the
very high level of a year ago.

The company is

summer.

considering the erection of

In

of

of rayon has

use

The

pany

making rapid strides. As compared

,

been

first

more

to other forms of fuel is indicated

automobile

offered

being

new

markets. An indication of the shift

are

the

100th anniversary this year.
The 3%% debentures due 1977 are-

increasing. Buy¬

and

marks

its

nar¬

markets

active and

debentures

public financing for one of Amer¬
ica's largest and oldest brewing:
companies
which is celebrating:

lower but the spread between this

rower

offering yesterday (Oct. I)
Anheuser-Busch,

$35,000,000

Inc.

year.

tion.
The

of

not

replenishing their
inventories from current produc¬
they

The

months

have

Daily average consumption of cot¬

running

place in the production of steel.
Operations have increased to very
put

all

this year output of coal has been

in

Among the major industries the
most

Publicly Offered by
Dillon, Read Group

which

textile,

though they

even

reached

a

buying

Anheuser-Busch Debs.

taking place

branches of which have risen from

ago,

has

Paper output and the

ily.

have been lagging for some time.

Among

be¬

ever

shoes?

significant

are

industries

the

13%.

of

of newsprint has risen stead¬

use

gas. Expendi¬

are

larger than

are

Production

risen

the

electricity and

ably

marked

any

should

15%.
have

charged

every

than

by

bonds

2\k%

in

was

since

prewar
are

is also

divisions

though the current trend

commodity prices is slightly
upward, no significant signs point

1947

of

Demand

in

United

Treasury consisting
bills had an average

even more favorable and
in m^ny
lines output is
higher than it was
last year. New orders in this fielcl
have also been rising and unfilled

rapid pace
than the normal growth.

orders have been

as

will probably be

States

best

an even more

have become

steadily
rising
even
though changes are gradual. A re¬
cent offering of securities by the
are

-

pected at

tions of the country. Not all these

been

in

possible future trends. Interest

rates

living

were

of

general business activity.

on

of

some

suggest future stability rather than

the

States Department

in

the

year and further increases

prices has been

slightly downward dur¬
ing most of the last year, some
significant
rises
have
recently

on

ceeded.

general

or

while

year.

United

stable

the peak of last year will be ex¬

capital expendi¬
tures
as
in recent years. Total
dividend payments that have been
publicly reported,, according to

Commerce, have so far this year
been 4% larger than during the

falling

and

are

of

Use

than

more

factors in maintaining good busi¬
ness conditions.

trend in wholesale

blut present trends do not indicate

yield

decided

seasonal

increases

highest

have

in

reached

was

during the remainder of this

tion

corporation' executives

System

close to 5% be¬

are

peak which

has

policy is possibly another indica¬
that

banks of

last December. Part of the

off

factors

the

agricul¬

and

by member

leading cities

Com¬

ago.

loans

low the

greater.

year

a

many

supply of goods and the de¬

mand for them. While the

Throughout most of 1950

than they were

accurately

that

now

tures

slowing

were rapidly
increasing. In the last six months

clines

even

current

marked

is the

of

and 1951 bank loans

the

been

few

next

indication

quite

con¬

which

thermometer

double

December.

is

the

in the rise in bank loans to

down

textiles, building equipment,
beverages and retail trade the de¬
have

the

near

last

electricity

aspects of the current situation in

largest

conditions

Caution

year

during

the

measures

has

declining
bond
nrices
which have accompanied
the higher interest rates and the
reduced yields of stocks because
higher

business in the

Commodity price changes
stitute

scare

of

after

those

and

in

Commodity Price Changes Varied

to

between

spread

indicators

are

of

price rises have held, however,

supplies.

ascertaining

periods

Many
of
main¬

have

tained high

Changing prices of securities
another

reduced.

corporations

They

future.

4% lower

were

elapsed.

of long-term trends rather than of

for

other

significantly
until
period of time

considerable

a

has

rectors have in the future outlook
a

trends

ness

reached

was

41

Joins Waddell & Reed
(Special to The Financial Chronicle)

SARDINIA, Ohio — Florence J.
Rockey is with Waddell & Reed*
.

.

42

The Commercial and

(1254)

Financial Chronicle... Thursday,

* INDICATES

Securities

Now

in

Registration

stock

common

trust

fund.

•

it Bureau

Underwriter

—

D.

NEW ISSUE CALENDAR

Investment

October

Management Corp., New York.
Admiral Corp., Chicago, III.
June 2 filed 41,669 shares of capital stock (par $1) being
offered in exchange for common stock of Canadian Ad¬

3,

of

ITEMS

ISSUE

PREVIOUS
REVISED

National

Affairs,

Washington,

Inc.,

C.

Sept. 22 (letter of notification) 1,500 shares of common
(no par), to be offered for subscription by certain
employees. Price—$30 per share. Proceeds—For work¬
ing capital. Office—1231 24th Street, N. W., Washington,

stock

1952

Hawaiian Electric Co., Ltd

ADDITIONS

SINCE

£ Aberdeen Fund, New York
Sept. 26 filed 500,000 shares of capital stock. Price—At
market. Proceeds—For investment. Business—A mutual

October 2, 1952

Common

.

(Offering

October

miral Corp., Ltd., at rate of one share of Admiral stock
each two shares of Canadian Admiral stock held.

exchange

offer

will

expire

on

Oct.

Manager—Dempsey & Co., Chicago, 111.
fective June

Southeastern

Statement ef¬

^Aeroquip Corp., Jackson, Mich.
195,000 shares of

(par $1),

stock

cumulative

of

preferred

common

stock

par);

(no

Gas

and

October

(Blyth

Cincinnati

St.

Inc.

Boston

Corp.)

Debentures

Enquirer, Inc
Inc.)

Louis, Brownsville & Mexico Ry

&

Southern New England Telephone Co
(Ofiered

to

stockholders—No

(Merrill

Lynch,

Common

underwriting)

Fenner

Beane)

&

Underwriters

Co.

October 9, 1952
Consolidated

(Blyth

&

Co.,

Development
(The

First Boston

such

Corp.

Co.

October 10,

division equally between the parties
certificates for such shares of stock to be

-

1982.

Preferred

(Bids

11

To

CST)

a.m.

—To be

determined by competitive
bidding.
bidders: Halsey, Stuart & Co.
Inc.; Paine,

October

(Bids

Gulf

Probable

of

Power &

$2,500,000
fund)."

(1953

an

5,000 shares of

than $25,000.

by Oil and Gas Co.

oil
be

Sept. 25

(letter of notification)
mulative preferred stock
(par

(Bids

ferred

and

chattel
for

Proceeds

falo 2, N. Y.

Underwriter—None.

a.m.

October

American President

Co.)

of

28, 1952

11

a.m.

November

^

Bonds

EST)

Lines, Ltd

(Bids

(Offering

Class A & B

made

15,

(Bids

—

be

November

underwriting)

(Bids

and

Pacific

Building, Buf¬

to

8:30

(Bids

to

be

Oils

Ltd.,

Inc

Bonds

acquire

leases and

for

per

corporate

share.

Private Wires




Pittsburgh

San Francisco
to

all

offices

Chicago

Cleveland

working

$100, $500 and $1,000 each).
caoital.
Office—2110 Central

,

Offering—Expected before Oct. 15.

sto^k.-.(par

purposes.

one

cent).

Price—50 cents per share. ...Proand dev »ipment program.

ceejRsJ-—For rehabilitation

Proceeds—

Of^fce —

Under¬

•

Boston

—

Suite 839. 60 East 42nd St.. New York 17, N. 'Y.

Underwriter—Gardner & Co., New York.

it Buckskin Copper Corp.,

Philadelphia

Underwriter

Peak Uranium, Ltd. (Nev.)
April 7 (letter of notification) 600,U00 shares of common
stock (par $1).

writer—None.

New York.

investment.

For

$evil

Canada
common

Price—Approximately 64.48 cents
To

—

Deerpark Packing Co., Port Jervis, N. Y.
March 21 (letter of notification) 235,000 shares of com¬
mon stock (par 10 cents).
Price—$1.25 per share. Prorpnav
RFC lour
o* «41 0*0 qr»d for working

invited)._

Toronto,

Investment Fund, Inc., Los Angeles,

St.| Kansas City, Mo. Underwriter—None.

PST)

Sept. 25 filed 1,000,000 shares of

subordinated certificates of indebted-

Proceeds

Proceeds—For

capital.
it Bristol

Halsey,

Debentures

December 15, 1952
New Orleans Public Service

—

(im denominations of $60,

invited)

a.m.

Underwriter

[Crown Drug Co., Kansas City, Mo.
Srapt./18 (letter of notification) $250,000 of 4%% con¬
vertible debenture notes due Oct. 1, 1962. Price—At par

1952

Telephone & Telegraph Co
(Bids

Corp.

Underwriter—None.

25-year 5%%

market.

Bonds
be

Steel

Portsmouth

Depipsey-Tegeler & Co., St. Louis, Mo.

Bonds

invited)

18,

the

Se£i|;29 filed 500,000 shares of capital stock. Price—At

Long Island Lighting Co

To purchase

contracts

to

&

i^afifornia

1952

Detroit & Toledo Shore Line RR
cu¬

competitive bidding.
Probable
& Co. Inc.; Lehman Brothers;
Co. and The First Boston Corp.

by

Stuart

Langley

it Counselors
Common

November

due

Underwriters—

At. face amount. Proceeds—To build plant. Business
^Wholesale purchasing association. Underwriter—None.

3, 1952

to. stockholders—No

construction.

h^sS^To be offered for sale to members and others. Price

EST)

Dow Chemical Co.__

prop¬

2,000 shares of 6%

mortgages and conditional sales
working capital. Office—601 Genesee

11

new

it Consumers Cooperative Association, Kansas
City, Missouri
Sept. 24 filed $3,000,000 of 10-year 4^2% subordinated
certificates of indebtedness, $6,000,000 of 20-year 5%%
subordinated certificates of indebtedness; and $1,000^000

Common

$100) and 1.000 shares of
Price—$100 per share for pre¬

(no par).
$50 for common.

&

Co.
Sachs

Halsey,

ville, Md.

1952

Virginia Electric & Power Co

• Brick Discount Corp.,
Buffalo, N. Y.

stock

Bonds

EST)

(Goldman,

Hecht

common

Proceeds—

acquisition, exploration and operation of
erty. Underwriter—None. Solicitations are
to

common

Light Co
noon

on

it' Congressional Finance Corp., Hyattsville, Md.
Sept. 19 (letter of notification) 5,000 shares of capital
stock (no par)., Price — $5 per share.
Proceeds — For
working capital. Office—5603 Chillum Heights, Hyatts¬

1952

October 21,

"contributions in oil property
Price—No contributions will

amount less

EST)

noon

received

Stuart & Co. Inc., Chicago & New York.

Equip. Trust Ctfs.

(Bids

(narket (approximately $14
Proceeds—To E. E.
Parsons, Jr., a director.
Underwriter—Parsons & Co., Inc.,
Cleveland, O.
^ Blackwood & Nichols
Co., Oklahoma City, and
The Oil and Gas
Co., Madison, N. J.

to

16, 1952

October 20,
Carolina

Lerchen & Co.)

Georgia Ry
(Bids

share).

be accepted in
For

Common

October
Central

be

• Cincinnati
Enquirer, Inc. (10/8)
July ,25 filed $3,500,000 of 15-year sinking fund deben¬
tures due Aug. 1, 1967 and $2,500,000 of 10-year convert¬
ible junior debentures due Aug. 1, 1962. Price—To be
supplied by amendment. Proceeds—To pay notes issued

15, 1952

'(White, Weld. & Co. ^nd Watling,

Bingham-Herbrand Corp.

interests

EST)

Aeroquip Corp.

equipment. Office—
Bldg., Denver 2, Colo. Under¬

Sept. 4 (letter of notification)
stock (par $1).
Price—At

Sept. 26 tiled

Co.)

Bonds

noon

October

(letter of notification) 750.000 shares of com¬
mon stock
being offered for subscription by stockholders
of record
Sept. 15 at rate of one new share for each six
shares held (with an
oversubscription privilege); rights
to expire Oct. 3.
Price—At par (10 cents per
share).
Proceeds—For drilling expenses and

per

Common
&

to

Peabody & Co. and Merrill Lynch,
Pierce, Fenner & Beane (jointly); Equitable Securities
Corp;:: Smith. Barne.v & Co. and Blyth & Co.. Inc.
(jointly). Bids—To be received up on noon (EST) on
Oct. 20 at Room 2033, No. 2 Rector St., New York 6, N. Y.

invited)

Morgan

(Bids

Sept. 15

Railway Exchange

be

scheduled

(jointly); Kidder,

Bonds

Utah Power & Light Co

Oct. 7.

writer—None.

1952

Sulphur Corp
(Peter

Big Horn-Powder River Corp.,
Denver, Colo.

603

to

determined

be

W.~r(3c

California Oregon Power Co

Webber, Jack¬
son
& Curtis, and Stone &
Webster Securities Corp.
(jointly); White, Weld & Co. and Kidder/ Peabody &
Co. (jointly).
Bids—To be received up to noon
(EST)
on
•

14,

Tentatively

Proceeds—For

bidders:

•

Associated Telephone
Co., Ltd. (Calif.)
(10/7)
Sept. 5 filed $10,000,000 of first
mortgage bonds, series
H, due Oct. 1, 1982. Purpose—To repay bank loans and
for property additions and
improvements. Underwriters

—

14.

• Carolina Power &
Light Co. (10/20)
Septi#17 filed $20,000,000 of first mortgage bonds

Co.)

1952

Seymour Water Co

issued.

Bids

Oct.

Debentures

Morgan Stanley &

and

& Hutzler (jointly); Shields & Co.
Rollins & Co. Inc. (jointly); White, Weld &

and Blair,

Inc.)'

("World Bank")....

—

Salomon iBhps.

and

...Common-

International Bank for Reconstruction and

(EST) on Oct. 28. If no bid is re¬
ceived which at least equals the minimum
price of $14,000,000, the trustee will surrender and deliver the cer¬
a.m.

(jointly);

(jointl£^fBlyth & Cof, Inc., The First Boston Corp.

~

Freightways, Inc

Co.

Co.

'

Preferred

Pierce,

(par $1).

preference stock
for the discharge of bank

California Oregon Power Co. (10/14)
Sept. 18 filed $7,000,000 first mortgage bonds due Oct. 1,
1982. Proceeds—To repay bank loans. Underwriters—To
be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc., Smith, Barney & Co.,
Union Securities Corp. and Carl M. Loeb, Rhoades &

and Dean Witter & Co.)

Corp.

stock

convertible

Blyth & Co., Inc., and The First Boston
Corp., both of New York.

Common

Webster Securities

&

derwriters

Eq. Tr. Ctfs.

CSTl

noon

two

California Oregon Power Co. (10/8)
Sept. 18 filed 250,000 shares of common stock (par $20).
Price—To be supplied by amendment. Proceeds—for
repayment of bank loans and for new construction. Un¬

Common

First

and

retire

Inc.; Lehman Brothers. Bids—To be re¬
ceived up to 11:30 a.m. (EST) on Oct. 7 at Bankers Trust
Co., New York.

1952

8,

White's Auto Stores, Inc..

tween the United States of America and the Dollar in¬

new

Co.,

Blyth

...

Sierra Pacific Power Co

bidding. Bids—To
Washington,
Agreement" be¬

cause

&

(Bids

be received by The Riggs National Bank of
D. C., as trustee under a "Settlement

and

EST)

a.m.

(Halsey, Stuart. & Co.

(Stone

tificates for

11:30

To

Fenner & Beane and William R. Staats &

^

Debentures

California Oregon Power Co.

American President Lines, Ltd. (Calif.)
(10/28)
Sept. 4 filed 100,145 shares of class A stock (no par)
and 2,100,000 shares of class B stock
(par $1). Proceeds
—One half to go to the Treasurer of the United States

to 11

.

Corp

—

(10/7)

common

issues (5.50% and 5.60%) or
loans, or both. Underwriters—To be determined by com¬
petitive bidding. Probable bidders: Merrill Lynch, Pierce,

EST;

Common

(Bids

Office—Houston,

and the other half to the Dollar interests.
—To be determined by competitive

Proceeds

(First Boston Corp.;

United

Sept. 8 filed 350,000 shares of

Common

(Bids 11:30 a.m.

Texas.

up

Underwriter—Walston, Hoffman & Goodwin.
Francisco, Calif.

California Electric Power Co.

Bonds

EST;

Harnischfeger Corp.

stock

through Marion R. Allen, President.

1952

California Electric Power Co

(no par). Price—For
debentures, at face amount; for preferred stock, $10 per
share; and for common stock, $5 per share. Proceeds—
For additional
working capital. Underwriter — For
debentures, C. K. Pistell & Co., Inc., New York; and for
preferred and common stock, none, with sales to be made

terests,

President.

Inc.;

Co.,

Ltd

(Bids noon

•
Allpark Finance Co., Inc. (10/6-10)
Aug. 28 filed $500,000 of 6% sinking fund convertible
10-year debenture notes due June 30, 1962; 29,180 shares

60-cent

&

7,

Associated Telephone Co.,

York, and Watling, Lerchen & Co., Detroit, Mich.

22347 shares

Herrick

October

(10/15)

common

150,000 shares are to be sold b,y company and
45,000 shares by eight selling stockholders. Proceeds—To
repay bank loans.
Underwriters—White, Weld & Co.,

of

...Debentures & Common

Fund

San

of which

New

stock

Inc.)

Co.,

&

15

(letter of notification) 4,100 shares of common
(par $1). Price—At market (estimated at $13 per
share). Proceeds—To Henry C. Maginn, Executive Vice-

Debentures

Pistell

K.

(Barrett

19.

Sept. 24 filed

Underwriter—None.

Calaveras Cement Co., San Francisco, Calif.

6, 1952

Aug.

(C.

Dealer-

17.

C.

D.

underwriting;

Allpark Finance Co., Inc

for

This

stockholders—No

to

Las Vegas,

Nev.

Dole

(James)

Sebttil9 (letter

Engineering Co.

of notification) 100,000 shares of con¬

Sept. 25 (letter of notification) 50,000 shares of preferred

vertible

stock

tion by stockholders of record Oct. 6 at rate of one share
foil each 10 common shares held; rights to expire on Oct.

10

(par $5) and 150,000 shares of

cents).

Price—At

chinery and land.

Vegas, Nev.

par.

Proceeds—To

Office—1020 V2

Underwriter—None.

stock

(par

purchase

ma¬

common

So.

Main

Street, Las

•

5% oreferred stock to be offered fo- subscrip¬

31

{ Price—At par ($2 per share). Proceeds—For general
corporate purposes. Office—58 Sutter St., San Francisco
4

Ilnilpru'rifpr

Nnnp

(

Volume 176

•

Number 5156

Dow Chemical

Sept 23 filed
be

to

.

.

The Commercial and Financial ChWHttle

.

Co., Midland, Mich.

625,000 shares of

offered

follows:

as

"...

(11/3)
stock

common

:

^

(1255)

L. L;

(par $5)

None.

$5,000

mgy„

be

used

Of the amount offered,

payment

as

for

services

and

for

About

420,000 shares for sub- *material^Supplied.
•
seription by common stockholders of record Oct. 21, 1952
Sept. 16 (letter oFhotification) 12,300 shares of class A
at rate of one new share for each 50 shares
common stock
held, and
(par $1). Price—$5 per share. Proceeds
about 20o,000 snares for subscription
—For working capital.
by employees of
Underwriter—None, sales to be
the

and

company

panies.
26.

subsidiaries

and

The offering will open Nov. 3

.'rice—To

For

its

be

supplied by

affiiiaita

com¬

close

Nov.

ana

amendment.

general corporate purposes.

on

made

through certain officers and directors.
Sept 18 (letter of notification) 16,972 shares of Class A
common
stock
(par $1).
Price—$5 per share. .Pro¬

Proceeds—

Underwriter—None.

ceeds—For

working capital.
Co., Boston, Mass.

* Duquesne Light Co., Pittsburgh, Pa.
Sept. 30 filed 250,000 shares of common stock (par $10),
of

which 80,0C0 shares will be offered by

170,000

shares

by

the

construction.

new

Philadelphia

Co.

Underwriters—To

Proceeds—For

be

determined

by

July 7 filed
(par 25

★ Hawaiian
(10/3)

McNeils, ufficeia

.

(letter of notification) 2,000 shares of common
Price—To be supplied by amendment.

Proceeds—To John C. Tyler, the selling stockholder. Of¬
fice—4680 Wilshire Boulevard, Los Angeles, Calif. Un¬

derwriter—Lester, Ryons & Co., Los Angeles, Calif.

—

'general corporate purposes. Address—c/o
tion Trust Co., 1004 Second

The Corpora¬

Ave., Seattle 4, Wash. Un¬

derwriter—Non6.

Sachs &

'

Stores,

Inc.,

Philadelphia,

100,000 shares of

Pa.

stock

common

—

To

repay

Underwriter

(10/21)

Co., New York.

21

(letter

of

cumulative

—$25

per unit to subscribing stockholders and $27.50 per
unit to public. Proceeds — To continue development of
"Courier" model aircraft and to design and develop

"Helioplane"

aircraft.

Metro¬

Office—Boston

Airport, Norwood, Mass. Underwriters—Chace,
Whiteside, West & Winslow, and H. C. Wainwright &
Co., both of Boston, Mass.
Hilseweck

Minerals

Corp.,

Dallas and

stock

None.

common

Sept.

18 filed $1,500,000 of 20-year non-negotiable de¬
bentures due Aug. 1, 1972 and 139,920 shares of common

(par

$1).

stock

Price—$960 per $1,000 debenture, plus
subscription warrants for the purchase

of 50 shares of

stock.

common

Proceeds

—

For general

19 filed $1,973,000 of convertible subordinate dedentures due Oct. 1,
1967, to be offered for subscription
by common stockholders at rate of $500 of debentures

corporate purposes. Business—To engage in oil and gas
business. Underwriter—None.

for

June

Sept.

each

66

shares

of

stock.

common

Price—100%

of

principal amount. Proceeds—From sale of debentures,
together with funds from bank loans, for constiuction
of new lithium chemical
plant, to enlarge ore mining
and concentrating plant, for retirement of
$200,000 term
note held by insurance company, and
for additional
working capital. Underwriter—Estabrook & Co., Boston,
Mass.

market

(on

the

Calif.

San

Underwriter-r-None.

★ International Glass Corp., Beverly Hills, Calif.
(letter of notification) 299,635 shares of com¬

cents per
tor.

share). Proceeds—To Irene F. Marple, a direc¬
Underwriter—Stanley Pelz & Co., Inc., New York.

General Bronze

Aug.

28

Corp.

48,0/6

Hied

snares

of which 28,576 shares are

by

common

IC

shares

stockholders

held

Sept.

10,000

shares

Employees' Profit

of

rate

(rights to

offered

are

stock

common

to

the

one

share

subsidiaries.

$5),

expire

trustees

Oct.

on

of

each

tor

the

6);

com¬

Sharing Plan and Trust; and

5,000 shares to directors and officers of the
its

(par

Price—To

stockholders

company

and

$14 per share.

Proceeds—For working capital and to finance inventories
and receivables.
Underwriters—For 28,576

shares, Rey¬

nolds

&

Co., New York.

rate

expire
and

of

Oct.

to

share for each

one

30.

reduce

bank

Glen Alden

Aug. 26
stock

share for

holders

$8.63

of

par)

loans.

latter

Glen

entitled.

of NASD

will

held; rights to
expansion of facilities

Office —17

East

Railroad

Underwriter—None.

Co.

in

exchange

share-for-

stock of Burns Bros. As an alternative

Alden
Offer

receive

may

share
will

25

receive
to

expire

cents for

cash

which
on

at

rate

they

of

would

Oct. 3. Members

each

share of Burns

Bros,

stock deposited under plan.
Underwriter—None.
Georgeson & Co., ^Jew York, will assist the company in
the exchange.

it Golden Ensign Mining Co.
Sept. 22 (letter of notification)
m'on stock.
sink

Lake

City, Utah.

•

Gulf

Sept.

8

cents).

com-

shaft

Underwriter—None.

Sulphur

Corp. (10/14-15)
shares of common stock (par 10
Price—$3 per share. Proceeds—To pay costs of
filed

225,000

drilling 25 test wells and for other corporate puiposes.
Underwriter—Peter Morgan & Co., New York.
'
•

|

Gyrodyne Co. of America, Inc.

Sept.

10

(letter of notification)

/
2,000 shares of class A

stock (par $1). Price—$5 per share.
Proceeds
working capital.
Office—Flowerfield, St. James,

common

—For

Technical Aero

Services, Inc.

15

(letter of notification) 300,000 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—For

working capital. Office—International Terminal, Wash¬
ington National Airport, Washington, D. C. Underwriter
-James T. DeWitt & Co.,
•

Iowa

Public

Service

Washington, D. C.

ic Life Underwriters, Inc., Phoenix, Ariz.
Sept. 22 (letter of notification) 600 participating profit
units.
Price—$20 per unit. Proceeds—To finance sale




policies.

Office

—

7

Weldon

Street,

Underwriter—None.

ferred

Underwriters—Blyth & Co., Inc. and The First
Corp., both of New York.
"

program.

ic Luckyleven Mining Corp., Phoenix, Ariz.
Sept. 26 (letter of notification) 7,500 shares of

Ariz.

common

Price—$10

develop mines.

per share.
Proceeds—To equip and
Office—39 West Adams Street, Phoenix,

McBee Co., Athens, Ohio
Aug. 8 (letter of notification) 2,500 shares of first pre¬
ferred stock, 5% series. Price—At par ($100 per share).
Proceeds—For working capital.
Underwriter—Roy E.
Hawk & Co., Athens, O.

June 12 filed

10,000,000 snares of

Price—$2

per

share.

Corp.

of

California

105 shares of first pre¬

Securities

Corp., San Francisco, Calif.

ic Mercantile Acceptance Corp. of California
Sept. 28 (letter of notification) $14,675 of 10-year junior
subordinated debentures. Price—At par. Proceeds—For
working capital.
Office—333 Montgomery Street, San
Francisco,
Calif.
Underwriter — Guardian
Securities
Corp., San Francisco, Calif.
ic M/chigan Spring Co., Muskegon, Mich.
Sept. 22 (letter of notification) 5,000 shares of 7% cu¬
mulative preference stock.
Price — At par ($10 per
share).
Proceeds—For working capital.
Office—2700
Wickham

Drive,

Mich.

Muskegon,

Underwriter—None.

ic Midcontinent Chemical Co., Grove City, Ohio
Sept. 26 (letter of notification) $50,000 of 5V2% secured
debentures due March 15, 1963.
Price—At par (in de¬
nominations of $1,000 and

$500). Proceeds—For working
Underwriter—The Ohio Company, Columbus,

capital.
Ohio.

'

'

Ltd., Toronto Canada
shares of common stock, each
"A," "B" and "C" warrant,
each giving the holder the right to buy one additional
share for each two shares purchased in two, three, or
Mineral Exploration Corp.,

July

filed 2,000,000

29

share

to

attached

have

an

$2 and $3 per share, respectively. Price
2,000,000 shares, $1 per share—Canadian.
Pro¬
ceeds—For exploration, development and acquisition of
five years, at $1,
—For

properties. Underwriter—Brewis & White, Ltd., Toronto,
Canada. Names of United States underwriters to be sup¬
.

.

ic Mississippi Chemical Corp., Yazoo City, Miss.
Sept. 29 filed 2,000,000 shares of common stock (par $5),
of which 849,038 shares have been subscribed, paid for
and issued, and an additional 107,550 shares have been
subscribed for as of Aug. 28 and will be issued in con¬

The remain¬
primarily to farmers
Proceeds — For new

expansion of ammonia plant.

nection with

ing shares will be offered for sale
farm groups.

Price —At par.

Underwriter—None.

•

.

Multiple Dome Oil Co., Salt Lake City,

Utah

Sept. 8 (letter of notification) 150,000 shares of common
stock.
Price—At market (approximately 10 cents per
share). Proceeds—To George W, Snyder, President.
derwriter—Greenfield & Co., Inc., New York.
Tank

National

Un¬

Okla.

Co., Tulsa,

Aug. 27 (letter of notification) 4,000 shares of common
stock
(par $1).
Price—At the market (estimated at
about $24 per share).
Proceeds — To Jay P. Walker,
President, the selling stockholder.
Address — Drawer
1710, Tulsa, Okla.
Underwriter—None.

Nevada

Mortgage & Investment Co.

Aug. 25 (letter of notification) 60,000 shares of common
stock (par $1) and 240,000 shares of preferred stock (par
$1) to be offered in units of four shares of preferred
stock and one share of common stock. Price—$5 per unit.
Proceeds—For costs incident jto organization and devel¬
opment of business in purchasing and making first and
second mortgage loans; and to exercise an option cover¬
ing sale of income property. Office—114

Nev.

Aug. 5 filed

North Third St.,

Underwriter—None.

common

Proceeds

—

stock (par 25

100,000 shares of common stock

Price—At the market. Proceeds—To J. Paul

dent,

Underwriter

brokers

on

—

None,

to

be

handled by

Stock Exchange.

the New York

Paradise Valley

sales

(par $4).

Getty, Presi-„

Oil Co., Reno, Nev.

stock. Price—
Proceeds—To drill six wells

Aug. 20 filed 3,000,000 shares of capital
At par

(10 cents per share).

subleased land and for other corporate purposes. Un¬

on

derwriter—None, with sales to be made on a commission
basis (selling commission is two cents per share).
Of¬
fice—c/o Nevada Agency & Trust Co., Inc., Cheney Bldg.,
N.

Virginia St., Reno, Nev.

Perfect Circle

Corp., Hagerstown,

Ind.

17 (letter of notification) 1,000 shares of capital
stock (par $2.50). Price—At the market (approximately

Sept.

$14 per share). Proceeds—To Herman Teetor, the selling
stockholder.
Underwriter — A. G. Becker & Co. Inc.,

Chicago, 111.

,

-

"

*

'

B

■

Md.
July 7 (letter of notification) 3,000 shares of common
stock (no par). Price—At the market (estimated a $7 per
share). Proceeds—To Levi B. Phillips, Jr., Vice-Presi¬
Phillips Packing Co., Inc., Cambridge,

dent, the selling stockholder.

Underwriter—Alex. Brown

Baltimore, Md.

ic Phoenix Budget Loans, Inc., Minneapolis, Minn.
Sept. 22 (letter of notification) 4,000 shares of preferred

stock, series A (no par). Price—$24 per share. Proceeds
—For working capital.
Office—227 Twin City Federal
Building, Minneapolis, Minn.
&

(Glenn), Inc.

For drilling of
exploratory wells, acquisition of leases and for general
corporate purposes. Underwriter—B. V. Christie & Co.,
Houston, Tex. Dealer Relations Representative—George
cents).

Acceptance

stock, 5% series. Price—At par ($20 per share).
working capital. Underwriter—Guardian

& Sons,

Underwriter—None.

McCarthy

Underwriter—Gran-

Proceeds—For

139

Long Island Lighting Co.
Sept. 3. filed 599,942 additional shares of common stock
(no par) being offered for subscription by common stock¬
holders of record Sept. 24 in the ratio of one new share
for each seven shares held; rights to expire Oct. 9. Price
—$15.50 per share.
Proceeds^-To finance construction
Boston

Proceeds—To Clifford

Pacific Western Oil Corp.

ceeds—To pay off temporary bank loans and for property
additions and improvements.
Underwriter—None.

insurance

additional

purchase four

(letter of notification)

Las Vegas,

Sept. 25 at the rate of one new share for each
eight shares held (with an oversubscription privilege);
rights to expire on Oct. 14 Price—$21 per share
Pro¬

life

to

share.

per

Strike, the selling stockholder.

Sept. 26

Co.

Aug. 29 filed 150,122 shares of common stock (par $5) be¬
ing offered for subscription by common stockholders of

stock.

250,000 shares of

Price—At par (10 Cents per share). Proceeds
for ore.
Office—1350 So. 7 East, Salt

—To

17,650

International
Feb.

Phoenix, Ariz.

offered

shares

shares; and to public, 275,000
shares. _Price—At par ($1 per share).
Proceeds—For
general corporate purposes. Office—119 South Beverly
Drive, Beverly Hills, Calif. Underwriter—Douglass &
Co., Beverly Hills, Calif.

of

iiotiiication) 13,232 shares of capital

being

common

of

per

become

Coal

(letter

(no

two shares

Proceeds—For

Street, Norwich, N. Y.

Corp.,

share to be offered in units

per

warrants

bery, Marache & Co., New York.

record

ic General Laboratory Associates, Inc. (N. Y.)
Sept. 30 (letter of notification) 7,435 shares of common
stock.
Price—At par ($20 per share) to be offered for
subscription by common stockholders of record Oct. 15
at

stock, to be issued as follows: To William Hoep6,985 shares; to stockholders of Soft-Flex Glass

Fabrics

being offered for subscription
at

18

pany's

of

mon

pner,

at $6

and

Price—$19.87 V2

construction.

Sept. 22
Front Range Mines, Inc., Denver, Colo.
Sept. 8 (letter of notification) 125,000 shares of common
stock (par $1).
Price—At market (approximately 37Vz

stock

share

shares.

stock (par $1).
Francisco Stock Ex¬

change). Proceeds—To selling stockholder (Gwendolyn
MacBoyle Betchtold, as executrix of the last will and
testament
of
Errol
Bechtold, deceased).
Office—San
Francisco.

one

S.

and warrants to purchase 20,000 shares

(par $2)

common

and

Idaho Maryland Mines Corp.
6 filed 200,000 shares of common

Price—At

stock
of
of

plied by amendment.

Oklahoma City

employees pursuant to the terms
plan.
Price—$3 below the average
market price for the month in which
payment is com¬
pleted.
Proceeds—For general funds.
Underwriter—

Co., Philadelphia, Pa.

of

type

politan

Telephone

Offering—Date indefinite.

McGraw (F. H.) Co., Hartford, Conn.
Sept. 10 (letter of notification) 5,000 shares of common

be

Norwood, Mass.
notification) 3,000 shares of nonpreferred stock (par $1) and 3,000 shares
of common stock
(par $1) being offered initially to
stockholders of record July 25 in units consisting of one
July

(par $1)

purchase

Foote Mineral

Proceeds

construction.

Helio Aircraft Corp.,

to be offered to certain
stock

share).

per

for new

share of preferred and one share of common stock. Price

Floseal Corp., Seattle, Wash.
Sept. 12 (letter of notification) 24,950 shares of*capital
(par $1). Price — $12 per share. Proceeds
For

stock

of

share for each 10 shares held.

common stock (par $15).
supplied by amendment.
Proceeds—For
expansion and working capital. Underwriter—Goldman,

(par $1).

filed

new

^ Hecht Co., Baltimore, Md.
135,000 shares of

California

9

H.

—None.

uiictr£.;:ivjprice—To

dxiu

ic Farmers Underwriters Association, Los Angeles,

Fair

T.

stock to be offered

increase caPltal- Underwriters—-*<• Bept; 30 filed

,?~T

tors of the two companies

Sept.

common

one

1,613,168 shares ol class A common
At par ($20
stocky,.,1,
and 2,744,034 srhares ol class, B uoimLoL^^Siett-term notes and

John J. Khoaes and James l.

Food

Honolulu,

stockholders of record Oct.

subscription by

cents)

Sept. 25

Ltd.,

Co.,

common

3 in the ratio of

(par 35 cents), the class A stock to be sold only to
policyholders of The Farm & Home Insurance Co. Prict

stock

Electric

for

Discount Co.,

stock

-

pur¬

Sept. 25 filed 50,000 shares of

Ariz.

r3ou TOCC

general corporate

Underwriter—The First Boston Corp., New York.

poses.

(jointly); Smith, Barney & Co.
Phoenix,

Jackson &

50 Broadway, New York, N. Y.

WHitehall 3-2181.

ic Mercantile

of bank loans and for

part

pay

competitive bidding. Probable bidders: The First Boston
Corp.; .Lehman Brothers; Kinder, Peaboc,y & Co., Merrill
Lynch, Pierce, Fenner & Beane and White, Weld & Co.
Farm & Home Loan &

—

Harnischfeger Corp. (10/7)
Sept. 17 filed 150,000 shares of common stock (par $10).
Price—To be supplied by amendment. Proceeds—To re¬

and

company

Underwriter

A. Searight,

43

Underwriter—M. H. Bishop

Co., Minneapolis, Minn.

ic Porter-Cable Machine

Co., Syracuse, N. Y.
shares of common
Proceeds—To two

Sept. 24 (letter of notification) 5,000
stock (no par). Price—$20 per share.

Continued

on

page

44

44

(1256)

The Commercial and Financial Chronicle
...Thursday, October 2, 1952

Continued from page 43
selling stockholders.
Inc., Syracuse, N. Y.
Powers

Underwriter

—

William

N.

Pope,

of

Manufacturing Co., Longview, Tex.

Sept. 25 filed 250,000 shares of common stock (par $1).
Price
$2 per share.
Proceeds —For machinery and
equipment and new construction.
Business—Production
—

of

Southern New England Telephone Co. (10/8)
Sept. 22 filed 400,000 shares of capital stock to be offered
for subscription by stockholders of record Oct. 8 at rate

heavy duty power transmission chain, prockets, gears,
Underwriter—Dallas Rupe & Son, Dallas, Texas.

etc.

Pure Oil Co.,
Chicago, III.
July 17 filed 85,688 shares of common stock (no par)
being offered in exchange for 471,287 shares of Hickok
Oil Corp., class A common stock
(par $1) at rate of one
Pure Oil share for

each 5V2 Hickok shares, conditioned
upon
approval of
merger
of Hickok into Pure Oil
Products Co., a wholly-owned

subsidiary of Pure Oil

Co. Underwriter—None.

Ar Rugh-Yuma Enterprises, Inc., Yuma, Ariz.
Aug. 26 (letter of notification) $50,000 of 8% debenture
bonds due serially 1962-1967 and 500 shares of
capital
stock (par
$100).
Price—At par (the bonds in multiples
of $100).
Proceeds—For construction of a motor hotel.
Address—Box 1701,

Yuma, Ariz.

Underwriter—None.

Ssf6W3y StofGSy Inc.
Sept. 12 filed 1,900 shares of 4% cumulative preferred
$100) and 18,000 shares of common stock (par
$5) to be issued to James A. Dick Investment Co.
(for¬
merly The James A. Dick Co.) in exchange for inven¬
tories, fixtures, operating supplies, good will and other
stcok (par

>

assets of Dick.

£ will sell all
time to time

It is

or

anticipated that the Dick Company

substantial part of
the New York Stock

a

on

writer—None.

these shares from

Exchange.

Under¬

Ar Salt Lake Hardware Co., Salt Lake
City, Utah
Sept. 23 (letter of
notification) 6,650 shares of common

stock

(par $10).

working

Price—$23.70

capital.

Salt Lake

per

Office—105

City, Utah.

share.

North

Proceeds—For

3rd

West

Street,

Sept. 19 (letter of
notification) 7,440 shares of common
stock. Price—At par
($25 per share). Proceeds—For air¬
craft and
equipment. Underwriter—None.

Ar Schulte (D. A.), Inc., New York
Sept. 26 filed 717,149 shares of common stock
(par $1),
in two
blocks, one in the amount of 349,500 shares and
the other
367,649 shares, to be sold from time to time on
York Curb
per

stockholders.

Exchange. Price—At market (ap¬
share). Proceeds—To certain selling

Business—Cigarette
Underwriter—None.
Ar Scudder,

Stevens

&

Clark

and cigar store chain.

Fund,

Inc.,

Boston,

Sept. 25 filed 75,000 shares of
capital stock. Price—At
Proceeds—For investment.
Underwriter—None.

market.

Seacrest

Productions, Inc., Newport, R. I.

Sept. 8 (letter of
notification) 5,000 shares of non-voting
stock, series B (no par). Price—$10
per share.
Proceeds—To acquire real estate and
buildings, convert
sound stages, install
recording equipment and
common

cameras,

and for other
corporate purposes.

Newport, R.

I.

Providence, R.

Underwriter

Office—73 Bliss Road,
Kidder, Peabody & Co.,

—

I.

Security Title
Aug. 22 (letter of

&

Guaranty Co., N. Y.

notification) 32,000 shares of common
Price—At market (about $2
per share).
Proceeds—To Investors
Funding Corp. of New York.
Underwriter—Dansker Brothers & Co.,
Inc., New York,
Sierra Pacific Power
Cp. (10/8)
Sept 15 filed 26,775 shares of
common stock
(par $15)
to be offered for
subscription by holders of preferred
stock (par

$1).

and common stocks
of record about
Oct. 8 on the basis
of one share for
each six shares of
preferred and one
share for each 12
shares of common

stock;

expire about Oct. 20.

rights to

Price—To be supplied by amend¬
ment. Proceeds—From
sale of
stock, plus proceeds from
private sale of
$1,500,000 first mortgage bonds in
October,
1952, to be used to repay

$1,100,000 bank loans and for
new construction.
Underwriter—Stone & Webster Secu¬
rities Corp., New
York, and Dean Witter & Co., San
Francisco, Calif.
Signal Mines, Ltd.,
Toronto, Canada
July 14 filed 300,000 shares of
common

At par ($1
per

stock.

Price—

share). Proceeds—For
exploration, devel¬
opment, and mining
expenses, and to reimburse Maurice
Schack, Secretary-Treasurer.
Business—Quartzite min¬
ing. Underwriter
Northeastern Securities
Co., New
York.
—

'/

<;

•

Socony-Vacuum

Oil

..•»

Co.,

Inc. :,
Sept; 5 filed 3,180,188 shares
of capital stock
(par $15)
being offered for
subscription by stockholders of record
Sept. 25 at rate of one new
share for each 10 shares
held;
rights to expire on-Oct:*147
Price—$31 per share. Proceed«—uFo,rrthe acquisition and
^

_

.

...

-

-

A

-

"

*

'

development of crude oil
production, and the expansion and
improvement of re¬
fining, transportation and
marketing facilities. Under¬
writer—Morgan Stanley & Co., New York.
•

Southeastern Fund,
Columbia,
Aug. 14 filed $350,000 of

S.

C.

(10/6-10)
10-year 6% subordinated sink¬
ing fund debentures (with
common stock purchase
war¬
rants attached) and
175,000 shares of common stock
par
$1).
Price
To be
supplied by amendment.
Pro¬
ceeds— To redeem
$53,500 outstanding 5y4% sub¬
ordinated convertible
debentures and 10,000 shares of
<6%% cumulative preferred
stock (at $11
per share and
accrued

dividends),

and for additional
working capital.
Business—Financing retail sales of house trailers on con¬
ditional sales contracts.
Underwriter—Barrett Herrick
& Co.,

Inc., New York.




each nine

for

shares

held.

Price—At

par

(Indiana)

Standard Oil Co.

Aug. 28 filed $139,647,200 of 30-year 3V&%

debentures
(convertible on or before Oct. 1, 1962),
being offered for subscription by holders of dapital stock
at the rate of $100 of debentures for each 11 shares of
stock held as of Sept. 17; rights to expire on Oct. 6.
due Oct.

1, 1982

Proceeds—To

Price—100%.
bank

loans

of

retire

$50,000,000 of

1%%

$25,000,000 of 1.75% notes of
Stanolind Oil & Gas Co., a wholly-owned subsidiary,
payable to banks; and $6,500,000 of 2.75% notes of
Pan-Am
Southern
Corp., a subsidiary substantially
owned by Standard, payable to banks.
Any remainder
will be used for capital expenditures.
UnderwriterMorgan Stanley & Co., New York.
company,

State Exploration

Co., Los Angeles, Calif.
Aug. 6 (letter of notification) 43,000 shares of capital
stock (par $1) being offered for subscription by stock¬
holders of record Aug. 20 at rate of one share for each
10 shares held; rights to expire on Sept. 19. Price—$5 per
share. Proceeds
For expansion program and general
corporate purposes. Office—649 S. Olive St., Los An¬
geles, Calif. Underwriter — None. Unsubscribed shares
will be sold to "small group of individuals."
—

Streeter-Amet

Co., Chicago, III.
Aug. 27 (letter of notification) 2,367 shares of
(par $50) to be offered for subscription by

stock

stockholders

at

shares held.
crease

rate

of

Price—$100
costs.

new

one

share

for

Ravenswood

Avenue,

Underwriter—None.

Sunshine Packing Corp. of Pennsylvania
July 3 filed $1,000,000 of 6% convertible debentures due
1972 (subordinate) and 450,000 shares of common stock
(par 50 cents) of which the debentures and 400,000 shares
of stock

are

to be offered in units of

$50 of debentures

and 20 shares of stock.

Price—$100 per unit. Proceeds—
To increase capacity of plant and for
working capital.
Underwriter—Weber-Millican Co., New York.
Sweet Grass Oils, Ltd., Toronto, Canada
July 29 filed 375,000 shares of common stock (no par).
Price—To be related to quotation on the Toronto Stock
Exchange at time of offering. Proceeds—For working
capital. Underwriter—F. W. MacDonald & Co., Inc., New
York.
Offering—Probably some time in October.

Texas General Production Co.
June 4 filed 2,500,000 shares of common

Underwriter—To be named by amendment

ably Hemphill, Noyes
Tentatively postponed.

&

Co.

New

John R. Kaufmann Co.,
Scherck, Richter Co. and Semple,
Jacobs & Co., Inc., all of St.
Louis, Mo.; and Gearhart
& Otis, Inc., New York.
Utah

Power & Light Co.

(10/14)
filed $10,000,000 of first mortgage bonds due
Proceeds—To repay bank loans and for new con¬
struction. Underwriters—To be determined
by competi¬

Aug.

14

4982.
tive

bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; White, Weld & Co.; Lehman Brothers and BearStearns & Co.
(jointly); The First Boston Corp. and
Blyth & Co., Inc. (jointly); Union Securities Corp. and
Smith, Barney & Co. (jointly); Kidder, Peabody & Co.;
Salomon Bros. & Hutzler.
Bids—Tentatively scheduled
to be received up to noon
(EST) on Oct. 14.

Ar Van

Horn

(prob¬
Offering—

York).

Texhead

Royalty Co., Houston, Texas
(letter of notification) $135,000 of 3% income
notes, due July, 1962, and 30,000 shares of common stock
(par 10 cents) to be offered in units consisting of $9
principal amount of notes and two shares of common,

Butane

Service,

King City,

Calif.

Sept. 22

(letter of notification) 10,000 shares of capital
stock (no par).
Price—$16.10 per share. Proceeds—For
working capital. Address—P. O. Box 1, King City, Calif.

Underwriter—Schwabacher & Co., San Francisco, Calif.

construction program.

Underwriters—To be determined

by competitive bidding. Probable bidders; Halsey, Stuart
& Co. Inc.; Kuhn, Loeb & Co. and Wertheim & Co.

& Co.

Stone

&

Webster

Securities

Corp.;

Union

Corp.; Salomon Bros. & Hutzler; White, Weld

Bids—To be received up to 11 a.m. (EST) on Oct.

21, at 11 Broad Street, New York, N. Y.
White's Auto Stores, Inc. (10/8)
Sept. 18 filed 100,000 shares of cumulative convertible
preferred stock (par $25). Price — To be supplied by
amendment. Proceeds—To redeem 5% convertible pre¬
ferred stock and for working capital. Underwriter—Mer¬
rill Lynch, Pierce, Fenner & Beane, New York.

Wilhead Royalty Co.,

Houston, Texas
(letter of notification) $135,000 of 3% income
July, 1962, and 30,000 shares of common stock
(par 10 cents) to be offered in units consisting of $9
principal amount of notes and two shares of common

July 17

notes due

stock of this

company, together with one $9 note and
two common shares of Texhead Royalty Co.
Price—
$20 per unit.
Proceeds—For acquisition of oil and ga3
royalties in the Williston Basin area.
Office—415 San
Jacinto

Mosle

Bldg., Houston 2, Texas.
Underwriter—Rotan,
Moreland, Houston, Tex
(See also Texhead

&

Royalty Co. above.)

Placed privately.

Magazine,

Inc., Beverly Hills, Calif.
Sept. 17 filed 6,600 shares of 5% cumulative preferred
and 6,600 shares of common stock (par
$10) to be offered in units of one share of preferred and
stock (par $100)
one

share of

stock.

Price—$110 per unit. Pro¬
national picture magazine. Un¬
derwriter—None. An earlier registration statement filed
July 14, 1952, covering a J ike offering of preferred and
ceeds—To

common

publish

shares

new

withdrawn Aug.

July 17

common

stock of this

Ar Woodward Oil, Inc., Denver, Colo.
Sept. 23 (letter of notification) 1,750,000 shares of common stock (par five cents), to be offered for subscription
by: present stockholders.
Price —17 cents per share.
Proceeds—To drill test well. Office—721 Cooper Building, Denver, Colo. Underwriter—None.

together with

$9 note and
two common shares of the Wilhead Royalty Co.
Price
—$20 per unit. Proceeds—For acquisition of oil and gas
royalties in the southwest.
Office — 415 San Jacinto
company,

Bldg., Houston 2, Texas.
Moreland. Houston. Tex.

below.)

one

Underwriter—Rotan, Mosle &
(See also Wilhead Royalty Co.

Placed privately.

Texo Oil

Corp., Ardmore, Okla.
Sept. 2 (letter of notification) 934,400 shares of common
(par one cent)ij Price—31*4 cents per share. Pro¬

stock

ceeds—To drill three wells to test formation on
corpora¬
tion's leases in Duval arid Live Oak
Counties, Texas.

Underwriter—Stanley Pelz & Co., Inc., New York.
Thompson Trailer Corp., Pikesville, Md.
Aug.

27

(letter

of

notification)

$136,150

of

5%

con¬

was

1, 1952.

.

Zonda Gold Mining Co., Salt Lako City, Utah
Aug. 18 (letter of notification) 1,200,000 shares of com¬
mon stock (par 10 cents). Price—At market, but not less
than par value.
(Current quotation of the company's
stock on the Los Angeles Stock Exchange is seven cents
bid and nine cents offered, if $120,000 gross sales price is
received by the issue before all shares are sold, no

further shares will be offered).

Proceeds

—

For Alaska

tin

placer leases,, qxploratipn and development, retire¬
ment of debt, and forking capital. Office—30 Exchange
Place, Salt LakeUity 1, Utah.; Underwriter—Samuel B.
Franklin & Co. of Los Angeles, Calif.

vertible

debentures, first issue, due Sept. 1, 1962. Price
—At par (in units of $50 each).
Proceeds—For working
capital. Address—P. O. Box 356, Pikesville, Md. Under¬
writer—None.
Torhio Oil Corp., Ltd.,
Toronto, Canada
Aug. 21 filed 300,000 shares of common stock (par $1) to
be offered first to stockholders and then to
the general
public. Price — 60 cents per share. Proceeds—For ex¬
ploration of oil and gas properties, and to drill a test
well.
Underwriter—None, but offering to public will be
handled through brokers.
•
\
-

<

★ Uintah-Wyoming Oil & Gas Co.
Sept. 22 (letter of notification) 500,000 shares of capital
^
oh
quire lease and royalty interests.
Office—211 Phillips
Petroleum Building, Salt Lake
City, Utah. Underwriter
—None.
'
•

Ar United

Funds, Inc., Kansas City, Mo.
Sept. 26 filed 100,000 United Continental Fund Shares.
Price—At

market.

Proceeds—For

investment.

Under¬

writer—Waddell & Reed, Inc., Kansas City, Mo.
•

United

Sept
1972.

5

Corp., Shreveport, La. (10/7)
$60,000,000 sinking fund debentures

Arkansas Power & Light Co.
Aug. 7 C: Hamilton Moses, President, announced that
the company expects to borrow additional money next
Spring to finance its 1953 construction program, which,
it is estimated, will involve $29,500,000.
..

•

Bemis

Bro.

Bag

Co.

Sept. 30 stockholders

were to vote on increasing author*
ized indebtedness by issuance of $14,000,000 notes.
"

Benson & Hedges '
^
•
Sept. 10, Joseph F. Cullman, Jr.; President; announced
proposed offering of common stock for subscription to
stockholders at rate of

one

new

share for each 10 shares

held, also proposed issue and sale of $3,000,000 of de¬
bentures. Underwriters—For stock: none, with Tobacco
& Allied Stocks, Inc. (owner of over 50% of present out¬

standing

common

stock) to buy any unsubscribed shares.

For debentures: Morgan Stanley & Co., New York. Of¬

Gas

filed

fering—Expected
due

Proceeds—To repay bank loans and for construc¬
Underwriters—To be determined by. com¬

tion program.

petitive bidding.
Probable bidders: Halsey, Stuart &
Co. Inc.; The First Boston
Corp., Harriman Ripley &
Co., Inc., and Goldman, Sachs & Co. (jointly); Morgan

Stanley & Co., White, Weld & Co. and Equitable Secu¬

.

Virginia Electric & Power Co. (10/21)
17 filed $20,000,000 of first and refunding mort¬
gage bonds, series J, due Oct. 1,
1982. Proceeds—For
Sept.

Wisdom

stock (par 50
cents). Price—To be supplied by amendment. Proceeds—
To buy property for•*oil prospecting.
Office—Houston,
Tex.

Airlines, Inc., Fort Lauderdale, Fla.
(letter of notification) $210,000 of 7% convert¬
ible equipment trust
certificates, series A, due Aug. 15,
1954. Price—At par (in units of
$100 and $1,000 each).
Proceeds—For purchase of two aircraft. Underwriters—

(jointly);

four

Bids—To be received up to
11
Oct. 7, at Room 2033, No. 2 Rector Street,

U. S.

Securities

each

(jointly).
on

Aug. 4

common

care

Office—4101

(EST)

a.m.

New York 6, N. Y.

common

share.
Proceeds—To in¬
of increased business

per

equity capital to take

Chicago 13, 111.

Samoa

proximately $2

share

and increased

Underwriter—None.

Ar Samoan Airlines, Ltd., Pago
Pago, American

the New

one

($25 per share). Proceeds—To repay $3,500,000 advances
from American Telephone & Telegraph Co. (owner of
960,296 shares, or 26.67%, of the voting stock of South¬
ern, and for property additions and improvements. Office
—New Haven, Conn. Underwriter—None.

rities Corp.

some

time prior to end of 1952.

Byrd Oil Corp., Dallas, Tax. :
July 22 it. was announced stockholders will in the fall
receive the right to subscribe for $1,700,000 of 5%% first
mortgage (convertible) bonds on a pro rata basis for a
14-day standby
(certain
stockholders have waived
their rights). Proceeds—To repay bank loans and for
development and exploration expenses. Underwriters—
.

,

,

Number 5156

Volume 176

.

.

The Commercial and Financial Chronicle

.

(1257)
Probably Dallas Rupe & Son, Dallas, Tex.; Carl M.
Loeb, Rhoades & Co., New York; and Straus, Blosser &
McDowell, Chicago, 111.
Central of

will

Bids

Georgia Ry.
received

be

Co. Incorporated,

(10/16)

the

at

office

of J.

P.

Morgan &

23 Wall Stree, New York, N. Y., up to

on Oct. 16 for the purchase from the railway
of $2,775,000 equipment trust certificates, series
"X," to be dated Nov. 1, 1952, and due $165,000 annually
from Nov. 1, 1953 to and including Nov. 1, 1967. Prob¬

(EST)

noon

company

able

bidders:

Halsey, Stuart & Co. Inc.; Salomon/Bros.
& Hutzler; Bear, Stearns & Co.

Kansas City Power & Light Co.
Sept. 15 company announced that it plans to issue and
sell late in 1952 $12,000,000 principal amount of first
mortgage bonds
Underwriters — To be determined by
competitive bidding.
Probable bidders: Halsey, Stuart
& Co.

Inc.; Glore, Forgan & Co.; Blyth & Co., Inc. and
Lazzard
Freres
&
Co.
(jointly); The First Boston
Corp.; White, Weld & Co. and Shields & Co. (jointly);
Smith, Barney & Co.; Kuhn, Loeb & Co., Salomon Bros.

&

Hutzler and Union Securities

able

Securities

Stearns

&

Co.

Proceeds—For
Hudson

Central
March

4

it

Gas

Power Co.

announced company soon after March 1,
1953, intends to issue and sell $6,000,000 of first and
general mortgage bonds and sufficient common stock to
yield approximately $5,000,000 to refund the then out¬
standing short-term notes. Underwriters—To be deter¬
mined by competitive bidding. Probable bidder—(1) For
bonds, Halsey, Stuart & Co. Inc.; Coffin & Burr, Inc. and
The First Boston Corp. (jointly); Blyth & Co., Inc. and
Kidder, Peabody & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Beane and White, Weld & Co. (jointly); Har¬
riman Ripley & Co., Inc.; Salomon Bros. & Hutzler.
<2) For stock, Blyth & Co., Inc. and Kidder, Peabody &
Co. (jointly); Coffin & Burr, Inc. and The First Bos¬
ton Corp. (jointly); Harriman Ripley &
Co., Inc.
Sept. 2 it

was

Cleveland

Sept. 11 it

Electric

was

None.

Connecticut

Light & Power Co.
announced that it is

was

presently estimated
that approximately $11,000,000 of additional capital will
be required during the latter half of 1952. Underwriter
—Putnam & Co., Hartford, Conn.
Consolidated

Freightways,

Inc.

(10/9)

Aug. 26 company applied to the Interstate Commerce
Commission for authority to issue and sell 100,000 addi¬
tional shares of common stock (par $5). Business—Sec¬

largest motor

the United States.

common

carrier of general freight in

Underwriters—Blyth & Co., Inc., San

Francisco, Calif., and associates.
RR.

(11/15)
'Sept. 17 it was announced that the company is planning
to issue : and sell $3,000,000 first
mortgage bonds due
1982. Proceeds
To refund approximately
$3,000,000
bonds which mature on Jan. 1, 1953. Underwriters—To
be determined by competitive bidding. Probable bid¬
ders may include Halsey, Stuart & Co. Inc. Bids—Ex¬
—

pected to be received about Nov. 15.
Duke Power Co.
will

16

company

later

(however,

on

no

that

further

construction

require additional financing; There are,
plans for raising any new capital at the

present time.

Stockholders

on

Oct.

15

will

vote

on

in¬

creasing authorized capital stock to 5,000,000 shares from
1(500,000 shares and on approving a 3-for-l stock split.
Eastern

Utilities

determined

suance

by

company of

cient amount

of

$7,000,000 debentures and

common

stock

to

a

suffi¬

raise

approximately
$2,000,000. plan further provides that Blackstone Valley
'Gas & Electric Co., Brockton Edison
Co., and Fall River

Maine Central

Sept. 2

RR.

sought ICC permission for authority to
$1,500,000 of divisional lien bonds without
competitive bidding. Proceeds — Together with other
funds, will be used to retire the outstanding $1,676,000
company

issue and sell

Portland &
which

Ogdensburg Ry. first mortgage 4%% bonds
Nov. 1, 1953. Offering —
May be made

mature

privately.
Aug. 23 it

was reported
company has asked the FPC
authority to start work on a $7,000,000 expansion pro¬
An early decision is expected.

gram.

Mississippi Power & Light Co.
March
sell

it

14

in

'

European American Airlines, Inc.

June 11 it was reported
company plans to raise an addi¬
tional $400,000 of equity i capital.
An issue of $200,000
of capital stock was
jiist' recently^placed privately at

$7.50 per share. Underwriter
Otis, Inc., New York.

—

Gearhart, Kinnard &

November

company applied to ICC for

and

$717,000 equipment trust certificates. Probable
Halsey, Stuart & Co. Inc., Salomon Bros. &

sell

bidders:

authority to issue

Sept. 16

an

issue of

if Mutual Telephone Co.

$8,000,000 first mortgage

(Hawaii)

Co., Houston, Tex.

applied to the FPC for authority to
construct an 860-mile pipeline
extending from southern
Louisiana to a point in northeastern
Kentucky. This
project would cost about $127,887,000. Transportation of
gas is expected to commence by Nov. 1, 1954.
<•

International

Bank

for

Reconstruction

and

De¬

velopment ("World Bank") (10/9)
Sept. 25 it was announced bank plans to issue and sell
$60,000,000 of sinking fund debentures to be dated Oct.

15,

1952, and to mature Oct. 15, 1971. Underwriters—
The First Boston Corp. and
Morgan Stanley & Co., both
of New York.

securities, half in preferred stock and half in
Traditional

Underwriter—Kidder, Peabody & Co.,

New York.

.

National

common

Sept. 30 it was announced company plans public sale
of part of the
200,000 shares of common stock (par $5)

remaining authorized and unissued followiftgUhe * tfoofor-one stock split, t Proceeds—To

sion and

new

finance plant

product development.

H. Davis & Co.,

Chicago, 111.




*

expan¬

Underwriter—Paul

l-to-10 years.

Probable bidders:

Halsey Stuart & Co. Inc.; Salomon Bros. & Hutzler.

preciation

and

reserves

earned

mainder must be secured

surplus, while the re¬
through the sale of securities.

Underwriter—Blyth & Co., Inc. handled previous
ferred stock

pre¬

financing.

Seiberling Rubber Co.
Sept. 3 it was announced that company plans to issue
publicly $3,750,000 of 15-year convertible sink¬
ing fund debentures. Proceeds—To repay $1,200,000 loan
and for

working capital.

Co. Inc., New York.

Underwriter—Blair, Rollins &

Seymour Water Co., Seymour, Ind. (10/10)
■
will be received by the
company up to 11 a.m.

(CST)

on Oct. 10 at its office, 114 South Chestnut
St.,
Seymour, Ind., for the purchase from it of 5,000 shares

-

New Orleans

Public

Service

Inc.

construction.

Underwriters—To be

de¬

termined

by competitive bidding.
Probable bidders:
Stuart & Co. Inc.; Lehman Brothers; Kidder,

Peabody & Co. and Stone & Webster Securities Corp.
(jointly); Equitable Securities Corp.; Union Securities
Corp. Registration — Expected about Nov. 14. Bids —

sell
pre¬

ferred

and common stock. Underwriters—May be Cen¬
Republic Co. (Inc.), Blyth & Co., Inc. and Merrill
Lynch, Pierce, Fenner & Beane.
tral

include about 442 miles of main pipeline addi¬
tions; installation of a total o^t 73*600 h.p. in new and
existing compressor stations; and numerous branch line

fpr{ debentures

bonds;

or

Halsey, Stuart & Co. Inc.; Blyth &.Co., Inc.; The First
mortgage pipeline bonds, and/preferred and common
Boston Corp. and Kidder, Peabody & Co. (jointly). Com¬
mon stock financing will probably be done via
rights.
Oklahoma

Sept. 10 it

Metropolitan

Oil

&

Gas

Corp.
plans some addi¬

announced that company
stock financing in about two

was

common

or

three

Proceeds—For

acquisition of properties, work¬
ing capital and drilling expenses, etc. UnderwriterScott, Khoury, Brockman & Co., Inc.. New York.
Pacific

Pipeline Corp.
filed a second substitute application
with the FPC proposing to construct a 1,384-mile trans¬
mission line extending from the San Juan Basin in New
company

Colorado

and

Northwest.

to

market

areas

-

in«the

Pacific

Estimated overall capital cost of the project

is $179,000,000.

Financing is expected to consist of first
stocks, and is expected to be completed by April, 1953.

Underwriters—White, Weld & Co. and Kidder, Peabody
& Co., both of New York, and Dominion Securities
Corp.,
Pacific Telephone & Telegraph Co.
Sept. 3 company was authorized by the California P. U.
Commission to offer for subscription by stockholders
an additional 703,375 shares of common stock
(par $100)
,

in

the

ratio

common

time. Probable bidders for bonds:

Halsey, Stuart & Co.
Inc.; Kuhn, Loeb & Co.; The First Boston Corp., Blyth
& Co. Inc. and
Kidder, Peabody & Co. (jointly). Any

financing

Southern

may

be via stockholders.

Ry.

Aug. 20 the ICC denied the application of this company
for permission to sell not exceeding
$46,000,000 of new
bonds without complying with the usual
competitive
If offered competitively, the bidders
may include
Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co.; Morgan
Stanley & Co. Proceeds—To meet in part the outstand¬

ing bond maturities of Southern Ry. and New Orleans
Terminal Co.. •*"
~
" V
.

.

Southwestern Public Service Co.

Aug. 4 it
tional

reported that company may do some addi¬
stock financing (with offer to be made
stockholders) and use the proceeds toward its
was

common

first to

Additional

bond

and

preferred stock financing
this previously was done pri¬
vately. Underwriter—Dillon, Read & Co. Inc., New York.

may

also be

necessary;

if Toledo Edison

Co.

Sept. 22 company announced that company plans to con¬
struct

$25,000,000 steam generating station on a 400site now being acquired near Toledo, Ohio, for about
$750,000. It was reported that this may be financed in
part with the sale later this year of about 400,000 addi¬
a

aere

tional shares of

common stock.
Probable bidders may in¬
Lynch, Pierce, Fenner & Beane; Blyth &
Co., Inc.; Smith, Barney & Co. and Collins, Norton &
Co. (jointly); Lehman Brothers, Harriman Ripley & Co.,
Inc., Bear, Stearns & Co. and Carl M. Loeb, Rhoades^
Co. (jointly); W. C. Langley & Co.
^

clude:

Merrill

United Gas Corp., Shreveport, La.
Sept. 10 Electric Bond & Share Co. applied to SEC for
authority to offer for subscription by its stockholders
525,000 shares of common stock (par $10) of United Gas
Corp. on a l-for-10 basis. Price—To be named later.
Proceeds

(owns

To Electric Bond

—

3,165,781

Gas stock.

&

Share Co., which now
of outstanding United

shares, 27.01%)

Underwriter—None.

United States

was

Pacific Northwest

Mexico

by the sale of additional first mortgage bonds or other
securities in such amounts as
may be appropriate at the

Associates, Inc.

reported corporation plans to sell publicly
an issue of prior preference stock to finance
expansion of
Kaar Engineering Corp. of Palo Alto, Calif.

Aug. 29

1953 in the amount then permissible under its
mortgage

1953.

Sept. 18 it was reported company may issue and
shortly after the close of this year some additional

bidders

bonds

which, it is estimated, will involve
approximately $23,000,000 for the year ended Aug. 31,

Northern Indiana Public Service Co.

Probable

that the company expects
during the first six months of

announced

was

construction program

Tentatively set for Dec. 15.

additions.

it

additional

rules.

(12/15)

July 24 company announced plans to issue and sell $6,000,000 of first mortgage bonds due Dec. 1, 1982. Pro¬
new

15

sell

to

stock

.

Inc., Portland, Ore.
Sept. 8 it was reported company is considering doing
some equity financing
(probably in the form of class B
stock of $20 par value).

Halsey,

Southern Natural Gas Co.

Credit Card,

Ltd., Toronto, Canada.

★ Jefferson Electric Co., Bellwood, III.

and to mature in

indenture, and to provide for other permanent financing

Sept. 23 it was announced company expects to place
privately in October an issue of $2,500,000 3%% bonds
and plans to issue and sell next year about
$3,000,000

Sept. 13 it

company

$2,450,000 equip¬
certificates, series EE, to be dated Oct. 15,

trust

1952

Sept.

Hutzler.
Gulf Interstate Gas

& Mexico Ry.
(10/8)
Bids will be received by the
company up to noon (CST)
on Oct.
8 for the purchase from it of

Blyth & Co., Inc.; The First Boston Corp. and W. C.
Langley & Co. (jointly); Equitable Securities Corp. and
Shields & Co. (jointly); Merrill
Lynch, Pierce, Fenner
& Beane; Union Securities Corp.

weeks.

Sept. 22

Brownsville

of cumulative preferred stock
(par $25). No proposal for
less than par and no dividend rate in excess of
6% will
be considered.

tional

Georgia & Florida RR.

-

,

Louis,

Underwriters—To be determined by competitive
bidding. Probably bidders: Halsey, Stuart & Co. Inc.;
White, Weld & Co. and Kidder, Peabody & Co. (jointly);

would

riman Ripley & Co., Inc.
(jointly).

St.

Bids

reported company plans to issue and

was

1

bidders: Halsey, Stuart;;& Co. Inc.
(for bonds only);
ILehman Brothers; Estabrook & Co. and Stone & Webster
Securities Corp. (jointly); Glore, Forgan & Co. and Har¬

•

and sell

Mid South Gas Co.

Northern Na&iral Gas Co., Omaha, Neb.
Sept. 17 company sought FPC authority to construct
pipeline facilities to cost an estimated $69,826,000. This

Co. issue mortgage bonds. Proceeds—To
bank loans. Underwriters—For EUA debentures
imay be determined by competitive bidding.
Probable

by competi¬
bidding. Probable bidders: Halsey, Stuart & Cou
Inc.; Lehman Brothers and Union Securities Corpw
(jointly); White, Weld & Co.; Morgan Stanley & Co. Bids
—Tentatively set to be received at 8:30 a.m. (PST) on
tive

San Diego Gas & Electric Co.
July 1, L. M. Klauber announced that of the more than.
$18,000,000 required for capital improvements in 1952;
approximately $4,000,000 will become available from de¬

sometime in Novem¬

(repay

FJectric Light

of

debentures due Nov. 15, 1979. Proceeds — For re¬
payment of advances and bank loans and for new con¬
struction. Underwriter—To be determined

Offering—Tentatively scheduled for
ber.

Associates

Sept. 3 it was announced that amended plant of reor¬
ganization of this company and subsidiaries calls for is¬

Pacific Telephone &
Telegraph Co. (11/18)
Sept. 3 California P. U. Commission approved a proposal
authorizing the company to issue and sell $35,000,009

ment

ceeds—For

announced

common stock.
Price—
Proceeds—To repay construction loans and for
further expansion.
Underwriter—None.

by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; W. C.
Langley & Co.; Smith, Barney & Co.;
Blyth & Co., Inc. and The First Boston Corp. (jointly).

stock.

Detroit & Toledo Shore Line

Sept.

construction program. Underwriters—To be

bonds.

March 1 it

mately 90% of the outstanding
At par.

November 18.

(11/18)

Aug. 27 company announced its plan to issue and sell
$20,000,000 additional mortgage bonds. Proceeds—For

for

Illuminating Co.,

reported company plans to raise about
$28,000,00 later this year through the sale of additional
common' stock, probably to its stockholders on a l-for-5
basis. Proceeds—For expansion program. Underwriter—

ond

Long Island Lighting Co.

was

Maine

construction.

new

& Electric Corp.

reported company plans the sale this
Fall of about $5,500,000 first mortgage bbnds.
Latest
bond financing
was
done privately in March, 1951
through Kidder, Peabody & Co.
Central

Corp. (jointly); Equit¬
Corp.; Lehman Brothers and Bear,
(jointly); Harriman Ripley & Co., Inc.

45

or

of

one

new

share

preferred stock

& Telegraph

for

held.

each nine

American

Co., the parent, presently

of

shares

Telephone

owns

approxi¬

Sept. 25, 1950 it

3

C'

formed

(Del.)

was

to

"common

carrier."
The initial financing has been ar¬
ranged for privately with no public offering expected
for at least two years. E. Holley Poe and Paul-Ryan,, of
70 Pine St., New York, N'/ Y., are the principal officers
of the corporation. Underwriters—Probably Dillon, Read
& Co. Inc. and Glore, Forgan & Co., both of New York.
Natural Gas Co.

Western

Sept. 2 stockholders approved the creation of an author¬
ized issue of 500,800 shares of preferred stock (par $30),
of which the company plans to offer about 170,000 shares
as

convertible preferred stock (carrying a dividend rate
5^) for subscription by common stockholders^

of about

Proceeds—To

redeem

preferred stock, (par
for

new

Weld &
7;,i

■>';"

Pipe Line Co.

announced that this company had
build, own and operate, a petroleum
products pipeline from the Texas Gulf Coast to St. Louis,
Chicago and other midwest markets to operate as a
been

•

f i

2,053

$100),

construction.

Co., New York.
•••

•

j-

outstanding shares of 5^
to retire bank loans and

Traditional
,

.

'

.

Underwriter—White.

\

46

The Commercial and Financial Chronicle

(1258)

will

Conservation of

the

(2)

a

leading oil produc¬

stabilize
make

The

production

is

that

obvious

so

little

sense,

subject

tries
Let

of

books,

many

discussions.

technical

and

ar-

common

including

oil

the

indus¬

and

excessive

con¬

fiscatory taxation.
The

-

ardent

most

exponents

of

!——

x

?

—

but

valid

less

conditions

local

what

'

the North, South, East and

to

and

until
of

they supply over half
greatly increased energy

now

our

oil in the ground forever.
Oil men have found that oil in
".he

in

requirements.

is better than money
bank, and bankers have

ground

the

that

earned

And

the

.»

*

-

tion
it

petroleum
%

i

i

*"™-JT

"XXT/\

1/1

to
to

lmnress
impress

one
one

wnn
with

tne
tne

aesn-

ability and the necessity of conserving to the fullest degree our
irreplaceable stores of oil and na¬
tural gas.

oil and

#

i

»| r

t

..

geologists

that

can't

can

be

r

.

M

.

.

.

prove

seen

nevertheless
^ I1CVCI IZlClCbh safe cUiU
bdlC and
.

but

.....

sure.

bui c.

the

province

say here
Alberta is

consumption,

proven

our

present

of oil would last

reserves

only 12 y2 years—our gas about 25
years. It is true that our known
•

-

of

of

governmental finance.

informed

\m

your

ment

are

that

oil

the

I

revenues

and gas develop¬
the way toward

well

on

of oil and

in my country have
made a stable, sound, tax-paying
industry of what was once more
or less of a boom-town business,
--J

gas

i

—J~J

involved

in

the

inefficient

the

responsibility of protecting the
public interest, always remember

of

deposits

bond

and

prices

al-

out.

areas

However, it
of

matter

a

those

at the time

was

grave

involved

it

and

matic

lent

those
muac

support to
mauc suppuxt.uu

to

concern

dra¬

who
wnv

the

bureaucracy, presiding
in

etye

different

I he

"
which

backward

step

a

would

we

long regret.
have

I

general
ter.

with

dealt

Now I

ities. I also mentioned these two
matters because I want to consider

A

specific

some

with

how

you
_

.

...

.

r

1

-

such

-

1

should

cases
'*

I

•

be dealt with by
authorities.

state supervisory

Warns

"Competition

of the

in

Laxity"

matters. On the
ment

savings banks,
emphasize that these
applicable to

such

to

reasons

state.

are

A

different

my own

situation

may

statement that the national banks,
the Federal associations, or the
Federal

credit

unions

restrictions.

have

no

This

argument
is not, and has never been sufficient in itself. ,1 also know that

prevail in other states. However,
they will serve to illustrate how you supervisors always have ready
the
in reply that stock answer, using
matter
of
federalization
is
a phrase from Comptroller Pole—
brought into the limelight.
•

_

One

of

savings
is

the

main

banking

the

problems

of

at the moment
of extending our

problem
facilities. It has become clear, in

lead

in

fur¬

a final decision is
pending-!
Whatever may be the decision
as to
problems of this kind which
arise from time to
time, it is

my

hope

that

on

they

be

may

local basis under

a

State charter. This
may take time
struggle and boundless pa¬

and

tience, but I prefer it to attempt¬
ing to seek a
ing to seek a hasty solution to our
difficulties by resort to Federal

charter and by transfer of our
allegiance to Washington. I earnV»pv\«
4-L#>4_l
estly hope that our savings banks
T

l_

1

where

more

they

stone

to

must

the

add

edifice

one

of

big

government.

or

want

the

and

supervisors are
of hearing as an argument
for the removal of restrictions the

federalization
i

first, the Depart¬

has taken

extension. As to the matter of borrowing power, this is to be analyzed by the Banking Department

'

With First California

weary

for

krar?ch

J

expanded borrowing
banks—lllustrate my point. Our State
Banking
Department has faced up to these
savings

I know that you

why some people
my own state have recently
been
toying with the idea of
reasons

well_
I
have

that

e X ^ 6 J1

J

and
for

powers

powers

tion

Against

to

in

-

may never be forced into the
posi¬

,

the

like to turn

would

what I believe to be
TVilMV

of

some

for Federal char¬

reasons

matters

two

mentioned

worked out

*

to me to be

seem

ana

earnest

'

over many

many

^Ucy ofreaiIlealtoshipa
me question
reacnmg

I have mentioned these two
matters—the branch problem and

than

1

con¬

opinion

my

"jr'•""'"j' -hin'ta

a

the Federal charter with interest,

supervision of our affairs to a the borrowing problem—because
bigger legislature, preoccupied I feel it is desirable to deal with
w—
T-otVior +ViQn
crpnpralwith other matters, and to a bigger actual cases rather than general-

—

v*

increased

recovery

lowed the situation to work itself

West—

by
resort to Washington. To shift the

places, would

ield

the

-

a

authorities

local

institutions

,

waste

to

sort

rpalDincr

realizing the stabilizing
the stabilizing
oil production in the

'

policy cover¬
ing everybody. Secondly, it seems
to me that our problems can be
settled more expeditiously by readopting

of

and it has provided more oil and

are

—before

benefits

constantly growing,
but inevitably there will be a gas when we need it, where we
shortage
of
petroleum
unless need it—at the same time keeping
cheaper, better fuel is found or an eye on the future and trying
developed to replace it. This is an to play fair with those who will
important factor in the conserva- follow us.
It is imperative that we in
tion picture.
pub¬
lic office, who are charged with
Another factor is the economic
reserves

"

situation in

variations within these

already

gas as an

of

"

piiv

Happily,

at all

ment, if it were necessary

airParj„

encouragement making Alberta the only debtto conservation, there is the de- free province in Canada.
pletion of reserves. At the present
In summary, then, conservation
rate

laws and regulations, it
would be unfortunate, in my judg-

-

Parenthetically, I might
^hat

"rom

addition to the demand for

In

y

re

Y*

brought^about oyisworia wa i
its attermatn
sunicie

ana

assets

ip

consump-

M W l/A V iV

i

of the

thought

mere

H CI 11 CI HA KJ UO
tremendous

you

thering a joint study and analysis
temporary in nature, by borrow- of the matter by savings banks
As savings oanxs they could
ing. As savings banks mey couia and commercial banks, the latter
not borrow, except for the specific being brought in because of their
purpose
of
repaying
deposits., opposition to savings bank branch

making

times to consider the

,

ing government bonds at a substantial loss. Had they been Federal savings and loan associations
they could have met this situation,

^

require. In

duce

production and leave most of the

XL.

T__

en¬

slowly for a long time than
enjoy a short period of flush

policy of support-

_

O

mortgage
commitments
which could only be met by sell-

—

,

1

in

increase

consumption. Over that same
period the role of oil and natural
gas became increasingly important

their

+hp

stantial

_

as
to
local
control
centralized control, states
rights against federalism. In the
first place, it seems to me that our
state legislatures and state banking authorities can best determine
agcuiiat
against

perience that it is better to

commensurate

incr

argument

dustry has learned from bitter

ergy

modified

-

When

reach, it is

authorities a decision wRl serve you

Federal. Reserve

cawio

1oco

and

a

racing

the

'

the

none

services in the United States,

ex¬

that

our

—

old

clusion you

became apparent last year.

TPoHprai

production of consumer goods and

pro¬

legislative session. Whatever

state, another instance of
the advantages of Federal charter

what I feel to be

livwww

-

conservation today are to be found
'n the oil industry itself. The in¬

on

runs

In

arguments. At this point

petro¬
leum. In the last 50 years there
has been a 500% increase in the
literally

country

the

is
needed, " is " one
which you will support at the next

Borrowing Problem

of

two

be the weaknesses

want to state
want
tv

I

x

-

and

are

onvprnmpnt
tne
A.
the prime reason against t+
prime leaaun
Federal ing the government bond market,
bond market,
i-"
it. +v-in
nf
charter for savings banks. It is the some of our ir»ctitntinns bad subinstitutions had sub-

wise govern-

justice

from

try,

merely say here that our

me

"e

•

must try to protect all in-

dustry,

mentioned

now

what I feel to

be designed to encouroe aesigneu
u

in

vast that it could be—and is—

the

have

I

_

,

services

lot of respect if,

grumbling starts,
lead in examining

policy in question and determin¬
ing whether or not it is one which
you will adopt or, if a statutory

The Branch Problem and the

the general arguments in favor of
federalization and have indicated

local,

rather than to discourage,
production and expansion.
The

state,

their

took

a

the

amendment

governments

a

where

lot of headaches and

a

win yourselves

Savings Banks

areas

Local Control Preferred

can

age,

elaboration, and at the same time
so

policy of

win
will

ment

to

revenues

to

your responsibility to
prompt conclusion. Lam

convinced that you would all save

needed.

nrtninei

The tax

States

needs

tax

proWnclal

or

resort

is

a

yourselves

well

contribute

for many years to come

recovery.

it

will

without

measures

the Legislature.

and
long-lasting

orderly,

that

tjve

conservation

sound

liherallv in

state

improve¬

conservation to the United

it

business

of oil and gas

importance

an

tax

is gopd business as
public policy. It
the
oil
industry

good

as

oil shortage unless more reserves
ment in

affects the

turn

program

U. S., saying it has stabilized the
industry, but warns nation faces

there is

in

A

it

before

Of

course,

picture.

ing stat? praises measures taken
to conserve oil and natural gas in

or

from

return

is actually
part of conservation—and con¬

servation

found

fair

a

that

Federalism and the Future

the

industry

9

page

reach

tax structure that
government and

a

both

Regulation, of

Governor of Texas

are

from

the production of oil and gas.

By HON. ALLAN SHIVERS*

Executive of

Continued

the greatest

and

gives

Oil Essential!

property rights and
possible return

protect

secure
—

Thursday, October 2, 1952

...

__

i__

Xi

x

(Special

to

The

Financial

Chronicle)"

SACRAMENTO, Calif.
Germain
First

is

now

California

Jay C.

—

connected

with

Company Incor¬

porated, Bank of America Build¬
ing. He was previously with WilJohnson & Higgins and
Davies

son

^
&

Mp-ia

Mejia.

Courts Adds

that

we
should not get involved
"competition in laxity." That
answer also is not, and never has
been, sufficient in itself. Some¬

in

(Special to The

to

Staff

f

Financial

Chronicle);
MACON, Ga.—Thomas L. Cprn

production of oil. With all of our
is now with Courts &
nat
nothing is more lmpoicanc
Co., Bank¬
times I wish the phrase had never
nuuung is mure xiiipuxidin
improved methods and techniques,
ctaip
at
lpaqt
that
thic
r
ers Insurance
to the oil
Building.
industry, and therefore
? i*been uttered. We should be very
we are
still recovering less than
40% of the oil in place in presentmuch against competition in laxtion of
Joins Pierce, White
opportunity and incentive
° hwtoa
day fields. This fact presents a ...
ht 'ty, but we should be very much
nor the little man. mK. oil busi- But savings banks are blocked by
The
(Special to The Financial
real challenge to
"it irf'favor of competition in proin favor of
our
in
pruengineers
Chronicle)
ness, like any other, is genuinely
and technicians, and they are re¬
where thev are needed
BANGOR, Maine — Laura * A.
The gressive
banking regulation.
If
prosperous only when the little
sponding to it with more than a
fagtest
the F^er.al supervisors haye put Royce has been added to the staff
fellow prospers.
in, ou,r into effect a sound rule or policy, of Pierce, White and
little success. The Interstate Oil
The wildcatter and the small
Drummond,
ha» °?iy
rrmnwpf Commission is croud to
the state authorities should not be Inc., 6 State Street.
Compact Commission is proud to • *
Z vV
<.
L
Many large communities
independent form Tu
the great core office.
have been helpful in stimulating
thrftll(,hftllt the state havfi no sav.
stiL have no sav¬ backward or nervous about imi¬
throughout
of the oil industry.
They are the
interest in secondary recovery, as
tating it, and vice versa.
With Denton & Co.
modern-day pioneers, willing to ings bank offices at all. We have
well as in improved methods of
We criticize the Federal savings
sought legislation on this subject;
risk time and
(Special to The Financial
money to develop
Chronicle)
primary recovery
and loan system because they have
we have thus far
got nowhere.
new oil frontiers.
BOSTON, Mass. — George M.
a more liberal branch
These two points—depletion of
policy than
An obligation rests
At theiisame time, and in con¬
upon the in¬
D'Arcy is now connected with
reserves and inefficiency of pro¬
dustry and the government to see trast to our own situation, the many of the states. Perhaps their Denton &
Co., 16 Court Street.
duction—are often seized upon by "hat a
Home Loan Bank Board has as¬ policy is right, at least to a certain
proper balance is main¬
proponents of a more centralized tained between the
extent, and the state policy ought
sumed
the
power
to
grant
opportunity
system of controls, as evidence
'emanded by free enterprise and branches to savings and loan as¬ to be adjusted. In the case of (the With Jackson & Company
that the present system is
(Special to The Financial Chronicle)
faulty. the regulation necessary in the sociations without regard to the power to borrow in order to meet
Let us
remember
to
tell
these
aublic interest.
restrictions
of
state
laws.
Our mortgage commitments, it is pos¬
BOSTON, Mass.—Alan Marshall
sible that the Federal policy is
critics that the tremendous growth
As the most important factor in strongest
is now affiliated with Jackson &
competitors
therefore
of the oil industry has come about carrying out that
also at least partially correct and
obligation, con¬ have a great advantage over us.
Company, Inc., 31 Milk Street.
under and principally because of servation has been
that a limited borrowing power is
We have so far been unable
and will con¬
to
,

ran

—

,

th/

_

.

£*** acoeunty *n

,

a

system

points
public
tem is

that

of

combines

private

the

best

initiative

regulation—that

this

and
sys¬

finding

more oil every day,
in Alberta and Saskatchewan and

tinue

4n

our

that, while

our

average

it }s running as high

stone of

a

sound

oil and gas production.
vital factors

the

are

prescribing of

1952.

Banff,

Alberta,

(1) regulation—
sound rules that




Sept.

now

—

with

D

the

General

&

Bond

2,

Draper, Sears Adds
Mass.

—

Chronicle)

Stanley

E.

Field has been added to the staff
of Draper, Sears &

Co., 53 State
Street, members of the New York
and Boston Stock

Exchanges.

to

the

on

Court

has

It

been

has

legislation

nowhere
iocai
setts

c]ared

so

ruled
tried

and

far.

in

their

by Fedhave

we

got

It has been tried

legislation in Massachu-

and

the

law

has

been

unconstitutional

highest state

by

de-

the

court.

desirable

in order- to promote the
flow of mortgage invest-

smooth

men^s

toward

(Special

any

institutions,

group
you,

of

supervised

state supervisors

are going to be faced with a
problem. Institutions under state super-

vision

are
eventually going to ask
why they should not get the same

privileges.;It
is

thrift

seams to

me

that it

the

these

institutions

charter, they
tunity
and

to

to

can

expand

serve

the

under
see

Federal

the

their

oppor-

facilities

public in

those

publicrirr general ahid that special

interests
not be

Three With R. A. Harrison

savings banks.

Every time the Federal authori¬
ties adopt'a more liberal policy

responsibility q| .the state
circumstances, it banking authorities to review each
is small wonder that our
people situation of this kind as it arises.
have been attracted
by the old It goes without saying that it
maxim "if you can't lick
'em, joijk^should
be reviewed
from
the
'em."
By joining the ranks ^standpoint of the interests of the
Under

BOSTON,

re¬

basis allowed by
state law. It has been tried in the
courts and the United States Su¬

eral

Corp.

(Special to The Financial

by

associations

these

branches

Hodgdon &

Stock

advantage

favor.

o r o t h y

on

The other

Canada,

is

Mass.

stricting

this

preme

(Special to The Financial
Chronicle)

BOSTON,

of

♦An address by Governor
Shivers be¬
fore the Interstate Oil
Compact Commis¬

sion,

prov¬

good of the

overcome

was

the key¬

public policy

common

Co., 10 State Street. Miss Roosov
formerly Assistant Treasurer

Conservation the Keystone

Conservation, then, is

responsibility

respective states and

Roosov

80%.

vital

Joins Hodgdon Staff

recovery

as

a

free world,

instances

some

be

inces, for the

North Dakota and elsewhere—and

is still too low, in

to

or

pressure-groups should

permitted-Co influence

solution.

Furthermore.

I

th

believe

to The

Financial

Chronicle)

SACRAMENTO, Calif.

—

.

Robert

V. Hagan, Frank R. Dole and Ber¬
nard
A.
Zink
are
now
with
Richard A. Harrison,
2200 Six¬
teenth Street.

•

With H. L. Robbins Co.
(Special to The

Financial

Chronicle)

WORCESTER, Mass.
w.

Barton

with

H.

L.

has

—

become

Robbins

&

Charles

affiliated

Co.,

Inc.,

40 Pearl Street,

Raymond Adds
(Special to The

BOSTON,
with

Financial

to Staff
Chronicle)

Mass—Allen Reid is
Raymond & Co., 148 State

Street.

r

-

.

'■

-

■

Number 5156

Volume 176

Continued jrom page 8

.

v

.

.

Our

The Tax Picture and
The

Mining Indiistry
$152,000,000,000.

Federal

Our

esti¬

President

The

emormous.;;

mates

also

is

load

tax

Some dealers felt

Reporter's
Report

Rus¬

side of the United States and

sia totals only

working out to the equivalent of
about
10
basis points
in yield,
tended to put a drag on the issue
which was priced for reoffering at
101.871 for a yield of 3.40%.

,

of

fiscal

will be

year

ap-

organized governments
including Russia,

of all other

1invest]ment market Un

™

only $68,000,000,000.

was

Un-

market

the investment

derwnterc

world,

the

in

ve

and^ealers^hke are

issue
last week
past few years in Federal spend- and on a yield basis that evidently
ing, debt and tax matters have cane(j for further readjustment in
since the big housing

more so

developments

These

.

the

over
.

,

its

made

,

offering, subject to
by the Interstate

are

authorization

Commerce Commission, $5,250,000

Chesapeake

of

Public offering of 450,000 shares
common stock of American Me¬
Chemicals

tallic

is

Corp.

being

made

today (Oct. 2) by Dobbs &
Co; and M. S. Gerber, Inc.
The
stock is priced at $3 per share.

improved tone.

serial

...

$75,000,000,000, ated by the erratic behavior of the
the total tax load Treasury list continues to hover
tne
oai
.

associates

&
Ohio Ry. 3J/4%
equipment trust certificates,
fifth equipment trust of 1952, to
Approximately one-half of the
Net Week's Large Ones
be dated Oct. 15, 1952 and to ma¬ net proceeds from the sale will be
The market is assured of at least
ture semi-annually April 15, 1953- used to alter and equip a plant
which the company plans to lease
Oct. 15, 1967, inclusive.
two big new offerings in
The cer¬
tificates are priced to yield from for the electrolytic manufacture of
ahead> one being
19-year debentures to be floated 2.15% to 3.25%, according to ma¬ sodium perborate, a product used
international Bank for Rein numerous industrial fields. The
turity.
construction
an(J Developmenti
The certificates are to be issued plant adjoins the company's pres¬
ent plant located in Portland, Ore.,
now set for Thursday
under the Philadelphia Plan and
Two days earlier, on Tuesday, will be secured by new standard- in which electrolytic manganese
the United Gas Corp. will open gauge railroad equipment esti¬ dioxide is produced. The balance
of the proceeds will be used for
bids for $60,000,000 of 20-year mated to cost $6,639,042.
The

an

The cloud of uncertainty gener-

Common Stock Offered

Equip. Tr. Ctfs.

Halsey, Stuart & Co. Inc. and

they had a bit

ket would help out by

proximately
whereas in 1949
whereas in iy49

Offers

selling job on their hands and
hoping that the general mar¬
developing

a

Am. Metallic Chemicals

Halsey, Stuart Group

were

Federal tax revenue for

our

the present

47

(1259)

Chronicle

The Commercial and Financial

.

appearance

the week
the $60,000,000

installation

the

additional

of

many
challenging ^ pOSitiori of outstanding issues, sinking fund debentures. At least
equipment
comprises 23
diesel
that ^must
be
met g0vernments, as well as munici- three large groups have been or- electric locomotives and 420 hop¬
straightforwardly if we are to pals.
ganized to submit bids for this one. per cars.
build sufficient strength into
The municipal market naturally
The week will be opened on
Associated in the offering are:
our
mining industry to support
was
the most
affected, but re- Monday by Associated Telephone's R. W. Pressprich & Co.: L. F.

equipment in the present plant to
double production capacity of elec¬
trolytic manganese dioxide, and
for working capital.

nlfatPlv^n^o^ttrap^neoHod
?aD?tal to the mining industry to
capital
the mining industry to

company

brought

us

problems

extensive
exploration
work as well as

ou

carry

$10,000,000 of new 30-

Rothschild & Co.; Baxter,

of governments with funds derived year first
three bids
&oing
^ housing loan. There three bids
B
fe
,.
,
m0st quarters that submitted.

To

mortgage bonds, with

&

and development

have

must

we

perhaps ,he reacti#n in Treasurys
had been carried too far, but it

it seems to me

expansion,

plant

tax relief in

some

was not until early this week that
of reduced tax exactions any distinct rallying tendencies
liberal tax exemptions
developed.
for the mining industry. Laws un¬
•And then it came in the wake of
favorable to
the discovery and

expected to

now

be

Associates Investment

the way
and

f^ral

lne

v

in

interested

(1) Excess profits tax.

buying
(2) Limitations on the deduc- of consequence could not be ascertions of exploration expenses.
tained, but the whisper of its
Whether

not: it did any

or

appearedjsufficienttoturn

(3) Denial to stockholders of views
depletion allowances,
market

which gave evidence

reasonable
...

.

_

..

,

of being decidedly thin

,

taxation

of

Thr0*gh

so-

called Capital Gams and the confiscation of

capital.

the

prospector

burdens
and
the

Treasury

!

,

,

small

.

»

.

'

n

,

..

_

should

Consideration

.

,

be

given

disposed to play hard to get as
ag

new

issues are

concerned.

Proposals made by

Minerals

depletion allowance to stockhold¬
Also

ers.

tion in

depletion and deprecia¬

excess

of the amount prop¬

erly allowable should
n

quired

'basis

be

to
of

The

is* the

which

company,

largest automobile sale fi¬

fourth

company
in
the United
plans to add the proceeds
from the financing to the general
funds of the company and to ap¬
nance

Large institutional investors still |0
are

be

not

deducted

•

they still

outlets for their funds

debentures will be

sinking fund providing for

a

10%

the retirement of
.

bentures
the

entitled

March

on

additional

1

of

each

is

with Edward E. Ma¬

now

State Street.

thews Co., 53

With Paine, Webber

Irving J. Rice Adds
(Special to The Financial Chronicxb)

ST. PAUL, Minn. — James A
BOSTON, Mass —Samuel T.
Arnold, Jr. is now associated with Miller has been added to the staff
of Irving J. Rice & Co., First Na¬
Paine, Webber, Jackson & Curtis,
tional Bank Building.
24 Federal Street.
*

Jains Vance,

Sanders

year

BOSTON, Mass.—John H. Wall,
has
become
affiliated with

Jr.

•.

Sanders &

The Board of Directors has de¬

Devonshire Street.

clared

Joins Baker,
Mich.

DETROIT,

Rheo C.
connected

—

Building members of the
Stock Exchange.

a

Stock

Chronicle)

become

has

a

(50c)

Simonds

(Special to The Financial

Marchand

.>.•»• -"V

.

Company 111

with Baker,

than

of the sinking

TECHNICOLOR, Inc.
•

Vance,

otherwise

redeemable

NOTICES

DIVIDEND

(Special to The Financial Chronicle)

The debentures

through operation

(Special to The Financial Chronicle)

JACKSON, Mich.—Roy McPhail
has joined the staff of H. H. But¬
terfield & Co., Jackson City Bank
& Trust Co. Building.

(Special to The Financial Chronicle)

of

under the sinking

10%

March

beginning .1954.
are

each

1962 and
retire up to an

the company may

on

of

1

1958 through

years

fund

of the de¬

Simonds & Co., Buhl

dividend of fifty cents

share

Capital
payable
stockhold¬

the

on

of the Company,

October 20, 1952, to
record

of

ers

close of

the

at

business October 6;

1952.

L. G. CLARK, Treasurer

Detroit

September 24, 1952

re-

t
from lul through the medium Of direct bond fund at prices scaled from 101%
the r,lirnV,asA« anil t.hp morte-ae-p mar- initial!
tn
mn%
nn
anH
aftpr

unless

property

have ample

and

companies

insurance

Big

banks make it plain that

BOSTON, Mass.—Edward J. El¬
liott

oversubscribed and the

as

books closed.
.

The

£ar

(Special to The Financial Chronicle)

at

able.

,v

They just refuse to be rushed into
Advisory
any- picture and from, conjecture
Council such as a three-year tax
ar0und
there
is
no
immediate
exemption for new mines and a reason why they should.

tS y.arl0us

National

feri

In the "Catbird" Seat

..

.

percentage depletion.

on

1962

1,

ply such funds initially to the re¬
duction of short-term notes pay¬

Constant onslaughts of the

(7)

fairly

Sept.

than the appearance of much in
the way of really active demand.

v
,

a

With H. H. Butterfield

Edward E. Mathews Adds

99% and accrued interest. The of-

States,

upon

operator.
n

corporate

giving

account o( itself. But this,
depre- too, could be credited to the abot
sence
of any Will to sell rather

ciation.

(6) Unbearable

either way.

the

311

been

due

debentures

3%%

Co.

Investment

sociates

and Mullaney, Wells

Co.

and Merri11 Lynch, Pierce, Fenner

good

of adequate

(5) Denial

it

market has

Co.;

inson & Co.;
&

Williams

underwriters

47

of

group

known that it ;-was interested in „ Beane offered nubliclv vesterhalting the downward movement. & aeane OIierea Puoiiciy yester
day (Oct. 1) $30,000,000 of As¬

areare*

(4)i Excessive

A

^

"aheaded by Goldman, Sachs & Co.,

production of minerals should be
removed without delay. Examples

0

Offer Oversubscribed

more

The

process to be used by the
for the production of
Freeman & Co.; Gregory sodium
perborate will be based
& Son Inc.; Ira Haupt & Co.: Hayupon a license from Noury & Van
den, Miller & Co.; The Illinois
der Lande N.V. (of Holland), one
Co.; Wm. E. Pollock &
Co. Inc.; of
Europe's best known chemical
First
of
Michigan
Corp.: Mccompanies , whose
business was
Cormick & Co.; McMaster Hutch¬
founded in 1838.

Portedly there was some selling offering of

purchases and the mortgage mar¬
tax ket In both these directions, it is

a

benefit results from the excessive

deduction.

indicated that their funds are ear¬

in good volume and

marked

well

on
and after
If redeemed by
operation of the sinking fund the
redemption price is 100%.
v
initially

Sept.

1,

100%

to

1957.

DIVIDEND NOTICE

It is my

belief that Congress to- ahead,
day is more aware of the nbed for
^jg does not mean that such
building a healthy and vigorous
potential buyers could not scrape
mrning industry than Congress has
together the wherewithal to take

Three With J. G. Kinnard
(Special

been

to The

Financial' Chronicle)

heretofore, but that Congress on their share of new public offerhas not yet fully realized the need
ingS if and when, the latter are
fnr SDPPd in attaini-ncr -fVio4- oK-inn
n..
!i.i.
i.1
D,a
for speed in attaining that objecin line with their ideas. But their

liam D. Hanney, Leo'E. Mauren,

tive and for

become

ing

Kinnard

•

maintaining our min- attitude leaves the market "very,
industry at a constant' high very touchy" as one observer re-

level of production at
We

each

of whom has

,„ni,

connection.with

tax

marked.

in

outstanding record

an

rnnnppfinW

in
in.

indeed,

„r

JJ
Federal

,

our

policies and the special prob-

lems that confront the

bids

.

responsibility that

of

-n

tt««

l

n

i

F. Schoenberger have
with John G.

Harry

our

,

„r

.

101 22

forB

&

Company,

71

Baker

for

a

3%%

Two With Goodbody Co.
(Special

to The Financial

Chronicle)

DETROIT, Mich.—Wright N. G.
Bell and Aurelian F. Wigle are
now with Goodbody & Co., Penob-

Apparently

national

i r>

Jpis

consideration,

son

& Curtis.

Pabst

has

Davies

&

Street. He

Co.,

affiliated

39

North

quarterly

A

a

share

regular quarterly dividend
of 75c per

payable

share and

a

5%

stock dividend on the out-

of

this

record

October 15,

SAN

with

Incorporated

Chronicle)

B, Crosman has joined the staff of
First California

members
Stock

300
of

Company Incor¬
Montgomery Street,
the

San

Francisco

Exchange.




of

30,1952,

holders

of record

to

business

on
,

DONALD A.

HENDERSON.
Treasurer.

stock¬
at

the

Vanadium Corporation

Treasure

of

America

-

TYPE FOUNDERS
*

Elizabeth, N. J.

DAYSTROM

ELECTRIC CORP.

DIVIDEND NOTICE

FRANCISCO, Calif.—John

porated,

close

1952.

Corporation payable

October

declared

1952 to stockholders

AMERICAN

First

With First California
Financial

the

been

«

REPUBLIC RUBBER DIVISION
Youngstown, Ohio

420

The Directors of

24, 1952.
It's every

i

DAYSTROM

FURNITURE DIVISION
*

DAYSTROM

LEE TIRE & RUBBER COMPANY
of New York, Inc.

Conshohocken, Pa.
Lee Tires & Tubes

At

a

meeting of the

Board of Directors helu

share wa
Corpora¬

today, a dividend of sixty cents per
declared on the common stock of the

payable November 18, 1952, to stockholders
of record at 3:00 o'clock p.
m., November 6,
1952.
Checks will be mailed.
tion

B.

INSTRUMENT DIVISION

American's right and duty to vote—be sure you vote November 4th.

New York 17

Dividend Notice

Daystrom, Incorporated

(formerly ATF Incorporated) on September
23, 1952; declared a fegular quarterly divi¬
dend of 2 5 cents per share, payable Novem¬
ber 15,1952, to holders of record October

Lexington Avenue,

Industrial Rubber Products

*

(Special to The

at

31.

$.25 per

Common Stock

has

September 24, 1952
H.

California Company.

.

Corporation

October

standing capital stock of
the

dividend of

cash

the outstanding

on

of

15, 1952. Books will not

Operating Units:

formerly with First

was

day declared

A. S. POUCHOT—

& Co.

Calif.—William

become

FOX FILM CORPORATION

Directors

be closed.

(Special to The Financial Chronicle)

,

this

of

close of business October

JL

DIVIDEND NOTICE

JOSE,

has

Board

,

indicated this represented scot Building. Mr. Wigle was pre"cover" of ar£ynd
points.
viously with Paine, Weber, JackAnnn.nntlir

torn world."

SAN

CORPORATION

The

,

3./2S, but other

all

received,

welfare places upon it in this war-

Joins Davies

TWENTIETH CENTUBY-

LEE RUBBER & TIRE

affiliated

mining jn- coupon,

dustry of America in meeting the a
"
full

.

Washington Water Power Co.
swarded its $30,000,000 of new 30year first mortgage bonds on a top

£id

j
and
««

Arcade.

•
.

Washington Water Power

today the members

us

this panel,

established

all times,

fortunate,

are

having with
of

,

MINNEAPOLIS, Minn. i«*- Wil-

Dated September

23,

O.

BRAND.

1952.

Secretary.

48

(1260)

The Commercial and Financial Chronicle

,

...

Thursday, October 2, 1952

'

said how rents

BUSINESS BUZZ

locally

/f
XjLm l/\Af

decontrolled

were

he

rents

was

What

rents

g~kW a

JL IrCv

Mr.

over

Woods

that

was

didn't

local

enacted

was

WASHINGTON, D. C.

Five

tion

and

million female votes for Nixon and

map

wouldn't

of

have

5,000,000

—

million

voted.

votes

A

for

distribution

objectives in

and

Congress
his violent objection.

GOP

still

man

month,

a

leaves

month, will take
of the

reasons

why GOP workers are
happy over the Nixon affair; why
they believe that since the issue of
the private campaign fund of $18,4)00 was raised by persons friendly
to Stevenson, the thing is a net
gain for the GOP ticket.

There
that

the

that

hinted

Fowler,

of

rector

if Tru¬
a
free

doing.

some

Truman

H.

the
of

Office

Di¬

new

Defense

Mobilization, should also accom¬
Mr. Sawyer and thus get

pany

himself

out

the

of

country for

month. Fowler is the

a

who in¬

man

Ordinarily the crowd doesn't sists upon taking seriously the
very
much attention to a ostensible Truman goal of building

pay

Vice-Presidential candidate. He is

up

in the

ment

background. Nixon was a
nice-looking nobody until his fa¬
TV

ns

quickly
that

Russia

will

from

It is

Senator Nixon

displayed a su¬
perb politician artisan's capacity to
take advantage of the drama and
the audience his

lized for him.

-

be

Changing Patterns

establish¬

able

to

ble

Defense

len

deter

circles

that

the

total

"defense" mobi¬

under

nice

a

looking boy, and

a

boy, a good
sincere man/

And. his wife wasn't

made

up

Present

planning,

of

dressed up to look good enough to

Administration.

new

What

—going—gone for a
crossing home plate

is
a

smile!—what

*

—

arouse

the

covert

any

jealousy from,

listening female population.

Of

not all those

course

female

voters

and

to

speech

the

of

form,

Richard

Nixon.

,A

it

on

could' be

"holes"

could

Senator's
washed
ator's
the

ditures"

expected

be

punched

defense,

out

at

but

that

in

the

this

is

on

this column reported. "Defense

as

expenditures include
wide range of objects.
Chief of

funds.

Breaths

out of observers

which
to

almost

were

knocked

by the speed with

President

Truman

moved

checkmate, at least partially,

Commerce Secretary Sawyer's
plans to bring business thinking
the

and

Commerce

Department

into planning for the "full em¬
ployment" which might be threat¬
ened by a reaching of a
peak in
defense production and the
taper¬
ing off of business capital invest¬
ment.

(Sept. 25). Sawyer hoped
a

to get up

report before he left the govern¬

ment, on how to solve full em¬
ployment, and also meant to re¬
organize the Commerce Depart¬
ment

into

em¬

ployment.
Such
square

a

design,

of

course,

ran

into the fact that the "full

employment"

planning

is

now

geographically close to the White
itself, through the Council

and

kindred

miscel¬

laneous things.

To

18 Months

it is slated to continue at that rate
for from 12 to 18

months, it

stated. This is taken to

the

$60

billion

must go to

Europe to stu#y. Euro¬

little

^©ut lils
take

most

Mr.

develops,

conditioner before

pean

scheme.

or

all

Sawyer has

of

said,

new

working
This

will

November,

"Aye

aye,

Secretary scarcely
up

full

a

report

on

a month to

how

employment, and

organize

the

Commerce

to

get

promote

also

Commerce

to

re¬

Depart¬

ment so as to set
up the produc¬




instead

of

the

over-

"If you are a notorious opponent
of Communists in
government, be

life

and

powers

sidetracked

almost

the

pur¬

for

lower

a

fiscal

1954

level

of

authorizations and appropri¬
ations than Congress made avail¬
able at its session this year.

I'm

throat

whole

entirely

thing.

accomplish the
Federal

and

You

purposes

Trade

forget

can

never

fjor which

Commission

established by mimicking the
or

False

masquerading

whiskers

scribed
black

for

were

judges.

never

pre¬

employees

your

robes

as

for

the

nor

Commis¬

sioners."

upon a

of

tience
took

with

from,

letter

said

If

affirmative

by the new
Administration to

and

Was

it

so

in

having

would

be

has

Boxes

trade
boxed

FTC's

Tighe

Parnell

as

taking
of

the

a

industry.

Activities

jailed

on

a

Rep.

of the

Commit¬

charge

of

salary "kick-back" from

his

ator Nixon

office
was

staff, and Sen¬

"exposed" for his

private campaign fund

—

while

the

ears,

installation

of

the

Federal

Trade

Commission. Wrote Paul Hadlick,
counsel

Marketers

of

the

J. A. Warner Wire to

White, Noble, Detroit
J.

Arthur

corporated,
York
of

Warner

120

City,

announce

direct

a

&

in

a

point

or

going to do

private

the opening
trading wire

White, Noble & Company, De¬
troit, Mich., members of the De¬
and

cogency.

decontrolling.
V

was

Midwest

Stock

were

•

Instead,

way

below

ceilings.

Mr. Retail Dry Goods
should
advertise
that

you

Industry,
selling

prices

Should

Tighe

are

below

Woods

ceiling.

take

legal

"wage control"
who

Woods
believes

should

hasn't

ling.

never

any

For

has

placed privately with a small
group of investors $200,000 tenyear convertible
notes, it was an¬

nounced yesterday
by Richard F.
Jarrell, President. Proceeds from

the sale of the notes will be
used
for repayment of bank
loans and

further expansion.

decontrol, said Mr. Woods,

would complicate
"wage control."
Mr. Woods did not
explain what

Mr.

Jarrell-Ash Co., (Boston, Mass.),
manufacturers and distributors of
scientific laboratory instruments,

a

Necarsulmer and
who

was.

is

The
financing was
arranged
through Kuhn, Loeb & Co. Henry

man,

he

said,

the

government
control anything it

Mr.

Woods

S.

with

Wilson

as

an

by

President

,'indispensable

Guest,
Kuhn,

&

Co., have been elected
directors of Jarrell-Ash Co.

necessity for control¬

instance,

John

associated

are

Loeb

For

Large Appreciation

Potential

WE SUGGEST

RIVERSIDE CEMENT CO.
CLASS B (common)

FIRM TRADING MARKETS

STOCK

FOREIGN

SECURITIES

leading producer

in

fast-growing Southern

of

cement
Cali¬

fornia.

Analysis of this Company and

HARL marks & P.O. INC.

a

review

of the

try available

on

Cement Indus¬
request.

Available around

15

i!."

"The Federal Trade Commission
was., recommended

Ex¬

Jarrell-Ash Notes

not

Instead, he admitted that prices
overall

FOREIGN SECURITIES SPECIALISTS

;

In¬
New

to

troit

"wholesale" price

any

letter to John Carson, a member of
the FTC, in part as follows:

Co.,

Broadway,

Kuhn, Loeb Places

is without

National

Association,

di¬

a

Exchange.

A

speaking,

of

industry is one in which changes.
almost universally, goods are sell¬
ing under ceilings, merchandising
costs are rising, and
price control

executive

figuratively

the

This

Broad

former

Thomas, chairman

was

retail dry goods

"No, never."

100% Honest
Inasmuch

Stock

Kaputs Decontrol

Ears

association

in¬

strument of information and pub-

to

private wire to S. R. Living¬
stone, Crouse
&
Co.,
Detroit,
Mich., members of the Detroit

1954.

A

Mean

rect

"taper off" defense spending after
—"—

Freedom

Reilly & Co., Incorporated,
Broadway, New York City, an¬

nounce

Representatives of the National

cognizance of this situation?

Anti-Commie Be

one

an

he

out

Commission divisions.

peak

some purpose

pa¬

by all members of the Com¬
mission and subordinate heads of

tee,

It will almost take

no

read

Un-American

1954.

has

boondoggling,

bawling

copied

appropriations boilers, unless
dampened
down, will continue

throughout

sincere de¬

a

causes,

FTC

Hadlick's

good
the

left

reduction in defense spending ap¬
provals By Congress, the fire in

spending

tude."

Mr. Woods objected. He

Carson, while

votee

In other words, barring a delib¬
erate slow-down by the new Ad¬

ministration, and counting

recti¬

Tighe Woods, on the prospect of
decontrolling completely Ceiling
Price Reg. 7, which governs the

the

FBI

new

unexempled

sion's

was

the Department of De¬
it has indicated, will ask

as

of

one

surprised that
Congress doesn't cut the Commis¬

funds.

Mr.

ity that

Does

J. F.
61

that your private and official

is

Retail Dry Goods Association ap¬
proached the new Price Controller,

will

It takes into account the
probabil¬

38th

Reilly Wire to
Livingstone, Crouse

Kwispy Wispys—"

publicity of their private doings,
it is being said in
Washington:

sure

that

hinged upop present
appropriations and authorizations.

Affairs

East

J. F.

curiously enough left-wingers in
Congress seem to escape much

impressed with its judicial and in¬

rate

This rate is

general

the

the

it back.

Oil

leave

about

vestigative

mean

annual

deliberately and purposefully cuts

said he will go to
Europe
will

latter

former. Its staff has become

the

throughout the calendar
1954 and into 1955, unless the
Administration of next year

Sir/' to the President's order, and
This

the

lowed

was

endure
year

Congress
it

from

."For the first 35 years of its
existence the Commission has fol¬

cient

While the peak rate may not go
much if any above $60

of Economic Advisers.

Sawyer,

distinguished

as

"Your
Commission
is
always
harping that it doesn't get suffi¬

Peak Rate to Last Year

effort of

Mr.

licity'

'menace of legal process.'

completely

aid,

House

Now

word

a

,

the

planning the full

Kwispy Wispys!—he's
that Kwispy Wispys

pose for which it was established.

fense,

OThis move of Sawyer's was re¬
ported in this column last week

for

now

nomic

billion,

Sawyer Partially Checkmated

of

with

great Kwispy Wispy ball game this is!

a

these is atomic energy. Others are
"defense housing," foreign eco¬

by the Sen¬
Stevenson for

private political

own

expen¬

not

22

Irving-on-Hudson, N. Y.—Paper—
No charge for
single copies; quan¬
tity prices on request.

goal included "de-,

supporting"

least

turning

tatter's

time rolls

as

and

and

—

case

now

that

merely Depart¬
ment of Defense plus procurement
for the foreign arms aid
program,

a

It is admitted that

said

fense-supporting security

the broadcast did call attention of
the

officials

■the $65 billion

,

women

xharmed by the Senator's defense
will continue their enthusiasm, but

figure,

Incidentally,

Inc.,

Ahead, The

Public

You?—Russell J. Clincy—Founda¬
tion for Economic
Education, Inc.,

"Bajoosky really Kwispy Wispied that ball!—it's going
course,

—

Street, New York 16, N. Y.—Paper

planning.

subject to possible change with

or

Al¬

Madison

—25c.

Actually, it was
said,;the total may full short of
.this target by as much as $5 bilNixon on, was enormous.
Now
millions of women are convinced libn when the peak is reached,
present

Voorhis

Committee,

annual

billion annually.

that Nixon is

285

Cooperatives Look

officially-proclaimed goal of $65

the female population wiring the
GOP national committee to keep

Hamilton,

—Jerry

expenditures for "all security pro¬
grams" may well fail to reach the

The response from

&

Avenue, New York 17, N. Y.

Goal

being said in responsi¬

now

of Executive

Compensation—Survey—Booz,

further aggression.

Lower

iimself.

1

military

a

defending

appearance

re¬

considerable surprise

was

Mr.

Henry

even

Sawyer

to

may or may not coincide with
"Chronicle's" own views.)

the

ployment. To achieve these twin

ticket.
one

to

gain

net

the

This, tentatively, is

division

who

of

by

flect the "behind the scene" inter¬
pretation from the nation's Capital

out and operate the full em¬

Five

point

decontrol

(This column is intended

Eisenhower.

con¬

(technically, "Housing Ex¬
pediter").

out

from the Nation's Capital ti

when

troller

Washington...
Behind-the-Scen© Intcrpretatioiu

'

50 BR0A0 STREET...NEW YORK
4, N. Y.

TEL. HANOVER 20050...TELETYPE: NY 1-971

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Investment Securities

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