Full text of Commercial and Financial Chronicle : October 2, 1958, Vol. 188, No. 5782

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AMERICAN BANKERS ASSOCIATION CONVENTION ISSUE

§5?<©
OCT

7

; •
'v.

Volume

New York

Number 5782

188

il-

7, N. Y., Thursday, October 2, 1958

Price 50

EDITORIAL

i

Cents

a

i

Copy

ABA Holds 84th

A':

We

As

,

j

Maiket

It is hardly surprising that voices are already
heard

>

j authorities
been

of the

condemnation

in

of

Federal Reserve

Anderson to

for the mild restraint that they have
upon the money market. Rarely

Nonbank financial institutions,

holders of nation's sav¬
ings, are asked to reverse their present portfolio policies
regarding government securities to help protect the pur¬
chasing power of the savings entrusted to them. In a
speech to the nation's bankers, ;Mr. Anderson under¬
scores need to protect integrity of money and to avoid
too hasty tax cuts; and calls for an all-out effort to keep

cautious in the lending

money,

or

who take steps that make others

'cautious in the

lending of

the fire of at least

tion who

some

money,

seem to suppose

that borrowing money

:\ freely is a sort of natural right
must

never

failed to draw

elements in the popula¬

be deprived.

of which they

ye'ars the old, old notion that easy money
almost any

cure

in nonbank

inflation.

can

ill has grown to great strength.

term considerations

Fed-

securities and urges

'A

good deal of courage was required of the
'eral Reserve authorities to take such steps as

they

■

time.

No

doubt

they

begin to pinch.

pose

restrictions

as

Taking their

cue

observers

are

courageous

strongly

and

be

never

can

They can be proper¬
only in relation to how
they accomplish the purposes of free
meri—more goods and more services
ly

treated

at

prices

willing

that

to

pay

ervation

of

'

tial

freedom

in

characteristic of

One

all

its

of

growth and development. We have
become the greatest productive na¬
tion in the world.
Yet at the same

tt. Anderson

ivouen

competi¬

our

been its phenomenal

tive system has

time, there is increasing pressure on
the

overwhelming at times—for
About a

government—almost

the solution of

economic and social problems.

Continued
♦An

40

the

tion,

undertakings

on

page

30

by Mr. Anderson before the First General Session
84th Annual Convention of the American Bankers Associa¬
address

Lee

dent.

P.

Miller

•

John

W.

Remington

Continued

in

REGISTRATION—Underwriters, dealers and investors in corporate
complete picture of issues now registered with the SEC and potenour "Securities in Registration"
Section, starting on page 50.

'UNDERWRITERS

Municipal

STATE

and

and

MUNICIPAL

<J'>3

So.

Angeles 17,

Hope Street, Los

CHEMICAL

Members New York

BONDS

Stock Exchu nge

Associate Member American

Stock Exchange

Members Pacific Coast

NT

Exchange

Offices in Claremont, Corona

SECURITIES

Pasadena, Pomona, Redlands,

BANK

THE FIRST NATIONAL

MCMBCRS NEW

ST., N.Y.

YORK ANO AMCAICAN

'

Distributor

T.L. Watson &Co.

" ;;

r

ESTABLISHED 1832

Members
New York Stock

American

Bond Dept.

Net

Active

To

Dealers,

Teletype: NY 1-708

Markets

Banks

Maintained
and Brokers

Exchange

transmountain

STREET

NEW YORK 4, N.

Y.

COMPANY
DALLAS




•

Chase Manhattan
BANK

PERTH AMBOY

Correspondent—Fcrshing: & Co.

$500,000

PROVINCE OF

,

Guaranteeing Quebec Hydro-Electric
Commission

Bought—Sold—Quoted

Payable in United States Dollars
Price 89.50 to yield 4.45%

CANADIAN

DIRECT

WIRES TO

NEW YORK

for California's

Expanding

-

Economy

DEPARTMENT
MUNICIPAL BONO

Do>u?no7f Securities

MONTREAL AND TORONTO

Goodbody &
115 BROADWAY

Municipal Bonds

QUEBEC

3%% Debentures
Due February 1, 1983

MEMBERS NEW YORK STOCK
BRIDGEPORT

New York

oil pipe line

Stock Exchange

25 BROAD

Diego, Santa Ana, Santa Monica

THE

California Securities

Teletype NY 1-2270

FIRST

Beach,
Riverside,

Inquiries Invited on Southern

Dealer
'

San

STOCK EXCHANGES

STREET, NEW YORK 5, N. Y. ' •
01 4-1400
COBUBNHAM
TELCTYPC NY 1-22*2

15 BROAD
CABLE:

CITY RANK

OF NEW YORK

Company

Burnham and

department

DEPARTMENT

BOND

del Mar,

Encino, Glendale, Hollywood, Long

CORN EXCHANGE

•

Bonds and Notes

California

of
I NVESTME

'Underwriter

40

Public Housing Agency

Lester, Ryons & Co.

DISTRIBUTORS

ILAnover 2-3700

30 BROAD

page

and

Securities

bond

on

State, Municipal

a

in

telephone;

re¬

spectively, were John W. Remington, President,
Lincoln Rochester Trust Co., Rochester, N.Y., and
Elwood F. Kirkman, President, Boardwalk Na¬
tional Bank of Atlantic City, N. J. The Chicago

u. S. Government,
State and

El wood F. Kirkman

Elected Vice-President and Treasurer,

Chicago, 111., Sept. 23, 1958.

afforded

are

,

aspects.

SECURITIES NOW IN
securities

people are able and
in order to enhance

the individual welfare and the pres¬

of

DEALERS

by the

affected

adequately ; examined

in the abstract.

i

page

meeting withCitizens

the election of Lee P. Miller, President,

activities of government. These forces

they im¬

on

civic responsibility

long term gab.

prise

_/.,y

Continued

The 84th Annual Convention of the American

Bankers Association concluded its

of forces predominantly generated by competitive enter¬

from criticisms of this sort,
already raising questions as
to whether construction, particularly residential
construction, is likely to move forward into an¬
other upward swing of major proportions. It is
said, and truthfully said, that action such as that
:
taken by the Reserve authorities is likely to
| tighten the money market and make mortgage
money less abundant and more costly. Residential
building is regarded, and rightly so, as being quite
.sensitive under present conditions to changes in
the mortgage market. Facts of this sort doubtless
led the Federal Government last spring to make
FHA and VA money more available than it had
.

some

involved here than short

more

The economic development of our nation is a medley

were

attacks if and when such

prob- '
bankers at their 84th An- {■
nual Convention. Lee P. Miller and John W. Remington \
are
elected President and Vice-President, respectively, i
for the forthcoming year. El wood F. Kirkman re-elected
Treasurer. Principal speakers, besides Hon. Robert B.
Anderson, include retiring President Joseph C. Welman;
Jesse P. Wolcott; Ray M. Gidney; Paul 1. Wren; Don G.
Mitchell; Gov.J.L.Robertson, and Herbert v. Prochnow.

of equity and profit for holders of

hard,

govern¬

lems presented to over; 10,000

help end basis for fears of future

for the

nonbanking institutions to rapport

Fidelity Bank and Trust Co., Louisville, as Presi-

they be—at this
well aware of the
charges that would, quickly be brought against
them and of the risk of much more energetic
taken—moderate though

have

to

area

States there is

attempt to unseat mutuals from ABA i

ment's debt-financing; efforts characterize weighty

sizable Federal debt out of debt-monetization route and

In addition, in recent

an

membership, and beseeching appeal by Sec.: of Treas.

Secretary of the Treasury, Washington, D. C.

imposing

have those who become

Disapproval of

By HON. ROBERT B. ANDERSON*

Co.

EXCHANGE

1 NORTH LA SALLE ST.
CHICAGO

DEPARTMENT

<ORPORATIO?i

ISuttk of America

Associate Member of American Stock Exch.

40

NATIONAL

Exchange Place, New York 5, N. Y.

Tel. WHitehall 4-8161

Tele. NY 1-702-3

L

JSftVos ASSOCIATION *

300 Montgomery St.,

San

Francisco,-Calif.

aus. ADM.

library

2

//£

(1326)

The Commercial and Financial Chronicle

.

.

Thursday, October 2, 1958'

.

'

73
For

The

Banks, Brokers, Dealers only

Secunty I Like Best

A continuous forum in which, each week,

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

Try "HANSEATIC"
O-T-C

long

Through

(The articles contained in this forum

The

market.

this

of

full

At

long

porters

Corporation

is

Member

Rose

SAN FRANCISCO

•

Wires

to

I

of

period to 20ryears with
lateral benefits.

Specialists in

&

Clifford

1

audita

profit margins

period from eight to 20 years
payment of the $10.50-agallon
excise
tax "on
whiskies
produced in the U. S. The exten¬

whiskies.

York

American

120

Stock

has

Stock

Exchange

TEL. RFctor 2-7815

;

\

felt

posing the
(m a i n 1 y

Institute)

Life Insurance Co. of Va.

tension.

this

Commonwealth Natural Gas

tremendously
eral

STRADER and COMPANY, Inc.
—5-2527—

Private

Wire

TWX LY 77

New

to

York

the

next

through

years

promotion

of

City

benefit.

miliion,

1959 earnings

share.

Using

wide tar¬

a

is

computed

the

For the

.

Continuing Interest in

Fischer & Porter Inc.
Grinnell Corp.
Stouffer

full

fiscal

on

sales

fiscal

of

'59,

and

on

$600

million.

however,

paid

dividends

since

1941.

In

have

1957,

Keyes Fibre Co.

BOENNING & CO.

'

SCHENLEY

f$500 Million

©

4.0%
5.0%

25.0

LO 8-0900

©

6.0%

30.0

t$550 Million ©

4.0%

22.0

Reading Co. 3i/8s, 1995

9X

Earning

29.82

34.08

f'

38.34

37.24

42.56

47.88

44.6b

51.04

57.42

32.76

37.44

42.12

;

46.72

52.56

56.16

63.18

40.88

©.

5.0%

30.0

6^38

45.99

44.66

51.04

©

6.0%

57.42

63.80

36.0

7.65.

53.55

61.20

68.85

76.50

outstanding

on

May 31,

1958.

INC.—7-Y'EAR

Total

Excise

Inc.

Oper.

Inc.

Sales

Taxes

of Total

Inc.

of Total

Members Phila.-Balt. Stock
Exchange

Pennsylvania Bldg., Philadelphia
N. Y. Phone
7-6814

„.

N.A.

N.A.

19.9

5.1

23.9

2.3

the

442,402
'

mon

Aetna

t

or

are

listed

on

Canadian and Domestic

com¬
the New

on

•im,

the

Opportunities Unlimited
IN JAPAN

(Fire)

58.40

■

Unci,

FINANCIAL

Inc.

picture of the Japanese

N.A.

Weinoerg

v

an

•

:

10.6

II.O

*Divs.

#

taxes.'

DATA

Range

Per Common Share—

2.25

U.00

an

-

excellent

ex¬

and

21.82-15 44

Recent industry experience has
unfortunately been unfavorable

20.90-16.72

2.6

25.44-1858

1953

421.3

1.63

167.0

4.1

25.32-16.27* and

17.2

1.6

1952

6.7

1.42

426.5

1.86

193.7

26.02-18.58

6.4

27.3

2.8

1951

12.1

450.G

2.57

1.86

213.4

30.89-21.60,

9.8

44.3

4.9

22.2

4.73

1.86

38.56-29.27

are

solicitation

for

,

INoe

has

plus

Over-the-Comiter

Quotation Services
for 44 Years

in prospect.

prompted

corrective

measures, now in effect. The 1955-

1957 losses reflected
by most com: panids were due to the
mounting
2y2fr ..fire losses, the

31, 1988.
tAdjusted for
1958.
ilndicated annual rate,
stock in August.
TI9 months to May 31.

or

particular securities

and has

year

0.93

M^v

offer

any

background.

more

0.93

,

BOwling Green 9-0187

an

contin¬

39.13-1765

§0.93

.81

for

that

penses, plus recently granted rate
increases. Further rate increases
have
been made this

1.80

3.8

not

diversi¬

The
company stands to gain both from
appreciation of its securities port¬

1.30

0.9

e

is

orders

^Company,
founded
in

-1819, is nationally known

2.33

on

a

Telephone:
This

Insurance
Samuel

8.4

February

h

61 Broadway, New York 6, N. Y.

•

51.10

tPrice
"Earns.

our Monthly Stock
Digest, and our other reports
that give you a pretty clear

economy as a whole.

folio and from curtailment of

(Millions)

-

for

Insurance Co.

dends

70.20

excise

Write

uously for 85
years! Aetna

6.1

Outstanding

Investment Securities

fied insurance

1.5

2y2%

owns

I

2.1

^

Dealers

JWas/SSffUW <"«i Securities Co., Ltd.

15.3

5%

Street, New York 5, N. T.

Underwriters—Distributors

L.
approximately
aboutr 9.4% of

Members: N. Y. Security Dealers
Association, Inc., New York City-

19.1

in

INC.
37 Wall

company,

President,. S.. Weinberg, Grossman &
;
Co., Inc., New York City-

3.7

stock

.

Burns Bros. & Denton

SAMUEL WEINBERG

4.7

shares

the

Exchange and are also
Boston, Midwest,
Coast, Philadelphia-Balti¬
more, and Pittsburgh Stock Ex¬
changes.

1579

4.-699,823

of

shares,

shares

traded

167.4

to

Bankers

York Stock

157.7

hi August 1957 and
5%
stock in February,
§Plus

Investment

Pacific

404.2

"Adjusted

&

Broadway, N. Y. 6 COrtlandt 1-6889

of

outstanding stock.
Schenley Industries, Inc.,

411.7

''

111

the

409.9

stock

future

S. Rosenstiel

1955

10.6

I no.

Tokya, Japan

paid off

company

company

*

Net

(Millions) Sales

179.0

_

in

1954

1956

Samttel K. Phillips & Co.

N.A.

York,

Affiliate of
Yamaichi Securities Co., Ltd.

has paid divi¬

% Net

:

Year

Ended

470.0

i{

»:.

Brokers

Capitalization consists of $117.8
millioi&ojf long-term and 4,699,823
shares of common stock on May
0
A" evidence
"
!1"
"
31, 1958;-As
of his faith

53.20

40.88

f 1958

Recently, the

46.80

-

35.77

Sales

..

company's products,

63.80

r,

49.14

(Millions)

p

•t

so it will expire Aug.
Thus, Schenley's work-

1963.

42.00.

5.84

(Mil.)

31,

Earnings

7.02

Aug. 31

agreement

10 X

Earnings

5.11

% Oper.

"
'

$75 million

PROJECTIONS,

8 X

Earnings

33.0

1957




PRICE

24.0

Excl.

credit

line

Net Sales

Buck Hill Falls Co.

bank

be

5.0 %

SCHENLEY'INDUSTRIES,

a

se¬

not

6.0%

■»

COrtlandt

Cur¬

4.0%

Pocoao Hotels Units

PH 375

were

©

shares

.writer

per

©
ISG00 Million ©

"Based upon 4,699,823

addition, Schenley modi¬

old

4.68

27.5

In

lected

5.32
6.38

"

1969.

therefore,

4.2G

•

.

chases.

will

7 X

perSn.

20.0

Teletype PH 30

Transp. Co. 3-6's, 2039

Teletype

^

$28.8 million of insur¬
company loans of early ma¬
turity, deferring them until March

force-cuts

Net"

$ Mil.

©

-

Phila.

Net

of Sales

Now ;

"

ance

necessary,
cash requirements will be
greatly

background

% Net

Sales

Philadelphia 2, Pa.
ATT

a

re-

tions, in addition to regular cash
dividends. More important, since

INDUSTRIES, INC.--MARKET

Projected

1914

1529 Walnut Street

CO 7-1200

Blatz

Brewing.

Operating against

Broadway
New York 6, N. Y.

of

$50

been

$1

plus 2^% in stock
distributed to shareholders.

In addition, important non¬
recurring profits are expected to

sale

^

■

has

company

rently, the company is paying 25 upward and plenty of cash in the
cents quarterly.
Five percent in r pockets of investors—one cannot
stock was paid in Feb. A
change in ■)
help being
the dividend policy
cautious and
appears to have
j
taken
place in^,1957 when -the:
prudentin
company initiated stock distribu¬
making pur¬

"very good". August,
Schenley could report net profits
in the neighborhood of
$3.00 per

the

of

Rosenstiely recently:

financed

For

allowance

sales of approximately

Common

a

from

basis

million.

estimated sales of $500 million

accrue

115

end
that

Table

should be made for elimination of
Blatz

share.

Corp.

Established

to

are

year

'or

Securities Company!

"

•

(

early '60s, Schenley should at¬

tain

expected

Aug. 31, 1958, indications

$44.66

the

on

share

A

about

of projected sales of $500 million.
$550 million and $600 million. In

sev¬

whiskies: in the 12, 15 and
20-year-old categories. While
this may be a temporary advan¬
tage to Schenley, in the long run

to

$20

per

below

aggressive

are

'or

share, they would read
$63.80,' respectively.

a

aged

domestic distillers

year or two, it
logical that Schenley

and

premium-brand,

all

Schen-

on

get of 7 to 10 times earnings, the
projected market prices would be
$29.82 and $42.60. At 5% net, or
$5.32 a share, projected prices are
$37.24 and $53.20. At 6%, or $6.38

is true, Schenley
position to benefit

over

solely

next

share could amount to

$4.26

even

LYNCHBURG, VA.
LD 39

a

many

projected sales (estimated)
$500 million, with 4% net of

per

that

If

depend

seem

\Ca1l

'

'

-

>

bonding law
Distillers Corp.r-Sea-

should be in

are

On

Schenley has a
large portion of the aged whiskies
in U. S. and would get a big com¬
petitive advantage from the ex¬

Bassett Furniture Industrie!

'

irig capital position appears a dequate for aggressive promotion of

of

grams,
Hiram
Walker,
BrownForman and the Distilled Spirits

American Furniture

•'

report net earnings of 4%,- $10 million in bank term loans,
5% or even 6% of sales (incl. ex- using part of the proceeds of the
cise taxes).
Blatz sale.
"

20-year
,

One official summed it

the

information

''

could

It has been argued by those op¬

Trading Interest In

premium grade

on

>

he..:Saies

the years.
vears.

share.

do

would

been

over

whiskies,

or

fied

■

the

BROADWAY, NEW YORK 8

grade
and

advantages with the pasage of the bonding law." Another^
cautioned, however,; these benefits
not

' For "current

V;

:

(3)

saying: 5"There

Over

partially discounted in
price advance of Schenley
common
(from the low. 20s to the
low 30s) in recent weeks, the full
favorable impact is expected to

Exchange

vv

JAPAN

>

ley.

Although this significant change

Members

New

;

.

col- ;as^
senior. .r obU^ation?, :
im- \amounted to about,$37 per share.:

untold

Sept. 2 President Eisenhower

signed this bill into law.

frfcpONNEII&fb.

by

lip

applies to existing stocks of
liquor as well as to future stocks.
On

many

mess, which, in turn,- will improve

carried

the provision to extend the bond¬

sion

Since 1917

especially strong.
On 'Aug. 31,
1957, current assets totaled $33R

possible".
President ;,
elimination of private label busi- reported
the

ing

SCRIP

knndt «ffIcm

-

Increased Book value of the common stock,$
markets.- / (4) reflecting increased number of
promotion
of -higher- shares; ;amounted to ' $51.29 • per

Reduction

(5)

Bill

before

RIGHTS

to ..our

world

on

Stronger
profit, premium

(Forand Bill);
which

Birmingham, Ala.

Mobile,Ala.: ;i#

Direct' wires

.

(2)Increased

Scotch.

ports of
emphasis

Omni-;

bus Tax

•%..'%^

Net working capital amounted-.. to >
$291.9 million nnd the' currents
(1) Extension of the bonding: ratio stood 7.2r-to-tK Net xurrent ;

are.:

nstiel,'

the

#IAn©ver2-0700f A:;if* 14557-^:;

New Orleans, La. -

.

.

finally result-.,
ing in passage
by Congress,

Principal Cities

19 Rector St., New York 8, N. Y,
; -

up for Schenley. Aniong
the factors enhancing the outlook

f:

o

Members New York Stock
Exchange Y
Members American Stock
Exchange

:

shaping

pri-'

forts

CHICAGO

•

PHILADELPHIA
Private

5

Teletype NY 1-40

BOSTON

due

Steiner, Rouse S Co.

Widening profit margins - andr million and were-more thaji twice
higher earnings appear • to be total liabilities' of * $164.9 million '

marily to the
untiring ef-'

Stock Exchange

4-2300

average
net-to-sales
figure
of
4.4% during the 1941-1957 period.

in-:

vestor interest

Established. 1920

WOrth

.

current;

upsurge in

Representative, Shearson, Hammill & Co., Los Angeles, Calif.
(Page 2)
•'
- :»
'

,

ly rewarded.
The

Tanaka, Western Research

v

ident, are be¬
ing handsome¬

New Yorit Hanseatic

American

Louisiana Securities

ford

•

Inc. and its dynamic leader Lewis
S. Rosenstiel, Chairman and Pres¬

120 Broadway, New York

Schenley Industries, Inc.—Y. Clif¬

be, nor
sell the securities discussed.)
to

able

last, stockholder-sup¬
Schenley Industries,

of

to

intended

not

are

competitive pricing, unfavor¬
marketing
conditions
and Aetna (Fire) Insurance Co.—Sam-;
uel.
high excise taxes, Schenley's
Weinberg,
President,; • 3.%
profit margin dropped sharply in
'Weinberg, Grossman & Co., Inc.,
1951 through 1955. Net income as
New York City. (Paige 2); ' ;
per cent of sales dropped, frorh'
7.3% in 1950 to 4.9% irr 1951, and
as low as 0.9% in„1954.
In 1957, relieved.
Thus,
cash « dividend'
however, the company brought payments may be liberalized next,
down
to
net
earnings roughly : year in line with projected higher-.
2.3%
of sales
(including excise earnings.
;
taxes), but still far short of the
- The
company's
finances
are

Research Representative

Schenley Industries, Inc.

"Try

Hanseatic."

Associate

Alabama &

of

Los Angeles, Calif.

at

are

Just

offer

as an

TANAKA

Sliearson, Hammill & Co.

benefits

knowledge

disp9sal.

your

CLIFFORD

Western

securities

unlisted

the

they to be regarded,

are

Y.

familiar with every aspect
of

Participants and

Their Selections

a

ex¬

intimately

is

This Week's

In the inYestment and

perience, our large Trading
department

/

Forum

damaging

Continued

hur-U

Nation! Quotation Bureaa
Established 1913

46 Front Street
CHICAGO

on

page

49

New
SAN

York4,N.Y.
FRANOIBOQf

Number 5782

188

Volume

.

.

(1327)

Chronicle

The Commercial and Financial

.

3

index
McKINLEY*

By DR. GORDON W.
of Economic

Director

of Canada: Radioactive Mining Empire

Rio Tinto

Newark, N. J.

—Ira U.

and housing

ness

life insurance firm estimates busi¬

outlook for the remainder of the year and

Comments

government's reaction,
the business trend. Dr. McKinley believes:
(1) fourth quarter G. N. P. will exceed $450 billion—$7 billion
above the 1957 peak rate—so that 1958 G; N. P. wiH approxi¬
mately equal 1957; (2)4 1958 private and public housing

initial Governmental inaction

proved inadequate

A".

"r

-

am

afraid that

we

we

what

we

learn

from

For

seems

Gordon W. licKinloy

what have we

learned

from

the 1958 recession? Have we come

discuss, briefly

to

What

(1)

questions:

following

the

caused the
(2) What

recession of early 1958?

were followed
Government in

policies
Federal

the

by

dealing

(3) What re¬

with the recession?

sults can foe ascribed to those

Growth

been

improved?

these

questions

.help

A discussion of
should not only

to{ learn something from

us

experience, but certainly will put
in

us

the

better position to

a

business

of

course

months ahead.

/

predict
in

the

what

the

about

middle

-

;*(3)\ The gradual fall

address

by

only

the

on

that

business capital expenditures

lev-1

demand.

Basic Atomics
Pacific Uranium

1963*
" 43

Convention to Be Held in Florida

Ling Electronics

.1. 43

Texas Nat. Gasoline

43

_____

Fund

to Attend World Bank and

A. Wilfred May

Meetings in India

__.i

12

_ —

,

IP. M. Arthur Hits Congressman

Patman's Proposal to Compel

Loan Accounts 37

Banks to Pay Interest on Treasury Tax and
Rules Covering Tax Stamps on

Singer, Bean

New Federal

Stock Transactions

;

;_

—

39

&

Electric Power Industry's

Chase Manhattan Bank Previews
Future

•Regular Features
Bank

and

(Editorial)

It

See

As We

Einzig: "A Rise in Price of

29
Activity.

Funds

Bankers

About Banks and

News

Wilfred

Observations—A.

—

May.

-

Report

Reporter's

Our

Railroad Securities
Securities Now in Registration

1.

37

eration, not because of a decline
in demand but. because more and

The Security I Like Best

The Market

The

.

.

.

—

Streete

and You—By Wallace

and

Pablished

You
Weekly

Twice

1

Ling Electronics
Commonwealth Oil Coof Florida

—

State of Trade and Industry

Washington

Sabre-Pinon

50
__-—55
45
14
2
4
60

—

Prospective Security Offerings
Salesman's Corner______

Securities

44

_________

Securities.^.

Utility

Public

Quinta Corp.

58
12
4

39
56
49

Reporter on Governments

Our

■'I

10
57

News—Carlisle Bargeron

Indications of Current Business
Mutual

Dallas

Chicago

Philadelphia

Gold Means Uncontrollable

Washington Ahead of the

From

1-4844

Los Angeles

San Francisco

8
8

Inflation" ;

%

inc.

40 Exchange Place, N» Y.

Direct Wires to

60

____.

—______

Coming Events in the Investment Field
Dealer-Broker Investment Recommendations. ____

oper¬

page

—

Bookshelf

-

Teletype NY 1-1825 &

Cover
—14

_

Stocks

Insurance

Business Man's

ation down to 85 or even 75%' op¬

on

mackie,

48

_______

HA 2-9000

industry in the first half of

Continued

Glass Fibers

L. 0. F.

Industry

1957 fell from close to 100%

City

Salt Lake

>43

Appointed

Announced to Observe 100th Anniversary in
of Founding1 of National Banking System
Backgrounds, of Nevy Ranking ABA'. Officials.
1959

It then became apparent

of

'

Wires to Denver 4

41

Plans

expansion

completed

HEnderson 4-8504
JCY 1160 X

Teletype:
Direct

■

New Division Heads

'

as-^

so

after

Dr.

40
40

Convention
Submits Recommendations to Spur Sale

Exchange PL, Jersey City

DIgby 4-4970

.

that

estimation

McKinley before
the 22nd Annual Convention of the Fed¬
eral
Savinsrs -League of New. England,
Swampscott, Mass., Sept. 13, 1958.
*Ari

1

Efforts in Behalf

State Bank Division
41
Walter Kennedy Reviews Trust Division's Activities
42
William M. Lockwood Discusses Role of National Bank
Division
42
John Adikes's Comments on Savings and Mortgage
Division
**42

that, in the rush to catch up, there
had been a rather general over-

of

•beginning

]the-

year;

insufficient

eled off.

crisis^ (2). The cutback in govern¬
spending

40

President Lee P. Miller.

City Stock Exch.

Spokane Stock Exchange

L. A. Hollenbeck Reports on

consumer

By early 1957, many

ment defense orders and

Members Salt Lake

40

Savings Bonds

of

J.F.Reilly&Co.,Inc.

Cover
Association.

1

Bond Sales

Committee

ABA

capital boom in 1956,
and mote businesses

programs were

exports from the. very high
reached during -. the
Suez

28

Text of Resolutions Adopted at the

the capital booni
could be kept going forever.

•level

26

many

sumption

immediate initiating
factors in turning business down¬
ward were:
(1) The decline in

URANIUM

_______

of Savings

industries was operating
at capacity, capacity operation was
achieved only because the full cost
of new plant under construction
was being distributed in the form
of incomes, yet the plant itself was
not yet in operation to satisfy .this"
swollen
demand. / Capacity was

reces¬

FEDERAL

24

-

Remarks of Incoming

deceiving aspect of the 1956
was that, although plant

thus

the

Mitchell

Treasury Cites Top ABA Officials for

,

caused

22

Institutions

Ray M. Gidney

Defeated

situation
in

CENTURY MINING

20

___

Convention in Chicago

,

A

CHEMICAL

18

1

Proposal to Oust Mutual Savings Banks from

joining the rush to expand capac¬
ity.
*

clear that the

'our

more

GUARDIAN
16

What's Ahead for Real Estate—James C. Downs, Jr

-

Looking back to 1957, it is

sion?

roaring

a

PETROCHEMICAL

Cover
15

Prochhow

V.

G.

—Don

greater strain on output capacity.
mild capital expenditure rise
of 1955 was thus transformed into

with

Dept.

NEW YORK

Securities Market

Nation's Banking

of

—Hon.

The

lists Recession Causes

First,

rising

WALL STREET,

f

American Bankers Association Holds 84th Annual

to

V

Opportunities and Challenges in Industry

ol

led

-

13

25

__

"Money in Peace and War"—Hon, J. L. Robertson.

demand which in turn placed dven

pol¬

(4) In what way could our
national economic policies have
icies?

turn

1

Minerals—Roger W. Babson

—Hon. Jesse P. Wolcott

capacity in 1956; and (2) A strik¬
ing shift in the pattern of con¬
sumer
expenditures during 1956
and
1957.
As
business activity

in

•

Before giving my estimates for
the months ahead, I would like

-

of Critical'American Problems

—Herbert

rose
following the recession of
out of the recession with business
policies improved, or will we re¬ 1954, existing plant in many in¬
dustries was pushed close to ca¬
peat the same, old mistakes in the
next recession?
Has government pacity, with' the result that businessmen
began to step up their
economic policy advanced as the
;
result of the experience learned expenditures for new and modr
ernized
plant and equipihent.
in our most recent economic les¬
These
capital -expenditures
of
son, or must we retrace the same
course
increased incomes which
old pattern during the next down¬

turn?

by

obsoletes!

Telephone: WHitehall 4-6551

Twenty-Five Years: Past and Future

'

„

99

11

Stocks and Inflation—Paul I. Wren

An Analysis

(1) A too rapid expansion in plant

instance,

your

Obsolete Securities

—Joseph. C. Welman

can

it.

recoup

c

10

Equality—Benjamin F. Fairless_____

Common

look beyond these imme¬

causes

wrong,

9

Burgoyne

vs.

should bet

trading

>

/
_

—Hon. Robert B. Anderson
,___
Not Complacency but Truly Sustainable Growth

the recession, it
to-me that there were two:

basic

7

..

diate factors and search for more

seeing

8

Wishart

A Healthy Government

but
into fruition.

too

out

BRAVES?

or

If you

JEFFERSON LAKE

quickly with¬

past

Situation—Harry A. Bullis

ABA Addresses and Convention News :

sharp, recession.
If

6

;

—Charles G. Mortimer

'eventually■ dragged the economy
as a whole into a short, but very

the immediate

Business

on

African Oils and

throughout

dismiss

often

Maudling

Confidence: A Vaccine Against Recession Fever

the year in business
spending on machinery and other
durable
equipment; and (4) The
economy as a whole and our busi¬
nesses
in particular, and to lay sudden, reversal in business inven¬
tory policy beginning in Septem¬
our business
ber, 1957—from a policy of inven-r
plans accordi n g 1 y. A It
tory accumulation to a policy of
inventory, liquidation. These were
though this
the four types of spending which
interest in 1he
turned downward first and which
future
is
healthy, I

S.

Quality

(3) that while the

capacity came

once new

naturally

are

us

YANKS

5

—Carl G. Freese__

resulting, from overestimated- demand-,

inter¬
ested in the future trends in the
of

Johnston.

Outlook for 1959 Machinery and Equipment Sales

generated additional income which maintain the boom

All

3

* r

Financing Our Government Presents Staggering Problems

by January, 1958, should have no longer delayed tax cut and
other decisive anti-recession measures; - and (4) too rapid
1957 plant expansion,

-

5

Reginald

B.

—Paul

desirable, the Government

was

"

Invisible Sound Barriers Restraining Our Economy

fourth quarter expenditures

will reach 1,125,000 with

rising $1.5 billion above the first quarter;

Hon.

—Rt.

better predict

starts

Page

...

Monetary Discipline and European Economic Trends

analyzes past year's experience, and
to

;

,

Cobleigh

Outlook for Steel Demand in 1959—Logan T.

Economist for large mutual

%

*•

Year-End?—Gordon W. McKinley___

How Much Recovery by

and Investment Research

Prudential Insurance Company of America,

Articles and News

-

.

Reeves

Soundcraft
Chemical

Montrose

Copyright 1958 by William B. Dana
Company

and
FINANCIAL CHRONICLE
The COMMERCIAL

For many years we
have

specialized in

PREFERRED STOCKS

Reg
WILLIAM
.

B.

25. Park

8

D

DANA

Place,

REctor

'

r

;

Members New York Stock Exchange

25 BROAD ST., NEW YORK 4,

HERBERT

Albany
,

Nashville




Boston

Chicago

Schenectady

-

w

Reentered as

Publishers

Glens Falls

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Rates

Subscription

York 7, N. Y.
to

second-class matter Febru¬

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York, N. Y.', under tnt aci or iviarcn a, roi.

ary
,

Subscriptions
in United
States, U.
Territories and
Members

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DANA SEIBERT.

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Thursday, October 2,

state

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news,

111.

etc

•

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(general news and ad¬
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PHILADELPHIA

,

"

i

4

The Commercial and Financial Chronicle

(1328)

.

.

Thursday, October 2, 1958

.

terval

of rising interest rates it
exceptionally fails to fill
the
role
of
an
inflation
hedge
with
its
regulatory
ceiling
on
earnings (over the last decade
profits
rose
only
32%
against

quite

Observations
One

Coming Up With Hard-Boiled

tool

Market Tests
The

longer the bull market is

extended

the

in

both

—

for

value

of

areas

ing decisions.
Particularly
important is

1

nas

style, and fetlike

ishes

"growth" (the
too

blind

fol-

lowing

*

f

o

which in 4ieuof

realistic

a

pricing
Lead

may

for

*

to
"hung-up"

you

become

in

be

major approach to realistic
appraisal of a stock — as of an
equity interest in real estate or
a commercial business — basically

investment, with the

•

some
■.

whether

to

as

off

other medium.

you

r

>

or
;

dividend

receipts, to recoup your
principal along with interest com¬
pensating you for its use, over the
following 20 or 25 years.
Realistic

Issue

weight to
the income and the

to

constitutes

areas

a

?ash-laden companies will be furlished within the next two years

the

"reform"

on
in
post-A very.
king of cash-rich entities
(although getting a' bit less af¬
fluent) whose net liquid assets
after deducting all liabilities 'in¬
cluding the entire preferred stock
capitalization, still is in excess of
:he shares' market price, has thus

we favor use
of
prospective

amortization

is

Irrespective

going

"Telephone,"

of
it

least

other

has

bulls

been

investment

17

"

recent

able

translate

its

substantial

expansion and
expenditures into

modernization

compensatory

Comparison

to

Ward's

net

earnings return.

income

results

over

Plan

company

The

follow np

timely

experience in France. Our col¬
of July 31 and Sept. 18, to

umns

on

pending introduction of legis¬

lation which would cut the tax in

half, and

apply

connection

sheet

liquidity.
AT&T?

re¬

discussed

the

■—

and

likely political

and

market implications.

is

the

In the latter

French

experi¬

particularly important.

ence

Price

assumed

of the national debt

ket

What

the

sulting increased, "take" to reduc¬

ment value to be

re¬

communication

which Mr. Felsette refers, reported

worth of different issues.

ten, particularly^ midst bull mar¬
atmosphere, is a "glamour"

Last

DEAR

MR.

Also bearing interesting watch¬
And the investor is
1 always read with
great inter¬
frequently motivated by tran¬ ing over the coming year will be est your
writing on the Capital
sitory factors. Stretching this to the market course of American Gains Tax.
the height of absurdity is the "sea¬ Telephone and
Telegraph, whose
You may be interested to learn
sonal" appeal, in linking particu¬ stock
has
been
so
surprisingly that during the inflation that took
lar industries or issues to holiday active
and
rising
in recent place in France, during the Ger¬
or weather aspects of the period.
months.
man occupation of World War
II,
This, incidentally, manifests the
None of the prevalently ascribed the Paris Bourse went
sky high
"Greater Fool" philosophy; that
easons for the stock's rise seems
and it was necessary to repeal the
to stand the test of logic. A split
would fly in the face of the com¬

capital
the rise.

misguided nitwits, who not realiz¬

pany's voluminously documented
opposition to the practice, accord¬
ing to which it would be fruitless

Nobody wanted to sell, to avoid
paying a very large capital gains

ing

in

tax,

market

community

yourself

consists

the

of

temporary

seasonal spurt, will
you a

liant

outside

nature

perspicacity

in

your

of

of

obligingly

profit to reward

of

bunch

a

a

both

tion

pay

its

market

effects.

The

and

distribu¬

alternative

ex¬

inaugurated

that

tax
at

the

had

been

beginning

of

About
Motors

planation of

there

and

were

not

sellers left to maintain

this

exploiting

the calendar.

major switch into

a

equity issue by pension funds,

mak*^

no

Tburmcr

sense.

this

in¬

enough

an

something similar hap¬
now
in Wall Street, but

pening
of

course

more

on

much

a

reduced

would

-O-.

',

;

•

'•>

''

.

•

"

'

Anyway

*

Maintained in all

to

if

the

the

capital

gains tax, it should adopt a de¬
creasing scale according to the
length of the holding period (six
months, one year, two years, five
no

tax

years) similar to the
for the California

over

one

five

in force

capital gains taxi

ROBERT

BANK STOCKS

FELSETTE

Los

of 12 largest Philadelphia Ifanks

We learn that following the re¬
peal of the tax in August, 1945, the
French

stock market went into

a

period of liquidation and decline,
the index of 300 common stocks

closing

STROUD & COMPANY

the

year

at

NEW YORK

•

PITTSBURGH




•

ALLENTOWN

477 in September when the tax
repeal became effective.—A. W. M.

BROOKLYN, N. Y.
Kish
LANCASTER

were

and

10,700

oyer

off the job as

General

consequence

a

V

industry; recorded substantial

power

the labor front in the period ended

On

of workers

ber

Sept. 13, the

on

num¬

drawing unemployment compensation dropped to

the lowest level of the year.

week

United

States

Labor

Department
or

a

reporting

decline

of

total

a

86,900 from

of
the

before, stated that it represented 4.6% of those eligible for
payments, compared with 4.8% a week earlier.

In the like week of last

year,.the number of <workers drawing
rose by 43,000 to a total of LI69,200

unemployment compensation
as

the first effects of the business recession began to be felt.

;<Initial

claims
for unemployment
compensation, reflecting
layoffs, edged upward by 9,400 during.the week ended Sept.
20 to a total of 268,600, according to the
report.' The agency said
a
good bit of the rise was because of temporary shutdowns of
new

apparel plants in New York City for religious holidays. During
like week of 1957, initial claims went down by
23,000 to a
total of 231,900.
.' t
:

the

The largest reduction in the number of workers
receiving
unemployment compensation in the latest reporting week came in
Michigan and Ohio, reflecting recalls in the auto industry. About

half

the New York decline,
however,
exhausting their benefit rights.

attributed to workers

was

week.

This trade weekly reports that most steel

that

men are now

certain

improvement in the market is well underway.
A
continued pickup is looked for over balance of the year,
although it is conceded there could be a seasonal leveling off at
a

grass

roots

year-end.
It

added

that

there

is

increasing optimism over the outlook
a growing conviction the automakers

for automotive demand with

will sell

more 1959 models than 1958's.
Detroit, it noted, is show¬
ing signs of rebuilding steel inventories after months of cutting

back.

.
•

mill

/■'

•

--■

cold-rolled sheet delivery promises have
stretched out to five weeks. Selling on the basis of quick delivery
is becoming a thing of the past and salesmen are
quoting Novem¬
ber delivery on cold-rolled sheets and landing orders.
some

A mild

others.

able

to

areas,

supply pinch has developed for
The

boost

requirements

for this

reason

is

that

production
of

fast enough for
steel users. While

some

appliance plants

some

the

mills

the
any

have not been

prompt
shortage

delivery
will be

temporary, it is another indication of how the market has im¬

a

This trade paper reports that appliance firms
stronger factor in the market. This is a case of

ventory cutbacks plus

is

conducting

—

a

business from offices at
Second Street.

Jack P.

securities
1620 East

are
an

becoming
end to

in¬

pickup in appliance sales.

a

Even the rail market is firming up.

In the last 10 days,

some

orders for rails

have been placed. Fairly substantial freight car
orders have come in and there are signs the railroads are getting

ready to step up car repairs.
A mild shortage of freight cars is being felt by steel and
aluminum producers. Nothing serious so far, but one traffic man
warns that a sudden boost in
shipping could bring on a real pinch.

At the

repair.

moment, the railroads have 15 to 20% of their
Last year at this time it was 9 to 11%.

cars

in

poor

Truck transporta¬

available.

Improvement in steel demand is being felt by steel service
centers, or warehouses. In the Midwest, they are now receiving
bulk orders for hot-rolled sheet as well as galvanized sheet and
cold-rolled.
some

gages

projecting

a

The
are

15%

spurt in hot-rolled sheet hit so suddenly that
temporarily hard to come by. Warehouses are
gain in total tonnage marketed during October,

concludes "The Iron Age."
The number of
at

new

higher level than

a

reports
with

Jack Kish Opens
•

employees

Trade volume in the period ended on
Wednesday, a week ago,
from 2% below to 2% higher than the similar week a
year ago.

was

426—against

INCORPORATED

PHILADELPHIA 9

electric

tion is still readily

Angeles, Calif.
Sept. 25, 1958

Send for comparison

Chrysler

in the plants

to

Compared v/ith the like week in 1957, the increase amounted to
Lumber shipments in the week ended Sept. 20 were higher
carloadings showed fractional gains.
\

government

maintain

years—and with

PHILADELPHIA

curtail

due

and

in transfer tax than it does

wants

'

to

output

5.5%.

collect

capital gains tax if it would do
away with the latter.

:

planned

proved.

government

on

Trading Markets

8,500

of

gains in
output the past week following mild declines the week before.

and

Is it not

The

Active

manufacturers had

80%

workers

The

•

,

orderly

scale?

;

to

of these walkouts.

In

market.

bril¬

auto

production of
plant walkouts.
This situation is not only delaying an
early settlement of the
auto industry labor problem, but- is
doing much harm to the
workers themselves and the
economy as a whole.
"'■'.'•■W

too

gains

.

The upsurge in steel demand is no flash in the
pan, "The Iron
Age," national metalworking weekly, stated on Wednesday of this 1

MAY:

gard to price.

is, assuming that the rest of the

week,

models

1959

such

tortion of the stock market by, the
capital gains tax based on actual

tion

industry picked without due

the

extremely important and
information ■■ on the dis¬

he country's next interval of re¬
tail activity will furnish crucial
evidence
regarding the invest¬

given to balance

vs.

Market in France
adduces

•

ing further gains each week despite a rather dormant automotive
industry. Currently, the bulk of steel orders pus', ing up steel
output are coming from sources other than the car makers.

The

Capital Gains Tax

Business Failures

J

1,953,000 workers for that week
The

Index

Auto Production

Industry

Business indications the past week
pointed to continued im¬
provement in the nation's economy with sleel production register¬

per¬

principal?

of

Likewise, realistic yardsticks, of
one
kind or another, are indis¬
pensable in comparing the relative
Too of¬

subscribers,

haps thus forsaken rigid value
tests for an "escapist" highmarket
defensive switch toward increased

safety

Trade

Price

bought

by way of
initial
or
additional
purchases.
The largest buyer was Wellington
with 40,000 shares, followed by

vestment

Food

on

either

managements,

Ward,

far not been

and

bull market

mere

heavily by the mutual funds. Since
the beginning of the second quar¬
ter the issue was acquired by at

For this

Along these lines,
of

important

relative

Montgomery

at

in; cash

much

given

via

accom¬

arriving

of

purpose

be- better

would

price

omewhat open question. A good
test of the value to be attached to

calculating realistically just

conclusion

a

the

of

balance sheet

what you are going to get out of

panying

stock

may

How

life).

your

of

issue

Carloadings
Retail

Commodity Price Index
•

nonsense.

of

hat you pay for the stock.

issue

an

One

lies in

dollar

this

to

These
include working capi¬
tal, long-term debt and shareownrs' equity, on the balance sheet; State Street with a new commit¬
md in the income account, gross ment of 35,000 shares, and Affili¬
ated also with 35,000. Among the
•ncome, depletion and deprecia¬
tion, taxes, net earnings and divi- other buyers in this expertise area
lends. The last two items are, of were
Pennroad, National Secu¬
rities Stock,
New England, and
ourse, freely published now; the
Axe-B.
Those exercising conver¬
thers being available from anasion
y<«ts on request or via periodic
privileges included Lehman
ubscfiption from a few of the ^nrooration to the tune of 3,050
shares.
as
Jnvestogrdphs
of
nave the funds,
Roches ler.
along with the
non-professional buyers like the
Assets vs. Earnings
Stock
Exchange's
Monthly
In¬

over¬

i

compari¬

considering items

amount

terns

coming such
fluences

a

useful

balance sheet and operating items
vhich you can get for each dollar

tests to invest-

fictitious

and

realistic
in

on

?xact

apply realistic

in

logical

basis instead of just on a per share
basis.
Such data will show the

price and glamorization — the
greater becomes the urgency to

this

good

lies

son

State of Trade

increase in gross). And the
attribution of "electronics" glamor

Production

Electric Output
■"

274%

By A. WILFRED MAY

Steel

The

Dun

11,361

&
or

businesses chartered

a

year

Bradstreet,
an

during August were
for the third straight month,
The total was 12,234 compared

ago

Inc.

increase of 7.7%.

It.was down 1.8%

from

the

12,454 of July.
The number of

new

January through August

concerns

was

listed for the cumulative period

95,167. This

was up a

fractional 0.1%

Continued

on

page

47

Volume

188

Number 5782

.

(1329)

Chronicle

The Commercial and Financial

.

.

through May 1; 1962. These war-:
rants have since been .detached

5

.

apiece.; The 2 c o m m o n
is

ining Empire
Enterprise Economist

..

J..

/..

.

l"

■

A look at stocks currently
able

of this unique mineral enterprise,
majoring in uranium, and minoring in copper, iron ore, gold,
cobalt, nickel and thorium;
v
Reviewing the

progress

selling below $2 a
viewed with some suspi¬

as

holding company,

a

it owned

> Executive Vice-President, Armco Steel Corporation

avail¬

as

New York City

Steel

c

hundreds of uranium shares have

•/>■'

against expecting another

encouraging the fact that

displayed quite meager, even
mythical, values, here's one of
some substance,
and one wherein
future

with

Viewed

re^sopably

rnay,

be

•

or

about

or

better off than

we are

six

we were

He estimates 108 million tons of ingots for 1959
year, as

60% capacity for this

against 85 million tons

year,

and expects all of

-

:

*

steel's major markets will share in 1959 upturn;

:

now

6hly:; this, .year
production

pany-'s - units are
approaching full•

schedules, 1957 resulted in a

When

the

business;

machine help to support

started to sputter last year, management decided to lighten the

,

load

and

sharp

a

slight- inventorie

net

demand

for

-

high .level of
durable
; V

a

consumer

goods.

liquidation of

'

a

s

-

Economic Balance Shifts to

Recovery '

$121,819, and results began.
As
this year should show/substantial shrinking outthe backbone of the current earn¬
ownership of "
improvement; ;
* p u t reduced
ing power of Rio Tinto. Rio Tinto
o ne
of the
Uranium bonds, although a new ■ profits, .-a
also owns $4,205,000 of Algom 5%
most impres¬
type of security, have in the past, snowballing
debentures and' $9,275,000 in
sive and fast¬
couple of years gaiped consider-, effect got-un¬
Northspan debentures due 1963.
est growing
able investor acceptance on the
derway
with
The
company does not, however,
mineral eiiterIra U. lottieifii
theory that they are virtually in- the major imstake
its
entire
future
on uranium.
prises in
d i r e c t government obligations,; p act felt by
North America, with a board of Attractive and predictable as earn¬
since the sale of mill output is the
durable
directors
of
international emi¬ ings from this source may be, the directly to a government agency goods indus¬
long range future of the company on an assured long-term contract.7 tries.
nence and uranium purchase con¬
%
tracts, with an agency of the Ca¬ is geared as well to potential ex¬ Further, heavy sinking funds
F r o m
the
■>..

Mr. Johnston cautions

future boom but does find

near

75% capacity in that

of ingots

y:

t

Up

optimism.

some

months ago.

earnings hayen't been im¬
pressive, but /that is diie to the
fact that a number; of :thie comto

predicts nation's steel industry should proObserving a shift in

economic balance to side of recovery,
>

the

executive

duce 25% more in 1959 than in 1958.

price range. Second, whereas

in its

By logan t. johnston*

$2

spects.
First, it has probably a
greater number of common shares
outstanding than any other issue-

are
(Dec. 31, 1957) a 75% common
cion, if not disdain, by the great stock interest in Algom Uranium
majority of board room habitues. Mines (through ownership of 2,Thus, "■-.today's :,*.v
vV",'• \
% 724,089 shares of Preston East
Dome); 42.7% in Milliken Lake
p i e c e. may
Uranium Mines; 14.4% in Pronto"
prove a bit uof T
Uranium Mines; 33.9% in Northa shocker in r*
spanUranium Mines; 31% .in
that it p r e- • ~
Pater Uranium; 15.3% in Peach.
s en t s .'anV
Uranium; and 6.1% in Rix AthaV
equity, presbasca. These are all producers of
ently quoted ..i
uranium, the largest being Northat
$1.6 0'| a
span with a total mill capacity of
share, which
8,500 tons per day; and these:.are.
represents the

share

■'

reveals Rio Tinto
unique in many re¬

below

common

'

Most stocks

Demand in1959

and

.-v'-'.v

funds.

si. :;-C

■

stock

over-the-counter

traded

Currently sells around $1.60. All
these
quotes
are
in
Canadian

^

By DR. IRA U. COBLEIGII

y

separately at around 60c

and trade

profit,

The balance has now

shifted to
enough

of recovery—not

the side

-

: : :

>

J,

expect another boom in the
near future, but certainly enough
to make us all feel" considerably

: to

better than we did six months ago.
It

of

that the only group
which may lag be¬
business pattern
the next several quarters is in
area
of capital goods.
The
appears

industries

hind
for
the

.

rising

the

; tremendous
postwar outlays for:
traction of a
number of other
should substantially maintain the peak of the
Government, totaling $632
new
plants and equipment—parmillion and running through 1963. valuable minerals in many sec¬ market in these bonds, and arc
boom
last
ticularly in the last three years—/
L.
T. Johnston
Quite a company. Its official name tions of Canada and in South calculated to retire a high per-;
year to the
pushed industrial capacity a little
Africa.
is The Rio Tinto Mining Company
centage of them prior to maturity. 1,6 w
p o i n t
^ beyond
our
consumption needs,
.of Canada, Limited, and it is the
There is a 44.7% interest in In the case of Rio Tinto 5s, $12 reached
this /past spring, gross As we • have' always done in the
lengthened shadow of a project Oceanic Iron Ore of Canada Ltd. million must be retired prior to national product fell by. only 4%,
we will; grow into our enlaunched
some
six
with
an
already 'indicated
300 Oct;' 30, 1962. .This cohstaht debt total
years
ago,
industrial
production
by larged industrial capacity and a
shepherded
by
a
distinguished million tons of commercial grade retirement, of course, serves to 13%, durable goods production by new wave of expansion. will be
geologist, Franc R. Joubin, and iron ore; an associated interest in build up the common stock equity.
20%, and steel
production by underway.
grubstaked by a personality of vi¬ Hudson-Ungava Nickel Mines, So, if all goes well, a sound ura¬ 38%. So
you can see that our in-. - Jn
the meantime,
the highly
sion and courage, Joseph H. Hirsh¬
holder of a 100 square mile con¬ nium company such as Rio Tinto
dustry has
0®en affected mo
competitive nature of our econhorn, now Board Chairman of Rio cession in Northern Ungava; a should reach the end of its con¬ than most others.
onfly
generate -a comfortable
Tinto, multimillionaire, and dis¬ 52% iriterest in Anglo-Rouyn tract period free of debt, with its
A major part of the sharp dejevej 0f business expenditures for
criminating collector of art
Mines, a copper property in the mills free and clear, and a sizable cline in steel was due to inventory
modernization
and
cost
saving
Lac La Ronge area in Saskatche¬
cash
flow
balance
in addition. reduction. Our figures show that
Geologist Joubin was convinced
equipment.
wan; and large share holdings in Even if uranium is a less urgent steel inventories, in terms,of in- ■■■.»
that fabulous deposits of uranium
jn £ac^
latest government
Consolidated Frederick Mines, and mineral
five
years
hence, Rio gots, have dropped about 15 milores lay
in the Blind River dis¬
survey 0f capital expenditures for
Howey
Mines
in Tinto should then have substantial lion tons since the middle of last
trict of Ontario, on the Northwest Consolidated
all types of industry indicates that
shore of Lake Huron. His confi¬ Canada. ; - ;
" earned resources with which to year. However, we now see a re- ^ese
supporting forces are gaindence and geological probing of
In Africa, Rio Tinto has a 35%
expand its other mineral prop¬ versal of this inventory cycle.
ing strength. That report projectthe
area,
played
back-to-back interest in the Empress Nickel erties.'
Today it is no longer page one e(j a slight pick-up in capital outIn January 1958, a new company
with Hirshhorn arranged financ¬ deposits of nickel and copper in
news that the economic skies are
iayS f0r the last three months of
ing opened up, in due course, one Rhodesia; and a 15% interest in was formed, Rio Tinto Dow Lim¬ clearing. The FRB Index of In- the year. The most recent Conof
the most important uranium the extensive Palabora low grade ited, to exploit thorium and raredustrial Production is now about ference Board report on capital
mining sections in the world and copper deposits in the Union of earths which are by-products of 9% above the recession low of 126 appropriations by manufacturers
uranium
mining
in
the
Blind
led to the formation of such suc¬
South Africa.
reached last April.
Output" of aiso suggests that the "decline in
River area.
Ownership of this
cessful companies as Pronto, AlThese and 30 odd smaller in¬
electric power,
petroleum, ma-„ capital outlays by this segment of
gom Northspan and Milliken Lake.
Rio
Tinto
Dow
is
spread among
vestment interests in a diversity
chinery, furniture and textiles is industry is hearing its end. So

nadian

•

.

.

...

^

All of these

are

now

a

part of Rio

Tinto of Canada,

pliers

and major sup¬
uranium oxide to the

of.

atomic arsenal of the Free
•

In

six

Elliott

the

years

World.:

burgeoned,
population
of

a

and
over

18,000; and a symphony of Geiger
counters, clacking over thousands
of

of

acres

has

Blind

been

now

River

terrain,

converted

into

a

significant 'industrial

community
embracing several major uranium
mining and milling companies,
the largest of which is Rio Tinto.
Rio

Tinto

means

a

formed

of

simple
in

1955

Canada

is

silver,

gold,

copper,

lithium,

lead, nickel and rare earth prop¬
make up the quite pano¬

erties

ramic

holdings of this interesting
of company. For a complete arid ac¬

township

Lake'.-has

attained

of

by

no

company.
It was
to place under a

the Rio Tinto of Canada, Dow

The new thorium

Milliken Lake.

and

interests,

the

latest

you

annual

need to consult
report, as only

the most important holdings have
been touched upon

midsummer 1959.

Canada,

in

one

Naturally, a company with its
fingers in so many pies seems
quite complicated; but its capitali¬
zation
is much simpler,
merely
$14,688,000 in 5% debentures due
May 1, 1963 and 53,204,338 com¬
mon

shares.

The bonds

are

quoted

despite

delays.

unforeseen

some

milling in late 1955,

Pronto began

Algom in February 1957,

and Mil¬

liken in March of this year.

new

Cer¬

supplies

100

began crushing last December

94

(ex-warrants)

over

the

^Each $1,000 bond origi¬

shares

of

at

$1 to
May 1, 1959 and at $2 from then
common

at

highest level

the

in this vital area of

..

equipment delayed Northspan

The plants at Panel

...

.

.

^

mcreasmg.

er

Corporate profits appear to have
decline in the secquarter. Consumer credit has
a breathing spell and should

ond

the

Thig year

«.•

checked their

'
,

..

t

k

#

...

.

„

s ^°°

A

one
g£eej
consumer,
and the
Waterloo of many forecasters,

little m the second quarte
government expenditures are

and

'

tive

,

product moved

i

^ ^ automoindustry—usually the number

^

.

the patential ear buy-

has lived in an uncertain eco-

nomic

atmosphere.
In 1959 the
brighter and per-

outlook will be

Sonal

incomes are due to

-

Markethig

AH this leads us to believe that

SrfcS&ffiS iC90nfie9K8.ce Board' New

Continued on page 37

operations in March of this year.
Full on-stream

We

pleased to

are

announce

that

should

plants

production at all

create

a

rise in earning power
new

JAMES B. DURNIN

market

become associated with

us

We

pleased to announce that

priced

speculations, this one

mineral

are

Tinto

Rio

lower

Among

common.

has

to

tone

dramatic

and supply

MORRIS H. WRIGIIT
'

carry

considerably less

risk than most,

and has the ben¬

to

seems

efit

OGDEN, WECHSLER & CO.
INVESTMENT SECURITIES

stantial

and

39

Broadway
6, N. Y.

running

into

there

a

is

tential

Telephone HAnover 2-5865




Teletype NY 1-1085

well

many

mineral

has been admitted as a

ultimate

'

General Partner of our firm

located ore re¬

1963.

broad

I

sub¬

and full output contracts

serves,

New York

management,

excellent

of

strong financial sponsorship,

•

In

of

development

controlled

properties.

and
•

Kuhn, Loeb & Co.

addition,

horizon

po¬

of

affiliated

September 30,1958

go up.

Added to this is a relatively fav-

orable auto credit situation,

-

commenced

Uranium

Spanish

and

-l

,

r°fS++,na-101lu

a

,,

and

two

m

and one-half years.

had

tain shortages of workers,

operations.

ests of

of

production with remarkable speed,

nally carried warrants to purchase

mining inter¬
J. H. Hirshhorn. Operating

a

^

counter.

extensive Canadian

estab- couragement
record rate of $355 the economy.

billion, thanks to a broad rise

up

at

and

lished

into

Rio Tinto have been brought

here.

interests of Rio Tinto Co. Ltd. of

substantial

there appears to be room for en-

//;/

Personal income in July,

was

1

The uranium mines and mills

single corporate roof the Canadian
the

continuing to rise.

in ; So much for the general busipayrolls. r Home construction has ness climate. What can we excurate
catalog
of
consolidated should be in operation early next how
gone
up
for six straight pect for steel demand?
subsidiaries, associated companies,
year and reach capacity output by months, and the rate for August
Examines Steel- Demand
first

the

plant,

London,

and

of

and

Northspan

Algom,

Canada,

6

The Commercial and Financial Chronicle

(1330)

We in the U. K. would regret very

of any such-. ,;
tendency.
For our part we 'are'/'•re¬
working in the opposite direction
.

European Economic Trends
Supply, and Economic Secretary to the

nity, whose benefits and dangers he details.
The developments

that

tak¬

are

trade

European

thrived

-

and

other forward stride can be made.

and the nego¬

ern

tiations
Free

for

turn the whole of West¬

can

we

to

Area, are of

dwell

profound

mass

market for the full exploita¬

tion

of

eco-

nomic

and

their

stress

political

sig¬

nificance

to

me

that

of

our

as

for

sion.

strong

European

economy

essential to the health
world.

I

is

of the free

for

example, as
recent experience has shown, act
as
a
great stabilizing factor.
In
can,

apparent

that

the

a

$425.8 dollars
nearly $20

sometimes

am

countries

new

recruits.

billion

to Join

K.

asked

But

for

We

can

already

'

see one

the

was

vious
Thus

policies

and

Holland

and

Luxem¬

This Treaty established the
Economic Community,

European
which
into

will in effect be
of the six

one

a

merging

separate

econ¬

omics of these countries.

Progres¬

sively,

12

over

a

period of

to

15

We,

nev. cannot
traditional

political

ha

other

anq

ex-

coun-

reconcile with our

political policies ; the
implications
of

quick

by

Rome.

circumstances

the

of

relations

our

Common wealth.

''
third

equal to the high

Federal

the

programs

recession

to

begin¬

are

are

expected

increase

to

$2.4

by

billion, and the reduction in.

a

tain

?

excise

Business

Many

transportation
little.

Programs

businesses

steps r to

cer¬

and

taxes will help a

quarter;//Industrial

' have

taken

put1' their

individual
produci0n has climbed slowly but houses in order. The profit motive
steadily from its low-'pbint in- is a powerful incentive and as
April, and by July Hal gained profits declined, programs for cost,
-pack nearly a third of its previous
reduction; 'product improvement,:

Jr6

"

of

;

,

•

re-

charac-

terized

-

,

pre¬

session

v

><

courage housing construction has
undoubtedly been a factor in the
increase of housing starts from
the low rate of 915,000 in Febru¬
ary to 1,160,000 in July. The addi¬
tional appropriation of $1.6 billion
for
highways
w i I U' encourage
faster planning and construction.
Iri. addition, defense expenditures'

f overall decline.
Best cf all, the
We,
in ;thO:
recovery has been widOjf>tqad, inKingdom, have the special
eluding, substantial improvement

lreaty
United

with

common

a

The

high.
the

been

Kingdom, and for many,
European countries, such a

Treaty of Rome by the Six.
Powers—Germany, France, Italy, ternal tariff.
Belgium,

about

f

>

,

,

counter

/

t e r of
1957 vwhich

the

in

us

United

"

i;Government Programs

qua r

who

Perceives

quarter of 1957.

under

mon

Economic

be

third

the

why we

world.

ning to be effective.' The appro¬
priation v pf $1.9 billion - to / en¬

the

European

Community

bourg.

A

possibilities

now

remark¬
able achievement: the signature of

The

expan¬

Impossible for U.

other

up

political ends

negotiate

to

million
you

is'

-

annual rate^of

,been
European

it clear that they would welcome

goal and

our

It

result

a

as

single

Keginald Maudiing

serious for the achieve¬

are as

250

than

more

This is

business

situation.

Free Trade Area.

I

the

in

year

dip" of
course is not
possible, because we; 4i/2% in Gross
Harrp A. Bullis
cannot accept the policy of inte]sj a t i onal
gration, political and economic, product in a
period of six months,
that is implicit in the Treaty of
and an abrupt turn after the low
Rome with its provisions for com0f
the first

in¬

prospect of economic

our

have

we

signed the
Treaty of Rome have always made

it offers.

vision in Europe can have results
ment

of

what immense

excellent

an

context,

six

a

/

more

this

/•/:

;■

present tapering off in capital spending followed by upward
change by mid-1959; finds decline in profits has apparently
been arrested; afid - refers?to uncertainties
of inflation and

effectively promoted. J recent
business
contraction
however,
the, reached its low
point in the1 f'rst
Treaty of Rome itself could func- quarter off 1958, when Gross Na¬
tion more easily. This view, I betional Produc.
A'
lieve, has been generally accepted,\ dipped to van
In-

the

can see

with its pros¬
pects of economic expansion. Di¬

world

be

will

division' of
Europe could be avoided and the
expansion of trade throughout the

tech¬

The

Europe there can be

BULLIS* v

Board, General Mills, Inc.

a

a

In the 17 countries of West¬

market

timately bound

thought

this.

people.

of Western

Rome

join the European Eco¬
nomic Community; and certainly

ern

political unity

of

not

be¬

is

of

industrial

modern

schemeV

do

seems

Europe

importance

Treaty

that,

a

United States fur¬
nishes the outstanding example of

that the

it

cause

the

upon

nology.

sig¬
nificance. ; I

Needed > '
felt

we

try and find
the

we

will the advantages be?. trying

I have no need in this company

political

should

Europe into one single market, and

how great

a

Trade

the

been

this;!:,;

o^i o m i c
Community,

If

reasons

these

way

place

c

Implementation

For

whereby

•

has

of

Noting the quick 4*/2% GNP (jdipydf six month's duration has
/succeeded by an ahrupt upturn after/first quarters low
point, Mr. Bullis believes GNF in last quarter of 1958 will be
about equal to the
high third quarter of 1957 and that 1959

v

,

could be complemented by a wider association covering all 17 coun-;
tries now in the OEEC.
In

nomic

E

imports

..." t

Wider

we

1
in the European eco¬ expanded.
;
This successful experience, has
system, the establishment ;
by the Six Powers of the European encouraged us to believe that an¬

ing

Chairman

V

remove

*

importance

stresses

to

into the U. K.

of Western European
leconomic strength in mitigating American depressions, in
fighting Communism, and in helping under-developed coun-y
tries. Hails establishment of the European Economic Commu¬
economist

week

_

British Treasury

British

by the decision an-/r

this

controls from dollar

more

Paymaster General, Great Britain
Former Minister of

shown

Thursday, October 2, 1956

,

Business Situation

on

fBy HARRY 'A.

•'

v

REGINALD MAUDLING*

HON.

RT.

By

is

as

nounced

.

.

much the development

Monetary Discipline and

.

jn

the

manufacture, of /primary

More-metals

and '; consumer

;•

durable

.:

/

elimination /of

and

items

..and

stepped

up.

unprofitable:

procedures / were
All, of this contrib-

uted. to- business confidence and1
helped - to turn the tide toward early recovery, f Apparently the

they will abolish all bar¬ over, of our world-wide trade,. <r0ods which
had
suffered 'the
amongst themselves, only a quarter is conducted
decline in profits
has been ar¬
witty
test decline
while establishing a common pro¬ Europe and of this only a half : ® ?
;.£ •
spread of the recession you then
rested./ Business was up against;
with the countries of the
tective
tariff
.EurorVi.Consumer
-Expenditures
against
the
rest
of
v.i
suffered in the United States. But
the
gunV" and5: it did something
pean
Economic Community. < We/
there are
even
more
g 0 t jT
wholesale !' and 1 "retail - about it.
important' the'world. Moreover, they intend
can not tie our hands in our
.trade business/ has
issues.
In the long struggle for to devdlop a single common eco¬
been
improving
relations with thd
and
commercial
';... Plant and Equipment
the allegiance of mankind that is" nomic
policy
/
Commpi^lth^^^y
-j. si^ the /low. points
01
with you m the
United States,
'/ * Expenditures V."*» V.\reac£ed this spring, as copsumers
' :
being waged between the free which will be worked out and
now
qur biggest market, _in /the , increased "
world and the Communist world," deployed under the supervision of
1 j
-ur
j
•'
irtv-rvcwvV
H.VH/. qyvnuing,.Business
theirspending
.vfrom;
expenditures .for- new:
way which would be involved
an
international
commission.
economic
'
iy\v j^lighjtly./enlarged/incomesan - the'-; plant and equipment are still de-t
strength is of funda¬
joining
mental importance. We must dem¬
This,
as
I
said,
is
a
great 111 tne the-l^aty ot Rome./But, seconci quarter. It is evident that clining, but the decline seems to'
onstrate that our free system can achievement. It will
iiee>
Hade
Aiea
we.be-the economic.adjustments did nor
be tapering off and there are inundoubtedly lieve there
is a solution
tq; these cause the American people to-lose dications that plans call for modat. least
match
the
Communist add
greatly to the strength
of.
six
system, and preferably surpass it, these
countries,
and
what
WhiimS'
th
f
v /. A >• •• confidence. They reflected some est increases in capital investment
nne 111 me
r 1 ee T
lraae Area.
tn
what
;conceriT ijy
it; can ensure for the- strengthens our friends strength¬ there
curtailing purchases during the fourth quarter. Spendwill be the same
freedom-,^
in
vi -•
Z
"1
So
living standards of our peoples.' ens us.
we,
in the United; of trade
among the 17 countries
Moreover, it is of high importance' Kingdom, have been very glad to'
crtdU
8
°f
is
envisaged
in
the
Treaty
that Western Europe should be see how much our friends have
a
year wlU be at; an ;annuql,.rate'
able to play its part in
helping achieved and what prospects this
spefit-lijberally .beyond the. $30 billion that;had'
the
under-developed, countries holds out for them. • We have, Trade Area
will riot
non-durable gobdk and^serv^. been//recgntly;,anticipated for the
1954, the strength of the European"

did much to prevent a'

economy

years,

riers to trade

•

,

^

....

,

u

•'

,

•

,

forward

on

the road to better liv¬

ing conditions; both by providing
a
market for their products and;
by
providing
capital for
their"
development. For all these pur¬
poses

healthy

a

and

progressive

however, felt

establishment

a

that

concern

of

the

the

European

Economic

Community
by
itself
might carry certain d a n g e r s.
There is a danger of division be¬
tween

the

six: countries

and

the

Western European economy is es-> other eleven countries of Western
sential.

Europe.
are

Results Over the Past Decade

,

We

•

draw

from' the

much encouragement*
of the last 10

results

If

no

will,
rate

other arrangements

made, then,

Rome- takes

as the Treaty of
effect,- British goods

for
of

•

Sealed ^nktotnt
pfeye/ ^cv '^^^1?^ t^dvl'at^
s^ped 1SathTrSvC°mltth?;they
Srd
^S/fOr

example, pay- a higher
duty in the Dutch market

external

common

country

will

its rihdepen--;

oh'iwt of^'hrVn^Tnul^ Ai'r1?;
like the

T,,t;l1

?nore ff.
barriers

Treaty of Rome/far

than the

rehioval, of

mere

a5^!+

todrade, and while it also aims to 9uar
develop closer and more intimate"

1?

all

eeonomic

Free
not

Trade

problems,

Area

the

in-

will-work

we

wSfeS "•?B0<>ds increases, business will find'•
••xponchtures.. n," » 'de.sin-.blp-to- incrcascf-sDeihting..
quartertofwere' ior*better, equipment; to yeduce
iqr

J1 :1"{3

^ tf peak.thirci costs,
in~

| ^

coming out of

search. By mid-1959,1 believe
4

ploy ment/

by

as. well: as fori expansion/of;,

production " facilities ' to-produce1
products

cooperation In Western Europe on

thlS*

the' d€mand ^fo^

E^hv^A§

tariff: "

retain

-

-x

8,6 fourth qUart'r

in

vestment

re-i
in-i

,

plant

new

and

establishing a single uni¬
equipment will be going forward
Increase in Production
years.
Since the foundation in* than would German goods. At the form policy, but by the
progresat a high rate.
y
'. *
"
1948 of the Organization for Euro¬ end of the period of transition all sive
;
Fori
many
months,v.tqtal
conconcerting of individual na-"
m"~
pean
Economic Co-operation, in goods will pass free of tariff and tional policies in a spirit of
part/ sumption has'exceeded; total pro* Conclusion
"
'(■
duction. The gap has been filled
which the United States Govern-' quota among these six countries- nership.
This, it seems to me, is a
of Europe, while
ment played such a great
The major adverse factors are
they will con-, method of which we in the West/ by drawing-upon inventories. In¬
part, the
development of the European tinue to put a common tariff upon and particularly in the Common¬ ventory liquidation reached" an the uncertainties created by the
annual rate of $9V2 billion in the
coming from their other wealth,
economy has been quite spectacu¬ goods
.Un
have much
experience,
lar. 'I do not believe this devel¬ European neighbors.
This result, experience on which we can base first quarter of 1958, and the liq- ' foreign situation and Hie possibilIf these unceruidation
continued
ity
'of
inflation,
which
I
at
a
rate
of
$8
sound
myself describe as dis¬
opment would have been possible
hopes
~ '
without, first, the aid that came crimination (though I know this /:■ I cannot offer any prediction as billion in the second quarter. As tainties /can
be
brought under
consumption rises further, there
across
the
description
is
to
Atlantic
the
outcome
challenged)
cannot
of
from
the negotia¬
the
control, we can be assured that:
United States and from Canada fail to have a divisive effect on tions.
There are many and seri¬ will be increased leverage on pro¬
economic
recovery
will / proceed
and, second, the co-operation that the European economy and ulti¬ ous difficulties to be overcome. duction because production will
has been developed
./
It is not easy to reconcile the two 'bawe to rise at a rate of $8 billion soundly.
among the 17 mately upon the European politi¬
1 do believe that there will be;
countries in the Organization for cal system.
rather different concepts of the
mere^y
Pu^ 3° end to inventory
'

.

-

•

.

e

;

European
and

the

Union.

Economic

established
of

Co-operation

European

We have
a

Payments

iri, these

10 years

multilateral

payments, and

.

system

credits

which

has proved
remarkably successful.
With this and with the

progressive

reiuriion of auotas which has
sulted from the trade

re¬

liberaliza¬

tion policies of the
»

*

♦An
*be

OEEC, Western

pursue

by

States

Mr.

Maudiing before

Council

of

the

national

Chamber
of
Commerce,
City, Sept. 19, 1958.




Inter¬
New

what

called

are

"inward-

Treaty of Rome and

Trade Area.

there ,is

concentrate

of

more

on

expanding

trade amongst themselves than

maintaining imports
suppliers.

This

from

on

tradi¬

nition

of

throughout

the

a

world.

Free

general recog-

importance

the

failure
doubt

a

would

that

found.

liquidation at the present rate of
consumption.

.n.^

-r^aS6S

to

be

involve.

the

will

the
sure

be

way

more

It

seems

reasonable

demand

for

will 1have

crease

in, the

believe

to

goods

that

Gross

our

months

succeed

in the fourth

strong
-•.♦From

a

of

ahead

so

National: Product

by

Business

Francisco, Calif.,

Mr.

Bullis

Leaders

Sept. 22,

1958.

in
- f

basici

-

at

a

a

pri¬

uation.

I

However, I

am

believe that

we

ward

toward

quarter of .1958 will

talk

failure,

factor in producing this sit¬

coveryluncheon

The

grips .with the

rising labor wage scale, is

in¬

will

inflation.

to

come

.

problem, which-is the constantly

m

no

will be

to

mary
/

,.

gradual

a

,

produced.

that

have

to

will
a

I

,u.

^

011

:

our

that
consequences

If consumption in-

quarter, that much

of

widespread realization

serious

prospect is

the

the

negotiations succeeding. Certainly

certainly causing considerable exists and if
alarm to many
primary producing enough I am
countries

of

But I believe there

is in Europe now

looking"
or
"trade
diverting"
policies, rather than
"outwardlooking" or "trade creating" poli¬
cies.
In other
words, they may

tional
address

United

Ycrk

Moreover, we fear there is some
danger that the six countries may

.,

.

world.

solid

move

for¬

economic

and that 1959 will be

excellent

San

optimistic, and
shall

year

in

the.

re¬

an

business

[Volume 188

Number 5782

.

.

The Commercial and Financial Chronicle

.

the

isv

freer enterprise
central

one

that

makes

the. desire
ho-pnrn
in
before
in

this

By PAUL B.

WISHARJ*

lic

Regulator Company
Minneapolis, 'Minn. ■,?.

•.

all
for

the

profit.

fallen

disrepute.
in

there

the

Yet [never
f+a^tt

And

>

had

sibility

much

profit as is legally and ethically possible — and not
apologize for it."The Minneapolis-Honeywell head makes clear
that this adidce is .not a
"public he damned" stand. Mr.
Wish art advocates ?. an educational
program
suit of profits best serves the

"showing why-

plication

pur¬

,

in .business

first to

serve

and

only-:secondly to make

a

profit.

Other ^invisible sound barriers"* to more effective
sales perforfnancej besides the attitiide tcward
profits, are
found tO' be i' public's resentment ■of

-

re¬

role

_,.n

sible sound

Psychologi¬
kind or an¬

„*_.

xi__x

barriers

selling. Now let

i

-

in American

us

try bring its
profits back

variably

is, in

der to do

how

that,
we

salesman¬

•

The reader must, in other
look beneath the surface for

meet
uhprecedented selling
ririeds of to¬

;

^

the

I

examination
examination
surface

ideas

Paul B. Wishart

ject.

Many

ideas

are

tion.

themselves

of

my

They

:

own

ideas

are

to?

have ' occurred

put perhaps

that these

find

may

in

inventions

...

many

—If I

as

clear

evoke

can

not have

it is to me

as

u

x^

.v.

....

determination

a

on the implications of this
relationship—then I believe this

Ifirst

the

role

of

5

for

have

we

duced.

remember that

the

responses and new relationships as between employer and
employee.

system,
profit."

new

a
_

variety of

to

seems

It

by their

best

was

simply

that bur

think
..

..

?

precisely

,

what

.

,

,

,

country today. By the

NEW

as

ago.

?

much

chromium

Has it been

about

and

Has it been
*

:

/

Industrial

Annual

Conference

you

Marketing

York City, Sept. is, 1958.

the

stances

our new

ness.

r

'

It is

precisely this attitude that
rise to the wonderfully'
bewitching — and totally - mis¬
has given

conceived

—

notion

that you

ness.

You

of business

only by taking the in¬
And if you will stop

centive out.

.to .analyse it for a moment—as, I
wish
some -of
the
more
vocal;
of business

would

competition is

exactly the theo¬

retical goal of all effective
our

We

may

deplore the fact that
13,739 busi-

Continued

on

these securities,

Corporation

Common Stock

Corporation is offering to holders of its Common Stock rights to

ject to the terms and conditions set forth in the Prospectus.

subscribe for these shares, sub¬

The subscription offer will expire at

P.M., New,York City time, on October IS, 1958. The several underwriters have agreed, subject
certain conditions, to purchase any unsubscribed Common Stock and may offer Common Stock,
both during and after the subscription period, as set forth in the Prospectus.

3:30

SUBSCRIPTION PRICE $16.25 PER

Copies of the Prospectus may be obtained in any State
as may

SHARE

only from such of the

lawfully offer these securities in such State,

'

Kabn, Loeb & Co.

five

that

I

our

"

arial-

r irst,

ih'pro

different circum¬
think create these

ie

'

Kidder, Peabwly & Co. Carl M. Loeb, Rhoades & Co.
Stone & Webster Securities Corporation

I believe you will agree
that they have never before ex¬
erted trie restraining influence on
our
economy--- arid
particularly
on the selling function of it—that
they do today; ■ '
Fir«t

n

hrOail

j j

-

Harriman Ripley & Co.

Glore, Forgan & Co.

Eastman Dillon, Union Securities & Co.

Incorporated

Merrfll Lynch, Pierce, Fenner & Smith Smith, Barney & Co.

*

^

based

IS a Droafl - naseq

criticism of the profit motive.

In

Allen & Company

Clark, Dodge & Co.
Hemphill Noyes & Co.
W. C.

Langley & Co.

Bache & Co.

*

White, Weld & Co.
A. G. Becker & Co.

Dean Witter & Co.
Alex. Brown & Sons

Incorporated

Drexel & Co.

E. F. Hutton & Company

Reynolds & Co., Inc.
October 2,1953

Wertheim & Co.

A. C. Allyn
and Company
Incorporated

Dominick & Dominick

sys¬

last year there were

(Par Value $1 per Share)

Riter & Co.

com¬

economic

tem.

offer to sell or a solicitation of an offer to buy

undersigned and others

stop to

do—the elimination of inefficient

offering is made only by the Prospectus,

:

can

but of doing busi¬
can take the risk out

the risk

take

many

The Pennroad

to

sim-;

that nobody, but no¬
body, should be run out of busi¬

1,286,619 Shares

The

am

recent years

per¬

level of

problems.

Board's
Conference, New *




level of

a new

r

years

Why, specifically, have these
problems arisen? Let me list for

gas

no

i?Aa «ddress b/^Mi-rWishart before'the

}' National

approaching monopoly. I

some¬

? Describes Obstacjies

over-pricing
a
steady in-

I don't -want to draw this

6th

problems.

Has it been

an

by

in wages?

We need

formance tb'meet

our products
opposed to function-

sales direction?

-

the com-

ISSUE

s° our
to rae
it is. pointless to say
shortcomings today can

corrected fcly a return to
thing weremember from

over-emphasis in

brought

an

The

de¬

I
be: said about salfesman-

can

.

is

be

And the crux of
what has hap-

so-called "hard sell?"

crease

too

that

We are given some clues.
Has
it been the disappearance of the

i

some of

deny petition within

will

executives

businessmen have
allowed themselves to be pushed

that

This advertisement is not

excell®nce of our, product10]! and
sa^s ^ochniques yv:e have v pushed
^ a^w; lequlreTi^
level. , Our. economy has reached

„

salesmanship is no'

..

tank?

Folk Mvth>

"the elimina-

were

longer adequate.
the mystery is:
pened?
"

too

sav

direction of monopoly or anything

critics

management have, been

validity of the charge.
But
I could not agree with Professor
Oxenfeldt more fully.
I .believe

reasons,

that " they

aircraft

our

skill.

own

that

J p I11

Yet suddenly, mysteriously, we
il

oh form

t

as the

signers had created for themselves

vention.

aii

maximum

pursue

''•* ?

company-v

have been

never

•

economic

our

the

fusion of the salesman's responsi¬

a„J^w-Tu11?/ should sur~
Pnse no
lhat from this peak
it today—that is, super-salesihanca" ®u<^!?^y1se®.< n^ vistasship^has'been an American in- a d n^,.
phstacles
that nev(
visible
before.
find

ago?

developed in recent years k dif¬

For

is, to

of

-to such a charge 20 years
I doubt it. Perhaps many

open

plying to the salesman—there has

_

wh^n

of', at least

as

framework

Could

mosj; specifically ap¬

precisely :the js a m.e quantities.
Salesmanship as the world knows

,

,•«

too, and recognize that it creates

had pushed the Puer"

problems

new

.

t

must

I

.

distorted and its functions

not good enough to solve the

were

ability to produce in ever-growing?
quantities has been our ability to?
sell—-to [ move bur inventory—in

-

'enlightened

management.

of

resort to a flat assertion that a
free_enterprise economy can be

getting into the selling act. And

sound bairier stood in the
|t would have
been foolish
that our failure

And
,

sion of this so-called
view'

x,r*x_.

bility.

Nnw

Y.

■

self-appointed pubcantly to confidence that supports lie
utility commission officials.
purchasing. But let us be realistic, Management's function, within

turning out second-rate planes.
Actually, we were then turning out
the best planes we had ever pro¬

developed industrial system, one
of^^ .whose two foundation pillars
has always b een salesmanship.
Co-equal in importance with our

"

claims of labor,
stockholders and gov¬

Am®ricans*
- it contrioutes signiii- themselves
onntlv tn nOnfirienre that surmort.s

everybody

T««iifr With

Takes Issue With yolk MytH

\??;'? ply taking issue with the popular
folk myth that has sprung* up in.
"Space- does not permit discus¬

ernment.'
-

® aspects. Social and.

Fifth—and

TakM

:

of

competing

for several years to produce super¬
sonic planes meant that we were

incongruity
world's

the

8

.

moment.

Here

the

again, this is,
~r>Tr"
not

v

•

mariagement's tion

top management as an arbiter

a, dpyeiopment tnat we must ae-

a

Instead

law

:

publi6 responsibility and describe petition"
I am riot easting' an
even furtively longing eye in the

^hhlf^nht

p

0f

speak

many

-

they can—within

the

nf

of

some

to have said-then

with all the doors and
from the inside.
this

money as

limitc

tv,p

sluggishness a lack of direct response to executive direction. This

think

I

to,, summarize

rietipnrTt ThpPpnrl nT|'

-^ay*

locked

examine

us
a

in

dustiy a

brought to

?®

f°rmabce of our planes to such a

•

Let

stresses

relationship—

J^el that they could go no faster,

baffling whodunit.,
We have, first of all, the in¬
congruity of the problem—just as
puzzling as the corpse found in
room

at-

your

because

way

)var e"ded

a

the

get

what-is wrong*—arid also, what is
,i"ight-r-with American selling is to
4dr?w a Parallel between industry

detective in

a

to

it

use

best

il

.

it p

&

I

the

addressed'-myself

mystery novel. For the central
question of what has. happened
td salesmanship in American in¬
dustry has all the ingredients of

windows

new

i? new, stresses in much

seller

•|C°nomic •• security me anymore .impaired. seriously if decisions are
the key to ?V~U-■ 51
e?+
V
made by persons who regard

device

tentioh.

that

a

'"f

nuts
-

starkly, this result is the

uS17 elimination of at least
pubhely^what
competition. «
\ :

that I have found'five

,

catchy

a

to the problem of profits and sales,
I "began to feel as if I had been
cast in

the; less
tne;

underlie the

economy.V1 Arid

our

me

J

wm^Jncieed ha«e -been, a fruitful
f, When

of
oi

some

visible sound barriers in selling."
I do not use this phrase simply as

others,

to act

;

t}

an

I call, these five factors "the in-

make this re¬

can

of

Explains Phrase Employed

imagina¬
that must

may

many

If I

lationship

of
ot

P

selling today.

the

thought of them in immediate re¬
lation to the problem of profits

arid sales;

it

But

consumers,

in particular 'that hold
the mystery of what is wrong with

•

not

of

to

seems

this sub- V

on

fl

'

deal

great

a

obvious factors that

have

definite
r

^

-

pretty

some

-wre>

the

in: recent [months-Vio

thought

s

given

have

I

?

subtle clues?

more

ship ..to

day?

clues

p u-s

wordsi

■

reinvigorate
our

i

v

the reader follows thpm

rTtfWSliS pthe •fru^eSlgnlnS
operational
theeciflorHder hiS
iS neVel"' Foiirti.; there is a new emphasis

or¬

can

b

o

.

,.

Sf1ssmen will, st^te
u>ar^ m business

is largelv resDonsi-

feSS% ^icP in^try must meet

tory level?
And the sec¬
ond

many

rne reaaer ioiiows in em the buyer

•

j.

satisfac¬

a

if

which
•

to

are'?ih-'dridu^trv itsSf

mystery; there

,

,

.„

Stated

.

,

managed

But, being/citizens of a republic
which public- attitudes are in
Jhe long-range controlling, they
must often give consideration to

jn

*

n

First is how can-indus¬

one.

themselves hold this unreal¬

istic point of view of the function
of the privately owned corpora¬
tion in the free enterprise system.

_

.

growihg huyefs'
i ^ophisticationi new eniphasis on security, and "trend toward
diffusing salesmen's responsibilities.
pressure,

into

This is not to say- that business¬
men

examine them acting as if they did. 7
in more detail and see what, spe¬
of one
And
of
course,
whenever a
other has always of necessity
cifically, we - can do to break shadow of a doubt begins to cross
characterized the act of selling, through the obstacle they impose.
an executive's mind as to the so¬
Yet today the public is asserting
*
cial—or, shall we say, public re¬
> its individuality in a
way that
Examines Profit's Acceptance
lations—desirability of pushing
/ dampens the effectiveness of this
First, there is the public atti- his
profits as high as he possibly
kirid of pressure. I am not saying tude towards profits. I think the
can, the sales department is one
that this is a negative social or best way to illustrate what I have
of the first to sense the wavering
; economic development.
But it is in mind here is to quote a couple attitude.
?;■?;. J.'
'?•.
'•
\
a basically important one that we
of paragraphs from some remarks
For in many cases this attitude
,who would sell to the public must by Alfred Oxenfeldt of the Cotoward profits stems directly from
recognize and adapt ourselves to. lumbia University Business
a wavering attitude toward what
[ Third, there is a rapidly-grow- School. They say better than I
have in* is> after all, one of the logical re¬
sults of an effective sales job.
cal- pressure

private and^ public good. Adds
that the public is in danger when
people believe that business
is

-pressure.

for

implied —- is
just one of the players.
It
seems to me we must give him
back his star billing.
Those, then,, are the five basic
problems that comprise the invi¬

Second, there is a widely-held
public resentment against the ap¬

_

wnn^An

now

inhibiting effect on the actions
of businessmen, who by and
large do not share it.

^

defensive attitude toward profits, midwest
industrialist calls upon all business erecntives.lo "make as
a

iU«

opportunity

and

that that

ward

an

even

rejechng

«1 V

au«

by a particularly^ articulate segment of public opinion into a defensive attitude toward the earn¬
ing of profits.

of the show—with all the respon¬

greater
this pub¬

has

in it, the

are

salesman, who used to be the star

Ur,n

history has

into

turn

people who

more

fewer people Can be held responsible for its success or.failure. The

wheels''.turn:

modern

our

attitude

system

motivating force

mnrlnm

ruir*

motive

public

Minneapolis-Honey well

President,

7

(1331)

Hallgarten & Co.

W.E. Hutton&Co.

Lee Higginson Corporation

L. F. RotbscbOd & Co.

Hayden, Stone & Co.

Ladenburg, Thalmann & Co.

Paine, Webber, Jackson & Curtis
Shields & Company

page

46

8

The Commercial and Financial Chronicle

(1332)

Erie

r

Resistor Corp.—Memorandum—Fulton Reid &

Commerce
Fischer

Dealer-Broker Investment

Wall

1

Street, New York 5, N. Y.

7, D. c.

'//.

analyses

of El

Paso Natural

Co.—Memorandum—Green, Ellis & Anderson,

Illinois

Iowa

"

&

Gas,

Power

Gas

&

D.
"

S.

Stocks

,

,

;5

:

—

In

of Southern Pacific, Safeway

Broad

Seneca Oil Co.—Memorandum—Miller &

Stocks—Survey—Dreyfus & Co., 50 Broadway, New
4, N. Y.
Treasury Financing — Appraisal— New York Hanseatic Cor¬
poration, 120 Broadway, New York 5, N. Y.
"
York

*

*

Franklin

Corporation—Analysis—Searight, Ahalt &

cular

are

data

on

Goebel Brewing

on

Tidelands

on

Royalty

Also available

Company.

Analysis — Edwards & Hanly, 100 North
Hempstead, N. Y.
Also available is a
Circular

Carothers

&

Com¬

pany, Inc., Mercantile Bank Building, Dallas 1, Tex.
Yard Man Inc. — Report — S. D.
Loring Co., 74 Trinity
New York 6, N. Y.

Place,

—

—

—

Norfolk & Western Railway, Signode Steel

Strapping and ltayonier.

the

at

the Association.
of the

new

for

the

annual

3958-59

meeting of

Other Governors

Board

are:

Vice-Chairman—D. L.

Erwood,

Secretary—N. K. Owen, Equit¬
able Securities Canada Ltd.

Treasurer—F.

A.

Blain,

A.

E.

Ames & Co. Ltd.
G.

Campbell, Burns Bros. ; &
Ltd.; L. F. Gower, Mid¬
land Securities Corp. Ltd.; J. R.
McCloskey, Royal Bank of Can¬
ada; R. A. White, James Richard¬
son
&
Son; L. M. Wightman,
Denton

Neptune Meter Co.

Trust "B"

Association

Harris & Partners Ltd.

—

Street,

memorandum

O'Connor, Inc., 115 Broadway, New York 6, N. Y.
American Steel Foundries
Data
du Pont, Homsey & Com¬
pany, 80 Milk Street, Boston 9, Mass. Also in the same cir¬
—

bulletin

a

ers'

season

Co., 105 East Fourth

ganization, 120 Broadway, New York 5, N. Y.
is

Sterling Drug Inc.

'

of The Toronto Bond Trad¬

ernors

Street, Tulsa, Okla.
Sperry Rand Corp.—Report—Halle & Stieglitz, 52 Wall Street,
New York 5, N. Y.
;
Standard, Pressed Steel Co.—Bulletin—De Witt Conklin Or¬

Tobacco

f. A. Blaiti

Company, 207

York 5, N. Y.

published quarterly—with surveys
of electronics, nucleonics,
drugs, chemicals—Harris, Upham
& Co., 120 Broadway, New York 5, N. Y.

*

Co., 72

Company—Analysis—Reynolds & Co., 120
Broadway, New York 5, N. Y. Also available is an analysis
of Travelers Insurance Company and Bestwall
Gypsum Com¬
pany./; ■
: ;*.,./•■■ •
/< ••••*••* V/'Republic Steel—Analysis—Baclie & Co., 36 Wall Street, New

be

/•"';•

&

Phillips Petroleum

Street, Philadelphia 9, Pa.

American Investors

Hentz

Pacific Power & Light—Report—The Milwaukee
East Michigan Street, Milwaukee 2, Wis.

current

Science and Securities—Review of scientific developments for

.

Company—Review—H.

analysis of the current Japanese economic situation.
Nopco Chemical Co.—Analysis—Ira Haupt & Co., Ill Broad¬
way, New York 6, N. Y.

18 Pine Street, New York

today's investor—To

Ilerrington

York 5, N. Y.
:///:///:^
Nippon Gas Chemical Industries—Analysis in
Jcurrent issue of
"Monthly Stock Digest" — Nomura Securities Co., Ltd., 61
Broadway, New York 6, N. Y. Also in the same Digest is an

Highlights"—Chase Man¬
15, N. Y.
Philadelphia'Bank Stocks—Comparison of 12 largest Philadel¬
phia Banks—Stroud & Company, Incorporated, 123 South
•

Stores, Flintkote Co.

/Wall Street, New.

issue of "Latin-American Business

hattan Bank,

D. L. Erwood

Basket—Memorandum—Bateman, Eichlcr & Co., 453

Marmon

used in the National Quotation Bureau Averages, both as to
*'*/'•• yield; and market performance over a 19-year period —
National Quotation Bureau, Inc., 46 Front Street, New York
!
4, N. Y.

Review

Jehn A. Lascelles

South Spring Street, Los Angeles 13, Calif. Also available is
amemorandum on Petrolane Gas Service, Inc."

!

—

/

and British Industries Corporation.

'parison, between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocks

America

issue

: :

Lighting—Survey—Shcarson, Hammill & Co., 14
Street, New York 5, N. Y. Also in the same circular are

Market

►

Latin

same

&

Industries, Inc.—Analysis—Dean Witter & Co., 45 Mont¬
Street, San Francisco 6, Calif.
*'

surveys

—

performance

Payments Problems in

Pacific

on

Light

Co.—Memorandum—Goodbody & Co., 115
Broadway, New York 6, N. Y..///\ -/*£/

Wall

.

/

in October "Monthly In¬
Stone & Co., 25 Broad Street,

Long Island

'

;

Gov-

gomery

Comparative analysis of 60 stocks
analysis—$1 per copy (in¬
cluded without charge is 5-year analysis of 16 New York
City Banks)- — Ralph B. Leonard & Company, Inc., Dept.
Chron. 102, 25'Broad Street, New York 4, N. Y.
f OilStocks in the Crisis—Study—J. R. Williston & Beane, 115
/.
Broadway, New York 6, N. Y.
Z Over-the-Counter Index—Folder showing an up-to-date com20-year

and

Kennedy

Litton

Company of New York, Inc., Ill Broadway, New York 7,
Insurance

of

Elecffic—Data

East Mason Street, Milwaukee 2, Wis. Also in the
is an analysis of Weyerhaeuser Timber Company.

•

New York.

showing

elected

was

Board

the

Co., 12 Broadway, New York 5, N. Y.

~

Life

Ltd.

of

Securities

Johnson Service Company—Analysis in current issue of "Busi¬
ness and Financial Digest"—Loewi & Co.
Incorporated, 225

Chemical,

View—Monthly investment letter — Burnham and
Company, 15 Broad Street, New York 5, N. Y. Also avail¬
able is current Foreign Letter. ,!*
Canada's Pulp Si' Paper Industry—Review—The Bank of Nova
Scotia, Toronto, Canada.
Japanese Stocks — Current information — Yamaichi Securities
•

Chairman

John A.

—

Dominion

Company—1957 Annual Report—Iowa
Power Si Light Company, Des Moines 3, Iowa.
Jefferson Lake Sulphur
Co.—Memorandum—Emanuel, Deetjen

Bnrnham

"

of

Broadway, New York 6, N. Y.

/ New York 4; N. Y. Also in the same issue are data
Cement and Vulcan Materials.

Phillips Petroleum and Westinghouse
Electric—Schweickart & Co., 29 Broadway, New York 6 N.Y.,

;

TORONTO, Canada
Corporations

Iowa

.•

Market—Brie/

the

Elect Officers

Airlines, Inc. and two selected portfolios.

vestment Letter"—Hayden,

Monsanto

Toronto Bond Traders

Lascelles

61

Atomic Letter No. 41—Report on possible role of lithium in a
thermo-nuclear fusion
device, r etc.—Atomic Development
Mutual Fund Inc., 1033 30th Street, N.
W., Washington

Thursday, October 2, 1958

.

vestors"—Francis I. du Pont & Co., 1 Wall Street, New York
5, N. Y. Also in the same issue is a review of Northwest

Ingersoll Rand

It in understood that the firmn mentioned will be pleaned
to nend interented parties the following literature:

.

Company—Analysis—Gude, Winmill & Co.,

Ilecht Company—Brief analysis in "Current Comments for In¬

Recommendations & Literature

Behind

Co., Union

Building, Cleveland 14, Ohio.

Porter

&

.

Isard, Robertson & Co. Ltd.; A. R.
Smith, Ex Officio Chairman.

American

Telephone & Telegraph Company—Investment an¬
alysis and financial forecast—David J. Greene and Company,

Oct. 8, 1958

72 Wall

Street, New York 5, N. Y.
Citizens Utilities Company—Analysis—Sehwabacher &
Co., 100
Montgomery Street, San Francisco 4, Calif.
Colorado Fuel & Iron Corp.—Report—Thomson &
McKinnon,

COMING

Connecticut Light & Power Company—Review in "Over-theCounter" securities bulletin—A. M. Kidder &
Co., 1 Wall
Street, New York 5, N. Y. Also in the same bulletin are data
on
Southern New England Telephone
Company, Emhart

Manufacturing Company, Fafnir Bearing Company, Eli Lilly
& Co., Metal Hydrides,
Inc., Perkin Elmer Corporation, G.
D. Searle & Co. and

Du

Pont

General

Jason &

Eastern

Stanley Works.

Motors

Stainless

Steel—Bulletin—Blair

&

Co.

Incorporated,

Street, New York 5, N. Y.

ner

Investment

Sept. 29-Oct. 3, 1958
Springs, Colo.)

(Colorado

(Des Moines, Iowa)

4

Iowa Investment Bankers Asso¬

Field

Day

at

the

Des

(Kansas City, Mo.)
Southwestern Group of the In¬

vestment
annual

Bankers

Association

outing at Oakwood Golf

&

(New York City)

Country Club; cocktails and
at Eddys Thursday and
that evening; golf, etc..
Friday.

,

Oct. 25, 1958

Governorf

meeting at Somerset Hotel.

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1959

Security Dealers Association

Trinity Place, New York 6, N. Y.

Rodman

Street,

Excha
T.

C.

bart

National Association of Invest¬
ment Clubs 8th annual conven¬

age

tion at the Hotel Sherman.

for

(New York City)

Security Traders Association of

Nov.

York

Annual

30-Dec.

5,

Beefsteak

1958

a

gen¬

Renshaw, 209

m e m-

New York and

(Mlum

Beach, Fla.)
Investment Bankers Association
of America annual convention

n

g e s,

Rodman

Mr.

Nov. 10, 1958

&

as

investment

South La Salle

announced.

-

Roth¬

has

been

in the broker¬

35

business
the

past

years.

started

He

with

Clement

Curtis

&

Co.

Rothbart

William

and

prior to
joining Rodman & Renshaw in
1957, he was associated with Rey¬
Co. for 10 years.

nolds &

at the Americana Hotel.

v

74

of

the

Small &

(b) Natural Gas Companies
Transmission, Production

Members New York

firm

in

Pierre.
Nov. 7-8, 1958 (Chicago, 111.)

New

of

partner

Midwest Stock

Party at the Antlers Restaurant.

Board

eral

Security Traders Association of
New York annual cocktail
party
and dinner dance at the Hotel

dinner

Oct. 6-7, 1958 (Boston, Mass.)
Association of Stock Exchange

111.—William Roth¬

bers of the

(New York City)

lunch

Firms

Rodman & Renshaw
CHICAGO,

Astoria

bart has been admitted

Astor.

Broadmoor.

ciation

-

Commodity Exchange Silvei
Anniversary Dinner at the Hotel

National Security Traders Asso¬
ciation Annual
Convention at

Oct. 2, 1958

Waldorf

Hotel.

Oct. 2-3, 1958

(a) Operating Utilities

the

Field

Moines Golf & Country Club.

Firm Trading Markets in-

at

Oct. 9, 1958

the

Divestiture—Study—Boni, Watkins,

Co., Inc., 37 Wall Street, New York 5, N. Y.

20 Broad

In

Rothbart Partner in

Bankers Association annual din¬

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Mr.

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of

Number 5782

188

Volume

.

.

(1333)

The Commercial and Financial Chronicle

.

9

opportunity of pointing out this ernment Securities and the Public
development to the Secretary of Debt assumes so important a role
the Treasury and his senior staff in the affairs of the savings bankten
i-.
The main types of financial in¬ recently in connection with the ing industry, I thought it would
;
^ be of interest to describe the prostitutions reduced their govern¬ last Treasury refinancing.
v'V- cedure under which the Commitment security investments sharply
The Committee's Activities
tee
operates in discharging its
in
the
earlier
postwar r years,
holdings readily in favor of higher

government-underwrit¬
mortgages.
"
*

yielding,

Financing Our Government
Presents Staggering Problems
By CARL G. FREESE*
Committee on Government Securities and the
Public Debt of the Nat'i Ass'n of Mutual Savings Banks and

;

Bank of

President and Treasurer, Connecticut Savings

;

New

Phrases such

:

■

The Committee

did not become net sellers of gov¬

was

until

by

the National

Association in the early 1940's to

represent The Mutual Savings
Bank industry in connection with

and

Ever

ment securities.

has

Savings and loan

financing problems.
then, the Committee

since
met

invitation

on

associations, having fewer invest-,
ment outlets, have been net pur¬
chasers
in
recent
years
with
current holdings well above their

Treasury to offer

war-end

from the

-

their Government security holdings, now approaching
15 to 20% of assets, and increasingly add mortgages and

level, though still consid¬

support

and

the

their

total assets

bling.

As

preparation

on

the

ootains tne
"IZIt «U,r5

status of the government seem*!of

experts,

recognized

among'the

from

not

only

banks,

savings

but also, from the ranks of secu¬

sub-', rity dealers, commercial" banks,
economists, and financial consuitfact acquired oven $7 bil- ants. An
appraisal of the general
represented
of buying

source

a

power >

°iGovern^t securities from economic situation and outlook-is
^Most of these a j^ey element in formulating rec-

1941 through 1945.

the Victory
2}4% couand scheduled to mature or

purchases

have been dou¬

Loan

result, Governments

a

on

„

in

™

nearly one-third since
end of World War II, while

curities by

job of refinancing maturing and called issues, and that
growing debt serves to complicate the problem.

tho

that might be- expected
savings banks.

industry

our

their holdings of Government se¬

the existence of

Considerable

Part of commlttee members and
association staff is essential prior
each Washingtonviews
meeting.
The
on
the

During the war years, of course,

reduced

have

of

suggestions

.

^

stantial

banks

Consultations With
Treasury

security issues and to indicate the

ings banks.

Savings

Describes

the nature and terms of proposed

erably below the volume held by
life insurance companies or sav¬

corporates.

tesponsibilUy, that of c<misuMing with the Treasury Depart^en * -

U. S. Treasury

tinued to be net sellers of govern¬

ing

cult

established

Debt

Public

have

1948

portfolios ever since. Life insur¬
ance
companies have also con¬

He notes growing interest in short and interme¬
diate term Governments as part of a liquidity fund as opposed
to traditional practice of savings banks limiting themselves to
long term bonds. The Connecticut banker observes that even
if our Federal debt did not ~rtse~lhere still would be the diffi¬

Government

on

the

and

steadily reduced their government

ernments

problems" underscore Connecticut banker's appraisal of the
Treasury's task of financing our Government without induc¬
ing inflation, deflation and unstable capital market. Long
familiar on a consultive basis with the subject, Mr. Freese:
wonders how much farther savings banks can continue redac-

■v:j-

varying

Securities

"trying problems" and "staggering financing

as

at

rates of speed. The savings banks

■"^7.'{'d-.

Haven, Conn.

although

therefore,

Chairman of the
**

pon

of
bearing

were

issues

ommendations

a

to

the

Treasury

Department. We are in tavor of
those policies which will contribute most to economic stability and

if a larger portion of now represent little more than be called between 1962 and 1972.
financing had come from one-fifth of total assets, compared The Treasury still has $28^ bil-: growth.
lion of these issues outstanding.
Qn thebasis of all the.informanearly $5 billion more than it taxes than from borrowed funds, with three-fifths for mortgages,
took in. In the present fiscal year but such a course did not appear Savings bank investments in cor- Duringlhe general decline in bond tion available the association's re¬
porate securities have also been prices in 1957, these issues sold search staff prepares a report on
feasible.
ending
June
war-time increasing, but are still well below down to the low 80 s., They re-* the nature of the Treasury's curIn
30,1959, it ex¬
event,
the
any
their holdings of Treasury secu¬ covered
broadly in the early-rent financing problems and
pects to spend
economy was characterized by a
rities.
months of this year and following
i.: '
Vj.
ionger term financing needs, the
lack
of
$78 billion,
desirable

.In fiscal 1953 our Federal Gov-

close to $72 billion, this

ernment spent

.

private

billion

$12

more

than an-

rable

ticipated rec e

i p t s.

goods

result

Re¬

was

for

of

du¬

a

and

for individuals. The
rapid inflow of sav¬

intermediaries

financial

to

ings

investments

institutions

financial

The

substantial

and

continued

reduction by savings banks of their

ernment

and
the sharp and continued expansion

clined again to

Government security holdings

of

mortgage

investments

which

in

expected
deficits, the

funds

into

also

past decade raises questions about
ljow much longer these trends may

Treasury re-

played a role, of course, in supporting the government's financing needs.

be expected to continue. Some
banks consider that Governments
should not be permitted to drop

and

increase in its
tern p orary

to

$280

r'onffre.fi

month
month.

Freese

li.

indicated

T
Even

that there

two-thirds of total assets.
These considerations suggest the

is

In-

Kf

^

debL were

not to grow at all, the lieasuiy s
debt

problems of re-

sues.

and called isThe expected need for large

sums

of additional new financing

financing matuiing

cern

Stoi tonlarty^tSi

thirds during the war period. This
was a larger proportion of holdingg by far than for any of the
Qther main typeg Qf financial in_

suluuons*n

provides one of
Regular background memoimportant services to; randa, based on all: of this inforthe savings bank membership, mation are sent to each committee
possibility, at least, that liquida- Whether or not we are large in- member well in advance of the
Governments mav soon vestors in Government securities, Treasury
meeting
date.
These
we are directly influenced in our
memoranda are studied carefully
^ at least> be
investment policies, by the impact and have become almost essential
of Treasury debt management ac- as a basis for formulation of comany
creasingly
sav- tivities on mortgage and corporate mittee views. In addition, cornings bank assets
securities markets. Moreover, the mittee members generally keep
long corporates, management has committee provides not only an well informed *on current condimost

the

In

event, because of the inhigh percentage of
in mortgages and

become increasingly interested in
short and intermediate term Gov- opportunity to represent the in- tions in financial markets, parernment securities as part of a li- terests of savings banks in con- ticularly at the time of an upcom-

R0™if®'Drovide(f^nothSe$22 bil6
Horf in kefneartv
much

mittee on Government Securities
and the Public Debt' 1 had the

course' <l"idity fund. The traditional view
that the interest of savings

played the: dominant ™to m fi-

*^£$0

bl'Uon or close to one-third of the

as

as

itself nearly as much as

>

Federal Gov- the , combined volume from the
large that three major types of thrift mstithe impact of its operations is felt tutions—savings banks, life msurby all of us." The problems of ance companies, and savings and
financing these
operations are, Joan associations. The inflationary
therefore, our problems. Savings implications of this type of fibankers, furthermore, channeling nancing are obvious, j.
we

government securi-

net increase in government bor-

of

expenaitures, providing nea ly $ ty

managers in Washington,
they are of fundamental import
to each and every citizen. Whether

the

particular Treasury jng Treasury financing.
'
operation, but also to
The Treasury meetings usually
in the Government securities mar- express views in the highest coun-; follow an established pattern concils of government on broad ques- siting of four main steps:
-Pi f«nnl
rl
n4"f»
K\A1
* '
'
ket is limited to long bonds may tions of fiscal
and monetary polsoon
have to
be modified.
As
(1)
A senior Treasury staff
Chairman
of Mutual Savings icy, so basic to the fight agaipst
pr6sents
an
economic
Banks' National Association Com- inflation and to the nations sound chart shQW on itle nature and

tanks

problems

policy

in

ties and capital markets. An historical record of the committee's

,

'dal

of course, of immediate conto our fiscal and monetary

While these financing
are,

of the capital market, and
of mutual savings

position

banks

^b^^r^^i^ovem^ t^

task.

seriously complicates their

the

humble judgment,

mortgage holdings should not ex-

management team would be g+itutions

faced with trying

de

suggestions to,, thp Treasury cqmpared with actual offerings and
the results of such offerings is
also maintained by the/ research
on Government Securities and the
staff. In addition an historical fact
Public Debt. As a result, the ex-* book
on
Treasury financing is
istence of this committee, in my being prepared,

approached-—and that

less than $4 billion to nearly $11

.9°!^--status

have

around 90.

have
been net
sellers of Government'
securities in the past decade has
not lessened the willingness of the
Treasury Department to seek our
counsel, through the Committee

below 15 to 20% of assets—a rate

billion between 1941 and 1945. As
nprppnt_ffp of total
qavj
little ? percentage of total assets, sav

further

V
if the Federal

banks ex-

Anderson

Ureases

•

nation's savings

now being

in the years ahead of

nrospccts

securi¬

panded their holdings of governments—mostly long term—from

last

granted

becietaiy

And

likelihood

the'

Carl

billion,

$288

has

The

ceiling

debt
from

government

Patriotic considerations

ties.

quested an

these

channeled

turn

markets

The fact that savings banks

•

the

in

flecting recent

bond

nection with a

banks financing

4-«

w» AM

o v*

v% rt

2 ■

.

■

economic

Because

growth.
the committee on Gov-

•

millions of small
into useful investment out-

savers

0'/(c<luck

of

atxl

>{

ffivedi, SHC.

Postwar Situation

particular interest in
in the years immediately folfinancing activities; in lowing the war the greatest de-

lets, have a
Treasury
the

activities on mands for financing .shifted from
of lending, the Federal Government to pricapital'markets generally, vate industry. The government's
the opportunities offered indebtedness
was
reduced from
of

effect

inteiest
and

on

and

in

these

rates,

for sound savbank portfolio management.

by these activities
ings

of 1951.

.7

.

War

Financing:

II

indebtedness of the
United States Government — its
size and structure—is the heritage
of World War II financing. When
The present

the United States

entered the sec-

ond World War its total gross

debt

billion. When the
concluded less than four

$280 billion.

the

sector

jn
been

delayed.

was

needed

increase

and

an

net gain of over $50
successful

waging

The

Demands for mortgage
funds to finance
formation

financial institutions

themselves in

an

leading to the

,

unusually liquid

large holdings of riskless, though
of

war

low-yielding, government securi-

ties
into investments yielding
higher returns.
Federal fiscal
expenditures. It would have been and monetary policies, moreover,
coupled with liberal mortgage
■

,

Ne*wA Hamper.1fedit Programs, made it possible
Banks,

merger.

found

B AC I IK & CO.

depended upon the successful financing of tremendously heavy

Sugar Hill, N. H., Sept. 20,




adviser to

were

thus, unusually large. At the same

time,

as

Refining Company during

negotiations with The Best Foods, Inc.,

corporate

capital

undersigned acted

Corn Products

billion a position, anxious to convert their
;

year-

The

aver-

cm

the

depression and war. Expansion of
corporate facilities had also been

war

age

of

shortages of housing had
accumulating from years of

and

three-fold

private

economy,

under $65

later its debt had grown to
nearly $280 billion, a more than

Since then it has again

risen to close to

was

years

merged into the newly-formed

$278 billion at the end of 1945 to
iess than $260 billion at the end

'

World

have

terms

1958.

to liquidate government security

October 1, 1958

v

Continued on page 47

like it or not our

funds

•

.

ernment has grown so

the

.

V

10

The Commercial and Financial Chronicle

(1334)

ment

Outlook for 1959 Machinery
And
•

"V

V.?-/
-

of a
replacement market at a rising rate in 1959 for capital goods
industry and finds a great deal of encouragement in the long
range outlook. Author anticipates construction equipment and

be

Our

busi¬

the

in

statistics

ness

second

the

of

when

quarter

machin-

new

estimate

7 % above

rose

the first quar¬

only

of

ship¬

4%

This

ments.

the

confirmed
last

govern¬

ment
A. S.

to

level

ter

within

survey

of

Burgoyne

capital expenditure

•plans that showed the decline in
'this

has

area

significant

degree.

sustain

this

sale

capital

of

down

slowed

to

However,

slight

recovery

a

to
the

must con¬
tinue at this improved rate. Many
goods

economists and research

still

men

feel that

industry has such an ex¬
cess
of
capital goods that any
major buying will be curtailed

ders

have
of

with cutbacks

the field

led

25%

over

themselves.

counted for

peacetime)

an

In

1057

all

time

they
high

of $49 billion

ac¬

(in

over

or

11%

of the

uct.

Thirty billion dollars of this

figure

Gross National Prod¬

spent

was

machinery

on

and

equipment.
By
machinery
equipment we mean electrical
equipment such as motors, genera¬
tors and controls, and non-elec¬
trical equipment such as engines,
and

farm and construction equipment,
and machine tools. In other words,

machinery and equipment includes
almost anything needed by indus¬

try to

produce

charges

depreciation

not

have

equip¬

even.been invested in new
ment.

constitute

manufacturers

Since

machine tool
builders have been especially hard
hit.
In 1955 press industry sales
were
over
$250 million.
Sales
dropped to $106* million in 1956
and the industry will be lucky if
it reaches $30 million this year.
the

market,

This

situation

same

has

been

prevalent throughout the machine
tool industry and companies with
record sales and earnings in 1956
and

1957

for the

down 79%

were

in sales

the bottom
fell out of the machinery market
was that productive capacity out¬
ran
demand.
Business expanded
at

rate

a

and

major

a

tion

gap

needs

GNP

than

rose

grew between produc¬
and capacity.
The

buildings.

ment

is

done

never

When

one

in

a

small

way.

could

have

spending

stage

.production

time has
limb

and

fact

the
a

to crawl out

come

give
and

the

our
forecast of
equipment • sales

I think

.that

on

we

can

past growth of
machinery industry has been
rate of about 4% per year in
dollars.

constant
ture

We feel the fu¬

in an industry
expands, everyone else jumps on
the bandwagon to protect its mar¬
ket position. A very good exam¬
ple of this occurred in the press

faster, about 4.2%, due to more
rapid machinery obsolescence and
replacement brought about by ac¬

industry

development plus automation.

company

,

in

1955.

All

the

auto¬

growth rate will be

celerated

industrial

a

little

research

and

re?

stamping
million

facilities

car

for

the

eight

at

the

same

market

Forecast for

machinery field to pick up will be
construction
eauipment and

Capital goods buyers expanded

tractors.

Now that

the physical volume of
capital ex¬

excesses

of

penditures 22% from 1954 to 1956

justed

and held the volume

growth

the

middle

boom

expected
no

one

severe
^An
the

1957.

most

After

this

businessmen

tapering off period but
was
quite ready for the
decline that actually oca

address

by

National

Board's
ence,

of

period,

steady until

6th

Mr.

Burgoyne before

Industrial

Annual

Conference

Marketing Confer¬
New York City, Sept. 19, 1958.




1959

it

the

capacity.

rate

It is

of

other
is

of

inventory
been

ad¬

respond to the
public
construction
as

Material

specialty

used

the

have

to

the highway- pror

handling
equipment

increase

and

which

efficiency

should

wanted

our

-

later.

*;

arriv¬

are

of 100
All

a

them

to

to

local

reach

the

until

the

pres¬

1960.

*

ital

Teamsters

Yet. for

The long range outlook is much

GNP

decade

has

the

labor

the
'

a

next

force

conceivable
shown against
Anything else will
be repetitious.
The impression is
given that the Teamsters are the

just

the Teamsters.

forecasted

growth

in

Gross

National Product.

Therefore,

chinery:

sales:

-industry

ma¬

ket

1957

for

the

will

by 1967

the

next

major

mar- -

year

half

over

fairly
has

clean.

The

•

- com¬

ago- shown the
need'for corrective legislation and

long

of course,
function.

hear

ever

than

brought

corrective legisla¬

no

we

to continue

are

recital

a

More

of the most

one

of

the

evil-do¬

ings of Hoffa and his fellow team¬
'
/'•>; '.
: ' ; ,:"Y;
V
If it just goes, onlong enough
we may somehow
"get" Hoffa. If

the

not

one

then another.
His
is ? the ; envy of every
in the country.
Every
lawyer is trying to get
way

treasury

jack-leg
his

on

them

payroll.

Thar's

hills, they

dissidentstried
prevent
the

Federal

go

far

so

legal

from

presidency

local
to

Hoffa

gold in
A bunch of

say.

of

action

taking

the

union.

judge not
to

as

to

over

A

wanting

deny him, hit

the compromise of appoint¬
trpstees to watch over

ing three
him.

•-../>

No

•

,

heard what the trustees

one

were

doing until

when

a few weeks ago
Hoffa named his own "re¬

form"

committee
with
diem fees. The
trustees,

fat

per

thinking

this might displace
life and are

them, came.to
resisting the com¬

mittee at every turn. One of these
trustees turned in a bill not
long
ago

for $225,000.

:y

: :

v

James B. Durnin Joins

Ogden, Wechsler & Co.
James B. Durnin has become
sociated with

as¬

Ogden, Wechsler &

That is,

just what it should be.a

will be in

year

This

be

:

mittee

dollars.

conclusion,

replacement.

billion

be

culprits.
Once
they
are
straightenedL out organized labor

mated to increase 51% from about

$30 billion to $45

every

can

only.

esti¬

are

about

thing that

productivity necessary to attain

In

his

.

in

in constant

confined

has

to

the tactics of the United Automo-.

projected

It would

-

stand.

situations

Instead,

upon

Sen-

year

have

jected at 13%. The machinery in¬
dustry must provide the increase
the

a

while the growth ; bile Workers in the Kohler strike.
The committee has shown up
is only pro¬

growth of 41%
of

In

not

the Teamsters.
only beem ay couple
of brief diversions, ope was in the
instance of the operating • engi¬
neers and then a slight look into

Encouraging Long Range Outlook

encouraging.

simply
-

than

more

investigation

There

more

are y

ator-McClellan

1961.

;

•>

parasite

*.

tells of- the' unions

mentioned.

In¬

significant upsurge in cap¬
goods may be delayed until
a

this.

on

sters.^

Passos

.

far

light and

tion.

to be rescued?

Dos

of

impossible to get
reaching
legislation

!•

serious

the in-

their

rest

year's study of

a

week.

of

tell of

Chamber

nigh

SO' therewe

ing at the rate

con¬

to

be ..well

r

a

production? been received from its members;

industrial

won't

point of 85%

sure

tact

committee's

only

/
spent on cgmtal
goods will go to replace existing ? But it" is mo " secretin' Washing-.
ton that the moving spirit behind
facilities,
and
replacement vre-1,
the
investigation is a vendetta
quirements have been rising at a
rate of $1 billion a year.
To in¬ against Jimmy Hoffa on the part

of

the

i

..

money

that

sure

partial

1959

is

recovery

manufacturers

a

of

year

the

obsolete
be

Robert Kennedy, the
r

Young Kennedys bragged to his

socialite

friends, even- made bets,
that Hoffa would be convicted of

a

the

charges of bribing
investigator to get on

lawyerthe ^com¬
mittee
payroll and keep Hoffa
advised of the committee's plans.
With,. the aid* of - a,' very, astute
lawyer
Hoffa
was
acquitted.
Young Kennedy vowed then and
there to "get" him.1' '
: I;i; submit; without holding any
Michigan Corpora-:1' brief " for?
Hoffa? thatv.this -is not
Few ordbrs will

written—they will

sold.

-;

re¬

equipment with:

,

committee counsel,

convince

their customers of the need to

..

of the young

even

machinery

must

modern machine.

have

-

a.

,

Co., 39 Broadway, New York City.

First Boston Gink
The First of

Mr. Durnin who has been in Wall

Street
years

2 Wall Street, New York" Kennedy's functionjH and ;»the al¬
City, has announced that -.iWilli'am1 most^ daily parade i?6L&Hbf fa ' for
S. Gilbreath has joined the firm'si mOre» than* a lyear, -vhas ^become
tiresome/ There are more^hfah
New York office.
Mr. G-ilbreath
13,000,000 members of organized
will be in the Sales Department
in? labor in the country. Theif griev¬
institul/ional capacity.
with

Blyth

"]He

was

& " Co.

Inc.

i ances
,

one of the most, influen¬
members of • the ".committee.

brought
protect

Stock

Exchange, is considering a
change from partnership to a cor¬
to

Winthrop

fare

mealy
much

;

r

a

--

.

bill

designed to

It

was

piece

a

legislation,

of
so

that^, George Meany and

Reuther

it.

endorsed

It

tional
Mr.

City

Bank

Wright;Was

President

of

of

The

the

employers
no

sug¬

Company, Cleveland, from 1946 to
1956.

tane

gestion
been

that the employers have
corrupt, yet here was legis¬
that

books

would
to

the

have

opened

Federal

Gov¬

Vice-

Weatherhead

He

recently

resigned

subsidiaries,

This

There has been

Cleveland,

financial

principal

unions.

resented.

$0.

Sept.

Formerly associated with the Na¬

the

their

as

.

partner,? effective

of

ital permanent.

contemplated

15

with

Kuiin, Loeb & Cb'.j So Wall St.,

President

lation

.

last

New

applied both to the employer and

method of making the firm's
cap¬

is

a

mouthed

so

increase in tractor production. In¬
dustrial and commercial
equip¬

change,

.•

Walter

H.

The

forth

the union members' wel¬

funds.

%

also improve faster than
general purpose machinery. Thus,
we
have estimated about a 20%

Smith, directing partnfer.

the

than

more

At>, the last session he labored and

Lynch, Pierce, Fenner &;'

according

'

now

for

York City, members of the
sample New York Stock
Exchange have
grounds upon which tp pass legis¬
announced that Morris H. Wright
lation. Why isn't it done? ,vYbuhg
Bob's brother, Senator John.Ken-" has been r admitted as a general

tial

;

Smith, members of the New York

poration,

is

?: nedy^is

Incorporation
Merrill

entitled -tb "a hearing.

available

Burroughs Corporatibn. fv;

Merrill Lynch
!
Firm Considering

are

But" betterstill ; there

1929

been' associated

M. H. Wrigkt Parlnw
In IMin, LMbt Co.

*

formerly

since

has

H. D. Knox & Co. Inc.

tion,

an

B. .Durnin

James

•

W. S. Gilbrealli With

should

projects such
gram.

1957

had

received

more

u

States

.No

than

by * last

that industry will not ex¬

probably

and

One of the first segments of the

better

r

and

Capacity

United

legislation
was
this, they. contended.
Furthermore, labor ? would have

100,000

justices and
corruption of

Excess

They opposed the legis¬
through the National As¬
of
Manufacturers and

sociation

Commerce.

Feby, t h e
article said,

or¬

motive companies expanded their

time and accounted for about 70%
of our press business.

Mc-

facilities unless it is work¬ from which the letters are re¬
He
mentions about 20.
85%-90% ; of capacity. " ceived.
We forecast that
manufacturing The International Teamsters is
not
mentioned
though it does not
capacity will only increase 2%-,
3% over the next three years, but- follow that no complaints have

agree on

the

Senator

n."

from

ing

to be

yet.

as

>Up until, now we have discussedthe past and the present, but the

Write
a

pand

just

at

expansion

of

and hasn't reached the

ture

that

70%

tention

place

the

seems

hour

an

the

1 1

e

letters

ex¬

ernment.

Members

and
the major problem, unions
Carlisle Bargeron
the
high¬
before, i s excess,
Today production is at handed way
of the late '30's—only
they are run. They are pleading

level

brought about to
balance the budget.
This policy
has been reversed since Sputnik
but the money is in development

machinery and equipment
market is very cyclical in its na¬
it

75c

played a small part in this chang¬
ing export-import balance. • An¬
other key factor in the recession
was
the
curtailment of govern¬

for 1959.

The

for

of

rate

"Head¬

mentioned

capacity.

reason

faster

of

lation

been

corresponding 1958 period.

The

issue

current

However,
as

the

their

the

In

a

machinery.

Problems of

of the Neivs

er's. Digest" there is an article by
John Dos Passos on "What Union

About
are

^

By, CARLISLE BARGERON

C l

not

falling and this pattern
continue until the econ¬

for much

enough these cuts have prevailed
in the large corporations where

finished product machinery

a

outside of the plant

is

are

surprisingly

and

industry is a case in
point, p To add to the woes of
Fortune calls the capital goods
machinery builders exports have
market the "master key to the
dropped to the dollar level of
performance of the whole United 1938-39
period and in the mean¬
States' economy."
Capital goods, time
Europe
has industrialized
of which machinery and equip¬
and price levels have risen con¬
ment make up the great majority,
siderably.
On the other hand,
are bought to produce other goods
machine tQol imports are at their
and
services
and
not for
their
all time time.
Imports for 1957
own
consumption. Besides being were
55% higher than the total
an influence on all markets, capi¬
for
1956 and 135% 'higher than
tal goods make up a large market
1955.
The low European labor
in

1959

spending
omy is back on its feet—for com¬
nas been cut 15% while GNP has
panies operating near the break¬
dropped only 6%. Manufacturers even
point are not in the market

automobile

for another year or more.

for

this
i

try. Imports are rising and
ports are falling, corporate
tained profits and machinery

In the last year

curred.

orders

ery

about

run

above
1957,- but
little optimistic.

a

should

ing snowed up

should

Washington y

Ahead

15%

number of problems facing the
machinery and equipment indus¬

10-15% above 1957.
optimism is beginning
to overshadow the pessimism that
has prevailed in the capital goods
field for the last year. This feel¬

about

encouraging but there

very

material
handling and other specialty equipment, ahead of general
purpose machinery. He projects 1958 orders about 15% below
1957; 19^9 orders about 8% below 1957, and 1969 almost
An air of

orders

1960

10%-15%
may

will be the first to improve, followed by

tractors

1958

feel

We

prom

1957

below

levels, with 1959 , (a
year of partial recovery)
orders
only about 8% below 1957 levels.

equipment sales, Mr. Burgoyne makes a diagnosis

and

Of

6%.

6%-10% increase in 1959
very lucrative for some
industries, but it would only mean
a
$35 million year in presses or
just 15% of the 1955 period.
:
In
total, the projected results
be

estimate

Canton, Ohio

reviewing past and present market changes in machinery

After

about

rise

course, a

could

Vice-President, Manufacturing
E. W. Bliss Company,

electrical equip¬

as

should

Thursday, October 2, 19&8

.

■

Equipment Sales

By A. S. BURGOYNE*

well

as

ment

.

.

that

New

The

as

two
Pro-

Corporation and LPG Credit

Corporation,, to
role

company's

with

assume

his

Kuhn, Loeb &

York.

new

Co.

in

Volume 188

Number 5782

.

.

Commercial and Financial
The
Chronicle

.

(1335)

all. While I
.treason

-

veisus
>'

tion of income, which has brought
about the great material increases

toward exceptional ability cannot
be continued without a deteriora-

Cmskjng a living; for myself and-and well-being to the life of the tion in the intellectual climate of
family, I nevertheless also feel the 1 average mart. ■ ~7 "
"
" ' •!". this country which might well be
glow of self-satisfaction when a ,v.! I cannot see how any thought- decisive."
*
*
task is going well. The trouble ful, responsible person could dis- v
In other words, we had better
f.with such a glow is, ,of course, pute the figures which prove this, take-another look at the rules. Do

-

By BENJAMIN F. FAIRLESS*

worked for any

never

other than -the necessity of

11

.

v

•

•

President, The American Iron and Steel Institute, N. Y. City

forebodingly, deplores what he be¬

Former U. S.- Steel head

'

the normal
work standard. Stressing that we are involved with U. S. S« R.
in "a race for quality that is probably one of the most vital
in
human : history," ; Mr. Fairless demands we encourage
hetter-than-average individual performance by all to prevent
lieves is

,

"dangerous drift", toward mediocrity

a

matter

doubt

hard
nara
:<f

as

/

lose the

th^ir ^therl;
"!athers

did
aia
did

and
ana
and

oeijcye-. uiai

we

period

are

w a

•

-

we

m

ic

lmnarfiaiiu

onenmroH

'

l;

rim™

because

been

exceptional
feeling they

a

are being exploited for some
confused ideas abbut equality. The

result

prove me

^p

income
was

mean

performance of scientists

al-:

agers

A

when

got

more.

Drift

we need engineers
need also technical people
prepared for
tougher
problems

we

when </the

fail.. But,

need

uneaual
unequal

for

are

rewards.
rewards.

^e'eon^in
Gennn'nv
West

As

v'

Wev...L.
We
^ d^d

much

i.

to

•

the reco^'ot
Laborneed
estimated'that
of'the men'''America would
an increase
l,
of ahnnt. 43% in tV»P nnrnhpTbring it about, 5*?
311
,num^er 0;f
one

*_

.

.

•.

and

we

un

a

probably

is

at

a

for

race

of

one

for survival be-

race

and

contending

systems

time

a

a

..

to

best

external

an

put it bluntly, I believe the: After all, such

To

lesplcls,'to^y^pa.alTels

Athens;

more

a

reward is objec-

been altered drastic- tiye,, and a far better measure of
a ly.: We have befouled the pnn-; our value to our fellow men than
ciplP :that 'ih^er-than-avei-age we can appraise for ourselves.
rl°1^manc®o
ei ve*
w''
' Strangely enough, Communist
|han-ayera8^ re^vald- ,/r Russia partly understands this
have. donethis ,rule changing, 1 factor and pays fabulous rewards

Income Tax Record

hard work

provide

and

because
and

race

a

is

this

in

technology,

ior

quality

-

science

of

era

large number of

a

outweigh a?'fewm superiory ones4
Many Military experts agree that
survival

the scales for our

en-

on

system, ours will reap civilization's highest reward — the preservation of a free society. -

inc0me tax has worked neither as
a particularly vital source of Fed'eral revenue nor as an effective
instrument to better the life of
the average man. It has worked,

In George Orwell's satire "Ani-

(c0n?P,fe? *°
average) to their
mal Farm®' he Stotes somt^f
soriet^
*. speci^llyrtalented people.
That however, as one of the devilish the socialistic and confused ideas
eq"allly ln a4I*fee so"ctypolicy along with some undemed ways we degrade high accomplish- about equality. In that book, the
On many things about equahty • help they received irom German ment.
4;
; animals revolt and take over a
we,_ar.e, <(in^ general, ggieement. s^eptists has paidjhem itch dmThere are other ways we tend to. iarm. At first, they set up seven
Most.of us,. I am sure,;feel that jdends. already. In The recent ie- discourage better - than - average commandments and the seventh
al* men are equally,, worthy of ^organization plan in Russia, on© ••.performance.. Professor P e r c y is, "All Animals Are Equal." Soon,
concern. We feel Thgt the ^eco- of the.key^featui-es is, ironically, Bridgman, a Nobel Prize winner, however, the pigs, who are more
o

changed
it

solid

balance and after nearly couragement for everyone to do
45 years of trial, the progressive his very best. As the winning
So,

_

dictator:ru?,^the!describes one, and since he is a. clever, start
to run things, and,
the seventh command-

tutf ;Sthe. ;

say

..

smaller cake-

incentive.

rales

-

^omes

It

vim

are

Sparta

example,

one

man

.

„«

Athens. - The
o£ our
are, in many respects, comparable to the older tones. Our
free republic, founded on democratic principles, resembles that of

tween'

catalogue of human activity. For

has' improved his position
That wouldn't be equality; mainly because the economy is | but
a

ing our free society must protest.

vital im-human history

In many
the ancient

^^reward.

- '

-

of

cate-

drift

we

that

oualitv

?he mLt

-

much

..u.

^

more
more

all this is representative of

sav

T

too

average working:
"^ufcu iiidi uic dveidge
wumuig <

s

contribute

.Dangerous

dangerous

or man¬

professors. The need for

or

comparable

we
a

ability cannot help
getting a raw deal

are

the other and

on

a

employment

of

two

1910

to

Erhard, their economic highly-trained professional
,wnen^
summed it
lw Q«vin^-: technical
workers by 1965.
guished v achievement is frowned >-iiaQri»t PhaneeH ereatlv over the - ™n.lsie1' summed it up Py saying.
f
nii 4mct
and when
outstanding ana
and"
cnangea
gieatiy
ovei
tne
1S considerably easier to allow'
Our
race
with Russia will not be
on
wnen our
oui
ouisxanaing
course of the. years and when you- eVervone
larger «lire out nf
won bv a lot of average students
most talented individuals are frus- -iook at neonle not as thev should ®Yeiy°nc a JaiS®f sllc.e uu1^0^ a wuii uy a iui, ux uveiage siuaenis.
trated by shabby rewards, then alL be
as
tdey
are
you
^ higger-cake than to gain anything av lage scientists or average pro,vf us who
whn have
have a stake
stake in
in preservnreservU*u!!
Z resnond.
"J™ i by
Gf
admit
that
most
of
us
y discussing
aiscussing the division of a duetion workers. We will, how-

living.

because

time

1900
have

not

GX&e^ct
to ge^t qua!Iny'
Ludwig
aisunperformance.
Human
nature,-'minister

by-'the:

but

^

ihXvnles ^ winhers, dnjoy

changed so that excel- should, if
ience
lence ,as: nenalized
penanzea, when distin-""T*^ *"*'

We want and demand more today
not

rewr

;v,,

,

uies.axieinpieo oniy to mane u.e then.we should also recognize the
rules,

>

merit by liigh
achievement
cost of

who

J

game

we;

produce or

man

•••!••?
.' ."•.it's
undemocratic, they say.
larger
larger.
So. it boils dqwn. to ian .ancient; .
But, the history of facts a$d 4 ahd, unskilled^ people willing to
question of quality versus equal-' USSR Accepts Unequal Rewards v
T?
.'
.
"ls*-ory Q*- fa£ts a1^4 work' hard to learn new skills A
itv < There
would, bb verv little
«
*
4 •
i
-i
i •
+u
figures only bears out the evi- w?rK nai'd to aearn, new skills. A
recognize the dence of a recent economic
mira- C0UP.le of years ago, _the Depart-

governedirnoti HHSH
bywhat

in

leeway

great

mimernns

more

the game.,

;andij
o u r

a

quality extends through the entire

raise s>ar e..y;

gory

all

praiseworthy job—the question is: hand, even a 55% share of income
Are
we
using to the maximum; today would represent a tremend-

wninet miuuiu uc.

un,

re

naturally

y^atv,

e,

but

would

decade

■

I

feel

in the free market place. When if the 1947 to 1957 decad<

fathers!?,

all. .More

that

now

effect the abilities
have?.
' ous.i
nt "over" what! quality ^ertomance^chmMshes
Wi;d, we s^,.
(^est., When applied to products, as I workers received in 1900.
and may even stop completely.
Mieol'thai
the winner
should be Said, the question of winner andThe average ""+ional
employed workers''..Here,
I would like merely
to-explain
believe 'diat the
winner shoi^d
in that I do not
the
be. reward js answered impartially share
of the national i

didn't: believe!,

m oi'

of

55%

believe

we

makes five times the average contribution to society should receive

re-

had^to ^

their-;
that

workers

estimated

.fadt-^at. ^e;

hard ,Ceveli%if

a

we

k

w o r

employed

an

:7al* adequate job—or even a great advance. But,
;

e|l.!:n:,
fathers

In the period from 1900 up

1910,

ceived

For-the question is: total income in the

race.

just whether

find people idea is applied to people.<)n the

tneir
their;% iainers,

•

to

.

•

on

accept .the

to

point.

,

penalties

More and more, we

coming

very

is largely a
self-analysis.
And
I
much whether all of

adequate judges of our own -income. By the 1930 to 1940 dec- .five times the average reward? It
performances.
..
v
ade, it has increased to a 67% ; seems to me, the majority answer
To feel
the
inner
glow from share of the total income, andris likely to be "No."
:
what we imagine a well-done job since then it has remained comAnd, because
the answer is
may very easily cause us to rest paratively stable.
But the point likely
to
be
"No,"
Professor
on
the oars a while and thereby is. that 67 instead of 55%' share of
Bridgman believes- that men of

'

we have- placed on - excellence,
distinguished achievement, and lack of
incentive rewards, and points up the harmfulness of taxes and
labor anions-.for: .their; barrier of outstahdnig ? performance.

blames

ticularly

tendency to frown

of

us>are
•

weakening the great forces of talent and imagination. He par-

>

self-satisfaction

-that

as

be

may

~„

r"~:;

—-

may. ne says:

„

to

read:

"All

Are Equal But Some Are

nijuutus

■

citizen prises.
"The consistent hostility of or- More Equal Than Others."
,
ha°ve Is \he
Unfortuftehly'
cpun!^ • ganized tabor to the man of ex-'
■'
■
" '
Phrase cut into the stone of dUr:'^hSn°torw^d to thrtoatter;^^^^^1^^-Porter' N°y«» InCSupreme Courrt Building puts -rt, ^ simulating qua lit yperfor-vwas justified'
theyearly days CORPUS CHRISTI, Tex.-PorEqual Justice^ Under
.
- mance.^^The individual who ssplffs - when perhaps "the most important ter> Noyes Inc. has been formed
t

Vj ^ a

p,°

,

S^ldri^le

_ _

the best jo
e can issue was
find ]10w to suppress. with offices in the Driscoll BuildWe —hes his vrewaid spite:fully re-• the exploitation of labor by the ing t engage in a securities busi
Equally vital are the large stakes have got to be brutally /rank- duced by taxes He may get a le- entrenched interests, but this jus- ing t0 eTngag+t
®eci™cs busi;
in
the
economic
and
political we're not born equal!" All men ward all right,^but he is not al- tification has iong since di^ap- ness'
Jonathan H. Noyes and
contests.
:
'
are not created equaLin^ ability, lowed To keep^it.- And, as a result;
red and it seems to me that Arthur H. Porter are principals
This
is
not
to
say
suy
that
a
the in what moves them-to do heir of tendmg in this and other ways th
historical attitude of labor of the firm,
best nor in the possible levels of to provide for men equally, I be*
...
tipped by even one or two sensational breakthroughs in weapons.'

as„. *flc Walker»
of Perm Btate said recently:

.

xms

uuu

lb

w

fire

f

desperately

must

programs m

al

off

■

of

re

crash

d

,

lowed "sDutnik number one" All

1

k that

mean

not

will

timev

on' In

all—I

would

lead. But the emitest
And
apparently, it

over.

not be

is

race

nearlv

areas

Sy we hold~a
is

the

over

for

that

Thomas

reach. I lieve wevhave tended to cause
.

;

Equal in

A11 Men Are Not
Jugt

as

knQW

we

:

of ^alth. Over the years, there

M
m
tis.

v

r

..

,

;

.

Zn

that

the^ fullest lange of; dujb

inspire

our

human

the

best

resources

skills.

It

-

is

through

of
we

staying

of

hope

the

.

.

second.

,

/

,

-whilP

wp

.

.

\

-

Can the Best Man
But

'
best

the
reaD

the;

CI?,

has within it a paradox
:

*Fr^m

a

talk

by

Mr.

the Board of Governors

cSTSm! /rim?

when t

Fairless

before

of the Caa Man-

C"' NeW




Blue
in

are

Our

'

..

i,*

tr

.

"L_

a

ei * r/\C

vivvtam

•

'

including
last

8

earnings

fy,"i7

covers

years

for

<>0

Individual

investors

do

not

insurance

industry

know,

the

and

that

and

life

percentage growth
instead of

companies

Investors

and

Institutions.

record

remarkable

life- insurance

of

stocks

th©

have

In the last 10 years than even the big profit mak¬
dul'ont and General "Electric.
Fres'- rpior unities

far more profitable

been

ing

life

over

Invaluable

-

substantial

sheltered

tax

Report

force

heretofore.

as

Many

of

in

insurance

the

Chips

like

making.

■

comparative Performance Analysis shows 20-year progress
Life companies with comparative earnings for 1058, 1054, 1055, 1056,

copyrighted

GO

1057, book values for 105G and 1057 plus

current price-times earnings ratios.

1

comparison to spot underpriced and overvalued life
insurance stocks. It plainly indicates several stocks that are

|

very

Use this

opinion, one of the most, pally to correct what a cynical.
powerful guarantees - of "quality!
p0werfui
quality. Irish wit once called "a world
external,made
haves,
have-nots, and
performahce is found in external,
made up ofK have;
iUl
^
incentives.. You ..-often• hear the; niver-will-haves.
_

Win?"

hell eve

in

jn my

•

"

should^wni and^.th
•

before

fades

starter

young because even -today the progres- g
the .finish", give rates generate only about 7%-. If

promising

a

our
human • wben the goal is made to appear, 0f total Federal income. So it must
have the great-"
grubby to hinv'; V
■ . / V'; ! have been• put; into effect princi-.

in frbnt. In
long race ahead, it will probably -neve!
never
be.
be safe iq
to come in
est

Many

all

use

that

up-to-date

Latest

50

ROt created

the

WHAT OPPORTUNITIES NOW?

-

•

this race

■

60 LIFE INSURANCE STOCKS

-

perience alone—that all men are great many poor could become |f
equal in ability, so we better-off if only the few rich §
we
must encourage better-than- sh0Uld realize that .native capacity
would, by some device, be forced i
average individual
performances alone is neVer a guarantee of; to share their wealth. One device I
by evervone. If we do not, we supericr
performance.
Many
a: hit upon was the progressive per- |l
may weaken those great forces of
keen mind, unhoned by a suffi-1 sonal income tax.
It could not ||
talent and imagination —- forces. cjent challenge or incentive, growsv
pretend to be a revenue source, ■ I
^

We know that to win

Comparative Analysis

If

Ability•'^4 dkplTed'and mZe"^

fr[>m ex.;

_

s

■

Declaration of. Independence, '
Redlstnbut.on of Wealth
meant that all men were.,: We have done this in the name
cl'eated eciual in talent and thus, 0f another confusion over equality.
shouId be rewarded-equally by. The name for it is redistribution
,

■V-W.Y^

NEW

i

..

never

soeiety.

ywA-yf--:

jefferson,;them to perform equally.

our

long, long

a

gure

writing the famous passage in

in

,

hnUonTit fot

nnThP

achievement they may
fegl

attractive
FOR

now

YOUR

—

large as

COPY, SEND

You will also receive FREE

well as small companies.
$1 WITH COUPON

5-year Analysis of 16 N. Y. Banks

'

that any ;re-L
Today, Iio we ver, with the weight I
Ralph B. Leonard & Company, Inc.
sponsible person will do his level of evidence bearing down on them, M
Specialists in Bank and Insurance Stocks
CHRON-10-2
best' not because he receives some even some of the severest critics i
external incentive, but because her qf unequal rewards and usually. ||. .
e
u
v
.
. M
Y
Tel.! Dlgby 4-7465
bas within him an i&ternal "wish/0f our free enterprise system as || '
Broad St., New York 4, N. Y.

counter-argument

aiwayS

to

.

best,

and

dis-: well

see

their mistake.' They un-;

||

the rest." He. derstand that it is the increase in ^
glow from doing a job Well.' oiltput in recent decades, far more^ |l

.tinguished
gets a

be

w.

Name

—

(Please Print)

above

1 don't deny that motivation at than the

effect of any redistribu-

Addre68

4

rmmmmmmmmmmM

Immmmssmasssmsammmsmmsmsm

12

The Commercial and Financial Chronicle

(1336)

ment Loan

i954,

he

Department. In August
transferred to the

was

shares

outstanding
value $20).

125,000

—

.

.

Thursday, October 2, 1958

.

par

A. W.

common

World Bank and Fund

shares,

May to Attend

Jentral Installment Loan Division

News About Banks

Principal Office. Prior to
,oming to Mellon Bank, Mr. Kerr

CONSOLIDATIONS

associated with the First Na-

.vas

NEW BRANCHES
NEW

the

n

Bankers

and

OFFICERS, ETC.

REVISED

ional

.

Fairmont,

Bank,

Va.

W.

Thomas W. McFarland has been

CAPITALIZATIONS

Appointed

Assistant

Manager

of

ne Ambridge Office and Oscar J.
Rhea, Assistant Manager of the

James F. Fox
President

in

elected Vice-

was

the

public relations
advertising department of the

and

Chase

Manhattan

the

#

Dr. -Gabriel
Hauge,
formerly
Special Assistant to the President

United

the

elected

__X~- 533,424,005 570,020,352

and due from

Govt,

V. S.

discounts

&

Undivided

Director

appointed

and

124,588,828
297,899,075

11,912,080

12,424,080

ft

/

ft

ft

GRACE NATIONAL BANK OF NEW YORK

Finance

June 30/58

Sept. 30/58

Commi ttee
Total

Manu¬

of

Com-

p a n y,

New
it

York,

a n n o u n

'j.

Dr. Gabriel

the White

from

executive

staff

five

after

of ^Washington service. He
will take up his new duties with
Manufacturers Trust Company on

M. Goss

of Leod
of

partment was announced Oct. 1
by Horace C. Flanigan, Chairman
Board.

the

joined

Manufacturers

staff

of

Trust Company in

assigned to its Inter¬
national Banking Department in
1937. He

was appointed an Assist¬
Secretary in 1951. He was ad¬

vanced to Assistant Vice-President

in

in April, 1955, was
appointed Far Eastern Represent¬
1953, and

bank with headquar¬

ative of the
ters in

Tokyo, Japan, where he is

still stationed.
ft

Total

resources-

Deposits
Cash & due

U.

r^nns

Vice-President

was

1

a

so

an¬

by Mr. Flanigan.
Mr.
Bingham
and

since 1952.
V

•*»

E.

Treasurer

in

the

of

The

Assistant

Investment

Bank

of

De¬

New

York, New York, and Norman N.

Higgins, Assistant Treasurer, In¬
Tax Department, have been
promoted to Assistant Vice-Presi¬
come

was

482,534,142

482,159,315

470,710,908

disets.

796.926,821

955.643.178

27,040,893

26,032,910

Undivid.

Simmonds, Jr., Chairman of the

ft

Herbert

ecutive

O.

ft

ft

Eversmann,

Vice-President

an

of

Ex¬
the

Bank of New York, died
age

been

Sept. 26
of 59. Mr. Eversmann

in

charge of all of the

bank's commercial loan and credit

operations. He had been with the
Bank for 38 years. Mr. Eversmann
started his banking career with
the

Produce

Exchange

Bank.

He

then

joined the Bank of New
York
in
1920,
was
appointed
credit manager in 1929, Assistant
Treasurer in 1937, Assistant VicePresident in 1940 and a full VicePresident
in
1945.
He
became

Vice-President

He

divisions

The

profits

Farmers

Bank

in

charge

of

the

banking division in 1955 and was
appointed one of three Executive
Vice-President last year.




ferred
fice

50%

a

be

special

distributed

holders of record

30,000
in

shares

sach

ing

will

and
be

Oct.

offered
share

new

a

the

1956

dividend

annual

sents

of

basis

1958, he

$2.50

7%

Oct.

She

1.

ft

rate

with

.

.

;

in

charge of the

Bradford

elected

ft

Barton

has

been

and

Mrs.

cf

M.

Midlock,

Fa»rf «eld

the

Secretary

4-ou

-

^ -»rs

Bank, Nor walk, Conn. Mr. Barton,

Donora

ft

ft

Department
Bank

and

of

Mellon

Trust

National

Company, Pitts¬

burgh, Pa. Frank R. Denton, ViceChairman of the Bank, announced.
Mr.
Curran
came
to
Mellon
Bank's Wilkinsburg Office in 1956.
He

assigned

was

ment

Loan

to

Division

the

Install¬

there.

In

February, 1958, he was transferred
to the
Principal Office, Central
Installment Loan Division.
Mr.

Kerr,

Bank's

1952,

came

in

of

Mellon

Trust

and

been

of
Na¬

Company,

to

Mellon

Mellon

to

came

loan, manager.

In

the

Central

was

installment

ft

Francis

elected

ft

P.

Burns,

Tradesmens

Company,

has

of

Bank

and

Philadelphia,
ft

been

Provident

ft

Trust

Pa

ft

Sept.

on
'•

the

close

of

business

13.

new

ap¬

North

the

and

#

'

" V"

V '

.

/•

Fidelity National Bank of Twin
Falls, Idaho, increased its

common

Cor¬

poration, to be
held

"•

the

at

Vigyan

Bha-

New

India during
J.

shares

nance

outstanding—5,000
value $100).
ft

ft

Edwin

E.

The Bank

shares,

Adams, President of
California, N.A. San

of

Francisco, announced the associa¬
tion

John

of

managerial
Miller

has

E.

Miller

staff

of

with

the

the

bank.

been
prominent
in
banking for the past

Sacramento
11 years.

During the next few weeks his
time

will

be spent between the
Office of The Bank of Cali¬

Head

N.A.
plans

where

in

and

Sacramento

progressing

are

establishment

of.a

for

local

office

the

has

been

Comptroller

of

the

.

Houtte, Minister of Fi¬
Belgium, is Chairman of

of

Boards

Governors

of

IFC.

and

de

of

the

Hubert

is Chairman of the

Belgique,

Fund's Board.

the significant events
will cover are:
Van

Among
May

Mr.

Houtte's address to the Boards of
Governors at the opening session.
Following the joint meeting, Per
Jacobson, Managing Director of
the International Monetary Fund,
will make his annual address and

present the Fund's Annual Report
to the Fund's Board of Governors.

Discussion of the Report

of-, place the

received

May

Ansiaux,
Governor of the Banque Nationale

Approval for the opening of
new

from

V;v

-

Van

Bank

■

ttired

the week of Oct. 6-

io, 1958.

the

//.

w

Delhi,

stock
from
$300,000 to
$500,000 by a stock dividend, ef¬
Sept.
16,
(Number
of

par

A

Palace in

van

fective

On

Oct.

7,

President

Eugene
the

of

will

Bank,

will take

next day.

Black,

R.

International

his annual

make

ad¬

Currency, Washington, D. C.
Miller's banking career began in

present the Bank's An¬
nual Report to the Bank's Board

1936. He

of

tional

with The Chase Na¬

was

Bank

in

New

York

until

1941;
ft

Brice

ft

ft

Anderson, former Assist¬

ant New
Bank

His

York

agent of the Royal
Canada, died Sept. 23.

of

age

68.

was

Mr.

Anderson

dress and

Governors.,;" Discussion of the
Bdnk's Report will take place on
Thursday, Oct. 9. On Oct. 8, Rob¬
ert
L.
Garner, President of the
international Finance Corporation,
will make his annual address and

present the Corporation's Annual

Report to IFC's Board of Govern¬

joined the Bank in 1907 and had

ors,

worked

will follow.

in

quarters

its

Montreal

before

New York

coming

office

in

1918.

head¬

to

the

Discussion

Edgar

'

of

Kaiser

IFC's

to

Report

Serve

As

Chairman
In

H. W. Jacobsen With

Cruttenden, Podesta
CHICAGO, 111.—Harold W. Ja¬
cobsen,
formerly
President
of
Horder's, Inc.," Chicago, has be¬
associated

come

Thomas E. Burris has been

Develop¬

ment

of

take

I

construction
and

as

to

ft

Director

a

Re¬

effect

Installment

appointed

for

International

Wyo.,

I

International
Bank

Division, and in April of that

year

Podesta &
209

with Cruttenden,

afternoon, IFC will hold
panel discussion onj

"Private

Enterprise

Growth.*'

La

in

Economic

Chairman

The

will

be

Edgar Kaiser, President of Kaiser
Industries

Corporation
Calif., and the

of Oak¬
principal
speakers will be Gunter Henle,
Partner and General Manager of

land,

Kloeckner

Co.,

South

the

informal

an

&
Co.
of
Duisburg,
Vicente Ribeiro, Pres¬

Germany;

■

Office

of

The

National

City

Salle

members

nounced. The new office is sched¬
uled to open Oct. 20.
Mr. Burris joined National

and

changes, in its

Bank in

new

City

Credit

1954

as

an

analyst in the

Department.

He

University Circle
January of this

Office,
year,

moted to Assistant

Robert A. Po¬

desta, managing
partner,

Manager at the

Chester-40th Office.

has

Falls

and

North

Offices, will continue
at

the

Olmsted

as

Falls

Office.
Mr.

sen

was

The

also

announced

that

Harold

Pres-

'

Clarence
May will continue as
Head Teller of the North Olmsted
Office at its new location.
Howard C. Hill of the
Southgate
Darned Adminis¬
trative Assistant at Chester-40th.

W.

Jacobsen

ary, Associated

that

time,

Stationers

he

was

Supply

1958. Prior

Southgate Office.
«

By

a

Bank

increased its
from

«

of

Chicago,

common

$2,200,000

fective

ft

Vice-President of United-Whelan.
He is also

Wholesale

Sept.

to
18.

HI.

Joins

past President of the
Stationers Association.

a

Form

Employees Corp.

(Special to The Financial Chronicle)

MIAMI, Fla.—Henry R. Bracken
is now with Goodbody &
Co.,

14
was

Northeast

at

Officers

3485

in

are

a

West

V.

C.

Deffenbaugh,
Campbell, Vice-

capital stock President; Dean
$2,500,000, ef¬ President; and Dorriss D. Deffen¬
(Number
of baugh, Secretary-Treasurer.

Avenue.

He

&

Co.

William T. Kirfc

Hoye Place

securities business.

First

formerly with Fahnestock

DENVER,
Colo. — Employees
Corporation has been formed with
to engage

Goodbody

(Special to The Financial Chronicle)

II

offices

stock dividend Mercantile

morning, Oct. 10.
Mr.
will attend all sessions ex¬
committee meetings which
are not open either to the press or
to the :public.
cept

Executive

Office, has been

Robert Andrews will replace him
as Head Teller at National
City's

Friday

May

,

ident of Horder's and its subsidi¬

to

closing session of the Fund'

and Bank Boards is scheduled for

Company, from 1953 to
Beam

Chemi¬

Executive Directors.

an¬

Raymond F. Hermann, who has nounced.
M r. Jacobacting as Manager of both'
Olmsted

Imperial

London,
England; and Neville Ness Wadia,
Chairman, Bombay Dyeing and
Manufacturing Company, Ltd. of
Bombay, India.
During the course of the meet¬
ings, the Fund and Bank will hold
their regular biennial elections of

Ex¬

in

Director,

cal Industries Limited of

business

pro¬

and

as

Steel,

Midwest

development
department,

at

was

the New York

Stock

Brasil,
Brazil; J. L. S.

S. A. of Sao Paulo,

of

the

acted

Assistant

ident of D.L.R. Plasticos do

Street,

Bank
of
Cleveland,
Ohio,
President Francis H.
Beam
an¬

National

Gateway Center Office in
Manager of the Install¬

as

Office

has

Manager

Canonsburg Office in 1953,

Manager

N. Kerr, Jr., have been appointed
Assistant Cashiers in the Banking

Cashier.

Mone¬

Finance

the

Siegrist

Siegrist

Olmsted

Curran, Jr., and Lester

is

tional

tary Fund, the

Worland,

iice.

ft

Assistant

Bank

manage

loan manager in the Butler Office.

the

formerly

was

Secretary.
ft

W.

to

there.

ft

installment

Bank

John J.

Char¬

Bank's

Office

loans

Butler

been

1935,

Gray

a
capital of $50,surplus of $670,190.04.

of

Interna¬

of

the

the

who has been associated with the
since

bank's

in

Administrative

Treasurer

Katherine

a

has
a

of

Boards

the

per¬

open

Edi¬

columnist,
A. Wilfred

and author,
May, will attend the 1958 Annual
Meetings
o f

the

Comp¬

Executive

known

lecturer

Conversion of: The Farmers State

to

Olmsted

New York,
of service on

ft

Mellon

pointed Manager of the

Bank's mortgage servicing depart¬
ment in Tarrytown.
ft

B.

well

Bank

fornia,

Office

as

■

of

Currency to

R.

Bank

January 1950, as
Installment
Loan
Manager.
In
January 1957, he was transferred

the

Plains,
years

is

and

000.00 and

Gwaley started his banking
Office

Loan

repre¬

over

dividend

■

White

the

1955, he was transferred to the
Washington Office to manage in¬
stallment loans there. In January
1956, he came to the Principal

per

Mary T. Lynch, Assistant Secre¬
tary of The County Trust Com¬
pany,

the

to

made Installment

was

Manager
in
Wilkinsburg Office.

Bank's

adjusted.

completed 25

transferred

was

Loan

as

plans to

which

of

Office

Mellon

to

came

Central Installment Loan Division

for

shares which will

annual

the

granted

was

the

Chronicle's

and

Governors

bank. Ray F. Bower is Presi¬

The

Office.

of the Principal Office. In Febru¬

Mr.

quarter of 1953

increase

an

current

ap¬

tor

«

nounced.

outstanding on completion of
proposed offering to stock¬
holders, Mr. Simmonds said. This
is the equivalent of $10 per share
an

been

Pittsburgh, Pa., Frank R. Denton,
for Vice-Chairman of the bank, an¬

later date.

last

he

be

on

Of¬

«

The

from

value $40).

par

Wyo.

by

troller of

dent

Bank,

Hills

has

Foster

Foster

tional

offering
by the Board

of Trustees

270,000

Worland,

trans¬

was

Grwaley, Assistant Manager of the
Charleroi

the

1,

timing of the

hare for the

E.

Richard

subscription

determined

declare

on

be

one

a

an

and

First National Bank in Worland,

mission

Meetings in India

in¬

capital
James

appointed

the ' stockholders

The

Board

he

Pleasant

ft

eight shares held, after giv¬
to the stock dividend

price

became

National

1954,

the

to

installment

effect

distribution.

when

Sept. 22, and

on

will

by

the ratio of

joined

pointed Assistant Manager of the
Wilkinsburg Office and Alfred A.

leroi

slock dividend to stock¬

subscription

various

and

head teller.

as

career

of

meeting Sept. 30 approved an in¬
crease in the
bank s capital stock
by 110,000 shares to a total of
270,000 shares, according to an an¬
nouncement
by Albert C. Sim¬
monds, Jr., Chairman.
Of
the
110,000 shares,
80,000
as

Pitts¬

1950,

Bank

Mellon

dividend

ft

.

Mr.

The

of

New York, New York, at a

shares will

Farmers

of

in

Bank

December

October

'n

ft

ft

>

The

Bank

worked

of the

in

of

his banking

and

was

$600,000 to $900,000 by the sale of
new
stock,
effective
Sept
18,
(Number of shares outstanding—

new

at

1937

National

Mellon

ary

.

Mr. Bachert joined the Bank in
1922 and Mr. Higgins in 1929.

had

secu¬

*

announced by Albert

Board.

the

1,802,048,379

$

Bachert,

partment

at

1,034,707,805
from

ft

William

C.

2.069,523,134

the

Mr.
Moger are assigned to the Com¬
mercial Loan Department at the
bank's
Empire
State
Office,
located in the Empire State Bldg.
Mr. Moger has been with the bank

dents it

1.841,890,351

holdings.
<Si

install¬

as

Bank's Kittanning Office in 1952,
as
Installment Loan Manager. In

411,080,919

Govt,

S.

rity

Office,

of

stock
Bank

$300,000 to $600,000

stock

a

«

June 30, '58

hanks

The

appointment of Addison B.
Bingham as a Vice-President and
Eyron J. Moger as an Assistant

Both

2,036,080

COMPANY, NEW YORK

of Trustees at

ft

ft

The

nounced

Deposit

by

22,500 shares,

Liberty
offme
In
was transferred to

started

from

creased

capital

National

Rockford, III.

ft

was

1945 and
ant

88,165,730

2,354,724

Sept. 30, '58

Stockholders

Manufac¬
turers Trust Company, New York,
in its International Banking De¬

Goss

in

career

Mr.

«

*

,

Vice-President

the

85.289,395

profits
ft

:

•/•

■

Appointment

Mr.

48,742,276

52,872,477

—

&

IRVING TRUST

House

of

58,133,281

security

Hauga

years

a

197,192,714

50,709,756

_

resigned

ft

185,002,792

discounts

Undivided

■■

Rhea,

Co.,

his

started

loan manager.

Mr.

the American
Trust

in 1952, at Mellon

Ambridge

ment

from

holdings
Loans

ced

Hauge

as

Govt,

S.

was

Flanigan, Chairman of the Board.
In an exchange of letters with
President Eisenhower in July, Dr.

"

due

banks

Horace

Oct. 14.-

-

and

„u.sli

Sept: 29 by
C.

on

208,358,084 222,341,371

resources—

Deposits

facturers

Trust

East

office

Chairman of
the

125,737,573
208,850,216

profits—

Office.

career

burgh.

security

holdings
Loans

188,825,010

109,571,383

banks

a

June 30/58

the

(ill,662,689 054,102,009

resources

Cash

Economic

Hills

McFarland,

June, 1953, he
-f:

Sept. 30/58
Total

Affairs,1 has
been

Mr.

CO.

TRUST

NEW YORK

Deposits

for

States

Colonial

banking

MIDLAND

MARINE

.

,

of

Pleasant

nab

of

Board

Bank's
TIIE

*

to

New

Bank,

York.
*

xjUi u&Ltnn

xwwicuiu

elected

Trust Co., New York.

The

William
member

Exchange,
at the age

illness.

Thompson

of

the

New

passed

Kirk,

York

away

Sept.

of 63 following

a

a

Stock

22

brief

Volume
■

188

Number 5782

.

(1337)

The Commercial and Financial Chronicle

.

.

'

i

.

and

Confidence—A Vaccine

heard
look

anti-recession drive

,

to recent

Advertising Council's

confidence

Investment: Bankers Association Receives

Americans

ahead.

and

It

to

1 -V

The Investment Bankers Association of America has

this

was

Slate for1959

■

received

the following slate of officers for 1959, to be voted upon
annual convention Nov. 30-Dec. 5 at the Americana Hotel,

Beach:

at the
Miami

>

relationship

between

public

attitudes and psychology arid, the v
economic

that

is

and

swings .which must

al¬

be part of our economy, if
economy is to remain free

ways

mum

function -With

to

mini- \

a

intervention./

of government

It is

gratifying that advertising's
appraisal of the economy's ability
to right itself was more realistic
than that of those who strongly
•

"

campaign" and notes it has been given more
by business and advertising media than
other Advertising Council peace-time drive.

enthusiastic support
any

convince

to
up

the

1

this "opens up whole new vistas regarding the important
relationship between the public state of mind and our economic
ups and downs/' Refers to appraisals made by others of the

;

i

that focussed national attention on

.,';///'••

real

a

news M

t

undertaking—to im->
understanding through The
Advertising Council campaign —-

break-through in the cushioning
of possible future recessions. After describing the extent and
success of the drive, started last
spring Mr. Mortimer suggests

;r.

as

bad

v

plentiful;'advertis-?'

part

and

The Advertising: Council

Head of General Foods refers

•

the.

on

so

advertising

Corporation

Co-Chairman, Industries Advisory Committee

.;;v,';■■ ■

was

ing assumed the responsibility of
raising ."the only, voice that was :

By CHARLES G. MORTIMER*
General Foods

feeding

which

Against Recession Fever
President,

13

■

demanded both tax cuts and pub¬
lic works to correct our

reverses

last

Spring. In the face of mount--,
Since the Advertising Council's of-pocket expenses of the Confi-: ing defense needs, with a high
"Confidence in a Growing Amer¬ dence
campaign, there has been budget deficit generating pres¬
ica" campaign was launched five generated
advertising of a value sures toward more inflation, we.
can be
months ago based on the theme of
thankful we are not con¬
nearly $20,000,000. That's a ra¬
that
"Reces¬ tio of something like 100 for one. fronted by the even higher deficit
sions begin
But the really important fact, and the still greater inflationary
a n d
e nd
i n of course, is that the recession is pressures which arbitrary tax re¬
the
minds of receding. Economists differ as; to ductions and more extensive, pub¬
lic : works
m
e
surely
would
have
n,'M\v e just ; how soon
we
will again
,

know

these

things

have

occurred:
R

e

achieve

1957's high point, but the

economic

indicators

once'

are

created

economy

.

turns

' -'l'
Happily, advertising recognized '

again pointing upward. And that's

sts

q u e

our

as.

upward.

the direction the Confidence cam-: fear
and

nation's principal foe

the

as

chose understanding as the
step of
medicine
against recession
ceived for 5,- the way. There can be no doubt- best
359 individual, we are indeed on the way to the' fever.It presented fundamental.
a d vertising
greater America which the cam¬ facts about the future of our econ¬
have been

re-:

mats from the

1,700
n

a

Charles

G.

Mortimer

paign

every

omy.

paign rnsists is in the making.
Refers to U.

S. Treasurer's "

were

I'rn

you will be interested
offered. Their in me "reaction of Robert Ander¬
readers—numbering in the many son, Secretary of the Treasury. I

which

they

sure

would like to

pertinent facts about the economic

ment he

country. Car cards
them — have
been

our

—57,000
of
posted in approximately
all

the

United

public

posters

have

produced

half

vehicles

-States.

sheet

in

of
the

Some

5,000.. 24estimated to

are

billion ad¬

over ,a

vertising impressions. " (
There have been nearly a hun¬
dred
million
home
impressions
from

the

29

on

133

broadcast

messages

network Tadio shows.

And

close

to

home

impressions have been ob¬

tained

and

one

from 218

103

on

network

vision-shows.
not

include

halt

a

billion

carried

messages

commercial
These

the

tele¬

figures

enormous

do

cover¬

age through messages donated by
local television and radio stations.

Full-page advertisements were
scheduled by 76 magazines with a
combined

circulation

of

mil¬

65

lion. Industrial publications sched¬
387

uled

papers

So

full-page ads and

ran

trade

293 full-page ads,
for

much

statistics,

,

which,

by the way, are for only the first
four months of the drive. These,
I

cite

a

state¬

recent

issued:

"Certainly most observers
seem

agreed that there is

better

state

affairs

of

now

much

a

the

in

na¬

tion's economy than was the case
a-.'few short months
ago," said
Anderson.

"It

difficult

is

to

say

addition

statement

Secretary
Anderson,
The
Council has received many other

from

thoughtful appraisals of the Con¬
fidence campaign and its impact
on
peoples' thinking. These are
from economists, business and fi¬
nancial leaders, and other con¬
citizens.

cerned

Angeles;
Carroll
Mead, Mead, Miller & Co., Baltimore; and Arthur L. Wadsworth,
Dillon Read & Co.,

New YoHc.

addition

Go-Chairmen of v

named by

much

and

about

as

the better turn has

campaign, which has been broad¬
ened to cover virus diseases ar¬

thritis,

and

defects,

birth

independently—play

a

without

the

Stresses

advertising.
over-all

The

public relations
campaign was an important ad¬
junct to the advertising messages.
Information

stockholders,

was

disseminated

sales

forces,

to

and

other

employees.
Over
300,000
booklets, "Your Great Fu¬
ture in a Growing America," were
sent out upon requests received
in response to all the advertise¬
basic

which offered them.

ments

Some

150

tributed

fund

as

asking

business

♦An

con¬

$255,000 to the campaign
a
result of one meeting

for such

support.

this, "seed money." to

the

firms

address

Second

Out

cover

of

out-

The
makes

by

Mr.

Annual

Mortimer

Hearst

before

Magazines




Secretary

Aspect

Anderson

about the small amount of

intervention in the
1958 recession is one I hope critics
of advertising will remember. The
Confidence campaign was a public
service performed by private en¬
terprise. As you know, the critics
of advertising, who do not under¬
government

stand its role

as

the element which

triggers the factors combining to
maintain our economy of abund¬

frequently criticize adver¬
tising for what they call, "irre¬
sponsibility."
ance,

The

paign

Lunch, New York City, Sept. 17, 1958.

Non-Government

point

that

current

should

kind

cession

of

was

Confidence

do
talk.

in

"

Gotshal,
&

Manges;

Corporation.

Champion Heads Drive
For YWCA in N. Y.
1

George Champion, President of
Bank, New

The Chase Manhattan

York,
Men's

will : head the Business
Committee for the coming

annual campaign of

the YWCA of
Cham¬

the City of New York. Mr.

pion's

division, composed of top

management
ness

personnel

and industry,

in

busi¬

will raise $93,-

000 of the :total $350,000

goal set

by the City YWCA.

heavy

major role in the Confidence cam¬
paign, as they do in* all public
service drives. For instance, some

own

Partner, Weil,
Gerald M.
Loeb, Partner, E. F. Hutton. &
Company; and Donald C. Power,
President, G e n e r a 1 Telephone
Sylvan

Gotshal

come

acts. of God; that .we do .not-have
inter¬ to take them lying down; that
vention by government which was
they do not have to run a full
urged by some in the early months course, like epidemics and plagues.
of this year. By helping the Amer¬
This new appreciation of the
of the Confidence messages in¬ ican
people remain confident
importance of the state of mind
cluded in the television and radio about the
ability of our economy
in time of economic stress marks
statistics I have mentioned were
to
right itself.
The Advertising
a real
breakthrough in the cush¬
delivered in person by heads of Council's
campaign has been, and
ioning of possible future reces¬
America's leading corporations.
continues to be, most important.
sions. The psychological-informa¬
There were many other imagina¬ I wish it continued success."
tional campaign of The Advertis¬
tive company efforts through their
made

Mr. Moore.* They are:
Fogarty, • President,
Continental Can Company, Inc.;
C.

Thomas

...

Perhaps we should make known
all Americans what we have
learned: Thatv recessions are not

the

•

These statements make it clear

to

of

maintenance

winning fight against polio.
Four other. Co-Chairmen were

,

helped
again that
it has great basic resilience, inas¬

to

Textor, Murphy

*

let the economy prove

Bosworth & Co.,

Blyth & Co., Inc., New York City; W.

N. Y. March of Dimes

fact that the campaign has

Whipple & Co., Chicago.

Detroit; Warren H. Crowell, Crowell, Weedon & Co., Los
Edward Glassmeyer,

the

to

President: William D. Kerr,'Bacon,

Vice-Presidents: William M.* Adams; Braun,

..

Others

In

A. L. Wadsworth

W. Carroll Mead

Edward Glassmeyer'

precisely what factors are respon¬
that the campaign made a major
sible for activity in anything as
contribution at a critical point in
large and complex as our econ¬
George C. Textor, President of
our national life, a time when not
omy,
but I personally ieel that
the Marine Midland Trust Com¬
only our economic, but our social
The Advertising Council's
'Con¬
pany of New York, and George A.
and political systems were chal¬
fidence
in a
Growing America'
Murphy, President of Irving Trust
lenged.
Like
preceding public
campaign was certainly a very
Company, were named Co-Chairservice
campaigns, in peace as
men of the 1959 New York March
important factor.
It realistically
well as in war, the Confidence
of Dimes, it was announced by
impressed
upon
the
American
campaign has proved that adver¬
people the reasons for continuing
Roy
W.
Moore,
Sr.; v General
tising can be'used to sell ideas
to have justified confidence in the
Chairman.
in the same way it sells goods
basic soundness of our economy.
As
Co-Chairman, the Messrs.
and services.
:
"I am sure that most Americans
Textor and Murphy will assist in
Our experience from this cam¬
have either seen or heard many
the coordination of campaign ac¬
paign,
added
to
what
we
learned
evidences of the campaign, which
tivities
and. help
to enlist the
in 1954, when The Council con¬
was the largest and most concen¬
support of business, industrial,
ducted r a
similar anti-recession
trated ever staged by The Council
labor,
professional and civic
ctrive, opens whole new vistas re¬
in peacetime.
leaders.
Many people have
garding the important relationship
commented favorably to me upon
In
announcing
the
appoint¬
between the public state of mind
its presentation, as well as its im¬
ments,
Mr. Moore stressed the
and our economic ups and downs.
need
for public support of the
pact.
March of Dimes' expanded 1959
Lessons Learned
'
"Most important to me is the

said, do not begin to tell the
story.
The efforts of advertisers
—both in cooperation with media
as

u

were

millions—were thus provided with

vitality of

5

Thoughtful Appraisals From

'

to

overcome.

!.iV

Reaction

news-

papers

When those facts were un¬

derstood, the uncertainties of fear

daily
d
4,700

weekly

underscored

much

to

When

gaining

cam¬

offset

Council can

ing

vaccine of public

of

out

terror

be viewed as a
confidence which
to take the
recessions.
This

a

experience indicates we no longer
need to panic if we are faced by
another similar situation in our
national economy.
At the very
least, like
it

scientific experiment,

a

up

opens

invite

and

new

avenues

which

sell

large
block?

Call

•

•

•

challenge further ex-*

ploration.
While the focal
out

the

national

recession
economy,

Marketing Department

point through¬
has been the
it

is

well

to

remember that what we really are

about is the individual
economic well-being of all our
citizens.
Personal
incomes
are
talking

the re¬

momentum

to

discovered

have

we

Like

Continued

on

page

48

Merrill

Lynch, Pierce, Fenner & Smith!
NEW YORK 5,

70 PINE STREET

Offices in 112 Cities

N. Y.

14

The Commercial and Financial Chronicle

(1338)

.

.

Thursday, October 2, 1958

.

of the

THE MARKET... AND YOU

improvement, particu¬
larly for the better-known
producers. Minnesota & Ontario Paper, however,; wbic'h
nas had
Big Board listing for

:

By WALLACE STREETE

than

less

four

available at
Whatever

to

lingering doubts present levels; and also signs

there

soar

into

ended

this

by

the

week

average

when

reached

The

senior

the

a

with

The funds, while starting to
show a bit more caution than

market

stock

level about they have in some time, still

dozen

The

re¬

eral

'

.

well-depressed i t e m
good chance' for im

a

American

is

provement

Standard
recently adoptaianaara, the
me recemiy.duupi
ed
nickname
of
American

'■ "v

•

•

This Week
annual

2

"

■

Deposit

—

report of the FedInsurance

calendar

been

definitely

were

was

above-average

'A

•*

r,n

-'V «y,
y

•

By ARTHUR B. WALLACE

the

territory stocks.

uncharted

decisively

an

•

,

5'// yield lately

a

turn in its group.

might have been over of wiuespreau covering m, me
ability of industrials to large, short positions in key

the

give it

years,

tBank and Insurance Stocks

year

Corp.

1957

released, and it shows

for
just

of;/ the% Corporation's : existence,
dropped off to 36.5% in 1942, but

con-

then increased to its highest, 56.3%

has

tinued growth of the reserve fund
that

was

set up

Bank Stocks
around 45% for the first five years

in

in 1934; after the

over

)nSs f°howing
The,1929 financial
-It will be recalled

main

thai time the Federal Government

s~red bank,

that

at

f

The build-up of the reserve fund

depositor losses due to bank closcrash.

V' ;v>

*

■

/

{be years has come from two

First,

sources.

the

annual

n^essment levied against each in-

to be

"based

the

on

bank's

nulling the list for Radiator & Standard Sanitary contributed enough funds to, so to deposit volume.
Secondly, the inpromising candi¬ Corp. Marketwise the stock ^peak, set the corporation-up 1° come derived from the investment
#
❖
❖
dates and adding to previous was
was
available cheaDer
earlv
busin??sThese
initial
funds
were
of
the
Corporation's
funds. This
available
cneaper eariy some time ago repaid to the Treasinvestments is', now.' confined ' to
Where earlier thrusts had holdings that haven't already this year than it was.in 1932
ury, :and FDIC has been on its United States Government
obligabrought in profit-taking and gotten into the wild runup!act. at the bottom of the depres- own since; that return- of initial tipns. As to the assessmetiL iti h^s
Some of these additions to sion.
an
The
reasons
aren't
hard
hinds.;
:
;
:
\
v
*
/stood at the original rate of l/12th
expansion of volume, the
find since
cinr-o thf
was
Some of the statistics'from: the of 1% of deposits since organizathe dividend
dividcno was
story was a bit reversed this holdings have been going on to tind
a

ord

points above the
high of 1956.

rec¬

the

week when the second session

during which four million
more shares
changed hands

or
so

far this year was one
eral strength, even

of gen¬
including

life

some

which

in

has

the

been

oil

seem

for

many as four, five and
quarters in a row which
covers quite a
span of market

neg¬

as

six

seesaws.
*

Outboard
that

showed

achieved

all

Our

the year one large
fund cleaned out

the funds

Extraordinary September

The

entire

tember,
was

It

as

month

a

of

Sep¬

matter of

fact,

bit out of the

a

usually is

ordinary.

month of

a

at

best,

a pause

ures,

to reappraise

industrial average
month

this

year

around

a

dozen.

it

closed-end
its

entire

But the

building industry is

profit-taking

was ap¬

a

with the

leverage inherent

to the

m>od

Standard

American

it

a

$1 rate in effect before
slashed

was

40

to

earnings

company s

if

And
....

such
.u.

imponderables

are

the

averages will top
out and when a sizable correc¬

action

with

predictions of

seemed to be

with

s

h

a r e s

in demand

picture,
was

present 3'/,. When such
could

Calculators.

this

Si

The

merger

was

a

that
tnat

decade

areadv
aireaay seem-to
seem to be
dc

tion

the

to

ratios

on

some

moreover,

times-earnings
of the higher-

offers

5%

so

miniscule

noted for

a

The

❖

group

growth that the

dividend

yield

❖

*

that

issue

is

rather

electronics

and

previous actions of rather well through the reces¬
the
average at various peak sion but a profit-pinch devel¬
levels and there is no basis of
oped when they weren't able
comparison now that it is in to pass on increased costs

ersed.

their

first

had

rather

a

market, life,




was rather
the
general

credits

now

insured

banks

the credit

year,

which

atinn
ation

mundane

$150,304,000

The

this

was:

122,000

built

and

Remington

forces.
at
at

The

recent

run

it

in

seem

their

tl^C^!

40%,

or

of

$60^

'
the* de-

transferred to

60%

share, subject to

jn 1957 FDIC had total

and the results. of such
examinations are. of course, avail-

of

,

some

income

$117,474,000 after provision for

the

credit

due

insured

banks.

Its

able to FDIC. Then, all state operating expenses, including two
cbarteied banks that are members small reserves were $9,715,000,
of
^Federal Reserve System are and $107,474,000 was transferred
periodically examined
by the.Re-

whose

serve,

findings

to the reserve fund.

also

are.,

to

be

in

the

reserve

system, but

covered

?

were

bank

but

pending.

ther

In-1957

added to these

was

of™ese casS

one

closed during 1957.
a half-hearted effort

are. now

to $10,000.....

up

ceedings
one more

All

do bave membership in FDIC for
t
protection of their depositors'

funds. These, incidentally,

"""

/At the start of 1957 the Corporation had a carry-over of six
banks against which formal pro-

Therefore, FDIC needs confine
examinations to those,, state

all

Rand;

a«

yield

under

4'/:

levels
levels

accounts

reduction

of

the

at

net

ment has been made, but

...

in

insured

were

fur-

a

assess-

thlcor-

poration officials have spoken out
against -it./ It is improbable that

a'ly ahange

banks-

of the end of 1957 had balances

$10,000,

be made 80 far

and

hence

Carrington III
Hickey

With Vilas &
William

were

become

The protection

is

III

has

with

Stock Exchange.,
j

£

y0^en Opens

posits of these insured banks went
from $18,075 millions to $127,055.
millions in the same period. The

E

percentage of deposits insured

North 37th .Street,

NATIONAL

and .low-

ran

ART'm™™

Va

,

Pn1

Tam(1

Totten is

engaging in a securities business from offices at 4612

little

those of the author

addi¬

and

.

.

BANK

Grindlays Bank Ltd.

■

and

:

Bankers

to

the Government in:
aden, Kenya,

uganda, zanzibar

Laird, Bissell & Meeds

4 somaliland protectorat1

Members New York Stock

Exchange

Members American

Exchange

"

Branches in:
INDIA, PAKISTAN, CEYLON, BURMA, KENYA,
^
TANGANYIKA, ZANZIBAR, UGANDA,
ADEN, SOMALILAND

:

120

'

Stock

BROADWAY, NEW YORK 5, N. T.
Telephone: BArclajr 7-3500
Betl

PROTECTORATE,

NORTHERN AND SOUTHERN RHODESIA.

.

STOCKS

BISHOPSGATE, LONDON, E.G2

London Branches:
13 ST. JAMES'S
SQUARE, S.W.1
54 PARLIAMENT STREET, S.W. 1

•,

INSURANCE

Head Office:

26

<

only.]

AND

Almalgamating National Bank of India Ltd.

tional

,

OVERSEAS

GRINDLAYS BANK LIMITED

profit research work for the
of

Carrington

to be about

areas

was

G.

associated

uecome associaiea witn the
tne mumytherefore widespread.
\
nicipal, bond brokerage departxhe total de;osits in
insured ment of Vilas & Hickey, 26 Broadbanks grew from $40,060,000,000 way, New York City, members of

fully insured.

is
is

out. The recession hurt
some

half military
poor.

distribution

credited to the insured banks,
banks.

was

existence foT^about" a'^ea^the

distinct contrast to the

which would
to

was

1957 was

posit insurance fund; the balance

lec,eial comptroller Qt, the Gut

rency,

income

inrm
income

not
net

Sperry Rand maximum was increased'to $5,000 3 63 as we can seeis
Only starting its for any single account; and in
Win. G.
year as a merged oper- 1950 this was increased to $10,000.
after
the
old
Snerrv per depositor- Approximateiy 98%
alter
tne
Otasperry

available
avauabie
m

of the supervisory

punt up.
up.
(including
those in the District of Columbia)
are
regularly examined by the

of

also

reason

tho
the

is

help. It added up to an
interruption this year in its
economy
Impact of the Funds
headed upward the decline continuing growth of earnings
What was
being watched would seem to be reversed but with bright prospects for
rather closely were the actions
a rebound.
and the normal
- ■>
leverage could
of the mutual funds which
result in an even
[The views expressed in this
sharper im¬
have had such a
large part provement "in earnings. The article do not necessarily at any
with their persistent
time coincide with those of the
buying recent prices of the shares
"Chronicle " They are presented
in
carrying the market to its seem to have discounted much as
With

calendar

For" pxamnip
For
'example,

is negligible return offered-by
the popular issues in any of in 1934 to $225,507,000,000 at the
these romance fields. Sperry's end of 1957; and the insured de-

on

so

the

due to the assessment in

guidOriginally insurance coverage
systems, yet had a maximum of $2,590. * Then,

rather

quickly
showing

to

3 such
devastatmgly
£evere affair to ment of the following period."
a fund.

missile

and control

fourth

machines;.

computing

fortunes have been weighed
Paper shares were another
down by several factors, inneglected group that
work is rather deficient at the came into a bit of
play this cluding a continuing drag on
moment, since much of it is week. Their business held up earnings from its U n i v a C

trav¬

Corporation

rata

the next July 1; and any excess
credit to be applied to the assess-

.

chartered, banks that happen not

xomdniic^ i e Qj oi pum

ness

joined

a

done

was

indirectly.

60% of the net assessment income

its

•

classify but still spans
the "romantic" fields of busi-

Corp.

a

'

hard to

also

is

Issue

were

before

The

«pr0

ranted it. We submit that any
economic debacle would have to

/-

return of

which

seldom mentioned.

run

never

to change
the rate;
to
cnange tne
rate; but
dui it

somewhat

availab1^ to,FDIC.
-

ance

figure,

in the future.

or so

Romance

it is defi¬
nitely not overvalued in rela¬ has

nicians,

area

that, -with the Corporation's
borrowing capacity there was ani-»
pie protection. So Congress acted

FDIC

^lor the

an in¬
nas
Deen
system matthat has
been
posted is, of First, national banks

be

issues

Marchant

and

superior offering in

an

which

borrow nip to $3,000,000,000 from

exists by

V„

discounting good prospects of

average.
The more
cautious of the market tech¬

based

under

'

Smith-Corona

dustrial

.willing to settle for
something around 550. Chart

bers

be

consolidation of the old

around

has gone a
long way and out¬
the
business
recovery,

law

and 'it

felt among many bank mem-

was

In
this connection, it must be
distinctly
average,
running remembered that a large element
71/,'/
against
the oi! protection of the reserve fund

around

crease

some

readings above 600 in the in¬

aware that the market

The

cents

return

a

..

would

above

Equipment

equipment

tion, long overdue, will show priced office machine shares.
up. The optimists were back The indicated dividend of
$1,
in

and it is said
1958 the fund

.

times

The two

mid-year

closely crowding $2,000,000,-

000.

made tne
the vield
on the present
maae,
yieja on
me present, tax

price

Interesting Office

Office

was

a

pearing on each new upthrust completed at the end of June
but, like the demand, it was which is also beginning of the
somewhat selective and made
company's fiscal year. On a
the going
tough for an occa¬ pro-forma basis the five-year
sional issue, but without dent¬
earnings average prior to this
ing the overall progress very was around $1.83 and, with a
market tag of less than 10
noticeably.

where

by

operates provides that when in
°Peraies proviaes mat wnen in
lhe judgment of its board of di_
1IL rectors additional reserve funds
return are necessary, the Corporation may

shnwimx

a

Some

However, in the late 1940's
agitation for a reduction
of the rate, as; the reserve fund

rebound and
snowing a good reoouna
ana

churning between
slightly better the various items in the group. course, problematical a 1
gains in the July exuberance, The low-priced item in this though some sources see it
fair nrncnprt for npvt vear
the September results
might field, as well as an unknown a lair
prospect lor next year,
have projected that
particular factor since it is still digesting To wpich should be added
that the well-depressed price
period to the best work of the a recent
merger,- is
Smithyear, which is an unusual role. Corona Marchant which is a means far less risk than some
Profit-Taking

$1,850,500,000;

that

hadn't been for

Selective

tion.

there

By hie end of 1957 it had increased had crossed $1,000,000,000;

to

six fig¬

that shows the
completely cleaned
holdings.

'

on

If

years ago.

report

An

nearly two dozen points, the still
rails

expected. Earlier in

issue

out of its

during that
tacked

in

and another is in with

later
same

the business situation. But the

one

followers

holdings running to

cau¬

tion, occasional setbacks and,

its

any-

come

being what it was

near

was

was

signs of having

lected of late.

and hasn't

years
where

i.i

Marine

Corporatioh>s report wiU not be
In 1934 the deposit insurance fund stood at $333,000,000.

reduced twice in the last two. amiss.

10
$

section

largely

more

r
-

Teletype—NY

1-1248-49

Specialists in Bank Stocks

"

Volume

188

Number 5782

Not
The

.

.

The Commercial and Financial

years

have

been

interest

and

chal¬

with

lenge for

:

,

.

crammed

:

.

conditions discusses such problems

so

i

that

important
its

Am

and

the

as

we

cost of

money

as

our

the

space age,

fiscal

banking. Bankers

productive system operating efficiently

the

Weiman

u

Josc^ii

As-

a

so

are

told

,

have

larger budget
of

de¬
been

voiced

witb

the

in

that

on

indeedgrateful

am

placed

in

for the
and I

international

the

situation,

me,

and

considerations of pn election year,
regard the recognition extended
There/ was; not enough .time to
as having more than just; personal
overcome the opposition of a few
Mgnifieance. f t is a tribute to the
democratic

Quality of the Ameri- ;

can

banking system that it cast its

lot

with

banker.

small-town

a

To

country
symbolizes

this

me,

the

vitality of this Association—
the ability of banks and bankers
with

varied

interests

and

prob¬

lems to work together for a more
useful and effective banking sys¬
tem.

So,
to

as

a r

thanks

my

term of office

close,
to

I

may

the

comes

extend

member

* my

banks

—

large and small—that have made

this a* memorable and satisfying
period in my life. You have been
gracious and hospitable. You have

been patient and tolerant. T am
deeply indebted to you. I would
be

ungrateful

publicly
and

if

express

acknowledge

ness

did

I

not

also

appreciation
my
indebted¬

my

to my own

bank, my associ¬
ates, my family, and my com¬
munity for their sympathetic and
understanding attitude during the
past two years.
y. The
problems,
requirements,
demands

and

of

the

past

year

have often strained and sometimes
exceeded my

ability and capacity.

It is indeed fortunate for me, for

and for our Association, that
many
big men—big men in

you,
so

determined

position
action

on

in

were

completion

a

of

In my opinion,

take considerable comfort

We can

firmly - believe "' is the
sympathetic approval of our ef¬
in

what

forts

I

by

substantial and grow¬

a

ing^ number of the nation's legis¬
lators.

We

and should recog¬

can

nize >and

accept .failures
and
disappointments..'without in any
permitting

discourage¬
to lessen future
efforts.- Bather, we should renew
our/interest and
redouble f our
activities in support of all pro¬
way

our,

ment to cause us

posals
and
-

the good of banking
public interest.

for

in the

In

covering thou¬
sands
of miles
during * the past
two years,' it has been my privi¬
lege to visit with many, many
bankers;/It

has

been

to

see

the

varied

of

the

tional

how

Association
and

as

service

gratifying
facilities
educa¬

an

organization

are filling the needs of the mem¬
bership// * ;
.//-/:
.'/ .//
i

The

recent

additions

staff and plans for

the Association

make
tive

and

tion

the

more

effec¬

responsible to member¬
,

ship needs.
the

to

the future will

such

times

ments

the active

of

A dynamic organiza¬
as
ours
changes with
to

new

meet

the

functions.

require¬
Most

of

in the Associa¬
tion have existed during only a
short span of its long history. We
shall find it necessary constantly
groups

willing to lend a hand and
put .their shoulders to the wheel
when called, upon.
The difficul¬ to reevaluate our work as new
ties, disappointments, discourage¬ developments create new prob¬
ments, and failures are far over¬ lems and opportunities.
shadowed by the satisfaction and
Praises Educational
Program
thrill in the ready response and
accomplishments of the many in¬ ,/ Let . me cite an example. For
of -a
.century,
the
dividuals,
committees,
commis¬ three-fifths
sions, sections, divisions, depart¬ Association has been engaged in a
ments!, and other groups.
The process of formal education for
lending of staff and banker ef- bank employees through the
American / Institute
orts in a quiet, pleasant, tireless,
of Banking.
efficient

and

time

made

that
we

complaints

has

been

Over

the

years,

are

have not done enough to

against

World

The

Communism.

questioning of our scientific su¬
premacy by the launching of the
-

has

drawn

feel

those

who

tional

facilities

from

fire

that

our

educa¬

deficient, yef

are

a

really appreciate how rapidly
ours is moving, and

one

this world of
how

complex are the problems
confronting the banking system
and

•

such

organizations

the

as

will be diminished if the common
denominator of our business —

The

"money"—steadily loses its worth
result of failure of our people
to comprehend the effect of gov¬
ernmental fiscal operations on the

a

as a

has

recession

excuse

to

provided an
the floodgates tc>

open

wave ,of
spending programs*
while pressures for tax cuts haver
had to be hurled back by leaders

of both parties who have been
guided more by the national wel¬
•
of value of the dollar.
:
fare than the illusion of votethe
world
today
a
regrettable
The past year has been confus¬
;.
' '
atmosphere of more than usual ing. The crosscurrents of economic appeal.
and more than justified restless¬ activity have been churned into a
;
/ Tolerating Inflation 3 /
'
ness, dissatisfaction, criticism, and
whirlpool, making it difficult to
It is hard to believe that there
irritation. There is a marked lack discern the

American Bankers Association,
There prevails in most parts

.

-

•

underlying tides.

of

restraint,

calmness,

tience.

and
exists

condition

This

pa¬

in

have

been

recession

We

fighting inflation and
different fronts, and

on

governments,
businesses, indus¬ major decisions of economic policy
tries,
labor .organizations,
and have been evolved on a seesaw.
many other groups.
Trade asso¬ This situation is reflected in
ciations, including our own, have widely divergent attitudes toward
not

escaped it.

Less

fiscal affairs.
decades ago, we

than two

//

Partisans and demagogues have
been more concerned about mak¬
-

Americans

thought that

comfortably
oceans.

World

aftermath

that

two

and

II

War

erased

were

we

behind

isolated

myth

its

and

ing
the

"political hay" than seeking
truth regarding fiscal needs

broad

national agreement in

goals

of

national

security,

our

eco¬

nomic stability, and growth, while
selfish groups

grams

and

constants

policies

endanger that

-

k
may
stabil¬

which

security

ana

ity, and may stifle our country's
growth. No responsible group in
the nation is openly tolerant of
inflation, but

it is alarming that

Continued

on

36"

page

global horizons. Today we
find ourselves exploring the third
dimension
of
space,
with man

gave us

seeking to penetrate farther and
farther beyond the surface of the
earth and its atmosphere. A year

the prospect of such

ago,

opment
the

to

fiction

was

average

Today

Dealer

phe¬
mod¬
the dawn
preceded
the

Securities of the United States
Government and its

penetration

institutions

economic

•

our

dimension poses new
our

Distributor

it

of the third
problems for
political institutions and the

the

•

and fantasy

citizen.
is sobering reality.
This is just one of
nomena that symbolize
ern scientific age.
Like
of the atomic age that

it,

Underwriter

devel¬

a

Agencies

State, Municipal, Revenue and Housing
Securities

serving

them.
I

would

like

to

discuss

Bonds, Preferred and Common Stocks

briefly

of those

problems and their
implications for banking.
some

As

of Industrial,
Railroad

reflects upon

this, he is
again impressed by the fact that
our
unique banking system is a
dynamic force in
our
growing
country—a force that is translated
to all levels of economic life by
a

one

common

denominator
.

,

Public Utility and

Corporations

Bank Stocks

Casualty, Fire and Life Insurance

Company Stocks

called

the Institute has
marvelous. For all of that I am made an enviable record; and it /.'money."/;...
Scientific advances are coming
duly thankful.
/ is a wonderful organization doing
a
rriarvelous job.
Through the so fast these days that it is haz¬
v; It obviously would be- impos¬
vision of Hal Stonier, it was aug¬
ardous to predict how soon the
sible to cover in detail much of
mented 23 .years ago by The Grad¬ first man will reach the moon.
the work oi the divisions, sections,
uate
School
of
Banking, which Of one thing we can be sure:
councils, committees, and other
when he arrives, he will be un¬
since has been an inspiration for
units
of
the Association during
other schools all: over., the coun-- able to spend any money. But the
the past year.
The specialized
cost, of
getting him there and
programs
have moved forward try; it, i§„ indeed an outstanding
institution. Yet, we recognize that bringing him back will be stag¬
through the teamwork of spirited
bankers and the staff. There have today the.educational horizons of gering. The "common denomina¬
tor" will be very much in demand.
been some disappointments, but banking still have hardly been
they have been counterbalanced explored. Ours is no longer mere¬
Space Age's Money-Cost
by the realization of other goals. ly a problem of educating bank¬
I believe, therefore, that it is a
ers.
It .is one of improving the
Financial Institutions Act
to
relations, of banking ,with edu¬ matter of great importance
cators
all., over the country, so bankers that the America people
;r' Foremost among our disappoint¬
that mutual good can come from have not yet fully grasped
the
ments
is
that the Congress did
better
understanding of each meaning of the space age in terms
not complete 'action on the Finan¬
other's .activities,
problems, and of its money-cost, and the impact
cial
Institutions
Act, legislation
attitudes. We must tell the story of that cost upon the whole econ¬
designed to make the banking
of American banking plainly and omy.
A clearer understanding of
system more useful to the coun¬
try. This was an extremely busy simply to those who are bringing the implications of missile devel¬
o.n
the
younger generations, and
opment. and space travel for the
Congress.
It
was
preoccupied
this
means
being closer to the position of the United States
with
the problems of
recession,
centers of learning. So I foresee Treasury is much the order of the
*An address by Mr. Weiman
a real
marking
opportunity ahead for this day; and I believe that we, as
the
completion of his tenure as Presi¬
Association to serve in a field of bankers, have a grave responsi¬
dent
of
American
Bankers
Association
at its 84th Annual
activity, just now getting under bility toward helping to develop
Convention, Chicago,
III., Sept. 23, 1958.
such an understanding. I say this
way.
manner

been

there is little inclination for many
thought-provoking ex¬ because the effectiveness of our
perience to review the history of efforts toward better service in qf the-critics to bear,the.cost of
just a year or two. Only then can banking policies and operations tire education so urgently needed.

/ It is

travels

my

ing

been

who

to a delay
the bill.

big banks and big men in little
banks, and they exist in surpris-,and
gratifying numbers in
both
types of institutions—have

men

t»

all fronts.

.same

*

I

failed

have

we

vyin and keep friends in the battle

sociation.
confidence

heavy

breath

same

Expenditures abroad have
attacked as wasteful at the

Sputniks

"G'v"V:,

while

revenues,

urged

fense expenditures has

that

we can

public under-

must develop better

we

''1 standing of our economy.

■

that

balance between "ex¬

and

match Soviet efforts

un¬

na¬

attacks

budget-makers for failure

charges

while providing growing job opportunities

higher standard of living, and that

rican

e

Bankers

keep

must

bear the cost of national security

mem¬

bership

15

our

observed

deficits.' Criticism

ser¬

n

operation, and
to

Congress' failure to

over

referring to drastically changed world

soundness and inflation and their implications for

tradition,
varied

have

to achieve

praises the extensive educational and

vice activities of the Association; and in

or¬

ganization

s o

disappointment

the Financial Institutions Act ;

enact

rich in history

s o

expresses

survival of

very

We

others

Outgoing ABA President

—

and

an

the

penditures

Presi¬

as

dent—

and

on

«

Vice-

as

President
then

President of the Bank of Kennett, Kennctt, Mo.

during

these years
first

for

By JOSEPH C. WELMAN*

-

.

tion.

been the greatest privilege of my
life to h a v e
served

fir

,

(1339)

Retiring President of the American Bankers Association and

country banker. It has

a

Chronicle

Complacency But Truly Sustainable Growth

two

past

('V A
.

Bankers' Acceptances

.

; »

...

-

Securities of the International Bank for j
Reconstruction and Development
Canadian Bonds

Foreign Dollar Bonds

.




;}

The

FIRST BOSTON
CORPORATION
New York
Philadelphia

Boston

.

Pittsburgh

San Francisco

Chicago
Cleveland

.

The Commercial and Financial Chronicle

"(1340)

19

.

.

Thursday, October 2, 1958

.

Common Stocks and Inflation
As

By PAUL I. WREN*

back to the early

look

we

attractive.

so

ratios

The

Mr. Wren

time in

more

that

available

aging views about

on

bonds, and
divide

d

n

earned

were

inevitable (which he does not assume)

by comfort¬
margins.

able

Yet

1

as

call,

problem of what price to
stock market at this

of
purchasin g
program

c

o

m

o

certainties

liave

were

been

the econ¬
enterprise
system, wages have more steadily

quarters. Unpresent at every

in
free

present

Under

omy.

the

Today we are still faced with
uncertainties, with some of an in-

of the unions strengthened. Prices
were raised enough or more than
enough to offset the higher wage
costs. Wages increased more rapidly than productivity. In. only
four out of the last 25 years has
the cost of living index shown a
decline from the previous year.
The record is rather discouraging,

ternational flavor mixed with the
brand.

Price-earnings
are higher, rates of return
lower, and high-grade bonds

ratios

more

than stocks

attractive

for many accounts. Those of us
who were present when the bar-

gains (looked at from hindsight)
were

available

One

of

word

of

uexixjiuurrj,

"a

The

dilemma/

a

definitions

trie
the

is

in

are

discinline

of

the

cold

standard has been abandoned

nix&
this

ui

0jd

the bargaining power

as

u

enhstitirtpd

minnPPH

We

mnnpv

situation

involving In
iq4fi
thp
Fmnlnvmpnf
Apt
choice between equally unsatis-.
rpfprJvi tn
f hp
factory alternatives." What better Ful] Emnlovmpnt Aon dpplarpd
description is there for the po- «lh
nnlirv
rpsnnnsihilitv nf
CiHap nf
/>deb f
^
sition
of a trustee bQirinrf
having cash to the Federal Government to use all
invest at this, moment?
practicable means consistent with
I shall try to consider the prob¬
its
needs
and
obligations
and
lem from several points-of-view..
other essential
QO

a

n

As the budget prospects for fiscal
ended

vear

S
been

June

1<)W

W

have
.

w

developed in more detail by
officials m the past

government

IfZ
tion

has

every

come

the

to

front

of

*

considerations

llati,?nal P°licy

When

bers of Congress

Director

the

bf $400 billion
of

five

fiscal

quarters
a

was

years

"is

strong

a

terrific.

Let

many

us

take

"at

rel-

a

political

the

have

conditions of this

geems

to

have

last

coun-

resulted

in

rather persistent inflation

Board

the

of

of

criticism.

caustic

with-

The

last

was

fiscal

actually
year.

spent in the
Thus died, in

the course of 29 months, a very
vociferous demand for positive
and
substantial
reductions
in

spending,
While

appropriations

the

for

defense are by far the largest in

is

An important one is the agricul-

painful

Nevertheits prountil the economic climate

the

gram

process.

held

Board

to

tural

price support program.
of the enormous crops

spite

In
of

challSed. Again on Aug. 14 of this many commodities this year, the
year the ®oar^ aPPr°ved a some- farm legislation has minimized
what

unexpected
uneApeeieu increase
ineiectoe in
in the
uie

discount rate at one of the Federal Reserve Banks, a step which
is being followed by all the others,
Apparently it hoped to wet down
o

a

IHIIa

oirAilohln fAT*
little nf
of IKa
the ftnrlAi*
tinder available
for

the

scries

next

of

inflationary

fires.
Fiscal

As

Shadow

Boxing

example of the difficulty

an

controlling the expenditures of

the Federal Government; I should
" 1
trace the ups and downs

like to

the
decline in
me a

prices which would

have occurred through the normal
operation of the law of supply
and demand. Congress barely del'eatecl a proposal to stockpile a
/*P

of

number

IrAtr

industrial

key

mate-

in

rials

spite of the fact that,
stockpiles of these items are now
several times annual consumption.

Housing legislation passed in pre¬
vious sessions requires Federal Na¬
tional

Association

Mortgage

to

purchase certain types of mortgages at par. With flexible inter-

™

'

persistent inflation,

crossed $70 billion in peacetime.
An

outcry in tremendous volume
came from
all parts of the country. Editorials and public opinion

Last

Honorable

month,

Mills,

Chairman of
and
Means

Ways
made

Wilbur

the

House
Committee,

very sound comment on'
The popular conception of how
control inflation points to sev reaching Congress were emphati- the problem. With some relucerai areas
baiancine^the'Federal ?ally *or a reduction in expend- tance he was speaking in favor of
a

,

j.

„

Gov-

.

.

.

years,

a

and

,A.-r
The

lllOSt

successful

Olie

of

ituAr?sCongressional committees
cut. here nnrt cut tnprp
Tn Ancust

legislation

the

to

increase

the

mi^ee released

the

President

statement that

a

by

$4,914,355,584,

The Majority Leader in the Senate estimated the total to be a

$5.9 billion while the

over

of

the

$612

Senate Finance

billion.

and

In

October,

appropriations

tt

c

not only the Members of Conbut
eyeryman.^oman.
and
child
in
the
United
States, to
develop a degree of statesmanship
with respect to our attitude about
government spending and fiscal
responsibility that we have not
yet attained in the history of the
United States."

the
ap-

Lower Marketable Debt Maturity
in

another

the Treasury
invesin reducing the
money which has

area,

must look to savings-type

$72.0 billion, an increase of $200

tors

The

over

the January request.

Russians

into orbit

on

put

Sputnik

I

for

help

amount of pew

to be raised from sale of securities

to the commercial banking system. In the past few years, their
appetite has been small. Since the
beginning of 1953, the Treasury
ourselves has issued $47.5 billion of secu-

Oct.

4, and the winds
from
the
constituents
changed to one which asked,
"Why weren't we spending more

coming

money

against

to
this

protect
new

threat?"

The

convening of Congress in January
brought

forth

an

avalanche

of.

bills to increase appropriations for
more

adequate

defense

and

to

spend our way out of the reces¬
sion.

The

mitted to

budget review sub¬
Congress by the Admin¬

istration

in

January, 1958, esti¬
mated expenditures of $72.8 bil¬
lion, an increase of $1 billion
over the original figure of a
year
earlier and $800 million over the
level included

view.

Boston

Cfavaiand

*

Philadelphia

Cincinnati




•

Washington
•

.

Pittsburgh

San Francisco

in the October

re¬

Preliminary

figures show
actual expenditures of $71.9 bil¬
lion

.

St. Louis

With

$280 billion, prog¬
substantial reduction

over

toward

a

in the debt maturing within
will probably bs slow.

one

year

The

attempt

raises to
seems

few

even

difficult.

more

taking

groups

like"

,

limit wage
increases in productivity
to

attitude,

With

"statesman¬

a

the

leaders

of
they
should lead the way. More direct
appeals from leaders in govern*
unions

not

do

believe

increased

ment,

that

unemployment;

and the slow process

of education

may eventually lead to some suc¬
cessful conclusion.
President

Eisenhower stated at

a

ference

that

in

August

management,
must

all

and

be

problem

press con¬

"labor,

government
in

concerned

this

inflation),
and
I
branches, no one

(of

think of all these

could be

concerned than is

more

labor."

the

With

passed

having
recession
in

economy

through

a

business with only minor price or

reductions, high costs have
adjusted in the old-

wage

not

been

fashioned
be

method.

Prices tend

to

controlled

by
competitive
forces when productive facilities
are adequate.
At the same time,
business seeks,
ing policies, to

profit,

through its pric¬
earn

after

reasonable

a

full

a
would

of

recovery

for fiscal

review
1959

of

the

1958.

The

budget

midyear

for

fiscal

by the Budget Bureau, issued

about two weeks ago, estimates
total expenditures to be $79.2 bil¬
lion
or
$7.3 billion more than

however,

seem,

President's

comment,

to fan the flames of inflation.

us,

expenditures for fiscal 1958 to be
million

Chicago

debt of

just quoted, that he now consid¬
ers industry less likely than labor

proved by Congress and estimated

HAnover 2-2727

a

sale

Congress passed the final rrient .and said: "When we are in
aa Pcri.od. such as the present, I
T1?e House Appropriations Com- think it is incumbent upon all of

programs

CO.

with the

only token amounts of long-

term bonds in any one year.

the

around

&

of

from

the Budget Bureau reviewed

5

business, the Treasury will

have to be satisfied

^"J bere and c^ut there. In August, debt limit of the U. S. Govern-

Committee thought the figure was

5tr««f, New York

As

It

Chairman

4t Wall

rates.

money

costs.

little

C. J. DEVINE

active

the

drawal of money from the market
a

demand for long term capi¬
from
business expands,
the

ress

budget, many others contribute to inflationary pressures,

less,

the

,

,

budget, selling
fewer U. S
°
'

Convention, Chicago, 111., Sept. 22,

chairman

the

Governors of the Federal Reserve
System and ^others in the System
were
subjected to severe
and

what

of

tightening of

savings of the country
enlarged, or until the fiscaL
authorities are willing to compete
aggressively for long-term capital
at higher rates during periods of

proposed expenditures of V $71.8 and I am citing only a few exbillion, the link time the total amples.
,
:

statement

to

'inflationary 'eminent issues to the commercial
pressures, sometimes very intense banks, restricting the supply of
and at other times more
dormant, money by the Federal Reserve
System, relating the rise in wages
a^res®
Wren before the tG increases in productivitv and
84th

years has
policy of the

the

Until the

been

0f^be

part

phrase!

w

The Matter of Inflation
the

Jadd

U1UUL(L-

past two

Federal Reserve System. During
the first part of 1957, however,

of

to promote

the

the restrictive

been

time,

with

are

unsuccessful. Money managed under this legislation and under the

of

look at the matter of inflation.

Over

attitude before plunging into the

in the life of the budget for the est rates, this price is frequently
fiscal year ended June 30, 1958. In above the price determined in a
January. 1957, the Administration \free market. The list is. longer,

similar

some

oyer a period try

possibility," the reaction in

•

atiVely stable level of prices" (or

theiBureauof

the^Budget' (before*
fw
C°™mittee> thought"
mat ledeial Government spend-

•

maximum employment, production> and purchasing power." Repeated attempts by some mem-

discussion of the economic

outlook.

•

cuiuiuvututi

in

these

any

so

by the temporary
the 2\»gs of 1965 and

the
tal

Paul I. Wren

advanced

domestic

see

more

Treasury will be faced again with
the question of how high a coupon
(he taxpayer should'assume.

time," and does not fail to note the presently attractive

turn.

look

that trustees still might have to face the

"wait aid

a

now

suffered

holders
were

position of municipal bonds and non-refundable corporate bonds.

n

was

questioned
seriously in some

are

if inflation

even

for stock5 of sound firms. Looking at the stock

pay

barometer, Mr. Wren adopts

the

a

m

that

is

losses

re¬

soundness of

stocks

unaware

reasons

a

savings is difficult at

and

ability to contro: inflation and to lengthen successfully

our

the Federal debt. The Boston banker is not

s

of

investment ratio of stocks to bonds with discour¬

proper

produce

plan at that moment
was
not appropriate.
The prob¬
lem of placing Treasury issues in
the hands of savers pr collectors

prefaces his remarks about the dilemma confronting trustees at this

determining

outside the gov¬

or

could

why such

price-earnings

were

than

inside

person

Vice-President of the Old Colony Trust Company, Boston, Mass.

low; the yield
was

y

ernment

part of the last decade, common
stocks now appear to have been

rities

with

maturity

a

of

five

either in refunding
programs or for cash.
Of the
total, only $7.2 billion had a maturity of 20 years or more, and
years or over,

$1.3 billion were in the 10- to 20year range. The average maturity
of

the

marketable

daily by the
In

debt

order to maintain

maturity

shortens

mere passage

of time.

the average

of December, 1957,
the Treasury is forced to sell $4.7
billion
20-year
bonds
(or
the
equivalent) in 1958; $4.3 billion in
as

1959 and

1960; and $3.8 billion in
financing would
change the above figures simply
1961.

Deficit

my

year

at the

Treas¬

ury, I found that at any time
sale of a long-term bond was

ing

considered,

some

the

be¬
responsible

Can't Control;

Inflation
Some

ficial

people believe that an of¬
Washington
has
the

in

answer

to all major problems.

In

this line of

reasoning, the control
of inflation can be accomplished
by
empowering
some ^Federal
agency
to review and veto in¬
creases
in
prices.
In 1953 the
people in the country wanted to
eliminate fixed controls
terials

and

over

abandoned

I

President

with

agree

hower

who

ference

ma¬

services, and the

Administration

said

month

at

a

new

them.

Eisen¬

press

con¬

"I still be¬
lieve the free economy is a bet¬
ter
way
to fix the price level
than is government fiat."
a

ago,

I
have spent more time
dis¬
cussing the areas causing inflation
than
I
should in my brief
re¬
marks. I did so intentionally since

influence

this

is

probably

the

dominant motivating factor in the

of

purchase
the

common

stocks

in

last few years.

As

you

somewhat

trolling

may

observe,

I

discouraged about

inflation

over

the

am
con-

years.

Until the people themselves really
want to avoid it, their leaders —

politicians,
and

heads

business
of labor

executives,
organizations

not

going to risk their posi¬
one is against infla¬
as the proposed rem¬
edy does not affect him.

—are

tions.

by adding to them.
During

Washington

tion

Is

Every

so

long

inflation

hopeful

that

inevitable?
over

a

I

period

am

of

Number 5782

188

Volume

.

The Commercial and Financial Chronicle

.

.

(1341)

particularly as a larger fied after the final figure for the ond half of 1958 than in the same
In the minds of
percentage of the people are on next few months are available. period of 1957.
pension, the evils of inflation will The second and the more serious some stock buyers, this fact jus¬
become
more
apparent.
Before would be a prolonged strike in tifies the present level of com¬
that
happens,
the
inability of the automobile industry in the mon stocks,r: V*/'7
, .,v
American industry to compete in event that the current negotia¬
;
"Wait
and
See'*
Attitude
tions
on
a
new
labor
contract
arc
foreign
markets
and, in some
It has been said that a rapid
cases,
domestic markets, will be unsuccessful.
V
increase in stock prices cannot
a
deflationary influence on the
Many companies are reporting
economy.
Continuous
inflation larger orders and higher sales. develop unless higher earnings
generates so many injurious side Some of these have conducted a and dividends are being\ antici¬
effects that it may well sow the
pated:. Some increase appears to
program of. tightening up their
be in the offing. However, indus¬
seeds of its own destruction.
Let; operating methods
and
cutting
years,

hope that leaders in this coun¬

us

try will take appropriate actions
before inflation accelerates to the

galloping stage.

in

assuming' (which I will
do) that inflation is inevi¬

costs.

items
a

labor

labor

be able to
than
the

costs

could very

margin

A reduced

produce
original
These
factors,
together
probably smaller increase

may

more

with

Inevitable

Even

not

force

group.

Not

Inflation

overhead

on

in

1958

than

1957,

easily widen the profit
an increasing sales vol¬

table, a trustee is faced with the ume, If the trend in sales con¬
as to how much tinues,
some
coriipanies
could

serious question

well

should pay for stocks of

he

show

better

earnings in

the

sec¬

trial stocks have already advanced

almost 25%

I

year.

take

from the lows of last

find myself
wait-and-see

a

inclined to
attitude

be¬

fore plunging into the stock mar¬
ket at this time.

in

supervision for a period

even

held.

In

the

most
are

account

of

In

valued

In pension and profit-

other

lieve that

to

own

a

words,

I

trustee

can

some

do

not

Form Ran dally Rose Firm

still

sharing trusts where new money
is being added with considerable
regularity, some part of the in¬
crement is being used to add to
equities. ;.v;
:v;;.
7;
be¬

afford not

stocks, but
I find it difficult to justify in¬
creasing the proportion at this

£

> (Special to The Financial

„

formed
Green

with
to

business.

offices

engage

Officers

are

Christopher

Clarke, President; F. Douglas
Rose, Vice-President; and Lau¬
W.

rence

Dwiggins, Treasurer.

Ruppert Investment* Opens
KANSAS

In the mean¬

CITY,

discussed at length

by

Winter

after-tax return is taken into

sideration.
with

a

are

Also

non-refundable

being

rates.

con¬

corporate bonds

offered

at

provisions
attractive

Officers

Thomas

are

Hoozer, Secretary-Treasurer.
Van

Hoozer

was

E. F. Hutton &

to

need

not

pursue

I

do

this angle in

remarks.

my

The

dwindling supply of com¬
of
top-grade
com¬
panies suitable for institutional
investors has been emphasized by
many students of the stock mar¬
ket.
Unfortunately, purchases by
many of the growing funds have
been
concentrated
in
relatively
stocks

mon

few
to

This has led

stocks.

common

these

for

premiums

apparent

A trustee with cash to in¬

issues.

has to appraise carefully the
outlook at that time and make his

vest

decision

own

of

tion

the

to

as

the

justifica¬

prevailing

market

However, a coupie of pos¬
developments on a broad

price.
sible

should always be taken

scale

into
Corporate
man¬
agements are always reluctant to
dilute the shareholders' position
consideration.

selling

by:

additional

stock to raise

new

common"
capital for ex¬

pansion. At some price, however,
this hesitation will be outweighed
by other considerations. Another
possibility, probably more remote
in

yiew of the pending deficits in

the

Federal
the

of

budget, is a revision
gains tax so that

capital

long-term holders with tremen¬
dous gains will be more willing to
sell
in
order to diversify
their

Either one of these
could enlarge the
high grade common

portfolios.

developments

supply

of

stocks.
I

As

preparing

am

these

re¬

the Dow-Jones Industrial
Average has just topped its 1958
marks,

high

two

The

indices

other

stock

prices

all-time

the

also

and

established

high
April.

industrial

of

at

are

correspond¬

a

high level.
justified?

ingly
prices

ago

years

present

Are

KENTUCKY
Business Outlook

situation

business

The

took

than

sure

the

of

am

have been

us

watching

indices of business

many

tivity,

I

expected.

many

profits

similar

and

STATE

a

1958

that all

-

THE TOBACCO

turn lor the better earlier in

ac¬

items,

that I do not need to elaborate

so

the

on

make
A

subject.

I will

However,

few observations.

a

comparison of the trends of
Federal Reserve Index

the

•

the

•

the bank with the

of In¬

largest financial institution

dustrial Production during the re¬

cession, 1948-1949 and 1953-1954,
with

the

interesting.

is

present

Present information indicates that

the low

made in

was

of

April when

largest number

correspondents

the index
covery

dropped to 126. The re¬
has been much more rapid

in

than

Within
low

the

had

other

few

a

been

faded in both
rent

be

1949 and

•

periods.
after

more

than

a

century of service

CITIZENS

the

the rise

recorded,

business

against

two

months

1954. Cur¬

sentiment

seems

FIDELITY

to

repetition of this fal¬
tering in the upward trend.
a

However,

t

w o

developments

Lee

P.

Miller, President

could change the results. The first

is

the

ment

fact
of

that

business

seasonal

indices,

adjust¬
an

MEMBER
ex¬

tremely difficult statistical prob¬
lem, could have inflated the
mer

figures

more

than

was




sum¬

justi¬

FEDERAL

DEPOSIT

INSURANCE
FEDERAL

CORPORATION

RESERVE

SYSTEM

Van

BANK &TRUST CO
LOUISVILLE

Mr.

formerly with
Company.

tne
Mid-

Conference..

H.

HoOzer, President; and Vivian Van

over

the

at

experts

Trust

Mo.—Ruppert

time, municipal bonds are selling Investments, Inc. has been formed
at
the
lowest
price for many with offices at 1016 Baltimore to
years,
particularly
when
the engage in a securities business.

beneficiaries of his trusts has

years

East

securities

H.

The
protection of purchasing power of
been

351

a

panies in growing industries.
the

at

in

soundly financed com¬

managed,

Chronicle)

PASADENA, Calif. — Randall,
Rose
&
Clarke,. Inc. has been

common

level of the market.

substantial amount,
after two or three cutbacks
in

of

at market.

of time continue to hold common
stocks

amount

common-stocks
60%

over

Accounts which have been un¬
der our

the

them,

17

-18

The Commercial and Financial Chronicle

(1342)

Analysis of Critical American Problems

An
In
der

four

Vice-President, The First National Bank of Chicago, 111.

the nations of the
in the cooperative

years,

magnitudinous changes and consequent problems taking place in the

Three

Th irty-one
years

American economy are

when the ter¬

role of government

later in
August 1945,
rifying clouds

■

r o s

hi ma,

analyzed by Chicago banker. After examining the

ity Credit Corporation,
Import Bank,
Federal

ExportHousing
Administration, Federal Deposit
Insurance Corporation, Securities
and Exchange Commission, Veter¬
ans
Administration, Social Secu¬
rity Board, Tennessee Valley Au¬
thority, and the Board of Gover¬

new

in the United States and the new role of the United States

Affairs, Mr. Prochnow offers eight conclusions and raises two ques¬

in World

lifted at

had
H i

citizen,

business, and

institution. He

tions of

concern

foresees

government's role becoming larger; calls for hard work, thrift and

to every

every

every

the world had

through

been
j

two disastrous

were

shat¬

tered

empires
bankrupt

and

tional economic
we

will

not

war

stagger-

ing

debts.

There

fortunately, on this subject we often think with our emotions and
not with our minds. In discussing

and

weariness

deep

were

*

*

sad disillusion. Millions were dead

millions

and

wandered

lin¬

pie need to bring judgment,

Prochnow

v

H

desti-

place of government in our
it is easy to utter
the world.
empty platitudes with aggravatcries in the night as men lost their ing solemnity. However, to parafreedom in the satellite nations,
phrase John Stuart Mill, a quesThere was an alarming drift to
tion. of such importance should
socialism
and
communism
over
not be fought between ignorant
the world as men and women change and ignorant opposition to
desperately sought economic se- change.
as

the

the highways of
There were desperate

economic life,

tute refugees on

curity.
Today, civilization

There has never been a time in

continues in

political and economic turmoil

Si-icfs

wf

ih»

nc

ings of the human spirit
of

dream

life

than

energy

to

spend

and

labor

armaments

has

MAttAliifi

l

v\

l!

We shall examine

y~*

I-

t-v-*

of

in

Government to

r\

economic life

was

provide various services.

pPriprni

rnvpmmpnt inrlndpd for

•*-

affairs

nationnl

pnfnrppmpnt

tav

nHmirfLtratinn

defense

rnllertion

the

nnst

law

tariff

s'erviee

banking regulation

nat-

^

ents, land grants, veterans' pen
sion, and Indian affairs. Total ex¬
penditures of the Federal Gov¬
ernment in 1790 were only $4.2
million. By 1860, they had risen
to $60 million a year.

role

new

our

principal phases. In
the first period, from 1790 to 1860,
the major task of. the government

In the second

economic

our

period, from 1860

world

to 1940, the Federal Government
became more and more the regu-

Finally, we shall outline
relationship of these changes
to the critical world struggle in

lator of business. In this period,
the government sought to promote
industrial development by in-

which

creasing the protective tariff, encouraging the growth of railroads
with land grants, establishing a
national banking system, and pursuing policies favorable to industry. Investment in industry grew
rapidly. By 1880, the value of
manufactured
products and the
capital invested in manufacturing

life.
of

The second
the

United

is

the

role

new

in

States

affairs.
the

we

are

now

engaged.

From the time of Aristotle and

Plato, thoughtful men have earn¬
estly debated the role of govern¬
ment

in

a

nation's economic life.

That

question is also one of the
great issues upon which our peo*An

address

in

These

by Mr. Prochnow before

elation

Convention,

Chicago,

Sept.

over five times fhe level of 1850,

22,

only

30

years

earlier.

The

in-

industries

huge investment, and they were ers, the Federal Government enparticularly
susceptible
to
the acted the Packers'and Stockyards
concentration
of ownership and Act of 1921, the Capper-Volstead
control.
Act
of
1922,
the
Agricultural
The major reason for a strong Credit Act of 1923, the Coopera-.
laissez-faire policy (a policy of live Marketing Act of 1926, and
letting-business alone) almost up the Agricultural Marketing Act
to 1900 is to be found in the social
which established the Farm Board
which this nation

onists

in

environment

economic

and

established

was

Many of the early col ambitious,
liberty-

and grew.

were

energetic persons who
here determined to improve

loving,
came
their
their

welfare.
welfare.

individual
individual
areas

with

an

TreTre-

of rich land, com-

industrial revolu-

tion, gave them the opportunity;
they asked only to be left
alone to use this opportunity fully.
and

Most of them lived

farms.

on

In

by far the
The isolation of

1860, agriculture
leading industry.

was

tt16 rurai community raised very
±ew of the difficult problems that
came later with the 6rowth of
congested and industrialized ur^an areasby 1900, 60% of
a11 workers wer^ in non-agricuftural
economy
tut-oi pursuits.
imiroHitc and
onri the
tho Vsrwnnmt?

fScing

was

the

problems of

new

industrialization.

there

1940,

and

noticeable swing away from

successful

throughout the nation!
Salt River Project (Arizona),

Jersey City,
Washington Suburban Sanitary District, Regional Planning Commission of
Cuyahoga County (Cleveland), and the City of
Houston
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70 Pine Street




on

Municipal Finance

•

New York 5, N. Y.

older

expansion
This was

an

agencies.

ment.

By 1940, the Federal Gov¬
had achieved significant

ernment

control

about

tionship.
to

now

business

over

to

The

and
new

a

was

rela¬

The
government
become, the biggest

in the

tomer

into

enter

nation.

coming

"

the

of

was

cus¬

•:J

-

1940's

\

and

America's

Government

towering

structure

of prosperity

will

for

account

an

estimated 17% of the nation's total

economic firmarpent
being

ears.

old

an

^

order

were

of

falling,

things

was

shaken down - about our
Those were anxious times

became the major
of government. The Reconstruction Finance Corporation,
The Federal Farm Board, public
economy

concern

arid

economic

important

financial power in the nation and
the biggest customer of business.

Today, government
expenditures have
effects

on

arid
reachirtg
Moreover,

revenues

far

the economy.

the concentration of this vast eco¬
nomic

and

financial

power, with
as
the largest
purchaser of the nation's goods
over great areas of our public works
projects, . and . emergency
and services, inevitably means' 21
lands. The opportunity for self- relief programs followed rapidly,
potentially dangerous struggle to
support on the western frontier Franklin Roosevelt vastly extend-.5
influence those who wield sucl)
was vanishing.
Increasing indus- ed these measures, and we expegreat power.
;
.
trialization brought congestion in rienced the second most important
In 1900, the total expenditures
the cities, labor unrest, and a period of growth of government
growing sense of economic in- regulatory powers in pur history, for Federal, state, and local gov¬
ernments .amounted" to but $l1/£security.
Recurring depressions
Government regulation in the
and a restless business cycle were 1930's was designed to achieve two billion, compared to $79-billion in
Continued on page 34
disturbing factors 4 as industrial goals: recovery and reform. The
corporations made gigantic strides recovery program included greatin their growth. More and more er activitv for thp Rprnnatfiintinn
the

government

.

grew

lhat.government jrinance Corporation,

should, have greater responsibility
for

the

The

conduct

economic

of

af-

took

government

first

its

major steps to regulate large segof

business

of the

sage

with

Interstate

the

pas-

Commerce

Act of 1887, followed by the Sherman Anti-Trust Act in 1890.- ;
Then

his

Theodore

Roosevelt

"Square Deal"

Wilson

with

his

and

with

Woodrqw

"New Freedom"

increased

Federal
regulation in
fields. This was the first
important period of growth in

many

.

the establishment of the PWA and the
WPA, and the use of public credit
to

prevent farm

closures.

eluded

essmg, trade
farm credit.

practices, power, and
It

created

central

a

banking system in 1913, strengththe anti-trust legislation in
1914, and took steps to preserve

and

home

fore-

The reform program in-

the

establishment

of

rpcnnrppc
resources.

With
Wltn

thp
tne

_

.

to 1939

inclusive, the
established

ICIeveland stated at that time, "I
d,nof°r such

the Constitution, and

that, the

government

government

ever

control

of

business

anything the country
thought possible.

During-the boom of the 1920's,
slogans
of
business
were
to Normalcy,"
and "Less

the

'Back

Government in Business"
gency

war

controls

were

relief

of

whose

porarily
James
their

If you

your

have loan cus¬
are

loaning

tem¬

policy,

Talcott, Inc. can help you keep
will and loyally. If you're
with
the decision of
limiting

good

faced

loans, Talcott witt cooperate with you
in

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special financing
beyond the services of a bank, Talcott
can supply this additional working cap¬

an
I

'

ital
your

client

until

requires

such

customer

time
are

as

the

again

needs

of

acceptable

to you.

can

COMMERCIAL

appropriation

do not believe

FINANCING AND

and duty of the general
ought to be extended to the

FACTORING

individual

suffering which is in
properly related to the public
A prevalent tendencv
to disregard
the limited mission of this
power and duty should, I think, be stead¬
fastly resisted, to the end that the lesson
should
be
constantly
enforced
that,
no

FINANCING?

requirements

beyond

power

manner

service

or

benefit.

*Wr_

largely

to Talcott.

Talk

tomers

your

approximately 100 new agencies,
including such major agencies as

in

HAVE

member: if you, as a banker, feel that

Government

country's entry into World War I,
exceeded

SPECIAL

also made in the banking laws of

Federal

YOU

ACCOUNTS REQUIRING

^

Labor Standards Act; the Agricultural Adjustment Act of 1938; the
Securities Act of 1933; the Robinson-Patman Act; the Miller-Tydings Resale Price Maintenance
Law; and the Food, Drug, and
Cosmetic Act of 1938 — to name
only a few. Major revisions were

ened

nnfinnnl
national

DO

the

National Labor .Relations Board;
the. Walsh-Healy Act; the Fair

regulatory legislation. This legis- the nation.
lation affected labor, food proc-"
From 1896

had

WAINWRIGHT & RAMSEY Inc.

also

the

cracked wide open. Gradually the
output of goods and services com¬
lengthening shadow of a deep de- pared with 1.2% in 1929 and an
pression settled over the nation, average of only 3.8% for the yeafs
Conservative men were in despair 1929 through 1939. The Federal
over $7-, $8-, and $9-billion Fed- Government has now become the
eral
budget:!. The
omi knHtrod
Tho pillars
niiiort* of
nf the
tvio
most

the

nnr
our

To learn

government agen¬

was

.

preceding period. Farmers, small
business
men,
and
labor were
critical of economic conditions,
Millions of immigrants had taken

ments

municipalities

„

for anxious souls.t The: stability of

fairs and the economic security of
the people.

serving

new

:

,

and

1860

Between
was a

number of

entry into World War
II, the Federal Government's pur¬
chase of goods and services at¬
tained -levels
undreamed of inearlier years.
Government pur¬
in 1929. In only a few years, we.
chases of $89-billion in 1944 were
had come a long way from the
only a little less than the value
time when President: Cleveland
of our total output for the boom
vetoed an appropriation of a mere
year of 1929.
$25,000 to buy seed corn for Texas
Today, the operations of the
farmers ruined by a drought.1 Federal Government
pervade the
But despite
desnit.e the
the slogan
slnaan of
nf
"T.ess
But
"Less,
whole
economy.
For the fiscal
Government
in
Busirffess,"
the
year 1958, Federal expenditures of
forces in favor of an expanded
approximately
$72-billion
weTe
role for government were growing
140 times the expenditures of 19(H),
stronger and stronger.
"
"
which compares with a population
•
•
*■ •••'.'*?
increase for the same period of
Obligation of Economic Security
only a little over two times. In
Then came the collapse of the
1958, the purchases of the Federal
stock market boom in 1929. The,

the individualistic attitude of the

Ditbi"nu:i "fw!™ B.ank°?«'Asa8"i industries had each increased _to tho-feeling
*958-

removed. Business attained record
levels. However, farm income was

populated squeezed by declining farm prices
needed and rising costs. To help the farm-

densely

located

bined

relationship of the Federal

has had three

two of these

change is the

government

years,

Federal Intervention-Phases
The

major changes and the problems
they have brought our people.
The first

9

greatest in the railin heavy industry

and

areas.

mendous

instruments

MintAMtr

the

S

of

use

Since

f

but the role of gov-

ernment has changed significantly
over

been

nwn

not

economic life

men

1914, the
undergoing one
of the most significant political,
economic,
social,
al|d scientific
revolutions in the history of man.
Changes of great magnitude are
taking
place
in
the
American
economy,
and they present us
with
critical
problems.
These
changes are certain to have an
increasingly profound effect upon
the life of every citizen, every
business, and every institution.
world

has

ment

their creative
for mounting

the

and

destruction.

of

fruitful

more

a

as

history when governparticipated in our

American

as

the great nations engage in a vast
cold war. There are restless toss-

were

field

road

Reserve Sys¬
in
the

increase

the

the great period for the develop¬
ment
of regulation
by govern¬

sacrifice freedom for economic security.
creases

With

cies, there
in

nalions. There
were

of the Federal

nors

tem.

survival requirements; suggests interna¬
policy; deplores labor power and inflationary bias; and hopes

personal sacrifice to meet cold

There

wars.

Administration,
Commission, Fed¬
Commission, Commod¬

Trade

eral Power

suicide of war.

:

Budget, Fed¬

ral Electrification
Federal

world engaged
.

the

of

Bureau

eral Bureau of Investigation, Ru¬

For the next

the horizon.

the

By HERBERT V. PROCHNOW*

August 1914, there was thun¬
on

Thursday, October 2, 1958

.

.

.

'not
the people."

NEW YORK
CHICAGO

DETROIT

,

Volume

188

Number 5782

.

.

.

The Commercial and Financial Chronicle

(1343)

S/A&y/lt
mate

Spectacular catalytic cracking unit symbolizes PURE's

operates

60,000,000 barrels of petroleum products a year—more

tugs and 39 barges.

demand and to feed

growing

four refineries, we have over

our

5,500 producing oil and gas wells in 16 states.

a

.

Marketing activities have kept

shopping centers,

on

5,000,000 acres of undeveloped potential oil land in the

work of TruckStops

United States and Canada—and 29,700 • square

expanded to

miles

in refining

/

7

>

pace, pure now

has

nearly 16,000 dealers, in 24 states. Existing stations
have been modernized.

Planning for tomorrow, we have under lease almost

progress

fleet of eight ocean tankers, 14 towboats and

Today,. Pure Oil's four modern refineries turn out
than twice as much as in 1940. To meet the

over

Key stations have been built in

highways and turnpikes. Our net¬
(another Pure Oil "first") has been

200 stations.

7"

;* /

Spearheading this growth, pure's Research Center at
Crystal Lake, 111., is constantly searching for ways to

and Central American countries.

improve gasolines, lubricating oils, greases, and other
of wholly or
what




we

partially owned pipelines—more than double

had just

/

eight

years ago.

v.

Today,

>'

.

In addition, pure
7

more

*,

than

i.

*..

petroleum products.

-

r

At pure we're building for tomorrow every

the pure oil company, 35 e. wacker dr.,

ever, you can

day.

chicago 1, ill.

BE SURE WITH PURE

19

20

The Commercial and Financial Chronicle

(1344)

.

.

Thursday, October 2, 1958

.

Twenty-Five Years—Past and Future
To the historian,

preoccupied

By HON. JESSL P. WOLCOTT*

as

he often is with periods measured
in

centuries,

25 years

seem

may

every
individuals
a

of

century
resents

stantial
ment

Anticipating banking problems in the next 25
tive

sub¬
seg¬

of

capital-asset ratio situation;

tion;

his

working life¬
time. Twenty-

(3)

comments

population growth.

the first board

being

of directors of

of

one

sion, and

Federal

Deposit Insur-

our

held its initial

Wolcott

P.

Jesse

prospec¬

(4)

1982

be

changing

notes

that the FDIC fund is not

successors

and

their

their wisdom

for

devotion

to

the

cause

of

strengthening the banking sys¬
tem. During the years which fol¬
lowed, it was my privilege, as a
member

and

Committee

as

on

Chairman

of

the

Banking and Cur-

in

and

functioning

Recently

The

deposit

law under which the

American

Bankers

uted
of

much to the improvement

so

banking.

Corporation

I

first

from

board

of

the

law

There

the

is

dwell

natural

a

occasion

of

sary

changes

of

deposit

at

which

directors

some

was

its
ap¬

temptation,
anniver¬

insurance,
length

to
the

on

which

I have just de¬
perhaps to point with
some justifiable
pride to the man¬
ner In whifch the Federal
Deposit
Insurance
Corporation has ful¬
filled
the
expectations
of
its

Many events of the past quarter
a century have been
of great
significance to banking. I will
mention

only a few: recovery
from the depression of the
early
thirties; a global armed conflict
and other military
operations: a
of

cold

war;

mounting

Federal

expenditures, debt, and
taxation; changes in the distribu¬

founders.
that

I

tpday,

do

preferring

can

see

arising

quarter-century
tury which I

population

momentous

of

unusual

intend

to

rather

to

during
—r

am

as

the next
quarter-cen¬

a

sure

the

will

one

we

be

as

have

just concluded.
*An

the
_

address

by

Mr.

Wolcott

ciation's
cago,

of

the

84th

American
Annual

Bankers

Aso-

Convention,

Chi¬

JUL,, Sept. 22, 1958.

Holds FDIC Mitigates
Recession
Before

doing

this,

however,

I
cannot refrain from
directing at¬

World

have

am

War

been

of

an

II.

quite

upturn;
will,

down in

go

will

the

for

the

decline, and I

articles

on

mildness

am

of„

that

sure

all of you here are familiar with
most of these reasons.
I would

simply like to direct attention to
the fact that
sons

been

the

of the basic

one

seldom

—

mentioned

rea¬

—

has

existence of deposit in¬

and

ures

to

the

eral

establishment

Deposit

tion

question that prior

no

of

the

Insurance

economic

Fed¬

Corpora¬

downturns

were

aggravated and magnified by bank
failures.
years

Even

of

bank

numerous

years

good

years—

During
bank

this

of the

kind

same

bad

have

since

sions such

failures

as

In

increased

serious

depres¬

1930-33, the number

became

catastrophic.

"been

have

a

World

very

largely

with which

we

deal

in

each

year

War

II.

No

bank

to

closing has been caused by de¬
positor panic. Neither bank fail¬
ure

fear

nor

failure

of

aggravated the decline.
that

vinced

of

years

I

has

am

con¬

bank

good

supervision, combined
truly amazing degree

with the
of public
confidence in the banking system,
have been significant factors in
this development—and both fac¬
tors are closely linked to deposit
insurance.
A

little

incident

illustrates

the

changed public attitude with
respect to bank failures.
In the
of

course

claims
of

the

few

during

banks

the

the

that

paying
the
insured
depositors of une

the

oi

past

claims

which

year,

failed

found

we

coming in
quite slowly.
Our claims agent,
anxious to conclude his business,
was
a
little disturbed over this;
and one day he mentioned to one
of

the

bank

were

former

that

a

employees of the
particular depositor,

with

approximately $5,000 in his
savings account and over $1,000
in checking account, had not yet

Sign of

appeared
to
claims
agent

ployee

fact,

if

him

look

Rochester, N. Y. Area

em¬

The

matter of

the

sure

that .such

a

now.

street,

the

or

see

can

money

all

agree

situation would

never

have occurred prior to 1934, when
even a small rumor of impending
bank

difficulty

hordes

23

OFFICES IN

ROCHESTER, BROCKPORT, CANANDAIGUA CORNING,
GENEVA, HAMMONDSPORT, NEWARK AND PENN YAN

of

manding
their

could bring
depositors, de¬
immediate payment of
frantic

balances.

today

about

hear

We

so-called

lot

a

"built-in

stabilizers,". by
which
people
mean
such things as social secu¬
rity payments and unemployment
benefits.

Lincoln Rochester
TRUST
MAIN OFFICE

...

'


/


that

one

of

important

success

during this first quartercentury of operation.

Rochester, N. Y.

Enough of the past.

'
•

*

most

maintain

"built-in"
stabilizers is Federal deposit in¬
surance, and the fact that it is
working so well testifies to its

COMPANY

183 Main Street E.,

Member Federal Reserve System

the

I

/

Member Federal Deposit Insurance Corporation

we

What

foresee for the future?

can

Look¬

ing ahead to the next quarter' of
a

century

that,

so

maintain

we

long

be

can

as

peace,

we

confident

are

our

any

than

more

that

$600

billion

compared with ap¬
$230
billion today,

there

will

growth

be

in

a

corre¬

bank

assets.

desirable.

Nevertheless,

it

may

give rise to certain new banking
problems and perhaps accentuate
old

some

ones.

It is to

a

discussion

these that I would like to turn

of

now.

Deplores Capital-Asset Ratio

.

The bank capital problem comes
to mind.
With the deposit

first
and

asset

expansion I have indi¬

cated, we will need to have ap¬
proximately $30 billion of new
capital added to our banking sys¬
tem by 1983 if we are merely to
retain the present ratio of capital
total assets. Judging from the

to

of recent years, which in¬

record

dicates that banks have been able
to

maintain, and even slightly
improve, capital ratios, it would
appear
that there is no serious
problem in store, so long as our
goal is limited and so long as
present practices do not change.
In other

words,

capital

if

we

must continue

we

rate

present

our

additions
remain

of

to

are

to

in

approximately the same relative
position we are in today.
The

difficulty is that the pres¬
capital level is not sufficient,
likely to become even less
satisfactory as years go by. The
reason for this is that the banking
system will have to participate
vigorously in the financing of the
economic growth which this na¬
ent

and is

tion

must

the

next

and

will

have

during

quarter-century.
The
present level of capital relative to
bank assets would be reasonably

satisfactory in

situation similar
just after
in which a large
proportion of bank assets was in¬
that

to

World

which

War

a

existed

II,

vested

in securities of the United

States

Government.

the

is

This

not

today, and it is even less
likely to be the case in years to
case

1

come.

Point
:,

Nonbank

Out

Competition

A rapidly growing economy will

*

bring

a

which

/

multitude of
banks

opportunities,
be

must

alert

to

and increased responsibili¬
ties, which banks must be quick
grasp,

serve.
If this is not done, we
will find that the nonbank finan¬

to

cial

two."

will

you

front

He prob¬

in for his

next week

am

a

of the bank you

ably will drop
I

the

out of

standing there

in the

if

person.

"Yes, as
lives acrcss

you

window

in the

this

was,

lie

and

The,

asked

knew

answer

claim.

make

have

and

had

they have been

and

every

Growth of this order of magnitude
is
not
only quite probable but

recession,

recent

failures

few,

were

failures, while in

the number

distressingly.
of

in

prosperity—there

effort to
slower rate of
deposits could be de¬

in

sponding

seriously depressing effect.

surance.

There is

difficulties

bank

development

a

—

make

deposits,
proximately

they were serious. It is even quite
probable that, at the beginning of
an economic downturn, public an-e
ticipation and fear of bank fail¬

of those mild

one

written

have

reasons

this

other

to be forgotten. Many

soon

people
the

bad

before

Annual Meeting of the State Bank

Division

there

confident,
history books as

do

devot^most of my time to a con¬
sideration of problems which we

tion of income and wealth; arid a

increase

not

since

the

the recession of 1957-58

cases,

this

tnan

encouraging signs
and

different

scribed and

of

decade

insurance

operates is in many respects very

on

of,

severity

tutions.

tives, to follow rather closely the
FDIC, as well as

Association, which have contrib¬

greater

downturns

pointed to administer.

those

our

banking and other financial insti¬

reyicy of the House of Representa¬

activities of the

of

must

'of

reces¬

compared to present $230 billion, with corresponding growth in assets,

the

about

Assuming, then, a 4%
growth rate of deposits, we can
estimate that our banks in 1983

foresees $600 billion deposits in

currency expert

expect

at

grow

flationary.

substitute for bank capital.

a

an

approxi¬

year, we may

infiationery

growth

of

pace

of

rate

our

at

grow

rate.

avoid—while

succession; and

to

deposits will
same

we

meeting. This
and finds we will need about $30 billion of new
was truly a
momentous occasion,
capital just to maintain exist¬
for upon those directors and their
ing
inadequate
capital
level.
successors
fell the responsibility
for shaping the policies of an or¬
ganization charged for the first proportions. Economic conditions tention to one facet of this
It would take a far more com¬
deposit
time in our history with the duty
throughout the nation are
now
insurance story which has some petent analyst than I to measure
of assuring the safety of deposits
current
vastly different from those of 25
relevance;
During
the precisely the effects these failures
in banks throughout the country.
years ago, There have been many past year, we have been under¬ had on the respective downturns,
We are grateful to them and to
changes in the banking structure going a recession of somewhat but there can be no doubt that
their

annual
a

If

growth.

Any faster rate of
deposit growth would, of course,

delves into rising nonbank competi¬

important "built-in stabilizers" in mitigating the

banking and

Corp.

ance

the

The former Congressman credits deposit insurance for

most

warns

The ex-House

that

the occasion of FDIC's

banking's structure leaves number of banking offices falling behind

five years ago
this month,

the

(2)

management

on

years, on

of

continues

average

Wolcott (1) deplores present and

quarter-century anniversary, Mr.

a

rep¬
a

record

mately 4%

most

quarter

able

output

Deposit Insurance Corporation

However, for

short indeed.

very

Chairman, Federal

able

to

economic

system will coritinue its remark¬

institutions, which have al¬
ready enjoyed a remarkable rate

of

growth, will continue to attract
of

much

the

business

that

banks

capable of doing. In addition,
may find new financial insti¬

are

we

tutions

appearing

the

on

scene.

Banks cannot let these

opportuni¬
responsibilities go
by
default; but if they are to take
advantage of them, there must be
ties

an

I

to

3nd

adequate capital base.
am

not

prepared at this time

that

say

there

should

be

any

specific goals, or any precise ratio
of capital to assets for the banking
system as a whole. As a matter
of fact, ratios based on aggregate
figures have a limited usefulness,
since

the

bank

needs

stances

There

which

amount

of

depends
peculiar
to

are
are

capital each
on

circum¬

that

bank.

banks

today
adequately capitalized
many

and whose officials

are

sufficient¬

ly alert to the problem to

Continued

on

assure

page

30

Volume

188

Number 5782

.

.

Commercial and Financial Chronicle
The

.

(1345)

THE

PHANTOM

How would you

like to build a $45 million open hearth furnace

with

only $10 million? You think it can't be done? At United

States Steel, we know
tax laws

on

Because

it can't be done. But under the existing

depreciation we're supposed to do it.
it

cost

only $10 million

furnace 25 years ago,
to

OF

to build an open hearth

THE
our

shareholders—the things

have to use them
Last year,

earned

were

HEARTH

OPEN

profits should be used for. We

just to stand still.

nearly J/4 of all the profits that United States Steel
phantom profits.

,

USS is

a

^

registered trademark

that's all that the tax laws let us set up

replace it when it wears out—even though it costs $45 million

to build

one

today. The additional $35 million has to come from

profits, But profits

we

spend

on

replacement are only phantom

profits. They can't be used for research, expansion, payments to



United States Steel

21

Q2

The Commercial and Financial Chronicle

(1346)

W

By HON. J.

oi
tne
American
Bankers Association has ever in¬

garnering

Member Board

situation

serve

Speakers

1

a

refer to

the

current
as

"dif¬

or

"mo¬

in the event of another

stand vast

He asks that

ciencies here
areas

be almost

can

Robertson

assure

sound money

a

these

are

Peace

is

troublesome

threatened

which

overseas

the

control

times.

by

of

any

goods and services efficiently and
widely among our citizens.

person,

or group of nations. Even
the comfort that we derive

We

is

marred

by

our

over

io

"Money in Peace and War"—lend
itself to light or easy treatment.

"

resource

as

guide

a

who

sorb

timate

be that in

may

association

the

of money and credit in

our

of

For

difficult

find

to

this

express

better

years ago

that

"the

vised
;
^

A

as

has

to

money

matter of

because
mind

so

many

created

for

of

the

his

in¬

science

of modern

warfare, is H. G. Wells.
He said—with not very great ex¬
aggeration— that "without trust¬

worthy

money

paralyzed

as

country

a

brain

a

wholesome blood.

She

is

as

without

She cannot act.

cannot- move.

and

services

the

gross

Employment

tinues

down

i

The

of

money."

institutions, laws, and

nomic

eco¬

relationships in the United

States

have

framework
system.

We

grown
of

know

tem has operated
to produce

the

enterprise

that

and

in

up

free

a

this

can

sys¬

operate

widespread economic
well-being, to direct resources to

productive uses, and to distribute

work

—

of

the

to

and

Prices

20%

of

work

move

reflecting
demand

and
and

items

tva
are

supply

which

our personal
existence
are

liable, when and
needed,

at

and

shifting
—

thousands

quire for
ness

ef~

up

the

thousands

of individual

re¬

we

and

busi¬

generally

where

prices

they

which

84th

But

if

this

system of free en¬
terprise is to continue to serve us

effieiently •in
mud
must

place

nni
not

in

and

peace
ahiiQP
abuse

it
it

it
it

i«
is

not
not

rioiH

ligid

war,

nhrtuiv

by in¬
missiles from
launching sites located elsewhere.
There is little doubt that this comf
range

-

bination of

forces would

blow

devastating

to

it.

upon

nr

or

oi

,
.

nnnm

uncom-

promising and does not demand
perfection, there"Vre "limits 'beyond which

we

must not go

if

we

would maintain it and expect it to
continue to operate efficiently.

Clearly

we

Monetary

Chicago,

should

restrain

.

survival

our

a

as

free

nation

is

a sound, but
flexible, monetary system. Again,
are

exceedingly fortunate that
enterprise economy does

our

free

not

require

can

individual
prices
general price level

the

move

perfection.

might,,it is doubtful
that our
interceptors would be
able to prevent more than half of
from the
enemy's bombs and missiles
hedge
from
hitting - their
marks.
Of
boruoi-

.

rowing

more

course,

we

than

their

present

course

would

some

^

mjss

and

off

veer

strategic cities, factories,

can

upward

or
downward
by
margins without disrupting the flow of production and

distribution.
not

the other side of
people are out of

particular velocity, would in some
cases
fallout away from
carry

work, and many more are spendas little as possible and potential entrepreneurs are hesitating
to go forward with new ideas and
plans for fear there may be no

target, but at would be just as
deadly to the people it enshrouded

kind

decisions

rational,

balanced
part of millions

the

on

c
activity, a;i
last winter and early

econom

proved again that the day when
you could not-"push on a string"
has passed.

have

it

been

III.,

Sept.

those

to

intended.

was

monetary

folicy available to us and the

knowledge and judgment which

Attack

Nuclear
While

exact
from

one

no

;

predict

can

the

pattern that would emerge
particular attack on a par-

a

m

it is not too difficult

ticular day

to calculate the kind of thing

that

mignt happen. Imagine, if you

will,

a

of

instruments

would

whom

for

more

Our recent experience has

The

jt

as

intended

the

toward

In such

times credit should aeonade

spring.

than

rather

plentiful and less cosily in order

However, we should
by this tolerance.

of

see

some

market for their products.

be deceived

The

coin:

Not only/to stimulate
fluctuate, was the case
itself

substantial

Qf

huge map of the United States.

We

what
New

bombs have

that

assume

can

locations, and
with fallout, the whole of
England is substantially out
in

struck

dozen

a

incompatible
tions

or

mp
in the

tain

V

a

must,

P monetary

buy
and

economy

obligations,
.

we
we

to

industry
nancial

or

labor

or

among

fi-

institutions, can destroy
PffoWivoiv
y
yasaiy

pponnmv

relv
rely

sound,
can

flexible
exeit

a

monetary
tiemendous

wiue&picdu

tion

deflation-

miiauonary ana aenaiion

widespread
causes

In periods

expectation

of

expectation oi

reckless

when
infln-

inna-

snpniimp

both

nnH

certain

and

allow

f

With

the

we

incredibly stupid

the

value

(0 meit aw&y
i__*

for

a time
by the invelocity in the use of
money and resultant expansion in
purchasing power. But in the
—

of

our

monev

vaiuc oi oui money
and I

personallv

am

xi-.x

j_„

Consequences of

—

I have

spoken

so

bv. making it
by,
making it

umo"?tal;y
harder

to

more rnstlv
more
costlj? to.

moI'e

that

we can

«»'
r

~

War

Za'nism

and will maintain

do

,

not

need

now

f

but

j.

•,

feel

li£?' alld

and credit structure
in

based,

the

Perhaps

which it

on

event

of

is

another

w mie my. nome town ui
.

In fact, the coast from

of states.

Uos Angeles to Seattle is left with
only a.few pockets where normal
human activity is possible.
Since

have

we

because

civil defense

our

lion

with

left

has

either

radiation

roughly 40
30 mil¬

us

another

and

dead

sick from
Large geo¬
suffered little or

injured

or

exposure.

graphical

areas

VeopHreLtart
p
p

s

point

of

but

tru<i

refugees from
the edges of the devastated areas
are moving into the less damaged

islands seeking food and shelter
it

that

obvious

is

would

have

the

hurt

been

enemy

just

as

much

to the nation that can first rise to

difference—what

with

hy-

true

lor

some,

many

of

do

advance.

in

of us—but how-

depends

us

what

on

we

-

Comptroller, of*, the

Deputy
rency

and

Board

of

work
in

as

a

Member

Governors,

with

a

small

government who

with

the

would
event

economic

confront
of

a

Without

missiles

its

planes, ships, and
under

were

therefore
more

our

victory

way,
pr

—

anc(

perhaps

accurately, survival—will go

knees, then stand

establish

fighting

itself

Perhaps
painted

as

and re7
living and

up

a

power.

the

is

picture

too

I

have

although I

black,

have tried to avoid exaggeration—r

One of my assignments, both as

Member Federal Reserve
System

?
organi¬

apathetic
support
from
a
disinterested
public, this assumed enemy at-.,

zation has received only

badly since

be

President

shelter pro-

no

.

worthy of the name, partly

gram

of you, along
good many of your neighbors, l'eel that if we had another
war money would not make
very
some

a

bombs, continent-to-continerit missiles, radioactive fallout,
et cetera. Undoubtedly that would

Jersey

one

town of

Broken Bow, Nebraska, escaped
unscathed, scores of bombs hit
along center and far western tiers

ebteipiis<e system.anq a sound

drogen

JERSEY

in Southern New

meeting,

home

mv

to'ynOvouid"be"le^" than frightened to/the
precious frank wiih you, however, if I did panic. Hordes of

pie to refrain from buying good,
they

While

our

~can restore confidence in the not reveal my much greater convalue of the dolIar and cause peo- cern about our ability to preserve
+w,r

development;

industrial

our

landed not far from where we are

million

far of the role

of

£

Georgia. Still others hit the upper
Middle West, destroying much of

tack

Another

end,^ ™nJ;y 'ij.f

money

Resources Over $100,000,000

Member Federal Deposit
Insurance Corporation

for-

move

will.

we

equally

am

M oUr-a command
have to be

would

creasing

Organized 1907

EL WOOD F.
KIRKMAN,

that

I

must

we

new

'%Ucy mayte trg°JlyTut ably smartcr tha" that

trated

Boardwalk National Bank

Serving Industry, Banks and Bankers

that

res0MT(:es
to

deliberately

move

borrowing

THE

NEW

should

search for solutions to

monetary problems,
ward

develop

to

we

our

with

CITY,

and

concepts and the tools
cope
with peacetime
instability.
While
I

our

think

J0 'J-

will "undoubted-

we

modify

lu

use

war.

ATLANTIC

t

economic

the forces which would otherwise
movements.

d

in

counterbalancing influence against

inflationary"and*

.

our

in the future.
,

A

ships develop,

our

-

policy

ary

.''A, ins tit u tKHuil

we

of

discharge

now and
,

cau^e

economy grow* arid hew institu¬

main-

all
all

ran
can

the' product

tionborl'ow' maklnS u
in

fluctua-

therefore,

eurrenev
currency

to

come
come

whether

wide

reai
vame
mrmetnrv
real
value m
of me
the monetary

w
We

unit.

upon

with

are

progressive deterioration

We must prevent
prevent further
farther inroads
inroads

nrices

linas,

fr($G enterprise system,

a

policy-making

possible,

our




enemy.

But try as we

ing
to

die maintenance of

Sber
£rih,?Lthf. SrSSSS*
sector, and reduce it "if

monopolistic

by Mr. Robertson at the
Annual Convention of the
American

Association,

strike a

the

given

System

Another important condition

nv

unduly

intolerable strains

address

Bankers

under

be

probably be supplemented

termediate

money

they might need later on,
speculating in stocks as a
against
against miiauon,
inflation, aria.iium
and from

the

Flexible
,

re¬

———

""An

Sound,

flect their relative costs.

Whilp
v\ nnc

value

to

forces
and

materially, a cash and credit sys¬
tem, dependent on men's confi¬
the

for

account

national

fieiently.
>

wp
we

in

would

District
>

becomes impossible and
produc¬
tion dies away. Our
civilization is,

dence

missiles

>mbs struck

f

necessity."

constitute the realities

now

be .: in the
their

submarines with

de-i

was

seemingly bizarre devices
fiction

guided

over

more recent observer, whose
seem
to
be
particularly

ventive

market, which
where
purchases of goods

grown to the point

product.
In
spite of this, and the fact that a
substantial part of the remaining

than

Aristotle

now

government

views

apropos

encouraged arrangements

would

bombs
our

iuia

the water. These measures: would

The Gov¬

provide

.r

i

when he observed
of

use

a

words

essentiality

those employed by

2,000

is

example, it has survived a
expansion of the
govern¬

mental sector of the

flow

It

and

operate tolerably well.

vast

in¬

econ¬

society.

our

ab-

can

Survival Against Fiscal Growth

omy you lose sight of the dra¬
matic importance of money to the

functioning

even

we

works

your

with

■;

to correct any such developments

know

we

it

imperfections

many

still

every day at the Taj Mahal might
come
to
regard it as common¬

place, it

movement,
experience that

jrom

"familiarity breeds contempt" was
never intended to
apply to money,
just

or

on assumptions of per¬
competition and freedom of

fect

that the phrase

sure

We must be alert
possibility that we have
foolishly
loonsxuy or lnaciveilenuy
inadvertently anowea
allowed
enemy.

the

to

based

are

of the role of money in the affairs

I an;

steadily increasing complex¬
While its philosophical roots

a

ity.

Much has been written and said
of men.

experience that

hardy, rather than

a

outside

be time

con¬

inflationary
Nor does my subject?—

pressures.

know from

have in it

we

from what appears to be a prompt
and vigorous revival in business

concern

to be able to

>

military forces
appropriate retaliatory
Our planes with their hy¬

drogen

presently do, and stresses need to

in all circumstances and

count ;1

can

launch

action.

defi¬

any

events

nation,

activity
tinuing

where they may; fall.

areas

we

enougit for our own
to

damaging to economic activity in the surviving

as

all

This would

construction.

mone¬

and credit essential to reconstruction.

at times be¬

seem

and points out^that

now

about

with the warning devices
which are still in the process of

ability to with¬

our

notice—«

.half-hour's

a

is

•,

that

has and

it

on, even

in private and public monetary and

engage

reviews what banks have and should

ernor
L.

James

I

cannot, for

but

we

which

which it is based,

sound, flexible

a

pre¬

everything
have

we

ability to

Let;.,

might confront us.

that the enemy attacks

assume

us

our

on

Robertson commends

this

break

now

Mr.

.

the bombs themselves in the

as

I

like to

precedent,

yond

war.

banking nuclear war-disaster preplanning

As

as

and credit structure

money

governmental expansion and to maintain

tary system.

o r

"critical."
much

of life and the

way

-

ways

mentous"

our

idea of the kind of situa¬

you some

Governors, Federal Reserve System

Concern is expressed by Federal Reserve's Governor about

plea s a n t,
quiet, and un¬
ci v entful.

would

ROBERTSON*

ap¬

peared rather

period
ficult"

L.

with

ing that the

Thursday, October 2, 1956..

.

tion which

of

by observ¬

remarks

h*"

troduced

.

Money in Peaceiand War

I doubt that any speaker before
a;

.

our

nuclear

has

Cur-

the

of
been

to

of men
wrestling

group
are

problems

that

nation in the
war

divulging

any

an

interview

probably

secret

experts

that

I

have

will
en-

gaged in understatement.

My purpose is not to play the role of an
alarmist, but simply to point up
the job that has to be done; for

no

the

matter

able

how

problems

glance, I

information, I should like to give

with

show

am

seem

at

first

convinced that work¬

solutions

developed

insurmountable

may

—

can

if

we

be

found

and

have the will

f
Volume

the

and

.

.

.

The Commercial and Financial Chronicle

and to

to think

courage

What

can

do to

we

the surviving

Americans—still

of this country at the

an

first

on

equal chance
their feet?

have

tial

at

we

Private Preparedness

and

The

tected

;and

which will

do now,

that the range
of possibilities is so wide and the
ensuing chaos would be so over¬
whelming that no advance think¬
ing or preparation would be of.
any avail. Certainly the prospect,
of nuclear war is frightening andthe
devastation
it
might bring
we can

of

are

banks

open

example, in our own field
—and, of course, the same sort of
thing has been done and is being
done by other arms of the gov¬

essen¬

prepared.

so

solvency

ernment

Board

be

maintained.
-

must

be

to have

are

pro¬

a
out

new

ities at banks that

can

to accomplish

the government as

a

years

poration, to

Reserve

the

Federal

of

into this machine

garding

by

information
resources,

attack, the machine

alternate

records

headquarters
duplicates of essen¬

elsewhere.

lines

We

have

of succession

of

prepared

instructions

the

nature

and

still

sources

up

estimates

after

the

attack.

for emergency use

throughout

serve

the

Currency, and the

Deposit

Insurance

Cor¬

prepared¬

encourage

measures

by the commercial
system designed to as¬
continuity of operations of
the banking system in the event!
banking

sure

of enemy attack."

As

committees

.

were

a

result, two

established

—

of active members of
Association. As I hope you.

composed
your
are

aware,

tees

sent

recently these commit¬
all

to

banks

five

pam¬

describing certain highly
desirable pre-attack preparations.
They are now working on a sec-!

Mobilization Responsibilities
Some

the

ness

of

23

phlets

were

stockpiled

an

produce

can

available

time ago
fense mobilization

'

of

of the amounts and location of re¬

been
and

location

within minutes realistic

and tested their ade¬
in a number of "alerts."
Reserve stocks of currency have
built

re¬

from

for

quacy

whole, by the

basic

our

drugs, chemicals, and metals, to
factories, banks, and man-power.
By feeding into it information as

operation,

If

a great

many things' need th be done

Federal

government's princi¬
several
experts have been feeding

equipped

ties,

loan facil¬

this,

Federal

each

authority in the event of casual¬

re¬

reopen.-

troller

pal relocation center. For

to

tial

to pre-exist¬

access

brain at the

Reserve Banks has established and

established

customers

finable to

the

—

and

and maintains

And

worked

permit the

that

the

of

must

ing deposits and to
We

For

a

structure

mechanism

that

be
in

being actively pursued
moment.

are

at the present

position to
after suffering seri¬

even

damage.

Some say that there is nothing

;

things

to

be

(1347)

others

money

personnel losses and physical

financial
Public

make

readily available.

of

are

must

operate
ous

thus

more

number

if

Banks

the

be

to

A

credit, 6r to restore

and

and credit

as

time of the

War—would

World

least

that

assure

the entire population

numerous as

first

of money and

solvency

/ <

act.
,

Number 5782

188

certain de¬
responsibilities

assigned to the Federal Re¬
Board,

among

which

ond series of

pamphlets which

concerned with the

measures

are

and.

operations which would be called
for

was

following-

attack.

an

.

bank supervisory agencies, and" by
horrible, but I am con-,
vinced
that public
Some of
and private1 the banks, themselves.
preparedness can make.; a differv these things have been done'. and
ence-r-in fact, the difference be-,
would be

"to

country.

As

just

another

example,

I

might mention the huge electronic

develop plans, in cooperation

with

the

Department

Treasury,

including

the

of

the

So.
been

noteworthy

progress

Continued

Comp¬

on

tween national survival and anni-;

hilation.

'i

/

'

.

V Others ^apparently belieye
will,1 lie: in

solution

immediate

the

and

the;

martial»law

imposition of

blanket of direct controls

a

over

all economic activity, Thijs is pureThere is; every; reason
to suppose that the military itself
nonsense.

-

will suffer heavy casualties. It will

certainly be in no position to take
all the problems of main¬
taining order, much less the prob¬
over

lems

of regulating economic ac¬
tivity. The Federal, Government
surely be scattered and the

Will

operable

fragments

occupied

with

be

will

pre¬

solving the "most
basic sorts of policy problems. It
is foolish to

assume

cumstances

that

would

be

>

that the

able to

in

cir¬

these

ration

books

promptly, distributed;
of goods avail¬

amounts

be

rationed, in all of the
circumstances

various

which

would

prevail, ;• could be deter¬
mined at a national level; or that
government lending agencies
would replace

banks in

maining town and

every re¬

hamlet

in

the

United States.

V

Bank's Role

s

While the Federal Government
would

certainly

establish itself

sible

and

direct

would

time
and

critical

the

many

and

most
areas

dependent for a long
their internal resources

would

it

thorities

pos¬

measures

to

purposes,

be

on

re¬

as

materials

production

essential

to

rapidly

begin to take

to-husband
to

attempt

as

be

local

to

up

direct

to

the

au¬

initial

re¬

construction.

They would unques¬
tionably rely upon the banks in
the area to provide the money andf
credit

essential

to

This

high-grade concentrate,

an

oxide of uranium known

as

"yellow cake," is the end-product of Anaconda's uranium ore-processing plant at Bluewater, New Mexico.

their

finance

efforts.

Money, both cash and de¬
posit money, would be an essen¬
tial element in the painful strug¬

gle for survival.

;

;

At first thought it would seem
that money would be redundant

./,

in

these

pur

main problem would be to soak

up

large amounts

circumstances

of

and

A handful of

that

peting

the

for

cash

excess

limited

available goods and services.

might

is

be

the

and

;case,

with which

prepared

to

it

must

we

On

cope.

the

a

other

Anaconda:^
»
«

would

be

too

to power your

-The material in these drums is "yellow cake." Uranium oxide, con¬
centrate is its technical name. It starts out as crude uranium ore at

.

be

hand, there is at least an equal
possibility that cash and deposit
money

make

can

supply

of
This,

situation

concentrate

"V

and deposits which would be com¬

scarce.

■

As

V*■- '

Bluewater, New Mexico, uranium mill. And it takes more
ore to make the yellow cake in just one drum.

than 100 Tons of
'•

-

'■

'*

>.*'

'*/<*

^ '9"

t*

.1

j

' ''

' '

r

'

-

*

,

,

i

^ After further processing, the material will be compressed into ceramic
€! ! pellets about the'size of a pencil eraser. Placed in the nuclear reactor

The

AnacondA

,

you', all
make

know,;.;demand
far and

up

of the money

States.
and

If

people

banks

were

of

of

generating plant, each tiny! pellet will produce enough
energy to run a TV set for almost a year. In the Shippingport, Penna.,
plant of the DUquesne Light Company almost a million such pellets,
weighing 12 tons, are in use—and a couple of dozen pellets will supply
all the electricity used in an average home for three full years.

supply in the United

the

transfers

away

deposits
the -bulk

were

closed

:

unable to effect-

funds

through
the
mechanism,, this
automatically shrink our
effective money supply to a small
check

clearing

would

fraction

An

of

attack

have

bring

its
such

previous
as

the

we

economic

viving

areas

activity in the
as

the bombs

selves created in the

they fell.

Thus,

we

areas

sur¬

them¬

where

must be

pre¬

pared

to

at the

time, to restrict the supply

do

whatever

is




needed

uses

for uranium

billion dollars yearly.
To

'

Company

power

being discovered almost
radioactive by-products alone are saving industry

just
contemplated
would
about technical insolvency

on the
part of almost all banks in
the United States—in the absence
of preplanned action.
This could
have almost as
damaging an effect

on

New

volume.
one

a

meet

are

day. Already
estimated half-

every
an

future demands for
developed millions of tons of
New Mexico. Through processes developed at
Anaconda in a few short years has become
present and

this wondrous element,
uranium ore reserves in
Bluewater, New Mexico,
the largest producer of

Brass

Anaconda Wire &
Andes

Company

Cable

Company

Copper Mining Company

Chile Copper
Greene Cananea

'

Anaconda has

The American

Company

Copper Compapyk

Anaconda Aluminum

Company

Anaconda Sales Company

internationalSmelting and

Refining Company ~

'

uranium concentrate in the United States.

Leadership in the production of uranium concentrate is typical of
Anaconda's versatility in contributing to America's growth and
progress

in

many

branches of industry.

lias

made, but much remains t<*

68253*

page

32

24

The Commercial and Financial Chronicle

(1348)

.

.

Thursday, October 2, 1958

.

Growth of Nation's Banking Institutions
."National

banks

giving

are

By HON. RAY M. GIDNEY*

an

increasing measure of service
their communities and to the

mercial

to

Nation, and

Comptroller of the Currency

ing system and finds mutual savings-banks and S. <& L. Assns.
faster than national and state commercial banks.

for

the former's

to

banks

Federal official concludes ."Two

perform

banking

exodus from national

sys¬

well despite

velop ment of
jealousies be¬

sional session will pass

i

n

M.

Kay

d i-

Gidney

of banks be¬

between classes

consolidations,

formula, and

reserve

they operate under State or
Federal charter. A bank is what
it is
because
of what it does.

43.6%.

or

ings

Management is of primary impor¬

Assets

banks

billion

tance, and no system has a corner
on good management.
In survey-

to

of mutual

more

195073624

mergers

sav-

Street" Law

"Two Way

This

increased from $20'
Besides direct growth of bank$35 billion, or 75%. ing institutions under their exist-

It

is

only fair

to

give credit

lower

to

part played in the American
Institute of Banking and the sev¬
Schools

of

in

Banking

ascribed to their ability version from
attractive

more

interest

liquidity requirements

favorable

the

eral

offer

dividend rates because of their

or

tax

status.

Mr.

and

M.

1VL

Kimbrel, Chairman of the Amer¬
ican

the

Bankers

Association

Corn-

mittee on Federal legislation,
furnished the Committee on Ways
sponsibilities increase daily and and Means of the House of Hepour training must keep pace.
resentatives, 85th Congress, as
development of depth andstrength
in bank
management
Our re-

A

1956324

chartered

State
tinues.

Ten

institutions

years

banks had 50%

57%

^StaSed

con¬

To

National

port for
III) for

of assets of commercial

made

percentage

a

about

tanks.

assets

total

to

bank

assets, and reduced the percentage
of National bank assets from 50%
to 47"% of total assets of commer-

reserves

cial and savings banks and from

age now.

Faster Savings Banks' Growth

rapid

Federal

income

million

^

and
^

profits

taxes

of

allocated

or

$24.1

$1,448.5

^

^

^

and undivided

reserves

profits.
Insured commercial banks paid

a

period, 1948-1957, inclusive,

an

is an

address by Mr. Gidney at

ty wide difference in the

a

those

Convention, Chicago, 111, Sept. 22, less.

Federal

types
income

TABLE I

nrSiCS^rvLe
aud Surplus Accumulations
With Federal

exposure

of institutions
tax

?

liability.

new

new

From Earnings Compared

as

1953.

or

Surplus

51.0

Taxes Paid

2.2

62.7

2.1

1955__

173

State

supervised by the
Comptroller of the Currency had
total assets of 121.1 billion, which
were 46.7%
of the banking assets

58

in

commercial

the

9

47

banks of the Nation,

51

the

36

51
50

84

30

87
64

47

178

645

commercial

street"

to

(In Millions of Dollars)

ikl

who.se

conversion

banks

Federal Income

Reserves

Undivided Profits

Total

Taxes Paid

158.8

32.4

191.2

3.2

208.9

22.2

268.1

law

net

in

which

1950

c££

State

voice

one

restrained

accomplished.
raised

reasonable

for

firm

in

restraint

for
be

inflation, there

likely

are

demanding that all

m

National

oJ:

States

by

the

banks

,

^lvl^ies proceed at a more and
rapid

more

before

pace.

When I appeared

in September 1955 I

you

commented upon the fact that the
peak figures, and suggested that a

$11.5 million

useful

for

the

State

com-

rule for bankers

is found

Paid ;

Paid

1952—
1953
1954

.—

1955

.—

1956

—,

Reserves

Profits

Total

Taxes Paid

442

77".

548

1,067

662

474

50

552

751

517

150

790

566"

158

590

617

263

600

1,076
1,457
1,314
1,480

2,616

698

3,080

6,394

3,799

;
-

Federal Income

Undivided

Dividends

Total

-

SOURCE: Annual Report of the Federal Deposit Insurance
the

862

754
770

Corporation for

year

Conversions

into

taken place. The
has been State to

From

banks with total

million

Jan.

1, 1950, to
State-chartered

resources

converted

into

banks, while in the
National

banks

of

$541

National

same

with

period

total

re¬

of $176 million converted
State chartered institutions.

consolidations,
fers

State Chartered Banks Converted

Mergers

National Banks Converted Into
State Chartered Banks

Into National Banks

Number

1950
1951

,

.

_

1952
1953

—

-

1954
1955

Aug. 31

Assets

$3,000,000

$50,000,000

1

2

11,000,000

0

—0—

0

—0—

6

88.000,000
21,000,000

3

14,000,000

2

11

160,000,000
62,000,000

2

19.000,000

4

23,000,000

120,000,000

3
2

8.000,000

5

29,000,000
95,000,000

1

10,000,000

48

$541,000,000

21

$176,000,000

v

3
to

N umber

6

10

1957
1958

Assets

8

•

1956

and

TABLE

Assets

Transferred

4.000,000

V

account

for

the

portant shifts from
other.

From

system to

one

Jan.

im¬

more

1,*1950,

to

Aug. 31, 1958, inclusive, 366 State
chartered
sources

4.8
5.5

14.1

355.4

5.5

banks.

368.7

18.1

386.7

5.1

218

1,448.5

24.1

of

banks

with

$3,983

total

million

re¬

were

consolidated, merged or trans¬
by purchase into National

ferred

National banks numbering

with total

million

merged
chase

or

resources

were

bv

1950

.

1951—

—

1952_

1953

_

_

1955
1956_
1957__

_

21
33

309,000,000

13

934.000,000
78,000,000
351,000,000

55

141,000,000
1,109,000,000
441,000,000
385,000,000

21

26

179,000,000

55

576,000,000

26

321,000,000

28

492,000,000

13

392,000,000

366

$3,983,000,000

218

$9,833,000,000

_

_

—

__

___

_

1958 to Aug.

Assets

Assets

$260,000,000
272,000,000

___

_

Purchase*

33

_

__

1954

or

National to State
No. of Banks

No. of Banks

—_

_

$9,833

consolidated

transferred

into State

of

Consolidation, Merger

by

State to National

mergers and trans¬

by sale and purchase of bank

assets

to
ac-

Economic Indicators then showed

has not

assets..

into

ftf

ge^ous^nsion
of
other forces making

and

The average assets per bank were

National

to

approval

Aug. 31, 1958, 48

284.1




be

pymminn

credit

would pennU direct
of

movement

231.1

Board.

Where
demand

be

must

to

'

in

National in number of banks and

15.9

Bank

is

that

if

by All Insured Commercial Banks 1952-1956, Inclusive

direct conversion of

without

cxodus

341.3

Loan

and 54% of

inflation

that

TABLE IV

the

—Allocation of Net Income to Reserves—

Home

dwel!

Purchases

Reserve and Lndivided Profit
Accumulation From Earnings
Compared With Federal Income Taxes Paid
by Member
Savings and Loan Associations

Federal

reacon-

Dividends Paid and Reserve and Undivided Profit Accumulation

Changes of status through bank

TABLE n

102.7

many

that it will

assets.

conversions

thrCurreLv

Deposit Insurance Corporation.

1,345.8

through

are

From Earnings Compared With Federal Income Taxes

Consolidations,

Total__-_

savings

banking

(Table IV.)

Federal

The business re¬

TABLE HI

the passage of the so-called "two-

sources

9.5

and

15

16

the

in

the short and

has continued

for believing

sons

having

we are

S

banks had assets of $35.2 billion,

51

*"Fon}rone.
ckarter to another, a
significant change resulted from

21

397.6

the

by:
re-'
It

Generallv.
the
National nation, 1 icai uicu we nave ucvci
them.
Generally, the
National
Banking System has been faring oped a strong bias toward mflawell in the matter of consolida- tion and that it is going to take
tions, mergers and
purchases, the best efforts of all who believe

7

12

respect

1.2

Total,

sharp recession.

them.

11

28

current

improvement

economy following

covery

by

eco¬

(In Millions of Dollars)

With

3.4

.6

assets

current

banks with State chartered insti- selves of the necessity of avoiding
tutions, and cailying total re- Big dangers of inflation
As
a
sources of $6 238 million with
tot

55

19

1958 to Aug. 31

98.8

SOURCE:

of

any

State system was largely ac- tinu in the months ahea(j This
counted lor by the merger in "nn« ™ V?e
""f
1955, referred to above, of two i oeueve is sunicienuy prooapie
lar8e New York City National that we should again remind our-

15

„

86.7

SOURCE:

.

—

1955.

98.4

note that

general

a

The 4 636 banks

National
„

1954.
1956.

with

compared

1949__

in
Federal Income

excellent

many;

is good to

were

National banks.

1948

way

on

J

make

views by authoritative sources.

(Table V.)
\, v..-;
For all banks at the end of 1957,
ceeded the Comptroller of the assets were $259.2 billion. ComCurrency in the number of pri- mercial banks numbered 3,944,
mary
organizations
authorized, supervised by State banking
For the ten and two-thirds year authorities, held assets of $102.9

but this

(In Millions of Dollars)

—

gain

State systems through conversion

\

Allocation of Net Income to Reserves
and Undivided Profits

net

to

Income Taxes Paid by Insured Mutual
Savings Banks

1952.

an-

change of status
through consolidation, merger or
transfer by sale and purchase of
assets.
In the chartering of new
banks,
State
bank
supervisory
authorities have consistently ex-

troiier of

from $156 billion to
f?oTSaVS?o%ti2iTuSed
earningS $6'394
mil"
$224 billion, rfUl,fl'T
lion. Clearly there
extreme•From

t'o

nhondn

dividends and add- National approU^cf
reserves and undivided

whilef
mS to

For the ten

charter

one

by

aS income taxes of $3'799 million, provided for

mirfiwl

year

and undivided

million to

Commercial banks, National and
as

appears

surplus; savings and loan associations, members of the Federal
Home Loan Bank System, paid

57% to 54% of commercial banks,
That is the approximate percent-

State,, have -not had

it

that insured
mutual savings banks in the five
year period, 1952-1956, paid Federal income taxes of $9.5 million
and allocated $397.6 million
to

3% in the relation of Na-

tional bank

1956 the figures (Table
all insured commercial

,

Thus

of

change

and

bartered
charted

Insurance Corporation Annual Re¬

savings banks

In 1955 two large mergers
which occurred in New York City

banks.

TabfTM n

in

complete this picture, I have

taken from the Federal Deposit

of the total assets

of commercial and
and

ago

the

Moderation

to

That is covered

nomic trends.

^ VJ948,
to Aug. 31. billion.
and 523 mutual
State chartered
State banks
an(* supervised
savings

fairly equal division of the

going

August and there

other

may be

to

Economic

not

am

extended comment

banks not to neglect adequate salary structure.

skill and devotion to tlie
ioimrootor.
banking which character¬
izes the leaders in our profession.
«

».

I

discriminatory tax free bad debt

ing charters, changes in relative
status of the banks in the dual
system come about through the
organization of new banks, con-

"raining,

favorable tax status. The

and purchases. He hopes next Congres¬

Assets of savings and loan assoing our banking system it is en- ciations increased from $12 billion
couraging and inspiring'to vecog- to $48 billion, or 300%. The more
nize the high measure of ability, rapid growth of these institutions

best in

banking system

which continues to be in good bal-v
and in excellent condition. /*

Financial Institutions Act, permit member banks to

urges

cause

i

-Gidney attributes this

Way Street" law has not significantly affected

include vault cash in legal reserves, correct

banks

vidual
or

status of the dual

banking system, and national hanking has been faring

tem, we should
avoid the de¬

tween

Mr.

footnote which

a

operating banks. (Table VI.)
much, for a survey;of the

So

growing

are

Preaches

liquidity requirements and

the dual

in

for

shows the number, size and status
of all

attractive interest and dividend rates which he says

more

results from lower

the part

they

million

ance

Na¬

to

tional

including

am

.1

United States Comptroller of the Currency surveys the status of dual bank¬

joyed.
While
giving due
credit

•

I

maintaining the

are

high measure
of presti g e
which
they
have long en¬

$20.8

banks,

the National banks, and $67.3 mil¬
lion for the mutual savings banks.

ever

31

24
65
52

8

22

.

$53,000,000

42

362,000.000

47

7,163,000,000

or

pur¬

chartered banks.

*Does not

include transactions effected within the District of

the Comptroller of the Currency is
and District banks.

Columbia

as

the supervisory authority for both National
I.

.

'

in

Number 5782

188

Volume

of

words

the

.

.

The Commercial and Financial Chronicle

.

ancient

the

yourself

wisely, when

tions.

They

//./.
By ROGER W. BABSON

find
..f.;-;
against which a reasonable ini¬
Scudding before too fair a
tially tax-free reserve should be
wind,
^'v //Y/;/'
established and this has been rec¬
Take in a reef or two." !
K
ognized1 by ruling of the Internal
That is always a good admonition Revenue Service under which the
you

keep in mind when the pace of

to

credit

granting

undue

acceleration.

signs

shows

of

provided.

•

Federal Legislation

for

serves

I would like now to refer to the

subject

legislation

Federal

of

which is of very great importance
to our National banks, and I be¬
lieve

also

the State chartered

to

We

banks.

disappointed that

are

Institutions

Financial

The

Act,

of

Bad

million.

banks

held

desirable

simplification

of Federal laws relative to finan¬
cial institutions and change's which

woulcl

of

be

benefit and advan¬

tage to the banking system and to

aggregating ?
These particular'

loans totaling
93.33% of all of
the loans of the 4,627 banks in the
or

system. For all insured
banks, the total \ bad

commercial

the

I feel sure there will

public.

be further efforts to obtain enact¬

ment of the essential parts of

this

legislation and I hope we may all
contribute

concerted

our

efforts

toward the enactment of a sound
and well balanced Federal law.

session

recent

first

was

introduced in the

were

of

R.

H.

Congress.

The

11871, introduced

by Honorable Brent Spence of
Kentucky, Chairman of the Com¬
mittee on Banking and Currency
of

the

the

House,

the

at

of

Board

Federal Reserve System.

section

amend

Reserve

19

of

the

It would

the

of

with

Act

of

request

Governors

Federal

respect

the

to

required to be maintained
by member banks of the Federal

accumulated

in

consideration

experience
vived the

only

banks

of

depression

years

that

so

of

Board

could permit

to count

banks

deposits

the

by regulation

Governors

ber

against

System

part of their legal

mem¬

vault cash

Doubt¬
less it will be reintroduced in the
next Congress.

State and National

banks would be

benefitted

by its

enactment.

of its

eligible loans while another bank

only

0.002%.

sayings banks and

to

develop

depositors
allowed

are

income

interest

paid

the

of

subject

tax-free bad debt

Much

before

useful

testimony
was offered by representatives of
different points of view.
Tax-Free Bad

Debt

dividends

Such

a

operate.

A

than

commercial

resume

for bad debt

is
the

formula

far

by

under which

or

the

of

study is given

Adequate
A

subject which should interest

this

group

with

which

to

Compensation

make

is

the

we

are

need

for

mula

a

long
bad

debt

not limited

the

reserve

for¬

to the loss

his¬

the individual bank, as
present formula, but
applicable to every bank upon the
tory

of

the

under

basis of the consolidated loss

perience of all banks. As
sary

bank

incident to
lending, it

the
is

a

ex¬

neces¬

business
be

to

I

ees.

have

importance

tional

work

stitute of

high grade, able
employ¬
the

the

very

educa¬
In¬

Banking and the excel¬
But

we

must
always keep in mind the
importance of adequate compen¬

sation.

Recently

of

office

our

Continued

antici¬

on

con-

page

Not Members of

Deposit Ins.

Corporation

Corporation

Fed.

Reserve

—Corporation—

Total

Number

or

Fed. Deposit Ins.

Only-

Total

Total

Type of Eank

Number

Assets

National banks_____

4,625

*120,563
$68,237

tio

*294

il

*243

6,766

413

$29

236

§32,440
§27,642

284

1f2,243
U7,497

188,829

7,012

60,376

698

9,983

1,765
Mutual sav'gs banks
3
Total

6,393

_______

—

Assets

RECAPITULATION

Number

Assets

—

Increase

National

banks_

Number

Branches

Total Assets

for 1057

2,828

*4,636

4,046

banks

8,944

4,059

121,100
102,920

Mutual savings banks,_

523

405

35,168

State commercial

as

hedge

a

Head

Offices

14,103

8,510

uranium is largely in the tailing

e r

to

now

will

SUCh

Gold

for

dumps

of

existing

and

do

not have

259,188

2,538
1,857
7,223

8,510

banking offices

the

gold

^Supervised
^Supervised

national

banks

outside

continental

United




reading.

Two With Scott,

Bancroft

(Special to The Financial Chronicle)..

mines,

gold

SAN FRANCISCO, Calif.—Rob-

uranium

real

become associated
& Co., 235
Mr. Coate

have

* will be able to talk was formerly with Merrill Lynch,

ever'

personally with

men

at

rities

uranium,

and

Fenner

Pierce,

Smith.

&

Corporation.

in¬

to

stocks

who do know

As U. S.

M

this

1

tilt|j

real infla-

this

laws forbid

of

sale

or

country

as

a

gi:|:||

i

£ <'

'

>

-1

gold
com-

modity, investors are confined to

buying the stock of gold mines. A
the

•

States; but most of our mines are
fairly well worked out. Wise investors
in
gold stocks on this

•

these

of

continent
selves

in

are

confining

are

'/ j

V V hen

'

them¬

with

Canadian mines

to

-

.

United

few

your

require

clients

banking services in Northern New

'

a

long life.

studying the statistics

When

'

on

Africa. This

gold is mostly from

mines which

are

little heard of in

*"

.

confidence
" /

-

'

Certainly I do not
visit any gold or other

New

to

and Trust Company.

Jersey

Bank

As the larg¬

country.

correctly

not

could

judge them if I did. I will, however, be able to talk with men
who do know the gold mines of
Furthermore, these men
personally to me when

Africa,

talk

will

they will not write frankly.
If
country continues on its crazy

our

spree

of spending, some of these

gold stocks should present a good
chance to make an honest dollar.
Outlook

Copper

for

stocks

copper

now

'

.

in

the

$284,000,000

in

est bank

area,

with

over

,

'

•
^

•/ '

offers

/
ff

a

complete

economic

-<

resources,

NJB

of expert

source

knowledge and banking

»
✓

In

experience.

addition,

your

,/

If./'

clients will receive the same care¬

ful, personal

attention to which

a

Copper as a commodity
in price during
the

bargain?

fallen

has

/
;

you

have accustomed them.

two years from around 40
to
a
present price of about 26.
Sometime
during
this
current
crisis in the metal, copper stocks
will reach their low point, if they

done

already

have, not

stock

favorite

Phelps

is

so.
My
Dodge.

however, has
only
declined from a price of 76 to
around
55
today.
Africa
is a
stock,

This

large producer of copper and may
ultimately determine the price of
the metal, and

I

hence when to buy

stocks.

copper
am

taking with me a column

which I have already
will correct while in
will then air¬
mail a corrected copy. Let me add
that three African copper stocks
on

copper

written and

already

Reserve

System.

Federal

Deposit

Insurance

There

are

investments

and
a

Oil

the N.

Y.

the

U.

in

few good

Africa

uranium

in

properties located

S.

on

Corp.

in

on

BANK
AND

Exchange.

Uranium

States.

Federal

listed

the

Colorado

Miss

both African oil Hardie was with Somerset Secu-

these stocks should go up

purchase

Stock

22,613

State banking departments and
by State banking departments and
^Supervised by State banking departments only.
by

Rhodes, which I have just finished

changes the price

country

within

'Supervised by Comptroller of the Currency. (Includes 0 nonnational banks in the
District of Columbia, 5 member and 4 nonmember insured banks with 23 branches.)
•-'Includes H

on

probably reading the life of Cecil

Canada. I do not intend to Hardie

ui

the prospects for

and

enter into

much more.

are

Total

plans

against Near East losses. I must

South Africa; and I

Branches

develops

past

Members of
Fed.

Federal Deposit Ins.

banks

this

if

in

we

Are

Members of Both the

Desert

visit Africa because the African

inflation

to

If

time.

38

(Figures in Millions of-Dollars)
Fed. Res. System and

Sahara

t

t

reference in these

I have made

columns

VI

All Operating Banks—Continental United States and Other Areas

comm'l

Outlook

and

of

large corporations are
frantically drilling for oil in

-

e

definit? intonnation toda^!*

to

of

and

Gaulle

statements or confirm them visit these dumps or the very with Scott, Bancroft
through these columns. Africa is interesting diamond mines. How- Montgomery Street.

mines

the American

of

De

my

intend

lent Schools of Banking.

TABLE

State

oil,

Roffer W. Babion

all concerned

spaken

great

nation.

having the Paris Bourse take the

d

mined

this

banking work and sala¬

ries attractive to

Reserve

recognized

est

nthm- Tr>f»+ni<*
a m

responsibility

and faithful officers and

have

We

the

r,

gold I find that over one half of
the Free World's gold comes from

initially

reserves

the House Ways and Means Com¬

mittee.

all

favorable

more

banks

and

deductions against

as

taxable

is Table VII

brought

re¬

shareholders,

or

reserve

Missouri

of

tax-free

up to 12% of total deposits
withdrawable accounts of their

or

Thomas

Curtis

sav¬

are per¬

serves

important bill, H. R.
8737, introduced by the Honorable
B.

now

e

~m,

of gold,

mitted

controls

be¬

which

Africa wilL be the world's great¬

Certain

gold,
p

tion, gold stocks will go up. They
have already made advances; but

formula

Another

p

for bad debts equal to 24%

ings and loan associations

nation

the

great

He

world.

mines such as exist in Colorado ert L. Coate and Katharine L.

of the

of

properly

the

I

as

reserve.

o

vestment

factor

that

lieves

■

bank is permitted under the pres¬
ent formula to establish reserves

loss

of

correct

having small factors. To illustrate
the spread between the high and
low loan loss factors, a particular

Mutual

storehouse

either

reserves

Reserve

that Africa has become the

doing

It revealed sub¬
inequities between com¬
banks having high loan
experience factors and those

loan

ac¬

loss

thirties.

a

have

great; responsibilities

the

sur¬

stantial

has

never

They

mercial
loss

oil
in. Africa,

holdings

get first-hand

the

which

Stock

about
c

for bad debts by

into

-■

which he has assumed.* He knows

that Africa is the great store¬

theses columns

reserves

commercial banks
under the present formula is 2.4,3
of eligible loans. This study takes

'

you read this column I Plateau; but most good uranium place of the London
Stock Exexpect to be on the high seas mines on this continent are in change in connection with, these
heading for Africa. You probably Canada. Your broker should be mining and oil developments. I
think this is a foolish thing for familiar with such properties. The know Paris, and in fact once had
me to
do, but greatest amount of uranium, how- an office there. One mission of my
following are ever, is now coming from Africa. Present trip to Africa.. is to assome
good Your
broker
probably- knows certain how de Gaulle will sucreasons..
In African uranium mines only by ceed in his magnificent program
view of what hearsay. I expect to get the actual and with what financial instituI have said in facts.
tions he will work. He today is

which points up the need
for a more adequate and equitable
formula. The study disclosed that
the average ceiling amount which
be

:

When

banks

early

Two other matters of important

legislation

reserves

may

aware

mineral

Gaulle would

cepted

plans to have the Paris Bourse
Exchange in connection with
mining and oil developments.

London

the

replace

debts

gross

$48.0 billion,
National

Believes De Gaulle is

oil.

been

established by-banks
passed by the. Senate - March ;21, under the reserve method were
1957, failed to be reported out of $1,667 million as of Dec. 31, 1957.
the Banking and Currency Com-.
A study has been made of "Re¬
mittee in the House of Repre¬
serve
for
Bad
Debt Losses
oh
sentatives in the recent session. It Loans" in
all insured commercial
included

personally facts about basic
commodities produced there, Mr. Babson comments on the
outlook for such African goods as gold, copper, uranium and

1957, 2,772 Na¬
maintaining Re¬

were

$920.7

debt

En route to Africa to observe

house of the world and that he

end

tional banks

and

de

*;

the

At

have

mentioned

reserves

Paris

If France did not have large

banking hazard

are a

25

Watch De Gaulle Operate From

pated that losses will at some time
and may become abnormally
large" under unfavorable condi¬

; occur

Roman, Horace, who wrote:
"So

(1349)

AT WAf:

TRUST

COMPANY

26

The Commercial and Financial Chronicle

(1350)

.

.

Thursday, October 2, 1958

.

Opportunities and Challenges in Industry
I

far from

am

being

a

By DON G. MITCHELL*

conserv¬

Chairman of the Board and President, Sylvania Electric Products, Inc.

sequently, a few weeks ago when
I began mull¬
ing o ver in
my mind what

Mr. Mitchell
new

the recession and

I decided
ought to be

reasona

and
ru

data

bly

tive.

p

then

But
went

weeks

Don

G. Mitchell

a guess

just decided that
they would not only continue to
let the British working man de¬
posit money but for the first time

decided that if British banking

through that sort of ago¬
nizing reappraisal, there would be
go

nothing

in

wrong

frank

rather

some

urges

my

making

observations.

They will be made with banking's
at heart, because I

best interests

billion in the second quarter, and

I'll lead with my chin with

Now

prediction:

believe that
fourth quarter not only will
a

ceed

the

previous

record

to

the

increase

and

revenue

would
the

of

other

tax

$450 billion. That should be am¬
ple enough optimism for bankers

Federal

long

in

clouds

a

year

ago

the

gathering
picture was

were

economic

than it had been since
here

we

storm

and the
cloudier
But

1953.

only 12 months later,
climbing out of a large-scale in¬
ventory adjustment; that hit sdme

a

year

greatly
in

revenue

keynote

in¬
the

My specific advice to each and
businessman is to let your
Senators
and your Congressmen
every

what

matters,

and

it No.

on

1

session ot

are,

possibly do.
I
firmly

believe

businessman

in

think on these
ask t^eip, to place
the list for'the next
you

Cpngress. We business¬

Recovery
To

be

(1) Give special tax concessions
to

small

new

recovery, there is every indica¬
tion that the 1957-58 adjustment

has been only a little less severe
than the recession of 1948-49 and
1953-54.

However, the current

re¬

considerably sharp¬
er than the others
perhaps too
sharp, from the standpoint of the
dangers of inflation.
The turn¬

covery seems

—

around

Gross

in

came

National

April

Product

they

address

by

Mr.

and
hit

Mitchell

the

$428
at

the

First General Session of the 84th Annual
Convention
of
the
American
Bankers

Association, Chicago, 111., Sept. 23, 1958.




get

businesses

their

feet

so

on

that
the

plow back more money into
spend more on research and new
product development. "
(3) Permit more liberal denretry

allowances

so

that

indus¬

produce constantly better
products with better machinery.
can

(4)
rates

Reduce
on

those

impossible

higher individual income

brackets to make

more

risk capi¬

tal

available for the expansion of
business and industry.

(5)

could

Straighten
of

excise

out
taxes

that

night¬

and

make
them equitable and
reasonable, so
that the public can
buy more with
their dollars.
If
done

properly,

cost

as

We

called

a

all of

business leaders from all

over

United States and Canada.

top

bear

out

at

hand.

of

us

of

management

,Who"

Canadian

of

people

—

business leaders from

pretty

first

the

that

a

They
they

we

harder

look

spelled

out

precisely

what

know that

the

bottom

of

the

re¬

cession had been reached during
April, but by putting the facts on
the line, these businessmen
gave
the

recovery

spark.

And

that
then

vital
as

-

extra

dramatic

proof of the Administration's high
regard for the job these business¬

postwar

taking
at

the

entire

ne¬

and

longer

a

our

years

the

about 60%

war,

of, the

,

total

went

for

reversed

are

for

more

60%

reiacement
and

of

-

ob¬

40%,. for .ex¬

pansion, and that shift came pri*
marily because of the busiriess
adjustment.v
1
\
\ ■

'

„

Must Invest to Survive

do

during this recession.
know why

you

we

were,

do it, and

why the.recov¬
got under way faster than any

ery

of

the

it

would?

economic

thought

experts
happened

It

note

1

because

I

said

increase

and improve

productive capacity.

our

Making
something is only part
story;
we" must
make

of

more

the

greater
lower

quantities

unit

markets.

We

must

and

new

at

in

cost

our

that

to

and
build

only that, but

develop new products
of making them -7

ways

is

a

technology
increasingly

producing

complicated
all the jobs
You

lower

order

Not

all of it in the face of

products

to perform
expect of them.

we

can

wrap up this entire
subj ect under the word "automa¬

tion"—the need for
broader

use,; of

broader and

a

mechanical

and
electronic equipment to help men
do their jobs — not. to

displace
them, but to extend the breadth
of

man's

mind and

his hands. *•' '{V

That

opera¬

Industry has done a terrific job
cutting costs and improving

able to

word

\,

the

power

,A V

of
•'

"automation"

"V

scares

some people.
They envision riian
being thrown out of work and the

few
remaining
emloyees being
relegated to becoming a sort of
baby sitter to a huge and. com-plicated machine—oiling it here,

and tightening a nut there. What
they forget is that machines re-;
move drudgery;
they don't remove

jobs.

They create jobs.

;

;

v

plants and equipment were in Automation in
Manufacturing and
top shape. We were equipped to
;,■{'; • 7
■ the Office
> .■;. [
do
a
job.
And the companies
our

.

with

the

ment

are

back

best

are

Sees

one

reason:

competitive.

Upward

.

_

Capital

manufacturing plant, and then in
the office—in other words, manu¬
their

coming
{

Spending

Since the

V-

in

have

greater portion of

ing

most, of
the

spent

time build¬

our

organizations

our

panding

ana

"

ex¬

capacity,
and
we
didn't have any choice. We spent

more

our

money

equipment
our

history. If

have

•

on

new

than

ended

ever

plant
before

and
in

hadn't,we wthild

we

in the cellar, be¬
cause
our
competition sure
as
shooting
wasn't
standing
still.

However,
pulls ahead
have

to

spending.
triggered
year.

up

capacity
periodically
of demand, and you

slow

down

capital
That is precisely what

off

But

the

the

your

recession

two

are

back

last

in

phase again, and capital spending
should begin to turn upward
by
year-end, and I wouldn't be sur¬
prised to- see it reach the annual
rate

of

$31

billion

Some

in

the

fourth

the

it

>

of you

impression

1

five

turing

six

or

in

not

goes

business-

that

make

-

the

than

years

past 25—and

only for manufac¬

industry,

but

banks: and

transportation and the entire wide
range
of service industries,
In
these
competitive days, it is a
matter

of

survival.

don't

make

tures

will

their
the

new

see

by

Those

who

capital expendi¬

their

investment
drain

•

business

and

washed
down
obsolescence.: I

could

name some
fairly prominent
companies that found themselves
in that situation.

Present-day plants
ment

could

never

and equip¬
begin to do all

of the work that will be
in the years ahead. This
an

required
presents

enormous

every

try.

planning problem to
businessman in this coun¬

The
in

future

a

guess

will

capital expenditures in
made

backdrop against which
industry are looking at the
is

this:

The

undoubtedly have mation will
have to
that

a

business

next

has

that

In those two

I will hazard

areas,

we

quarter.

the

istrative automation.

larger

end the war,

industry

facturing automation and admin¬

American

Thrust

us

Let's look at automation in the

plants and equip¬

the ones who are

first—-for

costs

va¬

doing to beat the re¬
Looking back, we now

in

faced with

were

for

And

the

were

cession.

of the war,

time

efficiencies

the

lion, and sales approximating $18
billion, put the facts on the line.

had

smooth

cessity

of

and

wide

one

we

tions than ever before, and then
doing something about them.

and

riety of industry, with a total
employment of more than I V2 mil¬

every

sailing ever
barring
a little adjustment here and there,
and that this recession was really

industry.
During the
session,
16 " top-level

two-day

deep,<

problem

knew full well that

since the end

These

American

the

on

Down

and
and

systems

our

hard

down

had

inefficiencies,

fat,

softness

beat the

to buckle down and

was

the

get

the chief executives and the

"Who's

after

more

of

had in mind the inescap¬

us

recession

than 2,000

more

and

<v

pri£Capital

■

able fact that the way to

two-day Economic

brought together

s.

at

the

industry
and • spark

Conference

in

a

controls, market de¬

them toward doing the same thing.

Mobilization

was

how
to
streamline
the same time strengthen
organization, and right down
line. You can readily see that

and

of

done

be

There

provements,

various businesses
rest

conference

as

your

.

(2) Reduce the tax rates on cor¬
porate earnings so that industry
new plant and
equipment and can

ciation

what

were

ground.

mare

♦An

can

can

specific about the

more

the

in

show the

Vice-President

over

address;

velopment,

only received the
they deserved, but that the

should

doing,

recovery programs

areas

businessmen not
credit

step: right

'U" V:-V-'-;7" L:. Y;•;

>;

percentages

—and they reached into such vital

man have got to stop being bashful
about
making
our
views
known on major issues.
Other

leaders
every

Submits Five Point Program

•

Sees Marked End of Year

we can

that

country must
keep hammering away at the ne¬
cessity for doing five things:

to

"adjust."
You
can't
go
on
forever
consuming
more than you're
producing, and
that is precisely what we've been
doing for the past year.

economic

growth than anything else

our economy relatively
After all, there isn't much

inventory left

our

treasurer

expansion, but the balance gradu¬
ally shifted, and this year the

we

•

run.

know

financial

solete, facilties

took

And when, we

forget about it^
vice-president and

the

or

were

,

and

the

us.

invest^

on,

by, it,' we>. gleep
keep femiiidin^

Regardless of what, the percent¬
resounding endorsement if I ever- ages are, however, that total is
going to keep on climbing. It Will
heard one.
«
have to keep on climbing. if we
This was no conference: loaded
want to keep increasing and im¬
with platitudes and high-sounding
proving our productive capacity,
phrases—a lot of "big talk" and
which is the very key to the con¬
very little "do."
These business¬
tinued growth of our economy and
men described their concrete plans
our
standard of living.
You will
of action—their

liberal

ago,

greater stimulant to

sections of
hard.

we

Chairman of the final session, and
President
Eisenhower gave the

emphasize
more

a

would

structure

crease

Nixon

I

areas.

tax

of

men

some

but that didn't groups are campaigning forcefully
by the banks
do the job alone.
Moreover, let's and effectively
and
sometimes
that are a little faster on their
be. thankful that Congress didn't
feet.
To the aggressive, imagi¬
viciously for what they want.
get
stampeded into voting a tax Let's get off the fence and stand
native, and progressive bank will
cut. And no one can give credit
come
more
up and fight for what we know
opportunities in the
for the recovery to government is
next five or 10 years than have
right and good for the continued
spending;
actual
defense
spending
growth of this country.
prevailed in the past 25 or 30. If
hasn't picked up \ that much, nor
you think the past 10 years have
have we felt the impact of other
Business Cuts Sparked Recovery
been a period of amazing eco¬
government projects — the high¬
Back in New York last May,
nomic
growth and development,
there was a dramatic demonstra¬
just tighten your seat-belts for way program, for example.
tion of what really sparked the
the next decade.
Tax Overhaul Not Tax Cut
I would like to tell you why I
recovery. V That spark came from
Let's look more closely at that the
am
convinced that this .country
strength and vitality of pri¬
question of tax reductions for a vate enterprise. It was becoming
is on the verge of an entirely new
moment. To my way of thinking,
era
of
increasingly
apparent
early, in
progress- throughout
the
there was one of the most over- March
that plenty of businessmen
economy—and that the banker's
inflated
issues to come up the had rolled
job and my job in the next few
up
their sleeves and
pike in many a year. From the were
years will be more than simply
doing a terrific job of tight¬
standpoint
of
psychological
effect, ening up ship—and tightening it
finding opportunities, but of de¬
a
cut in personal
income taxes up in a
ciding
whichs opportunity we
way that had never been
should select. If we falter, if we might • have accomplished some¬ done before. They were doing far
From the more than the old-fashioned
lose courage, if we take refuge thing, but I doubt it.
job
in conservatism and do things just standpoint of its economic impact, of
axe-swinging
and
arbitrary
it would have been a very, very
the way we've always done them
cost-cutting to bring things in
small drop in the bucket.
and forget about using more in¬
line.
In industry after industry
However, we have to be careful they were doing an intelligent
genuity and new ideas, then our
not to confuse an arbitrary shortcompetition will pull out in front
job and a carefully thought out
term tax cut with a general over¬
and leave us scrambling for the
job of beating the recession. At
hauling of our entire tax struc¬ one of our American
odds and ends that are left.
;
Management
I certainly am grateful that this ture'. A drastic dverhauling is long Association
board
meetings, we
over-due
and
would
provide a decided
is September, 1958, instead of 1957
that
it
was
time
that
—because

and

it,

or

than it has in

years

government

,

,

by

years

automating the

more on

offset

reductions

short-term

ex¬

rate

$445 Vz billion in the third quarter
of last year but will reach nearly

credit

the

short-term because

,

line

the basic im¬

on

investment—automation—for economic

increasing

the

I

sincerely believe that there are to chew on.
great opportunities ahead for
What sparked the recovery?—
the industry.
thai is the big question.
It cer¬
This economy of ours is about
to take off in high gear again, and tainly wasn't generated by any,
artificial controls or dp-controls.
bankers' will have the choice of
The "Fed" helped' a little by re¬
individually aiding and encourag¬
ing that growth or being left at laxing some of the controls on
starting

eat

Where does all the money, go?
Taking manufacturing industry as
a
whole, about half of it goes
for new plant and about half for
ew. equipment. For three or four

could not do before and to pay for itself.

some

the

-We

remind

businessmen to let: their

is made that business will spend

probably reached the rate of
history, they would actually let nearly $440 billion in the third.

him borrow some! That did it. And

can

cow ---"return

ment.''

ourselves about it.

five point

a

Further, he stresses the computer's ability to do things

past 25 years.

ish banking had

I

and

economy

manufacturing plant and the office in the next five-six

ago,
and I
changed my mind in a hurry. I
learned that the Big Five in Brit¬

in

The Sylvania head submits

be made known. Emphasis is placed

inevitably

of

growth, and

associate

several

these points

on

portance

Brit¬

our

ish

sacred

than expected; and {projects

sooner

recovery

entirely

an

credits business fort ending

economy;

$800-850 billion by 1975.

designed to aid the

program

views

annual trip to
visit

sparking the

of

verge

I

my

on

throughout the

the

we are on

:

depicting G.N.P. will be $449 billion by end of 1958, $500 billion by

1961 and

dis-

not

never happier than when,
making capital expenditures.
You
are
absolutely right. You,,
make money by spending
money.
At the same time, we have a very

tend to relax

servative

c o n

explains why he is convinced

of progress

era

subject to dis-,
cuss,

I

-is

man

he is

ative, and I like to think of new
ways to meet new conditions. Con¬

let alone

rate
be

maintained, if

of

auto¬

increased,
we

are

to

Volume

meet

188

Number 5782

future

the

demands

...

of

The Commercial and Financial Chronicle

our

customers.

the

By

should

do

to

able

end

of

a

new

hit

this

year, we
record
Gross

things
to

do

thought
At

have

we

before,

or

been

never

Sylvania

we

rule in many of these
local enterprises, and there
they have to learn
the hard way.
My suggestion is

or transportation, or communica-' At
the
tions, the heart of these activities and we

for

communications

is

have found
can do better,

operation our figure factory near

within

10
years.
'And
the trends ahead 20; Syracuse, N. Y., and a nationcommunciations
network,
we could
well achieve a wide
National Product of $800 This Data Processing Center rep-

billion

projecting
years,

Gross
to $850
r"

resents

billion by 1975.

These

simply

purely and
projection of existing

figures
a

trends of

are

existing demands.

They

conservative, if anything. But

are

the

only

mands

these potential de->

way

can

be met will be through

an

investment of close to

million-

$4

when

include

you

startmg-up charges.
We re now
doing company-wide payroll, acr
counrs

so :

receivables, and

payaoie,

things

we've- doing

And

ony

some

able to
But here's the real paynever

we ve

been

of machines, do before.
maintaining th^rate we' off: We are beginning to see optoday. ^ ThereZ won't be portunities we didn't even know

increasing our use

the

young

!'

•

plenty of tnings we
Product of $449 billion.
By 1961, we should be getting up ? faster, and less expensively
near $500 billion,
and I wouldn't; through automatic ctata processbe surprised to see it nearing $600 ing. In April 1956, we placed in

National

than

have never

existed before.

even

(1351)

no

specific

a

enoughi people

in

the

working

of helping

program

sound
and

investment

so on.'

Someone

,

extending

in real
t !■
''

li

.

might
a

estate,

•!.

ft f.,,!',. .fi.,,.;

this

feel

emy

next 20

million jobs over the

because there won't be any¬

years

body to fill them.

Not only that,

but more and more automation is

the only way we

will be able to
fight inflation by counteracting
the rising costs of doing business.
That is the task

facing industry in

the years

ahead, and it's going to
require enormous amounts of new
capital.
Vl,'\
'f

Now look at the

administrative

side of the business, including the

banking
clerical

business.
The cost of
employment in industry

and commerce has been estimated

at

$30 billion, and it is
rising;
Fifteen years ago,
there
were
some
five
million
nearly

Still

clerical

employees, or about 11
for each 100 manufacturing em¬
ployees. Today there are upwards
of twice that number,
and the
ratio is

more

than 16 for each 100

and
That
is the story in a nutshell.
Busi¬
ness
has become so complex in

manufacturing

employees,

that percentage is growing.

every

better,

phase of its operations that
faster ways of doing ad¬
work are becoming

ministrative

Again,
there won't be enough people to
do the job and we will find it
necessary to make broader
and
increasingly

broader

use

necessary.

of machines. ;

which we based the entire
project in the first place.
Now that you have seen some of
the benefits you can get out ot
automating your paperwork, let
upon

throw

me

to you.

an

even

meatier

bone

One of the outgrowths ot
mechanization

industrial

par-

Ueularly during the past 10

years,

has

been

sion

of the distribution and serv-

the

enormous

expan-

industry—the wholesalers, job-

ice

bers,

and
in
in

outlets
outlets

the

retail

vour
your

service

and

communities—in
communiues-^n

other

words, the local business
people who bring all of industry's
products to the consumer.
Electronics

'7.7

Distribution and

banking service too

far, but to

me
tomer service

it is simply

...

nile

in
in

nues

tion

thp
the

and

should

10

/jfctrfhu"

distribu-

business

$3%

times

.

0

electronics

service

reach

about

_-i__

billion,

what

it

alone

(that's
was

10

gadget

of

or

radar; but there

some

to

countermeasures.

tronics

cus-

we

are

counter-

the

enemy's

In

home

getting

do well.

we

earn

getting

.

The

there.

It

whether

opportunities will be

is

or

entirely up to us
we will take ad¬

not

vantage of them.

77

On European
Maurice Hart,

and

the New York

have wireless

.

Predicts Boom to Electronics

electric

circuits

Hans eatic

Corporation,
120 Broadway,
New

in

|!, City,

your home,
arid there will be
electronic still and motion picture

have

cameras.

been describing will take- place

for

And that is only the be¬

ginning. fly■. - .vt

.■

C-v''iy:

•

■ .*• 'iv

There will be plenty of

l■

downs

as

ups

...

y.v*

and

this progress unfolds in

without question,
the fastest growing major in-

r

can't go

I

remarks

much farther in my

Maurice

Hart

With Harris, Upham
FRANCISCO,

SAN

Joseph C. Morey has become af¬
guesswork are long since gone
filiated
with Harris, Upham &
Planning must look at
Home electronics has boomed
Co., 232 Montgomery Street.
with television, and National De- least four or five years ahead—it
must be systematic—and the plans
fense
is
becoming
increasingly
must be used, and not filed away
electronified, but the big untapped
With Henry A. Young
reservoir is the commercial and in the financial department and
(Special to The Financial Chronicle)
forgotten.
industrial market, both from the
.

*

.

,

,

way

a

forever.

.

product

is produced and the end product
Whether you have in mind
cteel-rolling
or
food nrocessins?
sxeei roiling, or rood piocessing,
*■

1

1

——

FRANCISCO, Calif.—
K. Knox is now with
its share of blame for some things Henry A. Young & Co., 155 Mont¬
'
^'7 7::-?
that have happened in the past. gomery Street. Just

as

in the

case

the banking business

SAN

of industry,

has received

George

.

——~
1

,

banking business to help
in your local
communities to grow and prosper.
enterprises

without

saying

some¬

thing about the computer, because
it is the heart of administrative

.

'

rat-

hole, I want to say again that the
way to make money is to spend
money.
Bankers throughout the

assuring the growth
prosperity of their communi¬
ties by rolling up their sleeves and
ready know from personal ex¬
taking an aggressive and imagi¬
perience, the computer is the native
approach to the many busi¬
most compelling and far-reaching
ness opportunities available them.
phenomenon to confront us for a
As I travel around the country, I
long, long time. To may way of
notice that the leading bankers
thinking, the- computer . is hot
have developed a more realistic
simply an electronic gadget, it
willingness
to
take
reasonable
embraces the Whole field of elec¬
risks, because they have found
tronics.
It is to electronics what
that taking reasonable risks is the
the
engine
is
to
locomotion,
way you get ahead in any busi¬
whether you- are thinking about
ness—banking included. I am sure
an automobile, or an airplane,
oa*
you will admit that this progres¬
a train, or anything else.
sive point of view hasn't yet pene¬
"V Ingenious as the computer is, trated to some communities, and
however, it Is not a cure-all. It's in some areas industry found that
a tool, and that's all.
A computer it had to do the financial job it¬
cannot thing, .although it certainly
self, not because it is our logical
comes
amazingly close to it—so role but because we had to, in
close, in fact, that it fools people. order to keep our distributors in
But if you ask a computer a silly business.
question, you'll get back a mighty
However, these local businesses
silly answer. However, from the need' even more than financial
'standpoint of members of banking
help.
I don't know of a better
management^ the computer can way to provide real collateral for
extend your business procedures,
a loan than to do everything you
automation.

'

a

As

some

bankers al¬

cpuntry are

and

.

systems, and planning to

of

a

degree

skill, speed, and effectiveness

that

has

never

been

even

re¬

motely achieved to date.

".

In

looking

at computers, you
have to keep in mind one ex¬
tremely important point: It is not
simply a question of what the
computer will do better
I like

or

faster.

to

regard those as the im¬
payoffs to the substan¬
that a computer and a
data processing system cost.
In¬
creased speed, and the elimination
mediate
tial

of

sums

paperwork

quick payoffs.

drudgery,
Far

more

are

the

impor¬

tant, however, is the opportunity




to make the borrower's busi¬

can

successful.

ness

More

and

more

banks have business development

With the establishment of
ices to 21 island
has
on

mobile banking

serv-.

communities, Banco Popular

developed by far the largest branch network

Our 42 offices provide island wide facilities making it possible for

hank

the island.

your

collections to receive the

fastest and most effective service offered by any
on

the island.

departments, or you might even
call them business advisory and

departments, and
prime objectives is to
help their clients insure not only
a
good financial control over the
funds
already
invested in
the
business but to plan their future
encouragement

one

of their

BANCO POPULAR
DE PUERTO RICO

needs.
Banks Must

Lend

a

Hand

Manufacturers

and

bankers

remember

that

experience

must

in business is the exception rather

v

Calif.—

the next decade

the

pouring money down

in

England, Hol¬
land, Belgium,

("Special to The Financial Chronicle)

problems for the local busi¬

cate

visit

financial

France,
Switzerland and Italy..

y Whereas 1 certainly cr^n't advo¬
Computer's Crucial Importance

will

centers

nessman, but by the same token,
it will bring a great opportunity

these

trip
to
Europe where

the

a

27
ex¬

busi-

hess
he

the years

ahead. After all, this is
dynamic economy, ; and there
Is
will always be some things that
dustry
in
the
world.
It
has we will not be able to predict or
doubled since the end of the war to counteract. But the underlying
and is well on its way toward strength of this growth will be
doubling again-and this time the determined to a great extent by
interval will be less than 10 years, the financial planning that bank¬
j d0ll>t care what industrial or ers and businessmen do. The days
commercial
field you have in of restricting planning to, shortmind
each one is destined to go term objectives and doing it by
through an electronic revolution too much reliance on intuition and

Here,

leaves
an

tended
,

>

s

York

Sept.

on

by 1961 and reach nearly
$7 billion by 1966—or double what
it is today.
This rate of growth
will bring with it plenty of finan¬

for

Tour

Vice-President'of

billion

cial

y(y

,

Maurice Hart Leaves;

ago) and it will add another

years

.■>

.

.

'1

ironies.

a reason¬

Let's make sure that

all the more credit in the

future.

elec¬

nearer

time, however, you

now

we

en¬

are

are

able share of credit for the things

It may be a microwave
network

same

arid when you nearer to flat-wall pictures—not
stop -thinking
about
customer tomorrow, -but- not' too far awqy-P
service, your customers will stop -and soon, radar steering will takd
over your automobile.
tWnking about you.
Yotf will
-

standpoint of the

Service Growth
•

rpi

sort.

countermeasures

was

ing demands? for goods and serv-■ fruitful areas. Furtheimore, we re .throughout the- economy—hut one
ices. rWhat I am really saying is in the black—the system is more
j„dustl.y will, out-pace all the
this: Let alone create more jobs,? .than paying its own. way, end. 0thers in the
opportunitlCs it'wiU
were moving toward the savings
automation must eliminate some
bring the banking business_elec20

electronic

an

ment which would counteract

'

'SS1, The-economic .growth i

force to meet the steadily increas¬

some

be

them obtain a good return on their process: control device, or fool¬
investment,; and that can come ' proof airway navigation, but it
only when they have sound ac- will be electronic.
counting practices, good inventory j To sense the possibilities, all
control, good control of receiv- you need do is look at National
ables and the extension of credit, ;
Defense. There not only is equip¬

let alone

have!

will

reason

27

Puerto Rice's

is

now

largest banking institution

celebrating

service to

its

45th

world wide trade.

year

ESTABLISHED

IN

1893

of
MEMRER

FEDERAL

DEPOSIT

INSURANCE

CORPORATION

..

..

28

(1352)

The Commercial and Financial Chronicle

.

.

Thursday, October 2, 1958

.

What's Ahead for Real Estate?
If

can

we

tions,

three

answer

ques¬

JAMES

By

C.

DOWNS,

JR.*

States,

tell pretty well what

we can

Chairman

is going to happen to real estate
investments and real estate men.

of

the

of

Board

the

Real

Estate

much

Research

Corporation,

Chicago

The

first

tions

of

Specialist

ques¬

what

is

real estate depression in tfie offing but he pessimistically

no

that the real

warns

is the outlook

sees

estate markets

will weaken further in the

unless

current

analyst claims housing supply rate

is

year

comedian
reflects

—

—

unless

it

and
are

up;

estate,
unless busi¬

James

C. Dtovns,

Jr.

force

are

of 1959 and notes that mortgage

second

thing

is

in

are

in¬

outlook

for

we

the

mortgage money.
After all, almost all real estate buyers in the
United
States
haven't
enough

world to pay for
the purchase they make in real
estate.
The only way they are
able to buy it is to be able to
borrow
money
on
terms which
in

money

in

the

the

rates

money

a

to

ion.that

Mortgage Money Outlook
Now let

high-level pros-

a new

Parity is around the

corner.

;

But

as beguiling as these facts
they are not being reflected
at this moment in a change in the
trends in the labor force.
For
example, .we are seeing some expansion in industrial production
at this moment, but not too much'
expansion in industrial employ-

are,

fabricated

;

past ten months,

have,

we

nessed the most tortuoiis gyrations
of the money rate that have ever
been experienced in any like pe~
riod in the historyof this .ecdn-

continue, that a high percent¬
of these savings, as invested,

I

we

put

up

of

in

wanted

the

to

last several

years.

discuss; that is, real

Real Estate Outlook

.

Nineteen

fifty-eight has been
the second year of a declining volume of real estate sales.
1957 was
not

-

as good for the
average real
as 1956 was, except
the West Coast where 1957 ree-r

estate broker,
on

ords

seen

of

the

decline

a

tween

In most of the

made.

were

balance

Home Acceptance that our current rate is 8 points and may be

Last November,'our'index

omy.

and

to the best deal we
made this year at 4 point's. We
arc now notified by National

of the effective borrowing rate for:
real estate borrowers for theVna-

level

high

a

estate itself.

down

£°t

anticipate
savings

we are

will

rienced

policy, We had the money, buf
it was costing us 13 points. We'

wit-

event,

any

This brings me to the third thing

v.:

outfit,

>

.

find their
way into real es-:
tate, but that there will be some
queasiness on the part. of the
market to go into real estate to.
the degree that we have expe¬

way

houses. Last November we were
paying 13 points discount for GL

give attention to the
question we have..In thfe

second

us

w

-

that

.

tion
are
climbing up. Generally
speaking, people are of the opin-

analysis.

will

Calls attention

changing attitude towards fixed investments.

money
contend

must

ing
age

estate outlook but

employment growth is the key to real estate's future.

so

are

of

movement

bankers

in the final

In

until

the

are on

not

bankers
who

savers

Sees Continued High Savings Rate

He predicts that
area

basic

that

rates

concerning industrial plant expansion; and declares urban labor

to buy it, unless
industry is expanding and, thus,
buys it, we do not do well.
The

faster rate than

a

strength would develop in the typical metropolitan

healthy enough

terested

at

bullishness about commercial and farm'real

expresses

is doubtful

real

far in 1958 is

so

though total housing demand has heen less.

even

second quarter

to r buy

nesses

ago

real market

no

con-

stimers

able

a

what

goes on

a

optimism is translated into higher employment. The Chicago

business, b ecause,
after
all, real estate
of

few months

impact

long run still going to be
high level of prosperity, but

in

with

for general

sort

next

has

the money that

the

over

-

those

and

on

taking in from

are

10%

country,
of

and

1958 has

somewhere be¬

20%

in

vol-j

trte

9 points. My own feeling is that ume of real estate transactions in
tion stood at G.19%. Last'month
may %° above that. We know this country over 1957, and we are
•
:
it stood at'5.41%. Basic money of the 9 points now scheduled.
availability and the cost of the ment.
,
down
now
somewhere
in
the
value of the
meney
they may
The fact is that when we conMarkets, which began to go-down'
The fact is that money rates for order of 25% in the volume of
borrow.
sidcr the present leal-estate situ-" last November, hit their bdttdm mortgage lending are on the way transactions from 1956.
\
The third thing we must know ation as we will shortly wo must in about May; and since May have
tup for the balance, we believe, of
During this period, we have
is the supply and demand relatranslate this into growth of labor been going up.
this year. Actually, money rates continued to add to the supply of
tionships in the individual mar- force hi local communities, and 1 But basic
money rates are' not are' more nearly affected by polireal estate in this country.
For'
kets which .make up the broad we
aro not currently
getting that always exactly .the same as mcirt- i tics noW,. and it is ?vow a more example, we have had a bulge in
are

satisfactory

we

are

Thus,

them.

to

in

interested

both

the

.

-

,

.

....

term of real estate.
to

make

.

.

I -would like

observations

some

er0vvth

what general business may. mean
to real estate in the year ahead.
From

purely real estate point
of view, that is, from the point of
view

a

residential

of

particularly,

now

we

rates

cage

demonstrable theorem >that money
are
controlled
by politics

There are two-factors

on

real

estate

are

inter-

Post-Korean Record

•'

^ 1952,

ning

we were in .the beginthe post-Korean adjust-

of

ment.

...

We had

had

wc

.

big bulge in' 1950 and
Miowthrough on'that'

a

a

money rates; If yod take the,'highgrade ..bond .'rate-and,-4et
soy,
for example, that it was at 3%,
the mortgage rate is established

than/he effort

was

starts this year 'to a latest adjusted;
level of
aboqt
1,170,000; starts.-

before. If the; task year

we

election mandate is what it ,ap4 nfefeftst

now to- fee, the, facts are,
^bat there wnl be a push for. loan,
by what \ve call the; mortgage money rates next year so that -the
money^' margin:
The mortgage"'^
Pears

r

! ■

are;

thatr

this bulge will slow down} im the*
last

,

good; yearViii

a

The probabilities

more.,

;

had

several mqnths of
of the money

thisyear,

because

rates:

we f

talked, about,' but^

just

as

rates you,:

have iseenf a
h substantial activity, on the
parUof
in: the -lew;

consumers

encKdf'ihe

lining of

o&tifeWi-:s
:

." houses.;-

'

4The-;average ^builder,^building
a ; soundi; markfet^fctos

tpdayy qn
The

Ihbor

urban

force

is

theL

guts of real esthte, to use a word
that my
The fact
ment

mother always despised.
is that 'jlist at the mo-

we

are

in

rash of national

a

optimism.
Stock market figures
are impressive and. market prices
arc going up.
Indices of produc"

■"From

Savings

a

and

American
nual

talk

'

-

by Mr. Downs before the

Mortgage

Bankers

convention,

Division

of

Associati-n's 84th

Chicago,

111.,

Sept.

th?
an¬

22,

1958.

still
|ife
which"iiman-gin ■ is#also>uhlikeiy.'-wildly;'M'bhey-.ratfe situa-, starts sellsMsvhoxi^
;them. The consumer is be^
se(jms to me that business &<>nera£ But what has happened>. inl the;
is;, tha„t::ybn caftft adjust
busineSs
is going io get better' iast se^erah rtlonths is foaWheres
as rapidly ^ and ilfeiiousing;iinit whicK
S
t>ut it will""hot'' bq Proportionately as Money rates reached their low,o^ust'adjust^the low income greatest ;obsplescfehce:
i^fei^or^iat Q
retlected in employment in
the that is, reached their low: in1 Mav^ which you'experienced ^as the re-; we have .seen on
the market.s Unbalance of this year
We have ail and then started to go up; mdrt- suit of the operation .of your port? less
-you'; .have,
seen 4 tbe:
new 14'
election this Fall
The indication^ gage- mohey
rates didn't reach folio. 'I. think ;.lt is- worth saying
'..hofeises^^h dp :iK)t;know^wjhat: a
are
bv
most ' political analysts
their low\ until last foohth'; bfeb ^so .that as we: look at money to-; teri;ific attraction
they are offer-?
outlook

'"-this,

at

it

moment

,

-

£SL Section

wiU

result

In

a

klfe\mai«i.i

pause.

squeezeri^ayadmit, 1 believe,

was

Actually
Actually,

what
wnat

•Ire

two

are

voters ,are.
voteis

inihiStSiecSdnV

they will rav

?1 ?

^things, principally.

(1)

they., don't like the present level
don't

like

the

trend

of

world
'

-

..

.

.

d?^ar. I.agree 100%; with

invest

there^hose who

-j.uese savings in real estate

that the

say

of

savers

iikelihood.liiut'a

a heater
Viol-' the-country as a whole are not at
»ar saved by! John Q. Public will a Poult where they have a distrust
f j ^ "the
highest' percentage
of View ot dollars;
As a matter of
JL,
nignesti peicentage pi,,. , ,
,
;
,

is

'they jhal dollr.r_soing tiito
i°ahs th£|^tdias' qyd

noli tire
•

£re^ter; tendency to

are**1116

the
tne

ipHoday's marke ty-botbias^tq

mg

swing toward /the I The very high incidence oLsav- -that^here^ is^a i gradual; erosion
Democratic Party in terms"' of the -lings, the.fact that in the
savingst.hf;.--^ttitude ? of people,^of
Congress.
V
of this country there is a greater- sophisticated people, dowards the
substantial

^

to

design; • as to equips ^
to terms; whereas, ,
;people-; iris this
economy that are impacted by the -5
unemployment, the bulk of them
a re
still working at; the highest'i
level of. income' they ihave5 ever ;
experienced. Therefore, they are
buy ing-. and buying -rapidly. The
real impact has been felt by the
Space,

as

ment,

and

as

there

are-

many

fact,their'.,
trust view
of had
dollars
i?.
extraordinary.
We have
an
fenced in this country, has pro-^ pi'derly/expansion
the infla- existing^bbtise; ;thb^Ihduse^jn;
fc^Ik
duced r a
competitive
situation tionary move.. But the people who. on
which bankers, have
^ their
which enabled jrhortgage money Put. their^money>in your .savings
mortgages.;.14 4''?&}•;'liV
rates, to resiist thic upward trend gecpunts have just as much confiThe single-family house, which
)asic money rates, and to have deucevin -a--fixed dollar, as ;:they
•„!
P
ilLj.
icLii.t:
.rtid-bpiBrp1 v.Ynii
Jcpf
represents 80% of all real estate
lepiioW'-up,^^
f;You^can:-:set: up
is only now being erased;
;
? T
a|desk_^ightc outside of your sav-r transactions, is the most % impor-*
realexperiestate

been

eveu*

"

-

^

.

Depends
As

on

Washington

forecasters

least

it

has

of *

been

'

business,

•

at

my:, experience
.

that
of

a

has

man

a

greater chance

being accurate if he can. fore¬
going on in Washing¬

•

what

can

go on in the basic
Our forecast is that as

result of the elections this
Fall,
there well be a new stimulus in
a

Congress'in
congress in the'
tne

uie
the

of next

firstnortion
tnst
poition

to produce

year

a

better

climate in
nf Wal pmninv
ln term-?
Liimaie

ment,

term^ oi local employ-

whicn

stimuli

in

struction,
with
easier

it

will

the

with

carry

form

of

and

which

stirauli

in

new

will

the

carry

of

moment, what

national
of WASHINGTON,

bank
D. C.

FOUNDED I«36
MEMBER

tfteDriUt EEiERVg IVSTEM

«

FEDERAL DEPOSIT INSURANCE CORP.




we

will

see

a

we

believe is

gradual

but

that

slow

strengthening of the employment
maikets, but that in the balance
of this year
as

rapidly,

it will not be created
as

new

rates
are

housing

Plles.
..

months

will

now

sup-

the

trends

nlo^wltfc yQti.

that

charnlv

will

and

nnf

tn

ing.

^
o ef hand, behind these
raise consumer savings are other peo-

being exhibited in basic

markets,

money
rathe

reflect

•

fh^ir

♦

hifrii

1

Ple» Ihe sophisticated investors.

I

with

a

raxner snarpiy, not to their high r '
t
associated
of last November, but not too far happen , 10 .pe assouaieq
frnm
.

I

"

if

trust company.

;

rather

..

happen to be

one

real

economist

that

practices

preach., Jt

have

told

ence

In any event, as we
analyze the
business
outlook
at the present

iin

;

;

j

belief is

it

rates.

money

Our

several

con-

form

nan

-taut single; aspect of the market
. ing teller's window^ and you can
" .try' to beguile them "with invest-; to most mortgage investors. ? But
there are other factors of the mar¬
that * in the next
-common stocks and you
mortgage money woulpnt gptrl% of them to go ket. One of these is rental hous¬

-

Sees Rates Going Up

forecast

is) going to

statistics.

PuPii

i:

■

A,;.-;...

;

cast what is

ton than he does if he

/'.j

-

_

that

I

have

estate

what

every

addressed

since

that

*1950 that they ought to buy land,
if they could, and that I wanted
to

buy land.

shouldn't

and

view

of

last

a

the

possibilities

stock market in the

a

the

stock

market

was

sev-

rela-

tively high priced. We have found
that

But I know enough
•

people are restive under such
an attitude, that they want to get
into the stock market, that there

ever

buy land unless is a generally accepted sophistiIn order to cated feeling that fixed dollar init, I went into the ^vestment? are for the birds.
building business and became a
This, in my .opinion, is. gradnational homes dealer, the pre- ually
growing in these
United
you

have

had
a

a

use

use

for it.

for

„

In this period when
added

new

jobs in

we

have

your

com¬

munity, for in the average

com¬

munity in the United States today
there

are

there

were

fewer
a

of

era! months, being of the opinion

audi-

about land economics to know you

We have taken

conservative

opportunities

I- the

.

wun

not

are

have
not

what
seen
an

makes
an

jobs filled

year

ago,

than

and jobs

consumers,

we

increase in vacancy*

alarming

increase

but

steady and gradual increase.

a

We

have seen a decline in spot sell¬
ing prices, and we have seen al¬
most

a

cessation

residential

ing

this

rents.

fact,

we

of

the

rise

in

Notwithstand¬
are

Continued

bullish

on

page

on

3%

'
,

\
^
■?

'
^
- v,

Volume

The Commercial and Financial Chronicle

Number 5782

188

(1353)

open;'the

A Rise in Price of Gold Means

trollable
No

.

Uncontrollable Inflation
.f

/

'!;;■£•■

•

•

of gold. - The widely
respected monetary economist concludes that the fixed price
of gold and inadequacy of British gold reserve compelled the
British Government from time to time to check itself—which
would not have occurred if gold price manipulation were resorted to—and predicts that a U. S. A. rise in price of gold

;

•

../

would enable the free world to embark
;

.

,r". vf ■-%

V '

Longer

Supports Higher

Gold Price

.

;

would

<

become

countries.

It

is

fense.

gold

But the

reserve

inadequacy of the
did compel the Gov¬

ernment from time to time to call
a

halt to the orgy of inflation.

value of the British gold reserve,
and of the proceeds of the current

The

would

prosperity to the

..

bring new
gold producing

for
emergencies.
change would stimulate gold

reserve

.^4'!;";4;4'

ader

for covering normal re¬
quirements and for0'providing a

and

During the postwar period the
dollar price
of gold was
Britain's
only
defense
against
runaway
inflation.
It
was
ad¬
mittedly not a very strong de¬
fixed

pro¬

than

because

would be not much better than it
is

now.

course.

It
to imagine what would
happened if the American
price of gold had been raised to
$100 or anything like a few years
ago.
The increase of the dollar

more

quate"

duction

in their

the cost to the

Praises Checkrein Function

producer,
and .a higher dollar price of gold
: would,
greptly assist the balance
of payments of the Sterling Area,
Moreover, the British gold reserve

- •

on

matter of

Warns Against U. S. A. Price Rise

,44v

is still, the largest gold

and social

44."

consequences.

hearts, passing

very strong also from a British
point of view. The Commonwealth

period of reckless

on a

and irresponsible inflation with all its economic

;

uncon¬ concede them with a
song

r

,

Beyond doubt the arguments in
favor of a higher gold price are

no

longer favors raising the mint price

v

of
.

consumer as a

i

By PAUL EINZIG

Completely reversing himself, Dr. Einzig explains why^he

floodgates

inflation.'"'

29

is

easy

have

Should the

United

ernment increase

of

States Gov¬

the dollar price

gold it would enable the free

world

to

embark

on

a

reckless,. irresponsible
with

all

its

economic

consequences.

Sooner

period of
inflation
.

and
or

social,

later it

would become necessary to

call a
halt," after the absorption of the
bookkeeping increase in. gold re-.'
serves."' The
Steep increase in
prices would then call for very}
drastic deflationary measures with •
incalculable

4

>

consequences.

Irving Lundborg Adds

of

(Special to The Financial Chronicle)
' t
these; gold output in the Sterling Area,
.; LONDON, England—There has
and there is strong temptation to
and "other
considerations
that I would have obviated the
SAN FRANCISCO, Calif .—John v
been a revival of agitation for an write it 'up by raising the price
necessity
was for many years a strong sup¬
for the series of disinflationary J. Donovan has been added to the
increase
in the dollar price : of1 of gold.
■
'
;
porter of a higher gold price. The measures adopted by the succes¬ staff of Irving Lundborg & Co.,!
gold.
Judging by the firm tone
Mr. "Roy Harrod,- in a recent
reason
why I have changed my sive Chancellors of the Exchequer. 310 Sansome Street, members
Of gold mining
article'appearing *in Optima, adof;
views ; lies; in the realization of They all resorted to these meas¬ the New York and Pacific Coast
shares on the
: vocated- The": increase
of I the of¬
the extent ta' which the stability ures with the utmost reluctance, Stock
London Stock
Exchanges.
ficial American' price of gold to
of the gold price tends to prevent under the inexorable
the' fahtastic 'tigure
pressure of
of' $100 an
Exchange,it
ounce.
must be wide:
The bookkeeping profit on' runaway inflation. After careful the* decline in the gold reserve.
Consideration
of
the
Joins Liberty Inv. Co.
arguments'
In the absence of a fear that their
such
a
transaction
would
wipe out'
ly expectedr
for and against an increase T came reserves
that some¬
) the' huge
might fall below danger
(Special to The Financial Chronicle)
budgetary deficit with,
to the conclusion that on balance level
: DENVER, " Colo.—Henry: ' J.
a
stroke bf the pen.
they would have allowed
The possi¬
thing-will be
its evil* effects would greatly out¬ the cost of
done in that
living to increase at an Clouthier has joined the staff of
bility of this further reinforces the
■■■■•• accelerated" pace
extent of the temptation to raise weigh its beneficial effects.'
without doing Liberty Investment Company, 511
sense,
pos¬
4
Should
the
officialAmerican
the
anything unpopular about it.
16th Street.
price, and the anticipation
sibly at the
"
;
buying
price
of
gold
be
raised
to
As
the increase in the dollar
that the' United
States Govern¬
impending
$100
or
even
to
a
much
lower
fig¬
annual
meet¬
ment might yield to the temptaprice of gold would have created
ure, ; it would' simply make
the World-wide inflation there would
With Shaiman Co.
tion.
'
ing of the In;".4 4- \
■ •' 4
.

.

-

;

"

.

,

'

The

ternational

British

Monetary
Fund. Owing
to

the

sion

in

Dr.

Paul

Einzig

reces-

United

the

-

States,

it

is

^rgued, the Washington Administration is likely to feel inclinedto

take

a

decision

and Congress
measure

reflation.

out,

the

r

to

that ;sense,

result

,

a
in

Moreover, it is pointed

net gold

United States
the

in

is likely to favor

calculated

reserve

(after deduction. of;

foreign--owned

balances) is

of the;

now

deposits

and

majority
of
responsible
opinion views the bare

possibility of such a step with
concern, and considers it unlikely
that the United States authorities

safe for unlettered infla¬ have
been' no
reason
why the
It would enable the Govern-- British balance of
payments should
ments to inflate with comparative have been affected to any

(Special to The Financial Chronicle)

tion.

.-DENVER,

Colo.

—

Polito

impunity,

The

.

,

.

.

,

/adjustment,' of

.

their

.

gold -

increases,/ and for employers

to -

ternational

liquidity

position

Stein, Roe & Farnham.

COMPOUNDED AND COPYRIGHTED IN U.S.A.

/

Mar-i

par¬

tinez, Jr. is now with Shaiman
British Govern¬ ticular degree. In any case, Brit¬
and Company, Boston Building.
ment could afford to forget about ain could have afforded to lose
the balance of payments and in¬
gold. Britain, and other similarly
would decide in its favor. Britain
dulge in overspending and large-; placed countries,- could have in¬
McCormick Adds
and all"'other-'-participating counscale credit expansion.
The- in¬ flated on an even
larger scale
tries in ;the International Mone(Special to The Financial Chronicle)
s
flationary wage spiral could be
than, they had actually inflated.
ta
Fund are of course directly
-CHICAGO,
111. —William
J.
stepped up. There would be a
M
«
maximum
of temptation /and a- Needless to say, by now the rise Dunn has been added to the staff;
concerned-, because an increase in.
of McCormick & Co., 231 South;
in prices would have largely ab¬
the dollar price of gold would maximum of opportunity for trade;
La Salle Street, members of the
unions - to demand unreasonable/ sorbed the bookkeeping increase New York and Midwest Stock Ex¬
necessitate a corresponding up-;
in
the
gold reserves, and the in¬ changes. He was previously with
unjustified and 'unearned wage
ward

relatively small,, parities.: Such, a move would rip




world

'

lY COTY, INC.,

.

30

The Commercial and Financial Chronicle

(1354)

imm

rewarded.

?()

nnnp

l+onmnueajT

puyv

;

have such

■_

VASVC
Yf[CDIymE 1VC I vfllw

J

PVVFA

:'*r.

•

<

-

""""m

Every bank should

program.

On-the-job training alone is not
adequate for bank officers of the

••

TflvAlllvr

a

■

<_

n

i

Alffl

CI91

*

_

.

VltllTA

r

QIM

A lUlllV

the banking industry has
truly a pioneer. American
are Institute of Banking courses, along
spect
been

requirements, in one way or another they
when they appear, will be met. not subject to the various restricOn the other hand, there are many tions applied to banks. However,
banks
with
insufficient
capital another reason for their growth is
even
by today's standards; and almost certainly the failure of
there is too large a number of banks to meet the financial needs
banks
with
dangerously
little of the public as rapidly or as concapital.
An illustration of this veniently
as
these institutions
that

capital

new

kind

last

is

of bank

in

found

risk.

at

Assets

asithose

defined

am

have been
development, in

risk

at

assets

an^ to the public. The American
Bankers Association deserves

willing to concede that
overly-cautious bank supervision
I

we

assets

to
are

been of immense value to bankers

have been able to do.

a

recently completed,
measuring t>ank capital relative
survey

with the various facilities offered
by graduate banking schools, have

factor in this
the sense that

a

may

re-

supported, and continues to support, legislation which will place

office serving 7,500 people.
In view of the duration and persistency of the trends I have just

in

one

great credit for this far-seeing of banks to expand and thereby
educational
development.
Of improve facilties, make feasible
course,one can hardly mention this the utilization of new techniques

I should like to close this discus-

aspect of banking without paying
tribute
to
the
late
Dr.
Harold

for the next quarter of a century;
of that we may feel ^certain. We

stonier,
years

who served for many
national educational di-

as

and

equipment,

rather

merger.

Bajlkmg? arJd who established The

that

cies

of

We

the

that we may have overlooked the

Government,

Federal

that

found

banks with

there

fact that,

200

were

some

in

country at least,
what amounts to

capital ranging from 5
risk. These

to 9% of these assets at

jmua- Graduate School of Banking at

banks

had total deposits of over
billion, of which about $2 bil-

ol

areas

we

over

£be years as Rs director and

the

dean.

jts

as

have today

underbanked

an

serving

I

then
improve on

cannot

some

words included in

tion

adopted

resolu-

American

the

by

a

ly impair the capital of these
banks, whereas a 5 or 10% decline

situation.
Bankers Association at the time of
Banks must also shoulder a part Dr> stonier's retirement from the
of this blame. Take the question Association: "Few men over the
of savings deposits, lor example. years contributed more to the
Institutions such as credit unions present soundness and high public
and savings and loan companies es£eem cf
banking structure
have aggressively sought the sur- q£ £]-jjg country. American bank-

in the value of these assets would

plus

$3

lion;

this

insured.

was

what

Notice

implies. Even

2 or 3% loss
just risk assets would serious-

on

a

Individuals

of

funds

ing< losr °ear/t'0

and

undoubtedly result in their clos- succeeded well in their eiforts.
ing. Of course, I do not want to The failure of banks to compete
imply by this that the only proper in this area was only partly a
measure of the adequacy of bank
consequence of regulation, since
capital is that which relates capi- for a long time many banks actal to risk assets.
The figures I tively discouraged s a v l n g s dehave cited

illustrate

simnlv intended to

are

one

as

tal oroblem

in

this

ill

£ct
^

next
Iicxi

XI11S

f
und,
iuhq

the
me

amount

xo
to

latter

growth

will

and
if
at

will

to

total

banks.

The

come

be
time

may

tendant
lenaani

growth
feiuwui

increase
increase

tunities, will

dollar
uouar

in
xn

relation

in

insured

in

slowly
rupted

both
boui

grow
giuw,

and

deposits

Economic
acuuuiiuc

during
uiumg

the

next quarter-century, and the at-

in-

Federal
reaerai Deue

posit Insurance Corporation
continue
uc

Electronics and Management

quarter-century
quarter
century,

of
01

•'

'

•

anticipate that the deposit

we

surance
Muance

rj-,be

proportion

ployees; and

a

of

bank

deposit insurance fund relative to

that within

this will be

deposits is

no

larger today

j

peri0(j

we

onnmvimntp

v

4.

j

lound

nnn

six-

that

fp.n-th

in

nf

thp

the

^

1hp lvmk

wx<5

lhp rhief mntivntion

em-

underlvinu its sale

^atIanvmPrPPr^
taken

nlat-e

tion: and relative to insured de-

inst

this

what

will

rpnnirp

in

thp

nniLre5V^eAni^
posits,
the fund is considerably way of
equipment, which is still
being
developed, nor how the
My point in mentioning the smaller banks will be able tS
to
anticipated growth in the deposit make full use of these electronic
smaller than in 1934.

Serbe 55e

insurance fund is

to

remind you

that-the fund does not serve, and
intended to
a

serve,'as

was -never

capitai. Asl
capital.
As I
have pointed out on other occasions, only so long as the banking
system shoulders the main burden
substitute for bank

of

protecting

loss

can

depositors

-the fund be

as

against
small

as

it is, and the assessment rate remain as low as it is. Losses which
occur

in the

banking

ordinary business of
absorbed

are

capital.

The
de|x>sit
fund stands as a kind

by bank
insurance
mobile

of

capital, to be used speedily and
at

the

there

mg

point

is a

needed
whenever
breakdown in the bank-

system.

In

this

it

way,

is

intended that banking difficulties

marvels*
marvels;

within
within

but
but

second

line
the

vears
years,
methods wBl
will

wesentaccou^tSg
present accounting method J

had

This suggests
not havo

therp

of defense, standing
capitalization of the

?o

been

a

available

management

continue oneratinir the hank

continue operating the bank.

-

the

anulication

of

be

accentuated

auarteT-centmv

tbe

during

the

next

that involves

~

L

technical

necessary

^e maxiZ^
new

cauioment.

secure

Officers will find

S morTnfonX

can

be

macje aVailable to them with less

S larThTneed Si Tp

?rPfl

J-ne need wiii oe_greax

;

,

-

1

t

,

1 .?e bee? Pleased to observe
mter^t shown in recent years
~

-

.

......

".ew bPa?

Tlie past

lem.

Areas

25 years have

seen

a

Management

succession

in-

the number and assets of the socalled nonbank financial institutions. I refer, of
course, to such

institutions

as

private life insur-

a"c®.c'?mPaiues- savings and loan
assocmtions,

credit
unions,
and
Personal finance. companies.
Many
of these institutions are
doing a
Dusiness and

meeting needs which

could be done

ter, by banks.
tion that to

a

as

well, if not bet-

There is

,

3&rv

no

ques-

certain extent their
.

,,

,

.

..

.

n nas reiiectea tne fact that




yaun£ ^ien and, as the years pass,
advanciag them to positions of

Progressively greater responsibiliJ«>e bank must first den.®
.—
,

?straUw^

istrative-which will be needed by

bank officers
men

erly,

given

develop
top
^

in

the future. These

must then be motivated
prop-

the

the

opportunity

qualities

needed

to
bv

officers, and their achieveuLxiLeib, cuia ineir acnieverecognized and adequately

ments

—

A

WW

IaI

■

A Hg silky G0V€IMII61lt
■iVWiHij WW W
H

,

^

;HIqIiKCI
w

J*

ppnnomir

di<?rnc<?inn

fn hp rrpditpd

S

with

com-

rpdnptinns

e ^ieclltya witn tne reductions,
launching

cnil+n;k

anri

of

ihe

the

Russian

Hccline

nf

himi-

bPutniK aaa t{ie decline 01 ousi
the late

ness

activity m

10^7

PaHv

L9"/demands
str01\g aemands

19x8

for

of «reat resiliency rooted

stration

discussion stration oi ^reai resiliency rooiea

eAt.onomic

'
on

petition among those who sought

fall

of

e-pnprafpH

eithS f tre-

lor eitnci a tre

men^0.us exPa"slon of govern4mental expenditures or massive
Jax re^ucJ^on~or both. Such acJlons coulci have led to serious
long-range effects. Today, a scant
we are talking

a competitive market,
Our financial mechanism

has
pillar of strength in re¬

a

versing the downward trend and
hrineine

about

renewal

a

of

cringing anout a iwie.wdi ux
growth. Our banks are sound. Our
citizens

confident

are

citizens are coniiaent.
bilizers built into our

The

sta-

economy

their

demonstrated

have

effec-

Wness

nveness.

.

n

j,

flno

When evidence ofthe r^ession
became clear last fall the Federal
IJeseive System eased credit, a
the Administration Pr^^P^n^0<?
steps to stimulate housing and t
accelerate needed government ex-

These

rapidly

changing

events

S5

since

billion

the

^heSe ,rapifdly- cha"ging, eyents ?5 ,bilIion fincerthe

and P°mts of view do not, how- mates in January.

budget

esti-

In addition,

_

0f reai goods and services within

produce a budget deficit
deficil this fis-

the framework of our cherished
freedoms. Certain principles we
accept as basic, despite wide variations in attitudes toward the

cal year of $12 billion
; iWe do not face a deficit of this
size with complacency. We are
attacking it vigorously from every

"ecds of the moment.

possible angle, and the American

.

^

large

F,ve Bas,c Pnnc,ples

du""g

Among these are that:

•

numbers

of

mergers

and

consolidations. Today there are
fewer banks in this country than
operated in 1904.

...

^

penditures in

.

We .wl11 continue to recognize
there 1S na ufcaPu I0nl
? Pf^"
ments o£ debts which are created.
•

Partially offsetting this downWe will see to it that each genward trend in the number of eration does, so far as possible,

-

-

"

-

-

,—

^

1930's to about 8,800 in 1957. Today branches comprise about 38%
of all banking offices, where as

yolvcs more than simply attractbank a few promising they

truly remarkable growth in both in^

challenge.

1

people can be confident that it
will be dealt with effectively The
economic recovery now well unwe will continue to maintain derway is a factor which is on
intjnr«fo'
precipitously from
integrity of our currency.
our S1de. A continuation of sound
, 9
°"33 dan'ig
bank'ng c,01"
We will operate the Federal Recovery and economic growth
Government at a minimum cost will not only replenish our revslowly but more less steadily ever consistent with our national de- enues, but will give us an env.mCeiv
decline in lecent years fense ancj domestic responsibili- vironment in which there will be
?aS been ?UG Prjmanly to th® ties.
•
less pressure ior government ex-

^Ut w,3

^

,

recognize and deal with this prob-

Lnderbanked

has

Continued from first page

burdens.

wn

.

oxnandini?

Sre ta^Vlg place and wlli.c011T^nu.^; sound, and dedicated to the cline associated with the recession.
achievement of progress in terms These two-shifts are expected to

™
w?thlP
Jhe n
latter
dna
1929 s because ofJth<;
training lapge null\b®rs 0
mergers and of

will be reauired in order to

our

°.Ur expandm«

sy?em "'H'^a'ppare'it^^ anfob- ^yer, obscure the basic philosophy there has beena
fundamental changes ot.a na i°n tbat 18 resolved .to be f TfJlSJS /hp
serv+e^ .lhat lunda"Jental changes mllitarily strong, economically from the January estimates, a de-

elec-

rdeSStamwSiS

in

1

,

,

tedi6uJ task?

Corporation

fGW months later

organizations, the
tronic ecminment to bank account-,banks
tbls
j„a both space and personnel will £aS
3 °,wnwar, trc'!d wb":b
become hvfiteble to?^ reSderine haS pe™sted now for almost 40
mor™ and better service to the SS PT Were app™xim?i?, y
banks' customers^ Emptovees will
30,°(W banks operating in 1920;
with

,

Banking Structure

ion^d

1

nart

abo+u.t in^lai.10"> the size of pros- penditures And additionaljpendMention of bank mergers brings
Ve
cl!s*, agam
lng ^uch the last Co» gr iss au falanotnei
™ther^?obW
which wfll ff°rtS t0Wa+r^ the r,eductlon of orized. bavo ^^ed the devel ot
■?
piooiem wnich will governnmental expenditures.
expected government spending by
Changing

doubtless alltaT^ve^ old-fash- Except lor a few years after World
f^i^eSS appear very old-fash- ^ar jj ^hen there was a flurry

stopped before they can grow
to catastrophic
proportions Thus
the deposit insurance fund
behind

a few
few
a

trained,^tlert officers who
^'°yrec^y interpret and act on
i" I th? 5ata prPvlde,d-

be

QUabf;Gd

much of

changed through the
than it was at the end of the first
application of electronics to bank
year x>f operation of the Corporaaccounting.
We cannot
foresee

The
—

The

•

death, age, ill health, or retirement of the leading officer of

considerable

few years

a

with

situation.

been

a

economy,

and

banking system is to play

nrnnpr

85th Congress, with strong

more

total

the

Jailuie of bankers to piovide for
successors- In a sVrv®y made
ol the number ol applications for
over

maintainance

judgment on the
part of bankers will be required

in

aPProxim^Jely

any
amount of space has been devoted
than the usual number of, to activities such as check
sorting
bank failures. The amount of the and record
keeping.
It appears

is

Great skill

accept and
which
will

free

our

because it

absorntions

received

the

in store

those thoroughly familiar economy. We count upon all of
all aspects of the banking you to face, accept, and master the

—

carry

cases,

a

to

growth of

and

centered
the expenditure reauctions of the first session of the

mpr(,pr„

prepared to

contribute

thought:

are

by

management
me

and

be

changes

01..£anK mergers and aosorpuons
wi hm recent years has been the

year

the already

the time of

be

this

encourage

if

yf

mergers

reduce

can

must

"S pr0per

v

bank

mergers

leaving

by

Tremendous changes

benefit to the banking public. The

of

•

paper
paper work
woik done
auue

has required

large

ooDoruppur

Gf

concerns

some

sion

line here is very difficult to draw:
but if it is to be drawn, it must

is QUite apparent that one of the
major causes of the large number

hank

In the past this type of

by banks.

quite
interthere

bank
uanK

increase

heavy
neavy volume
voiume of
w
work

in

prokiem

weakened, through a
However, it is also true

competition unduly, without offering
much if
any
additional

£be deep impress of Hal Stonier."

succession

nosits

of toe canto

wjll

com6;

in

than

for so Jong with the possibility ol

tion, similar to that ol the jy^us,>Rutgers university,

and

general
offer better service to the public,
Often, competition is strengthened,

cash balances. United States Govinsured

super-

Yet if this is question, as well as to the other
we
problems described earlier, it
have a number of difficult would be possible to make a prequestions to answer. For example,» cise prediction of what will hapshould the merger trend be slowed pen, and tell you the specific
and, if so, by what means? Many manner in which the Federal Demergers are due to quite natural posit Insurance Corporation will
circumstances, such as the desire react. I cannot do this. Therefore,

rector of the American Institute of

return of ah overbanked

bank

to be the case, it is clear that

have been concerned

a

the

of

may

supervisors

obligations, and all loans
or
guaranteed by agen-

the hands

visory
agencies
more
effective
tools for preserving the competitive nature of our banking system.
I wish that with respect to this

the next 25 years.

maining after deducting cash and
ernment

Thursday, October 2, 1958

.

by 1933 there was one for every
7,000 people, and today there is

Organized professional
education must play an important described, it is reasonable to anPar^ in this program. In this re- ticipate their continuation during
future.

..

on

of

the
a

basic of wide

short-term

na-

,ast
avoided

areas,

letting

up

jn this

sessioPof

congress

we

further addition of $5V2

a

billion in spending authorizations.
was

accomplished by Presi-

dential vetoes of several spending

authorizations, and by successful
opposition, with help from some
members of Congress of both par-

ties, to other spending proposals
that had actually been, passed by
either

The

the

House

President's

government

0ne

some

nQt

are

fight to control spending. In fact,

This

firmly adhere to the
proposition that nations as
well as individuals must carefully
budget their resources and their
expenditures in relationship to an
enduring future of stable growth

made up only 16% at the
time the Corporation began opera- rather than
tions, and only 4% of the total in fluctuations
1920.
•
tiire.

We

or

the

drive

Senate,

to

reduce

employment

by : at

interesting development in
We are emerging from a period
this connection is that, despite the of recession. None of us is wise

fiscal year

growth in

dence of our determination in this

branch banking,

a

growth which in recent years has
made possible regular increases in
the total number of banking of-

enough

to

know

with

exactness

the rate of economic growth that
lies

ahead.

achieve

is

What
a

seek

we

sustainable

rate

to

of

least 2% during the rest of this
is

an

additional

evi-

area,

^T° Hasty Tax Cuts
With progress in controlling the

fices» these increases in banking growth in terms of lasting jobs budget, we can deal more effecfacilities have not kept pace with and real goods and dollars which tively with the economic and so£be growth in banking office
In for0 maintain
their purchasing power, cial burden imposed by our present
there was one PCP"1^0"The current
resumption of growth

every,

3,000 people in this country;

we

are

experiencing is

a

demon-

high level of taxation, and make
further strides toward tax simpli-

Volume

Number 5782

188

.

.

The Commercial and Financial Chronicle

.

(1355)
fication

and

reform

that

so

system can function
tively and equitably as
tax

We

our

effec¬
possible.
firmly convinced that the

are

as

tax structure must be further im¬

will find himself in trouble. What

War

counts

is

entirely out of taxes.

at any

one

how

not

fast

one

goes

instant, but how soon
and how safely one arrives at the
end of the journey.
The journey
which

the

United

States

II

which

This

blind
accept with

nomenon

centive of individuals which is

less future.

be

important

basically

to

free

our

enterprise system.
.

Changes

in

tax

our

structure,

however, must not be hastily re¬
sorted to as a matter of expedi¬
will recall that those

You

ency.

who

urging

were

last

were

on

reductions must

be

accomplished

in the ways they proposed, with¬
out
regard to
what might be
politically
possible
within
the

framework

of

national

the

chology at that

have, of

erable

course,

in

success

stability

psy¬

time.

of

of

power

1939

versus

often

a

is

a

phe¬

that is manmade and

to

control

The

can

problem

it without

em¬

too

greatly

individual

initiative

and freedom of choice.

price

ing

in¬

ploying methods that would limit

had consid¬
maintaining

Progress
phere

in

recent years.
their: While it is true that the purchas¬

making
the ground that the

spring

proposals

reductions

tax

must

Inflation

man-controlled.

is how

that

inevitable,

we

resignation.

way.

We

not

force which

on

ventured stretches into the limit¬

for the
sake of covering a few miles per¬
haps more quickly, jeopardize our
progress along all the rest of the

met

is

imum of interference with the in¬

We must not,

be

us

proved so as to provide the min¬
so

not

helps remind

flation

has

could

the

is

dollar

about 48

in

decline

1958

race
no

cents, we

occurred

happy life

for

the

we

of World

stable

a

even

in

a

would become

moral.

celerated

The time for

is

victory

Each

harder,

people become

more

convinced

that

avoidable.

We

more

WhaU

be?

spending, induced

gov¬

or ac¬

evaluate business

we

economic outlook as reflected, for
example, in the preference being:
shown by the business community,
for debt vs. equity financing, and?
on
the other hand in the heavy

un¬

to

now

to

and investor attitudes toward the

firmly
is

act

it

expect

being performed by

How should

delay

because

inflation
must

is

by our desire to speed
up ' output
and
reemployment?

showdown with

a

now.

we

ernment

\

inflation
makes

can

keep an inflation psychology from
becoming dominant.
Analyzing Switch to Equities

for

people

As

part at least induced by fears of
future inflation?
"

for those who

The

des-

savings does not make
society. The drawing

contracts

role

atmos¬
is

moreover,

American

to stay ahead.

struction of

before

of

expenses

the

The nerve-wracking
between prices and wages is

manage

1953, and is largely chargeable to
enormous

uneasy

inflation,

really want.

forget that all but 4 cents

the

in the

of

what

not

depreciate is contrary to our tra¬
ditions of good faith. Inflation is
not only
uneconomic, it is im¬

currency that
resigned to let

demand

nize

a

first step, we must recog¬

and; evaluate

nomic

and

both

the

psychological

eco¬

The

factors

the

on

industrial

part of investors

stocks

demand

for

influencing activity at the present

from all of these

time.

ery

Foremost

among

the

recovery

are

generating it?

itself.

these

is

funds

is

coming

sources—recov¬

itself, government

future—presents

broadly

based is it and how well sustained

programs,,

numerous

prob¬

er

■

Now, six months later, it seems
clear that hasty resort to tax cuts
would have been not only unwar¬
ranted

to

deficit.
rate

would

but

heavily

have

r

added

already
serious
shifts in our

an

Temporary

The New York Trust Company

economic

of

justify

growth do not
indiscriminate tax

either

reduction

or

indiscriminate spend¬

ing.

■

We

look

now

"70 years
forward

period of growth.

to

of service to business and industry

a

During recent

American industry has in¬
large sums in plant and
equipment. We have built great
productive reserves into our econ¬
omy.
We must now wisely man¬
age our affairs to use this produc¬
years,

vested

,

tion for sustainable growth.
It is growth we need. The gov¬
ernment faces increased responsi¬
bilities

at

home

those

be

national

met

in

''

a

They can
growing

with

a

income which will

increased

from

in

,

ftr——>friD(*'iiiin'i

will meet

We

responsibilities.

will

and

abroad

and

world of tensions.

'MOW.

come

productivity,

ex¬

panding employment opportuni¬
ties, and a demand on the part of
our
people for continually rising
standards of living.
We

have written

into

laws

our

recognition of the government's
responsibility to promote "max¬
imum
employment,
production,
and purchasing power." The gov¬
a

has

ernment

that

accepted

res-

sponsibility; it is equally import¬
ant
that
we
accept, either by
statute or self-acknowledgement,
the principle of the integrity of
money.

Let

I

the

repeat here

me

have

Treasury

follow

or

inimical

try

or"

upon

point that

a

jnade many times.
urge

to

We in

going to
policies which are

are

never

national

our

defense

to impose our judgment
those responsible for our

national safety. However, military

strength is based upon a strong
and dynamic economy.
Weaken¬
ing our economy plays into the
hands

those

of

who

threatened

of life just as surely as
weakening our military position.
But coupled with the promise
of growth, we also today face the
our

way

threat
ble

inflation
ruinous
ness
"

long

inflation.

of

responsi¬

deflation

or

course.

Nor

to

can

run

any

a

organized labor group
maintain the confidence of
people if it

ducts its affairs

of

as

so

Wants

are

inflation
we

growth.

is

Without

those
the

who

Inflation

that

say

inevitable

price

have to pay for continued

Such

of

they say,
and big.gov¬
If

inflation,

argued, we shall
maximum growth.

our

"We installed National POST-TRONIC'

60% annually

investment."

also

we

ma¬

use, we

August 1957. After

more

than

a

estimate the savings they have effected

total about 60%

annually

on

the investment.

it is

"These

savings

are

made up of several

factors among which are:

50% saving in post¬

ing time; elimination of overtime; 46% sav¬

I do not agree with this thesis.
has a superficial

filing, etc.; 50% saving in training time due

because

we

could,

of course,
a

by inflationary finance, just as we
accelerate a car by stepping
on the gas.
Over the longer run,
however, these inflationary meth¬
can

ods would get us into

trouble, just

the recklessly speeding




to the machines'

ac¬

certain time

driver

The

"In addition to these direct
are

other benefits which

siderable value,

we

savings, there

feel have

con¬

namely: neater statements,

miracle

of

a

means more

eration of any

Your
will

higherdegree of accuracy, and more prompt

mailing of statements. These
are

are

important in our customer

factors which

simplicity and electronic fea-

electronics

York

local

be

the

your

known.

efficient over-all op¬

bank, regardless of size.

National

representative

glad to show how much the
can

Call him today. He's
in

provides

lowest posting costs ever

This

yellow

save

your

bank.

listed

pages

of

S&&S3

phone book.

relationships."
*

,

ing in valuable floor space; 43% saving in

plausibility

reduction in employee turnover.

POST-TRONIC

curb

so

tures; and

year's

sacrifice

celerate growth for

—THE NEW YORK TRUST COMPANY, New

1he

growth,

demands easy money
ernment spending.
these forces

on

chines in

Growth

There

as

save us

con¬

soundness.

It

machines

to be unmind¬

its
own
responsibility
promoting economic

towards

that

"C/fjatUnuUPOST-TRONIC

busi¬

or

the American

ful

No

government will allow either

MARK R£0. U,er< f>AT, aPfV>

mm
President
The New York Trust

Company

W&S&onai

*Trode Mark

gill! ACC0VN n HC MACHiHti
THE

NATIONAL
1,039 OFFICES IN

121

CASH
COUNTRIES

REG I ST ER
...

COMPANY

HELPING BUSINESS SAVE MONEY

9,

OHIO

in

and business attitudes toward tho

What forces
How

which

*wcmm

us*

62

The Commercial and

XX386

will

A

commun¬

ity. To mention one—the sale of
bonds, which constitutes the only
means
for raising funds
in the
market to finance public expen¬
ditures, state and municipal • as
well as Federal, and a principal
to

finance

industrial

growth, is being placed
more

is

vote in

an

election may not seem

demand

a
high
standard
of
economic
literacy is not going to repeat the
developments furnish evidence, if mistakes so many nations over the
more were
needed, that we must world have made in following un¬
intensify our efforts toward meet¬ sound fiscal and monetary policies
ing the requirements of the gov¬ which erode the purchasing power
ernment and of the economy it¬ of their currency.
Other nations

getting closer to yields

are

S.

Government

bonds.

will continue to exhibit

characteristics

in

the

Program

You

_

ing periods of prosperity when-the
tightening effects which their -sale
may have on the money market
would be in harmony with a pol-

the

enlarging

require

may however,
aggressive Sav¬

system

more

a

self

to

of the national

great

progress

veloping
gate

techniques

recessions.

which

The

miti¬

unemploy¬

ment which

accompanies a down¬
turn in activity is abhorrent to
our people, and it brings about a
prompt demand for government
action.

Inflation,
creeps

on

upon us

the other hand,
gradually and in¬

sidiously. We must remember that
inflation and booms

are

the

cause

of recessions.

on

sound

a

monetary

sys¬

tem.

a

inflation.

In

know

will

we

in which it is

It has been argued that

every

corner

debt and the way

handled penetrates
of American eco¬

tra¬
society.
The
against inflation nomic
frequency
♦—Federal
Reserve
monetary with which we go to the market,
policy, sound fiscal policies, and the volume of debt financing that
a management of the
public debt is required, the distribution of the
debt in length rof maturity and
aimed at lengthening its
average
affect
the
whole
maturity and -obtaining distribu¬ ownership,

;

ditional

our

weapons

tion outside the commercial banks

scheme

inadequate because this in¬
flation is a "special kind" of in¬

municipal,

—are

flation.

The

new

inflation,

so

the

argument goes, results from wage
increases which outrun produc¬

tivity, from administered

prices,

not frpm excessive credit
expan¬
sion
and
government
deficits.

of

individual,

economic goals of

a

free society.

than

is

more

consideration

now,

involved
of

here

equity and

holders of securities.
as

large

as

ours

to

the

greatest

is

for

occasions

to-order

tially lengthening

entrusted

to

them,

they:

ultimate

There

economic

conse-,

well,

as

are

number:of

a

possi-;

bilities for improving holdings in.
the nonbank area.
We are now,

•

carrying on an extensive program:
of study and consultation on
all;
phases of debt management.
A.
number of groups, in and

out. of.

government, have been asked to
join with us in studying the over-/
all debt management problem and
to come up with specific sugges-/
tions

to

as

improved

techniques,

and procedures,

•

-

-->••/ ■/••

substan-

the debt.

founded.

opportunities which do arise are

-

they are v imperfect;
necessarily linked
particular phase of -the

infrequent;

overcome

difficulties, and our determina—
tion to follow through with sound*
debt
management
policies
and/
other
anti-inflationary measures
make confidence justified that the,
purchasing' power of the f American
dollar will be maintained."
The entire free world looks to us.
'for sound and constructive leader-/*
ship and as a bulwark of financial:

to
any
business

There

extent

the

cycle.
were some

efforts

who criticized

debt extenduring- the past "year

Treasury

sion

for its

that we'should sell
short-term issues during- a
On the other hand,,-if
had done all of our financnig

grounds

on

only

agree¬

recession.

able

to.

Activity

we

in ir-the

govern¬
Fluctuations

free

enterprise economy is well
A rising economy, to-!gether with effective measures to

a

The

and they are not

the fundamentals applic¬
market.

-

Despite the problems which we;
These principles, as you know,' face today —and they
are
real
have
presented
difficulties * in problems —the future is full of
practice. The Treasury has found hope. Our economic recovery is
that there are few if any madeproving again that our reliance on

on

bond

the

by

ment

ment

the

quences

largely
commercial
,

possible outside the commercial
banks is of exceptional impor¬
tance at the present time.
I am sure that there is

savings

be

banks.

our

temporary

budget,

in " the

one-year ' area
our "debt strength.'^/;
;
J
be'indefensibly short as we •* if aii of u^n lM^
pubiic'andj.
take on the serious problems "of *
private life-work /together; with.
a period of sizable debt expansion,
foresight and responsibility^: we.

in market

prices and yields serve
important function in our pri¬
vate enterprise economy and legit¬

would

an

,

imate dealer

activity is important

The issues

are

made clearer by

our high aims.!'In so'
glance at the changing doing we assure that the future
ownership
pattern y6f; America* is unlimited// •;,
Speculative Activity in % 1.:"//
during recent years.
MM' !''' .*'.;'•—""'V ' ""
" '—-—*•

and necessary.

Transcends Equity and Profit.
There

Monetary policy plus expenditure profit for the
controls, it is said, cannot cope With a debt
with an inflation that is fed from

corporate,

and
state financing,
and bear a significant relation¬
ship to how we accomplish the

absorbed

placement of Treasury marketable
securities

will

which

area

pro-

must look not only to the immedi->
ate results of their actions but to

larly, it is said that during periods
of recession the Treasury should
contribute to liquidity and to 'the
availability of capital by doing
most of its financing in the shortterm

institutions' to -help

tect the purchasing power of the"

icy of monetary restraint.— Simi-

relentless

based

made

nancial

the

debt held outside of the commer¬

They impede sound,
sustainable jgrowth in real terms,

have

with

principle that the Treasury should
seek to sell long-term bonds dur-

fight against you will come forward with sug¬
that, we need and I gestions for new approaches at the
receive, your sup¬ present time. As you know, the
port. As people become more fully Treasury resisted
pressure
last
aware
of the problem, we will spring
to cut back its Savings
win the fight.
We will not sell Bonds program because of the re¬
America short,
cession; as a result, we are in a
I should like to turn now to the
strong position to move ahead
particular problems of Treasury now into even more active en¬
financing and debt management.
couragement of individual savings
All too often these problems are through
purchases
of
Savings
regarded as something of con¬ Bonds.
cern
While
we
only to the Treasury or in¬
expect to
put the
volving only those engaged in se¬ strongest
possible emphasis
on
curity transactions.
That, of Savings Bonds this means alone
The successful
course, is not true. The influence will not suffice.

We

in the last quarter century in de¬

familiar

all

are

maintaining and
proportion of the

The problem of

cial banking

..

and/how

them-

toward

some

of

case

best to protect the market frohv
disruptive influences raises difficult questions on which -there is
no unanimity of opinion.
-

ings Bonds program. The banking
self without at the same time be¬ have learned this lesson the hard
community
has
always
given
coming active collaborators with way—by cruel experience.
strong support to the Treasury in
the destructive forces of monetiThis Administration pledges it¬ this area, and I am hopeful that
zation and inflation.

work

to

same

their holding of

Urgency of Savings Bond

on

It should make every eflengthen the debt so as-to

.

Series E.

These

Again

tell us, as in the'
inflationary wage and
fort to
price increases, • that" the actions'
keep the number of financing, op- . qf ^' single institution in a coriierations at a minimum. In addi-v petitive market have little effect.'
tion, it should generally ^conduct it cannot, some tell us, buy Treas-'
its operations so as to interfere ury bonds to fight inflation when
as little as possible with the free-, its competitors are
obtaining bet-'
dom of action of the Federal Ren ter yields elsewhere.
M-r '-'MM.-,:
serve in its monetary operations';.
Our* conduct- cannot be guided:
I repeat—there is general agreer ( exclusively
by1* these ebnsidera-:
ment on these goals. But hoW best- tions/"'Since it is the goal of fi-/

for

course

the commercial banking

by

system.

Series

of

drain, the Treasury, as you know,
much; yet each vote has recently opened up Series E
important in our democratic Savings Bonds for the investment
process.
The
same
standards of the proceeds of maturing F's
should apply to the business man and G's, without regard to individ¬
setting prices, and to the labor ual annual purchase limits, be¬
leader negotiating wages. If such lieving that those who chose to
restraints are not exercised, public hold their F's and G's to maturity
to count

some change in the ground rules.
stock
have risen
to
a
A nation that has conquered so
point where their average yields
are
below the yields of senior many of the forces in the mate¬
bonds of the same corporations rial world and which has achieved

and

ship

Treasury resulting from the cash¬

is

common

U.

complicating

problem in the nonbank area
the continuing drain
on
the

F and G Savings
lieve the individual of his civic Bonds, originally issued in large
responsibilities. After all, a single denominations. To help meet this

more and
jeopardy. Today prices of opinion will in due

in

in hold¬

decline

factor

further

A

ing

lems for all who engage in the ac¬

a

our

Securities Market

means

banks. This means increased bankcredit, a larger money supply, and
ity, tne Treasury's debt manage-, new inflationary pressures.
Toment goals are, I believe, fairly- the extent that; inflation results,
well understood. It is recognized the customers of these savings in-;
that tne Treasury should rely as
stitutions are among
the chief:
little as possible on debt ownervictims.
:
r;
V*

ings this year.

Healthy Government

tivities of the financial

be

Thursday, October 2, 1958

by
the entire financial
community. Within this commun-

ments are
there

...

shared-

benefits and other pay¬
exceeding receipts, and

versed;

Continued jrom page 31

Financial Chronicle

a

Cgn

fulfill

quick

government

Governments

yj.://;//// r*/

Since 1952, the government security holdings of individuals and
personal
trusts/- have -Tincreased
somewhat on net balance, "as have
the holdings of commercial banks.-'

The experience of last summer,

however, has focused attention
certain

unhealthy features of

on

mar¬

debt management is at the

~

,

,

/-

•-

;

•

09

V-

QontinuedyjtOTfl^page 23.VM"

ket activity; in particular the par¬
*
in
problem of ticipation
of
market
operators /Ownership on the part of retire¬
national thrift. It is a major
part whose only object 'is to secure a ment funds of f state and ' local
\j. The fact is that inflation is of the
fed from many sources. It has to
responsibility resting on a quick profit. Speculative activity government and the government
competitive society for maintain¬ of this sort makes no contribution investment
be attacked from
accounts is up substan¬ be done, y The most urgent thing many - angles.
ing
monetary
The traditional weapons of mone¬
integrity, institu¬ to the breadth, depth or resiliency tially.
at;?the moment ::is -that -Tespohsi-'
tional liquidity, and the achieve*
of
the market. On the contrary it ■>>A Corporation holdings are down?yble bank officers ponder-"the sit-;
tary policy, fiscal policy, and debt
ment of growth.
Decisions
bear¬
is
destructive
of
these
management will
be
but the liquidation here
qualities. /
employed
ha^s uationl of-their own bank < in the
vigorously. But we must remain ing on the management of the
We
must
all ; give
continued / been in the short-term area,-as event of a nuclear attack and-then'
debt touch the lives of every indi¬
alert to the
possibility of other
thought to the ways in which'a corporate liquidity varies with-the "consider .what measures the bank
vidual of our nation and
weigh recurrence of such excesses can be economic cycle. A matter of .con- can reasonably take to safeguard
methods, too, and be prepared to
heavily in the accomplishment of
use them with
vigor.
avoided. However we must recog¬
siderably; greater concern is"the its existence and assure the dis^1
our international
\
objectives.
nize that there are other major sharp
drop in .the government charge of its, responsibilities to
Hard Courage of Civic
As you know, we have for fiscal
forces behind the recent decline in security holdings of nonbank fi- its customers; to its business com—
1959 a sizable
t
Responsibilities
financing program: bond
nancial institutions.
*
~'T'3 munity, and to the nation;* Not
prices.
"
$23 billion rollover of regular
«. But
the battle is not all up to
Because
of
its
effect oiv the all banks will come up with the:
It is these fundamental factors
the
bills,
four times yearly.
government.
Leadership in
longer term debt picture;--this same answers.-/The problems of a'.
$49 billion of other maturing which provide the fuel for specu¬
our type of system is
meaningless
tough problem for the large
institution ^ serving other
lative activity regardless of what poses a
without a strong national deter¬ issues to be handled.
Treasury;; These institutions,'/"of banks;" and / corporate .customers'
$12 billion deficit to be fi¬ short-run circumstances may set
mination -that
the problem
be
course,
have
played
a
"major
part*
locatedthroughout- the 'country1
it
off.
Permanent
relief
from
solved.
Leadership can call for nanced; a portion of this financing
in helping finance the grpwth/of '.will
be "different from /those of
will be announced in a few
speculative
excesses,
can' occur
restraint; it can make the issues
days.
the economy during the past dec-' the
smaller- institution
serving
only when the basic conditions
clear; it can program the reme¬
Finally, even with steady eco¬
ade. "But in view of the,size of
only its immediate locality. Ap—
giving rise to fears
of either
dies.
But hard personal choices nomic recovery and
our
growth, there
government debt today and' propriate-^measures for- a bank.
are required to
get this job done. is the prospect of some deficit in creeping or runaway inflation are ;/ with
deficit
financing • "looming-* with "widespread branches may
recognized I and dealt with.
Be¬
<
It takes courage to
put the long- fiscal 1960.
there are important" ye- Well differ,from'those having no
cause
of this as I have said, "all large,
range general interest—the hard
The size of our
sponsibilities
on
the part -of-pri'-' branches, / y/
- V;'•
financing pro¬ Americans must show determina¬
--\
choices—ahead of the immediate gram
increases the urgency of our tion and
vate
investment:. iniStitutioriS^fGr. • I.urge^ou'to consider/seriously,*
courage in making the
interests—the easy and momen¬
obligation to finance as large a
.-, aggressive assistance m the T¥eas-"
as a matter/of good -business and
required hard choices.
tarily attractive. As I see it, the part of our
requirements as possi¬
ury financing job, as w&-l.-as>in normal prudence/.the steps Which'
one
truly great requirement is ble outside of the
Voids Debt-Management Goals
the industry financing
commercial
Job.
that our people not
^ou/shoiild takg .to •pr©t6et;!76ur>.
just voice plat¬ banking system and thus mini¬
As I see it, the problem of how :'/-;The market for Treasuryv^u-! mstitu|ion. Obviov^lj?X^oiiccafthot;
itudes but exhibit this hard cour¬ mize
the inflationary pressure of
to' maintain
a
.healthy.
govern¬
vrities,
apart
from
Savings
Bonds,
move
the center / of /your 'opera-;
age in their demands on the gov¬ deficit
operations.
This
raises ment
securities > market Ms; / one is to a large extent „an jnstitu-"iions .to. a/cave hundreds 'Of mites"
ernment. We are often told that
very difficult problems for us.
which must be attacked coopera¬ itional market.
The
in a competitive
flow.>f/per- away frbm the.^customers/"yhueconomy a single
First of all, ' we are not able tively
by all of us—banks,' deal* ;; sonal savings today also goes pref serve from day to day. There are,:
firm, m single union, a single con¬ this
year to place large amounts ers, institutional and other private
dominantly through
institutions' however, a great many things/that/
sumer
cannot exercise such re¬
of securities with the
government investor groups, as well as the —insurance companies, .savings you can do, some of which involvestraint. If any of them
did, it is trust funds. ' Over
the
past
10
Treasury.
Huge
as
its
operations
banks, savings and loan .associa-. little expense and little time or
said,
they would
only
injure
years, these funds added $20 bil¬ are, the Treasury (unlike muni¬
tions, and pension-funds / When • effect but;/which' might make a
themselves without
influencing lion to their
holdings of govern¬ cipal and private-borrowers) em¬ the great institutional holders cof tremendous / difference.'/. You can.
the course of events.
ment securities as their reserves
ploys no underwriters in the usual the nation's savings do not buy find many .valuable suggestions;
We cannot guide our conduct
by accumulated. Currently,
however, sense of the term. The under¬ Treasury securities, the Treasury in the pamphlets which-have been'
these norms, for they seem to re¬ the flow of
funds is
turn
to
the
commercial issued. This is not only a broad
being re¬ writing responsibility is, in effect, must
a

different

source.




heart

of

the

•

whole

War": Robertson

—

.

.

'

•

•

.

.

-

Number 5782

188

Volume

....

The Commercial and Financial Chronicle

.

(1357)
■

free

society on this planet. Like
responsibility, but an im-. the fact that—if we do need an
mediate and direct responsibility all-out emergency
plan for the you, I find the job distasteful,
of bank officers to the depositors banking system—whatever intelli- frustrating, and complex—but not
and stockholders who look to yon gent,
conscientious planning we insurmountable. It is with real
to take appropriate measures to
have", done will pay off a thou- regret that I give you my opinion
that American banking has not, to
protect their interests in all even- * sandfold,- despite the inevitable
tualities.
:
defects. If the plans we make now date, set its shoulder to the wheel

public

—while there is time—should en-

the

of

Waste

of

Question
One

able

"

and

frankly admit that if all goes well,

the

Federal

its destruction:

fares

be

in the

wasted

will

we

will

never

be

not

Milton

a

securi¬

(Special to Tpe Financial Chronicle)

LOS

ANGELES, Calif. —Merle

with

been with J. H.

South

Lederer

Co. and

A.

J.

Co.

Inc.,

Gould

&

the

Lester, Ryons & Co., 623
Hope Street, members of
York and Pacific Coast

New

Stock

Exchanges.

you

have the

machinery to
circum¬
This is not just a "'fair

stances..
weather"

responsibility,

-

to

be

of

The American

trouble.

look to you

This is

war.

you

people
for protection and for

a

must not,

role you can not,
you

dare not de¬

(Special to The Financial CtiftomcLE)
:

PORTLAND, Ore. —William B.

Mersereau

has joined the staff of
Earle C. May, 618 Southwest Yam¬
hill Street.

RALEIGH, N. C.
Lortz

is

with

—

Pitser

George E.
Co., 617

&

Opens

HICKSVILLE, N, Y. — Solomon
Newborn is engaging in a securi¬
ties business from offices at-87
Broadway.

E. L. Raymond

With Pitser Co.

Opens

y

/

SARASOTA, Fla> — Edward L.
Raymond is engaging in a securi¬

ties business from offices at 7334

North Tamiami Trail.

Hillsboro Street.

cline.

Solomon Newborn

Joins Earle C. May

necessary

sound money in all

assure

preparedness

defense

for

will

for the continued existence of a

plans and our expendi-

our

this job under

leadership—both in. peace and *in

for

ins^urance^^gamst t^ collapse; of |jie ruills cf nuclear bombing as
J Certainly we all hope devoutly, second -none in bur planning
that

to

—

F. Van Pelt has become connected

Company.

effort

;;

(

Lester, Ryons Adds

Powells Cove Blvd. Mr. Smith has

way.
As bankers,
have a large portion of the
responsibility for seeing that we

concerted

that could be reconstructed among

planning

necessary

or

BEECHHURST, N. Y.
Smith is engaging in

33

ties business from offices at 162-10

Bornstein

real

a

shifted to the government in time

you

ferred that I

"waste" in the
high-premium

budget;

of

banking

D.

get

in

have already inregard the job of
a
banking system

think

I

which make up most of the

form

civilization

ern

like " your
insurance
premiums;
"waste" like the defense expendi¬
tures

a

efficiency, that could make
difference, on that dreadful
day, between the survival of west¬

counseling "waste"; "waste

am

reconstruct

to

fraction of our present capacity

quently raised for. doing nothing
"the cost" of doing anything. I

a

is

I

us

system that could perform at even

fre-

most

reasons

Smith Opens Office

'

sense

them.

use

that
They

if

however,

wasted,

,

they serve, as the experts think
they will, to deter an enemy at¬
tack on this country.
There is another major reason
for

reluctance to take up and

our

carry

through this thankless task.

Most

of

of

fields

in

work

us

ac¬

tivity that existed for decades or
centuries before we got into them.
The
machinery
ordinarily
has
been

developed through trial and

by

error

No

predecessors.

our

that ever lived could develop

man

the

engines

internal^ combustion

mil¬

that Detroit turns out by the
lions

every

tions

of

the contribu¬
Kettering do not

year

even

a

—

create, the whole structure, but
simply
add
a
self-starter,
or
change the design of the engine.
In

our

field,

own

"invented"

banking

channels

and

capitalistic
of

dreds

could

or

—

system

invent

—

if/

a

-furnishes

that

lifeblood

the

j.V

d':

ever

one

no

of

a

In the hun-,
since European

economy.
years

goldsmiths began to lend out some
of the wealth deposited with them.
\ for- safekeeping, hundreds of fbatures of the modern

bave

tern

been

banking

sys-

and

added

•

;

re-ftx

through::1 the
efforts-1; of,
intelligent., trained,; ingenious, and~
;dariug -merif We regard the
troduction of term loans,,' or elec-y
fined

■

bahking.

■

as

considerable Steps

'yV/J-o

v

'/ r/

*

.

q
>

.

<(
/•:

J

for^y

ward—as they are.

of

parts

than

'more
that

;
■

the

these1 developments;- are-no

teven
;

But viewed asy
banking structure, 'y,

refinements

i;

of ydetail^;i:

improve the operation of apv ."
enormous and smoothly function irvg iapparatus, 'yy >;■,
Preparation for rehabilitating
,

banking

thd

clear, attack

work, without,

a

country

our

We

different matter.

very

to

after

system
on

the

>

muy;y;v:;
is

a

■

-

-

have

benefit

of

laboratoryexperiments ythat
•would -.disclose

the

eliminated In'"the

"bugs"*; to

be

next model. We

cannot

effectively conduct ' pilot
operations on a small scale.
The
is

task

almost

enormous

;

"

-

•

.

beyond

calculation, and we must prepare
for it theoretically—by a process
of deductive reasoning, the valid¬
ity of which cannot be determined
until
(heaven forbid!) it-has to
be applied "for real."

-:

.;

1
-

For

most of us, it is not easy.
pleasant to grapple with a task
of this character and magnitude.

,:

•

or

-

Before

they begin such a job, men
that they can foresee only a

fear

fraction

the

of

needs

and

prob¬

lems—that the blueprint they de¬
vise will not produce a machine

Every day of the year friendly hands

that will meet the needs that will

actually confront

cumstances,

unless

through

the

may

we

speed bananas from the Tropics to the fruit bowls

think

implications,

it

of the world...

that the job is not
doing particularly because
hope that we will never

appear

worth
we

all

In such cir¬

us.

all

the machine.

need

of

ence

chine

that

the

and

a

power

is

sound

existence

shaft, and

tem, may

But

blueprint

very

a

that

the exist¬

for

a

in

a

So

any

we

in

principle,
cylinders, a
lubricating sys¬

time

and

United Fruit Company
General Offices: 80 Federal St., Boston 10, Mass.

never

machine at all.

must,

strengthens the nations of the Americas.

of

well make the dif¬

reasonable

two-way trade

a

ma¬

ference between the ability to get
some sort of machine going with¬

having

stimulating

never

lose sight of




COLOMBIA

•

COSTA

RICA

.

CUBA

•

DOMINICAN

REPUBLIC

•

ECUADOR

•

GUATEMALA

•

HONDURAS

•

NICARAGUA

.

PANAMA^

1-

r

3$

The Commercial and Financial Chronicle

(1358)

Continued from page 28

"Tell me about it." I say, "Well, Continued from
1

apartment buildings,
We believe in re-centralization.

is where

I believe that the movement of

the

insurance

and

company

the

moving out to

major companies

office

the

United

consuming

We

apace.

business,

conduct

we

The

an

States
are

mistic, even in

in
growing

start

making

them

at $80 profit.

start

groups

are

watch,

it

sell

I

lor

page

17

malting

watches,

and

.w

•

a

limviivilll

reasonably optiYou see, the reason we always
the light of the had depressions in this country is

is

The

over.

reason

is

entrepreneurs and our

our

ernment alone. For fiscal 1950,
total expenditures of thesp government units were responsible
for $1 out of every $15 spent in
the United States. By 1956, only
six years later, these expenditures
had grown to $1 in every $4 spent,
.

•

a

.

-

of

president

ff.

.

that

friend of mine.

He

work.

i

j,u..

..

company

He knows of
to

said

one

me

:

—

tj

^

__

we would like to build a new
building, but we think everybody
is moving out to the sticks."
I

"Jim,

said, "Well, perhaps we better do
a study of it for you," which we

technological improvements. The
third is that industry needs to lo-

Technologically,
found

in

that

out

Toledo

we

believe that

industries will find that they

more

nobody had. built a square foot of have to build plants in order to
grade-A office space downtown match modern methods and modfor anybody to occupy since 1930. ern costs. Market-wise, if you are
We had not done it in Chicago in an expanding territory, like the
iintil the Prudential came in here Southwest or West or Far South,
from Newark, with risk

capital to
build a million square feet, to
rent at $5.90 a square foot. Everybody in Chicago was scared to
build a building. When they anuounccd this a lot of proprietors
of buildings said, "Oh, that is a
terrible thing.
It will ruin the
market.

It will over-supply."

What

has

Within

happened?

of the time they ODened
it they were 98% rented at* $5.90

one year

built
all kinds of new buildings in the
downtown area at over $5.90 a
square foot. What are they? They
are well occupied. What are these
apartments? They are 100% occupied. Nobody can live in or
have an office in a building that
does not exist.
We did a study
for Prudential in Boston when they
bought the Back Bay Yard. We
found out that at any time since
1930 if you had come to Boston
and wanted 10,000 square feet of
grade-A office space, you couldn't
bave purchased it. I don't know
anything about jour town, but
I will
wager you that
if you
wanted to go to your town and
buy today 5,000 square feet of
grade-iV office space you couldn't

ft

foot. We have

square

find it in your

now

town, because

no-

body is building.
The

.....

..

.

^

cial

at

are

bullish also

properties.
time

on

commer-

The United States

an

largely

was

As

economy.

a

.

What about the industrial workwho does get the $100 a week

er

and who has three kids at home?
He

is

nowhere

comfortably

near

and

mine.

have

too

much

this

even

according

standard
we

country of

living

to

your

To say that
capacity for
ours, I think is

absurd.
We have, at the present
moment, not discovered the way
to make the goods flow as we

had them flowing and as we have
to get them flowing again.

Farms v*omg Up
Now what about farms?
interested in farms.

^

in total Federal- expenditures,
m.Ur.lnr,f;olln

4

_

We

may

now

ask,

What

as

higher taxes and limitations on

be the probable role of gov- our rising standard, of living to
ernment in the years ahead?":
keep the economy sound,
Private enterprise is today ca•
pable of producing goods on such
Widespread and Conflicting
a gigantic scale that it is depenDemands
dent as never before upon the
The government has now beeconomic well-being of the masses come a vital factor in most of the
of people. The tens of millions nation's major economic decisions,
of Americans who constitute our whether they involve business,
markets must have the means and agriculture, or labor. Furtherthe willingness to buy the prod- more, there seems to be a wide,

ucts of industry if the economy is spread willingness to have gdvto Operate at the high level of ernment assume this role. If a

Mass production by" modern,
power-driven i n d u s t r y is now
capable of producing an endless

strike threatens to tie up a great

industry for weeks, the government is expected to prevent it.
If

the

close

dock

thirH

of

+h<*

ment is expected to arrange easier
credit, lower down-payments, and
other remedies. If we seek slum
we

hiSivtr

r

r

,...

As the president has stated,
?'
knew that the Illinois <.Thc demands of modern life and
Merchants was the Mitchell bank;
unsettied status of the world

considered adequate for national

the Continental was the
£eyaoids bank; we knew that the
*Tlrst was the Morgan bank.

demands

??

.

require

a more

important role for

government than it played in
lier and quieter times."

ear-

If metal

If the price of an agriproduct falls, there are

defense.
cultural

that the

.

snrf SI K ST
f?J*
o

ii

eiI> f «M-eSf
sngntest

uns mem.

J®
®

?aaK?

^

u i

^,

but ii

tiollthe
i

v

yo°u VaTe

adverfeine

ran

ca1,
the locahe not

a*

using can be not as

?
-V

It

of

a

vastly

+w

,

we

feel

acfivY

ift

q^ ^n

expanded

acre.

•

"

we

of hours we work, our minimum

restless world.

We

state, first, that

so long
as we are involved in the present

may

strucele
to

years
be

be

a

and

thi

conflict

government wdU

bv

far

the

lareest

consumer pools is

wages, aad °"J unemployment
compensation. We expect govern-

manv

ment to provide a yast expansion
of our highway system. We seek

?onthme to

larger contributions from govern-

anna«

over

purchaser

nation produces. A budget of

ment to

improve our particular

^rbor or river.

„

mately 77% of all Federal budget
jecting your institution into the expenditures are for national seflow of savers with land/and if curity. Unfortunately, there is no
you want , to contribute to your evidence that the American people
community in good will and in can look hopefully in the near
importance of in-

a

aremakinesome-

thing and growing something
ha\
our

are

already

e

we

oea'k

the

of

industrial

employment
We
going to employ a lesser and

lesser
in

passed

We

percentage

industry
ever
t

and

of

our

Deonle

agriculture

than

before
have before.
ic

i

.




e

if I
live

in

ftfdffiS?!L°f W!lat happens
W
of farm prices.

I

are as bulllsbi about land tate.

as w.^ ever were: We don't think
"? P&L asn^st»
;h:!
nexv,y®ar af it has. But there is
°nei
,\n-g abauJ- land. Suppose I
watch» ancl
and Ii meet you
maxe tbl^
inis watcn,
? i1 and say» "Jim, what do
you
,°
? living?- And I say,
I make
watches.

Then you say,

have

tried

to

give

what

I think is the outlook for real
There isn't

any

real

es-

estate

,

over

dynamics, build yourself a new future for any major decline in
building that will house and make these expenditures. With a conplvwVnvthinff ThnvW0■ , bllt the ^act ls that farm it possible for somebody to come tinuance of present world unfffpc liJil vmi'mH
prices are continuing to go up, into your town and expand in settlement, new weapons and detVrS
ana will continue, in our opinion, Grade A office space.
fense modernization will bring

^oplewho

of

competition

We expect government to pro-

national

n

me

the

constantly changing" by tariffs or import quotas,

It means also that

economy.

entlv

^

is

Nation to

If

foreign products, we believe government should help us to compete

vide security for tens of millions
In*need to assess the role of govern- of us in old age. We expect govmdnt in terms of a turbulent and ernment to determine the number

:

.

all-powerful state.

an

that we need repeatedly to
reexamine the role of government
and

niLSSnLS
k

v

omy
means

fZ,in terms
Jlblc

.umns. auuui

f soM this Spririg for $900 an

sup-

,

.125.ln.

" l

price be

ported even though large stockpiles result. If drought burns up

m,?es. 01 mdividuals were imsome farm lands, we expect the
P°*tant.
Repeated Examination of
government
to
deal
with
the
would wager that the cusFederal Role
problem.
If we are engaged in
t'le ^avin^ department,
But this does not mean that we small business, we want governJ* 0 ?
^ customeis in the gbould now thoughtlessly turn ment to establish agencies to help
savings
departments
of those over the management of the econ- us with our particular problems,

I went out

1^ thought,
$100 an acre

.

jj1 Chicago and we knew about the

Many

Lonomv invwbPi? mL
fSe haveuthe impact and the
IvdP of fhf? npnnfi Af Z iTnuS mipetus of^ urban areas which are
sia -snpifhc^mafjpnot farmsinthetrue senseof the
thnn

ask the government

prices fall, there are insistent demands for larger government stockpiles, regardless of
whether
present stockpiles
are

I bought

oountnTtha?was nro^^inrv 1 1 n0t a «ty speculator, for $o75 an
JornmerciM ''WwTfrir Vht 3 n'tJc farm ,behiad me was
in

and

strike

construction declines, the govern-

are

the

workers

large port, we turn to
government for relief. If housing
a

have moved steadily away from to provide a large part of the
the sedative hum of £$e hand funds required. If some businesses
spinning wheel and the village grant exceptionally easy instalfeed null to huge gray factories ment terms, other businesses be-

.

and

IVion

labor, and greats markets make
highly improbable any broad return of government to the Areadian simplicity of Colonial days.

a

Chicago and I figured that
farms were worth $250 an acre.
The cheapest farm I could find to
buy .was $350 alv acre.

SftolX'XS "r St°

industrv

the

w

an agran-

im

who is doing business with you
has land. If you want to go so
far as to be a mortgage banker,
you can make more money in
land by financing and providing
for .normal expansion. I am not

enough
good enough, they drive old, beat- future.
up cars. tTheir level of consumpOne Other thing about real estion is nowhere near where they fate is the influence of real estate
would like to make it.
on banking. When I was a kid

matter of fact,

!2edtomake Ws™eShe°^

that is ever going to be in your
community is there now.
If you know anything about
population statistics and you pose
those population statistics on that
land supply, there is only one way
that land can go, and that is up.
It is scarcer today than it ever
was.
It
will
continue
to
be

and

a;

Well, I am paying
commuter premium. So 1 will just
in the early history of our econ- blow that extra $100 an acre. That
omy, it took the labor of 97 peo- is
a bad investment for a real
ple oil the farm to support three estate economist, but I will buy
one

or

flow of goods. Mass markets,
therefore, become imperative. We clearance,

west of

Properties
We

crn-»_

Let me illustrate. I have two
married children, a boy and a
Sirl- That means two couples. But
they are at nowhere near even
tbeir needed level of consumption*

a larm six years ago.

,

AmpnVan

.

.

are

Optimistic About Commercial

a

Ihr>

outlays

huge

its

activity which is the accepted
objective of business, labor, and
government.
At this point, the
economic concerns of private
business, labor, and government
are identical.

people went outJying is because they were forced
to out-lying by dead capital in
_

a

kind of

in

\r

ing

policies that require those expenditures. We ought never to accept *
complacently the philosophy that
the largest single expenditure of
the government is beyond the
most critical and searching analysis.If we have a continued
growth in defense expenditures,

industries will
locate factories
because they have to get close to
new markets. In terms of capacity, scarcer.
there is a common feeling in
America today that we have too
Mortgage Financing Advice
much capacity. I think that this
If you are in the mortgage fiis complete nonsense. We have a nance business,if mortgage finane'great deal of capacity in terms of ing is a part of your business,
our present system of distribution, you have to be sure that the guy

reason

the centers of cities.

kind of

cate some place because of an of, and land, is one thing: Nobody
expanding market.
can make any land. It is true they
All those three reasons are a can dredge up a few acres in
little different today than they Florida, and we can build a beach
were two years ago.
out here, but basically all the land

did.v
We

JP,
product, or any other tion.
product you can think will
..

our

day,

T"ncfr»rir»i»1 I

-u,.,.:

• iWlfiVMW

-

sell fiscal 1959 for the Federal Gov-

them at $60 profit.

1_1

Yfc

A|MOf If? All rTODlRlllS

great expansion of construction that the profit system is selfin the commercial outlook at this exhausting. We would ultimately
capital have now finally gotten moment.
do this until we got the watch
enough intestinal fortitude to risk
As to industry, there are three down to where the profit was unsome
investments in downtown reasons why industrial plants are satisfactory. Then we would curWe have examined the succesareas.
We did a study not long built. The first of those is because tail the production of watches, sive roles government has played
the sticks

because

Thursday, October 2, 1958

.

?

watches, and sell
When somebody hears he is
making $80,
somebody will form a syndicate,

office.

That
live in the day. That

we

where

is

Revival in Downtown Building

in

daytime

the

this

.

SSHISSs • An Analysis of Critical

What's Ahead for Real Estate?
well-located

make

.

not.

contribute

infinite
number of organizations which
seek to get something from the
government or urge the government to expand its activities. In
countless areas we now turn to
government where we did not do
an

so a generation ago. To paraphrase
Shakespeare, "The fault, dear
Brutus, is not in our stars, but in
ourselves" that government grows

pressures for large defense expen-

bigger and bigger,

d£tur?s in the years immediately

-

ahead.

We

time and money to

We condemn the expanding role

of government

over

the world, but

depression in the offing. The marHowever, in any attempt to we encourage it here. With one
?®ts_ maj: weaken somewhat in reduce the role of government as hand we work to reduce the role

the next two or three months un- a purchaser of goods and services,
til we get back into the swing defense is the single most imporof full employment. But as we tant area to examine. Because of
look over the year ahead, you the very magnitude of its expenneed not worry about your real ditures, defense should-be under
estate investments.

the necessity

constantly of justify-

of government in our economic
life. With the other hand we work
even

hard(
harder
to increase it.

We ask

for la reduction in government expenditures,
but
not
where
it
would affect our business.
We

Volume

Number 5782

188

..

The Commercial and Financial Chronicle

.

demand that government expenses

sider

bo. cut,

square

stitution setting forth the rights of
for the Federal freemen. We,are now engaged in
projects "irf- our own communities. - a? great world struggle, to see
On one day, we write ourCon--whether this nation or any nation
but not

to. reduce government so conceived can long endure,
expenses and taxes. The next day. 7: With the founding of the Ifcei
we
write urging, him * to bring npublicK our people began an unhome the Federal bacon to our. precedented
record of achievecommunities.
.-ment/.within the nation and of
gressman

.

~

the

Will

-

of

role

f government ;

contributions to

progress over the

has since woild. .They went down the Great
Republic? A:-Lakes lnto the Middle West, across
few " questions may indicate the i thei Appalachian Mountains, oyer
probable trend.;
Will scientific
Pfairies in covered jvagons
progress, increase,- with far reach- end «finally across the- Rockies, :
ing effects on industry, sources of -clearing forests, building roads,
raw materials, and hours of em®?d? staking out a new nation,
ploymerit, so that those affected There c were booms and depreswill seek government assistance? sions, a Civil War, m o n e t a.r y
Will unusual new products and crises, crap_ failures, and critical
services adversely affect some, in- problems, a Life was not soft.
It
dustries as they have in the past;^5^0^ easy-. It was hard. But,:

continue to expand as it
the founding of this

will these

and

ernment

Will'

the record of those titanic years
was»ne of.ceaseless driving pig¬
ress .in practically every field of
worthwhile human endeavor. No
other system of government or,

gov-:

groups' seek

help? 7

the; adjust-

number Of years in agricul-

a

cTemand by

witna

continue

ture

enterpr^e: ever,matched .those ac'jomphshments. Individual oppor-

the

industry for price support
programs and the accumulation of
surplus products? Will uncertain-.
ties
and insecurity vi continue
to
arise

time

from

to

time

in

economic life for different
and will government
to

provide- remedies

individ u a 1 effort, and
individual reward drove free men
®nd, •women*

our

.

be expected
for these

^

opment of the nation,

w

still^dranv
cr .expand,
on our
dead

resources

to

millions

of

persons

in

.our

g

growing

demand

communities.

•/

By 1854> commodore
0pene(j japan to our

In 1867

1898,

miies

we

the

0ff

By ,I914>

Will vastly increased
highways and transportation requirements in the next 10 years
lead to large expenditures by gov-;
could

One

continue

Year

little or no

Produces

than

more

it

did

and

10

years

ago.

by year, the undernourished

clear.

and

the

become

less- to
are

peasant

eat.

less

gets

Disease and

_Witm 50 to

90%

illiterate, there

poverty

of the masses

certainty

is no

m

many of these underdeveloped nations that we shall soon have constitutional

will

the

be

government.

broken.

There

is

However, when

overwhelming majority oLthe

people of
erate

and

nation

new

a

hungry, they

spread

illiteracy,

and disease.

the earmarks of the miserable

mi£rs-fu

Even in Latin America, the final objective of destroying the present
is not now clear.
Al- social and economic order and re*
though capitalism is fostered and placing it withr ther communist
freedom is valued, there is wide*- system* Unless we propose to be

llht-

are

may

and

poverty,
a

determination

American

govern*
Industrialize and raise

to

meats

WSMsMksf® with a deisperate determ:ma
systems-

ouf

Astern^ncf me

com-

5l

lsjv^_£and

we have
invested
in

dollars

piart Of the world. Econom-

an-

other1 power'which is determined
to destroy the present social and

economic

order

and

free"

in education, in science; in industry' and in world power. We need

tL*

~

excessively ambitious rulers, these nations may endanger the peace of the entire
world.
Premature independence
can be destructive
of the liberty
of a people, and it can be dangerous to other law-abiding nations.
these

In

of

docile

been

nations, millions
'women who have

new

and

men

willing

seem

now

to

place their lives in the hands of
leaders who

the flag of ag-

wave

gressive nationalism and speak
the language of economic urgency.
With a rapidly increasing popula-

critical W

^ PThetcommumstSsv^em

will

in

under

or

more

of these

some

25

of the people
nations are

new

™

.w®®^®sses ot tne

^iommumsm Ltere ^

^

mto communism before they
are economically strong or politlca ^ ma u

We are only 7% ofthe worlds
p0.?
01?' but the future of capimlism rests with us. If we become
®
\
ytf ~a^f'
^ wo
1

doubtful whether any ^otner

1S

nafoon in tlm world is sufficiently
strong to meet the threat that
coniron's us-

our

institutions

and

Philosophy will inevitably be

our

We

have

examined,

first,

the

years

that

We ^v® legislation, which

deals

with

possible

power in business.

the years ahead.

this

But

challenge.

In

we can
an

have big labor as well as big business. We need to study objectively

^cie important question of whether
lahor now has such power thSt it
can force wage advances which
overall productivity and

exceed

create rising costs, resulting in

a

strong upward nressure qp, prices
an^ an inflated cost of living for
every (American consumer. We
know far too little' about these
hew economic forces, and we have
no assurance that the" welfare of
the American people is being safeguarded. To illustrate, are these
forces sufficiently strong to destroy, in part or entirely, the effective use of the instruments of
credit control by the Federal Re-

ifforfT
^bor

meet

age

monopoly

But today we

of the

?£

of

to

to

SrS

Bustae«^r

eeon^v

m

it
The destiny of
replace

society and the ideals we
at stake in this great

are

conflict.

caUythfit though work find saeri-

fice they ^iU achieve leadership

the'western Wo"h
and often with

Survival

of our society depends upon hard
work, thrift, and personal satirisocialistic
development, serious fice and not upon leisure, extravinflation, and a sharp depreciation agance, and personal indulgence,
of curreAcies.
It is folly for us complacently to

far beyond the rate of savings of
the people.
The result is often

fidence

in

the biggest economic sitting, duck
in history, we need tcr recognize
that no nation grows Stronger by
continual emphasis upon more Jei-

the standards of living at a rate surer and; less work. TM

ac-

SfnV=^tKhTchTevae

There is

j^y the Latin

selves in bitter conflict with

victors

as

Today

wars.

of

cherish

-

Egyptian

are

creating

outcome

We
are
now
the most
powerful nation in history,
1 We have achieved a position of
world leadership only to find our-

our

government in the years

seems

teed,

la"d

!

tame

our

•

of age and are new role of government in the
intolerant of delay and the or- United States and, second, the new
derly procedures of constitutional role of the United States in world
government. Many millions have affairs. The following conclusions
had no personal experience with are submitted:
private property.
(1) The historical trend indiWe shall be sadly disillusioned cates that the role of government
if we assume with a smug eon- will grow larger, not smaller, In

with communism.

questions, but the probable

ahead

had

we

emerged

we

every

Will the development
energy for peacetime

inspection?

of

?fnSisconsin#
EvS5"y <Jay-there are
i,ouo. more mouths to

of

Europe is in constant jeop(2) The communist system is
ardy because of the Uncertainty concentrating its resources, its
of the control of the Suez Canal, production,
and
the
enormous
the pipelines, and the oil.
energy of its people on the single

Theri

billions

purposes lead to the establishment
of agencies for its regulation and

role

of the state

area

revolutionists

35

ern

tion, 50%

ically,

these

the

In the Middle East, the Soviet

policy is to create economic and American industrialists,
political instability so that West- wealth for the masses,

young prince of the world
with practically no national debt.

in the

ernment?

China

rjch

-

two wdrld

past?

of

cost

Tm mmjrom ^ Francisco.

pie lead them to demand more
schools,
hospitals,
medical and
recreational facilities as they have
atomic

bought Alaska,

we

had a heavy interest
Far East, because we had
acquiredthe Philippines, only 600

Will rising ineomes of the peo-

of

in the Monroe

1823

as

pe

Will, trade.

metropolian
better. cOOrdittation and development by govern;ment of water -supplies
sewage
plants, educational facilities, and
streets and highways in adjoining
rapidly

centers

early

as

Doctrine.

more

legislation-' tor conservation?
the

in Latin

continual

the

national

the domi-

nant interest of the United States
America was recognized

...

.

Ahhough our peole were pre-

occupiedwith the ^internal devel-

Will the socml security program

Will

one-fourth

unparalleled

to

heights of achievement,

groups,

problems?
s^nd

Egypt.
Egypt has 400,000
miles of land, but 386,000
square miles are; unusable. As a
result, the 23-nfillion people of
Egypt are crowded into a little
area of 14,000 square, miles, only

.

that have been under way

ments
for

.

(1359)

•

world, the idea of a free society
with
capitalism and private
property—has already vanished.
—

equipment producing an
flow of goods, which is
greatest instrument for the

driven

endless

the

^ ^ When maladjustments occur
irJ our economy, Such' ag an excess
Production of some commodi.

enrichment

t0

Therefore, while some
functions and services of governnew role of the United -States in
confront us. But the truth is that
ment may expand, it is within our
world affairs.
*
the peace
power to have the relative role
and stability of the
of government decline, as private
_V,
world are in peril. Up to 1900,
New World Affairs Role,
jg empires had ruled the world,
tion and subversion.
The Free industry
continues its amazing
In 1787, the 55 founders of this largely by keeping a balance of World is in danger of being cut record of raising the standard of
Republic of only 3-million people power.
These old empires, with off gradually from vital raw ma- living of our people. The greatest

®sktihe g<^up-

'We have examined the new role

of

government

.

States.

Now

we

United

the

in

jt would be easy to

threadbare and comforting platitudes
about
the
problems that

shall examine the

„

In this battle with world

utter some

.

com-

munism, we face the threat of
piecemeal aggression, steadily losing one after the other of the
neutral and underdeveloped nations through communist infiltra-

social

and

economic

of man.

.

met
a

in

nation with

new

and created

Philadelphia
a

written Con-

their balance of power collapsed
in

the

world

two

wars.

Out

of

these empires have come 20 new

...

which

nations

have

thrown

off

of colonialism for political

years

The United

freedom.

States

was

major factor in making the idea
political freedom a great force
in the world, and this idea swept
through the new nations.

terials, such

oil, until finally
the United States may stand alone.
As early as 1952, Stalin said that
as the communist world expanded,
the Free World would ultimately
collapse.

a

of

Our

people also

men

cannot

dom

unless

freedom.

inate

have

they

declared

that

political free¬
have edbnomic

We determined to elim¬

freedom

people

and

security than any
history. This idea of

in

economic

Foremost in

recourccf,

experience.facilities. Located
for

more

than

a

century

Ji-

freedom

u

i rice

ccrJiilly invite J.

which

RIGGS
"NATIONAL
fOUNDEl) 1836
MEMBER
•

and

areas

also

now

economic

is

sweeping

The

FEDERAL DEPOSIT INSURANCE CORP.




have

vast

overwhelming majority of

ple in the
erate

through

of the world.

the hundreds

BANK

./WASHINGTON, D.C.

FEDERAL RCSEKVB EYETEM

is

freedom,
widely proclaimed by the United
States, are in a large measure
responsible
for
the
economic,
political,
and
social
revolution

rccllv opjioeite U.S.Treasurv.
I lie]

freedom

Sweeping through the underde¬
veloped nations. It is therefore a
strange historical paradox that
these two great ideas of political

and
a

of

new

millions of peo¬
are illit¬

nations

undernourished.

They

life

30 years.

expectancy of about
To illustrate the condi¬

tions under which

they live,

con¬

of

areas

some

Korea,

communists

the

will

make

over

603 V. F. W. Building

final

no

of

South

KANSAS

80-million people

of

sources

length and having

in

richest

the

democracy

and

re¬

China under

in the world.

communism

natural

India

under

being watched by
many new nations to see which
has the greater economic development. One may agree or disagree
with the policy of India, but it
might well be a major disaster
for

the

are

World

Free

if

the

385-

million people of India with their
democratic form
of government
for

finally to lose the struggle
progress
to com-

fn

China.

nnmrrmnism

mn-i

most

•

tragic

history.

The loss Of
one

was

i.c-oc,

losses

i

m

China
of

the

ArriDpipori

American

34th & Broadway

L. HART
Percent
Increase

6/30/48
Amount

to

Increase

6/30/58

6/30/48

6/30/68

$ 8,766,899
174,685

36,500,240
442,788

27,733,341
268,103

21,500,000

16,046,000
102,804,395

Svatem Statistics

Operating R.v.nurs
<12
-

mos.

ended)

Telephones Served
Construction
Program - Year
1958
Estimate
Largest in
Our History
Plant

Investment

$ 5,454,000
$27,083,376

Employees

2,600

Net

Income

(12

mos.

Average
Number
Outstanding (12

Earnings

Per

(12

mos.

(12

mos.
Value

of

ended).
Shares
ended)

The

largest

ended)
Per

379.6
111.5

9,018

13015

$ 1,045,297

3,543,694

2,498,397

239.0

598,353

2,143,119

1,544,766

256.2

$

1.75

1.65

(.10)

—

Share

$

.85

1.25

AO

47.1

$

12.63

5J24

415

17A7.

ra8>

(S.7)

telephone subsidiaries of United Utilities, Incorporated comprise the second
telephone system in the United States.
Approximately 88% of

independent

the consolidated operating revenaes are derived from telephone operatiena.
*ace of

294;2

2,900

Share

ended)
Dividends Per Share
Book

153.5

15,926

mos.

Average

129,887,771
5,500.

316.3

6,906

Stoc^h<,lders

economic

munist

36

11, MISSOURI

HIGHLIGHTS

^

were

CITY

PRESIDENT

and

? ™jSla".dS 6Xtfndi"g m?r? than

3,000 miles

on page

Incorporated

Southeast Asia, the struggle with
communism is intense. Indonesia,

some

Continued

Unite® Utilities,

the

ALDEN

nations

alone, has

Soods for which there is no de-

we

settlement.
In

Jkej®1

TEN YEARS OF GROWTH

lost 30,000
men
and over 100,000 wounded.
We spent billions of dollars and
are
still
spending hundreds of
millions
annually
because
the

all

poverty and give our
people economic freedom. As a
result, we have greater economic

In

}
J®.« 3
f

as

at

Look

world.

If L

The bal-

the operating revenues is obtained from subsidiaries engaged in the electric,

water and LP t%s

businesses.
-

36

The Commercial and Financial Chronicle

(1360)

Continued

from

We need to be

life is threatened.

35

page

that

certain

still

are

we

the fundamentals upon

An

nation

Analysis of Critical

First, in the years immediately

,

government tion ultimately is only as strong
stockpile. These activities expand and only as great as the characthe role of government, result in ter, ideals, and vision of its peothe loss of world markets, and pie.
In the last analysis, we are
compel the taxpayer to carry the today engaged in a great moral
burden
struggle.
If our people believe
(5) We shall not discuss the ad- that the budgets of Federal, state,
vantages and disadvantages of our and local governments must be
.

believe

people

be willing and able to proThe communists continually

that

inflation

will

determination to
achieve social and economic progress rapidly—or will it be possible

investment over the
However, no private busi-

pend, then they will adopt policies
that end the dangers of inflation

to those

In the great struggle in which we

society tnat lie far

world.

and

iiess

individual

no

will save

for investment in foreign
where
there
is great

money

countries
risk

involved,

are

return of

^

Investment

of

the

Not

treaty to which they would

a

setting

safe¬

adequate

up

guards for private investment and

private income.
violated

this

Any nation which
Would

agreement

seriously jeopardize its economic
greatest economic progress for a
nation results when there is the

incentive for private sav¬
ing and private investment.
A
high rate of investment is perhaps

proper

the

single most

in

important factor
economic
growth of a

the

nation.
Am,wn

inpTr

iit

TWcd
Unned

i nl

«
states

ennh

nc

rn L

Sf
i-S
some
prob-

with

Jems, and they
goal

w.nnWc

the final

not

are

broad
and
expanding
world markets. However they do
of

offer

the

means

of

now

adding

greatly to the economic strength
of

some

United

parts of the world.
States
might well

The

give

stronger leadership to the development of common markets, and
other
comparable
regional

in Fnrnnp
Ei
but in other sections of the world,
world

rangements,

such

as

not

Latin

markets

mass

only
ly

America,
and

that

so

lower

areas

of economic

strength against

communism.

(7)

The

communist

bloc

trade,
of the

world

trade of the

under¬

In

world

trade, the communists lag far be¬
hind the Free World.
However,
they

concentrate

their

trade

m

those

strategic places where they

w'oh
wish

"
to

introduce

communism,

create
of

chaos, and disrupt the trade
the Free World.
They may even

trade

at

they

have

upon

a

loss
a

them.

for

a

time, until

nation

dependent

For

already sells

example, Egypt
one-third of its

over

exports to the Soviets

lesf

the x
Free
less, liic
iG0

Nevrrthe

f:

Wnrm
Woilcl is in

3

bettei

man

many

groups

—

way—are

willing to

ends that

serve

in their
pursue

economic

to

masses

contrast

in

to the state, and to hold securely
priceless values in

free

a

beyond goods

and guns?

come

position in
than the Soviets. In
have strong nations
so

they

can

world
our

trade

desire1 to

economically
dangers of

the

meet

communism,

we need constantly
to encourage the
expansion of reciprocal trade.
•

(8). Granting that
tional defense is

a

a

strong

na-

necessity, it is

highly probable that econbmi'c and
not militai-y factors will
finally

finallv

determine the victor in the
struggle between these two systems.
This
makes financial
soundness
Imperative m ever> area of the
economy
ana

—

individual,

government.

business,

However,




a

na-

the

upon

is

is
disservice to the

a

own

selfish

to pi event inflation than by

persistent inflation threat

en*

can

marj<et

forces

tion

the

to

of 1955 to

as

natural

a

inflationary

1957

in

__

pressures
has

no

sense

diminished the need for

instead, it has renewed
^ba^

interests
that

worj^

are

are

with

short-run

ency

than

vigilance,
warning

a

constantly

political
the

at

concerned

more

with

reac

expedi¬

long

range

The

economy.

reminded

dislocations

rected

a

be

can

cor¬

and

through which forces
of competition can keep business
on
its toes to develop greater ef¬
ficiency and explore new markets.

Root of the Problem

II just does not exist today.

groups in our society. At the foot
of the problem, of course, is the

The

one.

easy

specter of inflation

behind the

looms

an

problem of

ac¬

our needs
for na¬
security and scientific development, our requirements lor

commodating
tional

essential civil governmental serv--

spearheaded

It

must be rejuvenated.
Some

simple
tion

that

is

itself

that

the

fiscal situa-

our

national

if magic

as

—

to

.<••

mu

w

growth

—

by

will enable

the economy to generate the production and incomes necessary to

•

,,

-,i

inflation^
will
of
all

nnnnnri

the
,

,

against

Trio

mil rn

•

«

The light

„

believe

grpups

answer

people

this

problem

ti

nn

At

cooperation

,

„

development

of

of

.

better

under-

citizen

on

is

a

means

and

maintaining
sound economic growth with some
reasonable price stability. In other
words, we want truly sustainable

growth,
based

that

and

growth

means

real production and real

on

consumption

—

not

on

production

and consumption geared to an in¬
flationary bias or downright fear
of inflation.

One

of

the

greatest .opportuni¬

of banking for service to our

ties

country is the exercise of leader¬

ship in supporting those in gov¬
ernment in elected and appointed
capacities when they try to take
to

steps

reduce

the

inflation

dangers and in the encouragement
and
enlightenment
of
and
co-

operation with all citizen groups

wbjcb take or

JV

■

_

.

.

can

be persuaded
_

-

be in the front lines in this

ingiy

never

seem-

ending battle.

Chase Manhattan Bank

cannot merely
spigot and produce a
flow of economic activity that will
give us all the missiles and other

turn

of

when
firmlv

and

must seek

we

obtaining

oil.

average

a

standing by the
that Uncle Sam

seriouslv

Truly Sustainable Growth
What

has

dynamic
requires adjustments by

economy

which

recession

that

us

tiolV

.

solVe

can

be

require

.

the

Moreover, the reeession 0f the past year—induced by

fiscal actions through World War

is not

We

dealth with.

triotic

,

to espouse: sound
governmental financing. A Federal deficit may be tolerated now

greater contribution to the future

merely to feed the
fires 0f short- and long-run inflaThe task ahead

which

responsibility

of America by telling people how terribly damaging inflation

meaning of our expanded program
of defense expenditures. The pa-

drive

public interest in stability of private and government credit. ; '
On the fiscal side, we have a

The cold truth is that there is economic stability and growth. No
only one sure way of hedging government can over a long peagainst inflation: that is by pre- riod spend more than it receives,
venting it in the first place. In and no people can consistently
my opinion, all of us can make a demand more than they produce,

a

Makes

Appointments

The appointment of James F.
ices' our desires ior new benefits calTy the defense burden without defense items, social benefits, and
and conveniences, and our clamors strain. One might agree with this things—governmental and private Fox as Vice-President in the
for downright subsidies. All of vlew in theory, but the truth is -wc would like to have. The public relations and advertising
these must be balanced against the
that as a nation
natioA we have done a people must appreciate that the department of the Chase Manhat¬
we

abilUy cf

them
and

our

to

economy

meet

with

increasing efficiency
willingness to pay for

our

them,

pretty poor job of balancing revenues
against expenditures in a

and

growing

nation's

War

since

economy

II.

World

resources.

George Champion, President.

Mr.
joined the bank as Assistant
Director
of
the
department in

Fox

The world to-

Only those periods most

day is burdened by a new type
warfare, and no nation has ever
really gained a higher standard
can- National
output of goods and serv- of living for its people through
not
be
achieved, or that it is jces amounted to
$429 billion in warfare. Therefore, we must meet
uniiecessary.
To
yue, this repre- the second quarter of 1958, and the problem directly and make our
We must

allow the

never

on-thc-street

man-

to

develop the
pression that such a balance

im-

s,en*s the foremost problem facing
the natl0U today*. 1 say that be"
,

effectiveness

the

cause
„

^

defense effort

of

our

,

•—

indeed

our

very

over

fiscal

Federal

its

will

year

deficit

of

produce

$12

billion.

'total

.

,

I submit, however,
close that $71 billion
merely through price infla-

that if
gap

we

,

Charts Our Goals
The

problem that faces us, then,
keep our productive system
operating efficiently so that we
can

we

toTt

The result

stall plunge deeper into

Federal debt.

problem of pass¬
ing significance, it could give us
were

1

bear the cost of national

a

_

secu-

vuiumc

*°ods for a higher standard oi
believing

keep

the

draft

and

that

that

inflation

under

economy

they

can

forced

for
defense costs by extended deficit
—
can

pay

fact that

impedes'

rary—burden
resources.

tempo-

upon our productive

I would not

even

haz-

sources

in the Ions

one,

two,

or

from productive

speculation,

creates

uses

into

disparities in

our budg- standards of living
threatens infor defense may be dividual and national securitv tnri
five years from now;
of
general

general-saps^theTitalUv

but in^the present state of world
tensions, there is not other course

burfo °ac epf L"need

for i
Sratlng a heavy Hurden Into

an

economy

This

means

us,

our

the

I believe that

situation

is

than

any

our

more

time

nation's fiscal
serious

in

the

today

past
century because, generally speaking, the public is unaware of the

other

newspapers

in

large

publications

of

general

and

whose

edi-

financial

circulations

cities

torial

name

value

of

that

we

must

give

We must accept restraint
is
appropriate in the

it

stability of credit and the

of

the

can

dollar, and

we

Tilere

,

Lester J. Gil¬

E.

A.

Sawyer,

Jr.

were

Assistant Treasurers.

must

(Special to Tire Financial Chronicle)

MANSFIELD, Ohio—William K.
PrakJ! and Clinton L. Stenger have

bfc°meT assoclate^ with Central
^ tes Investment Co., Walpark
^uiiaing.
Joins

Milburn, Cochran

(Snecial to The Financial Chronicle)

KANSAS CITY, Mo.-William
F. Anthony has become affiliated
9

^

t

_

} burn, C«och]ran & Co., Inc.,

the "dictionary 15 West 10th Street,
bapking- That goes for lending
Smith, Polian Adds
as investment
(Special to The Financial Chronicle)
oar depositors,
ouJ shareholders, and the general
OMAHA, Neb.—Robert H. BachpublJc
the o»ligaOon of keeping ler has joi'ned the sta£f of Smlth_
loans

pollcles' as wel1
policiGS- ^GGWe to
our

sound; and equally imshould guard against

we

p0lian

Bank

&
Co.,
Building,

Omaha

rities that interferes with orderly

conditiGns *** free nJai"kets- Tbe

sul'vival of those markets, indeed,

upon the willingness

„

„

..

recognize

the

broad

of

the

.

With R. H. Moulton
(special to the financial chronicle)
SAN FRANCISCO, Calif.-Wiliiam S. McKee has become affili-

financial institutions and other ated with R. H. Moulton
to

National

members

^
the T, 0i
^
for SeS'ESn1
f

investors

dis-

1947

Two With Central States

is no place tor the word w

flation.

especially

joined

Assistant

?

rvc lirnai
We
must avoid
a vuiu
like
ntvc
the
mc

.

an

Ernest F. Gustavson; Ber¬
J. Murray; Robinson Roe and

appointed

promote strength of the credit

structure.
auutiuic

W1^ ^ePend

yet,

nard

branch also

Mr. Harris

was

Charles

exercise the kind of policies which

policies
have
recognized
the dangerous implications of inAnd

H.

and

_

policies.
when

portant,

! erL™

flscal structure.

at

inflation

James

National Bank in

Warren F. Beer;

be willing to accept it.

must

efficiency^ 1 dh^rts'^^e- "s^calation'' in

ard a guess as to what

etary needs

run

of

Broadway

announced.

Chase

bert;

this age upon the position of the
United States Treasury. Financial
leadership is expected of

25

appointed
Manager in 1953.

helping to develop a better
understanding of the impact of

cold^feet thatthe!n3vemeSt "nf.ncinS which may generate in- plague the speculative fever that
mthkil security
Jrnrill" witli
wHn the
llatl0"' 9!1 fhe
contrary, our peo- begets and feeds upon inflation.
iistionsi
tne nlc should
lxnow and accont tho
a

the

Thus, may I emphasize again the

,
oui

concept of space technology fore-

promotion

the

was

point I made before. We, as bank¬
ers, havd a grave responsibility

of„

casts an increasing—not

The

and

_

Uvln«- " would be a grave mistake
if our people were mislefl
into

Corpo¬

ration.

they must shoulder the cost of
these demands thrust upon us by
the space age.

SStSZtl

niraici

Chemical

at

continued intelligent and enlight¬
ened support to sound monetary

emu

manamr

MathieSon

Harris to Assistant Vice-President

we

xuitc

Olin

people conscious of the fact that

rit.y, while at the same time providing a growing number of job
iauui

,

Vir "

was pubhc ielatlons manager for

for

is to

SttoS

groups to lace up

the

far

su¬

budget message last January. It is
the
largest deficit ever ex perienced except for years of

If this

not

is

out of reach.

the Soviet system.

Contrast this with the surplus $0.5
billion projected in the President's

is that

mark

.x,

system to retain

periority

a

billion

$500

barfcnabm4"of
ou? !ifni-We f3" "0t 1JaVe enriehed
abi_?y ?A 0U1 the llves of our people.

P..P?

economic

current

markedly dominated by inflation
have produced Federal surpluses,

the

has been announced by

tan Bank

cost of defense is real and heavy,
that it is a drain upon our

m,

overall

been

insist

Thursday, October 2, 1958

.

great mass of people, who obvi- and then, but protracted deficit
ously would never be able to pro- financing is incompatible with the
tect themselves against inflation, goals for national security and

our

ac¬

only 10% of the world's
and it has less than 3%

exalt

and

who

some

efficiency, growth, and security of

The official estimate is that the

counts for

developed free nations.

so

costs

gradually improve the standard
of living of the masses and build

and

for the restless

progress

enrich

social

Complacency Bat
Trnly Sustainable Growth

well take the initiative in prepar¬

agree,

to

also

might

world

achieve

Continued from page 15

various

The

income.

governments

of

to

1C

reasonable part of any

a

way

within the framework of freedom

—

•

of

nationalization, expropriation, and confiscation, or where
monetary restrictions prevent the

ing

whole

our

of

is in their fierce

bad because it erodes the value of
bonds, pensions, insurance pollcics, and savings deposits, and
destroys the incentive to save
upon which the economic growth
and welfare of our society de-

pri vate

role

government
to
those, functions
which private individuals cannot
perform as well, or will we as a
people gradually become less selfreliant, less willing to assume responsibilities and seek increasingly the delusive shelter and deceplive security of government.
The second Question confionts

cxploit this situation. We need to
encourage savings, even of small
amounts in these nations, and we
need also.,to encourage the flow
of far more private capital into

vide.

the

limit

we

have

recently
of

telling the public how to prepare
for a coming inflation. The prosure

ahead

inand except that of a

turbing
actions

confront motion of fears that inflation

questions

great

us:

American Problems

may

established.

was

Two

to

true

which this

.

.

Pa™y, 405

& Com-

Montgomery Street.

Number 5782

188

Volume

...

The Commercial and Financial Chronicle

Continued jrom page 5

Mils Palman's Plan to

The Outlook lor Steel

Compel Interest

automotive

to

at least 5.3 million cars

produce
and

expeeted

be

conservatively

might

industry

Conservatively,

we

this rise at 5%..
In

of

agriculture,

million trucks during 1959,' farmers have had two consecutive

a

Union Pacific System's earnings
the years have shown a great

.

field

the

Union Pacific

estimate

now

over

degree

of

reasons

for this has been the

stability.

One

the

of

large
rising income, and we
revenues
received from oiL and
believe
that
agricultural
steel
000 trucks over this
year's- ex¬ needs for construction, machinery,
pected output. r 'And if the now and equipment should increase
^
models really capture the public about 4% in the coming year.
$10 OQQ ono
Shipbuilding
should
continue
fancy, our forecast will prove to
be too' low:;' ;
z close to its present level in the
$12 084 OOOhi
year ahead.
'/■
'
" v
Steel's Major Customers
Other steel markets
military,
/
Next, let's turn to another of mining, and commercial equip- ^ The decline in the other revenue:
steel's larger customers—construe-' ijient—1appear to be in a mild up¬ is attributable to a drop in output
from the Wilmington field.
This
tion.
It has often been said that ward trend for next year.
That covers the domestic situa¬ field has been in operation for
a major depression in this country
tion—now
what
about
many
years
and
the
decline
was
exports? In
is impossible as long as construc¬
1957, we shipped more steel to not unexpected. The railroad has
tion is going well.

representing an improvement ;qf
roughly one million cars and 15Q|r

of

years

fecu^vFholding1'Thri ypfrhnf
ever^ eanSnes^from^
oneratfons declin^T^to
-°5wSSS?
thIeromn°^lhSlpfirqS
Somht'
comparable 4907.

-

'

—

this

Earlier
some

there

year,

was

hesitancy in the construction

but lately contract awards
have spurted ahead Of last year.
In terms of physical volume —
stated in 1947-49 prices—new con¬
struction in 1958 should hit $35.3
field,

billion,

the

about

same

last

as

Next year should be even

year.

better, except for a lag in indus¬
trial
construction.
In total, we

expect physical construction vol¬
ume to expand about 3% in 1959.
Now to machinery. Although the

expansion cf industrial capacity
has slowed, the cost-price squeeze
continues to force industry to re¬

equipment

obsolete

place

and

modern

more

chines.

outlook

The

shown

some

with

efficient

ma¬

here

has

improvement in the

last two months, an upward trend

which

hope will be sustained.
In 1959 we look for about a 5%
we

gain.in machinery output.
r

Steel

demand

should be

railroads

from

in
1959.
This may sound too large,
but it will be an upturn from an
by at least 15%

up

extremely low level. As you know,
the railroads this year have de¬
ferred every possible expenditure
for repairs and maintenance. In¬
creased operating revenues as the
economy moves to higher levels
will mean an improved steel' de¬

foreign customers than in any pre¬
vious year—5.2 million tons. 'This
year we
more

probably won't ship much

than half that amount. For¬

demand

reduced
drums

but

containers

and

for

shipping

reversal is indicated.

a

sequently,

Con¬

container

steel

demand for
is expected to rise 4 or 5%

next

year.

Now, let's put on our steel spec¬
tacles and see how 1959's demand

The

appliance industry has

re¬

trend it entered in

1956.

In 1957,

production fell about 11.5%, and
in 1958 another drop of 6% ap¬
pears
likely.
Through most of
this period, the appliance industry
sales

projections were somewhat
on the high side, and as a result,
producers have had some difficult
inventory situations to overcome.
They
under

now

tell

control

us

that stocks

at

ail

are

of

about

million

75

tons

of fin¬

So

our

forecast is that steel in¬

production

got

about

103

crease

of

in

million
about

1959

will

tons—an




increase

and

also

be

which is
production

in coming weeks
possibility that final

narrow

the

is

also

25%

over

be

rail

:

receives

substantial

sion.

ingots

seeking

folio amounted to $35,071,000

the

next

pay

any

period.
This income alone
was equal to $1.47 a common share
against $1.66 in -1957.
What has

Pacific

Fruit

Express,

jointly

owned with the Southern Pacific,

Payments from P. F. E. this year
are expected to exceed the $2,880,-

dai[Jlast

had

^nd
we

000 of 1957 which compared with

Capital

expenditures

last

a

on

30 davs

aeainst

cal

thelSthdav

were

total

called

we

for

unon

denosit with

on

have-

Tccount
o^Sentember
85%
us

before

decision

a

is

ers

remained
strong.
As of
30, cash and its equivalents

where we could invest money

nances

that would bring us in any income*

june

for periods of 10 to 15 days.

totaled

against

$85,693,000.

The

latter

drop was almost entirely accountable for by the transfer of $19,-

000,000

bonds

government

to

Government.
email countrv banks with total as—

an

should
$40,000,000 as compared
less than $3,000,000 equip-

mniion, which
the banks*
What yoit
propose, if put into effect, will
force all of us to give up these
funds and channel this money to

t

the big city banks,

depreciation

which

charges

t
,,

,

retirement

and

this

t

year

maturities

It

is

DOS_

trust matuimes. it is pos

"Yours +T,„
truly,

sible that this year, Union Pacific
will have earned better than $3
share

common

nrpspnt

"H. M.

v

ARTHUR,

*

a

"President"

the basis of the

on

traffic

$6

about

comprise the bulk of
in the United States.

to

with

of

sets

Cash flow should be augmented

run

'

"jyjy bank is one of those very

investment account.

by

There*

simply is no such medium for th&
investment of these funds.
We
handle them purely as a convenience to our customers and the

$79,753,000 and
current
were
$85,516,000.
Net
WOrking ■ capital was $68,072,000
liabilities

ana

business

out

Present tiamc an« business outi°°k as compared with $3.34 a
share reported in 1957.
Cates the $1.60 annual

Stanley Ringel Opens
ALBANY,

This indi-

N.

Y. —Stanley

rw£7s"engaging 'in

a

dividend is business from offices at 90 State*
Street.

well covered.

INDUSTRY

FINDS

NEIGHBORS

FAMOUS

in

IPALCO-LAND, IOWA

by

the Commission. Union Pacific has
shown good

control over operating
this year. For many years

expenses

it

did

the

show

not

same

degree

of

Sixty of the nation's top 500 industries

operating efficiency as some of
the other roads operating in its
district.

^"iVmiT^
Cr*ic*

More than two years ago

are now operating in Iowa. They find
it a convenient, comfortable location,

it started

a program of moderni¬
particularly of its yards
and equipment. Despite lower rev¬
enues and higher wages, the oper¬
ating ratio was 77.3% as compared

zation,

close

The transportation

1957.

was

Power and

and gas
based

operating effi¬
were held in line

other

The carrier also is

The

re¬

service.

on

both

Ipalco-Land has

come

months

—

with

Iowa

a

sound economy,

supply of intelligent, competent labor is ade¬

We'd like to tell you

Agricultural traffic is important

seven

markets

agricultural and industrial income.

costs.

U.

nation's

Light Company serves over 240 commu¬
electric

quate to meet the

train-miles as
program to cut passenger

to the

the

nities in Central and Southwestern Iowa with

passenger
a

of

ratio

35.3% against 35% and prac¬

part of

heart

good transportation by land, water and air.

with 77% in the first seven months

of

the

to

your

needs of expanding industries.
the Ipalco-Land story. We wel¬

inquiries.

this

P. and

year's large
crops has helped
revenues.
The
road's
carloadings
in
the
first
this

year

were

from

a

somewhat

was

drops

off

year

only
ago.

larger

than

9%
This
A copy

the

cago,
are

our

1957 Annual Report
for the asking

Burlington & Quincy which

more

pronounced

roads, but it
clines

Pacific

reported
and

granger

less than the de¬

was

by

the

the

Southern

Western

Pacific.

IOWA POWER

With crops continuing to move to
market

and

picking
carloadings

ity

of

is yours

by the Atchison,
Topeka & Santa Fe and the Chi¬
reported

manufacturing activup,

the gap between
year and
last

this

and

LIGHT COMPANY

des moines 3,

,

,

B.

s7curitle»

are

reached

of

Thia»

Please tell me and all other ,bank-

year

amounted to $60,239,000, but fi-

trans-continental traf¬

on

gauges

Joins Bache Staff

pers

1957

Hearings on this case are
scheduled to begin shortly, but it
is likely that some time will elapse

ciency

year

funds in the very shortest of pa-

fic.

this

steel

•-

to make enough interest' ta
the Treasury any interest of*
"amount on the same when
the constant probability of a calt
for these funds is hanging over
helped in this connection is the the heads of all bankers?
higher income being received from
fiive vou an examPie
Almost
as

compared with $39,200,000 in the

larger division of rates

a

received

all

would mean
industry
would
operate at about 75% of its esti¬
mated
1959 capacity.
Naturally,
we would like very much to raise
that operating rate to 100%. So I
have an order book right here and
I will be happy to talk to any of
you
about delivering most any
kind of steel, most any time, most
anywhere!
that

: 4

-

reduced, but nevertheless net from Accounts. Ho\r in the world can
any bank anywhere invest these

*U sou*ces in the first seven
months on the investment- port-

the

railroads

Midwestern

ducing

of

•

"Dear Congressman:

pending before

case now

tically

tons

-

-

.

°ther income froiil its investments. ^ "You seem to be 'spear-heading*
S' Tn? 733-^shares of Illinois the effort to force banks to pay
Ge,ntrai on which the dividend was interest on Treasury Tax and Loan

the Interstate Commerce Commis¬

tion.

million

Union, S. C., to Representative
Wright Patman follows:;

result of the Trans-Continental

Divisions

with 1957.

108

Arthur,
Bank,

"Washington, D. C.

a year ago.

The

of other commercial
deposits of various minerals which

year's depressed level of produc¬
of

State

"Congressman Wright Patman

possibility

a

Arthur

President,

over

important

an

There

source.

in¬

levels, and
(Special to The Financial Chronicle)
production is being geared closer
RALEIGH, N. C.—Raymond B.
With housing starts and Streb has become connected with
consumer income rising, together
Bache & Co., 130 South Salisbury
with a better inventory position, Street.
He was previously with
appliance output should improve. R. S. Dickson & Co., Inc.
to sales.

to

project

Text of letter of H. M.

.;

:

.

months might report actual gains

picture will compare with this would be an
important source of
year. During 1958, actual require¬
increasing carloadings.
ments for finished steel will total
There is a possibility Union Pa¬
about 70 million tons.
However,
about five
million tons of this cific might lose some revenue as

Production

cently been showing encouraging
signs of pulling out of tne down¬

expected

traffic

temporarily

barrels,
containers,

water-flooding

count

Performance

ing activity will turn upward in ished steel products in 1959, about
1959, and well completions will one million tons of which will
be about 50,000, with total fobtagain be supplied by imports. The
age in the area of 210 million steel
inventory situation, however,
feet. This would be an improve¬ will be
completely reversed, and
ment of 6% over this year's ac¬
steel users will be rebuilding their
tivity.
depleted stocks. If past patterns
Another
industry
slated
for are a good guide, we believe it is
improvement
in
1959
is
con¬ quite possible that a four million
tainers. Lower industrial produc¬ ton inventory addition might take
tion this year and the inventory
place during the year.
of

joint project with
the area on a

a

with

.

StaS&l1athd atrrth; wat;rr™'; *2'4oo>oo°in 1956-

,

runoff

into

other operators in

capacity
and
output
are and at the same time arrest the
rising rapidly. Since World War
II, steel production outside of the adjacent to the off-shore drilling
U. S. has increased about 260%,
nrn
nJ (U/0 otf all
11
*f Pro^lc*e<*
while in the U. S. the gain was arounci
oil and
gas
about 70% in that same period.
profits and at one time was equal
As foreign countries install to approximately one-half of Unmills, the technology of the indus¬ ion Pacific s income after taxes; or
try necessitates their being plants in otner words it matched the net
of large capacity.
Consequently, operatmg income produced by the
following the initial installation of railroad operations.
such mills, they may momentarily
The carrier has other large acrebe too big for the level of demand
age which
is in the piocess of
then existing in those areas. That
development., These in time probbeing the case, these countries,
ably will result in the establishtend toward
greater
activity in ment of new oil and
gas reserves,
the
export market, making the It owns
7,200,000 acres of land or
competitive picture for U. S. ex¬ mineral
rights in Colorado and
ports much more cloudy. Conse¬
Wyoming and these could produce
quently, at this time we are not
earnings m time.
It is believed
forecasting that 1959 will see any that 011 the
property in Wyoming
improvement in the steel export there is a substantial
deposit of
picture.
iron ore which if developed could
produce earnings for the land acCompares Ingot Expected

The

tinue that trend. We believe drill¬

entered

System

should

eign

:
/' *'
total will come from inventory
petroleum industry appears
and another one million tons will
to have largely worked itself out
be supplied through imports. This
of a troublesome inventory posi¬
will reduce demand on U. S. mills
tion which developed after the
to approximately 64 million tons
sudden easing of the Suez crisis.
of finished products, or approxi¬
This applies to both petroleum
mately 5 million tons of ingots.
products and the steel used by
Without detailing the require¬
this industry.
*
■
ments
of
other
industries, but
Production
allowables
h av^
certainly including them in the
been rising and are likely to con¬
total, we foresee a demand level

mand here.

on

Tax-Loan Accounts

Demand in 1959
the

39*

(1361)

iowa

SB

The Commercial and Financial Chronicle

(1362)

Continued

401

branches

opened, for

of Branch

Growth

Growth of Nation's

Banking Institutions
a

of the compensa¬

survey

tion paid officers in 3,980 National
banks with deposits of less than

$25 million. The information was
compiled from reports of exami¬
nation made in the fall of 1956

through the spring of 1957. The
figures show the average annual
compensation of the five highest
paid officers in National banks by
deposit-size groups, Federal Re¬
serve districts, location and econ¬
omy of the area.
The average
compensation for the highest paid
officer
ranges
from $4,764 for
banks with less than $1,000,000
deposits

to

for banks of

$20,145

to $24,999,000.
The
in our Annual Re¬
1957 and merit careful

salaries

appear

port for

consideration.

of

with

obtainable

tion

the

What

is

true

of

salaries

is

true

also

bank

compensa¬

bank

in

able

recent

considerably

very

anticipate

taining

good

believe

We

in main¬
and compe¬

funds

also

that

adequate

pensions and welfore
important and necessary

employee
are

in present

attractions as a ca¬
reer, and I know that most of us
are very happy that we entered
this profession. At the same time

degree that is practical and suited
to the circumstances of the par¬

offers

confident

that

many

ticular

bank.

We

in the Annual Report

IX.)

in

business

urban

tinued

sections

establishment
are

in
to

either

tunhel,

by

tut

cooperation

has

had

from

under

Several

nized

overhead

Insured Commercial Banks

the

to work with Bill Lockwood dur-

States

need

or a

ing' this year, as it was with Sam
Fleming in the year before.' It is:
pas-par«<julairly good to " note that"
pa"S-r Hulbert Bisselle
will
be
your

have

recog-

Office, sd^we shall be able to' get
and keep in close''

for -this * y
pe^i'togetheroften

faCJlBjfa^h-

acting specific legislation, declaring such extensions by•State'iihartered

institutions

branches.
not

con¬

not

the

be

to

fj.S.C. 36).

of

(Amounts in Thousands of Dollars)

Arizona

Banks, Resources

Banks using reserve
Total resources

Aggregate loans

method (number)—.

$5 Million

3,193

Total

3,519

Percent

6,712

50.80
87.40

Georgia

3,331,014

79,849,229

Idaho

7,059,731
72,789,498

83,180,243
7,330,576

89.60

270,845

90.10

Indiana

75,849,667
1,531,005
1,840,785
2,275,510
434,725

89.40

Kansas

49.20

Michigan

12.60

'Minnesota

10.40
9.90

Mississippi———'

3,060,169

—...

debts

already established
Ceiling reserve for bad debts (under present formula)
Ceiling, 3 percent of loans
:
Increase over present ceiling—

1,466,507
1,755,353

TABLE

Total

using

method (number)
It

reserve

resources

Aggregate loans

Ineligible loans

:

_

__

Net loans-

6,393

428,332

5,331
$10,719,139
3,906,238
281,188

1,173
$15,327,440
5,748,573
454,052

3,625,050

5,294,521

6,504
$26,046,579
9,654,811
735,240
8,919,571

0

0

0

0.00

New Hampshire

216,747
267,585
50,838

2.43
3.00

New Jersey

______

I

2.02

Kentucky

2.43

Louisiana

3.00

Maine

Estimated

ceiling (under
Ceiling, 3 percent of net loans

Increase

reserve

present

formula)

__ _.

present estimated ceiling

over

.____

23.60 ^

Net

increase, 3 percent formula
—

RECAPITULATION

—

Reserve for

•

Percent of——

—Bad Debts—>

Number

_

Amount

of

—Eligible Loans—

Banks

No

for

reserve

bad

debts

established

Banks with reserve for bad debts
1.99

2.00

percent

Percent

,

Reserve

Ceiling;

Ceiling

to Total

to Amount

lished

Amount

Ceilings

Elig. Loans

10.5

0

>216

10.5

2,778
1,689

2,245

33,076
25,505
17,269

13,216

84,769

in

same

proportion

to

eligible

loans

as

the

total

of

? >

:!
!>r

2

-

-

7

Total Deposits

Ml

Contributions

Surveyed

Made By

"* "

•

J

9

53

12

158

■

--

17

-

-

T- >•
"

:

67

'>136

-

1

47"

3

14

3

3

1

43

68

9

1

76

South Dakota

23

Tennessee

78

14

Utah

31

6

6

1

32
203

14
11

—

—

__

..15

.

.

>6

20.4

582

764

37.2

4.43

100.0

1,531

2,056

100.0

•

_

1

their

in

branches

the

total

Average Annual Cost ■'

Profit-Sharing Plens

(Bank only
(Bank only

10 to 25 million

,-oJBank and staff—

25 to 50 million

21_

50 to 100 million

12_
u

'

'

.

Over 500 million

„

5,924

62

17,642

(Bank only

85

23,612

(Bank and staff—

41

35,027

(Bank only

60

45,538

49

100,622

39

115,854

10

1,202,040

10

666,300

21(Bank and staff—
(Bank only
4 noi

5,937

209

(Bank only

*

196

146

(Bank and staff—

on(Bank and staff—

100 to 500 million

3,276

4,929
9,107
11,191

(Bank only

/

162

173

47

4,247

1

3,769

____

63

5,386

2,832

4

14,800

73

11,064

5

13,333

41

27,975

10,090
36,251
161,970

4

49,575

21

34,190

3

129,600

21

160,586

2

352,900
776,200

5

supervision

by 7 nonnational banks in
Comptroller of. the Currency.

operation
of

the

•

Average

v-

Other

Ann. Cost

Employee

Cash Bonus

Welfare

-

■V Plan

r

Plan'

_

1,816

=

3,213

1,475:.-

822 ;

6,722

5,225
534

13,006

5,133

507
650

282

1,021

382

1,154

255

2,263

234

2,454

118

4,788
4,571

193

23",087

72
78

9,130

106

38,916

46

8,887

57

24,346

86

99,263

39

32,126

18

176,939

3

118,922

16,600

56,700
203,350
14

296,143

639

21
271

3,571

1,521

292

3,571

2,720




j..-v

Avge. Annual Cost
To Bank

745

761

______

..

Other Welfare Plans

Plans

391

i,i50,-

(Total bank & staff

1,400

' "•

Cash
Bonus

/Total bank only__

Grand total

; ■
—

—33

prior to enactment of McFadden Act, Feb. 25,

;

1,312

__

16
8
22 V

'

:;P

-

>4,023

•

___

.

Rrofit-

906^Bank and staff—

5 to 10 million

6

96
214

__

401

3,655

-

37

__

■—

—

92

__

1 v; v
2*■■.

,

23

__

11

"

■•"Established

:

138

-

South

Carolina

;

234

341

Virgin Islands

I To Staff

78

1-

•

7

2.51

1,073

-13
361

r_

31.2

To Bank

186
■;'>

34

641

2

19

"4

547

plan

*1

39

30.1

719

'

314

Hawaii

To Staff

V'
'

>-19
> 1

^202,;>>-iiA 33 >

1.32

Sharing

2,555

■'

*1

322

.

!v

15

•

;;n:l

_________

21.1

Pension Plans

To Bank

164
*6

v

3

-

/-168

435

or

158

;V

1
__

5

VL-.■

*

402

Average Annual Cost

Pension Plan

74

•

9

-v-

>>

'•> 16

39.0

Retirement

(Bank and staff___

Less than 5 million

49"
31

—-

Wisconsin

:„-jk
of Banks

65

.

TABLE Vm
Number

Size of Bank Based

37

109

" ; ;

10

Alaska

ceiling of participating banks represents of

29

Rhode Island

23

""Estimated

6'0

>

__

'

eligible loans (2.43 percent).

4

1,017

1

17

.

31, 1357

92

__

4

;

44 >

:

Carolina

Toal
Total

2

-

"*

6

Virginia
Washington

*2.43

c

=.

92 >.

Vermont

-

over

or

8,919

Amount of

Estab-

ceiling:

percent to 2.99 percent

3.00 percent

Amount

6,504

less

or

Ceiling;

35:

156

Oregon
Pennsylvania

(Amounts in Millions of Dollars)

•

_£

146

Ohio

$485,563

______

1
__

2

,» 67

—

New York

$2,057,532
2,543,095

V':>»>;

27

.

Mexico

North

Ceiling, present formula
Ceiling, 3 percent of loans.

1

>>26.

Nebraska

New

16

3

operation
Dec.

47

44

Nevada

,

77

~

__

3

^

Maryland

10.60

5

.

2

2,183,685

Reserves already established

during 11)57

42

Branches in>

or

consolidated

62

64,498
85,432
91,825

23.60

discontinued

during l'Joi

4

.

so

Existing branches

for business

73

r*

fulf

particularly

IX

opened

•

10

——:

is

problems call for attention

many

54

District of Columbia

Massacnusetts
Banks not

that

947

Connecticut

$8,510,283 $172,709,201 $181,219,484

__

bad

for

reserve

California

ahd under

—«

Net loans-

Total

Arkansas

-

Over

Ineligible loans
-

—

I urge that you gwe:

'(12' important in tWese days when

operation on
Dec. 31, 1D5G

Alabama

Vice-President for the"

Washington: staff very

your

Branches in

(Does not include data on 440 noninsured State commercial banks with resources of $2.3 billion)

as

year.

sdction -suoport' for

Statutes

State

•

forward to liaving; John

coming

Of 170 connected fa-

'

also pleased that ,we:

am

,

Coleman

be

branches

meaning

of the Revised

5155

: to

I

*•

can

Such facilities also, are

considered

witjun

(13,216 Banks)

85 Million

'

President for the coming year; He
drive-in'iopei-a-'y spends nidst-of: his business life
bank's-parking just: across "the street from" our

additional service

promote the need for
banking service and 31%

Loans, June 6, 1957;

Bank

The most

a canopy.

usual type is the
turn located on a

lot.

of ^facilities

i*

Branches

on

office'

our

National

many

■

Debt Losses

which

the

close proximity and
authorized office,

TABLE VH
Statement Re-Reserves For Bad

f

"

an

pneumatic-tube,

sage way,

to

drive-in

in

situated

being

closing, I wish again to ex-,
press appreciation of the wonder-

of: States; and

(Table: X.?)-

numbers

in

including" reference-to

connected

sageway

modated adequately in their ex¬
isting quarters. Increasing traffic
congestion and parking problems

summary

a

(Table

businsss volume of many

creased

included

have

banks.

banks which could not be accom¬

day banking and should

be established by all banks to the

feel

four
sea¬
agencies, being operated by

National

statutes

changes.

which

including

number of branch fa¬
cilities established during 1957 re-_
fleets the continuing population
growth of suburban areas requir¬
ing new or additional banking
services, parking problems in cit¬
ies and larger towns, and the in¬

staff.

tent

the

yearend there were 4,023

The large

success

efficient

an

banking

I

685

salaries

the

included

is

During the past few years

study.

sonal

est

States have applicable legislative
provisions.

Division, from your officers and
;Committees, from the Washington:
banks have found it necessary to":
staff, and from individual bankenlarge their operations'through ers. It'has been a great pleasure'

34 withdrawn, and
in process of investigation

branches,

by the Comptroller of the
Currency to national bank exam¬
iners so that we are having and

banking

rejected,

were

footnote

banks-

Florida and Texas, both of which

to summarize the status of branch

novo

those

At the

paid

place of

A

territories

and

staffs.
I am
we have been
years to improve

the confines of the bank's

business.

Is¬

1957, of which 303 were approved,
32

of

supervisory
to say that

glad

de

487

were

beyond

applications received from
National banks during the year
118

officers
those

of

Virgin

facilities

National

established in States which do not

.

limited

of

by

permit branch banking, the larg-

.

was

States
ment

branch

other fields.

in

the

and

There

lands.

basis which will be

a

on

competitive

$20,000,000
data

sight of the im¬
maintaining officers

lose

cannot

we

portance

Rico

Puerto

of service.
year 1957 new; legenacted by several
permitting the esttblish-

During the
islation

in¬
creasingly important and exacting
bank supervisory task in 37 States,
the District of Columbia, Hawaii,

_

ducted

Banking

setup

located in 30 States. 86 have been

this type

Branch banking presents an

Thursday, October 2, 1958

.

cilities

business during 1957 provided for

(Table VIII.)

doing in this field.

the

of

of what National banks have been

from page 25

.

.

1,199

-To Staff

the

1927.
•'Does not include
District of Columbia under

Volume

138

Number 5782

.

.

in

The Commercial and Financial Chronicle

.

Washington. If you can find
for frequent meet¬
ings of your committees in Wash¬
ington; or if you can make indi-"
Vidual visits, I believe it will be
very hel-ful and for the good ol'

this

be given to Ben Summerwho, during his tour as Pres¬
ident of the State Bank Division,
showed an
interest, which *1 we
gladly welcomed, in the aims,
purposes and practices of our of¬
fice. We had exchanges of views
which were very helpful.
Suc¬
ceeding State Bank Division Pres¬

,

opportunity

Ben; knows
banker and

,

5i

Relations which

days „when v we were
at the
Uniyersity of

I believe exist be¬

tween The National Bank Division

an&:, thq State

and

I

have been

1

Associa-.

classmates
California,

particularly

en-

,

.

And

help

'

-

to

said
start, we are fortunate in
having a wonderful banking sys¬
tem with an outstandingly able
personnel.
We have the oppor¬
tunity and the obligation to work
together for its continued progress
and- success, and I know that we
so

what

repeat

I

the

will all do

..

.

as

shall give him all the

we

can...

at

cotifaged and delighted by his
coming, to.-, assume his duties as
fipn.i I thiitkAhat much credit for' Senior,. *-; Vice?-Presid
of
the
Bankers

so.

V

•

-

States

Statewide

Permitting

Branch

Arizona

Arkansas 4

Connecticut.

•

-

Delaware

"

New Hampshire

Wyoming

,

Montana

Kentucky 1

Nebraska

Massachusetts 1

Texas

Maryland

Missouri

~

West

Michigan v * C

Nevada

Mississippi58'

North Carolina

New Jersey1

V

Oregon

New Mexico 6

Rhode Island

New York 7'

South Carolina

W

Virginia

C

new

non-Federal outstanding and new

securities that will, be coming
Higher long-term interest rates; due mainly-to the
capital market, might not be takeh
too kindly by the forces that are important to the recovery: of the

Oklahoma 4

Washington

Pennsylvania 11

new

The

:

Havvgii 9
branches

within

city

branches

within

limits, of

banks

certain

in

4 Permits

only

5 Permits

branches

within

banks

establish

6 Permits

located,

- offices."
to

within

or

a

and/or

classes

cities

radius

banks

to

establish

branches

3 Permits

banks

to

establish

only

9 Permits

branches

10 There

are

establish

and

11 Permits
is

within

office

banks

to

in

a

certain

provisions

no

of

the

geographical

Virgin

Islands

establish

branches

be

to

county

within

limits

"branches"

of

outside of the commercial banking system.

office.

city of head

for limited

"the inflationary effects of the

purposes.

limits

of

or

of

the

.

the head ofiicc is

county contiguous to the county in which
city in which the head office is located/ •

or

office,

the

number

limited

or

office

the head

within

banking

district

the

which

in

V

banks, but

banks

organized

not

in

Virgin Islands

the

the

county

county

or

contiguous

to

do business

•,

the

located.,

head

the

in. which

county

office

■-

should

(Reference

made

the

statutes

various

det

for

provisions

iled

of

the

confine its new

money

raising

operation to the short end of the market was not a surprise as
far as the money market was concerned. It has been evident that
a long-term
Government obligation at this time would not have
had a favorable effect on the long-term or capital market; sine#

*

"may

'

,."

...

within

The decision of the Treasury to

branches.
•

This tends to minimize

financing.

Long-Term Treasury Issue Impolitic

.

situated.

is

office

head

zones.

local

branches ol

to

as

the

of

Urn. nee

7 Permits

branches

"windows"

head

of

within

branches

certain

establish

to

"stations,"

' agencies,"
lOd-mile

office.

county of. head
"

county.'

of

special Treasury bill, at a fixed discount, was a
the usual method of financing.
This procedure

necessary,

ness

1 Permits

a

according to Treasury officials, by the awkwardr
trying to sell a fixed interest bearing security and an
auction-type obligation at the same time. Regular Treasury bills
are usually
sold on an auction basis. The special Treasury bill
was selected to raise the bulk of the new money because experience
has shown that well over half of the Treasury bills find a home
was

Wisconsin 4

3 Permits

of

use

departure from

Virginia 1

2 Permits

not enter that

money

Inflationary Effects Minimized

South Dakota 4

.Tennessee1

-

Series of Treasury Operations

a

raising operation. There had been none¬
theless considerable talk that a token offering of Government
bonds would be made in this cash raising venture.

Ohio 2

Alaska 5

raising of the Treasury indicates that

in for sale.

sector for its

Vermont

Virgin Islands 10

money

the Government bowed to the inevitable, since a long-term obligar*
tion at this time could have had an adverse influence on the

long-term Government market the Treasury did

North Dakota 4

Utah

selected for the

$3,500,000,000 of securities just offered consisted of
$1,000,000,000 of 3.50% notes, dated Oct. 1, 1958 and due Nov. 1.5,
1959, and $2,500,000,000 of 219-day special Treasury bills,, dated
Oct. 8, 1958 and due May 15, 1959. The bills were sold at a price
of 98.023, equivalent to an interest return of 3.25%. Officials said
this cash offering should carry the Treasury over until late
November or early December, at which time there will be another
new money
offering in the neighborhood of $3,000,000,000.
December will also bring with it a major refunding operation,
when slightly more than $12,000,000,000 of Treasury obligations
come due, of which about $4,200,000,000 are in the hands of the
public and $8,000,000,000 is held by the Federal Reserve Banks;
Because of the uncertain position of the intermediate and

Minnesota

Iowa4

.

concerned.

The

Banking

Colorado

Kansas4"'";
•

Branch

Florida

District of Columbia

.'

Regarding

Illinois

Idaho

Maine

was

The fact that the near-term sector of the money market was

States With No Laws

Prohibiting

Branch Banking

!■

.

Indiana1

Louisiana

income

First in
States

Georgia 3

.

The Treasury in its latest financing went pretty much accord¬
ing to the rules by using short-term obligations to take care of
its new money raising venture; Although the Treasury likes to
have a surprise for the money market—when it is in one of its
frequent operations—there was very little of it in this one, aside
from the fact that a discount obligation was offered at a fixed
price. The 3V2% obligation and the special Treasury bill, with
a 314% return were termed as being on the liberal side as far as

economy.

Alabama *4 ""

California

Governments

on

By JOHN T. CHIPPENDALE, JR.

Permitting

Branch Banking Within
Limited Areas

Banking

Reporter

■

Government's crowdings of the

•TABLE X
States

Our

up

.

that
we

Division, of

Bank

American

the

grew

■

•

a

as

became

idents, Bob Bolton, Archie Davie
will spare lime from his duties -at-- and Ben Gorlett have been equally
The Rigg- National Bank to work
friendly, and .understanding, and
ef feetivelyfor. the; goodof.tbc- I know we have benefitted by the
NationalBanking System. ; We- contacts which have been main¬
shall call on him for important- tained between the officers and
help and he knows that we will committees of the Divisions.
I
do all vc can to help him.
have known Ben Corlett since the
I would .like to mention the fine

business

our

a bank supervisor.
in National banks,
Superintendent of Banks
for California, and occupied a top
position in an outstanding and
highly regarded; Trust Company.
He brings what we need and will
give a final account of himself in
Washington.
You maybe sure

He

-

is located in Washington is going
to be very helpful.
I know he

of the Washington office.

charge

.

banking- system. Again I sug¬
gest the fact that Hulbert Bisselle

39*"

American Bankers Association in

can

will

the

(.1363)

law.)

the only way in

which the Treasury could have sold such ap issue
competitive with the offerings of corporate
Also the mortgage market would have

to have made it

was

and tax-exempt securities.
not the stock has

New Federal Rules

Covering

Stock Transactions

a

par

value. The

the

gations will not be

par

value

face

or

House

Clearing

interprets,

Federal

recent

In the

tax

cents

transfers.
New Federal stock

issuance

each

of

stamp

tax

transfer and

make

changes

due.

re¬

difference in the total tax

a

Thus

.

transactions

involving

stocks of low par value and rela¬

law.

Take for example, the common
stock of a- company with a par

enacted

affect

present

Stamp tax changes which be¬
effective next January were

come

made in connection with

a

whole¬

sale revision of the Federal excise

tax laws, the
Both

the

CCH report said.
rates

basis

and

for

computing the tax on stock trans¬
fers have been changed.
Under
the new law, the tax on the sale
transfer

or

posed

of

stock

will

im¬

be

the actual value regard¬
less. of the par or face value, and

the

on

rate

is

4

cents

each

or

major fraction.

$100
The tax is not

to

be

cents

less

than

4

on

more

or

than 8-cents per share.
.

The

par

6
at

current

face

or

cents
5

ing

per

tax

is imposed

value at the

on

rate

$100 or fraction

of

and

cents

share on
Celling for less than $20.
per

While the rates
the

higher

c

would

be

urrent

market

subject

in¬

to

creased tax.

are

stocks

Gives

.

.

value

law, basing the tax on the
value, which in most cases

new

actual

would

be

the

selling

price,




may

Examples

of

$1.66% and selling for
$35 per share. Under the
present law, a transaction involv¬
ing. 1,000 shares of this stock is

subject to the transfer tax
666.70

$100,

the

at

rate

of

6

$1.02. Under the

on

$1,-

cents

per

law,
the transfer tax will be imposed
on
$35,000 at the rate of 4 cents
per $100, or $14.
or

Brokers
transfer

who

•

agents

new

stock

to

issuance

of

present

for

which

in
on

the

case

each

$20

or

tax

is

fraction

3

recovery.

the

actual value.

Each

issuance

classified

as a

certificates

of

is

separate transaction

present law, so that a cor¬
must account for taxes
many fractions of $100.
The

law,

new

tax

on

however,

imposes

the

the
corporation in

the aggregate value of

issued

stock

by

a

day, rather than on the
stock issued to each person. Since
one

any

the

corporation usually pays this

tax, the change has the effect of
eliminating the
"breakage," as
there can be only one fraction of
a hundred dollars each day, rather
than

a

potential fraction for each

transaction.
The

Act

actual

value

must

of

also

provides an ex¬
from the stock transfer

the

or

the certification.

certificates

of

indebtedness

representing securities put up
Effect
New

on

stamp

affect stock

collateral for

Stock Issues

tax

issues.

changes

also

Like the

new

a

loan

is made

as
ex¬

empt from tax, according to the
CCH analysis of the new legisla¬

value

is to be based

rather

value. vThe

cents

on

of

than

new

rate

each $100
actual

par

or

value,

is

on

to

Joseph Schonberg Opens

face
be

10

major frac¬

whether

or

the "comfortable restraint" attitude of the monetary authori¬

ties and it is believed this will be the case unless there is another
surge in the inflation psychology. The new offering of short-term
securities by the Treasury to finance the current deficit will

nevertheless add something to the money
these issues

of

a

Joseph Schonberg is conducting
securities -business from offices

at 31 Union

Square, N. Y. C.

supply even if. the bulk

should be taken by those that could be classified

ultimate investors.

as

On the other hand, the monetary authorities

to have taken steps rather cautiously to stem the inflation
tide to some degree, and there are indications that it is bearing
appear

fruit, since the inflation psychology does not seem to be forging
ahead as rapidly as it was a short time ago.
Reservations should be made with

N. Y.

Analysts to Hold

Haskell Sweet, 40 Exchange

Place,

N. Y. C.

Dinner Forum
President
Manu¬
facturing Company, will head tne
group of speakers at the manage¬
Herbert

of

.

P.

Minnesota

Buetow,

Mining

&

ment forum of The New York

So¬

Chicago Analysts to Meet
CHICAGO, 111.—Analysis of In¬
Stocks will be the sub¬

surance

ject of the forum meeting of the
Investment Analysis Society of
Chicago to be held Oct, 2 in the

Security Analysts, Inc.,
at a dinner meeting in the grand
ballroom of the Biltmore Hotel,

Adams Room of the

Thursday evening, Oct. 2, 1958.

Robert

ciety

of

Other

speakers will be Clar¬
Sampair, Executive VicePresident in charge of tape and
ribbon products and President of
3M International.
Louis F. Weyence

and,

actual

or

say,

Psychology Dampened

continues to reflect the neutral, or as some

B.

tion.

stock transfer tax, the stock issu¬
tax

Inflation
The mcney market

cents

of

heavy in the future as they have been in

as

offering securities with a long-term maturity at this stage of the

emption
certify "the tax for the sale of an odd lot of
stock, the stock by an odd-lot dealer to a
study says. "The liability of the broker for one of his customers.
transfer agent is limited because
The return of stock certificates
he is given the right to rely on
certificates

new

tion

though it is likely that new offerings of corporate obli¬

11

also

each $100 or fraction of

poration

around

ance

lower under

is

tax

long-term offering of Government

the past, there is still enough money that has to be raised by others
than the Federal Government so that the latter should not be

under
„

per $100 on stock sell¬
for less than $20 a share. On

5

or

tively
prices

cents

no-par-value stock, the transfertax is presently 6 cents per share

issuance

on

a

the

unless the actual
value is less than $100 per share,

on

"

of no-par stock,

Even

the actual value,

by Congress will
methods of figur¬
ing the tax on securities transac¬
tions,
according
to
Commerce
Clearing House, national report¬
ing authority on tax and business
cently

case

current

changes affecting tax computations oh securities issuance and

adversely affected by

bonds at this time.

certificate.

Commerce

been

present rate for stock with a par
value is 11 cents on each $100 of

Executive

and Director

Halpin,

Vice-President

of Sales.

George H.

Vice-Chairman

of

the

for

the

dinner

Midland Ho¬

Members of the forum will be
A.

Sjostrom,

Hammill & Co.;

Shearson,

William W. Amos,

the First Boston

Corporation; and
Miami. Corp.

Evan L. Ausman,

Stephen C. Dvorak Opens
WESTFIELD, N. J.

—

Stephen

Dvorak is engaging in a securities
business

from, offices, at. 638

Shadowlawn Driye under the firm

Executive Committee.

Tariff

tel.

is

$8.

name

of Stephen

Dvorak1 & Co.

The Commercial and Financial Chronicle

(1364)

40

commitments

Continued from

first page

if true

and

Much the

As We See

of

economy begins to lag, it must be quickly restored to its
former rate of growth. Few seem ever to

residential build¬
who now under¬

reasonably sure that the rate of new
ing will fall short of the goals of those
take to manage the economy.
be

There

to

credit-worthiness of the borrower, we may

of the

other

also

are

fields

•

which

believed by

are

likely to suffer if money becomes
dearer. Some of the current fored&sts of automobile sales
some

least to be

at

are

year

not likely to be realized

absence of very
instalment loans. A number of other lines of durable

inquire whether
it would or would not be wise in the
long run to do any
such thing..This attitude, of course, makes criticism of the
Federal Reserve authorities natural, almost
inevitable,
whenever they restrain the creation of funds
by commer¬
cial banks to take the place of
savings which do not exist.

Continued from first page

in the
substantial increases in the volume of

during next

activity which the New Dealers and the Fair Dealers
by one means or another. It has grown
be taken for granted that once any
department of the

would stimulate

presently becomes really scarce
or even moderately expensive, and. lenders are undei the
necessity of lending on the strength of their own judg¬
If mortgage, money

ment

the

has

17,603 members
represents 98% of the banks
United

the

the

States and

nation's

banking

reached,

v/ill

we

have

equally important considera¬

waited

late

too

to

be

Fair Deal,

times

most

the

unwise

truth

suffering from
There is

a

no

is

that

there

are

when

amend

in the business

or

it is

economic world

that the

course

of business

activity and of business
be determined or controlled,

such way
the longer run.

any

over

Mutual

with

meet

.

■

.

:.

Bankers

regarding differences
banks

and

Savings banks which, he
will
revolve
primarily

says,
around' tax treatment of
institutions.

alyzed the twin problems of price
debt-management and financing.
He strongly appealed to nonbank¬

ing financial institutions

to

help

prevent monetization of the debt,
and

resulting pressures. on price,
by not allowing government bonds

Other

banking

•

:

%

.

who

• ■:

addressed

to restrictive

general

It

is

policies

true

on

the part of the Reserve authori¬

enough, of

tighter late in 1957

as

course,

was

also

that

the

fined

money

case

became

prior to

decline in business in 1953. What is not
understood
so

well

by nearly

so many

the

nearly

is the fact that the part that
played in tightening the

-the federal Reserve authorities

money market upon both occasions was merely that of
refusing to substitute fiat money for saving that was not
taking place in amounts adequate to the needs of the
day.
The trouble was that the
public was trying to buy more
goods and services than the public would or could
produce.
To revert to the matter of
who

housing, if there

are

people

really want houses, and who have a reasonable
pros¬
pect of being able to meet the financial commitments in¬
volved, and if there

other
people with funds who are
willing to entrust their savings to would-be home
owners,
there

are

is

every reason to approve home construction in the
amounts
which such
accommodations can provide.
If,
JK>wever, therenre no such
savings out of which to finance
t

e

building of new homes, then to proceed to construct
them anyhow
by government subsidy or by the issue of
a
cI^dlt
1S
certainly
to ask for trouble in the years to
come. The
question is, therefore, not whether some
way

p311 he found to stimulate housing construction by tinkerwith the credit system but is merely whether or not
the
people who want the housing




to

secure

can meet the

required

sessions

economic
of

generally

themselves
scene

American

to

the

con¬

domestic

future

and

banking.

A

state

former

Deputy Under Secretary of State,
now

First

the

Vice-President

National
"An

gave

of

of

Chicago,

Analysis

of

Critical

Gidney surveyed the faster growth
of mutual savings banks and sav¬
ings and loan associations in our
dual

1%

all

ceiling of 5%.

misgivings
about the capital-asset ratio; and
retiring President Joseph C. Welman

of

dealt

the

speakers

in part

still
gave

with the work
and

banking

unmet.

Other

the

bankers

benefit of their views

ture,
look,

the

agricul¬
economic out¬

real

I

recent

the

across

■.;%%

VT

j

presentatiorvJIiecretary
'■.
"V.
;

Anderson said:
"This

Union

carried

was

Jack

of

the

by

48

stars

atomic

sub-',

marine

Nautilus

voyage

under the ice and across"

the North Pole.

its

on

It

was

epic first-

flown from

the

jack staff of the Nautilus in

the

harbor

of

Portland, England,
21-day trip from

"T

the

also

am

an

on

estate,
wartime preplanning, and
ratio of stocks to bonds

[Editor's Note — Texts of these
are
published in this
issue starting on page 15.]

a

realistically, not mere¬
telling Uncle Sam that he
stay

business

by

that
them

in

the lending
convincing our

of

out

but

customers

dence

have

we

and

confi¬

will

and

can

supply the credit needed for them
succeed.

We must continue

to

dispel the false notion that bank¬

upon

Inauguration

as

ings Bonds to help

to

run

when

cover

weather

becomes

think

that

number

look

the

busi¬

build Amer¬

Miller

Lee

Miller

P.

by

presented

was

Secretary

tificate

of

"And now, Lee P. Miller, as in¬

calling on you to help meet
greatest sales challenge for
the Savings Bonds volunteers and
since

staff

into

without

the

question

problem

one

future

is

we

as

inflation.

steady growth in the economy
on
population growth ana

formations would be ex¬
tremely healthy. .Full employ¬

ment

of

is

it

tion-

course

be

must

for;

accumulation

of

predicated

on

not

and

use

desirable,

very

based

produc¬
for

,the

inventories

that

the expectation

on

rising prices. It should be re¬
to capital expenditures that
required for the real needs

lated
are

growing

a

those

economy

and

not

generated through the fear

that inflation will make them

costly

too

if

delayed until the time
they are really needed to meet
growth requirements.
\

"Again,
look

I

may

forward

say

to

to

that

you

the year

ahead

with full confidence in the
of the

ability
banking fraternity to per¬

form

in

a

make

all

of

which

manner
us

World

War

II

the

—

of world events we
comprehend.
I
know
the
Treasury will have the same line
help from the banks under your
leadership as it had under your
predecessors.
Your work will
consequence

all

,

for it will help to

come,

keep the dollar sound and stable

family

I

De¬

Sav¬

S.

benefit all Americans for genera¬

stormy.

based

of

to

Award

tions to

of

of U.

coming President of the ABA, we

should

but

sale

ica's Peace Power."

the

A

National

between

the

the govern¬

will

proud."

thus

and

to

fortify

America's

Peace Power.
"And now,

reposing special con¬
integ¬
rity and diligence, I do hereby
appoint you Good Will Ambassaor
for the U. S. Savings Bonds pro¬
gram.
Here is your certificate of
appointment."
fidence in your patriotism,

Since the inception of the United
State

at

Program

Bonds

Savings

the end of World War

II, the

prif

vately owned and operated banks
of
the
country have been the

principal

agencies

the

Bonds.

the

for

sales,

redemption'< of

and

distribution,

During

the

postwar

the American Bankers As¬

years,

sociation has
mittee

and

had

active

an

com¬

of
each
state which has cooperated closely
with the Treasury, especially in
organization

an

.

Savings Bonds chairmen, in

the sale of E and H Bonds to

dividuals

as

a

means

of

in¬

gaining

as

wide

as

possible in the financing of the

a

participation by citizens

government.
Bond Awards to ABA Top

Resolutions

Officers
of

Banks
ored

for

the

and

Bonds

Welman,
the

were

hon¬

services

ren¬

United States Treasury

sale

Savings

nation

patriotic

dered the
in

the

distribution

when

outgoing

American

of

Joseph
President

Bankers

C.
of

Associa¬

tion, and President of the Bank of

Kennett,

Missouri,

incoming

President
and

Trust

Kentucky,

Citizens
„

and

and

Louisville,
from

awards

Secretary of the Treasury Robert
Anderson.

the

At

adopted

awards

were

<

,

of the Convention.

-

*

of

the

Association

resolutions

do¬
hanking
responsibilities, nonbanking com¬
petition, and sincere expression of
appreciation for Joseph C. Welman's leadership and statemanshlp
mestic

and

qualities
The
as

of

covering

international

some

resolutions

long

standing,

in full text, read

follows: "
The United States is

a

constant

struggle

engaged in
for survival

forces that seek to
freedom and its institu¬
of life,
our people must ever be aware of
this obligation as individual citi¬
zens, as members of society, and
against

evil

destroy

tions.

The

the

Adopted
session

second

Convention

Fidelity Bank

Company,
received

P.

Lee

President,

B.

acceptance
President of

and

get into, the lending field
large scale. We must answer

made at the First General Session

of

link

are

"I

expres¬

experienced,

banking '.be¬

downturn in business,

we

pressures

by

ness

an

for

I do think that the

In

remarks

close
fense

ly

ers

it

appreciation for patriotic
service by ABA member banks
as
Treasury issuing agents for
U. S. Savings Bonds, and
as
a
symbol to remind us all of the

this threat

to

consider

of

over¬

Newly Elected President's
Message
his

"Please
sion

ment to

Miller,

addresses

flag made available for this
particular purpose by the Navy
Department.

Mr.

high, for

are

every
as

brings
on

Savings Bonds program, it is
pleasure to present this his¬

toric

have just

stakes

proper

in trusts.

my

Anderson with a cer¬
appointment as Good
Will Ambassador representing the
Treasury Department. The Secre¬
tary said:

cause

such

with

annum

expressed

Association

challenges

per

"Of course,

banking system; Hon. Jesse

Wolcott

is

industry-wide tnv
bad debts, possibly Vz.

Of

The

Bank

American Problems"; Hon. Ray M.

P.

Finan¬

an

for

reserve

sys¬

business activity in 1953-54 and
again in the latter part of 1957 has often been attributed
ties.

secure

very hopeful that we may be able

are
;

speakers

can

should be accomplished.

our

an¬

inflation and plight of government

:

we

ing laws since the Banking Act of
1933 and 1935, and it undoubtedly

the

in

year

Number One Problem

forthrighily

by default.

hopeful that during

very

first attempt to recodify the bank¬

:

■.

Anderson

B.

am

coming

rinanoat

Savings and Mortgage Divis¬
ion, State Bank Division, National
Bank Division, Trust Division and

downturn

"I

Secretary of the Treasury Rob¬
ert

tem
.

be

representa¬

Commercial

In enter commercial

Higher Rates, But

will

American

the

between

The

i

to
of

Association

particularly

t

tives

credit and

growth will in

:

named

committee

a

little understood and

ever,

vote of 1,445

constitution.

announced

so

so
badly misunderstood as that of
banking. There are many of the newer schools
of thought who seem to
suppose that what they like to
call "money
supply" is the controlling factor in industry
and trade and
imagine that by manipulating it something
very close to permanent and unremitting prosperity can
be attained. The
supply of "money" is, of course, mainly
determined by the volume of bank credit
outstanding, and
the Federal Reserve
System can do a good deal—though
not
nearly as much as some seem to think—to cause that
supply to increase or to shrink. It does not follow, how¬

t

the

a

Following this vote, William A.
Lyon, President of the Dry Dock
Savings Institution, New York,
expressed his gratification to the
leadership -of the ABA for its
stand "against dismembering the
family of deposit banking" and

activity in fields of endeavor
slowing down of activity.

area

from

banks

''for*"
and 1,520 "against," which fell l'ar
sh ort
of
66 % %
' hecessary ■ to

stimulate

to

by

second general session of
Association's
84 th
annual

the

Rank, Franklin Square, N. Y„ was
defeated

the

or

savings

President of the Franklin National

against the inflationary pressures that brought about the
price increases." As unwelcome as the fact is to many who
New Deal

mutual

oust

the

the passage of S. 1451, the
cial Institutions Act.
This

Fails

Move

membership
failed
during
the
closing session of the convention.
The move, led by Arthur T. Roth,

effective

have enlisted under the banner of the

his

In

after its

voyage

U. S.

convention, Lee P. Miller stated:

of

ship-banking problem confronting
the Association ended, leastways
for the present, when a move to

it is to have

as

99%

resources.

The most controversial member¬

System, M. S. Szymczak, said recently,
a recovery under way, carrying
with it promise of expanding job opportunities for those
seeking work, it is still more essential that it be a recovery
that lasts, and thus provides jobs that also will prove
lasting," adding that "it is necessary for the System to
recognize that inflation is not merely a phenomenon of
rapidly rising prices. Indeed, if we wait until that stage is
essential

Nautilus,

under-the-ice
North Pole.

tion, in recognition of his untir¬
ing and devoted service to the

the American Bankers Association

at

in

Federal Reserve
"

marine

of the American Bankers Associa¬

Association
and

member of the Board of Governors of the

one

the bow of the United States sub¬

Joseph C. Welman, of Ken-'
nett, Missouri, outgoing President

meeting was the largest held by
the Association since 1922.
The

Ouster

tions. As

Mr. Welman was presented by;
Secretary
Anderson 7 with - the
Navy's Union Jack that flew from

"To

Annnal'ConveDlioti

Other Considerations
other and

Welman Receives Nautilus Flag

at the end of her

ABA Holds 84th

probability be limited in the same way. And,
of course, business enterprises need funds, particularly if
they are to proceed vigorously to exploit technological
advances and avoid so far as is possible the burden of
excessively costly labor. All this is by way of saying that
conditions in the money market and the investment mar¬
kets have a good deal to do with the current rate of ac¬
tivity in the business community as a whole and doubtless
with the volume of employment.

are

Thursday, October 2, 1958

.

Alaska.

goods

would in all

But there

be found for the

can

be said of the various other forms

same can

*

been

savings

purpose.

.

.

To preserve our way

Number 5782

188

Volume

of

standard-bearers

as

of the Free World.

.

The Commercial and Financial Chronicle

.

.

ideals

the

.

.

^

will

effort

determined

Only

.

lasting security. This ef¬
fort must be directed along three

give

•

us

'• '•••<••••......

fronts:>

The development of a scien¬
tific and technological superiority
(1)

that will give us military
second to

none.

strength

-

*

a

who, with That resolution stated:
of statesmanship, have re¬
"We shall continue to

sense

sisted efforts for tax reduction in
of

heavily increased ex¬
penditures, and those who have
sought to place government ap¬
propriations on a sounder basis.
They deserve and have the sup¬
port of bankers.

•

The maintenance of eco-"
nomic strength through an ability

produce with ever increasing
efficiency.
■
7
(3) The preservation, "through

The

of

leadership and mutual aid,

Federal

Debt

In periods of threatening infla¬
tion, the management of the Fed¬

the Free World.-;

V

way, these goals must be pursued
in an environment of freedom for
the individual—an environment in
which

not'reduced

is

man

without

robot

mere

to

a

incentive, and without a sense of

obligation toward others.
Military
strength,
economic
vitality and world leadership in a
free economy involve responsibil¬
ities that rest upon all of us. They
require:

A

(1)

/v

MV

*

;■

vigorous

free from threats of se¬
rious inflation or deflation which

economic vitality and hinder
progress,' and .in/ which price stability is recognized as essential to
maximum employmont and pros¬
sap

government
convert

when

a

power¬

toward fur¬
holders
of

securities ' seek

them

on

The

We

bankers

fully

to

free

a

in a community of free
peoples. We pledge ourselves to
the pursuit of policies and prac¬
tices

that

them,

and

others

to do

with

consistent

are

shall

we

the

encourage

same.

pledge,

the responsibil¬
in particular re¬

we

acknowledge

ity

of

bankers

Credit

is

Credit

of

financing

deficit

heavy

a

conditions

under

of

threatening inflation and a de¬
sire of investors for liquidity.
the Treasury in orderly financing
new and maturing debt obliga¬

of

tions.

We

shall

investors

to

*

time since World

no

has

the

had

Savings
much

so

American

We

his

War 11

Program

meaning

citizen.

stimulate

to

Bond

for

the

must

help

incen¬

patriotic

lore

the
do

pledge vigorous support to
Savings Bond Program.
We

however, with the convic¬
the program must .be
accompanied by an attack against
so,

tion

that

.

investment

in

tend

that

to

people's
Savings

our

their

Bonds.

Government

in

requires

government

participation

ac¬

community

by

work

communities,
to
conscientiously, through

instrument

instability, retard¬

their

representatives

growth

and

economic

and

prog¬

We pledge to support policies
that seek to avoid unsound

and

monetary

use

of

combat

to

deflation.

The

policy

credit

of the Federal Reserve

essential

System is

inflation

Federal

and

Reserve

leaders

in

in economic

particularly

con¬

for

its

formulation of

the

alone

communism.

The

health

operate

environment

fiscal

of

we

to

return

the
the

stability and

the avoidance of inflation.

To

no

small

degree, the spread of infla¬
tion psychology in recent months
is due

to the prospect of a heavy

government

deficit.

ing

deficit

Federal

A

continu¬

infla¬

under

tionary conditions is unconscion¬
able.
of

our

major

tasks

is

to

carry forward the message of in¬
dividual and group responsibility
for

sound

Federal

The desire of

benefits
be

from

balanced

national

our

fiscal

the

security.

more

must

needs

of

The people




we

political
longer
can

no

that

"means

must

we

harmonize

to

be

individual

cial

interests

group

relationships

affected

to

further

by
the

solidarity

rity and
peoples.

free

among

late

world

trade

nations

other

to

We

economies.

and

assist

to

strengthen
believe

that

their
this

is essential, in the long
to both our military security

course

run,

domestic

and

we

along

favor

the

economic
serve

economic

such

health,

further

steps

road of international
cooperation that will

to attain these

objectives.

Savings and Loan Associations
It

that

is
the

particularly
resolution

Convention

with

appropriate
the

1952

respect to

sav¬

of

'

calls

this

of

in¬

Association

\

.

man

of the

and

statesmanship

Welman.

its President

as

a

qualities of leadership
of Joseph C.

We

extend

sincere

thanks

for his

devoted

and

to

him

our

appreciation

service

behalf

on

of the Association.
To

the

other

officers

and
on

Savings

Baird

National

is

"A Pause for thought might be
appropriate here as the study
shows that expenses were up
were

over the prior year> wages
up

" 8.1%,* interest paid on
money up about
taxes

were

9.3%,

up

and

T

...

.

Supervision— Problems and Op-

j7
stepped-

Savings

up

next

year,
Baird said.

Bonds

0f
Gf

military,

crises

the Middle and Far East.

Mill-

preparedness
will

age

JJV
a*
that

the

missile

undoubtedly be

expen-

herefore,

< u

in

Savings Bonds Program
be pushed more
vigorously than
ever as
a
healthy means of providing the Treasury Department
with necessary funds to-help fi¬
the cost of

gratitude

for

loyal arid effective work.

Mr.

their
.

the

Committee

the

State

Legislation

on

Bank

Division, at
which the subject discussed was
'How Can We Improve the State
Banking System?'; and lastly, the
panei discussion
boards

before

state banking

on

the

Committee

on

we recommend state Legislation at Atlantic

the

nance

tion, and the officers and members

Chairman

At present our coun-

.

°f the Committee on State Legislation, the State Association Sec-

for

program

Committee

Rj1
several others; for instance,
?e kro.cl}ure entitled State Bank
Portunities. We are proud of our
participation in the joint meeting

^

^

ee

Division

our

of

f endorsement
,uncm^ I16*ABA
of a

it

Particular study of

Trust

President

Savings

Company, Washington, D. C.

the
Di¬

visions, Sections, Councils, Com¬
missions, and Committees we also
our

States

defense

our

ex¬

penditures."

members who. have served

express

United

Mr.

taiy

timely that during the
the American Bankers

year

banks, private banks, industrial
banks, and cash depositories), and
522 were mutual savings banks.

one-third,

Program, Bruce Baird,

the

that

Appreciation

was

United

1958."

ii

It

i

nation, 8,867 were commer(which include loan

banks

and trust companies, stock savings

a+
time and savings
States

Bonds

ef¬

the elimination of inequity in the
taxation of financial institutions

'

cial

"for 13,1 %

-i

is engraved "For Patriotic

Service,

;
of

intensifed

be actively sought.

year ago.

in the

Their capital position
larger than a
Of the 9,389 state banks
million

„

is the declared policy of the mem¬

bership

$548

was

a

existence

for

assets in the United States, an all-

time high.

a

reverse

by the elected officers, ap¬
propriate committees, and staff. It

City,
special committee of the Division appointed in 1955 to work
in liaison with

similar commit-

a

tee of the National Association of

Supervisors

of

State

Banks

met

with the Executive Committee of
the

Baird

said

the

Committee

is

"deeply concerned with the
growing problem of inflation" and
emphasized that the government
"must take every

possible step to

prevent

erosion

further

of

the

N.A.S.S.B. in Washington on
April 10. There are a number of
problems confronting the superviin their various states which

sors

were

discused in detail and

steps
attempt to assist
them with their problems as well
as
strengthen the various state
taken

were

to

hospitality of our hosts, the purchasing power of the dollar."
Chicago banks is very much ap¬ Raising govern m e n t money banking codes especially in regard
preciated.
We are
legislative
questions.
grateful to through the sale of U. S. Savings to
Many
the hotels, the press, and all others Bonds, he pointed out, permits the^ matters were discussed including
who have contributed to the suc¬ government to draw on genuine the chartering of new banks and
cess of our Convention and to the
savings in placing its Obligations branches, responsibility of direcand
to
avoid
more
enjoyment of our visit here.
inflationary tors, salary, department budgets,
types of financing. Sale of Sav- as well as the organization of a
To Push Savings Bond Sales
ings Bonds is particularly impor- new Washington
office of the
More Vigorously
tant in times of deficit financing.
State Bank Supervisors. I really
The

In

accord

with

for

Treasury's

increased

sales

the

feel

ex¬

ABA

Suggestions to Treasury

has

The

ABA

to

Savings

Savings

Bonds

Committee

recom-

recom¬

mended that the Treasury Depart-

mended that sales of United States

mentseek the following objectives

Committee

of

the

ABA

riiiuinrf

Savings

Bonds

"be

pushed

more

tho

-I

novr

inoo

l

during the next fiscal

that
a

this

liaison

committee

and needed function

proper

perform,

"Now,

lest

thing that the

you

state Bank Division has
.

year:

.

lems, let

(1) Increase the number of payroll savers from QV2- to 10-million, and broaden
the
payroll
savings
plan
to
include
more
companies.

that

Division
same

-

make

me

observations.
sense

no probfew personal

_

...

we

is

in the

true

State

in

a

Bank

looking

are

gun

a

It

barrel

Bank Division.

down the
the National

as

We

are

interested

in sound banking practices and
motional efforts among self-em- good banks—but there the similarployed
and
professional people ity
ends.
For instance, when,
(2)

for

and intensify pro-

Expand

the

regular purchase of Sav-

in mind that

Increase the holdings by the
public so as to maintain at least

se's °f state la™s t0 consider and
™hat ?. P™POT
your state may
entirely contrary to law in

the

present

total

ratio

national

F.

James

Stiles, Jr.

15%

of

debt

Bonds
Bruce Baird

members write in for action, bear

ings Bonds.
(3)

(holdings
billion).

in

of

M

now

are

the

Savings

$42^

vigorously than ever" next year
help meet the problems of
mounting defense expenditures
to

and inflation.

Committee

Bonds

Savings

tendance at

and

the

at¬

the Convention heard

Savings Bonds sales for
the
first
eight months of 1958
which showed that purchases of E
and H Bonds totaled $3,264,000,000
reports

5%

or

tions
bonds

Savings

than

year ago,

a

of

in

matured

were

13%

similar

the

while redemp¬

and

unmatured

lower

than

in

Stamps

children

States

addressed

by
James F. Stiles, Assistant to the
Secretary of the Treasury and
were

national director of the U. S. Sav¬

ings Bonds Division; and Mrs. Ivy
Baker

Priest,

Treasurer

of

United States.

the

are

~~

housewives, as in¬
of United
Savings Bonds.
purchases

Report of

the

State

Bank

.

—
mine- Even 4fc
the way of life, inmay

be

rate,

,

,

.

.A?"i?lSI^niL0fA ihAe TStalG
Bank Division of the
Hollenbeck,
Board

and

Farmers

«£i,

ABA, L. A.
Chairman of the

President

Merchants

and

Iroquois,
^

S.

D.,

...

of

on

the

State

reported
^

The Committee

,

State Bank

annual study on the 'Condition

and

Operation

The

report

State Banks.'
includes an annual study of earnings and expenses.
This study covers 9,389
state-supervised banks as of Dec.
of

also

1957.
and
shows
that
the
Stiles, 31.
made total resources of these state-chartered
institutions
amount
to
$138
presentations.
To retiring
ABA President Joseph C. Welman, billion or 53.4% of all the banking

During

on

behalf

three

the

session, Mr.

of

the Treasury,

At

any

have to reconcile all these dif-

ferences

in

order

to

work

out

a

sensible overall program.

In doing
ibis, we have to contend with an
appalling turnover in the officials
"I

charge of the banking depart-

ments in

how

some

little

states. It is

some

of

these

a

shame

men

in

responsible positions are paid in
parts of the country. The

opportunity. It often happens that
we send out an
inquiry to

when

states, before we can get anything done, some of the key men
certain

areas

have

been

changed, necessitating starting
over

while

new

men

acquaint

themselves with their offices.

Research has for 27 years put out
an

entirely different.

>*esult, of course, is that many of
them take other jobs at the first

_

.,

have 48 different

some

Division
.

Bank,

chairmen

States

that they

so

of

number

United

C„a
" SL?a.^ .arly f?h?.01
and

stalment

1957.

During their meeting, Commit¬
tee members and Savings Bonds

of

available to additional millions of

on

more

the

outlets

ABA

in

chairman

(4) Increase
sales

we

terests, and needs of people
we

months

We commend the 85th Congress
for adopting measures to stimu¬

action.

people for

government
with

world

broad objectives of national secu¬

and

One

of

international economic and finan¬

pledge

continued

stitutions

Wo

Financial

Institutions
The

upon

in

an

of

•

we

+H

size

institu¬

our.

and

basis consis¬

a

economic

of

policy
Federal

unsound

operations,

with

Taxation

/~n

j

^

41

nnHIr^ac an? Pr°grarn- The sec- excepting Federal and state taxes,
was fifty-cent
a silver medallion the which were up 16.9%.
of
piece.
On the
face is
minute rqan and on the
Yfe .are P1"®^ npt only of. this

''■•-V;';

■

The

willing

effectively

support of efforts
Federal budget to
tent

credit

banking

our

our

and the de¬
it are insepa¬
rable from the strength of the Free
World.
Having accepted the re¬

This

that

and

economy

made

tolerate economic isolation.

cannot

tions

tions."

hope to
against world

policies take effect.

Recognizing

differences

cannot

sponsibility
leadership,

Policy

substantial

between savings and loan associa¬

Responsibilities

struggle

•

t'
thrnnivf
thiough the

nntinn
ation

to the

as

legislatures, for

America
win

c?

a

dated6 ^eot &

through

Federal

in

reliance upon the market place as
the
vehicle
through
which
its

Federal Fiscal

advertising

or

and

misled

or

of

International

mands

and

not

sound
legislation not only in the finan¬
cial field, but in other areas close
to the broad public interest.

domestic

to changes

the

local

Board is to be warmly commend¬
ness

should

It is an important respon¬
sibility of bankers, as leaders in

ed for its courage and responsive¬

ditions,

real

Bond's

thousands

ible

publicity

hortation

security and higher living
standards. Unwisely used, it is an

credit. We recognize that the flex¬

•

inflation

of

forces

tional

ress.

;

confused

Association had

laws.

ing

be

past

Savings Bond Program

a tz>

-

such

in

catalyst for
economic growth. Wisely used, it
is an asset indispensable to na¬

of

public

The

A£A Savings Bonds Chairtion

other;

encourage

participate

financing.

tive

potent

a

tw

l!!Lc nCe

the

Welman.

a

in recognition of

was

insist

that

Mr.

featuring

Savings Bonds Chairman Baird

clear¬

forts

in

Federal

Good

Soundness

opera¬

Treasury

Participation

spects:

and

savings and loan
more

of

leadership in behalf
of
the
United
States
Savings
Bonds Program.:

circumven¬

practices

Bank

Mr. Welman's

rights in order to

of Federal

from

presentation

rules,

equity in taxation of financial in¬

destroy the value of

In the fulfillment of this

the

advertisement

message

meas¬

Congressional fiscal actions
impose a great problem upon the

that

;

essential to the survival of

the

-

Bonds

ly the worthy purposes for which
they were originally created. We

appreciate

group ^pressures

economy

and

President of the

„

for

press

is

Kennett, Mo., Mr. Stiles presented
a
framed replica of
a
Savings

'i I

,

permissive

States'

of

adjust

sacrifice "of

;

interest 'and

-

regulations,
tion

who

abuses exist¬

any

through

scale

broad

a

tive to share directly the finan¬
partisan
cial responsibility for our defense
in
program. The regular purchase of
favor of the broad national wel¬
Savings
Bonds
is
an
effective
fare, so that economic stability means of
impressing the impor¬
and growth can be fostered while
tance
of
sound
Federal finance
still insuring the basic freedom
upon our people while at the same
of the individual to make his own
time encouraging thrift—the base
decisions.
:
r
for
personal security and eco¬
We bankers recognize these as nomic
progress. We bankers there-

;l. (3)

ing

;

i,*

remedial

propose

correct

tangible assets.

At

(2) A proper balance between
the requirements of national secu¬
rity and our desire for better liv¬
ing standards.
/
""'- V.

to

into money with which to acquire

■:r'"' •* ':y

'

force

inflation

govern¬

We pledge full cooperation with

growing

and

potential

ther

t

economy,

perity.^

ment. The debt becomes

and

purpose

of the most chal¬

one

lenging responsibilities of
ful

American

the

to

conform

To

of

other nations

with

ties

our

eral debt is

will

ures

associations to reflect

•

moral

and

tions

(2)

to

ings and loan associations be re¬
affirmed
by : this
convention.

those in public life

are

the face

•,

.

should understand that nothing is
free. Especially to be commended

(1365)

"One
to

me

.

.

.

thing that has come home
very
thoroughly is the

!*10ag.ll|;
3S 3 natio?1 se®m
J® think that it is proper to take
th« ea?y way in everything from
schooling of students to the run-

o£ a business. I don't mean
at we are necessarily lazy, but
we are ow-rWVmgour responseContinued on page 44

#

42

The Commercial and Financial Chronicle

(1366)

Continued

from

Our

iodical

41

page

Bulletin'

'Trust

is

published
ten
months
a
year,
September to June, by our pro¬

ABA Holds 84th

fessional

staff."

National

Bank

"

cil. at

Economic

April.

completed study by the
Policy Commission of
ABA, Which was published in the
September issue of 'Banking.' It

Annual Convention

In

his

Division

Bank

of

the

their

the

sale

ing

bilities.

to shirk our responsi¬
must

We

forward-looking if
at

forces

are

to keep

we are

work

and

alert

be

There

with modern problems.

up

nation

the

in

which

could destroy our
dual system of banking; and there
today

other forces which,

are

asleep, will take

if

are

we

business

over our

in one way or

another. Don't for¬
get this for a minute. Let me add
that
if anything
detrimental to
banking starts, it makes no differ¬
whether

ence

it

does

smallest

but

selves,

not

do

outpost.
them¬

correct

rather

they tend to
they
blanket
the

until

spread

in the

or

farthest

and

ills

the

in

so

largest city of the nation
These

country.

The time to correct such
situations is when they are small
and

relatively unimportant, not
they have become conflagra¬

after
"If

banking is to continue strong

be

must

known

it

as

is

post ourselves.

alert and willing

today,

we

We must be

to stand and be

don't

"We

The Commit¬

ber from each state.
tee

Legislation

Fiduciary

on

the Council

are

have

the

here

time

today to go into all of these situa¬
tions—but just take the matter of

and

preparing

now

a

fiduciary legislative pamphlet
covering all of the model statutes
affecting trusts that have been
approved by the Executive Com¬
mittee. The study, will show what
have

states

the

enacted

various

statutes, the citations to the codes,
or
not
changes
were

whether

leading cases af¬
This will be
helpful to trust men all over

made, and

any

fecting the
very

statute.

the country as a
various

in

guide to the Jaw
All

states.

the

of

re¬

search work is being done by the
Council members in the various
states.

,y\

"The

Committee

Businesses in

Handling

inyTrust' that is

nesses

Handling

on

Trust has written

on

a

Busi¬
being

now

printed.

It is a very complete
book, to be used for guidance in
this
most
important field.
The
late

Fall.

done

a

in

Committee

This

the

has

wonderful job, and all its

members
"The

be congratulated.

tc

are

Committee

In¬

Trust

on

competition. We well recall the
day when we had too many banks.
Today there are many cities where
you will see a certain bank on a

active.
Beginning in the September 1957

certain

Committee

location

block

you

to

loan

10

sorts.

they

will often

all

3

various

be

small,
minute that

may

thing for

will

that

they

of

a

from

see

companies

True,

but don't

within

and

a

remain

and

small

they will not eventually get

good deal of the bank's business.

a

We can't hold all of the business,
but we had better take a hard

look at

shops and see that we
are
not doing something to help
the business go elsewhere."
our

Trust Division Head Speaks
Some
Trust

of

by

up

Division
of

activities' of

head

outgoing

Walter

Trust

Kennedy.

President

the

First

progress
made and
of

the

Walter

were

Kennedy

successfully

however,

manner,

some

new

projects were
commenced
during the current year that will
fruit

until

some

years

ahead....
L "All

of

our

16 committees have

held meetings during the year. The
fact that a portion of the
person¬
nel

on

each

.forward

committee

each

year

is

carried

provides

con¬

tinuity to the programs and
mits long range projects.

per¬

*T will not summarize here all of
the activities and
accomplishments
of all of our

committees,

mention

seem
'

"The

Committee

Legislation
Act

few

a

but

events

I

that

particularly significant.

for

Mutual
pany,

-

has

the

on

a

Incorporation

Model

of

a

Trust Investment
Com¬
patterned after the New

York
statute, but it is broad
enough for adoption in any state.
"This Committee" is also working
pn

several

other

model




statutes.

of the
r

-

a¬

Trust

and

the

of

ment

to

actment

have

the

m

are

more

should

ceived

by

all

It

be

available

will

well

be

trust

re¬

knowledge
the

in
Lockwood

M.

Wm.

the

the

that

pray

more

a

reasoning may dominate our
thinking and our actions. ...
"We are told that at the end
there

were 4,627 national
operating, with almost
as
many branches as there Were
chartered banks. The Comptroller
states that 'based upon the funda¬

of

1957

banks then

considerations

mental

of

manag¬

erial competence,

adequacy

of

capacity,

an

continues

to

made substantial

and strong.

We

not ready

are

retire.

deposits

of

terest

customers.

be

The

amends

1958

Federal
that

Glossary
this

late

Fall.

Statistics is

on

One hundred and

ticipate,

to the restrictions

secured

another

of

cant

developments

may

take

place

in

in

this

the

field

coming

year.

"The four annual conferences of
the

Trust

Division

members

our

developments in
of

serve

abreast
our

of

to

keep

current

various fields

interest.

"Our great Mid-Winter
Trust
Conference, held annually in Feb¬
ruary in New York City,
is in

unique in Association
The 39th Annual Mid-

many ways

meetings.

Winter Trust Conference last Feb¬

attended by more than
2,100 persons and was inspiring as
ruary was

educational.

as

"The
ences,

three
regional
confer¬
consisting of the Mid-Con¬

tinent

Conference

in

November,

the Southern

Conference in May,
JRegional Confer¬
October
are
likewise

ence

in

meetings
benefit

to

trustmen
year.

that
the

are

replete

with

large numbers of
they serve each

whom

These conferences

are

pri¬

marily educational in nature.
"The Trust Division is the
only
division in the American Bankers
Association that publishes a
per¬

1957

increased

and

billion

$2.1

by June 23,

Probably it is safe to gen¬

shift,

in

that

there

1957

was

a

continuation of a trend
earlier, from spending to
saving. Perhaps this tendency was
or a

begun

encouraged by the increase

from

2Vz % to 3% in the maximum rate

payable

time

on

deposits

effective

Jan.

Board

Governors

eral

of

Reserve

"The

1957,"

1,

of

made

by
the

the
Fed¬

System.

increase

than

It is likely that signifi¬

Bankhead-Jones
Act

billion,

in

loans

net

actually
the

Was

somewhat

growth

reserves

of

de¬

approxi¬

m

in¬

to

to 25% the limi¬
in¬

loans

Secretary of Agri¬
pursuant to that Act.

culture

"Finally, I direct
Small

your

Business

1958, which

by the President
302

(b)

vestment

gible

for
in

Investment

approved
Aug. 21. Sec¬

was

on

of this Act provides

that shares

banks

attention

in

small

business

companies
purchase

shall

by

be

in¬

aggregating
1% of capital and
surplus. This new authority per¬
mits-national
banks, ; and statenot

than

more

banks

authorized

by

to

/the

state

law,

31 and

$50.9 billion

on

"At the end of 1957,
of national

banks

Dec.

financial institutions of the

coun¬

"Economic growth and expan¬
sion put a particular strain on the
risk
and

relationship

assets.

Banks,

in

the

of

capital to
like business

industry, have found it diffi¬

of

and

business

in¬

small

panies
juncts

or

other

financial

thus

will

may

service

their
the

be organized as ad¬
affiliates of existing or

"Jof

such

'small 4

and

enlarge the

institutions

communities.

'

business ;

investment

is experimental,
involving; greater than normal
risks

for

every

national

banks.

Nevertheless,

bank

should

con¬

sider it carefully with the thought
that active
participation in the

might

tive role in the

organization

of

enhance

such

the

a

company

bank's

effec¬

area it serves.
:
capital
revision programs, which added
"Perhaps, the most noteworthy
$223 million to their capital struc¬ single
development -oi the past
tures. At year-end, the aggregate
year
for our division was the
of
capital
funds
and
reserves
progress made in planning for an
slightlv
exceeded
$10
billion, appropriate - observance : of
the
equivalent to 9.2% of deposits andv 100th •
Anniversary of i the-4 Na¬
.

.

.

8.3%

$1

of

$5.80

of

total

assets.

There

was'-

capital, protection for each
of

risk

assets.

The

to

the

raise,

from

the

membership, the funds

necessary

to finance such

servance.

Moreover, they author¬

point

a

pose

of

ob¬

an

ized the President of ABA

|o

ap¬

Commission for the pur¬
making and executing
plans for the Centennial."

Report of Savings and
Mortgage Division i

John

Adikes,

Savings
and

and

President

Mortgage

President

of

"savings

the: Jamaica

Jamaica,

N.

Y.,

de-

posits
banks

the

of

Division,

in

have

continue d
their

upward

trend

during

the

past year.

in

both

t

a

mu-

.

1

savings
banks
a n.d
u

mercial

c om

bank s.

total

The

held

now

which

John Adikes

by

banks

all

.

savings
is

represents

June 30,

an

the

billion .for

$9

$94

nearly

billion,
increase of
year - ending

1958.

:

'

"For the second successive year,

savings and time deposits in banks
increased

have

in

accounts

sociations.

12

months^in

accounts

in savings

billion

increase

banks,

share

and

in

associations

loan

share

than

more

savings and loan as¬
Compared with the $9

increased

approximately $5 billion. The total
net
amount
of
savings now in
commercial banks is $61
billion
in

and

mutual

savings banks $33

billion.
Growth

"There

in Mortgages

has

been

renewed

ac¬

tivity in mortgage market's, and in
mortgage investing by banks. On
June 30, 1958, banks held a total
of

tional

has

been

very pronounced in the
following World War II. At
of 1945, total mortgage
loans held by banks in "the
couptry amounted to $9 billion.
At
that time, commercial banks had
16% of tiroe deposits invested in
mortgages, and 27% of savings
deposits of mutual savings banks
years

the

end

invested in mortgages.

were

;

•

to

Admittedly;

company program

national

undertook

institutions

operate to

cult to retain enough earnings. It
is significant that during 1957, 228

banks

formation

operation

$120,522,higher by $2,820,658,000'
previous year-end. By
June 23, there had'been a further
increase of $1,946,175,000 to a to¬
tal of $122,463,815,000. Associated
as I am with a
small bank, truly
in the country, I must confess that
such figures appear astronomical:

proper

leaders

vestment companies. He believes
that the majority of " these com¬

640,000,

Division's

basis

be
small

total assets

than at the

authorized

Division

to

June 23.

were

they

Bank

voluntary

a

extent

the

on

on

approximately $45 billion ,in
mortgage loans; commercial bank's
have 39% of their time deposits
active participants in
the
so invested, and the ratio of mort¬
business investment company pro¬
gages
in mutual4 savings banksgram.
; •• : "
stands at. 65 % pf. theirtotal de¬
"The Administrator of the Small*
posits.
The popularity of .mort¬
Business Administration frankly
gage loans as investments of sav¬
states that he is looking to the
ings and time deposits in banks
chartered

net

$50.5 billion

National

eli¬

try, particularly -the banks, to be

of

Therefore,

national

amount

an

mating $1 billion, the system had
loans

im-

Anniversary

all banking has in the
ap¬
propriate observance of that event.

loans

Far

amended

was

posits ^declined

the end

Small

subject

upon

the

of

de¬

or

limitations of

or

imposed

national bank

After

study for
enlargement of opportunities
advanced
training in
trust

be

by

posits.

a

not

par¬

by real estate.' "i

"The

Act

to

under. the
shall

on

greater

engaged in

basis,

section

Small
cooper¬

immediate

an

Business Act

this

provide

agreements

sured

be available after Jan. 1, 1959.

is

on

Act

of the

the

Administration

through

ferred

to

tation

thirty-two

Trust Per¬

Act

which

nearly $2 billion
year-end total of $109.4 bil¬
lion and had increased another $1
billion by June 23. Demand de¬
a

$2.3

on

in

24

tional banks rose

departments are now com¬
piling data, and the report should
Committee

Section

Reserve

'loans

national

to

Business

Small

to

1958.

The

published

benefit

and

banks.

from 10%

na¬

ac¬

constructive

crease

1957,

unusual

were,

of

Tenant

"During

the

New
high
during the year', levels have
legislative accomplishments of in¬ "been
reached

"There

ates

system.' Ladies and
Gentlemen,
you
who represent
this great system can take much
pride in that record. Although we
are approaching our 100th
birth¬
day, we are not senile but vigor¬

and

in

of the
founding of the National
Banking System and the interest

Act.

characterize

na¬

to

amendments to the National Ban k

Business

the

each of you

urge

cept

asset soundness,
capital and earning
excellent condition

tional banking

to

I

Meeting

100th

Institutions Act,
Savings Bank,
might have been dif-. stated that

your share of this responsi¬
bility.
If you will, it is tale to
predict that
the 86th
Congress
will not adjourn without having

sober

the

Financial

results

thing about it is that the efforts
to
escape
merely lengthen its

eralize

distribu¬

representatives
changes contained

ferent.

We

Spring

recognized

us,

The insidious

for

through banks to attorneys,
C.P.A.s, and life underwriters, in
addition to trust personnel and se¬

of

our

desirable

tion

porance of

simply out of

with
conviction, dis¬

and

with

cussed

inflation.

departments.

tion

Had

.

.

.

tion

booklet

beneficial
banking
laws

date.

at

approved in February.

majority

a

many

the

which, in part,

d

Terms

was

in

in

the

may go when
captivated by
anything so
as the specter
of

resulted

changes

to
n

failed

Act

approval of

i

which
mass

Institutions

Banking and Cur¬
adjourn¬
the 85th Congress.
En¬
of this legislation would

of

is

impossible
forecast

Divi¬

Bank

active, though

an

their

In their actions, these two
governing bodies of the Associa¬

that

.

.

House

out that, "it

lengths

.

rency Committee before

pointed

Vt.,

sion this has been

to win the

Burlington.

stock.

National

the

Financial

Company,

augment
through the

funds

common

facing

to

somewhat frustrating year in the
field of Federal legislation.
The

to'the

and the Western

Fiduciary

drafted

President

and
a

Bank

tional

ous

the

<

.will

N

moderately over
the last year
and a half while
time deposits were up $2.9 billion

well

...

Howard

problems

desire

capital
of

reviewing
the investments in the light of the
present; market, and suggesting
changes that seem desirable.
"The
Special
Committee
for
Publication of a Glossary of Trust

business.

concluded during my term of of¬
fice were projects that were begun
in
previous
administrations.
In

bear

of

look at the five studies,

the

you

same

series

a

September
1958 issue of the 'Trust Bulletin,'
the Committee is taking another

for

tha t,most of
items that

not

part of them.
"Starting with

sonnel

the

the

the

case studies. They
well received, and the
'Banking'
reproduced

very

"The

d i d reporting
requires me

tell

presented

magazine

still

remain. "Can-

to

Bulletin,'

trust

p erennial

problems

were

ness.

some

some

very

progressing in an orderly manner
with its study.
It represents a
most forward step in trust busi¬

that

during his incumbency
was

'Trust

"The Committee

Alabama,

stated

the

been

five investment

will

Montgom¬

ery,

of

lected

National Bank
of

issue

Its

the

Division in past year were

summed

The

the

has

vestments

vision head

shadow.

Handbook will be available

counted.

ap¬

proved the appointment of a Trust
Legislation Council, with a mem¬

'Handbook

tions.

and

"The Executive-Committee

We cannot aford in bank¬

today

the

which

"For

ABA, William M. Lockwood, Di¬
bilities.

with

banks

of

report

year-end

National

Report

Thursday, October 2, 1958

.

recently

deals

Division

.

.

Banking' System in 1963.
winter^ -President Welman
appointed a special committee to

"By
the

the

total

end

of the year 1950,
all mortgages^ out¬

of.

standing had reached $72.8 billion,
up 105% in the five-year period.
By 1955 the total amount of mort¬

outstanding in the country
$130 billion, up 266%
during the ten-year period. The
$156 billion investment in mort¬
gages

had reached

gage
at

loans which

the

uted

start

as

of

was

1958

outstanding
was

follows:

"'

distrib¬
:'";

Amount
-

.

Commercial

Mutual

Savings

&

Insurance

Other

banks

savings
loan

banks

associations

companies

sources

i

:

%.ot

(biUion)

total

$23.3

14.92

-

Yi.2

13;56

40.1

25.<55

-35.2

3/5.5
$156.3

•

_

22.52

23.35
100.00

Last

Encouraging Savings-Deposits
Comp¬
troller notes that, in the opinions confer
with the special commit-" -.."The Savings and
Mortgage Di¬
of the examiners, the volume of
tee of the National Bank
Division, vision of the ABA continues to
assets containing substantial risk
chaired by-Gibbs Lyons, formerly encourage
actively - the growth of
'continues small in relation to the President of
the Division.
Their savings accounts in bank&throughprotection
afforded
by
capital recommendations
were
out
adopted
the'country. Through a greatly
structures and reserves.' ' V>. • •
by the Administrative Committee stepped-up' savings
advertising
"I commend to your
reading a of ABA and the Executive Coun¬ and
public
relations
program,

.

every

Number 5782

188

Volume

effort/is

.

being

.

.

savings.

*

•'

'It, is

essential; for

banks

'

•

-V.

,

''"r

1. V >

...

to

Heads of ABA Divisions and State Association Section

effort; in the field of
thrift,
for
the competition for
savings is so great that nothing
exert

(I367>

to
for

made

in meeting competition

assist

The Commercial and Financial Chronicle

.

every

less than

h-

Thumbnail sketches

of

Bisselle

T.

of

President
of the

Division

and

Savings

is

carried

JH

1

on

E.

B.
The" Com¬

Chairman:

mittee

Savings

on

of

Development actively seeks ways
arid means to help banks meet
the growing

ings.

Bank

competition for

President

Hurley,

State

of

Trust

President
■

lip ■

Lee P.

Bank

■

....

He entered

the

Hulbert T. Bisselle

Louis

Finger, Chairman:

S.

Committee

in

comprehensive

a

Economic

Researcn,

sults

published in

were

its

and

Be
1

a booklet,
Corporate Bond Ex¬

'Long. Term

perience.' "

making

a

-

'

'•

%

v

-

1954;

iHysdi k

,■

to

member banks

vestment

banks

for

de¬

/"/.

Louis E.

1

Hurley

Jeff Burnett

Carlysle A. Bethel

termining their policies for stock
purchases, in those areas where
state laws permit equities as in¬
vestments for savings.
"Committee

Savings' Man

on

•

Operations—Everett
J. Livesey, Chairman: After sev¬
eral years of study, a simplified
plan of "cost analysis" has been
completed./ It will be published
soon in booklet form, and at pres
ent

is

being tested for accuracy
and completeness by several banks
which have agreed to try it.
y.
.

...

"Committeo
Committee

1

*

Federal
Fede
al

on
on

t
Leg s

Raul A. Warner, Chan-

latum_

was

ber
man

appears

just

tention
which

fair

F

to

d

e

1

e r a

fc-r

competition

un-

It

savings.

bills
introduced in Congress relating to

has iollowed and

popular

Banking

reported

on

as ever.

'

also

fol-

being

X

$181

million

nWbanki 1^This i

crePase

"Committee

ceives

credit

and mortgage

housing

attention

constant

the

Committee

the

Bisselle,

The
Riggs
National
Bank, Washington, D. C.

re-

„

.

.

,

__

.

,

.

Savings and Mortgage Division

of

Louis

President:

Estate

Real

on

T.

Hulbert

President:

Lundborg,

B.

past several Vice-President, Bank of America
months have been especially active N.T. & S.A., San Francisco, Calif,
The

Mortgages.
in this

field,

tivities

of

housing
mortgage ac-

as numerous

the

affecting

have

lenders

all

.•

for

credit

liberalized

further

mortgages and

El

Company,

Bank

Dorado,

President:

Carlysle

vice_chairman of the

v

tion's

and

and

"*..

.

dent

Bethel,

A.

Board and
„T

,

.

of

in Dallas,

H.

W

public

announced

of

the

ap*

*

*

.

"Committee

on

President: Jeff Burnett,

^

Personal Money

Management—C. Arthur Hemminger,

Chairman:

been

made

of

A
the

Secre-

Arkansas Bankers AssociaLUUe Rock

t-

has

revision

booklet

tary>

Arkansas.

First

National

of

this

'

'Per-

Three ABA Staff

Members

Bank Divisions

en,

as

ex

to

officio

mem¬

Chairman Woot¬

members

other

was

ABA at

of the

in

Convention

Annual

Sept. 23, 1958.

on

Miller

Mr.

three

He

1957-58.

served

has

the

on

Federal Advisory

Council for the
Eighth Federal Reserve District.
He

President

is

the

Director

and

of

Citizens

Company; Chairman of the Board
of

which

of the University of

Trustees

Louisville; and Trustee of the Ma¬
Widows

sonic

&

Orphans Home.

Mr. Miller is married, has one

and makes his home in Louis¬
*

#

^

?

JOHN W. REMINGTON

Vice-President
W.

John

Remington, President

Lincoln

Rochester

Trust

1959 Convention of the American

of

Bankers

Company, Rochester, New York,

nounced

Association,

it

was

an¬

by Lee P. Miller, newly
President.

elected

the

The

dates for

of the Com¬

named offi¬

was

University
LL.B.

Appropriate
will
to

Convention
be

the ABA

and

member¬

Hotel applications will

ship later.

be sent to members

No

com¬

organized

early in 1959.

applications will be

accepted

A.B

his

1959.

mittees

that

in

born

ceived

the Convention will be Oct. 25-28,

announced

mission,

84th

for

Association Vice-

was

in

elected President

The Dade County, Florida, (in¬

commission,

bers.
addition

He

Bank

dents of its National and its State

In

Committee

Executive
years.

President

County, Florida

...

State Association Section

ABA for 11 years and was Chair¬
man for
four years.
He was a
member of the Trust Division's

out

special assistance Senior Trust Officer, Wachovia which will include in its member¬
mortgage purchases by the Fed- Bank and Trust Company, Winship the president and vice-presi¬
eral National Mortgage Associaston-Salem, North Carolina.
dent of the ABA and the presi¬
tion
of
FHA and VA loans at
*

the ABA

of

ation of the Trust Division of the

commission to cluding the Miami Beach resort
a centennial
area) bankers will be hosts to the

a

authorizing

jOO

member

a

ville.

1959 Convention to Be In

ooten

Texas, has been named

chairman

-

Dade

carry

the

Anniversary
Banking System

the

served on the Committee on Tax¬

son,
Ben

outgoing Pres¬
ident
Joseph
pointment

100th

of

Committee
on
Excess
Profits Tax during its life from
1952
to
1954.
In addition,
he

to him."

Executive

Welman

the

National

relationships
through fuller understanding and
appreciation by every American
of how the banking system works,
particularly in terms of benefits

istrative Com¬

G.

also

the

the

Taxation

on

Special

Chicago

banker

of

Admin¬

mittee

was

of

a

member of the Sub¬

a

committee

versary

would be the betterment of bank-,

with

celebration. Ben H. Wooten, Presi¬

Trust Division

ized

the

Associa¬

the

observance take the form
coordinated, national public
educational
movement
imple¬
mented at the regional, state, and

likewise*

Legislation Committee and was its
Chairman for several years.
He

Fidelity Insurance
provide the theme, the pro¬ Company; Director of the Asso¬
gram would seek to tell the story, ciated Industries of Kentucky, the
of banking as a whole," he said..
Kentucky Chamber of Commerce,
"Purpose
of
such
a
program and
the
Louisville
Investment

Sys¬

resolutions

proposed that the 100th Anni¬

of years, and was its Chair¬
from 1955 to 1957.
He was,

would

accord-

n

plan

Arkansas.

author-

nearly $2 billion in support
of the housing market, through
direct loans to veterans and by

Exchange

The

I

is

of

States.

ance

Wooten pointed out that it

"While

National
in

A.

Sienkiewicz,"
President, Central-Penn National
Bank, Philadelphia.

Council, ABA

Hurley,

K

Louis

President:

been

in Congress.
The President,
Emergency
Housing
Bill
was and Trust
passed by Congress on March 19, which

•

State Bank Division

prominent

terms

founding

Casimir

and

local levels.

the
o f

of

sary

United

President,

Francisco; Robert V. Flem¬
ing, Chairman of Board, The Riggs
National Bank, Washington, D. C.;
Sam M. Fleming, President, Third
National Bank in Nashville, Ten¬
nessee;
Homer
J.
Livingston,
President,
The
First
National
Bank
of
Chicago; Reno Odlin,
President, Puget Sound National
Bank, Tacoma; Everett D. Reese,
Chairman
of
Board, The Park
National Bank of Newark, Ohio;

Mr.

lOOthanniver-

Banking

*0uows.

Real Estate

on

Federal legislation affecting

Banking

San

Centennial Set

in-

an

National Bank Division

Mortgages—Cowles Andrus, Chair-

bills

f£'h

National

1963

During the annual meeting of
during the year of 277 000
scjKxd savers,
2,100 school, and the National Bank Division, plans
.ni
.
denosit<? »
were
launched for special activ¬
** miinon ln deposits.
ities
during 1963 observing the

*

*

*

,r,,

Thelma Boes,

tem
'*'J

the

Division.

on

lowed.

man:

was

participating in the

ithL

New Division Heads
expansion of the savings and
industry, the Financial InstiOfficers elected Sept. 22 for the
tutions Act, and the Postal Savfour divisions and th£ state Assolngs system. Legislation al ee ina ciation Section of the ABA are as
is

of the ABA.

"

15 5qo schools

the

unions

arm

office manager in
the Washington headquarters of
the
ABA, was named; assistant
Banking there were approximately
5 2
million
school
children
in secretary of the Association.

loan

credit

is the educational

the

C.

Frederick

—

Banking, was named
associate secretary.. The Institute

appointed assistant editor of
"Trust
Bulletin," riationally
Ober,
circulated publication of the Trust

School .Savings

on

of

Mary C. Smith, assistant secre¬
tary of the ABA Trust Division,

Chairman:
The
school
savings
program continues to grow, and
in aJ recent survey made by the
Committee
on
School Savings

legislation

intended to correct

is

as

edition

new

at this early stage to be

"Committee

This committee directs its at-

man:

The

bank customers.

to Institute

distributed

been

member of the Committee

a

Federal Legislation for a num¬

on

copies: have

agement and

1938

In the American Bankers Asso¬

in¬

in

from

ciation, Mr. Miller was identified
for many years with the work of
its legislative committees, partic¬
ularly in the field of taxation. He

principles which are be¬

valuable

lieved.

basic

those

member of the Ex¬

a

Committee

1940-41.

.

available

to make

intended

Associa¬

through 1941, being Chairman in

study of the investment
stock equities.

is

and

ecutive

Z

of savings funds in
It

long been active

Bankers

Research Committee from 1951 to

presently

is

' *

'

'

'

committee

v/'

MM

•

.

W*

.'-I*.

//The

1

Br 5 >>

Kentucky

tion, he was a member of the
Jurisprudence
Committee
from
1937 to 1956, being Chairman from
1937 to 1951; Chairman of the Tax

re¬
.

Director

a

bankers association affairs. In

the

\

I-

-

and

1949.

in

K'

review
last year of the Corporate Bond
Study of the National Bureau of
pleted

Fidelity Bank and
Company, of which he was

Mr. Miller has

com¬

now

Citizens

elected President

Lundborg

The

Investments

on

Louis B.

—

1

banking in 1911 with

Fidelity Trust Company,

the

sa v-

Investments

in

born

tended the Louisville schools.

...

on

Louisville, Kentucky,
that city
and at¬

Company,
was

Association Section.

State

Miller, President of the

Citizens Fidelity Bank and Trust
V

Division; and Jeff Burnett is

head 'of the

'

P. MILLER

LEE
/

Trust

"Committee

Associa-

Bankers

follow:

>

Division; Carlysle A. Bethel, President

Mortgage

and

National

and

Savings

on

ABA's

of Savings and Mortgage Division; Louis

Mortgage Developments-Louis

Lundborg,

tion

elected

Division; Louis B. Lundborg, President

by several active committees: • "• :
"Committee

newly

Committees

the

"The work

is

of the
officers of

ranking

American

/>/

;

Backgrounds of New
ABA Top Officers
new

Hulbert

Mortgage

*

all-out drive will be

an

successful.
Work

'

43

of

city,

Law School.

re¬

and an

Rochester

University

Harvard

from

and

degree from the

He is also

a

gradu¬

ate, with the class of 1937, of The
School

Graduate

Banking,

of

which the American Bankers As¬

sociation

conducts

State

The

at

Rutgers

University,

—

New

Given New Titles
by the Convention hotels directly. Brunswick, N. J.
Three members of the Associa- cially as "Commission for the Ob¬ Official reservation forms will be
During World War I, Mr. Rem¬
servance of the 100th Anniversary
depositors and their families in tion staff were given new titles at

sonal

Money

Management.'

information

provides

planning

personal

for

to

savings.^

financial

af-

meet

a

booklet

claim,

meeting of the Administrative

savings Committee
announced

bilities.

"The

a

previous
have

and

of the National

Banking System,"

will be: Gibbs Lyons, Chairman of

the Association
life's responsi- held Sept. 20 in Chicago, it was Board, National Bank and Trust

fairs, and in maintaining
program

It

was

editions

met

more

with

wide

than




of

this
ac-

450,000

of

by

G.

Russell Clark,

Stamford,

executive manager,
Hartwell Davis, since

sistant secretary of the

Company

1952 as-

American

of

Fairfield

Connecticut,

Chairman); S. Clark

County,
(Vice-

Behq^ Presi¬

dent, Bank of America N.T.&S.A.,

used

and

will be handled by the

Hotel

Convention

Committee

Miller

said

that

plans

are

being made for the 1960 Conven¬
tion, which
York

will

ing

a

Lieutenant

member

after it is organized.

Mr.

ington served in the Navy, becom¬

held in New

City Sept. 18-21.

of

(jg).

He is a

the American Legion

and the Veterans of Foreign Wars.
Before

business,

entering

Mr.

banking

the

Remington

Continued

on

was

page

a

44

44

The

(1368)

Continued from page

He

43

and Director of

the volume awarded in the

Guaranty Company, Atlantic
City; President of the Flanders

parable period of 1957. At the time
when the private economy most
needed a stabilizing influence, the
net effect of positive Federal Gov¬
ernment action was to drag down;
rather than buoy up, production
and employment.
I hope you will realize that I am
talking
economics, not politics.
During this period Congress was
controlled by one political party,

and

ABA Holds 84th

Hotel

Company, Ocean City; Di¬
(Wal¬

rector of the Dennis Hotel

Annual Convention

ter J.

Buzby, Inc.), Atlantic City,

and of the South Jersey Gas Com¬

and the Pennsylvania-Read¬
ing Seashore Lines; past Director
of the Community Chest and Wel¬
fare Council of Atlantic County
and of the Atlantic City Chamber
of Commerce; Trustee of Dickin¬
son Law School and The Training
School at Vineland, New Jersey;

pany

partner in the law firm of Rem¬
ington; Remington, and Keating
in Rochester.
He was assistant
United States attorney for the
Western District of New York in

Trust
Lincoln-Alliance

Remington

Mr.

Officer

the

of

became

Company in 1930
-and Vice-President in 1935.
In
1944 his bank merged with the
Rochester Trust & Safe Deposit
& Trust

Bank

Company to become the LineoJ 11
Rochester
Trust Company.
Te
became Executive Vice-President
and Trust Officer in 1950, and in
1954

also Vice-

was

on the
Organization Committee in 1953-

and

54

Federal

member of the

a

Legislative Council in 1955-56. He
elected ABA Treasurer

was

1924-25.

He

1957.

1953 to

President for New Jersey

at

a

meeting of the Association's Ex¬
ecutive Council held

close

at the

of the 83rd Annual Convention in

Atlantic

City,
1957;

Sept.

25,

for

second

a

the

of

Executive

in

President

and

Board

Governors

Council

held

Chicago

Sept.

on

of

City

a

member

Hospital

of

nearly the responsibility of both
parties as it is ever likely to be.

as

of

the

I

Associa¬

Kirkman

is

married

daughter; he

one

home in

1958.

makes

policy

and

serving a three-year
Director of the Buffalo
iBranch of the Federal Reserve
Bank of New York.
In
the Trust
Division of the
term

Margate City, New Jer¬

Belated

a

has

Remington

member

Association,

Bankers

American
Mr.

served

He served two three-

-year terms on
mittee of the

the Executive Com¬

Division-—1938-41.
was Chairman
of the Committee in 1947-48, He
'•was Vice-President of the Divi¬
sion in 1948-59 and President in
1949-50. He was a member of the
1945-48—and

ABA
sion

Economic

Commis¬
In June

1958.

to

1953

from

Policy

1955, he received the Ay res Lead¬
School of

Graduate

the. ABA's

from

Award

ership
■was

Banking. He

elected Vice-President of the

ABA at the 84th Annual Conven¬

tion in Chicago on

Sept, 23, 1958.

Mr^ Remingtorris a^member o:t

the

Fiochester,

New

and

American

Bar

York

State,

Associations.

'

Re

President

is

and

the Rochester and Genesee

Valley

tomobile Club of

Rochester, Inc.;
Ailing & Cory Company; Curtice
Brothers Company; Haloid Com¬
pany; Stecber-Traung Lithograph
Company, and Super ba Cravats,

that

positive govern¬
needed, the issue

some
was

whether

into

itself

should

taxes

be

in¬

cut

demand

whether

or

consumer

large program of government pub¬
lic works should be initiated. The

At first, the Government
nothing at all. Although this
may sound like a strange policy, I
believe it is the correct policy in
the very early stages of a reces¬

re¬

a

overestineeded capacity, had it

mation of

not been for

justment which
the form of

a sharp redirection of
purchases. Early in 1956,

consumer

began

consumers

interest

usual

to

in

durable

but

almost

all

of

the

and healthy, and partly becuring recessions before they

essary
cause

nondurable goods and services. In

happen would inevitably turn out
to be an extremely inflationary
course.
In addition, it should be
remembered that what are briefly
called the "built-in stabilizers"

of 1956 to the third

quarter of 1957,
increased their spendnondurable goods and serv-

consumers

ices by $23 billion,
expenditures
rose only 3%.

combination

The

in

businessi,

o r

d

10%

or

Their

.

durable

on

of

a

for

e r s

goods

cutback

durable

By January

equipment and a virtually station¬
ary consumer demand for durable
goods meant
rable goods

whole

that the

pressure

which it

(3)

In

February,

personal in¬
cut

taxes should have been

come

across-the-board.
cut is the

method of halting
cline.

income tax

An

quickest, least wasteful,
a

business de-

It is not true that

government deficit.

income

an

Almost all the

Under the conditions existing

ing.

the

at

beginning of this year, an
income tax cut would have halted

a

liquidation, and

would have in¬
and incomes
sufficiently to maintain and quite

creased employment

government, workers, an extension cession, I have grave doubts that
of the unemployment compensa- we will ever succeed in cutting
tion period, a rapid increase in them.
Federal construction contracts
(4)
Defense spending
should
awarded, and a very slow and have been stepped up promptly
small rise in defense spending. It and vigorously early in the year;
come into play fairly early in a might be noted that defense spend- If it was possible for the Federal
business
downturn without the ing in the second quarter of this Government to buy defense goods
necessity for any change in gov- year was still running below the in the second quarter of 1957 at a
1957 rate of spending.
ernment policy.
$47.5 billion annual rate, it is dif¬

the 21 months from the beginning

on

inflationary

was that the
too high anyway, and I do not ex¬
m
tax was rejected, ancFa pect to see Federal expenditures
moderate public works program cut in the future as long as high
was accepted. In the interim, how¬
taxes provide the money to pay
ever, a
number of constructive for such expenditures. Certainly,
steps were achieved—the most ef¬ the time to cut taxes is not during
fective being the passage of the some future inflationary boom. If
Housing Act, pay increases for we cannot cut taxes during a re¬

was not going to
all, partly because a cer¬
tain amount of adjustment is nec¬

their expenditures was directed to

irig

the

will now impose as it gets around
to ordering for 1959.

income

at

occur

liqui¬

in the private
economy, would have secured
these goods at low real cost to the
economy, and would have avoided
process

The final result

sion.

omy—partly because the Govern¬
might attempt to cure a

in

increase

It would be a great mistake
government to attempt to preadjustments in the econ-

recession which

goods.
They continued to spend heavily,

in

consumed several months, possibly even raise Federal tax
government apparently "find¬ receipts for the year as a whole;
I believe that income taxes are
ing it difficult to reach any deci¬

ment

their

lose

of the unnecessary

some

dation

with

vent all

underway in

was

off

debate

sion.
for

second basic read¬

a

tially stepped up its rate of order¬
ing of staple items, the need for
If or¬
staples
required for 195 and 1959, the
Government would have headed

which is quite predictable.
ders had been placed for all

to

sion?"

temporary

Federal

the decline in February, would
provide immediate stimulation to have avoided excessive inventory
come

did

this

the

January,

decline in business activity, not to
an increase in government spend¬

the

cession

In

government deficit is due to the

more

could have survived without

(2)

Government should have substan¬

stage of government

resolved

How Much Recovery by Year

Director oil

Railroad and Director of the Au'

clear

plant capacity was reaching
production stage.
It is possible that the economy

Thursday, October 2, 1958

.

reached,in April and
Since by this time it was

ment action

a

as

several

Chairman of

or

committees.

and

3

page

Response

was

May.

from

Governmental

The second

now

as

that we may learn somethe experience.

so

policy

Association

Bankers

State

is

and

the ef¬

anti-recession

our

.

,

tax cut would have increased the

He has been active in the New
"York

of

thing from

his

sey.

Continued

in assigning

not

evaluating

blame, but in

named President.

was

interested

am

fectiveness

Mr.

24,

Administration by an¬
Anti-recession policy was

other,

at

has

com¬

the

and

tion.

year

the close of the 84th Annual Con¬

vention

and

the

Atlantic

New Jersey,
on
he was reelected
at the meeting

below

three months of 1958 were

Chairman of the Board
the Chelsea Title

is

Comrylercial and Financial Chronicle

du¬

of

.

for

third

question— ficult to understand why we were
what will getting defense goods in the first
be the effects of these government quarter of this year at only a $45.5
Now

however,

1958,

the

the recession had been underway
for five months and it was becom¬

"What. have been and

ing clear that, for lack of any de-

actions?"

It

seems

to

me

that the

cisive government action, business, answer is as follows: (1) Because
had embarked on a policy of in- the Government took no positive

manufacturing sector

of the economy began to experience rather poor times even while
the rest of the economy continued

ventory liquidation

billion rate.

*

(5)
Finally, if prompt action
had been taken along the lines I

action until the bottom of the

violent that

re- have indicated, we would not be
cession had already been reached, faced at present with the fact that
the
severity
or
sharpness
of
the
bpth defense spending and slow'Chamber of Commerce and?the
manufacturers were unwilling im¬ national
inventory figures were downturn was not lessened at all. moving public works projects are
Rochester
Bureau
of Municipal
mediately to adjust output down¬ first collected. Businessmen also (2) The actions of the Federal just now approaching the boom
Research, Inc. He is a Director
cut back sharply on their expendi-. Government in the second quarter
of the Rochester Chapter of the ward, their inventories began to
stage and will continue to compete
rise. By the middle of 1957, the tures for plant and equipment—< of the year contributed substanwith private demand and pose in¬
American Red Cross and of the
durable goods sector was faced much more sharply than they had tially to the sharp upturn from the
flationary problems in the years
Society for Prevention of Cruelty
with high inventory-sales ratios, done in either of the two previous bottom of the recession. The fact
ahead.
We would have avoided
to Children.
He is a past Presi¬
with plant capacity which, though postwar recessions.
The decline that defense spending showed vir- the
dent and Director of the Roches¬
unnecessary public works and
not too large for the long run, in business inventory and capital tually no rise indicates, however,
would have secured a portion of
ter Community Chest and a past
was nevertheless temporarily ex¬
spending meant, of course, - a both a very poor state of military our defense goods at low real cost.
President of the Alumni Associa-\
severe
reduction
in
forward
cessive,
and
with
demand
which
production,
planning
and
an
juni'drNow let's turn from anti-reces¬
tiojj of the University of Roches¬
had virtually ceased rising.
which in turn resulted in a rapid tunate failure to capitalize on an sion
ter.
policy to an estimate of the

He is

a

Trustee of the Roch ester

to

Since

expand.

durable

so

it substantially exceeded anything

goods

we

have

in all the years since

seen

•

Mr. Remington is
two

daughters and

married, has
one

and

son,

F.

KIRKMAN

cutback

Treasurer
El wood

F.

native

of

tended

Kirkman, President

City, New Jersey, is a
and at¬

Philadelphia,

Dickinson

Carlisle,
Georgetown

Law

School,

Pennsylvania,
Law

School,

and

Wash¬

ington, D. C., from which he re¬
an
LL.B; degree.
He was
the New Jersey Bar

ceived

admitted to
1926

and

is

also

a

rise in unemployment. This situa¬
tion continued, and became worse,

unfortunately at this junc¬

on

final blows

•of The Boardwalk National Bank
-of Atlantic

was

in

abruptly following the clearing up
of the Suez situation, and the Fed¬
eral Government imposed a severe

makes his home in Rochester.

ELWOOI)

It

ture that export demand declined

member of

the American Bar Association.
Mr. Kirkman is senior member
of the law firm of Kirkman, Mul¬

all

hope

porary
switch

that

defense orders.
were

adjustment

of

in

consumer

manufacturers

of

Now

let's

Counter-Measures

turn

the

to

during the early months of
During these months, manu¬

anti-recession

Federal

Government

He

has

been

a

Director

1932 and President since
The

Boardwalk

National

MAJOR

since

1942

a

Chairman of the Board since
1955 of The National
Bank of

Ocean City. Ocean City, New Jer¬
He

Gross

National

Product

(billions)

Inventories

Business

capital

expenditures.——

Export gap

sey.

Jersey

President

Bankers

of

the

New

Association

in

1951-52.

Defense

ciation, Mr. Kirkman

was a mem¬

ber of the Executive Council and
of the Finance Committee from




purchases^

T

State

government purchases
Housing expenditures
Consumer

In the American Bankers Asso¬

"How

third

billion

annual

quarter of

rate

of

Index

spending

of industrial production
Private housing starts (thousands)
Consumption of all goods & services

tEstimated.

First

Second

in the rate of

production of goods

and services.

In the second quar¬

fact that output rose does
necessarily mean that the up¬
ward path is to be continued. In

mere

desirable.

ECONOMIC MEASURES:

not

order

to

estimate the

pace

of the

1953-8

1958-

Third

Fourth

First

Second;

Quarter

Quarter

Quarter

Quarter

Quarter

Quarter

1953

436.3

441.2

445.6

438.9

425.8

429.0

453.1

l.i

2.9

2.2

—<..3

—9.5

—8.0

1.0

47.6

47.7

47.7

47.3

42.1

41.0

50.5

(45.8
35.9
17.2

<

<

Third

-Full Year1954

1955

1956

1957

365.4

363.1

397.5

419.2

440.3

438.2

0.4

—1.6

5.8

5.4

1.0

—4.6

40.5

36.1

35.1

39.3

45.1

£7.4

40.9

J1958

4.2

3.6

1.9

0.5

0.5

0.5

—2.0

—0.4

—0.4

1.4

3.5

0.5

51.5

50.9

50.5

50.9

51.9

54.1

59.5

48.9

46.8

47.1

50.8

52.5

(47.4)

(46.9

(46.0!

(45.6)

(46.0)

(47.8)

36.0
16.5

.

36.1

37.8

16.9

39.1

38.6

24.9

27.7

30.3

33.1

36.3

39.9

18.5

13.8

15.4

18.7

17.7

17.0

17.9

286.2

288.3

297.0

232.6

238.0

256.9

269.4

284.4

291.1

145

139

130

128

143

134

125

139

143

143

1,028

1.010

930

1,020

1,120

1,068

1,202

1.310

1.094

282.5.

288.3

146

144

943

984

435.2

438.3

443.4

17.6

17.1

41.5

287.2

279.8

16.2
'

-

441.2

435.3

437.0

1957

$426 billion

in the first quarter of this year—
a decline of $20
billion, or 4.5%,

recovery marked a sharp reversal
from
the
downward trend, the

period of inaction in late 1957

was

the

annual

could government
policy have been

(1) As I have indicated, the ini¬
tial

peak $446

a

in

an

ter, gross national product recov¬
ered to $429 billion. Although this

Quarter

4.2

Federal government
was

first

is

from

reaching this low,
product had dropped

giving my esti¬
remainder of the

the

improved?"

-1957-

Bank

Director since 1927

and

the

for

In

(AH seasonally adjusted. All, except index of industrial production, at annual rates)

of

*

and has been

in

year

Despite

before

up

Policies?

question which I will

actually

declining.

Better

There

last

mates

was

reees-

The
take

ligan & Harris of Atlantic City.
,

pressures

Were

to

inflationary
in the future.

reached a very low
Yet official government fig¬
show that defense spending

construction industry, construction
contracts actually awarded by the

developing

contribute

psychology

question, '"What steps were taken
by the Federal Government to
the

a

ebb.

much talk about assistance to the

with

April.

to

second

deal

legacy of barely-

in

gross national
rate

ures

Governmental

are

will

inaction of govern¬

facturing output was severely cur¬
tailed, construction declined, un¬
employment
rose,
and
business

recession.

we

begun government projects which

1958.

inventory

that

means

left with

desirable, it is difficult to justify

the

liquidation
which took the economy into the
process

got underway

was

the remainder of this year.
The
low point of the recession occurred

the continued

tem¬

demand, so
began the

1957

of the business recovery in

pace

now

ment

to

with which government programs

While the reticence of the Fed¬

These

to

and

February and March.

eral Government in late

sufficient to end

overcapacity

opportunity to secure defense
goods at practically no real cost
to the economy. (3) The slowness

452.1

365.0

364.7

391.7

413.8

993
439.3

'

135

1.070

442.8

Volume

188

Number

''r■■
business recovery

fourth

quarters

The Commercial

.

this

the

year,

we

strength

or

weakness of each of the individual

spending

segments

make

total

up

which

to
expendi¬

national

ture and thus total national

go

output.

cutback, pre-Sputnik level. Al¬
though the defense program is
lagging, non-defense purchases
have

moved

total

Federal

slightly

up

purchases

now

$297

purchases will rise in the second

only to halt the rise in inventories
but' to. cut inventories down to

reasonable level relative

more

sales.

a

to

Businessmen switched from

accumulation

of inventories

at

half

of

Federal

this

present

in

will

as

be

Government

There

year.
of a

rumors

cutback

new

are

elephantine

course

spending

it

as

was

at

spending

Washington.
difficult

to

conservative

are

Inventory Spending: Of the total

that

A

place

The very fact that the
govern¬
ment moves slowly,
however, en¬

But

stop

it

the

of government

to get it under¬

way.

a

estimate

consumer

billion

quarter,

rate

in

$10

billion
first quarter level.
The
sumer

about

would

purchases
the

at

Securities Salesman9s Corner

a

fourth

above

the

'!
By JOHN BUTTON

big question about con¬
purchases
and therefore

Meet Mr. Whitford

the

performance
of
the
econqmy as a whole — in the

Some

people, who read columns
this, I suppose, have a doubt
they' concerning the validity of stories
do—and all economic factors point such as the one I am going to
to good sales — then consumer tell you this week. But it is the
purchases will rise by more than unusual happenings in life that
the $10 billion I have estimated:
■
prove
that some
of
the basic

and

automobiles will sell well.

(3) There was no pressure sell¬
ing but a desire to help and ci

If

truths

have learned about liv¬

we

•

.

1

quarter of this year,
the liquidation is likely to be
over, and a small rise of about

$1 billion annual rate is probable.
The inventory turn-around alone
is thus likely to push production
in the fourth quarter of this year
to a rate $10.5 billion above the
first quarter.
Business

Capital

Expenditures:

After

declining by $5 billion in
first
quarter of this year,

the

business

spending on plant and
equipment fell by only $1 billion
in the second quarter.

to

this year.

tures

will

rise

from

expendi¬
third

the

quarter low point to about $40.5
billion in the fourth quarter. De¬
spite the beginning of a recovery,
the fourth quarter rate will still
be $1.5 billion below the level in
the first quarter of this year.
Net
Foreign Investment:
excess

of

our

exports

The

imports

over

fell sharply following the end of
the Suez crises, and leveled off
at $0.5 billion in the first two

quarters of this

likely

to

current

in

maintained

be

are

the

at

high level, and uncertain

economic
ropean

Imports

year.

conditions in

countries make

Eu¬

some

an

be

from the accompany¬

seen

table

which

shows

housing

for¬

during

the

Spending:

surprising

aspects

the

of

reces¬

sion. Government purchase orders
been increased moderately,

have
and
an

there
effort

has
to

undoubtedly

speed
actual

final

up

of

the

defense

goods

second

were

still

1957, and

lion below the
defense
were

the

not

in

average

for

bil¬

In

back

other

in
to

words,

mid-1958
the




pre-

—

will

ensure

the

in

was

wheel chair. We had

a

long talk about their securities.

I

made

there

mention

was

of the

fact that

no

I've many times thought of you;"
It

the

was

same

Then

man.

I

To Give Course

the

Fundamentals

Electronics.

The

of

Industrial

course

will

be

The

four

sessions

will

electronics in industry.

rate.

clude:

Spending: Consumers

1957

rate.

Despite

of

the

1957.

consumer

rate

The

in

basic

income

was

the

he

was

with

ready to do
He told

me.

ened by extension of the unem¬
ployment compensation period in
a

number

tial

of

states, and substan¬
in pay
rates for

private
to

(3)

Basic Electronics Devices.

De¬

some

Computers

and

Inventory

Industrial Control

Devices.

consumer

Wage rates in most
industry have continued

power.

climb, and the
has

average

work¬

The Promise of Electronics.

Mason Mtg. & Inv.

Corp.

WASHINGTON, D. C. —Mason
Mortgage & Investment Corp. has
with

offices at

2633

increased

considerably Fifteenth, Street,
Northwest
to
the
recession
low
point. engage in a securities business.
Average weekly earnings in all Officers are Edward Mason, Pres¬
major segments of the economy ident;
Jacob
Sopher, Executive
at mid-year were higher than at Vice-President
and
Secretary;
Consumer

John

buying

gives

every

L.

Meakin, Vice-President;
Mason, Treasurer.

and Edward A.

to

new.

as

Make

The

1

Calls

.

Meet people who are
investors^
the more of them you meet on a
favorable

on,his

me

left

office he
list of his

my

complete

a

present cash funds. It took
four years for this sale to jell and
for

this

that

account

to

materialize

do,

you

if it

is

constructive

sincere, is wasted.

(1)

The

Us

the

a

there

little

first

piece has been;

person

I

may

add—•

are

pot enough hours in the*
day to study what is going on in
this world; to keep' up with thes
economic

the

background

bond

of

events-

market; the stock

ket; corporation

mar¬

and special
situations
that
make
up
the
background of what a top-flight
securities
This

is

news;

salesman

should

know.

demanding business*
every day there is a new set of
events. If you like this business
you'll give it all you have even
when

a

have

you

been

at

it

for

many, many years. I know of no
other occupation that is more of
a
taskmaster but those who read
these words and can say with
mej,
"It's not only my way of making

living

a

but

avocation

stand.
off

a

of

while you should

a

write and ask

column

end

my

then

day for fishing.

anyone
a

hobby and my
well," will under¬
don't forget—*

my

as

And

in

once

the

on

that—I

But

me

to

take

don't

to write

still holdl

can

pretty well with some
of the boys in my

up

rest

neck of the woods when it

comes

selling stocks and bonds—but

don't

ask

how

me

well

I

do

at

fishing!

Sailer Go. Consolidates
With

Thayer, Baker

PHILADELPHIA, Pa.
consolidation

of

the

— The
business of

Thayer, Baker and Company and
J. Sailer
and Company was
today by Wallace M.

as

the call.)

The customer's investments
discussed, the list was fol¬
by mail and

rendered.

announced

McCurdy,

(Keep

a

your

President

of

service

was

name

con¬

Thayer,

Baker and Company. A. J. Sailer
and
Company, formed in
i924,

joins the Thayer, Baker organiza¬
tion, established in 1920.
The

managing

partner

the

01

Sailer firm, John P. McCoy, was
elected a Vice-President and Di¬
rector of

Thayer, Baker and Com¬

pany.

A.

be

located

J.

Sailer and

discontinued
in

the

CompanyBudding

and

will

Philadelphia

be

Na¬

tional Bank Building.

visit to

home

be unless you make

lowed

the

will

made on a
advertising

was

from

consummated

(2)

in

offices in the Land Title

a prospect
office, but it
part of a
business trip to another city. If the
call had not been made, the lead
would
have been wasted.
(You
never know how good a lead can

far from

were

counsellor.

Since this

The

Analyze

call

secured

necessitating

was

investment

A.

Let

from

mid-1957.

me

his

The Research and Develop¬

formed

with

work

present holdings; he left me some
orders for securities he wished to

lead

been

and

he

Before

ment Problem.

(8)

distance from
now it was con¬

account.

and

(7)

as

chair, may someday move*
your office, change his*
broker, and walk again as good

qlose

short

a

to

had

but it proves one point—no work

Machines.

(6)

venient

we

the years, and also
moved
to
another

we discussed the matter
of how much he should invest of

(4) Nucleonics.

in

be

may

wheel

business

that he ap¬

me

buy; and

vices.

increases

buying

week

Electrical

Elementary

(5)

my

he

only
office

gave

(2)

first

stability
strength¬

Topics in¬

(1) Basic Electricity.

rising

unemployment and shorter work¬
ing hours early this year, con¬
sumer purchases
averaged $6 bil¬

the

technology, applications, the busi¬
ness and economic implications of

end of this year will run about
$1.5 billion above the first quarter

Consumer

cover

-

fair

has another

or

who

or

too

Could

a

had

workers further swelled

year

mistakes

office,

your

lives

.

city

military and Federal Government

rate in the second

1957.

deliveries

still

this

name

from

he

man? About four

same

that

pur¬

services

01

running $1.5

were

quarter of

and

quarter

below

this be the

remembered.

Oct. 15, 22, 29 and Nov. 5.

been

chases, but
results
have
dragged astoundingly. Deliveries

I

p.m., 011

above

during the first half of
this year has been one of the most

then

Liberty Street, from 3:00 to 5:15

will jump upward
quarter and go still
higher
in
the
fourth
quarter.
Spending on homes toward the
the third

of

sendees

my

because

basis, the more yon
expose
yourself to the
proper
relationships with other people*
years ago coming back from a trip who are
possible clients, and thai
to a city about 250 miles from
greater your volume of businbsfl!
my
office I travelled about 50 will become
providing:
v
miles out of my way to make a
(1) You find out your investor's*
call on a man who had answered
objectives, his desires, his inclina¬
one of our advertisements. It was
tions regarding investments and
a hot day, I remembered it well.
his capacity to make decisions.'
'
I spent about an hour with a Mr.
(2) You understand your busi¬
Whitford and his wife. He was
ness, you are up to the mark not
recovering from a serious illness
only as a salesman, but as art
and
and

in

half

and

in

I tried to place the

memory

Expenditures

lion

goods

back

over

ernment

of

Somewhere

me.

here to

was

sent him

The performance of Federal Gov¬

purchases

Mr. Whitford

a

preciated the information

peak

segment

my phone
secretary told me

my

conducted in the Great Hall, New
York Chamber of Commerce, 65

additional stimulus from the

trade

that
see

day last week

and

rang

you are

starts rising in the second quarter
while housing expenditures fell.

have continued to spend through¬
out the recession at close to the

remainder of the year.
Federal Government

*

can

exports unlikely. The U. S.
economy will probably receive no

eign

One

Industrial Electronics

increase

our

scepticism to which
surely entitled.

your

asked, "This is one of the nicest
things that has happened to me in
a
long while. Just why in the
world, after all this time, did you
on
will
total
about
1,070,000, with
finally come to see me?" Then he
publicly financed starts amount¬
explained that he finally closed
ing to about 55,000, for a total of
his account with a brokerage firm
1,125,000 starts.
Daystrom, Incorporated, under with whom he had been "doing
There is of course a lag be¬ the auspices of the New York So¬
business back in his home state
tween housing starts and residen¬ ciety of Security Analysts, will
(many miles away) and that he
tial construction expenditures, as conduct a four-session course on remembered our visit
and decided
ing

•

our

who cannot give you business*

man

broker,

in them and practice them.
a true one—regardless of

is

,

continued world leadership of the
American enterprise economy.

by mail. (You sell
service, not securities.).
:
(4) People move around. The?

lieve
This

/c,:

follow through

today

brokerage firm in
the small city where he lived and
;
Gross .Rational; product in the
assistance
by mail 'and
fourth quarter seems to me likely offered
cause of
the recession and part¬ to exceed $450 billion—$7 billion phone. I left with a list of their
securities
and
from
time to time
ly because of unusually severe above the 1957 peak rate, $13 bil¬
the years my
weather. After the passage of the lion above the total 1957 figure, over
office sent
Housing Act and with the devel¬ and $14 billion above the fourth him information regarding his
opment of an easy money mar¬ quarter of 1957. Gross national stocks.. During this entire period
ket however, plans for increased product for the full year 1958 will he had not made a single inquiry
residential construction mush¬ approximately
equal
the
1957 by phone or letter about his hold¬
ings. Yet the name came back to
roomed, and the seasonally ad¬ total.
me
and I told my secretary to
justed housing start rate has risen
The 1958 recession thus seems
steadily in every month since likely to go down in the history have Mr. Whitford come into my
office.
March.
The volume of applica¬
books as the sharpest, but by all
tions for FHA commitments has
I've Thought of You
odds the shortest, of the three
set all-time records in the past
mild
As he came in to see me this
postwar business setbacks.
two months, so that housing starts
The lessons which we can learn man said, "You may not remember
during August and September are from these temporary downturns me because the last time
yout saw
likely to go over the 1,290,000 —if we take the time to review me I was in a wheel
chair, but

Expenditures on New Housing:
Housing starts fell to a 900,000
rate early this year, partly be¬

j

There is likely to be a further
$1 billion decline in capital spend¬
ing in the third quarter, but by
the end of the year plant and
equipment spending will again be
on the rise.
Overly hasty aban¬ rate. It is my guess that this will
donments of capital programs are. prove to be the
peak for the year,
being rescinded, with many cor¬ with the seasonally adjusted rate
porate treasurers a little chagrined dropping back to just over 1,100,at not having taken full advan¬ 000 in the final
quarter. Privately
tage of the easy money market financed starts for the full year

earlier this year.,
Plant and equipment

top the first quarter rate by
about $26 billion!.

prospects);■

ing and working do work out to
the advantage of those who be¬

,

fourth

structively before your customers

months ahead is whether the 1959 like

Federal Government purchases
A further problem is the possi¬
$2.2 billion annual rate in the third
of goods and services in the fourth
bility of an extended automobile
quarter of 1957 to a liquidation of
quarter of this year are likely to strike. A long strike would seri¬
Inventories in the first quarter of
rise
$3 billion above the first ously hurt the recovery. Although
this year at the unprecedented rate
quarter rate.
I have no particular insight in
of $9.5 billion.
this area, I would bet against it.
State
and
Local
Gov
In the second quarter of this
Spending: Throughout the post¬
year, encouraged by the mainte¬
The General Business Outlook
war period,
in recession as well
nance of a high level of consumer
Now let's sum up the various
as boom,
state and local govern¬
buying and an increase in State
ment purchases have continued to segments to get an estimate of
and local and Federal Government
rise.
The increase in state and probable GNP in the last quarter
purchases, businessmen slowed the
local government purchases dur¬ of this year. Compared to the
reduction of inventories. As often
ing the 1958 recession has far ex¬ first quarter rate: Inventory pur¬
happens following an inventory
ceeded the increase in Federal chases are likely to increase by
recession, some industries began
Government purchases.
$10.5 billion; business capital ex¬
to find inventories
^90 low, so that
This increase is likely to be penditures will probably be down
a step-up in ordering has begun
accelerated in the last half of this $1.5 billion; net foreign invest¬
to occur all along the line. (In
will
show
little
year because of the speed-up in ment
change^
recent
weeks, there have been
hie Federal-State highway pro¬ Federal Government spending will
widespread reports of lost sales
be up $3 billion and state and
at retail. because of inadequate gram. State and local government
purchases of goods and services, local governments will contribute
inventories.)
which now total to a figure 76% another $3 billion; housing ex¬
It is probable that the rate of
as large as Federal
spending, will penditures are likely to rise $1.5
inventory
liquidation .has
now
probably match the Federal in¬ billion; and consumer spending
fallen to $2 billion, compared to
crease of $3
billion between the will probably be up $10 billion,
$9.5 billion in the first quarter. In first and the
fourth quarters of Total expenditures are thus likely
the

45)

promise of continuing to climb
during the remainder of the year.

that

Examines Spending Segments

recession; decline of $20 billion in
GNP, $12 billion was due to re¬
duction of production in order not

(1369)

so

fractionally above the 1957 level.

sures
;

and Financial Chronicle

■'v;v'v;

•

.

in the thiffa and

of

examine

must

5782

;■

Wallace M.
P.

McCoy

McCurdy and John

are

members

of

the

Philadelphia-Baltimore Stock Ex¬
change and associate members of
the Boston and Pittsburgh Stock:
Exchanges.

R. Fulton
R. Fulton

Cutting II

Cutting II, associated
with Moore,
Leonard & Lynch,
New York City, died Sept. 28.

The Commercial and Financial Chronicle
4S

the

Continued from page 7

who

But

failures.

all sorts of odd little foreign cre¬
ations that no self-respecting or¬

in mind that had these businesses
remained in operation,

over¬

our

and going out and buying

groups

must keep

we

ganization man

all system would have been that
much less efficient.

should be caught

1958

sional

some

operating level may mean
pretty hard-headed and un¬
sentimental remaking of certain

me make myself clear on
point. I am not urging a
"public foe damned" attitude on
the part of businessmen. I say that
under pur economic system both

Let

Public's Sophistication
Added to this is

selling today—the truly
remarkable
degree
of techno¬
rier

first

are

businessmen

if

served

best

be

strive

that buyers

How has the public

sophisticated?
Just
industry. Look
the so-called "service maga¬
so

look at your own

biggest possible profits, doing so

at

ethical

within the accepted legal,

showing.

become

foremost for the

and

in

logical sophistication

private and the public good will

onto

levels.

Responsibilities.

ter.

under

comes

the

heading of security.

We are a se¬
curity-conscious civilization. And
I do not say that that is bad.
30
years ago there were,
to over¬

.

make

profit—it is then that the

a

firs of initiative goes out under

the boiler of performance. It is
that. the escape valve is

then

tripped and the steam pressure
goes down,
ft is then that the
public interest is indeed in dan¬
ger.

.

.

So

my first recommendation for
increasing sales is this; industry
as a whole—and corporations in¬
dividually — must
explain over
and ever again, to their employees
and the public that profit is
nothing to be apologized for; that
it is the essential element that
makes our economy tick; that the

profits each individual com¬

more

pany earns,

the healthier will be

pur economy.

What Thomas Watson did with
the word "Think" we should do

With the word "Profit." He gave
it a respectability and a power
in a field and at corporate levels
where "thinking" had been re*
garded
as
something required
only of the next man up the line.
Jhat is the way too many work¬
ers of all levels of industry today
regard profits. And that attitude

the consumer-research former as a matter of necessity,
magazines that take no advertising and on the latter as a matter of
and whose sole purpose is to tell personal satisfaction.
It was not
the reader which brand is best, an even balance.
In those days the boss, could tell
and why. Or look at what indus¬
try itself has done through its an employee, you must perform at
trade
associations
to
establish such-and-such a level or I can¬
not afford to keep you.
standards of safety and efficiency
And the
by which customers can judge the employee would do bis best to
relative
m e r i t s
of competing perform at that level.
But today our society has de¬
products.
And at the level of industrial veloped jnany methods of miti¬
sales we should not forget what gating both the extremes in this
has been done to keep the buyer picture. The executive has fewer
superbly informed by organiza¬ of the incentives to earn more
tions
such
as
The Conference money, because a relatively large
w i 11
disappear in
Board, or by such factors as the proportion
rapid expansion of trade maga¬ taxes. And the worker has fewer
zines in virtually every facet of of the compulsions to give his
every industry.
top performance, because he is to
Now this growing insistence by a large degree insulated from his
the consumer that he is an in¬ former insecurity both by profes¬
dividual, plus his increasing sales sional custom and by government
sophistication, are both most en¬ guarantee.
couraging factors in a social sense.
Again I want to emphasize that
But let's' face it. They make the I am not against social security
salesman's
job
a
good
deal and all it has meant to this coun¬
tougher. The old-fashioned sales¬ try. But in terms of getting per¬

cannot be allowed to prevail.
Resistance

.

The

second

to

Pressure

that

in recent years to

selling efforts—the second in¬

our

visible

barrier

—

has

growing resistance
to

obstacle

new

has developed

being

been

the

sistance
the

to

to

called

Now I realize that in

saying this
going against some currently
sociological theories.

am

have reacted to these new

public

what might be

fashionable

We have read—in such books

as

has

condi¬

simply to retreat
out a re¬

office and write

his

port

been

the

to

effect that

tomer wanted

the cus¬

something else and

couldn't be talked out of it.

is
aided
and
preoccupation with
the powers of the hidden persuad¬
ers.
Many of our salesmen have
lost confidence in the persuasive
This

tendency

abetted by our

of their own voices and
personalities. They have come to
see selling as the working out of
powers

a

mathematical formula in which

the human element

public is a homogenized mass of
predictable and controllable re¬

store
three-to-one per
square foot of floor space, with¬
out a human voice being raised.

who

We

sit in

have

the

that

read

control

industry need only

towers

summon

the

appropriate genie who
trigger the appropriate mass
rosis and presto, we have a
mass

I

we

of
up

will
neu¬
new

market.

think that quite the contrary

is true.

It

seems

to

me

that

this

picture—if we allow for certain
artistic license on the part of
those who have painted it—was
an

accurate

one

of

a

few

years

ago.
But I think that the devel¬
opment is in the opposite direc¬
tion today.
Certainly that has been the ex¬
perience of Detroit this past year.
If ever an industry had honed
mass-psychology
selling
t e c hniques to their sharpest edge, it
was

ers,

the

the

automobile

And suddenly
mass

isn't

manufactur¬
we

find

reacting

to

that
the

psychology. On the contrary, it is
breaking itself up into individual




of

They

are

no

part.

told of the supermarket

outsells

that

plays

the

old-fashioned

grocery

They regard themselves as rela¬
tively ineffectual pawns in a
power game in which the really
determining factors are milliondollar
advertising
budgets
and
technological superiority.
To

the real salesman is the

whom it is a challenge,
defeat, when the customer

to

man

not

me

a

starts out wanting something else.

This kind of challenge can still be
And it seems to me that the

met.

only way

to be sure

it is met is

for management to be less under¬

standing
lems.

of

brought

formance

the salesman's prob¬

If he cannot meet this chal¬

lenge, he must be in the wrong
line of work.
on

Security

But this brings us to the fourth
barrier to selling in today's econ¬

omy—the
economic
the

emphasis
security.

on

social and

Thiar involves

problem of what to

lag,

mean

illustrated

do

is not to buckle

better job

a

still

do with

in

be

or

needed

we

his

problem" in
Granted

"the security
own companies.
must

we-

security

job

today

is

morale

more

before.

ever

about

I

give

than

that

Granted

fore.

all agree
a seri¬

of

our

that

get the

must make

reappraisal

ous

we

more

hereto¬

the dark
past of industrial despotism. New
social concepts—concepts that we
all welcome

such

a

as

retreat

into

whether

see

all

PHILADELPHIA, Pa/—
is made of the
consolidation of J. Dorsey Browry
Announcement

Co. of Baltimore and Elkins,
Morris, Stokes & Co., securities

&

firms, effective Oct. 1, 1958.
/ The consolidated firm will con¬

contributions'.

But

man's

lies

and ' his

challenge

tunity—and the sole

should

he

which

•

the product/
both the sales¬

sell

to

therein

be

oppor¬

cantile Trust Building, Baltimore.

Partners
in the combined firm
that, gentlemen—in a good,
will
be:
Casper Wistar Morris;
words—is my, .solution to
Charles
H.
Howell;
J.
Reece
the mystery of what has happened
Lewis;
Edmund
G. S. Flannigan;
to profits and selling in .America
in
recent
years.
On ; one .level George W. Elkins, Jr.; Edward B,
Stokes; S. Grey Dayton, Jr.; John
there have been certain basic so¬
M. G. Brown; John E. Heppe; Wil-j
cial attitudes that have affected
all of us so gradually as to have liam G. Berlinger, Jr. and John,
y
;
been
almost
imperceptible. /.On Gribbel, II.

So

.

another level the reaction of

our

corporations to these attitudes—
and to the growing complexity, of
our
products and sellipg. tech¬
niques ~— has
created
confusion
within our ranks.
/. //,•
...

think

at

both

first

in

that

lies

levels the
realistic

a

appraisal of the forces that .have
brought about the-changes; and
second, in a determined • and un¬
sentimental program to adapt to
or

to

root

'

out

ef¬

their 411

I

am

;

■

proach

convinced that in this ap¬
we

will find the key to the

need

level

of

have
said

we

The

back to two points I

mentioned

should do

perviously..
our

I

best to par¬

establish

to

our new

founder

a

new

performance' in

sales

keeping with
quirement.

performance?
goes

Harris, Upham &Co.

/Improves Wire

X
of

level of re¬

-'//y-r-.'our

-

company,

»

Harris, Upham & Co., 120 Broad¬
way,

I

solution

—the

This

in the Mer¬

Co. will add an office

In

isn't it the tightly
disciplined
company
that
not
only has the highest
morale, but also gives the best

offices in Bethlehem

Huntington, Pa. The consol¬
idation with J. Dorsey Brown &

and

judged.

fundamental need in selling today

army,

the firm has

many

step back and

well

Elkins, Morris, Stokes & Co. are
of the New York and

criterion by

bit too far in the other direction?

the

do

Elkins,

name

^

a

to

tinue

these

is

It

man.

And

fects.

gone

Elkins, Morris, Stokes
I Absorbs J, B. Brown

Philadelphia-Baltimore Stock Ex-,
changes and associate members of
the American Stock Exchange. In
addition to its main office in the
Land Title Building, Philadelphia,

unthinkable.

haven't

t-

fherchari-

the

decisions h.ave
been made there is. only..on.e ad¬
ditional responsibility, 'aqd it rests
solely on the shoulders /of .one

them

we

*

agement's responsibility alone.

beneficial—render

But shouldn't we

Elgin.

members

employee

important than
am
not
talking

retreating

ana

Building and outat Indianapolis

branches

of-town

the decisions themselves are man¬

When

In¬

promotion slimmer.
all, has not yet got
to the point where he is running
a
nonprofit organization.

are

Station

Union

.

His boss, after

increased sales that

„

The/firm

%

thevshipbinjg^ the

and

valuable

most

for

I think that if we are to

Murln;

ever

warehousing

thereafter

difficult,

the

themes, to solve

down and

load

work

more

chances

John

business under the
Morris, Stokes &
Co.
The latter firm, one of the
dising problems.
/yy.;'/////-■'-■ oldest and largest in the Greater
To be sure, in making all these
Philadelphia area, was founded
decisions the advice and counsel
in 1905.
J. Dorsey Brown & Co,
of the salesman can be, One of the
was founded in 1947.

It

personnel policies. But
unhappy because he

his

knows
will

it

both

*

is

he

r

specialized organization ^to*' /our
companies, but let us /kerip orir
lines of responsibility straight.
It
is management's responsibility to
design the product, to price 1 it
right, to decide when and in what
quantity to put it on the1 market,
to
determine
theadvertising

stead, it is to go home and berate
or his dog, or his chil¬
dren, or whoever happens to get
in his way, about the misery of
his professional lot. He is secure
enough in his job to know he
won't be fired, because his boss
subscribes to the "new enlighten¬
ment"

than

.

familiar

the next day.

F.

vv i.iiain

What I do find wrong .wigi the.
picture is the diffusion;of respon¬
sibility.
When the. whble*; crew
votes on which way.' to/steer/ the
ship, nobody can say who ran it
up on the rock, And conversely,
nobody gets credit for bringing
it safely to port.
'
:
\
*
We can add layer * on layer of

magazine-cartoon
scene
of the
employee
who
has
just
been
chewed out by his boss.
His re¬
action

•

H. Newman/
waitnouse and Alec
.'
\ ;/ '
■
"' /■■■ are members of the

Margolis.

,

by this is

the

by

are

^ ° rs

was befofejfoecause
New York Stock Exchange and
product and' the selling other leading exchanges. Its printechniques are more, highlyre¬ •cinal office is at 208 South vLa*
fined.
".V
I.V.*
Salle-Street with a :branch in the

stickiness, a per¬
into the corporate

what I

I think
best

OHHorr>

certainly more complicated today,

employees—and
has done.

-Present

Walter C. Aim, John

Now, I am not questioning the
of the experts,.; Selling is

controls.

run,

Emphasis

a

copywriters,

and- -development

value

his wife,

"The
Organization
Man,"
and
"The Lonely Crowd" and "The
Hidden
Persuaders" — that
the

actions.

out

formance

research

/

,E.

people—and at the end. of 4he pa-t
rade, the salesmen, vv .^ -

specifically salesmen—I think we
has

questions. But now
out in front of the public
only to find a thousand curious
eyes peering at his product
every angle and a thousand voices
asking probing questions.
The way many of our salesmen

above.

days.

diffident

he goes

from

flock-of-sheep reaction of for¬

mer

felt

must realize what it

of the

pressured

is, the public has been as¬
serting its individuality in many
ways,
the
most
of
important
Which from the salesman's point
Of view has been its growing re¬

who

man

about asking

tions

That

defined the ideal customer as

blind

a

the advertising

the

one

partners include Paul
Murin; senior partner,
Philip
W. Broclhiaus who have been $skociated'*with David A. 'Noyes- &
Coinpcuiy lor over; three decades/

feign¬

customer-service; men,
point-of-sale promptipn.-pep-

the

David A. Noyes & Company
of eight remaining of about,
100 security dealers which were
in business in 1908.
is

the

ple,

leaders

Chicago during most of the
half of the Twentieth Cen¬

tury.

analysts, fol¬
training,staff,

of

in 1946/

first

market

ers,

.

man

of

First comes a

platoon

of

years

Noyes, who passed away
was one
of the financial

all under one roof.

followed by the industrial

the

David A. Noyes
The late David A.

Company.

&

experts

lowed by the sales

William C. Jackson,

of

firm was renamed

sponsibility.
Today
when
something goes
wrong on the sales graph and we
want to call a meeting pf all the
who might advise us on
a cure, we have to hire the Madi¬
son
Square Garden to get them

level that
are constantly pouring out objec¬
simplify it a bit, two classes of
tively written
explanations of people. There were those who
When the public Is In Danger
what the customer should look for had to work in order to eat, and
It is when the attitude prevails
in a synthetic fiber, or a washing there were those who, bad to work
that business is in business first
machine, or a pair of shoes. Look in Order to get. very rich.
The
to serve and only
secondly to
at the rapid growth in recent burden of performance was on the
zines" at the consumer

social ideas of the day.

and

when,

1926

ment

salesman'sre¬

the

of

under that name until
following the retire¬

operated

us

in

barrier

diffusion

this

these points in
consider, the fifth
modern
selling:— the

let

mind,

the

1

keeping

Now,

jobs that other men could do bet¬
of

commodities, celebrated Oct;
50th
anniversary of its
founding. The firm was organized
in 1908 as Noyes & Jackson- and.

Salesmen's

of

Diffusion

We

organizations where such factors
as these are keeping men at their

All

Company, one of Chicago's pio-'
neer brokerage firms in securitiesarid

days

these

job

a

all know of cases within our own

the third bar¬

CHICAGO—David A. Noyes &

as

at the executive

& Co.

Celebrates 50 Years

• H
well as loyalty personnel practices.
But there is, after - all,' -such • a
up." We all know what seniority
and
tenure
mean
in terms of thing as too much security. ~

even

this

the phrase,

have heard

all

"loyalty down

/ fX-

,

David A. Noyes

the

performance.

talk?"

to drift and

A real¬

istic

definitely,

this

do

we

clearly, sincerely and above all
immediately, or.shall we continue

ideas /to

of these

extension

people today enjoy
has meant in the realm of profes¬
We

"Sh£?H

em¬

the American

holding

dead in.

our

of work.

the wrong kind

that

this, what "the new security"

Restraining Onr Economy
ness

describe

audience such as

in detail, for an

of

each

to

ployees where he stands in the
profit picture. And I said that we
should recognize that the sales¬
man
who can't sell is simply* in

v

I don't think I have to

Invisible Sound Barriers

ticularize

people in your organization
are obviously in the wrong

line of work.

I

Thursday, October 2,

...

(1370)

erage

New York, investment brok-,
firm with 36 offices coast
members of the New

to coast and

York

Stock'

Exchange,, has

nounced that the Long Lines

partment of American Telephone'
and Telegraph Company has com-'

the installation of a se¬
quentially coded automatic start
communication system, speeding

pleted

the

transmission

ders by as

plifying
tween

much

of customer
as

operating procedure be¬

the

New

York

office

ville,

S.

C.; Spartanburg,. S. C.¬
N. C.; Huntington, W.

Charlotte,

I

He

asked:

and

Harris, Upham branches in At¬
lanta, Ga.; Columbia, S. C.; Green¬

Va.; Charleston, W. VaV;

here.

or--

40% and sim¬

years ago,

phrased a question that
believe is painfully/appropriate

an¬

De/

Winston-!

Salem, N. C.. and Durham, N. C.

Volume

188

Number 5782

The Commercial and Financial Chronicle

...

(1371)

Continued

-

from,page •

Continued

V-

from

'

4 '

page

^

-

r

estimated

was

Electric

Financing Federal

:

Vh:

Government Presents

characteristics
financial'

the

of

but

,

Treasury's

>

situation^-including -the!:

trasted

related Treasury matters.
-

Following 1 the
economic
presentation, the committee meets
(2)

;

below the 1956 record for

4.0%

was

Car

calculated

the week's

total

car

to

37,150 units the week before and
corresponding week last year.

the

The

at

automobile

revenue freight in the week ended Sept. 20, 1958
1,278 cars, or 0.2% above the preceding week.
Loadings for the week ended Sept. 20, 1958 totaled 667.277
cars, a decrease of 57,657 cars, or 8% below the corresponding
1957 week, and a decrease of 155,159
cars, or 18.9%
below the

pro¬

Friday last.
47,718 units con¬

on

of 51,552 in

count

a

corresponding week in 1956.

■'

statistical. publication

said, however^ .that walkouts at
various plants of General Motors, Chrysler Corp. and Ford Motor
the Seeretary, Under-SeicreI
Co.
restricted
production
to
about
80% 'of the pace originally
-tary and-other senior officials for
\expectecl to be reached the' past week;.^ Troublesome also were
a
briefing
on
immediate
and
parts shortages at assembly plants of Ford Motor Co., whose Mer¬
longer. term., problems faced by
cury and Lincoln divisions have yet to build a 1959 model car.'
the Treasury. At the briefing ses¬
"V;" Studebaker, the only other firm which has not gotten new
sion, the Under-Secretary is usu¬
model operations underway, set its South
Bend, Ind., assembly
ally
quite
candid
about
these,
line in motion on Tuesday of this week.
Mercury and Lincoln
problems and earnestly requests J
resuiiiptioii
is dated for October.
|
an expression of pur committee's 'rt
"Ward's" predicted the industry will fall nearly 30% short of
views. The Treasury is interested
its September schedule of 195,500 cars. A figure closer to
140,000
not only, in our opinion of what
units is now anticipated. All companies except American Motors
kind of security issues the sav¬
will fail to fulfill this month's programs.
ings banks are likely to support,
It added that failure to meet September goals seem to make
but also, hi what we judge to be
it urgent that October programs be met, since the
majority of
the most feasible type of financ-

Automotive

Output Held to About 80% of Rate
Expected Last Week as a Result of Plant Walkouts

mar--,

ket and economic situation.

(3)

,

The

committee

into executive

session

the

and

Treasury

lems

and to draft

Secretary.
mittee
the

„

At

various

to

open

this

members

goes

about 80%

Last week's

session,

August

com¬

in

detail

financing possibilities,

the. Treasury,

including
*

aspects

The final

(4)

is

the

in

step

the

presentation

but

explanatory
of

of

a

and

25

by the Chairman, other

The

Treasury continues

staggering financing
the current fiscal

billion

problems

refinanced

before

in

Some $30

year.

securities

of

to face

need

June

to

30,

be

1959.-

perhaps $12 billion of
new money needs
to be raised to
meet the expected deficit. The ingenuity

the

of

Treasury's

cents

will

management team

be

funding
tions

and

new

that will

sorely
opera¬

neither

nor

senting other
stitutions,

committees

our

committee

on

sheets.

offer, suggestions

.$43

observations

terms

on

nent

fiscal

on

policy.

In

views

and

savings
Please

get in touch, with

me or

free

serious

all

views

will

Webster

;Dougherty
passed away

a

week
.

be

In

than

Steel

Co.

operating 19 of its 35

reactivated

two

it

has

at

any

time since

last

December.

The

Buffalo

composite

on

steelmaking

scrap

is

unchanged

*

was

of

Iron

steel

and

Steel

Institute

companies will

announced

average

that

A.

For the like week

1,666,000 tons.

Co., Philadelphia,"
on Sept. 26.




a

month ago the rate was

*103.7% and

A year ago, the actual weekly
or

pro¬

production

of production

is based

on

average

weekly

production

1947-1949.

Latest Week
The amount of electric energy
power

251

in

1956

and

the

Failures, however, '<
total of 264 in

prewar

a

last

year.

Small failures, under $5,000, declined
1957. Liabilities in excess of

week ago and 47 in

incurred by 34 of the week's failures as against
preceding week.
among manufacturers climbed considerably to 59
from 39, while retailing edged to 131 from 129 and commercial
service to 23 from 18. Contrasting declines brought construction
casualties down to 35 from 50 and wholesaling to 20 from 26. More
manufacturing and service concerns succumbed than last year
and the wholesaling total held even with 1957. However, failures
ran below a year ago for retailers and
construction contractors.
Six of the nine major geographic regions reported a week-toweek rise in business mortality. The toll in the West South Cen¬
tral States jumped to 24 from 8, while milder increases lifted the
East North Central to 35 from

30

and

the

Pacific

to 66

from

64.

In

contrast, Middle Atlantic casualties dipped to 84 from 87 and
South Atlantic dropped to 19 from 38.
Most regions had fewer
failures than last year.
The only increases from 1957 occurred

in the Middle

Atlantic, West South Central and Mountain States.

Wholesale Food

Price

Index Showed

Noticeable

Rise From Prior Week
There

was

a

noticeable rise in the wholesale food price index

last

week, Dun & Bradstreet, Inc. reports. It climbed 1.7% to
$6.49 on Sept. 23 from the 1958 low of $6.39 a week earlier and
exceeded the $6.17 of a year ago by 5.2%.
,

Higher in wholesale cost last week were wheat, rye, hams,
bellies, butter, cheese, milk, cottonseed oil, potatoes, steers and
hogs. The list of declines included flour, corn, barley, lard, coffee,
cocoa

and eggs.

The
of 31

index

represents the

sum

total of the price

per

pound

foodstuffs and meats in general use and its chief function

raw

is to show the general trend of food

prices at the wholesale level.

distributed by the electric light
industry for the week ended Saturday, Sept. 27, 1958

Moderate

Declines Last Week
The general commodity price level declined the past week,
reflecting decreases in grains, flour, cotton and tin. The daily
wholesale commodity price index, compiled by Dun & Bradstreet,
Inc., stood at 276.99 on Sept. 22, compared with 277.21 a week
earlier and 286.96 on the comparable date a year ago.
Most grain prices declined steadily during the week.
Corn

prices fell moderately as supplies increased with corn buying
equalling
that of the prior week. Purchases of wheat sagged
and prices were down fractionally, except in Minneapolis where
flour bookings expanded and prices edged up.
Interest in rye and oats was

those

131.7%.

Electric Output Registered Good Results in the

and

slightly to 268

toll

of

week

a

commercial

&

size

the

•

placed at 2,115,000 tons,

Webster

increased

at

*115.2% of steel

before.

*Index

industrial failures

Wholesale Commodity Price Index Registered

American

!

Modestly

were

The

more

Dougherty
of

$100,000

fur¬

more

hearths, producing

open

gros.s ton.

duction

Dougherty, founder !

proprietor

of-this

are

of the utilization of the Jan. 1, 1958 annual capacity of
140,742,570 net tons compared with actual production of 67.3% the

to

for

A.

products

+;*■.

28 in the

will

as compared with an actual rate of *113.0%
capacity, and 1,816,000 tons a week ago.

this business, there is always room
for one more opinion.
'
f

and

Orders

Output for the week beginning Sept. 29, 1958 is equal to about

'

A. Webster

suit.

68.5%

with Saul

consideration.

231

to beat the deadline.
of finished steel has re¬

production for 19-17-49)
of

welcome

bankers

feel

follow

to

prices

capacity for the week beginning Sept. 29, 1958, equivalent, to
1,850,000 tons of ingot and steel castings (based on average weekly

re-,,

staff economist, and

our

be' assured that

given

this

is

operating rate

of

perti¬

monetary'

would

we

of

everywhere.

Klaman,

be

discharging

sponsibility
the

may

base

and

above the

to 34 from 46

net ton since the middle of August.

a

Buffalo, Bethlehem

* It

The

financing and to make whatever
other

on

••

Casualties involving liabilities of $5,000 or more rose moder-,
ately to 234 from 216 iivthe previous week and edged above the

are

Galvanized

"Steel's"

gov¬

debt will probably be called upon
to

rV'Vv-^'Y<•"

year's level of 278 for the second week.

remained

•

burgh at'62, up 1 point; Detroit at 56, down 11.5 points; Youngstown at 54, down 5 points and Birmingham at
54, without change.

public

1.8% above the previous week and 0.9% above

the similar week of 1939.

canmakers try

Cincinnati at 73.5, no change; Wheeling at 73.5, up 4 points; Cleve¬
land at 68, up 10.5 points; Eastern district at 66, up 2 points; Pitts¬

repre¬

the

last

-

types of financial in¬

securities and

ernment

composite

as

operated last week at 58.5% of capacity, up 5 points.
Other districts were as follows: St. Louis at 78.5, up 0.5 point;
Chicago at" 76.5, no change; Western district at 75, up 1 point;

will unduly upset the

with

Pittsburg, Calif.
are
expected

district

general capital market.
Along

at

producers

orders

new

in the week ended Sept. 25 from 262 in the preceding week, Dun
&
Bradstreet, Inc. reports.
However, casualties dipped below

running 10 to 15% ahead of those booked
during August, steelmakers report. Sheets are leading the field,
thanks to increased activity in the automotive and appliance in¬
dustries.
Demand from manufacturers of light tanks and steel
drums is also improving.
Many producers are booked through October on cold-rolled

steel

re-

money

box

soar next month

'"Steel's"

At

.to inflationary or deflationary ex¬
cesses,

probably

naces.

contribute

a

Other

debt

taxed in establishing terms for

Commercial

Capacity

holding up better than expected
because of continued strong demand from the construction indus¬
try, farmers and furnace manufacturers.

In addition

period

same

The Past Week

Monday last.

on

New'orders

request.

upon

were

Expected to Rise to 08.5%

stated

mained'at $149.28

members of the committee partici¬

pating

orders

new

the like week in 1957.

from

per base box on electrolytic and hot dipped tin plate, black
plate and feme plate at Irvin and Fairless, Pa., Gary, Ind. and
Fairfield, Ala. Columbia-Geneva Steel Div, will raise its prices

general financing prob¬
These questions are usually,

In the

1.2% below production. Unfilled orders amounted to 42% of
stocks.
Production was 3.6% above; "shipments 8.0% above and

cents

to

answered

tional Lumber Trade Barometer."
were

10.0%

comes, will not affect base prices but would be made
charges for extras, the structural fabricators believe.
Steel companies raised extras during Januaryrin 1956 and
1957.
They have already declared that this year's base price in¬
creases in August are not
enough to offset higher costs.
Base prices on tin plate are going up on Nov. l.U. S. Steel
Corp; and its .Tennessee Coal & Iron Div. will boost prices 35

points summarized

Shipments Rose 7.3% Above Output in the
Week Ended Sept. 20, 1958

Lumber shipments of 474 reporting mills in the week ended
Sept. 20, 1958 were 7.3% above production, according to the "Na¬

in

Secretary often
asks specific questions at this final
session relating both to our report

lems.

Lumber

&

increase, if it

pro¬

in the report. The

and

Last week the agency reported there were 14,388 trucks made
This compared with 14,110 in the previous

that some structural steel fabricators are protect¬
ing themselves against the possible increase by adding $4.50 to
$5 a ton on quotations for work to be delivered after Jan. 1. The

of the

discussion

was

Of Ingot

It

report is usually accompanied

elaboration

Dun

of August 1957, but down 0.8%
month earlier.

-:

ported

debt management team. This writ¬

by

period,

■

in the United States.

Steel prices may go up early next year, "Steel" magazine re¬

committee report to the Secretary
of
the
Treasury and his, senior
ten

ago

-v

.

Business Failures Continued to Rise

«...

the problems.
cedure

year

the $72,289,031

$104,770,856 of

may

one to four
hours depending on the complexi-

'

from

year,

Steel Production This Week

(and redrafted several
Otherwise the majority-

controversial

similar

the

•

car

week and 9,242 a year iago.

■

require anywhere from

,

last

drafted

times).
opinion prevails. The sessions

of

-

output rose above that of the previous week
by 10,568 units, while truck output advanced by 278 vehicles
during the week. In the corresponding week last year 51,552 cars
and 9,242 trucks were assembled.

eighth consecutive month building permit values in
those

•

Last week's

less than the all-time high
of $724,235,66.9 of the preceding month.
Plans filed in New York in August totaled
$103,987,432, up
the

the

cars and trucks amounted to
62,106 units, or an increase
10,846 units above that of the previous week's output; states

"Ward's."-

Bradstreet,* Inc. reports. The total for 217 cities, including New
York; amounted to $651,592,289, the highest level for any August
on record. This was 15.6% above the
$563,592,289 of the compara¬

43.8%;

pos¬

unanimous view of the committee

.

the

exceeded

ble month

vs.

refunding is involved). If
sible, a report representing

and

of

four weeks.

next

car

total of

Industry hopes for October are to more than triple September
outpiit;' edging near the 490,000-unit mark if ideal conditions
prevail.'' '
V."
■•' 7
For

report to the

a

ties

set for the

Chrysler Corp. and

output totaled 47,718 units and compared with
37,150 (revised) in the previous week. The past week's production

'c'

prob-

long issues,
yields and maturities, and outstanding issues to be refunded (if

is

are

of the pace originally expected to be reached, due to

walkouts at various plants of General
Motors,
Ford Motor Co.

.

consider

to

discuss

the merits of short

*

then

related
a

model introductions

new

t ing, considering the overall

"

Passenger car production for the week ended Sept. 20, 1958,
according to "Ward's Automotive Reports," was restricted to

,

*

Loadings Rise Fractionally in Week Ended Sept. 20

Loadings of

were

,

*

after

Sept. 27, 1958 output increased by 102,000,000 kwh. above that of the previous week and 645,000,000 kwh.
that of the comparable 1957 week and
977,000,000 kwh.
above that of the week ended Sept.
29, 1956.

the automotive industry last week*,'
notwithstanding labor
ilareups and parts shortages, United States car makers were ex¬

"Ward's"

expenditures, debt maturities, and

Edison

week

above

-,;

,

magnitude of the Federal debt and pected tq accelerate the tempo of 1959 model
duction, "Ward's Automotive Reports," declared
its ownership, -budget receipts and,
"

the

Institute.

For the week ended

•

from the 95,075 of 1957,
..the period of 99,109.

-

Staggering Problems:

at

12,342.000,000 kwh., according to
Output recorded gains the past
trending slightly lower the week before.

-

47

earlier.

channels

The

resulted

steady and wholesale costs matched
influx
in

an

of

new-crop

appreciable

supplies into

dip in soybean

prices; soybean purchases were sluggish.
Despite scattered, orders in some markets, ever-all flour
trading lagged and prices declined during the week. Purchases
of flour for export dipped noticeably. Transactions in sugar fell
moderately, but prices were unchanged.
There

was

a

marked

decrease

in

•

the

buying

of cocoa and
/V/)

AX

The Commercial and Financial Chronicle
48

2, 1958

Thursday, October

.

.

.

(1372)

the ' information —
in the forms in
accustomed to re¬
ceiving information, and with the

steady.
The call for steers was sustained at the level of the prior week.
Prices moved up slightly and cattle receipts in Chicago proved

trading and prices were

steady. Hog receipts expanded

noticeably and prices edged lower.

Hog trading was sluggish at the beginning of the week, but picked
up at the end of the period.
Although the salable Supply of lambs
rose slightly during the week, stocks were limited. Lamb trading
was steady and prices were unchanged last week.
Following the

dip in hog prices the wholesale cost of lard

slipped, but trans¬

actions were steady.

While cotton prices were

steady at the beginning of the week,

they declined later on. Purchases improved following reports of
unfavorable weather in certain parts of the cotton belt. United

exports of cotton during the period ended on
last week were down somewhat from the prior week
States

ably below those of the

Tuesday of
and notice¬

similar 1957 period.

Trade Volume in Latest

Level of

a

year ago.
Shoppers were primarily
women's Fall apparel, housewares and

a

Scattered reports indicate

interested in men's and
some lines of> furniture.

that sales of new passengers cars were

again sluggish and sharp year-to-year declines remained.
The total dollar volume of retail trade in the period ended
on

2% below to 2% higher

Wednesday of the past week was from

spot estimates collected by Dun & Bradstrcel,
Inc. reveal. Regional estimates varied from the comparable 1957
levels by the following percentages: East South Central States
-f-1 to +5%; New England, Middle Atlantic and South Atlantic
0 to -j-4; Mountain —1 to 4-3; West South Central —2 to 42;
East North Central and West North Central —4 to 0 and Pacific
than

a

Bank's

year ago,

Coast States —5 to —1%.

of dresses, sportswear, coats, suits, acces¬
boosted over-all volume in women's apparel
noticeably over the prior week. Slight year-to-year gains oc¬
curred. While purchases of men's topcoats and Fall suits advanced
appreciably, interest in shirts, neckwear and hose was sluggish.
Total sales of men's apparel fractionally exceeded that of the
similar period last year. Retailers reported moderate year-to-year
increases in children's merchandise.
There was a substantial rise from a week earlier in the call
Increased buying

sories and millinery

sets which helped total furniture
sales equal those of last year. Although shoppers spent more on
floor coverings than m the prior week, sales of draperies and
linens fell somewhat. Despite a moderate gain in television sets,
purchases of major appliances dipped below those of both the
previous week and the similar period last year. Volume in house¬
wares, silverware and glassware rose slightly during the week.
Housewives stepped up their buying of fresh produce, some
dairy products, canned goods and baked goods last week, while
interest in frozen foods, fresh meat and poultry was unchanged

has

a

textile trading last week,

especially in industrial fabrics and cotton gray goods. Boosted by
a noticeable increase in new orders from the automotive industry,
volume in wide coating fabrics expanded considerably.
Best¬
sellers in cotton gray goods were sheetings and print cloths. Al¬
though wholesalers reported a slight gain in the call for carpet
wool, transactions in woolens and worsteds were unchanged from
a

week earlier.

in re-orders for fall dresses in the week
noticeably from a year ago. While the call
women's fall coats and suits moved up substantially during
There

and

for

was an

volume

was

upsurge

up

week, purchases were below expectations. A substantial rise
in the buying of children's clothing, especially sports¬
wear.
Re-orders for men's fall and winter suits and topcoats re¬

the

occurred

mained

close

to

those of the

prior week.

Shoe wholesalers

re¬

ported marked gains in volume in both men's and women's lines.
Buyers stepped up their orders for bedding, upholstered chairs

called

juvenile furniture during the week. Volume was close to that
There was some increased interest in linens, drap¬
eries and floor coverings as buyers sought to replenish depleted
stocks. Except for a slight rise in purchases of television sets,
the call "for major appliances was unchanged from a week earlier.
Food wholesalers reported another substantial rise in orders
for canned goods, particularly vegetables and fish. While the call
for rice expanded appreciably, interest in flour and sugar lagged.
There was a moderate gain in turnover in dairy products, but
volume in fresh meat and poultry slackened. The buying of fresh
produce and frozen foods continued to climb.
Department store sales on a country-wide basis as taken from

the

has

industry

is

What's more,

than doubled.

proven

Federal

1958

rose

Reserve Board's index

1%

for the

above the like period

last

week

year.

ended Sept. 20,

In the preceding

week, Sept. 13, 1958 an increase of 4% was reported. For the four
ended Sept. 20, 1958 a gain of 2% was registered.
For
the period Jan. 1, 1958 to Sept. 20, 1958 a decrease of 1% was re¬
ported below that of 1957.

weeks

Retail

trade

sales

volume

in

New

York

City

reported to be unchanged to 2% higher than the

1957, according to trade
Budget

clothing

and

last week was

like period in

houseware

and

accessories

promotions

showed good results for the week.

According to the Federal Reserve Board's index, department
sales in New York City for the week ended Sept. 20, 1958
showed an increase of 1% from that of the like period last year.
In the preceding week, Sept. 13, 1953 an increase of 9% (revised)
was reported.
For the four weeks ended Sept. 20, 1958 an increase
of 4% was noted. For the period Jan. 1, 1958 to Sept. 20, 1958 an
increase of 2% was registered above that of the corresponding
store

period in 1957.



of

record

has

bargain."

a

and

extend

furnishing

to

I

respond.

am

confident that advertising

will continue; 4n the future as it
has in the past, to perform faith¬

fully and dependably; that in the

public service arena it will be of
more and more importance in our
efforts to prove that free men not
only can do what Russia's driven
men are doing, but do it better.

Winners in ASE
Annual Golf Tournam't
Harold J. Brown, Brown, Kier& Co. and Joseph F. Reilly,

nan

tied for the low
of the Board

its

Chairman

gross

Trophy in the annual

golf tournament of the American

at

Stock
Exchange, held at the
rates," the Chase Man¬ Winged Foot Golf Club, Sept. 30.
publication adds, "the elec¬
George
D.
Martini
won
the
output has increased in every year
utilities
have
consistently president's trophy for low net
during the postwar era in spite of tric
three
moderate
class
A
with
a
score
of
72.
Runnersought
to
utilize
the
most
modern
adjustments in
facilities.
Year after year their up was Thomas J. Hickey, Jr.,
over-all activity."
Industrial
manufacturers
and expenditures on new equipment Vilas & Hickey, with a score of 73,
About 300 members and guests
processors
are
prime users of play an important role in the
electric power, consuming about
attended the tournament and
over-all construction outlook; it
45% of total output. The average
dinner.
takes $4 of investment to produce
working man now has the equiv¬
alent of 290 fellow-workers
in $1 of revenue from electric pow¬
Watling, Lerchen Branch
the form of electrical machinery er.
In. 1958 the electric utilities
In Birmingham, Mich.
and equipment. Thirty years ago,
are expected to account for almost
with
power
less plentiful, his
BIRMINGHAM, Mich. — Watone-seventh of total outlays for
electrical helpers numbered about
ling, Lerchen & Co. announces the
new plant and equipment."
70.
opening of a new- BirminghamBloomfield Branch Office, located
in the Creson Building, West Maple
Continued from page 13
and
Cranbrook Road, Birming¬

than

business

general:

in

power

power

minimum
hattan

growth of the community.
Victor W. Hughes will be man¬
ager and Paul J. Pickner his as¬

Against Recession Fever
As

personal incomes go up, so
does the urge to "trade ud"—in
automobiles, in home furnishings,
in

all

consumer

And

chase.

goods

we

pur¬

personal income, the
reported after ) the

July 1958 figures were in, was at
an
all-time high -— higher by

public

pertinent

the

gets

facts into its consciousness—when
it understands

it

a

relied

be

can

given situation—
upon to do the

right thing. There

are many areas

in which I feel that this

might
as

time

been

have

men

members of the Watling, Lerchen
& Co.

organization for many years.
Watling, Lerchen & Co. will
offer complete brokerage and in¬

vestment, services

principle
proved

new

■

,

Form Ross Mtg.

goes on.

the

at

office.

advantageously

be

Both

sociate.

demonstrate that when the Amer¬
ican

first

the

is

brokerage office in this area and
is
evidence
of
the
substantial

Confidence—A Vaccine
what guide each of us in our out¬
look and in our buying habits.

This

Mich.

ham,

& InV.

WASHINGTON, D. C. — Ross
impoitant,
as
our
Mortgage & Investment Co., Inc.
recovery continues its upswing, is
has been formed with offices at
inflation, which
now
threatens
1511 K Street, N. W. to engage in
our
economy.
I
wonder
how
The

most

nearly $2J/2 billion than the prerecession previous record set in
August of 1957. This undoubtedly
a securities business.
Officers are
accounts for the fact that, despite Americans would react to a fullthe
recession,
two
top-ranking scale and forthright presentation Stanley Ross Stein, President and
questions in our country continue of the grave consequences — both Treasurer; and Saul M. Schwartzto be: "Where can I park?" and national and personal—which are bach, Secretary.
"How can I lose some weight?" inescapable unless we check this
Smallman & Co. Opens
Incidentally, these questions we menace to really sound growth.
all continue to hear also afford
measure

a

of the consumer's mood.

For the retention and continuation
of that

mood, I believe, The Coun¬
campaign merits

Confidence

cil's

considerable

credit.

All of The Council's
in

the

With
these

increasing frequency,
days, we hear that both

business

gation

campaigns
public service highlight a
of democracy: That
are
only two ways—com¬

and

to

labor

show

curbing inflation.
obvious

truth

have

an

responsibility
This is such

that

no

one.

Ala.
Inc.

—

&

in

securities business.

Small-

has been
formed, with offices in the First
in National Bank Building to engage

an

chal¬

4';;''i

lenges it.

BIRMINGHAM,
man

Company,

obli¬

a

are

Officers

Ralph A. Smallman, Jr., Pres¬

ident,

T.

J.

Smallman,

and

Vi

c e-

and
this truth into terms of themselves Charles C. Seagle, Assistant Sec¬
there
as
individuals
as consumers
as
retary.
Mr. Smallman was for¬
pulsion and persuasion—by which well as producers? How many merly
with
Odess,
Martin
&
people can be moved; that our
fully realize the stake of every Herzberg and Courts & Co.
way is persuasion.
At the same individual in the mounting battle
time, advertising demonstrates
against inflation?
Roger Evans Opens
that it is a potent force for making

basic

our

But

Virtues

of

Advertising

these

public

service

en¬

deavors, advertising is a dynamic
instrument of public information
and

a
champion of national and
community
interests.
It
helps

marshal

the

informed

and

intel¬

ligent cooperation of the

people,
the indispensable ingredient in a

more

can

as

it

in the campaign

was

and

find the simple, proper words
ways

to make all Americans

understand
abundance

that
and

not

only

individual

our

well-

being, but our very freedom, de¬
pend
upon
a
continued
sound
economy?
Can we recognize, as
a

people, that something must be
inflation, just as some¬

done about

thing

that ingredient today
than ever. For we now face
need

democracy's

translate

against recession, public under¬
standing is the only remedy. Can
we

We

many

President

Secretary;

—

Just

work.

way

In

how

tenet

working democracy.

observers.

ever

maintain

"To

be

to

than

more

*

the

says.

electricity

of

use

Brief"

in

"Business

one,"

a

"As

and

of last year.

on

push-button economy — and the
soared, the average rates paid per
phenomenal growth of the electric
kwh have steadily fallen: 30 years
power industry clearly bears this
ago a residential consumer paid
out," the bank's publication says.
almost three times as much per
"In the past eight years alone,
kwh as he now pays. Electricity
production of electric power has

Government

week earlier.

A moderate rise occurred in over-all

been

are

Pricing Record

Increasing Output

"America's

for bedding and dining room

from

power

"The pricing record of the elec¬
tric utilities is also an impressive

much less vulnerable to recession

Fall

cool

tric

output

its

the
Chase
Manhattan
bi-monthly business re¬

Brief,"

the

Year Ago

Other major consumers

industry,

power

doubled

has

port.

more

Week Held at

weather stirred consumer buying the past
week and over-all retail trade matched that of the similar period
More

of elec¬
the households of
every
10 years since 1900, this America, the Chase Manhattan
year will produce over 600 billion study reports, with average home
kilowatt hours of electrical en¬ consumption today amounting to
more
than 3,000 kilowatt hours
ergy and by 1980 might treble
even this production, according to yearly—-a rate that has doubled in
the current issue of "Business in the last 10 years.
electric

The

national unity and
appropriately
under¬
scored—the American people will
understand, and can be counted

appeal to
strength

might triple production by 1980. Bank praises pricing per¬
formance and record capital spending for up to date facilities.
which

bias,

without

which they are

electricity will be produced in this year and that the industry
prices di*opped substantially from the preceding week. Although
buying picked up noticeably at the end of the week, coffee prices
finished moderately below those of a week earlier.
Reports of
unfavorable weather conditions in growing areas stimulated rice

given

that,

shows 600 billion kilowatt hours of

Chase Manhattan's study

record to date is clear

The

soon.

Previews Electric Power Industry's Future

47

Continued from page

was

done

about

recession,
does

that like recession, inflation
not

have to

run

the full course to

Own Investment Office
D ALL AS,\ Tex.—Roger Evans is
engaging in a securities business
from

Mr.

offices

Evans

Manager
Prior

at

for

thereto

Emerich

&

1509

Main

Street.

formerly Resident

was

Blair
he

Co.

was

and

Co., Inc.
Ames,
Dempsey 8c

&

with

Co.

With Columbine Sees.
(Special to The Financial Chronicle)

DENVER, Colo.— John Hey is
now
connected
with
Columbine

challenge disaster, that we do not have to
Securities Corp., 621 17th Street.
compulsion, undergo the hardships which in
openly and blatantly invite our own time befell Germany, for
With Liberty Inv. Co.
the peoples of the world to choose
example, because she did not stop
(Special to The Financial Chronicle)
sides
in the struggle for men's inflation in time?
greatest

from the exponents of

who

minds.
Results

like

those

afforded

by

the Confidence campaign serve to

DENVER, Colo. — John Wodack
Our times and the world chal¬
lenge we face dictate that such is now connected with Liberty In¬
understanding must be achieved vestment Company, 511 16th St.

Volume

Number 5782

188/

.

.

.

The Commercial and Financial Chronicle

investment

Continued

from

2

page

ited risks
sells

The Security I Like Best
the

experienced in those years,
in the severity and

increase

acci¬
court

frequency
of
automobile
dents,
the
too
liberal

awards, etc. These factors caused
combined

the

loss

and

expense

ratio for the industry to rise from
an

of 94.6%

average

(1951-5)

100.5 % in 1956 and 103 %

to

in 1957.

During these past two years, un¬
derwriting losses were
experi¬
in

enced.

practically

all

lines

of

business.

1

State statutes have been

tcr

provide

which

for

would

changed
increases

rate

reasonable

assure

underwriting profits. Automobile
Bodily Injury Liability rates were
increased about 20%

in 47 states

in

1957, while Automobile Physi¬
cal Damage rates were raised 10%
in 42 states. Casualty rates have
been
increased,
discounts have
been lowered and agent's com¬
missions have been reduced. Evi¬

increases

dence

that

industry

passed the nadir of its cycle in the
third quarter of 1957.
Additional encouraging steps by
the industry are the homeowners'

of

acceptance

package

policies

tomobile

23.3%

(26.2%), cas¬
ualty, including fidelity and sur¬
ety—14.7% (17.6%), accident and
health— 1.1% (0.6%).
—

1951-1955—Annual net premium
writings increased from $105.3 to
$139.5 million and underwriting
operations yielded average profit

margin

of

income

advanced

investment
from $4.17 to

1.4%.

Net

1956-1957—Premium

electronic

mechanized

of

equipment

to

re¬

duce

1957.
Tax

the

lion

in

revision

the

Of
a

the

insur¬

upward of

tionary

will also be of
help
in reducing
claim
costs.
Comparative reports from many
companies for the second quarter
as against the first quarter of this
year, appear to show a definite
improvement in underwriting re¬
pressures

investment

net

Estimated

income

Federal

Better

Income

credit at the
of over $2.9 mil¬

equal to $2.94

was

of

forward

carry

end of last year,

trend

rates. A subsidence of infla¬

ance

the

basis

less

now

Trend

a

times

income per

share

1957

volume

of

the

constructive attitude

a

longer-term

believe

and

the

industry will return to a fully
profitable operating level as a re¬
sult of capability of
management,

selective

a

policy towards fire

casualty insurance stocks is
today fully warranted by those
responsible for investment and
institutional

accounts.

Current

price
of
65
(Over-the-Counter
Market) affords a yield of ap¬

proximately 4%.

New Zealand Obtains

$46 Million in Credit
Minister of Finance of New Zea¬

land, announced

last

year.

dropped

3.5%,

loss- declined

Premium

but
from

volume

underwriting
$6.58

in

the

first half of 1957 to $2.97 a
and net loss

share,
(after investment in¬

on

Oct. 1 that his

$46,000,000 from

a

group

of

headed by J. P.
Morgan & Co. Incorporated, as
agent. * This ijnancing marks the
American banks

first
in

borrowing by New Zealand

the

New

York

market.

Mr.

Nordmeyer said the funds
be used to help tide New
Investments—C onservat ive
Zealand over the transition period
AETNA'S
total
net
premium
management policies are reflected
of adjustment to sharply reduced
volume of over $150 million last
in composition of the investment
prices for her export produce,
year was 21.6% greater than in
portfolio which at 1957 year-end
1952 and 60.4%
particularly dairy produce and
above the 1947
was
76% in bonds and 24% in
wool.
He pointed out that, as a
total.
Relatively
smaller
gains stocks. Increased
holdings of taxcorrective measure, restrictions by
compared with those for the in¬
exempt bonds reduced effective
dustry reflect greater selectivity tax rate on investment income way of import controls have been
and stricter distribution of pre¬
placed on all classes of imports.
from 20.83% to 17.82%. $20 mil¬
Two
thirds of the $46,000,000
mium volume by class, as well as
lion in U. S. Treasury Bills made
financing
is to be secured by gold
by source. Distribution of 1957 for
flexibility and liquidity.
and this part is for a three-year
net premiums written (1952 data
Prices of fire and casualty in¬ term with interest at
3-%% per
in parentheses):
fire and allied
surance
stocks, as measured by annum. The remainder constitutes
lines—46.8% (43.7%), inland and
sults.

come) from $1.78 to $0.32

a

share.

would

.

-

the Alfred M. Best Co. index

cov¬

ering the stocks of 30 representa1ive
companies,
reached
their
"highs" in June 1955. Although
the general stock list continued
in an upward trend until a little
less than

year ago, fire and cas¬
ualty stocks between the middle

of

Pinal victory
•nr cancer

will

com*

from

th# research laboratory. But
there

are

Many

cancers can

when

detected

treated

is

victories today*

the

be cared

early

and

promptly. Vigilante
key to this victory.

There

are

seven

signals

which might mean cancer.

Vigilance in heeding then
could
cer

victory

mean

over can*

1955

a

and

declined

close

casualty
selling at

to

stocks
a

of

30%.

last

Fire

,

Indicated Net Worth, at the end

funds

plus

$124.16 for each 1,000,000 shares of
capital stock, $10 par. Invested
assets of $227.44 a share and net

premiums
mean

of $148.74
a
good leverage for the

earned

resources

exceed

$272

million.

1. Unusual

bleeding or discharge

2, A lump or
breast

or

thickening in th#

elsewhere. 3. A sort

that does not heal. 4.
bowel

or

bladder

S. Hoarseness

gestion

or

or

Change lit
habits*

cough. 8. Indt*

difficulty in swallow*

Ing. 7. Change in

a wart or moist

If your signal lasts longer than
two weeks, go to your doctor to
•cam if it

means cancer.

AMERICAN
CANCER

SOCIETY




nancing include: The Chase Man¬
hattan

Bank, The First National
City Bank of New York, Manu¬
facturers Trust Co., Bank of
ings

The

1958-Capital

Dividends—Current pay-out of
only 41.7%* of net investment in¬
come suggests increase in annual
rate to $3.00 is reasonable prob¬

ability when underwriting is again
profitable. $2.60 was paid in 1957.
Summary and Opinion

participating in the fi¬

Chemical Corn
i^xchange Bank, Guaranty Trust
Co. of New York, The Bank of
New
York, Girard Trust Corn
Exchange
Bank
(Philadelphia),

unearned premium reserve equity
indicate
liquidating
value
of

share

Co. banks

&

America National Trust and Sav¬

"highs."
June

revolving credit with

and

currently
discount of about 25%

from the level of the general stock
in relation to their 1955

of

one-year

j nterest at 4 Vz % per annum.
In addition to J. P. Morgan

year

are

market

stock. Total

for you.

October

a

Association,

Shawmut

National

Bank

of

The Northern Trust Co.
(Chicago), The Philadelphia Na¬
Bank and The Riggs Na¬
tional Bank of Washington, D. C.
Earlier this year New Zealand
borrowed
£20,000,000
($56,000,000) at long term in the London
market. In 1S56 that country ob¬
tained a $13,000,000 loan from the

Boston,
tional

Export-Import Bank lor develop-,
merit of a pulp and paper project.

Connolly With Hornblower
(Special to The Financial Chronicle)

HARTFORD,

Connolly, Jr.
ated

with

Conn.—Walter J.
associ¬

has become

Hornblower

75 Pearl Street. Mr.

&

is

holding

a

owning

company

(with

minor

stocks of 22 companies supplying vari¬
500 communities in Arkansas,
Illinois, Indiana,

common

some

Iowa, Kansas, Missouri, Nebraska, New Jersey, North and South
Carolina, Ohio, Oregon, Pennsylvania, Washington, Colorado and
Wyoming. In 1957, telephone service provided 88% of revenues,
electricity 8%, and gas, propane, etc. 4%. The twelve telephone
subsidiaries comprise the second
largest group of independents in
the United States, the more
important states served being Pennsyl¬

vania, Indiana, Iowa and Missouri.
companies there is
sas

Power) and

In addition to the telephone
electric-gas-water company (Central Kan¬
gas-transport company.

one

one

Economic activities in the various service areas include farm
products in the west and'midwest; coal, oil, dairy, and manufac¬

turing in the midwest and east; and cotton, tobacco, timber and
vegetables in the southeast.
In

July 1957 an important addition to the telephone system
made, Oregon-Washington Telephone with 29 exchanges and
21,000 telephones, over 90% of which are dial-operated. This
company was acquired through exchange of stock. This property,
serving prosperous areas in the Columbia River Valley, adds

was

desirable diversification to the United
system. The Deans; well-;
known founder and son, will continue to
manage the property.

1950

Including the Oregon-Washington Company the United System
now
serves
464,804 telephones in areas containing about two
million people. In 1957, there was a net gain of
36,447 telephones
(21,589 by acquisition of Oregon Washington Company) and 2,008
power,

water and propane

gas,

customers.

Weeks,

Connolly was

formerly with Coburn & MiddleThe
capital
stock
of
Aetna brook Incorporated. In the past
(Fire) Insurance Company cur¬ he conducted his own investment
rently
affords interesting yield business in Boston.
and
capital appreciation poten¬
tialities based on the premise that
Elmer A. Dittmar
underwriting operations of fire
and casualty insurance compa.» js
Elmer A. Dittmar, President of
should, by 1959, again be profit-' Dittmar & Company, Inc., San
able.
Although
recent
record Antonio, Tex., passed away on
detracts from the stock's former Sept. 18.

new

dial 37%

of their calls and 27,000 phones (about
to dial systems last year.
By
1958, it is expected that 50% of system phones will be

now

the

of

total)

the end of

government has arranged to bor¬

of

services in

ous

6%

row

Utilities

exception) all the

customers

1958 confirm

first apparent in the third quarter

United Utilities Inq.
United

telephone service continued throughout 1957,
and at the end of the year there were
2,653 unfilled applications
for new service and 2,393 applications for
upgrading. United,

The Hon. Arnold II. Nordmeyer,

change in trend

By OWEN ELY

Demand for

results for the first six months of
the

Utility Securities

liquidating

than

9.8

of

I hold to

for

share.

Evident—Aetna's

Public

43%

business.

and

clerical costs. The most sig¬
nificant factor of all, however, is

recognition by some
regulatory authorities of

for

It

about

indicated

underwriting
profit
margin
be
restored, potential net earnings of
over $6
a share are indicated on

feel

$6.02 and $6.23 a share, there was
a
profit after taxes of $2.67 in
1956 but a loss of $1.85 a share in

introduction

it

in 1957. Should 1951-1955 average

volume

After

the

be assumed.

discount of

its

investment

$149.7 million and $150.2
million, but loss and expense ra¬
tio jumped from 1951-1955 aver¬
age of 98.6% to 103.8% and 105.6%,
causing
adjusted
underwriting
losses of $5.93 and $8.54 a share.

to

rose

ment

and

consider

$5.77 a share, and net earnings
rate adjustments, changes in com¬
adjusted for equity in change in
petitive
practices,
and
further
unearned premium reserve aver¬
growth of the economy. Insurance
aged $4.92 a share annually. Capi¬
lias come to be regarded as an
tal and surplus funds rose from
essential. The need for insurance
$53.3 to $73.5 million, reflecting
protection increases in direct re¬
chiefly appreciation
of
invest¬
lation to the accumulation and
ment portfolio, and unearned pre¬
ownership
of
private property.
mium
reserve
increased
from
The industry's volume of business
$90.7 to $117.8 million. Dividends
is little affected by changes in the
of $2.25 a share in 1951 compared
general level of business activity
with $2.70 a share in 1955, includ¬
or the fortunes
of any particular
ing $0.25 extra dividend.
industry. It is on this basis that I

which

reduce overhead,
install¬
selling and the use of stand¬
ardized casualty claim forms plus

a

can

value and

marine—14.9% (11.9%), au¬

ocean

at

from

net
canes

appeal, I

attractive for purchase where lim¬

converted

were

dial-operated.
Faster service, resulting from dialing outgoing
toll calls direct, is spreading
among United exchanges. Additions
to United's own toll plant are being made" as toll volume increases.
The

system has enjoyed outstanding growth in the postwar
increasing about five-fold, due in part to new
acquisitions which included Investors Telephone Company in

period,

revenues

1953 and

Oregon-Washington Telephone in 1957. The construction
last year was about $18 million reflecting a steady annual
increase from $7 million in 1952. Construction for
1958, estimated
at $22 million, continues this growth.
program

Financing last

included about $8.5 million common stock
sold and 109,000 issued to acquire
properties), together with about $10 million in senior securities of
subsidiaries. It seems unlikely that there will be
equity financing
(about

320,000

year

shares

were

this year.

and

The company applied for rate increases of $509,000 last year
obtained 94% of this amount, or $479,000; of this amount

$398,000 would apply to 1958 earnings.

In the first half of 1958

subsidiaries obtained rate increases aggregating $167,000 and

plications have been pending for

a

total of $709,000

The postwar financial record has been

follows:

as

% Earned
-Common Stock Rccord-

Year

(Millions)

1957-:

'"Earned

Paid

on

Approx. Range

Invested

Capital

$34

*$1.54

1956

31

*1.63

1.20

25-20

1955._

27

1.71

1.175

24-19

5.7

1954

24

1.45

1.10

20-17

5.6

1953-.

23

1.44

1.00

18-15

5.8

1952——

15

1.43

1.00

15-13

5.3

14

1.30

1.00

14-11

5.0

11-

1.39

1.00

14-11

5.0

1.951

1949-

10

23

±$1.25

1.00

1.60

19

-

5.5%
5.7

13-11

5.2

1948—

9

1.67

0.90

13

10

5.8

1947——

8

1.57

0.80

14-11

7.3

1946-.—

7

1.35

0.75

16-10

actual

"On

SJ .7(5

ap¬

more.

in

1957

shares

the

In

outstanding.

same

.i:Including 5%

Dec.

stock

l-for-3

1953—

l-for-21/2 at
l-for-6, at

1954
In

the

but due

at

to

as

increase

shares

average

on

J

•,

,

.

.

•

earnings
.

;

:

were

.

increases

stockholders have

received

follows:

$11.75
16.00

l-for-6
l-for-6

19561957

at $21.00
at 19.25

17.50

six months ended
an

Rased

195<».

31, 1957.

dividend

to

new

in

as

extra

addition

rights to buy

%

-

June

of 25%

30, net income increased 13%

in the number of average shares,-

share earnings were 80 cents vs. 88 cents in the first half of 1957.
Current earnings presumably do not yet

reflect full earnings from
operations, and the
company does not take advantage of an interest credit charged
to construction. Accelerated depreciation on the declining balance
method has been used in 1956-7, but this has been normalized.
the heavy expenditures for conversions to dial

The

based

stock

on

five cent

is

over-counter around 27 and
of $1.25 (which included a
extra in 1957) yields about 4.6%.
the

currently

current

Joins Paine,

quoted

dividend

rate

With Cruttenden, Podesta

Webber

(Special to The Financial Chronicle)

(Special to The Financial Chronicle)

LOS

Jesberg
with

ANGELES, Calif.—Robert
has

Paine,

connected

become
Webber,

South

Jackson

&

Spring Street.

Curtis,

626

He

formerly with J. Barth &

was

Co. and E. F. Hutton &

Company.

CHICAGO,
litz

is

desta

now

&

111.—Helen R.

Git-

with Cruttenden, Po¬

Co., 209 South La Salle

Street, members of the New York
and Midwest Stock

Exchanges.

50

The Commercial and Financial Chronicle

(1374)

.

.

.

Thursday, October 2, 1958

^INDICATES

Securities Now in
ture

(10/8)

Addressograph-Multigraph Corp.

Sept. 17 filed 141,113 shares of common stock (par $5)
to be offered for subscription by common stockholders
of record Oct. 7, 1958 at rate of one new share for each

Price—

held; rights to expire on Oct. 22, 1958.
To be supplied by amendment. Proceeds—For
20 shares

general

Underwriter—Smith, Barney & Co.,

corporate purposes.
New York.

American Box Board Co.

by at least 95% (23,623 shares) of Wolverine common
stock; howeyer, American may declare offer effective
whenever it has been accepted by not less than 80%
of

the

outstanding Wolverine

common

stock.
American-Caribbean

Oil

Co.

(N.

Y.)

(par 200).

Proceeds

supplied by amendment.

To
Un¬

—

discharge current liabilities and to drill ten wells.
derwriters—To be named by amendment.
Cement Corp.

American

(10/8)

To reduce bank loans and for expansion program.

Under¬

writer—Blyth & Co., Inc., New York.

^-American Diversified Mutual Securities Co., Inc.
Sept. 22 (letter of notification) 21,000 shares of preferred
(par $7.50) and 52,500 shares of common stock
(par $1) to be offered in units of two shares of preferred

stock

common

stock.

Price—$20 per

Proceeds—To promote a program of a new appli¬
of

cation

G St.,

the

open

end investment trust.

N. W., Washington 5, D. C.

Office

—

1426

Underwriter—None.

^American & Foreign Power Co., Inc. (10/22)
Oct. 1 filed a maximum of 185,000 shares of no par
common stock (public offering of a minimum of 180,000
shares of stock).

Price—To be supplied by amendment.
Proceeds—To Electric Bond & Share Co. Underwriters
—Lazard Freres & Co. and The First Boston

Corp., both

of New York.

American Mutual Investment Co., Inc.
Dec. 17 filed 490,000 shares of capital stock. Price—$10.20
per share. Proceeds—For investment in first trust notes,
second trust notes and construction loans. Company may

develop shopping centers and build or purchase office
buildings. Office — 900 Woodward Bldg., Washington,
D. C.
Underwriter
None.
Sheldon Magazine, 1201
Highland Drive. Silver Spring. Md.. is President.
—

it American Petrofina, Inc., New York
Sept. 29 filed 12,000 shares of class A

common

be

offered pursuant to the Thrift Plan
of company and certain subsidiaries.

for

stock

to

Employees

Service, Inc.
375,000 shares of common stock (par $j
Piice—$4 per share. Proceeds—To purchase equipmer
and supplies and for working capital and other
corporal•
17 filed

Office—Salt Lake City Utah
Underwrite
Amos Treat & Co., Inc., of New York. Change in Name
purposes

«—Formerly United States Telemail Service, Inc.
Ampal-American Israel Corp., New York
Aug. 8 filed $3,289,100 of 10-year discount convertible

debentures, series E. Price—61.027% of principal amount,
payable in cash or in State of Israel Independence Issue
or

Development

ment and

Issue

bonds.

Proceeds—For

develop¬

expansion of agricultural, industrial and
Israel. Underwriter—None.

com¬

mercial enterprises in

Anderson Electric Corp.
Dec. 23, .1957 (letter of
common

Proceeds

stock

(par $1).

Price

14,700
—

To go to selling stockholders.

—

$12

shares
per

Office

of

share.
—

700

N.

44th Street,
Birmingham, Ala. Underwriters—Cruttenden, Podesta & Co., Chicago, 111.; and Odess, Martin
& Herzberg, Inc., Birmingham, Ala.
Anita Cobre U.

Sept.

8. A.

Inc.,

Phoenix, Ariz.

30,

1957, filed 85,000 shares of common stock.
Price—At par ($3.75 per
share). Proceeds—For invest¬
ment in subsidiary and
working capital. UnderwriterSelected

Securities, Inc., Phoenix, Ariz.

Arizona

Public Finance

Co., Phoenix, Ariz.
Sept. 2 filed 802,808 shares of common
stock, which are
issuable as underwriting commissions on
the sale of an
issue of $981,700 5%
common

stock

debentures and 9,805,603 shares of

being offered publicly under an ear¬
lier registration statement. Under an
underwriting agree¬
ment between the
company and Public Development

.

now

Corp., the underwriter, the latter will
ceive

common

stock

equal

be entitled to re¬
in par value to 10% of the

value of all stock sold pursuant to this
offering and
subsequent to June 30, 1958. Common shares will also

par
,

be issued
sold

in

an

amount equal to

5%

of the debentures

Subsequent to that date.

Associated Grocers, Inc.,
Seattle, Wash.
.June 30 filed 4.788 shares of common
capital stock (par
$50) and $1,500,000 of 5% subordinated registered deben¬

,

h




to

working

members

Under¬

capital.

•

Baltimore

Sept.

holders of
Paint

$2,000,000
1973, and 140,000 shares of
and

35

Proceeds—For

shares

stock.

of

reduction

Price—$605

Baltimore

it Cincinnati
(10/21)

per

of

Paint

Chemical

&

Sept.

York.

Corp.

common

258,740 shares of common stock '(par $1,
125,000 shares are to be offered publicly anc
133,740 shares to employees pursuant to stock purchasi
options. Price—To public, $6 per share/ Proceeds—Fo
expansion and other corporate purposes
Office — Ai
tanta, Ga
Underwriter—None.

26

&
■

Suburban

Bell

Telephone

Co.

*

:

■

filed

;/

.

stock

of the company. Underwriter—To be determined
by competitive bidding. Probable bidders: Halsey, Stu¬
Inc.; Morgan Stanley & Co.; The First Boston
Corp. Bids—Expected to be received up to 11 a:m. (EDT)
on Oct, 21 at Room
2315,195 Broadway, "New Yrptk, N. Y* i
art & Co.

Fidelity Life Insurance Co.

Feb. 28 filed

•

Cinemark

which

of

Cary Chemicals Inc. at the

$25,000,000 of 35-year debentures due
1993-: Proceeds — For construction program and
to repay advances from Ahierican Telephone & Tele¬
graph Co. which owns 29%. of the outstanding common

'

.•

Bankers

of

Oct. 1,

(10/15)
stock (par 50
Price—$3 per share. Proceeds—To selling stock¬
holders.
Underwriter—P. W. Brooks & Co., Inc., New

17 filed 25,000 shares of

stock

Underwriters—Lee -Higginson
Corp. and P. W. Brooks & Co., Inc., both of New York.

outstanding loan and
for working capital.
Office — Baltimore, Md. Under¬
writer—P. W. Brooks & Co. Inc., New York.

Sept.

common

one

—For expansion program.

stock (par

to be offered in units of $500 principal amount

debentures

unit.

common

ISSUE

share for every four shares of Cary Chemi¬
cals common stock held. Price—$2 per share. Proceeds

Corp. (10/15)
of 6Vz% sinking fund deben¬

17 filed

tures due

of

rate

Chemical

&

REVISED

it Chemirad Corp.; East Brunswick, N. J.
(10/15)
Sept. 25 filed 165,830 shares of common stock (par 10
cents) to be offered for subscription about Oct. 15by

coupon
of the

II

Productions,/Inc.
notificatibn) 300,000 shares of.common
(par '10 cehtsjv^Price^&l.-per share; P*oceeds4.

June 30 (letter of
<

Management Corp. (10/15)
Feb.
10 filed 400,000 shares of "common stock
(par 2f
cents.)
Price—$1 per share.
Proceeds—To reduce out¬
standing indebtedness and for working capital. OfficeHouston, Texas. Underwriter — McDonald, Holman &
Co., Inc., New York.
•'/■
%
Bankers Southern,

-

,

Inc.

April 14 filed 8,934 shares of common stock. Price—At
($100 per share). Proceeds—For general corporate
purposes
Underwriter — Bankers Bond Co., Louis¬

par

ville, Ky.
•

•

w

-

stockFor

working capital. Office — 937 Acequia Madre Rd.,
Fe, N. M. Underwriter—Watson & Co., Santa Fe,

Santa

N/M.

,

"J'- /

-;.v

...

"

;

<

Leasing Corp., San Francisco, Calif.
Sept. 17 (letter of notification) 25,000 shares of common
stock
(no par).
Price—$12 per share.
Proceeds—For
working capital. Office—465 California St., San Fran¬
cisco, Calif. Underwriters—J. Barth & Co.; Brush, Slocumb & Co., Inc.; Elworthy & Co.; Hooker & Fay; Irving,
Lundborg & Co.;; and Shuman-Agnew & Co., all of San

Francisco, Calif.

Offering—Expected today (Oct. 2).

Bowling Corp. of America

(10/10-15)

Calidyne Co., Inc., Winchester, Mass. ;
4 filed 230,875 shares of common stock
issuable

upon

conversion

(par $1).
of

an

gregate principal amount of $923,500 of 10-year 3%

ag¬
con¬

vertible subordinated income notes of the Calidyne
Co.,
a limited partnership, which notes were assumed
by the
company

Dec.

3i,

1957.

The

notes

are

convertible

at

time after July 1, 1958, until the4 maturity or prior
redemption of the notes at a conversion price of $4 per
share. Underwriter—None.
•
Canal-Randolph Corp., Chicago, III. (10/14)
Sept. 22 filed 91,662 shares of common stock (par $1) to
be offered for subscription by common stockholders at

the rate of

about

Oct.

one

14,

new

share for each 10 shares held

1958.

on

or

Price—To be supplied by amend¬
corporate purposes. Under¬
Thalmann & Co., New York.

ment. Proceeds—For general

writer—Ladenburg,
Carrtone

of

obligations and working capital. Office —c/o John
Harlan Lowell, 2200 Kenton, Aurora, Colo.-"Underwriter.

—Lowell, Murphy & Co., Inc., Denver, Colo.
Columbia & Rensselaer Telephone Corp.
Aug. 4 (letter of notification) 2,800 shares of common
stock (no par) to be offered for subscription by stock-*
holders at the rate of

of common stock (par 10
Price—$5 per share. Proceeds—For expansion,
working capital and other corporate purposes. Under¬

14, 1958,

on

the basis of $100

of

debentures for each 13 or 14 common shares held;
rights to expire on Oct. 30, 1958. Price—To be supplied
by amendment. Proceeds—To reduce short-term indebt¬
edness to banks.

Business—Farm machinery, etc. Under¬
writers—Morgan Stanley & Co. and Clark, Dodge & Co.,
both of New York.
Central Oils Inc., Seattle, Wash.
July 30 filed 1,000,000 shares of common stock. Price—
At par (10 cents per share).
Proceeds —For drilling
costs. Underwriter—None. Offering to be made
through
A. R. Morris and H. C. Evans, President and Vice-Presi¬
dent, respectively, on a best-efforts basis. Office—4112
Arcade

Building, Seattle, Wash.

.

'

'

Charles Town

Racing Association, Inc.
Sept. 9 filed 4,000,000 shares of common stock (par 10
cents), represented by voting trust certificates, of which
3,530,000 shares are to be offered to the public and the
remaining .470,000 shares have been issued to nine per¬
sons, who may sell such shares at the market. Price—60
cents per share. Proceeds — For construction of
racing
plant and acquisition of eauioment.
town, W. Va. Underwriter—None.

share.

share for each 2.572 shares

Proceeds—For construction

plant.
Office—19
Underwriter—None.

Railroad

Avenue,
/

Commerce Oil

Refining Corp.
Dec. 16,1957 filed $25,000,000 of first mortgage bonds due
Sept/ 1, 1968, $20,000,00 of subordinated debentures due
Oct. 1, 1968 and 3,000,000 shares
f common stock to be
offered in units as follows:

$l,00u of bonds and 48 shares

of stock and $100 of debentures '—d nine shares of stock/
Price—To be supplied by amendment.
Proceeds — To

refinery. Underwriter—Lehman Brothers, New
Offering—Indefinite.

York.

Consolidated Cuban Petroleum Corp.
July 1 filed 419,000 outstanding shares of common stock
(par 20 cents}'.. Price—Related to the current market
price on the American Stock Exchange. Proceeds—To
selling stockholders. Underwriter—None.
Consumers

Power

Co.

Aug. 29 filed 150,000 shares of preferred stock (no par).
Price—To be supplied by amendment. Proceeds—To re¬
short-term bank loans

pay

and

Stanley & Co., New York.
initely.

it■ Continental
n.

Connector

for

expansion and im¬
Morgan
Offering—Postponed indef¬

provement of service facilities.

Underwriter

Corp..

—

Woodside,

L.

I..

:

y.

(par $1).
Price—$8 per share. Proceeds—To selling stockholders.
Underwriter—H. M. Byllesby & Co.,
Inc., New York.
Counselors

Feb.

Research Fund, Inc., St. Louis, Mo.
100,000 shares of capital stock, (par one
Price—At market.
Proceeds—For investment.

5

filed

cent).

• Case (J. I.) Co. (10/16)
Sept. 26 filed a maximum of $23,000,000 of debentures
due 1983 (convertible into common stock until Oct.
15,
1968), to be offered for subscription by common stock¬
Oct.

one new

telephone

new

Chatham, N. Y.

cents).

on

oer

Sept. 25 filed 125,000 shares of class A stock

Laboratories, Inc., Metairie

(New Orleans), La.
July 2 filed 600,000 shares

holders of record

Price—$60

construct

June

are

Clute Corp.
Aug. 21 (letter of notification) 300,000 shares of common
stock (par one cent). Price—$1 per share. Proceeds—To

of

ceeds—For working capital. Underwriter—Charles Plohn
& Co., New York.

shares

-

held.

Sept. 11 filed 450,000 units, each consisting of one share
of common stock (par 10 cents) and two common stock
purchase warrants, one warrant to expire 18 months
from the date thereof, exercisable at $3.25 per share, and
one warrant to expire 30 months from the date
thereof,
exercisable at $3.50 per share. Price—$3 per unit. Pro¬

These

Clary.Corp. /
V:"
Aug. 27 (letter, of notification) art undetermined number
of shares of common -stock' (par $1) vto-be offered to
stockholders on a pro rata basis (with an oversubscrip¬
tion privilege).-Price—At the market (estimated at about
$3.87% per share). Proceeds—For working capital. Office
408 Junipero St., San Gabriel, Calif. Underwriter—None.

v.--

pay^"additional costs of construction; and for retirement

Boothe

writer—None.

notification)

class B

offered

any

American Telemail

Feb

-

For

..

Sept. 17 filed $20,000,000 of sinking fund debentures due
1978. Price—To be supplied by amendment. Proceeds—

stock and five shares of

be

—

PREVIOUS

Bankers

Feb. 28 filed 500,000 shares of common stock

Price—To be

To

Proceeds

cents.

Sept. 11 filed 49,732 shares of common stock (par $1) to
be offered in exchange for Wolverine Carton Co. common
stock at the rate of two shares of American for each
share of Wolverine. The offer is subject to acceptance

shares)

series, and $606,000 of 5%

second

debentures.

writer—None.

of

Amber Oil Co.f Inc.

unit.

notes,

bearer

association.

50 cents)

Sept. 5 (letter of notification) 125,000 shares of common
stock (par $1). Price—$2 per share. Proceeds—For de¬
velopment of an oil and gas property. Office—1305 Con¬
tinental Life Bldg., Fort Worth, Texas.
Underwriter—
Leeford Co., Inc., Fort Worth, Texas.

(19,983

Registration

•

ADDITIONS

SINCE

ITEMS

•

Office—Charles-

Underwriter

Louis.

—

Counselors

Research

Sales

Corp.,

St.

Robert H. Green is President.

it Cryogenic Engineering Co.
Sept/22 (letter of notification) 150,000 shares of class A
common stock
(par 10 cents). :Price—$2 per share. Pro¬
ceeds

For repayment of
loan; purchase of plant and
equipment; raw materials and supplies; and for
working capital/etc; Office—U. W. National Bank Bldg.,
1740 Broadway,
Denver, Colo.'* Underwriter—L. A.' Huey,
Denver, Colo/-. - "
\ c
r, ■;
—

office

Cuban-Venezuelan Oil Voting Trusts,
Havana, Cuba :
r ■ "*-'r
■\
'

March 31

filed 767,838 units of
Voting trust
each certificate representing the

*

ownership of

of

commoh

stock

(par

Cuban

companies.

ment.

Proceeds—For

costs and

one-half

cent)

in

:

/

certificates,
one

share

each-of

24

Prices-To be supplied by ^amend¬
capital expenditures, exploration
other corporate purposes/
Underwriter—None.

•

Daybreak Uranium, Inc., Opportunity, Wash.
29 filed 1,156,774 shares of common
stock (par 10
cents), of which 630,000 shares are to be offered for ac¬
Jan.

count

of

company and 526,774 shares for selling stock¬
Price—At mfcrket.
Proceeds—For exploration
drilling costs and other corporate purnnvc Under¬
writer— Herriri
Co., Seattle, Wash. "Statement with¬

holders.
and

drawn.

"

Number 5782

188

Volume

.

.

Derson Mines Ltd.V

v.

The Commercial and, Financial Chronicle

.

.

ing stockholders.

.

June 5 filed 350,000 shares of common stock.

Price—$1
per share. Proceeds—For new equipment, repayment of
loan, acquisition of properties under option, and other
corporate purposes. Office—Toronto, Oanaday, and Em'porium, Pa.- -Underwriter—None.
V;,
' -V
-

•

Chemical

Dow

Co.,

Midland,

.

Mich.

Los

Underwriter—Bateman, Eichler& Co.,

Angeles, Calif.

^

At par

,

aries, and certain associated companies; subscriptions
be accepted from Oct. 13 through Oct. 31.
By a
separate registration' statement the company plans to
.'offer 12,500 additional shares;of the said, stock to em¬
ployees of Dow Corning Corp., a 50%'owned subsidiary
of the corporation.
•will

_

Corp.* Baton Rouge, La.
July 31 filed 400 shares of common stock (no par) $500,000 of 6% debenture bonds and $50,000 of
promissory
notes to be offered in units of four shares of stock.
$5,000
of bonds and $500 of notes.
Price—$7,500 per unit. Pro¬

Price—

Underwriter—None.

Exploration Service Co., Ltd., Far Hills, N. J.
Aug. 11 this company and Amkirk Petroleum Corp.
(latter of Fort Worth, Texas) filed $400,000 of working
interests (non-producing in Sinu Valley
Project), to be
offered for sale in $12,500 units (of
wMch^$8,000 is pay¬
able in cash and $4,500 is to be represented
by promis¬
sory notes). Proceeds—Exploration Service Co. to ac¬
quire 80 % interest in a certain concession from Amkirk

Specialty Co., Los Angeies, Calif.

a

contract to purchase the Belle-

in Baton Rouge; for
equipment; and
working capital. Underwriter—None. Statement effec¬
tive Sept. 23. )%J.;/';'.;;77;'

it First Mississippi Corp.
'
Sept. 24 filed 200,000 additional shares of common cap*
ital stock.
These shares, together with 100,297 shares
previously Registered but unsold will be offered for pub¬
lic sale.
[The purchaser of each new share will be
granted an option to purchase an additional share at $5
per share at any time on or before Jan. 31, 1960.J Price
—$5 per share. Proceeds—To be used for general cor¬
,

Underwriter—Cador, Inc.,

Federal Commercial Corp.
May 21 (letter of notification) 300,000 shares of

over

mont Motor Hotel

Far Hills, N. J.

(letter of notification) not in: excess of $50,000
aggregate value of common stock" (par .50' cents) to be
sold in State of California only. Price—At market
(es¬
timated at about $12.25 per share).
Proceeds—To sell¬

•Aug. 8

take

r

and for exploration program.

•

Fields' Louisiana

ceeds—To

•

Electronic

•

($5 per share). Proceeds—To cover operating
during the development period of the corpora¬

expense

51

York, N. Y. Underwriter—Dumont Securities Corp.. New
York, N. Y.

,

Ethodont Laboratories, Berkeley, Calif.
Feb. 20 filed 300,000 shares of common stock.

tion.

10/13)

S^t.^ll^Ib^/l75,0()0; sharesofernnmon^ stock (par $5)
to- be offered- to employees of the company, its subsidi¬

7

(1375)

porate
None.

common

stock

(par 10 cents). Price—50 cents per share. Pro¬
ceeds—To make loans, etc. Office — 80 Wall
St., New

purposes

and

working

capital.

Underwriter-*

Florida Water & Utilities

Co., Miami, Fla.
55,000 shares of common stock (par $1).
$7 per share. Proceeds—Together with other
funds, to be used to reduce the company's indebtedness,
for working capital, and for
property additions and im¬
Sept.

4 filed

Price

NEW ISSUE CALENDAR
October

3

provements.

(Friday)

October

Hawaiian Electric Co., Ltd—_™_L.
(Dillon, Read <fc Co. Inc. and Dean Witter

Preferred

i

&

Case

Co.) $3,500,000

_V.

,,

&r Co.," Inc.)

October 6

$750;000'-'

(Offering

(Monday)

Gas

(Kidder, Peabody &

(William

(White,

(Lehman

:_i_^:Common

(Bids

10

CDT)

a.m.

'

•

,

Bonds

.......

Dean

Witter

October

&

8

Co.)

$3C>070<)0

7

(Lazard

(Offering

•;

Smith,

-

'

Barney

&

Co.)

Grace

(Blyth -& Co.,

Kidder,

shares

£

-

$9,000,000 j

(Blyth & Co

l )

:

Inc.)

:

shire

Debs.

First

Boston Corp.)

300,000

★ General Aero & Electronics Corp., New York
Sept. 29 filed 500,000 shares of common stock (par

shares

cents), of which

(Tuesday)

AwHolman-<fc

—

invited)

to be

October

29

$10,000,000

$8,000/000

•

t

Inc.) • $300,000

*

(Bids

EDT)

noon

$15,000,000

-

November

(Thursday)
Arabol Manufacturing Co.—-Preferred &. Common
(Bids 11

.

y.y

EDT), 210

a.m.

,

'

.

515.6

shares

shares .'of

of.preferred

common :

.7

.

•

m

(Bids

/

-:(Bids

>

November

(Charles Plohn

Trust Ctfs.
be

to

received)

(Thursday)

EST)

a.m.

&

Co.;

Clayton

$7,440,000

10

Class A

Securities

Co., Inc., and The First Bos¬
Corp.
(jointly); Kuhn, Loeb & Co.; Lehman
Brothers, and Glore, Forgan & Co. (jointly). Bids—Had

(Monday)
Bond &

Plymouth

,

Bowling Corp. of America-(Charles,

Plohn'&

October

•

Corp.)

been scheduled to be received up to 3:45
pjn.

(EDT) On
May 13 at Room 654, 101 Indiana Ave., N. W., Washing¬
ton 25, D. C., but bidding has been
postponed.

common

Share Corp.,
$600,000

and

General

(Monday)

(Thursday)

Norfolk & Western Ry

Common

-7 November

a

18

mon

$5,310,000

stockholders
for

(Tuesday)

Dow Chemical Co
1
'
(Offering to employees—no underwriting)

Pacific

-Common

_—

"

■

175,000

Telephone & Telegraph Co
'

(Bids

shares

50,000

I

October 14

,

-

(Tuesday);

(

Offering
"

'

.7

,

to

-

91,

7) December

•

by

/

Southern Bell
iy 7;

Ladenburg,

shares

662

(Tuesday)

& Gas Co.—

-

9

(Tuesday)

Telephone & Telegraph Co.—Debens.

:

December ;18

'7;::

3

(Thursday)

;7

-.(Bids to be received)

$6,450,000

Co._--l_i:i^_7____^^7ii-_-_Bonds

(Bids to be

received)'$15)000,000■

'rf:

•

$611,100

Co:)

'7

-

*

Baltimore Paint

& Chemical Corp.
/
r7'"
;'-'7
• Debentures &

••

7V*

Brooks &

(P. W.

-

Co.

Inc.)

Consumers Power
~

(Bids- to be invited)

Baltimore Paint: & Chemical Corp—:_7..Common
Bankers

(-P; w.

Brooks

Management
'McDonald,

&

Co.,

Inc.)> $75,000

Co.-—_——

Holman Sc Co., Inc.)

i

Common

Michigan

$400,000

Chemirad Corp.

Belt Telephone

$40,000,000

Hauserman (E. F.) & Co

Moore-McCormack Lines, Inc

National Shares Corp
(Offeririg

Oxford

Paper

Sanborn

underwriting)

540,000

_1

Co.^...

(Blyth & Co.,

Common

—

to stockholders—no

Inc.)

Jackson

&

Debentures

Curtis)

•

Co. -and

Moroney,




Beissncr

&

to be invited)

(Bids

to

Bonds

Bonds

be

invited)

—

—Bonds

$8,000,000

agents

to

be

invited)

Bonds

$10,000,000

Southwestern Bell Telephone Co
(Bids

shares

Co.)

$6,500,000

to be

Debentures

invited) $110,000,000

'

£Bids to be invited)

Bonds
$20,000,000

of

company.

Subscribers

are

limited

to

—

capital stock account and will be credited to paid-in
surplus. Office—8270 N. E. Second Ave., Miami
38, Fla.
Great Northern Life Insurance Co.

Aug.
mon

12

(letter of notification) 31,011 shares of com¬
(par $1) to be offered to stockholders on the
one new share for each seven shares
held; war¬
expire Oct. 20, 1958. Unsubscribed shares to be
to public.
Price—$3 per share. Proceeds—For
funds to be used for expansion. Office—119 W.

stock

rants to

general
Rudisill

Utah Power & Light Co

on a best efforts basis.

policies produced and delivered during each
"Qualifying Periods." Rights will expire April
30, 1962. Price—$3 per share. Proceeds
To increase

ba"is of

South Carolina Electric & Gas Co

York,

insurance

offered

Debentures

Realty Corp., N. Y.

Underwriter—None.

$20,000,000

and Lehman Brothers) $24,000,000

Pennsylvania Power Co

-

&

Co.——

(Kuhn, Loeb & Co

(Bids

100,000

Weingarten (J.),Tnc
(White,: Wehl

(Bids

shares

Common

Webber,

Power

.•

$10,000,000

Co.

(Paine,

.

—Debentures

Co

invited)

to be

Montana

Common

For general corporate

of seven

$10,000,000

(Offering to stockholders of Cary Chemicals Inc.—underwritten
by Lee Higginson Corp. and P. W. Brooks & Co., Inc.) $331,660

165,000 shares

—

★ Great Atlantic Life Insurance Co.
Sept. 24 (letter of notification) 25,000 shares of class A
non-voting common stock (par $1.50) to be offered to
sales

—Bonds

(Bids to be invited)

(Bids

Common

(Blyt.fi & Co., Inc. and McDonald & Co.)

Bonds

$17,000,000

Laclede Gas Co—

n.

Proceeds

18 filed 484,000 shares of class A stock (par 10
cents). Of this stock, the company proposes to offer
400,000 shares and certain selling stockholders 40,000
shares, the remaining 44,000 shares being subject to
option to be offered for the account of the underwriters.

both of New

Preferred

Gulf States Utilities Co.——_——
•

■■V;*'! 7 t &

Co.--i

(Morgan Stanley & Co.) $15,000,000

Common

$2,420,000

share.

be supplied by amendment.
Proceeds—For
working capital and other corporate purposes. Under¬
writers—Joseph Mandell Co. and Louis L. Rogers Co.,

77/Posiponed Financing

October 15 v( Wednesday)

7

"

Underwriter—Buckley Enterprises, Inc.

Price—To

^

^•R'T^:E?CPrp^_^-i_2-_)L7I_-:_-I\J-:f_7___Common
&

per

Aug.

•

Power
;

Price—$6

purposes.

Great American

$70,000,000

Norfolk & Western Ry.-——-Equip. Trust Ctfs.
'

,

Idaho

-7";'

the rate of
approximately 18.5 shares
shares held about April 15; unsubscribed

Georgia Casualty A Surety Co., Atlanta, Ga.
May 6 filed 450,000 shares of common stock (par $1).

Common

Fenner & Smith) 700,000 shares

:.(Bids;tovbe received)

; -

j.^

■(OfreriKg;'t<f stockholder^?—underwTitte'rf 'by^ The; Fikst
-7.!/ 7: "71-V♦>-"i' " K-vk'.: Boston Corp;) $2,538,900

at

Price—$3.50 per share. Proceeds—For
expansion, equipment and working capital. Underwriter

.Debentures

$80,000,000

^'

Co—3r____—.1 / /^11 Debentures

V;Home.., (Joseph)
;;i

Service Electric

(May be Merrill Lynch, Pierce,

■

..Common

stockholders—underwritten

" Thalmann; &"Co.)

';?;

Public

and

shares,

Canal-Randolph Corp.___
-

Common

$1,600,000 of.debentures

common

invited)

December 2

Debentures &

Reissner & Co.)

(Moroney,

be

100

—None.

Weingarten Markets Realty Co.
•^

to

each

shares to public.

'
•

Devicos, Inc., Prlneoton, N. J.
(letter of notification) 40,000 shares of com¬
stock (par $1) to be offered for
subscription by

March 31

Equip. Trust Ctfs.

to be received)

(Bids

Co.). $1,350,000

13

13

November

(Friday)

10

sold for the

ton

*

October 10

be

Probable bidders: Blyth &

$20,000,000

Perrine Industries, Inc

..

•

.

11

and1"

.

Norfolk & Westfehi;,

6

Indiana & Michigan Electric Co.———-——Bonds

October 9

:.

to

General Aniline & Film
Corp., New York
Jan. 14, 1957 tiled 426,988 shares ul common A stock
(no
par) and 1,537,500 shares of common B stock (par
$1).
Proceeds—To the Attorney General of the United
States.
Underwriter—To be determined by competitive
bidding.

Puget: Sound Power & Light Co.———Debentures

7'^7;

are

Co., Inc., New York.

(Wednesday)

*

125,000 sliaTes

Co.,

100,000 shares

account of

Electronics Corp., additional working capital and other
corporate purposes. Underwriter—Willis E. Burnside &

Service Co.

(Bids.to be.invited)

Precise Developfnen t Corpi-i JiiPreferred" & Coin.
""f

Blvd., Los Angeles, Calif. Underwriter—Oscar G.
Co., Pasadena, Calif.

•

(Monday)

Co.)

N. Y. Underwriters—Statement

Frontier Refining Co.
Aug. 29 filed $2,000,000 of 5%%, 5%%, 6% and 6M$%
serial debentures, series of 1958.
Price—$1,000 per unit.
Proceeds—For working capital.
Underwriters—Peters,
Writer & Chirstensen, Inc., and Garrett - Bromfield
&
Co., both of Denver, Colo. Offering—Expected this week.

(Wednesday)

&

filed

Werner &

•

*

4'

Price—$2.50

Texas Electric Service Co.——— Preferred

.

,;Mr. ;

Peabody

26

stock.

$25,000,000

The

St.

Inn
Aug. 6 (letter of notification) 300,000 shares of common
Price—At par ($1 per share). Proceeds—To erect
and operate an activities
building, comprising a restau¬
rant, cocktail lounge and coffee shop. Office—3938 Wil-

/

Co., Inc.-*—-——-Common
and

Inc.,

selling stockholders. Price—$2.25 per share.
Proceeds—For acquisition of stock of National Missile &

Lynch. Pierce, Fenner & Smith; Paine^ Webber,
Curtis; Smith, Barney & Co., and F. Eberstadt

Northwestern Steel & Wire Co.™ -1'_ Ll --Common
,

22

Co.

&

(Bids

Jackson*&

%

EDT)

a.m.

Hough,

-Bonds

Texas Electric

,

Co.)

Inc.)

(Tuesday)

October 28

by

Bonds

&

Sales,

&

Fremont Valley

Common

Street

Beil

Laboratories, Inc.

March

cents).

poses. Office—Brooklyn,
to be amended.

(May be Merrill Lynch, Pierce, Fenner & Smith and

Line,

(Merrill

William

October 27

$2O,0O01,GO<)

Inc.)

Corp.)

Common

underwritten

141,113

Common

Florida Power & Light Co————Common

American Cement Corp.—---'-Debentures
'

shares

Securities

—

150,000 shares of capital stock (par 10
per share. Proceeds—For sales pro¬
motion of company's products,
working capital, addi¬
tional inventory and accounts
receivable, for research
tnd development and for other
general corporate pur*

185,000 shares

$36,000,000

be

&

(Monday)

'

(Wednesday)

to stockholders—to

11

Freres

1

Addressograph-Multigraph Corp.—
V

20

and

October

Wellington Equity Fund, Inc—-—Common
(Kidder, Peabody & Co.; Baclie & Co.; Reynolds. & Co. Ino.
and

Webster

&

'

American & Foreign

L—preferred
)

500,000

Cincinnati & Suburban Bell Telephone Co.

$11,000,000

.(Piper, Jaffray & Hopwood

~.

Co.i

Canada, Ltd.--.

Brothers

(Bids

Madison. Gas & Electric Co——

Murphy (A. A.) & Co., Inc

Stanley

Common

&

October 21

(Simmons & Co.) $290,000

f

Morgan

$23,000,000

3,000,000 shares

(Tuesday),

•

*

by

Co.)

Pipe Line Corp

and Stone

Scudder Fund of

—Common

_

Imperial Packing Corp—
'

Gas

October

(Offering to r>tockholders—underwritten, by .blore, Porgan & Co.
and The First Boston- Corp.) 447,346 shares '

October 7

&

Forest

600.000 shares

$8,580,000

Peoples Gas Light & Coke Co

Dodge

Staats

R.

Weld & Co.

Corp.__Debs. & Com.

Co.)

Clark,

Transcontinental

(Berry & Co.).$300,000.

North Carolina Natural

and

Pauley Petroleum, Inc—

,

Haydu Electronic Products; Inc.iT_^.—Debentures
•'

Debentures

stockholders—underwritten

to
Co.

>*.f:.'-;7

v

Underwriter
Petersburg, Fla.

(Thursday)

(J. I.) Co——————-

IsraeLNegev Petroleum Corp.._ -.Common
(Alkow

16

Blvd., Fort Wayne, Ind.

Underwriter—North-

Continued

on

page, 52

The Commercial and Financial Chronicle

.

.

Thursday, October 2, 1958

.

(1376)

Continued from page

construction

51

Investment Inc., 502 Gettle Bldg.,

western

Fort Wayne,

Ind.

Guardian

Underwriter—To be determined

program.

Probable bidders: Halseyv Stuart
& Co. Inc.: Eastman Dillon, Union Securities & J2o.; The
First Boston Corp.; Harriman Ripley & Co. Inc.
Bids—
by competitive bidding.

(EST) on Nov. 6.

Expected to be received up to 11 a.m.

Baltimore, Md.

Insurance Corp.,

Aug. 16. 1957, filed 300,000 shares of common stock, o1
which 200,000 shares are to be publicly offered and the
remaining 100,000 shares reserved for issuance upon ex¬
ercise of warrants which are to be sold at 25 cents per
warrant
to
organizers,
incorporators, management,
end/or directors.
Price—$10 per share. Proceeds—Foi
working capital and general corporate purposes. Under¬

D. C.
stock (par one
cent). Price—$1 per share. Proceeds—To develop and
operate graphite and mica properties in Alabama. Un¬
derwriters—Dearborn & Co. and Carr-Rigdom & Co.,
both of Washington, D. C., on a best efforts basis.

writer—None.

Feb. 28

Utilities Co.

Gulf States

Aug. 14 filed $17,000,000 of first mortgage bonds, series
A, due 1988. Proceeds—Together with cash on hand,
redeem and retire $17,000,000 principal amount of 4%%

to

*irst mortgage

by

termined

bonds due 1987. Underwriter—To be de¬
competitive bidding. Probable bidders:

Halsey, Stuart & Co. Inc.; Lehman Brothers; Merrill
Lynch. Pierce, Fenner & Smith and White, Weld & Co.

filed

Proceeds—For plant
Underwriters—Blyth & Co., Inc., New York,
McDonald & Co., Cleveland, Ohio.
supplied by amendment.

and

Hawaiian

•

Electric Co., Ltd.

(10/3)

Sept. 12 filed 175,000 shares of series G cumulative pre¬
ferred stock (par $20). Price—To be supplied by amend¬
ers

Underwrit¬
Read'& Co. Inc., New York; and Dean

Proceeds—For construction program.

ment,

Dillon,
Witter & Co., San Francisco,
—

Calif.

(letter of notification) 150,000 shares of class
common stock
(par 10 cents). Price — $2 per share.

A

Office—1426 West Front St., Plainfield, N. J.
—
Berry & Co., Plainfield, N. J. and New

purposes.

TJnderwriter

York, N. Y.

Hoagland & Dodge Drilling Co., Inc.
shares of capital stock.

June 12 filed 27,000

Price—$10

share. Proceeds—To be used in part for the ex¬
ploration of mines and development and operation of
mines and in payment of indebtedness. Office—Tucson,

per

Underwriter—None.

Ariz.

.

—None.
Home

(Joseph)

Co.

(10/14)

basis of $100 of debens. for each 12 common shares held:
.rights to expire on Oct. 28, 1958. Price—To be supplied
amendment.
Proceeds—Together with other funds,

primarily to acquire furniture and fixtures
working capital for the opening of two
[Pending the opening of these stores the
proceeds will be used to reduce or eliminate seasonal
bank borrowings.] Business—Department store. Under¬
writer—The First Boston Corn.. New York.
will be used

to provide

and

stores.

Household Gas Service, Inc.

(letter of notification) $75,000 6% convertible
debentures due June 15, 1973 to be offered in denomina¬
tions of $1,000 and $500 each. Price—At par. Proceeds—For repayment of debt and for working capital. Office

^ept. 10

Underwriter—Mohawk Valley Invest¬
ing Co., Inc., Utica, K. Y.

—Clinton, N. Y.

Idaho Manufacturing Co.,

Inc.
Aug. 22 (letter of notification) 2,000 shares of class A
«toek (par $13j, $170,000 of 6% subordinated debentures
and 2,000 shares of class B stock (par $15) to be offered
first to stockholders. Price—$15 per share for class A
and $100 per unit

to stockholders (each unit consisting of

$85 of debentures and one class B share). Proceeds—For

of setting up production and distribution; man¬
ufacturing and operating expenses and for operating

Office—210 North 30th, P. O. Box 5070, Boise.

Underwriter—First Idaho Corp., Boise, Ida.

Ida.

Idaho Power Co.

(10/14)

Sept,

17 filed $15,000,000 of first mortgage bonds

1988.

Proceeds—To reduce

To

be

bank

loans.

due

Underwriter—

determined

by competitive bidding.
Probable
Halsey, Stuart & Co. Inc.: Blyth & Co.. Inc.,
(joint¬
ly); Merrill Lynch, Pierce, Fenner & Smith: Salomon
Bros. & Hutzler and Eastman Dillon, Union Securities &
Co. (jointly); Equitable Securities Corp.; Kidder, Peabody & Co., and White, Weld & Co. (jointly). BidsExpected to be received on Oct. 34.

tiaders:

Lazard Freres & Co. and The First Boston Corp.

•

•

Imperial Packing Corp.

$250,000 of investors income certificates
[6% 10-year maturities) and 125,000 shares of class A
:ommon stock. Price—The certificates will be offered in
various

100%

denominations at

per

certificate, and the

Proceeds—For
the purpose of owning, buying and selling, and othervise dealing in real estate, or matters pertaining to real
jstate and the improvement thereof, in the areas in
vhich the company will operate
Office—Aiken. S. C.
A

.•lass

common

stock at $2 per share.

Statement withdrawn Sept. 17.

Underwriter—None.
•

Israel-Negev

(10/3)

Petroleum Corp.

29 filed 750,000 shares of capital stock (par 20
jents). Price—$1 per share; but the company may grant
Aug.

37

purchasers of 100,000 or more shares a discount of
1/a% from the offering price. Business—To engage pri¬

marily in the business of exploring for, acquiring inter¬
ests in, developing and operating oil and gas properties
In Israel.
Proceeds—For drilling and exploration pur¬

Underwriter—Alkow & Co., Inc. (formerly Henry
Morltor Associates, Inc.), New York.
poses.

Itek

—Garden

sometime in October.

holders. The offering will be made

Proceeds — For working capital
plant site. Office—1605 Trapelo Rd.,

Price—$30 per share.

acquisition of a
Waltham, Mass. Underwriter—None.
ir Kaiser Industries Corp.,

in the production of citrus juices and by-products
snd working capital.
Office—Anaheim. Calif.
Under¬
writer—Simmons & Co., New York, N. Y.
penses

* Indiana

&

Michigan Electric Co.

(11/6)

Sept. 26 filed $20,000,000 of first mortgage bonds due
1, 1983. Proceeds—To retire bank loans used for

Nov.




City, L. I., N. Y.

Lowell Gas Co.,

rate of two

Sept.

shares for each

new

Offices—Wilmington,

poses.

Madison Gas &

Sept.

10

1988.

filed

pletion of the Latonia plant, and for general corporate

Underwriters—The Kentucky Co., Louisville,

Ky., and Scherck, Richter Co., St. Louis, Mo.

Manufacturing Co., Inc.

(letter of notification) 1,482 shares of common
stock (no par). Price — $100 per share. Proceeds — To
pay off short-term obligations and to improve working
capital. Office—90 Mill St., Laconia, N. H. Underwriter
Aug. 25

—None.

Proceeds—To

of first mortgage bonds due
1983. Proceeds—To refund 4%% first mortgage bonds
lue 1982.
Underwriter—To be determined by competi-

$10,000,000

Co
Lehman

Halsey, Stuart &

'Tic.; The First Boston Corp.; Blyth & Co., Inc.;

3rothers, Merrill Lynch, Pierce, Fenner & Smith and
leinholdt & Gardner (jointly); Eastman Dillon, Union
Securities & Co.; Stone & Webster Securities Corp. Bids
—Had been expected to be received up to 11 a.m. (EDT)
>n July 8, but offering has been postponed indefinitely
Laughlin Alloy Steel Co., Inc.

.

subordinated callable de¬
bentures due June 30,1968, and 150,000 shares of common
stock (par 10 cents) to be offered in units of $100 of
debentures and 30 common shares. Price—$100 per unit.
Proceeds—Together with a $175,000 mortgage loan from
the American Brake Shoe Co., will be used to meet ex¬
penditures in acquiring latter company's South San
Francisco foundry and for working capital. Offices—Las
Vegas, Nev., and South San Francisco, Calif. Underwriter
—Sam Watson Co., Inc., Little Rock, Ark., on a best
efforts basis.

Leader-Cleveland Realty Associates, N. Y.

July 16 filed $1,280,001) of participations in partnership
Price—$10,000 per participation. Proceeds—

Interests.

purchase the Leader Building in

Cleveland, Ohio.

Underwriter—None.
Insurance

short-term

bank

loans

and

Securities Corp.; Merrill Lynch, Pierce, Fenner &
Smith;
Otis & Co., Inc.; Smith,
Barney & Co. and Robert W.

Baird & Co. (jointly); Eastman Dillon, Union Securities
& Co.
Bids—To be received up to 10 a.m. (CDT) on
Oct.

7, at 111 West Monroe St., Chicago, 111.

Magna Investment & Development Corp.
Vlay 26 filed 56,000 shares of common stock and $500,000
if 6% convertible debentures.

Price—For

(in $1,000 units); and for

jar

vhare.

Proceeds—For contractual

debentures, at

stock, $4.50

common

per

obligations, for work-

capital, and other general corporate purposes. BusiTo engage primarily in the development and

ng

—

iperation of various properties, including shopping ceners.
Office—Salt Lake City, Utah. Underwriter—J. A.

Hogle & Co., Salt Lake City, Utah.
sometime

in

October.

Offering—Expected

~

Mairs & Power Fund, Inc., St. Paul, Minn.
Aug. 6 filed 40,000 shares of common stock. Price—At
market.

Proceeds—For

investment.

Office—1002

First

Co., Baltimore, Md.
$25,000,000 of sinking fund debentures, due
Proceeds — Working capital and general

fune 11 filed

which

ing,

(ssue

to

was

20

in

on July 2, has been postponed,
registration.
5

Mortgage & Investment Corp.
filed

$6,000,000 of warranty and repurchase
5,000 shares of cumulative preferred
stock, 6% dividend series, the latter shares to be offered
principally to holders of whole mortgage notes and re¬
agreements

and

lated

warranty agreements, although the company re¬
the right to offer such stock to others.
Price—
For preferred stock, at par
($200 per share). Proceeds—
To be used
principally for the

serves

purchase of additional
mortgage notes for. resale to others. Office—2633 15th

Street, N. W., Washington, D. C. Underwriter—None.
Mayfair Markets
March

24

common

(letter of notification) 5,000 shares of 6%
preferred stock (par $50) and 5,000 shares
stock (par $1) to be offered in units of one

ihare of preferred and

—$60 per unit.
1383

Bandini

one share of common stock. Price
Proceeds—For working capital. Office—

Blvd., Los Angeles, Calif.

^one.

Underwriter—

'

.

_

Middle States Telephone Co.*of

Illinois

Aug. 20 (letter of notification) 12,906 shares of common
(par $10) being offered for subscription by stock¬
holders of record Sept. 16, 1958 on the basis of one new

stock

share for

each

12 V2

rights to

expire

on

shares held

Sept. 30.

Margaret St., Pekin, 111.

as

of

Proceeds

record
—

capital stock (par $1).
Price—$5 per share. Proceeds—To acquire stock control
>f "young, aggressive and expanding life and other inturance companies and
related companies and then to
March 28 filed 1,000,000 shares of

jperate such companies as subsidiaries."
first Maine Corp., Portland, Me.

Underwriter-

To

Sept. 16;
discharge

Office

Underwriter—None.

—

416

*

Mid-West Durex Co., Kansas
City, Mo.
July 14 filed 725,000 shares of common stock (par $1).
Price—$2 per share. Proceeds—For construction of plant
md for working capital.
Underwriter—Investment Sales,
(nc., 532 E. Alameda Ave., Denver 9. Colo.
Midwest No-Joint Concrete
Pipe Co.
Aug. 22 (letter of notification) 60,000 shares of common
$1). Price—$5 per share. Proceeds—For work¬
ing capital. Address—P. O. Box 550, Rocky
Ford, Colo.
Underwriter—IAI Securities
Corp., Englewood, Colo.
Milgo Electronic Corp.
Aug. 6 (letter of notification) 10.000 shares of common
stock (par $1) to be offered for
subscription by

stock (par

stockholders
owned

Securities Corp.

by amendOffer¬

expected

remain

Mason

Aug.

Price—To be supplied

Underwriter—Smith, Barney & Co., N. Y.

short term loans and for working capital.

Aug. 28 filed $500,000 of 6%

Life

repay

Witter & Co.

of

Laclede Gas Co.

bidders:

(10/7)

Stuart & Co. Inc.; The Milwaukee Co., and Dean
(jointly); The First Boston Corp.; Equitable

sey,

cumulative

Probable

Electric Co.

construction program. Underwriter — To be deter¬
mined by competitive bidding.
Probable bidders: Hal¬

Martin

(5 of which will not be separately transferable from the
pertain prior to Dec. 1, 1959). Price
—To be supplied by amendment.
Proceeds—For com¬

bidding.

Pa.

for

Oakland, Cal.

bonds to which they

ive

Emporium,

and

$11,000,000 of first mortgage bonds due

jorporate purposes.

filed

Del.,

Underwriter—None.

National Bank Bldg., St. Paul, Minn.

★ Kentucky Jockey Club, Inc., Louisville, Ky.
Sept. 26 filed $2,300,000 of 6% first mortgage bonds due
1973, and 230,000 shares of common stock (par $1) to be
offered in units 6f $100 of bonds and 10 common shares

18

of

as

^ LuHoc Mining Corp.
Sept. 29 filed 350,000 shares of common stock. Price—$1
per share. Proceeds — For the acquisition of properties
under option and for various geological expenses, test
drilling, purchase of equipment, and other similar pur¬

tion Plan for Officers and Employees.

June

shares owned

expire on Oct. 10. The parent will
not exercise its rights to its pro rata share.
Price—$45
per share. Proceeds—Together with other funds, will be
applied to pay short-term construction notes payable to
banks, and any balance will be applied to reimburse the
company for expenditures made for property additions.
Underwriter—F. L. Putnam & Co., Inc., Boston, Mass.

fuly 1, 1978.

Kinsman

11

17; rights to

Sept. 26 filed 1,000,000 shares of common stock (par $4)
to be offered under the company's Restricted Stock Op¬

purposes.

Underwriter—-None.

Lowell, Mass.

Aug. 28 filed 15,400 shares f>f common stock (par $25).
Of this stock, 12,000 shares are being offered in behalf of
the issuing company and 3,400 shares by American Busi¬
ness Associates, present owner of 68,178 (98.86%) of the
68,962 outstanding shares. The 12,000 shares are being
offered for subscription by existing stockholders at the

less

Corp.

Sept. 15 (letter of notification) 9,340 shares of common
stock (par SI) to be offered for subscription by common
stockholders on basis of one share for each 12 shares
held.
Unsubscribed shares to be sold to certain stock¬

To

(10/7)

Aug. 21 (letter of notification) 290,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For ex-

.

Financial Corp.

Mortgage &

Realty

Investors

expenses

capital.

Underwriter—None.

St., Aiken, S. C.

Pickens

2928

to be offered for subscription by holders of the com¬
pany's presently outstanding 55,975 shares.
Price—$6
per share. Proceeds—To be added to capital funds. Office

nent.

Sept: 25 filed $2,538,900 in convertible subordinated de¬
bentures due 1973, to be offered for subscription by
common
stockholders of record Oct. 14, 1958 on the

new

purchase real estate mortgages, loans to
and for working capital.
Office—

concerns

and

Memphis, Tenn.
Ǥep1. 24 filed 50,000 shares of common stock (par $1.50)
to be issued upon exercise of options granted to certain
officers, directors, employees and others. Price—$9.75
per share. Proceeds—For working capital. Underwriter
Holiday Inns of America, Inc.,

;

business

to

Haydu Electronic Products, Inc. (10/6)
£ept. 3 (letter of notification) $300,000 6% convertible
subordinated debentures due Dec. 31, 1968. To be of¬
fered for public sale. Price—$100 per $100 of debentures.
Proceeds—For working capital and for general corporate

Financial Corp.

Realty Mortgage &

Investors

July 24 filed

be

150,000

Sept. 24

'/'-V
Hauserman (E. F.) & Co. (1015)
Sept. 23 filed 165.000 shares of common stock (par $1),
of which 73,000 shares are to be sold for account of
company and 92.000 shares for selling stockholders. Price
—To

•

(N. Y.)
shares of common stock (par 10
rents). Price—To be related to the market price. Pro¬
ceeds—For working capital and to enlarge research and
levelopment department. Underwriter — S. D. Fuller A
Co., New York. Offering—Being held in abeyance.
Industro Transistor Corp.

Proceeds—To

expansion.

Corp., Washington,

July 24 filed 600,000 shares of common

(jointly); Stone & Webster Securities Corp.; and Salo¬
mon Bros. &
Hutzler and Eastman Dillon, Union Se¬
curities & Co. (jointly). Bids—Had been expected to be
received on Sept. 15, but has been indefinitely post¬
poned.

Minerals

Industrial

ir Long Island Casualty Insurance Co.
Sept. 29 filed 100,000 shares of capital stock (par $2.50)

of

on

the basis of

record

date.

one

present
share for each 8.8
shares

Rights

expire in September.
Price—$24 per share to stockholders; $26 to
general
public. Proceeds—For test equipment and
working cap¬
ital.

Office—7601 N. W. 37th

derwriter—None.
Minerals

Avenue, Miami, Fla.

Aug. 29 filed 1,000,000 units, each
consisting of
of

common

Un¬

Consolidated, Inc., Salt Lake City, Utah

one share
stock (par 10 cents) and two
warrants to pur-

Volume 188

chase

Number 5782

.

.

The Commercial and Financial Chronicle

.

common share.
Price—$1 per unit. Proceeds
drilling, exploration and development of oil and
properties. Underwriter—None.

•

one

North Carolina Natural Gas Corp.
(10/6-11)
July 31 filed $5,200,000 of subordinated income deben¬
tures due Aug. 15, 1983, and 520,000 shares of common
stock (par $2.50) to be offered in units of $20 of deben¬

—For
gas

it Mon-Dak Oil, Inc., Sidney, Mont.
Sept. 26 filed 6,860 shares of class A voting
stock and 367,000 shares of class B non-voting

tures and two shares of stock.

Price—To be supplied by
(a maximum of $33 per unit).
Proceeds —
Together with funds from private placement of $13,750,000 of 5%% first mortgage pipeline bonds due June
1,1979, to be used for construction program and working

common

exchange for oil and gas leases on the basis of one share
for each $1 value of such leases.
The class B shares
will also

be

issued

in

Price—$1

rendered.

payment of salaries

class B

per

share.

incidental to the operation of
Underwriter—None.

expenses

pany.

Montana Power Co.

and

a

mining

Olfice—Fayetteville, N. C.

capnai.

services

Proceeds—For-

*

Underwriter—Kid¬

der, Peabody & Co., New York.

Peoples Gas Light & Coke Co. (10/6)
Sept. i 12 filed 447,346 shares of capital stock (par $25)
to be offered for subscription by stockholders of record
Oct. 2, 1958 at rate of one new share for each 11 shares
held; rights to expire on Oct. 20,1958. Price—To be Sup¬
plied by amendment. Proceeds—To repay bank loans,
for advances to or additional equity investments in sub¬

North Carolina

com¬

June 19 (letter of

Telephone Co.
/
notification) 207,143 shares of

common

stock to be offered to

.

of

July 1 filed $20,000,000 of first mortgage bonds due 1988.
Proceeds — Together with other funds, to be used to
repay $15,500,000 in bank loans and to carry on the

common stockholders at the ratio
share for each six shares held. Price—At par ($1

one

per share).
Proceeds—To pay off obligations and for
telephone plant construction. Underwriter—None.

company's construction program through 1959. Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders?-ilalsey^Stuart & Co. Inc.; Lehman
Bros.;
Merrill Lynch, Pierce, Fehner & Smith, and Stone &
Webster Securities Corp. (jointly); White, Weld & Co.;

^ Northern Wholesale Hardware Co.
Sept. 23 (letter of notification) 300 shares of common
stock. Price—At par ($1,000 per share). Proceeds—For
working capital. Office—805 N. W. Glisan St., Portland

9, Ore.

*

sidiaries and for construction

of

Northwest Gas & Oil Exploration Co.

,

corporate/administrative

expenses.

Office—150

New York 38, N. Y. Underwriter
Co., Inc., New York 5, N. Y.
way,

July 1 filed 100,000 shares of common stock (no par).
stock will be offered only to bona fide residents
o$*Montana. Price—To be related to the current market

price on the New York Stock Exchange. Proceeds—^To¬
gether with other funds, to carry on the company's con¬
struction program
through 1959.
Manager-Dealers —
Smith, Barney & Co.,: Kidder, Peabody & Co. and Blyth
& Co., Inc.
Investors

•

Inc.

share for each five shares held; rights

Telephone & Telegraph Co., the parent; and for general
corporate purposes. Underwriter—None.
Control—The
parent owns over 80% of the 3,504,809 outstanding

debentures due

common stock (par one cent).
Price—10 cents
share. Proceeds—For mining expenses. Underwriter
—Birkenmayer & Co., Denver, Colo.

National Educators Finance Corp.
(letter of notification) 50,000 shares of common
stock. Price—At par (50 cents per share). Proceeds—

Oct.

1, 1978.

Proceeds—For

for the years

tive

5.

•

^National Shares Corp.

at rate of

writer—Investors Investments Corp., Pasadena, Calif.

Price—At

Oct. 15, 1958 (with an oversubscription
privilege); rights
to expire on or about Oct. 29, 1958.
Price—To be sup¬

at rate of

one new share for each eight shares held
(with
oversubscription privilege). Price — $10 per share.
Proceeds—For general corporate purposes. Underwriter

•

■

\

r

of record

share.

Underwriter—T. J. Campbell Investment
Co., Inc.,

*

,

,

New England Telephone &

one

new

share for each

Y

Telegraph Co.

Oct.

1, 1958

the basis of one new share
(with an oversubscription
privilege); rights to expire Oct. 15. Price—$16.25 per

loan; to acquire fishing tools for leasing; and for
working capital. Office—931 San Jacinto Bldg., Houston,
pay

•

the basis of

Corp.
Sept. 12 filed 1,286,619 shares of common stock (par $1)
being offered for subscription by common stockholders
for

Houston, Tex.

each

eral

four

shares

Proceeds—For

corporate

on

held

additional

investments

and

gen¬

Change in Name—The cor¬
poration's name to be changed to Madison Fund, Inc.
Underwriter—Kuhn, Loeb & Co,, New York.
purposes.

Penn-Texas Corp.

July 31 filed $40,000,000 of 34-year debentures due Sept.
1, 1992. Proceeds — To refund a like amount of 4^%
first mortgage bonds, series B, due
May 1, 1961, which

25 filed 1,488,438 shares of common stock (par
$1 to be offered for subscription by common stockholders

intended to be redeemed on Nov. 1, 1958. Under¬
writer—To be determined by competitive
bidding. Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; The First Boston

Price—To be supplied by amendment. Proceeds—To be
used to buy from Robert H. Morse, Sr., 297,231 common

are

Corp.; Morgan Stanley & Co.
received at Room 2315, 195
up

to 11

20

decided

a.m.

withdrawn

to

Bids—Were to have been

Broadway, New York, N. Y.,
(EDT) on Aug. 26, but company on Aug.
postpone refunding program. Statement

Sept. 11.




struction

Price

—

Saskatchewan

$3

per

and

Alberta

and

to

"only in the State of North

share.

Proceeds

—

For

con¬

Office—Saskatoon,

Saskatchewan,.
Ltd., and United
Securities, Ltd., both of Saskatoon, Canada.
Canada.

•

purpose.

Underwriter—Allied Securities

Precise

Development Corp. (10/8)
(letter of notification) 60,000 shares of 20-cent
convertible pieferred stock (par $1) and 60,000 shares of
common stock
(par 25 cents) to be offered in units of
one share of preferred stock and one
share of common
stock. Price—$5 per unit. Proceeds—To reduce outstand¬
ing bank loans and for general working capital, etc.
Office — 2 Neil Court, Oceanside, Long Island, N. Y.
Underwriter—R. A. Holman & Co., Inc., 54 Wall St., New
York, N. Y.
Preferred Risk Life Insurance Co.

Sept. 8 filed 250,000 shares of

■

common stock
(par $1).
Price—$4 per share. Proceeds—To increase capital and
surplus.
Office—Colorado Springs, Colo. Underwriter
—None.
v" ''• f:.

Private Enterprise, Inc., Wichita, Kansas
May 5 filed 125,000 shares of common stock. Price—$10
per share.
Proceeds— To be used to organize, or re¬
organize and then operate companies in foreign nations,
principally, but not exclusively, in the Far East, Neaf
East and Africa.

Underwriter—None.

Public Service Co. of

Indiana, Inc.
Aug. 27 filed 242,826 shares of 4.80% cumulative con¬
vertible preferred stock (par $100)
being offered for
subscription by common stockholders of record Sept. 16,
the basis of

1958

on

mon

shares

preferred share for each 20 com¬
on Oct. 6, 1958. Price
—$100 per share. Proceeds—To reduce bank, loans. Un¬
derwriter—Blyth & Co., Inc., New York and San Fran¬
one

held; rights to expire

cisco.

Pennroad

May 5 (letter of notification) 150,000 shares of common
stock (par one cent). Price—$2 per share. Proceeds—To

Tex.

on

Any unsubscribed shares will be pur¬
chased by Rock-Ola Mfg. Corp. Warrants expire 20 days
from date of issuance. Price—$4.25 per share. Proceeds
—For working capital. Office—800 N. Kedzie Ave., Chi¬
cago 51, 111. Underwriter—None.

an

Nadow Oil Tool Co.

Under¬

four shares held.

Nebraska Consolidated Mills Co.,
Omaha, Neb.
common stock
(par $10)
to be offered for subscription by common stockholders

.

investment.

27

ity stockholders

Sept. 9 filed 49,423 shares of

"

Proceeds—For

Weighing & Vending Machine Corp.
(letter of notification) a maximum of 25,000
shares of common stock (par $1) to be offered to minor¬

Proceeds—For investment. Busi¬
ness—A diversified management investment
company of
the closed-end type. Underwriter—None.

,

market.

Peerless

June

plied by amendment.

—None.

Dakota."

■

Peckman Plan Fund,

on

stock (par $1.50)

Sept. 8

Inc., Pasadena, Calif.
May 19 filed 20,000 shares of common stock (par $1).

as

Manitoba,

residents of the United States

Price—To be supplied by
capital improvements pro¬

(10/15)
Sept. 26 filed 540,000 additional shares of capital stock
(par $1) to be offered for subscription by stockholders
share for each two shares held

of

inces

1959-1962 inclusive. Underwriter—

Pauley Petroleunin Inc. (10/16)
Sept. 24 filed 500,000 shares of common stock (par $1).
Price—To be supplied by amendment. Proceeds — For
repayment of notes and for working capital. Underwriter
—William R. Staats & Co., Los Angeles, Calif.

to

common

to be offered for sale to residents of Canada in the Prov¬

•

implement and carry
out the projected plan of development and
operation.
Office—1406 Pearl St., Boulder, Colo.
UnderwritersWestern Securities Co., Boulder, Colo.

new

Prairie Fibreboard Ltd.

Aug. 18 filed 209,993 shares of

ices; the remaining 664,818 shares are to be offered to
Price—To be supplied by amendment. Pro¬
selling stockholders.
Underwriter—Market
Securities, Inc., Salt Lake City, Utah. Statement effec¬

June 4

share for

holders

Ponce de Leon Trotting Association, Inc. '/YYY'
Aug. 7 filed 400,000 shares of common stock (par one
cent). Price—$1.50 per share. Proceeds—To pay current
liabilities, for new construction and working capital.
Office—Bayard, Fla. Underwriter—Robert L. Fernian
Co., Inc., Miami, Fla. .

the public.
ceeds—To

per

new

held; unsubscribed shares to be offered to
and to others.
Price—$8 per share..
Proceeds—For working capital.
Office—27 Chenango
St., Binghamton, N. Y. Underwriter—NoneV
debenture

Paradox Production Corp., Salt Lake
City, Utah
April 18 filed 767,818 shares of common stock (par $1),
of which 100,000 shares are to be offered by the
company
in exchange for oil and gas properties and 3,000 for serv¬

assessable

one

share

each

Blyth & Co., Inc., New York.

National Beryl & Mining Corp., Estes Park, Colo.
May 16 (letter of notification) 2,916,000 shares of non¬

com¬
to be offered for subscription by

(par $5)

stockholders at the rate of

6

amendment.
grams

(lett££ of notification) 30,250 shares of

stock

mon

common

^Oxford Paper Co., New York (10/15)
25 filed $10,000,000 of convertible subordinated

Hopwood, Minneapolis, Minn.

one

Policy Advancing Corp.
March 25

Sept.

^Murphy (A. A.) & Co., Inc. (10/7)
Sept. 22 (letter of notification) 6,000 shares of 6% prior
preferred stock, 1956 series. Price — At par ($50 per
share). Proceeds—For working capital. Office—174 E.
6th St., St. Paul, Minn.
Underwriter—Piper, Jaffray &

persons

./y-,'

Enterprises Inc.
(letter of notification) 23,200 shares of com¬
mon class B stock (par $1).
Price—$5 per share. Pro¬
ceeds—For completion of plant plans; land; construc¬
tion and operating expenses.
Office—2502 N. Calvert
St., Baltimore 18, Md.
Underwriter—Burnett & Co.,
Sparks, Md.

Municipal Investment Trust Fund, Inc. (N. Y.)
May 9, 1957 filed 5,000 units of undivided interests in
Municipal Investment Trust Fund, Series A. Price—At
market. Proceeds—For investment. Sponsor—Ira Haupt
& Co., New York.

procure

Telephone Co., Waconia, Minn.
(letter of notification) 3,000 shares of 53A%
series F cumulative preferred stock. Price—At par ($100
per share). Proceeds—For expansion and improvements.
Underwriter—M. H. Bishop & Co., Minneapolis, Minn.

O. T. C.

March

shares.

and

*

Pioneer

Sept. 10

Oil & Mineral Operations, Inc.,
Tulsa, Okla.
April 14 filed 200,000 shares of common stock. Price—
$2.50 per share. Proceeds—For payment of loans, various
—To acquire and operate mining claims and oil and gas
equipment, and a reserve for future operations. Business
properties. Underwriter—Universal Securities Co
En¬
terprise Biiilding, Tulsa, Okla.
Statement withdrawn
May 1, 1958.

expire on. Oct. 24, 1958. Price — At par ($100 per
share). Proceeds — To repay advances from American

train

•

corporate purposes. Underwriters—Charles
Co., New York; Plymouth Bond & Share Corp.,

Miami, Fla.; and Clayton Securities Corp:, Boston, Mass.

•

to

To

/

general

Plohn &

—

k

new

for

Ridge, Inc.
Sept. 4 (letter of notification) 100,000 shares of common
stock (par $1). Price — $3 per share. Proceeds — For
working capital.
Office—11 Flamingo Plaza, Hialeah,
Fla.
Underwriter
Henry & Associates, Inc., 11 Fla¬
mingo Plaza, Hialeah, Fla.
/;■■' Y/'/Y
YY^ Y

Telephone & Telegraph Co.
Sept. 3 filed 700,961 shares of capital stock being offered
for subscription by stockholders of record Sept
26, 1958
one

$100,000 for reduction of indebtedness; and the. balance

Greenfield &

Oak

Mountain CStates

at rate of

Y

York."

July 11 filed 200,000 shares of common stock (par $1).
Price—$10.75 per share. Proceeds—For investment. Of¬
fice—1000 Power & Light Bldg., Kansas City, Mo. Un¬
derwriter—None.

—

Broad¬

Northwestern Steel & Wire Co. (10/8)
Sept. 12 filed 125,000 shares of common stock (par $5).
Price—To be supplied by amendment. Proceeds—To sell¬
ing stockholders. Underwriter—Blyth & Co., Inc., New

The

Picture

New York.

Perrine Industries, Inc., Miami, Fla. (11/10-14)
Sept. 23 filed 150,000 shares of class A common stock
(par $1), of; which 125,000 shares are to be sold for ac¬
count of company and 25,000 shares for selling stock¬
holders. Price—$4 per share. Proceeds—$150,000 for ex¬
pansion of business of Glass Arts, Inc., a subsidiary;

Underwriter—None.

Aug. 22 (letter of notification) 300,000 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—
For acquisition of additional gas and oil interests and

Montana Power Co.

Motion

Underwriters—

program.

Glore, Forgan & Co. and The First Boston Corp.,. both
.

Eastman

Dillon, Union Securities & Co.; Kidder Peabody & Co., Smith, Barney & Co. and Blyth & Co., Inc.
(jointly). Bids—Had been expected to be received up
to noon (EDT) -on Aug; 26 at Room 2033, Two Rector St.,
New York, N. Y., but company on Aug. 22 again decided
to defer sale pending improvement in market conditions.

53

by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Kidder, Peabody & Co.; White Weld & Co.;
Equitable Securities Corp., and Shields & Co. (jointly);
Lehman Brothers, Eastman Dillon, Union Securities &
Co., Salomon Bros. & Hutzler and Ladenburg, Thalmann
& Co. (jointly); Merrill Lynch, Pierce, Fenner & Smith
and Dean Witter & Co. (jointly).
Bids — Tentatively
had been expected to be received up to 11 a.m. (EDT)
on Aug.
27 but company on Aug. 22 decided to defer
sale pending improvement in market conditions.

amendment

common

The class A and class B shares will be offered in

stock.

(1377)

Sept.

at the rate of

shares

one

new

share for each three shares held.

of

Fairbanks, Morse
Stearns & Co., New York.

& Co.

Underwriter—Bear,

gage

redeem

bonds clue

1987.

a

like

Proceeds—To

reduce

bank

loans.

Underwriter—To

be

determined

by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc. and Lehman Brothers (joint¬
ly); Merrill Lynch, Pierce, Fenner & Smith; Stone &
Webster Securities Corp., The First Boston Corp. and
Smith, Barney & Co. (jointly). Bids—To be received up
to noon (EST) on Oct. 29 at 90 Broad St., 19th Floor,
New York 6, N. Y.
it Puritan Fund, Inc., Boston, Mass.

Sept. 24 filed (by amendment) an additional 2,000,000
shares of capital stock (par $1). Price—At market. Pro¬
ceeds—For investment.

it Racing, Inc., Pocono, Pa.
Sept. 19 (letter of notification) 800 shares of 5% cumu¬
lative

Pennsylvania Power Co.
Aug. 1 filed $8,000,000 of first mortgage bonds due 1988.
Proceeds—To

it Puget Sound Power & Light Co. (10/29)
Sept. 26 filed $15,000,000 of debentures due Nov. 1, 1983.

amount

of

5%

first mort¬

Underwriter—To be determined

preferred stock (par $50) and 20,000 shares of
non-voting common stock (par $10). Price—At
Proceeds—To purchase land and to construct race

class A
par.

track.

Underwriter—None.

Continued

on

page

54

The Commercial and Financial Chronicle

54

53

Continued from page

Simplicity
Aug. 15 filed

,

June 2b filed

$r,000,000 of 15-year 6% series A sinking
1973, to be offered in denominations

fund debentures due

of $500 and

$1,000. Price—At par.

ing capital and general
Corp.,

Israel

—Rassco

Proceeds—For work¬

corporate purposes. Underwriter
New York, on a
best efforts

than

less

the

market

or

•

Inc., N. Y.

Pattern Co.

42,500~sfitN^es of

the

Price—At

Rassco Financial Corp.

at a

bid price and

common stock (par $1).
price within a range not

not higher than the asking

Reynolds Engineering &

Supply, Inc.

Underwriter—L. L. Bost Co., Baltimore,

18, Md.

Md.

South Carolina

Electric & Gas Co.-

Underwriter—To be determined

if Richey Mfg. Co.
Sept. 22 (letter of notification) 2,000 shares of common
stock.
Price—At par ($100 per share).
Proceeds—To
buy machinery and equipment and for working capital.
Office—£801 Rochester Rd., Springfield, 111. Underwriter

Lehman Brothers

Alberta, Canada
of common stock (par $1).
Of this stock, 1,174,716 shares are to be sold on behalf oi
the company and 824,000 shares for the account of cer¬
tain selling stockholders. The company proposes to offer
the 1,174,716 shares for subscription by its shareholders
at the rate of one new share for each three shares held
Ltd.,

Petroleum

(jointly)/ Bids—Had been expected to
(EDT) on Sept. 10, at 70
Broadway, New York, N. Y., but sale has been post¬
poned.
„
//"
" * / ■

June 26 filed 1,998,716 shares

(with an oversubscription privilege). The subscription
period will be for 30 days following issuance of sub¬
scription rights. Price—To be supplied by amendment.
Proceeds—To pay off demand note, to pay other indebt¬
edness, and the balance if any will be added to working

capital Underwriter — Pacific Securities Ltd., Van¬
Canada.

couver,

Riddle Airlines, Inc.,

Miami, Fla.

May 15 filed 750,000 shares of common stock (par 10
cents). Price—To be supplied by amendment. Proceeds
—For working capital. Underwriter—James H. Price &

Co., Inc., of Coral Gables, Fla., for 250,000 shares; balance
on

"best efforts" basis.

1957

31,

Price—At par ($1 per share).

Proceeds

outstanding indebtedness. Office—Littleton,
Underwriter—R. B. Ford Co., Windover Road,

repay

Colo.

Memphis, Tenn.

ic Routti Robbins Investment Corp.
Sept. 22 filed $1,000,000 of 10-year 6% cumulative con¬
vertible debentures and 99,998 shares of common stock.
Price—Of debentures, at par (in units of $100 each);
and of stock, $1 per share. Proceeds — For investments
and working capital.
Office—Alexandria, Va. Under¬
writer—None.
• R

J/J/;;; ' /

T & E Corp., Waukesha,

Wis.

(10/14)
Sept. 18 filed 40,740 shares of common stock (par $1).
Price—$15 per share. Proceeds—To selling stockholders.
Business—Company is engaged in the manufacture and
ssde of electric distribution transformers for use by elec¬
tric power companies.

Underwriter—Loewi & Co., Inc.,

Milwaukee, Wis.
Mass. (10/15)
of common stock (par $1),
to be offered publicly and
in exchange for outstanding

shares of 6% cumulative preferred stock; Price—To be

by amendment. Business—Manufactures

supplied

elec¬

tronic measurement and recording instruments. Proceeds

$200,000 bank loans; to retire $510,000 of
5V^% notes; and the remainder will be available for gen¬
eral corporate purposes, particularly working capital.

Underwriter—Paine, Webber, Jackson & Curtis, Boston,
Mass.

Scientific-Atlanta, Inc.
Sept. 11 (letter of notification) 6,500 shares of common
stock (par 50 cents) to be offered for subscription by
common
stockholders of record Sept. 10, 1958 on the
one new

share for each 20 shares held; rights to

expire Nov. 14, 1958. Price—$5 per share. Proceeds—
For working capital. Office—2162 Piedmont Road, N. E.,
Atlanta 9, Ga. Underwriter—None.

if Scudder Fund of Canada, Ltd. (10/20-24)
Sept. 26 filed an additional 3,000,000 shares of capital
stock.

Price—At market.

Proceeds

—

For

investment.

Dealer-Managers—Lehman Brothers and William Street

Sales, Inc., both of New York. At end of initial distribu¬
tion period (probably extending to the year
end), latter
will become the sole distributor of the shares.

if Scudder, Stevens & Clark Common Stock Fund,
Inc.

Sept. 26 fUed (by amendment) an additional 300,000
shares of capital stock (par $1). Price—At market. Pro¬
ceeds—For investment
* Scudder, Stevens & Clark Fund, Inc.
Sept. 26 filed (by amendment) an additional 100,000
shares of capital stock (par $1). Price—At market. Proceeds—For investment.
i

gan

Sheridan-Belmont

Hotel

Co.

debentures due Sept. 15, 1963 to be offered for
subscrip¬
tion by common stockholders on a
pro rata basis. Price—
At par. Proceeds—For
working capital. Office — 3172
North Sheridan Rd., Chicago
14, 111. Underwriter—None

★ Shop Rite Foods, Inc., Albuquerque, N. Mex.
Sept. 25 filed 35,383 shares of common stock (par $5)
tp be offered for subscription by stockholders at the rate

Aug. 14 (letter of notification) 300,000 shares of common ;
Price—At par ($1 per share). Proceeds—For de¬

stock.

Office

velopment and operation of an oil well.

—

9151

Los Angeles 46, Calif. Underwriter—U. S ;;
Corporation Co., Jersey City, N. J.
:/Z/;/

Sunset Blvd.,

State

July 29 (letter of notification) 26,850 shares of common
stock (par 10 cents) to be issued upon exercise of war¬
rants. Price—$1 per share.
Office—Main & Astor Sts.,
Norristown, Pa. Underwriter—H. A. Riecke & Co., Inc.,
Philadelphia, Pa.

Proceeds—For equipment, merchandise and

per

gen¬

Underwriters—First Southwest
CP. Dallas, Texas; and Miner, Mee & Co., Albuquerque
New Mexico.




Gas

Transmission

Co.

.

>

;,k

Sept. 11 filed 467,098 shares of common stock (par $5)
to be offered in exchange for outstanding capital stock

(5,766.633 shares) of Hartol Petroleum Corp. on the basis
81

shares

Tennessee

of

share.

Gas

stock

for

each

z/"'''/.

Calgary Co., Abilene, Texas
April 30 filed 2,000,000 shares of capital stock (par 25
cents). Price—To be supplied by amendment. Proceeds
—To selling stockholder.
Underwriter—Thomson Kernaghan & Co., Ltd., Toronto, Canada. To be offered in
Canada only.
Thomas Paint Products Co.

(par ,$t) 1. P^ice—-$2 per share.• Proceeds—To pay
cqst of /plant option; for. first year's; pay¬

bft/jnstdlmen^ purchase contract for. land and im¬

Triton. Corp.,

to be offered to stockholders on the basis of one unit foi

each two shares of stock

owned

(500 of the shares are

being offered to the President of the company). Price—
$60 per unit. Proceeds—For working capital. Office—
543 Whitehall St., S. W., Atlanta, Ga.
Underwriter—
None.

shares of

cqhimon stock (par $1) to be offered in units
debentures, 20 shares of preferred stock and
of ; cpmrpon/ stock,. Pricc^-r$10,240 per unit.
Proceeds^To acquire, ovvh and operate interests in pro*/
dueing oil and £as properties. Underwriter—None, Of¬
fice—11 Commence, Street, Newark, N.J,
Tirhothy H.
Dunn is President/ £.J: //J//.;/ J vf ../v; ///• /J/;//;/'".r//i :/
240 shares

.

Tungsten Mountain Mining Co^
100,000 shares of com¬
stock (par $1). Price—$1.50 per share. Proceeds—
To extinguish preseqt indebtedness, increase reserve for
contingencies: and working capital. Office—511 Securi¬
ties Bldg., Seattle, 1, Wash.
Underwriter—H. P. Pratt
& Co., ,80? Hoge Bldg., Seattle 4, Wash.
mon

March 25 (letter

of notification) 27,272 shares of 70-ceni
stock (par $5) and 27,272 sharei
of common stock (par 10 cents) to be offered in uniti
of one share to each class of stock. Price—$11 per unit
Proceeds
For working capital.
Office — 111 E. Mali

cumulative preferred

Price—At

St., Morristown, Tenn. Underwriter—Valley Securitiei
Corp., Morristown, Tenn..
Tip Top Oil & Gas Co., Salt Lake City, Utah
April 15 filed 220,000 shares of common stock, of whicfc
200,000 shares are to be publicly offered. Price—$5 pel
share. Proceeds—To drill two new wells and for general
corporate purposes. Underwriter — Andersen-Randolpk
8e Co.* Inc., Salt Lake City, Utah.
Uranium

Mining Corp.
Nov. 6, 1957 filed 3,000,000 shares of common stock (pai
one mill). Price—25 cents per share. Proceeds—For land

e

Owens

of

Waterloo.

Transcontinental

Ia.,

is

maiuet.

Gas

Pipe Line Corp. (10/16)
Sept. 24 filed 600,000 shares of common stock (par 50
cents). Price—To be supplied by amendment. Proceeds
—For repayment of outstanding notes and for construc¬
tion program.
Underwriters—White, Weld & Co., and
Stone & Webster Securities

Corp., both of New York.

the

27

(letter of notification). 7,500 shares of commoi
(par $1) to be offered pro-rata to stockholders oi

basis of

one

—$4 per share.
Office—293

new

share for 10 shares owned.

Pric#

Proceeds—For drilling for oil and gai
N. Main Street, Coudersport, Pa.
Under

writer—None.

J]..

.*

.

J1 ■'

'. '

$1).
Under¬

v/V/Z'i

■

Plan, Kansas

City,

'

filed $10,000,00.0 of plans for the accumulation

June 20.

of shares of

Twentieth Century Investors, Inc. Price—At

market.;Proceeds

investment.

For

—

& Co.,* Kansas

Stowers

Underwriter—

City, Mo.

//

Finance Corp., Tampa, Fla.
Sept. 26 filed $500,000 of-6% 20-year sinking fund con¬
vertible capital debentures due Oct. 15, 1978. Proceeds—
To be addeddo-the general funds of the company and
initially used to reduce bank loans and short term notes.
Underwriter—Beil
Hough, Inc.,'St. Petersburg, Fla..
if Union

United

Employees

Co.

Insurance

April 16 filed 2,000,000 shares of common stock (par $5).
Price — $10 per share.. Proceeds — For acquisition of

operating properties, real -and/or personal, including
office furniture* fixtures, equipment and office space, by
lease or purchase.
Office — Wilmington, Del. Under¬
writer—None.
JVIyrl L. McKee qf Portland, Ore., ii
President.

»«.

;

United Life ,& Accident Insurance Co.

Aug. 8 (letter.of notification) 410 shares of capital stock,
(par $20) being offered for subscription by stockholders,
of record Aug. 29, <1958;on the basis of one new share for.
each 10 shares held (with an oversubscription privilege);
rights to expire Sept, 30, 1958; Price — $375 per share.
Proceeds—For operating a life insurance and a sickness
and accident insurance company.
Office—2 White St.,

Underwriter—None.

United Security Life &

-:

Accident Insurance Co.

r

120,000 shares of class A common stock.
Price—$3 per share. Proceeds—To provide the reserves
required to be held in life and accident insurance poli¬
Aug. 22 filed

cies, and

to pay the necessary expenses in producing
Office—Louisville, Ky. Underwriter—None.
M. Smith, is President.

insurance.
Edmond

U. S. Land

Development Corp.

Price—

Aug. 15 filed 1,200,000 shares of common-stock.

($1 per share). Proceeds—To be added to the
company's1 general funds and used to develop Pineda
Island near Mobile,. Ala.
Office—Fort Lauderdale, Fla.
Underwriter—Palm
Beach
Investment Co.,. Inc., 308
par•

South
•

County Road, Palm Beach, Fla.

■ ■■

Universal-Cyclops Steel Corp.

$22,500,000* of sinking fund debentures due
1978./ Price—To be supplied- by amendment.:

Aug. 5 filed

Sept.

1,

Proceeds—To

repay

of bank loans and for
Underwriter—A. G. Becker & Co.,

$10,300,000

construction program.

Inc., Chicago, 111., and New York, N. Y. Statement being
withdrawn.

:

*

v.

.

;

Universal Oil Recovery Corp., Chicago, III.
June 4 filed

—$4 per
ment of

37,500 shares of class A common stock.' Price

share. Proceeds—For exploration and develop¬
properties, and the balance for other corporate

Underwriter—None.

purposes.

•

Uranium Corp. of America,

Portland, Ore.

April 30/1957 filed 1,250,000 shares of common stock (par
cents)/ Price—To

oected

be $1

to

purposes./

per

be supplied by amendment (exshare). Proceeds—For exploration,

Underwriter—To

Graham- Albert
ident.

Griswold

be
of

named

Portland,

by amendment.
Ore.,

is

Pres¬

h

Utah Minerals Co.

April 11
mon

Trans-Eastern Petroleum Inc.

~

,

Twentieth Century lnvestors

16

President.

I*.'

•

Proceeds—For investment.
writer—Stowers &, Co;, Kansas City, Mo.

—

E.

.y

June 20 filed: 2 000,000 shares of common stock (par

At

Timeplan Finance Corp.

fred

Newark, N. J.

Aug. 1 filed $1,600,000 of 5% debentures due 1973, 4,000
shares sif JSfa preferred /stock
(par $100) and 48,000

Concord, N. H

May 26 (letter of notification) 1,250 shares of common
stock (par $10) and $37,500 of 6% serial subordinated
debentures series 1958, to be offered in units of one
share of stock and $50 principal amount of debenturei

Trans-America

;

provements; for construction of plant, tools and equip¬
ment; advertising and working capital. Office — 540
Steamboat Rd., Greenwich, Conn
Underwriter—Sano &
Co., NevV York, N. V. *■•/ •*•'

Hartol

Texas

Feb.

eral corporate purposes.

Austin, Texas.

Strouse, Inc.

stock

Price—$11.50

ment

Mo.'

Tennessee

-

V,
150,Q00 shares of common

expenses and

v'

Strategic Minerals Corp. of America, Dallas, Tax
March 31 filed $2,000,000 of first lien mortgage 6% bond*
and 975,000 shares of common stock (par 10 cents). Pric«
—For bonds, 95% of princmal amount; and for stock $1
per share. Proceeds—To erect and operate one or mort
chemical processing plants using the Bruce - Williami
Process to beneficiate manganese ores.
UnderwriterSouthwest Shares, Inc.,

Statement to be withdrawn,

Twentieth, Century Investors, Inc., Kansas City,

Address—P. O. Box 678, Gulfport,
Underwriter—Gates, Carter & Co., Gulfport, Miss.

21, 1958, rights to expire

Nov. 10.

mineral

Tricon, Inc.
j
.
Aug. 3 (letter.of notification)

Life, Health & Accident Insurance Co.

(letter of notification) 50,000 shares of common
stock (par $1).
Price—$5 per share. Proceeds—To be
invested in stocks and bonds and to acquire other life

July 9

of one new share for each four shares held
of record Oct.
on

exploration/ and it is hoped, recovery of buried
exploitation of lost mines and
deposits/ Office—130 East 18th Street,
Brooklyn 26, N._ Y. Daniel Stack is President, Under¬
gram,

Aug. 11. (letter of notification)

acquisition, exploratory work, working capital, reserve*
and other corporate purposes. Underwriter—None. AJ

Aug. 19 (letter of notification) $250,000 of 6% convertible

share.

Exchange Agent—Mor¬

Stanway Oil Corp.

repay

basis of

until Oct. 14, 1958.
Stanley & Co., New York.

remain open

stock (par one
share. Proceeds—For research pro¬

of. $8,000 of

(New Jersey)

July 31 filed 11,406,078 shares of capital stock (par $7;
being offered in exchange for Humble Oil & Refining
Co. capital stock at rate of five Standard Oil sharesNioi
each four Humble Oil shares. The offer is expected to

of

if Sanborn Co., Waltham,
Sept. 25 filed 118,530 shares
of which 100,000 shares are
18,530 shares will be offered

—To

to 11:30 a.m.

Standard Oil Co.

Miss.

300,000 shares of

(letter of notification)

stock.

common

—To

up

insurance companies.

Rocky Mountain Quarter Racing Association

Oct.

received

be

per

and sunken treasure and

stock

mortgage;

Proceeds—To repay bank loans and ioi

bonds due 1988.

by competitive bidding. Probable bidders: Halsey, Stuari
& Co. Inc.; Kidder, Peabody & Co.; Eastman Dillon,
Union Securities & Co.; The First Boston Corp., and

ttichwell

cent). Price—$f

writer—None.

Aug. 12 filed $10,000,000 first and /refunding

Thursday, October 2, 1958

Inc., Washington, D. C.

Hunters,

foregoing range. Proceeds—To go to Joseph M. Shapiro,

construction program.

—None.

Treasure

other

stockholder; Underwriter — Lee Higginson
Corp.. New York. Offering—Indefinitely postponed.

Aug. 22 (letter of notification) 60,000 shares of common
stock /par $1). Price — $5 per share. Proceeds —- For
working caoital. Office—2118 N. Charles St., Baltimore

-

.

Aug. 14 filed 1,946,499 shares of common

price quoted on the New York Stock Exchange at the
time of offering. The shares will also be" offered from
time to time on such Exchange at a price within the

fthe selling

I

.

.

(1378)

.

*

(letter of notification) 900,000 shares of com¬
Price—At par (10 cents per share). Proceeds

stock.

—For

Utah.

mining expenses.

Office—305 Main St., Park City,
Sondrup & Co., Salt Lake

Underwriter—Walter

City; Utah. Tz.

*

.

...v/f

Utah Oil

Co.>rNew York, Inc.May 6 (letter of notification) 300,000 shares of capital
stock.

Price

—

At par ($1 per share).

Proceeds

—

For

Volume

188

Number 5782

development of oil and

.

The Commercial and Financial Chronicle

.

Office—574 JeffersoL

lands.

gas

Ave., Rochester 11, N. V.
& Co.,
Inc.,.Rochester, N/

.

i Arvida Corp.
.(Florida) ^
Sept, 19.4t^was lanhotinced by Arthur Vining Davis, for-

Underwriter—Frank P. Hunt

T

Chairman of Aluminum Co. "of
America, that it is
planned to > raise between $25,000,000 and
$35,000,000
mer

i;-: Utah Power & Light Co.
June

26

1988.

/

filed $20,000,000

Proceeds—-To

first

01
redeem

bonds

mortgage

through the sale of common stock of Arvida Corp. Price
—Expected to be about $10 or $11 per share. Proceeds—

dtu

$15,000,009 oi first mort
gage bonds, 5%% series due 1987, to repay $4,000,000 oj
bank borrowings, .and the balance, logeuiei -with A'urthei
borrowings under a bank, agreement ahd cash generated
in

the

will

business

struction

program

amounting

to

be

used

the

ol

to

forward the

carry

company

approximately

develop residential communities in the near future,
complete with regional shopping areas, industrial parks,
utility installationsJj.arndl, recreational facilities. Under¬
writers—Carl M. Loeb, Rhoades &
Co., and Dominick &

con¬

Dominick, :both of NeW -York.

subsidiaries

its

and

$43,000,000

To

for

the

Underwrite*—To be determined by competi;
bidding. Probable bidders; Halsey, Stuart; & Cc

pected in the

•

at

further

October, 1958.

Central

ficate

Co., all of New York.

stock

common

to

be

Industrial Shares, inc.,

We strand

Denver, Colo.

Oil

be

new

the

offered

share for each

holders

debentures of record

of

ol

shares

ol

.outstanding

March 24

joou of debem ures

share

Proceeds—F6»

then

working

such

divisible

holdings

by

5%

subordinate

rate of five shares foi

at

held;

Price — $60 pev
capitalUnderwriter-

;

Wilier Color Television System, Inc. •
■
April 2 (letter of notification) 72,035 shares of commui
stock (par $1) of which 10,000 are to be offered to stock
holders at $2 per share and the remaining 62,035 share*
are
to be publicly offered at $3 each.
Proceeds — Focorporate

Office—151

purposes

Yonkers, N. Y. Underwriter
Broadway, New York 6. N Y
•

Adell

Edwin

—

.

Wisconsin Electric Power Co.

Avenue

Jefferson.

31

Common at the
as

of

rate of

Sept.

24,

one

new

shard for each

Proceeds—For capital expenditures.

—None.

market this year.

of

-

10 shares

V'-"

Underwriter
"V.

Co.

March 21 it was announced that the company plans addi
tional financing this year, in the form of common stock

preferred stock, or a combination of the two, includinj
bank loans.
Proceeds—For expansion program, work¬

ing capital and inventories/-Underwriters—Blyth & Co.
and Merrill Lynch. Pierce. Fenner & Smith.

Inc

Arabol Manufacturing Co., N. Y.
(10/9)
Sept. 9 it was announced that bias will be received at
the Department of
Justice,; Office of Alien' Property,
Room 664,101 Indiana
Ave., N. W., Washington 25, D. C.,
by 11 a.m. <EDT) on Oct. 9, 1958, for the purchase from
the Attorney General of the United States, as
ah. entirety,
515.6

shares

common" capital stock (par/$i00) and
210 shares of 6% cumulative
preferred capital stock (par
$100) of this company.
of:




The

A

.

that
is

an

planned

offering of 250,000
(including 100,000

150,000 shares for selling stockholders.

leading

of "Sunsweet" prune
Underwriter — Kidder,

processor

company expects later
to issue and sell additional securities, prob¬
ably preferred stock, to secure approximately $5,000,000

of additional funds.

Proceeds—Together with $7,000,000
from private sale of 4^%
bonds, to repay short-term
bank loans and for construction program. Underwriter!
—May be The First Boston Corp.; Kidder, Peabody &
Co.; Merrill Lynch, Pierce, Fenner & Smith; and White
Weld & Co., all of New York.
First City

it

National Bank
announced

(10/2)

Bank

plans to offer to its
stockholders of record Oct. 2, 1958 the right to subscribe
was

125,000 additional shares of capital stock
the basis

of

one

new

share for each

(par $20)

10 shares held.

Price—$40 per share. Proceeds—-To increase capital and
-surplus. Office—931 Main St., Houston 1, Tex.
•

Florida

Power

&

Light Co.

(10/27-31)

Aug. 20, McGregor Smith, Chairman, announced that the
company plans the sale of 300,000 shares of new common
stock. Proceeds—To finance construction program. Un¬

derwriters—May be Merrill Lynch, Pierce, Fenner &
Smith and Kidder, Peabody & Co., both of New York.
Service Co.
24

it

notes

was

and

Underwriter

loans
If

and

for

construction

program.

determined

by competitive bidding,
probable bidders may be Halsey, Stuart & Co. Inc.;
Merrill Lynch, Pierce, Fenner & Smith, and White,
Weld & Co. (jointly); Blyth & Co., Inc.; The First BostoD
Corp.; Lehman Brothers.
General

April

7

will

mature

1

on

Smith; Paine, Webber, Jackson & Curtis; Smith,
Barney & Co.; White, Weld & Co.; and F. Eberstadt &
Co., all of New York. Offerings—"Santa Rosa" offering
expected

about

"Santa Paula"

Oct.

8

at

100%

and

interest,

accrued

offering later in year,;//,;;.

was reported a secondary offering of common >
voting stock is expected in near future. Underwriters— '
May include; Blyth & Co., Inc.; Lehman Brothers arid/
Smith, Barney & Co.

Hartford Electric Co.

Aug- 27 the directors approved a program under which
it plans to issue 149,633 shares of common stock
(par

—

Public

Utilities Corp.

stockholders

approved a plan authorizing the
directors, in connection with an offering of common
stock
to stockholders
(on a l-for-20 basis), also to

offer certain shares

„

$25) to be offered first to

common stockholders on a 1for-10 basis; 100,000 shares of preferred stock (par
$50);
and $18,000,000 of first mortgage bonds.
Stockholders

will vote Oct.

6

the proposal

pit

and if approved,

company will seek authorization of the Connecticut P. U,
Commission.
Underwriter — Putnam & Co., Chas. W.

.

Scranton & Co. and Estabrook & Co. for any preferred
stock. Under previous rights offering to common stock¬

holders unsubscribed common, stock was sold to Chfis.
W. Scranton & Co.
Previous bond issues were placed

privately.

Offering

Expected

—

late

October

or

early

November.
•

Hawaiian

Sept. 29 it

Electric

Co., Ltd.

announced company plans to offer to its

was

stockholders the right to subscribe for an addi¬

common

tional 84,700 shares of common stock in the near future
l-for-10 basis. Proceeds—For construction program^

on a

Underwriter—None.

.

..

Heublein, Inc.

Aug. 25 it was reported that the company plans early'
registration of 400,000 shares of common stock; of which;
100,000 shares are to be sold for the account of selling
stockholders* Proceeds—For expansion. Underwriter—
Glore, Forgan & Co., New York. Offering — Expected
sometime in October

or

November.

an

$50,000,000 of bonds
the

American

issue of between $30,000,000

may

market.

soon

be publicly offered
public works

Proceeds—For

Kansas Gas & Electric Co.
March 31, G. W. Evans,

Chairman, announced that com¬
pany plans to sell some bonds originally scheduled for
mid-year, but which sale may now be deferred until
late 1958 or early 1959. Proceeds—About $8,000,000 for
construction

by

on the same terms to employees, in¬
cluding officers, of System companies. Clearing Agent—
Merrill Lynch, Pierce, Fenner & Smith, New York. Of¬
fering—Expected late in November.

program.

Underwriter—To

be

determined

competitive

bidding.
Probable
bidders:- Halsey,
Stuart & Co. Inc.; Kidder, Peabody & Co., and Merrill
Lynch, Pierce, Fenner & Smith
(jointly); Lehman
Brothers; Eastman Dillon, Union Securities & Co. and;
Stone & Webster Securities Corp. (jointly); Glore, For¬
gan & Co., and Goldman Sachs & Co. (jointly).
Kansas

Power

&

Light Co.
company plans to issue and
$10,000,000 of first mortgage bonds due 1988. Pro¬
ceeds—For construction program.
Underwriter—To be
determined by competitive bidding.
Probable bidders;t
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Glore,
Forgan & Co.; Harriman Ripley & Co. Inc.; White, Weld
& Co.; Blyth & Co., Inc.; Equitable Securities Corp
Feb.

14

it

announced

was

sell

Kentucky Utilities Co.
June
mon

For

16 company
stock in the
any

Hilliard

stated it will sell bonds and/or

Co.

com¬

last

quarter of 1958. Underwriters—
common stock: Blyth & Co., Inc. and J. J. B,'

&

Son.

For

competitive bidding.
Inc.;

any

bonds, to be determined by

Probable bidders: Halsey, Stuart &

Eastman

Dillon, Union Securities & Co. and
Merrill Lynch, Pierce, Fenner & Smith, (jointly); Kid-'
der, Peabody & Co. and White, Weld & Co. (jointly)v
Laboratory for Electronics, Inc.
July 3, Henry W. Harding, President, announced that
the directors are currently considering refinancing $790,000 of outstanding notes ($658,750 held by a principal
stockholder and $131,250 by a bank) on a more perma¬
nent basis.
This may be done through equity .or con¬
vertible debenture financing. Office—75 Pitts St., Bos¬
ton, Mass.
Lorillard (P.) Co.
Sept. 17 company announced it plans to offer its stock¬
holders the right to subscribe for approximately 363,000
additional shares
new

reported that company plans to issue
$11,000,000 of first mortgage bonds later this year. No de¬
cision as yet has been made as to the procedure the com¬
pany will follow.
Proceeds—For repayment of shortterm

issue

York.

in the year

19

Rosa"

"Santa

Underwriters—Merrill Lynch, Pierce, Fen¬

and

projects, etc. Underwriter—'The First Boston Corp., New

.; Equitable Gas Co. -v;^
July 18 it was announced that the

Gas

Steel

stock

common

Business

/

^

"Santa

and

financing will comprise two issues of $9,-

July 1, 1978.
ner

on

Underwriter—Kuhn, Loeb & Co.,

juice, and "Clapp", baby foods.
Peabody & Co;, New Yorlc/

March

Acme

of 200,000
preferred stock

'

'

for company and

Sept.

Rosa"

issue

Bostoh'Cbrp. and Glore Forgan & Co., both
New York. Offering-—Expected late in 1958 or
during

>

1958

each.

was

Duffy-Mott Co.
Sept. 15 it was reported

on

r

(with an oversubscription
privilege); rights to expire on Oct. 14. Price—$29 per
share.

an

convertible

subsidiary in the amount of $768,000.

a

New York.

-

The

000,000

"Santa

new

and

for

,

Sept. 3 filed 510,005 .shares of common stock-(par $10)
being offered for subscription by holders of outstanding
held

authorizing

cumulative

$10). Convertible into common stock at the rate
$2.86 per share. Proceeds—To retire outstanding notes

can

ii

four; alsi

Paula."

the

on

(par

5%

.

ont

•

general

incorporation

of

shares

four shares held and

balance

the-

fot*

numbet

each. $ 1
None

Co.

Denmark (Kingdom of j*"*" "*
' " v*4" *
Sept. 2.it-was-reporte# that an issue,of between $20,000000 to $30,000,000 may
possibly be placed on the Ameri¬

Co., Minot, N. Oak.

additiohali share
tt

Gas

the first three months, of ,;1959.

'

mortgages

approximately $18,000,000 of
secured by first preferred

bonds

of

of

.

of

offering

be The First

April 17 filed 7,799 shares of capital stock to be offeree
fot subscription by stockholders of record March J24 a

excess

the

reported that the company may issue and
sell $25,000,000 of
preferred stock. Underwriters—May

16 filed 1,000,000 shares of, common stock (par 2t
cents).
Price—$5 per share. Proceeds-i-For investment
Underwriter
Andersen, Randolph & Co., Inc., 65 So
Main St., Salt Lake City, Utah.

one

Electric- &

Aug. 25 it

ol

July

of

of

Commonwealth Edison Co.?
of

(10/8)
issue

to

insured

government

ship

Inc.

plans

Japan (Empire of)
Aug. 20 it was stated that

of

holders of outstanding com
stock at the rate of one new .share for each thr©«
shares held. The. record date is to be supplied by amend
ipfcnl
Price--r-At .par. ($5 pei share), Proceed^-To b«
applied, to t^e payment: of $700,000 of/Shbrt-tCrrii bank
loaqs iiicurrgd in carrying forward the^coffipdhy^s C6h*
struct ion. and conversion program.
Underwriter^-Non#

rale

of

shares

mqn

:

date

Central Hadlejr Corp.
The shareholders of the company at a
special meeting
held on June 25, approved an amendment to the certi¬

N. Car.

June 6 filed 89,391 shares
fered for subscription by

Western

exact

Jackson & Curtis and Stone & Webster Securities
Corp.

Western Carolina Telephone Co.^ Weaverville,
.

the

of the

Sept. 11 the company applied to the Nebraska Railway
Commission for authority to sell
up to 100,000 shares
of common stock
(par $3.50) and up to $3,000,000 con¬
vertible debentures^
Underwriters —-. Paine, Webber,

• Wellington
Equity Fund, Inc. (10/7)
Aug. 29 filed 3,000,000 shares of capital stock (par SI).
Price—$12 per. share. Proceeds—For investment. Under 'writers—Kidder, Peabody & Co., Bache & Co.', Reynolds

;a

sur¬

securities to be offered has been
Proceeds—To repay bank loans.

determined.

'

& Co. InC. and'Dean Witter &

Neither

the nature

nor

property, .acquisi¬

7

Proceeds—-To increase capital and

Underwriter—-Morgari/ Stanley & Co., New York.

,

tions and; development and other regular Corporate pur¬
poses.
Underwriter—Moroney, Beissner & Co*, Houston,
Texas.

^determined by trustees

later date.

a

California Electric Rower Co.
July 14 it was announced company contemplates mar¬
keting between $5,000,000 and $7,000,000 securities in

.

due Nov. 1,1978, and 50,000 shares of common stock (par
$1); The offering of the common stock will be subject
to the right, of certain stockholders to subscribe for a
total of 9,410 shares
at^the rate of one hew share for each
four shares held. [Stockholders who have right to sub¬
scribe for remaining 40,590 shares have waived such
right.] Price—To be supplied by. amendment. Proceeds
—To discharge bank loans and other
indebtedness, and
for

Sank of Mew York

plus.

Line

Feb. 19 it

.

dividend and offer .tq stockholders the
right to subscribe
for the
remaining. 30,000 shares in the ratio of one new
£hare fpr each eight -shares held after giving effect to the
stock distribution;
Price-r^T© be

Weingarten Markets Realty Co. (10/13-17)
Sept. 19 filed $1,600,000 of 6% sinking fund debentures,

used

;

Sept. 30 stockholders approved a proposal to increase
the capital stock by 110,000 shares to a total of
270,000
shares. The bank will;issue
80,000 shares as a 50% stock

:
Weingarten (J.), Inc., Houston, Texas (10/15)
Sept. 22 filed $6,500,000 of. sinking fund debentures due
•Oct; 1, 1978: Price—Tc be. supplied by amendment. Pro¬
ceeds—To repay, outstanding indebtedness and for ex¬
pansion of supermarket cjhain and related facilities. -Un¬
derwriters—W hite, Weld & Co., New York; and Moroney,
Beissner & Co., Houston, Texas.

be

(Republic of)

electric power projects* and other
improvements. Under
writer—May be Kuhn, Loeb & Co., New York. Offer
ing—-Expected in October or early November.

Co.;
Eastman Dillon. Union -Securities & Co., ant
Smith,. Barney & Co. (jointly). Bids—Were to have been
ibceivea in Room 2033, 2 Rector Street, New York,
N. Y., up to noon (EDT) on Sept. 9, but were postponed
on Sept. 3.
Bids will now be received on such day sub-,
sequent to Sept. 22, 1958 but not later than Nov. 25, 1958
as shall be designated
by company.

balance will

Ex¬

was announced that the
country contemplate*
the issuance and sale of
$30,000,000 bonds. Proceeds—Foj

(jointly); Salomon Brothers & Hutzler; Kidder, Peabodj

the

—

Grace

future.

near

July 15 it

&

.

Registration

•

Company

55

Great Atlantic & Pacific Tea Co.

Austria

Ihc;, First Boston Corp. and Blyth & Co. inc. (jointly)
While,- Weld & Co. and Stone & Webster Securities Corp

,

Offering—Scheduled to

begin within the next two months.

perioc

1958-1960.
live

(1379)

share for

general

of

common

stock

each eight shares

on

the basis of one,

held., Proceeds

—

For

Lehman
Brothers and Smith, Barney & Co., both of New York.
Registration—Expected early in November.
corporate

purposes.

Underwriters

—

Master Fund,

Inc., Fairfield, Calif.
this newly organized invest¬
ment company nlans to offer to bona fide residents ©f
California 10,00 shares of capital stock (par $1>. Price
—$10 per sharless an underwriting discount of 8Vfe%.
Jan. 27 it

was

announced

Proceeds—For investment.

Michigan Bell Telephone Co.
Aug. 12 directors approved plans to sell $40,000,000 of
34-year debentures. Proceeds—To redeem a like amount
of 4%% debentures due November, 1992. Underwriter
—To

be

bidders:
Co.

determined by competitive bidding. Probable
Halsey, Stuart & Co. Inc.; Morgan Stanley &

Bids—Had

been

tentatively

scheduled

Continued

to

on

be re-

page

56

56

The Commercial and Financial Chronicle

(1380)

Continued
ceived

from

voted to post-

Sept. 16, but on Aug. 26 it was

on

832,000 shares of 6% preferred stock (par $100) and 11,936,835 shares of common stock (par $100) outstanding
as of Dec. 31, 1957, there were owned
by the American
Telephone & Telegraph Co. 640,957 preferred shares and

Midland Enterprises, Inc.

announced it plans to issue on or
$3,200,000 of first preferred mort¬
gage bonds.
May be placed privately. Proceeds — To
repay bank loans and for working capital.

March 28, company
before Dec. 31, 1958

10,790,943

March

it

24

Commission

Power

Montana-Dakota

March 24 it
sell

and

for

announced the company plans to issue

was

undetermined

an

first

of

amount

mortgage

St.

(about $10,000,000) in the latter part of this year
1959. Proceeds — To repay bank loans.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc., 31yth & Co.,
Inc.; Merrill Lynch, Pierce, Fenner & Smith and Kidder,
Peabody & Co., Inc., (jointly); and Blair & Co., Inc.
bonds
in

or

early

ing

March 7 it

this

market conditions. Underwriter—For any common
The First Boston Corp., New York.

stock:

it

10

announced

stated

that

immediate

Sept. 12 it

on

financing will not be

additional

an

was

Underwriter—To be determined by competitive bidding.

was

undetermined

amount

company plans sale
bonds and/or preferred

of

of an
stock

gram.

Pacific Telephone & Telegraph Co,
(11/18) '
Aug. 22 it was announced company plans to issue and
«ell $80,00.0,000 of 32-year debentures due Nov.
1, 1990

Proceeds—For

construction

program.
Underwriter—To
by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co
Bids—Expected to be received on Nov. 18.

be

determined

common

shares of

preferred shares held.

or

list itself made

ury

ment to

back

Corp*. /
announced company plans to sell about :

28

it

was

Kuhn, Loeb & Co., and American Securities Corp.j
(jointly). (2) For any preferred stock—Merrill Lynch,
Pierce, Fenner & Smith; Salomon Bros. & Hutzler and
Eastman Dillon, Union Securities & Co., (jointly); Leh¬
man Brothers; Kuhn, Loeb & Co. and A. C. Allyn & Co.
Inc. (jointly)t The First Boston Corp.; White, Weld A
Co.; Kidder, Peabody & Co.

(10/28)

the

that

reported

company

the

plans

Probable

bidders:

The

by competitive bidding.
Corp.; Eastman

First

Boston

Dillon, Union Securities & Co.; Kidder, Peabody & Co.
adjust¬
and

tended

their

to

initial

was

petitive bidding. Probable bidders: (1) For any bonds—
Halsey, Stuart .& Co. Inc.; White Weld & Co.; The First
Boston Corp:; Kidder, Peabody & Co.; Merrill Lynch,
Pierce, Fenner & Smith; Eastman Dillon, Union Secu¬
rities & Co. and Salomon Bros., & ? Hutzler (jointly);

Oct. 28.

on

Underwriter—To be determined

some

from

away

big pension funds, having prime rate on any of these funds
plenty of latitude in the type of taken down and the notes will not
security in which they may in¬ be for longer than 90 days. The
vest, are looking toward the equity bank loans will be funded when

that

the

market rather than at bonds.

Meanwhile Puget

opportunity arises.

much

pretty

foregone
conclusion that the corporate mar¬
ket can be expected to back and

The Week Ahead

The
a

investment

week

or

so

striving for
be

to

about

a

again

in

Treasury's latest
T

were

generosity

looked

r e a s u r

upon

welcomed

they

bit of recalculation

showed,

calling

as

y's

in

the

for
sec¬

ondary corporate market.
As

a

matter of fact,




the Treas¬

Doubtless

capital
banks

Yet

with

Novem¬

market
to

than

finance

programs

bid for

But at the moment

ahead,
in

more

new

looming
themselves

money

observers find

quandary in endeavoring to
gauge the near-term outlook.
a

Feeling is growing that it might
well

up

to

fronts

for the

the
it

and

come

long-term bond
would

Treasury to

situation

call

for

Institutional

even
a

which
out

face
con¬

with

a

though this

liberal

coupon.

buyers quite ob¬
standing idle at the
moment, with best guesses being

viously

are

the

to

the

to

expansion
basis.

temporary

a

liking

into the

go

their

ber's large roll-over and probably

on

come

of

things

the

not

are

prospective

borrower.

frankly puzzled by the current
situation in the new issue market,

is

prospective borrowers continue to
preparations for entering
the market when the clouds lift.

make

Latest

to

register with the

So rather than get hung

up

for

for

an

offering

is J. I.

which has filed to

at high rates

lion

are

loans.

The

Edison

a

number of

corpo¬

financing through bank
latest

Co.

of

is

New

common

York,

Inc.,

for

a

credit of $100 million to run

for

a

year

big

from Oct. 7 next.

utility

will

pay

to

be

stock.

Case

Co.,

$23 mil¬

25-year

convertible

de¬
into

And International

Harvester Credit Corp., subsidiary
of

International

reportedly

the

cover

of subordinated,

bentures

Consolidated

which has arranged with 15 hanks

The

Se¬

curities and Exchange Commission

long periods with funds borrowed
rations

The

Though the underwriting world

borrowers

corporate

would much rather

list

be

the

terms, while they
the

now seems

move.

Presumably

were

base,

floundered

financing

which

back appeared to be

a new

the wake of the

for

market,

a

fill at least until the Government
stabilizes.

Prospective Offerings

Going to the Banks

issue.

Sound Power

filed to cover the
sale of $15 million of new deben¬
tures at competitive bidding.
& Light Co. has

levels.
It's

Proceeds—For con¬

program.

Wisconsin Public Service

of 80,000 shares of preferred stock (no par). Pro¬
ceeds —- To repay bank loans and for new construction.

bills

reported that the company plans the sale

$12,500,000 of new securities in the last half of the cur¬
rent year.
The type of securities has not yet been/
decided on.
Underwriter—To be determined by com¬

13-month 3V2S

new

discount

new

was

$5,000,000 first mortgage bonds.

March 4 it

the latest turn of events.

Even the
the

(10/28)

sell

Sept.

Price

early in 1959.

or

and

sale

and preferred stockholders 1,5.94,604 additional
common stock on the basis of one new share

lor each eight common

Un¬

determined by competitive

Sept. 28 it

^ Texas Electric Service Co.

Telephone & Telegraph Co.
Aug. 22 it was reported company plans to offer to its

To be

Underwriter—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Co.
Inc.; Estabrook & Co. and Coffin. & Burr, Inc.
(jointly); Kidder, Peabody & Co. and White, Weld &
Co. (jointly). Offerings—Expected this Fall.

repay bank loans and for construction pro¬
Underwriter—Stone & Webster Securities Corp.,

to be received

Pacific

1958

struction

—

Blyth & Co., Inc.

—

Aug. 18 it

was reported that the company plans to issue
$10,000,000 of first mortgage bonds due 1988.
Proceeds
To repay bank loans and for construction
program.
Underwriter—To be determined by competi¬
tive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp.; Eastman Dillon, Union Se¬
curities & Co.; Kuhn, Loeb & Co.; Blyth & Co., Inc., and
Merrill Lynch, Pierce, Fenner & Smith. Bids—Expected

Probable bidlers: The First Boston Corp.; Halsey,
Stuart & Co. Inc.; Blyth & Co., Inc.; (2) For preferred

plans to issue
Proceeds—

Worcester Gas Light Co.

reported that the company plans an offer¬

^ Texas Electric Service Co.

ding.

stock:

late in

New York.

in the latter part of this year or early 1959. Underwriter
—(1) For bonds to be determined by competitive bid¬

Light Co.

bidding.
Probable bidders: Halsey,
Stuart & Co. Inc.; Smith,
Barney & Co. and Robert W. Baird & Co., Inc. (jointly);
Equitable Securities Corp. and Eastman Dillon, Union
Securities & Co. (jointly); White, Weld & Co., Kidder,
Peabody & Co. and Salomon Bros. & Hutzler (jointly);
The First Boston Corp.
Offering—Not expected until

ceeds—To

reported

&

announced that company

To retire bank loans and for construction program.

of

ing of 100,000 shares of preferred stock (par $100). Pro¬

Pacific Gas & Electric Co.

Power

was

$10,000,000 of first mortgage bonds.

derwriter

Sept. 23 it

it

and sell

Bell

Corp.; Glore, Forgan& Co.; Blyth & Co., Inc.
20

Wisconsin
March 17 it

Tampa Electric Co.
was

$11.50 principal amount of debentures for each pre¬
Dealer-Manager—Harriman Ripley & Co.

ferred share.

Telephone Co.
July 10 it was announced Missouri Public Service Com¬
mission authorized the company to issue $110,000,000 of
35-year debentures. Proceeds — To refund outstanding
$100,000,000 4%% debentures. Underwriter—To be de¬
termined
by competitive bidding.
Probable bidders;
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
Of¬
fering—Has been postponed. Bids had been expected
about Sept. 30, 1958.

necessary.

(par

Inc., New York.

100,000

Probable bidders: Halsey, Stuart & Co. Inc.; First Boston

March

of

of

Southwestern

proposal to exchange

$10) for $32,148,250 new 6% subordinated income sink-,
ing fund debentures to mature Aug. 1, 2008 on the basis

Jackson & Curtis.

will sell late this

company

$10,000,000 mortgage bonds but

year

authorized

a

2,795,500 shares of 6% cumulative preferred stock

preferred stock (par $50).
UnderwritersStone & Webster Securities Corp. and Paine, Webber

Illinois Gas Co.

was

stockholders

9

shares

purchase from it of $19,200,000 equipment trust certifi¬
cates due from l-to-15 years, viz: Oct. 9, $7,440,000; Nov.
13, $5,310,000; and Dec. 18, $6,450,000. Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.
Northern

Virginian Ry.
Aug. 26 the directors approved

Southern Colorado Power Co.

May

Norfolk & Western Ry. (10/9)
(11/13) (12/18)
Bids will be received this Fall by the company for the

June

N. E., Atlanta, Ga.

dated Dec. 1, 1958. Proceeds
Underwriter—To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; Morgan Stanley & Co. Bids—-/Tenta¬
tively' scheduled to be received on or about Dec. 9. Reg¬
istration—Expected in mid-November.

banks and expects to sell equity securities later
or in early 1959, depending upon prevailing

The Chase Manhattan

Bank, The First National City
York, and Bank of America National Trust
The Chase Manhattan Bank will
be the fiscal agent for the credit.
The Amount of the
new financing involved is in the neighborhood of $250,000,000. The purpose is to restore government balances
which have been reduced by the repayment of excessive
short term obligations previously incurred.

of 35-year debentures to be
—For construction program.

year

a

States,

& Savings Association.

^ Southern Bell Telephone & Telegraph Co. (12/9)

Co.

United

Bank of New

Sept. 22 directors authorized the issuance of $70,000,000

approximately $7,500,000
from additional financing will be required for construc¬
tion expenditures for the balance of this year. The man¬
agement intends to negotiate a new line of credit with a
group of

syndicate of commercial banks in
Canada and the United Kingdom.
The three institutions which are to head this syndicate
the

Underwriter—None.

announced that

was

banking firms and

Proceeds—To expand opera¬

Auburn Ave.,

197

State Su¬

with the New York

Kidder, Peabody & Co., both of New York, have
as financial advisors to develop a financial
for the country. As a first step in the pro-!
gram a short-term credit is being negotiated between the
government in cooperation with the two investment

are

future.

near
—

rests

program

done privately.

Office

tions.

transaction

been selected

short-term bank loans and

by competitive

holders in the

an issue of common stock
public, the proceeds of which
between $50,000,000 and $60,000,000. Approval

Co. and

Co.
Aug. 26 it v/as announced that the company in all prob¬
ability will offer additional common stock to its share¬

,

run

the

Products Co.

reported that

was

be offered to the

Venezuela (Government of)
July 1 the Government announced that Kuhn, Loeb &

Southeastern Fidelity Fire Insurance

later date.

York State Electric and Gas

was

may

•

Society. Underwriters—Expected to be Leh¬
Brothers, Smith, Barney & Co. and Merrill Lynch,
Pierce, Fenner & Smith, all of New York. Offering—
Expected in mid-autumn, probably late in October.

Underwriter—For bonds to be
bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Smith, Barney & Co., Glore,
Forgan & Co. and Blair & Co. Inc. (jointly); White, Weld
& Co.; Equitable Securities Corp. Last preferred financ¬

/A* Narda Ultrasonics Corp., N. Y.
Sept. 8 it was reported that the company plans a regis¬
tered secondary offering of 60,000 shares of common
stock (par 10 cents). Proceeds—To selling stockholders.
Business—Manufacture of ultrasonic equipment; Control
—The company is controlled by Narda Microwave Corp.,
New

company

soon

part of

Proceeds—For

Chemical

for construction program.

determined

bonds secured by
linersjS, S. Brasil
and S. S. Argentina. Underwriters—Kuhn, Qpeb & Co.
and Lehman Brothers, both of New York.
Offering —
Postponed because of uncertain market conditions.

a

temporarily its plans to market $6,500,000 in bonds

Proceeds—For repayment of

sell $24,000,000 of government insured
a first preferred ship mortgage on the

Underwriter—To be named at

ferred

to market

plans

man

has de¬

19

company

preme Court (expected within two months >. Proceeds—
To the
Petroleum Research
Fund of the American

and/or preferred stocks. A bank credit of $6,000,000 has
been arranged — in lieu of the long-term financing.

Moore-McCormack Lines, Inc.
March 24 it was announced company plans to issue and

N. Y.

Joseph Light & Power Co.
it was announced that the

will

of

Sept.

Co., St. Louis, Mo.
announced

was

Universal Oil

Aug. 13 it

Sept. 22 it was reported that the company plans offering
700,000 additional shares of common stock, and plans to
apply to the State Public Utility Commission seeking
exemption from competitive bidding. Underwriter—May
be Merrill Lynch, Pierce, Fenner & Smith.

Utilities Co.

it

/this year or in the first quarter of 1959.
construction program.

(12/2)

Electric & Gas Co.

Public Service

28

about $30,000,000 of common stock in the latter

New York.

permission to issue first
mortgage bonds, unsecured notes and common stock.
Proceeds—To build pipe line system to cost about $111,000,000.
Underwriters — Stone & Webster Securities
Corp. and White Weld & Co., both of New York.
eral

March

(Republic of)
July 14 it was announced a public offering is expected
of approximately $26,000,000 external bonds. Proceeds—
To redeem certain outstanding debt and for Panama's
feeder road program.
Underwriter—Lehman Brothers,

this subsidiary of
applied to the Fed¬

that

announced

was

Union Electric

shares.

common

Panama

Midwestern Gas Transmission Co.
Tennessee Gas Transmission Co. has

Control—Of the

Underwriter—None.

previously made.

because of present market

pone this refunding program
conditions.

1958

and Merrill Lynch, Pierce, Fenner & Smith (jointly);
Kuhn, Loeb & Co.; Blyth & Co., Inc.; Lehman Brothers
and Salomon Bros. & Hutzler (jointly); Harriman Rip¬
ley & Co., Inc., and Stone & Webster Securities Corp.
(jointly); Glore, Forgan & Co. Bids—-Expected to be re-/
ceived on Oct. 28.,^: •:•//'? /'••

—At par ($100 per share). Proceeds—To repay advances
and to reimburse the treasury for capital expenditures

55

page

Thursday, October 2,

.

.

.

Harvester

contemplating

Co., is
a

new

biggest straight offering in
cards
next week, provided

the

things do not change, is American
Cement Corp.'s $20 million of de¬
bentures now slated for marketing
on

Wednesday.

Aside from that offering,
son

Madi¬

Gas & Electric Co. is slated to

bids

open

bonds

on

$11

on

million of new
and
North¬

Tuesday

western Steel & Wire Co. is sched¬

uled

to

common

offer
stock

125,000
on

Two companies,

shares

of

Wednesday.

namely Peoples

Light & Coke Co. and Addressograph-M ulti graph have
Gas,

"rights" offerings

on

schedule, the

first-named due to start

day

and the

last

on

on

Mon¬

Wednesday.

Volume

188

5782

Number

.

.

The Commercial and Financial Chronicle

.

(1381)

The following statistical tabulations

latest week

Business
AMERICAN IRON AND

Indicated

STEEL INSTITUTE:

operations

Steel

Activity

week

(per

capacity)

cent

.

Latest

Previous

Week

Week.

or

month available.

month ended

or

Month

(net-tons)—"

AMERICAN PETROLEUM INSTITUTE:
Crude oil and condensate output—daily

Ago

Oct.

5

§68.5

"61.3

61.7

82.6

Oct.

5

§1,850,000

'1,816,000

1,666,000

2,115,001

7,087,085

7,009,235

6,874,735

Crude

runs to

stills—daily average (bbls.)—1

Gasoline

output (bbls.
Kerosene output (bbls,)—'
Distillate fuel oil t output (bbls.)
Residual fuel oil output (bbls.)

Total

of
__Sept. 19

117,604,000

7,845,000

7,892,000

28,010.000

28,005.000

Sept. 19
Sept. 19

2,001,000

28,056,000
2,008,000

1,791,000

2.028.001

12,310,000

12,415,000

12,004,000

12,007,00C

——-^Sept^ 19

6,896,000

6,788,000

6,710,000

7,820.00C

—_

7.830.000

Kerosene
>

unfinished

and

of

(bbls.)

at

Distillate fuel

oil

Residual

oil

fuel

ASSOCIATION

gasoline (bbls.) at

(bbls.)
(bbls.)

19

173,158,000
30,011,000
149,461,000

*146,190,000

173,756,000
27,548,000
132,398.000

Sept. 19

68,893,000

68,378,000

66,994,000

56,003,000

cars)—
Sept. 20
(no. of cars)—Sept. 20
ENGINEERING

667,277

665,999
539,521

633,687

724,934

525,245

605,295

Sept. 19

.—-—i^—_—.—-—Sept.

at
at—

of

freight received from connections
ENGINEERING CONSTRUCTION —

Revenue

CIVIL

NEWS-RECORD:
Total

U.

construction

iept. 25

municipal

and

Federal

.——

STORE

30,596,000

22,192,000

26,606,000

Sept. 20

8.425,000

8,345,000

8,280,000

Sept. 13

483,000

401,000

404,000

Sept. 20

136

145

134

AVERAGE

—

Electric output (ih 000

BRADSTREET, INC.

100

kwh.)

Sept. 27
INDUSTRIAL)

steel

(per

Pig iron

(per

gross

METAL PRICES

Electrolytic

(E.

ton)——;
J.

refinery

Louis)

(delivered)

———-Sept. 23

at

—

i

Group

____

Group
YIELD

DAILY

Average corporate

5.967c

$66.49

$66.49

$66.49

$66.42

$43.17

$43.17

$42.50

$43.83

24

11.000c

10.750c

10.750c

14.000c

10.800c

10.550c

10.550c

13.800c

U.

Month
U.

(tons)—.—

of

FOR

purchases

Short

■

sales

Total

10.500c

ERAL

10.000c

As

92.750c

95.375c

-

95.000c

Short

sales

Other

sales

88.10

89.67

88.32

86.38

>89.78

90.06

92.06

89.37

30

94.12

94.41

96.54

94.2

jtrpt, 30

92.64

92.64

95.01

91.9]

89.64

89.92

83.40

83.66

...

:

92.06

89.51

85.20

•82.52

89.23

92.20

92.20

95.62

91.34

30

3.60

3.45

3.56

3.70

Total

4.41

4.27

4.13

4.ir~

3.97

4.12

4.23

4.23

4.07

4.28

Sept. 30

4.44

4.42

4.27

4.45

Sept. 30
Sept. 30

4.91

4.89

4.77

ACCOUNT

OF

4.53

4.48

4.59

4.47

4.45

4.30

4.47

Sept.

30

4.26

4.26

4.03

4.32

3ept. 30

389.3

393.1

Sept. 20
Sept. 20

260,256

310,445

275,008

259,955

311,174

305,978

293,915

296,404

20

95

97

92

96

20

446,577

509,651

419,411

465,246

392.8.

Total

108.69

108.60

108.68

_

transactions

To

for

account

Total

of

...

—

SECURITIES

Dollar

EXCHANGE

1,509,410

1,762,520

2,592,340

749,860

Sales

Customers'

other

sales

Dollar

Number
;

shares—Total
sales

Short

TOTAL

All

round-lot

Short

LABOR

sales

All

494,010

165,570

ON THE

N.

Y.

Sept.
Sept.
3ept.

398,530

644,630

137,800

43,100

56,500

33,900

346.400

332,510

599,640

23/J10
128,090

RUBBER

Sept.

389,500

389,010

633,540

152,000

Sept.
jept.

517,270

519,140
93,590

845,290

235,850

83,860

135,890

51,560

—Sept.

575,570

712,932

892,010

249,410

—Sept.

659,430

806,522

Sept.
Sept.

2,425,210

2,671,080

Sept.

2,123,950

_Sept.

2,544,300

1,027,900

300,970

1,123,510

499,160
2,411,452

4,082,260
663,800
3,610,490

420,350

1,006,720

2,910,612

4,274,290

1,247,760

i-

—

U.

S.

DEPT.

as

of Jan.

figure,

V

1, 1958, as against Jan.

Monthly Investment Plan.
one-half

cent

a




99,631

232,037
162,838

142,770

27,336

60,074

138,539

10,769

8,725

890

600

($981,000

$966,000

$501,000:

76,492

*73,302

98,926"

of

foreign

Zinc sold

on

a!

Sept.

1,024,107

$46,827,523

1,155,792
$51,501,247

1,485,737

781.484

$67,022,937

$36,566,145

Sept.

1,038,465

1,209,612

1*578,423

543,445

Sept.
Sept.

5,334

8,354

11,772

6,420

1,033,131

Sept.

$45,813,508

1.201,258
$51,688,977

1,566,651
$69,512,553

$26,258,784

537,025

336,310

453,150

538,510

107,870

336,310

453,150

538~510

107,870

325,190

385,280

452,750

DEPT.

S.

OF

*

.

FEDERAL

.

ISSUES

IN

GREAT

LTD.—Month

August

(Number

-

Tractor-Implement Tires

(Number

Shipments
.

(Number

Truck

and Bus

Shipments

runs.

109.1

106.4

93.2

126.0

126.0

125.9

125.7

§Based

on

new

annual

capacity of 140,742,570 tons

tons.
(Number of orders not reported since introduction of
delivered basis at centers where freight from East St. Louis exceeds

2.28

2.21

1.94

1.88

,

137

*134

145

136

*126

145

£26,037,000

£33,206,000

£14,578,000

8,317,705

8,117,358
7,305,754
17,464,550

16,097,080

8,610,751
7,449,072

1,113,247
987,543

,1,228,778

919,921

3,114,255

3,455,867

3,219,093

274,947
275,981

334,286

280,749

294,512

219,905

663,729

657,058

634,910

3,465,795

3,708,280

993,987

6,287,227

39,154,000

*39,442,000

Production (pounds)

38,564,000

Inventory

30,367,000

*41,551,000
*30,515,000

37,815.000
36,629,000

Tread Rubber

Shipments

2,941,262

(Camelback) —

(pounds)
(pounds)

27,871,000

SELECTED INCOME ITEMS OF U. S. CLASS I
RYS.

(Interstate Commerce Commission)—

Net

of

May:

railway

.

operating

•

Total

——

'——!

income

deductions

available

for

fixed

after

from

fixed

income

Net

Ratio

deductions

UNITED

of

taxes

stock

stock

preferred
income

STATES

-

to

—

fixed

GROSS

August

31

General funds balance
Net

debt

Computed
•Revised

4,141,189
52,168,230
20,761,402
4,033,976

4,205,134
99,641,977
69,159,071

27,265,525

16,727,426

50,248,915

50,180,879

9,810,343

13,057,669

64,985,513
48,407,946
27,314,666

33,095,412

17,930,487
591,114

39,707.633

4,571,417
1.98

1.66

3.27

$278,584,011

$275,568,258

$273,954,003

6,367,820

5,118,714

4,898,310

$272,216,191

$270,449,544
$2,632%

$269,055,693
2.857%

3,889,493

animal

figure.

rate

charges

DEBT

GUARANTEED—(000's
As

4,123,886

4,173,558

appropriations:

coihmon

of

56,309,419

31,155,018

income
income

$36,900,976
19,408,443

62,831,498

charges

charges

$80,845,272
23,001,839
103,847,111

22,962,574
66,955,384

$43,992,810

income

income

Federal

109.7

$2.07

8,156,429

5,663,660

Sept. 23

$2.13

3,601,590
3,476,034

14,133,900

Sept. 23

39.5

$2.12

2,889,695

—

12,321,060

105.9

40.3

*38.9

7,680,282

Production

Sept.

110.2

39.4

39.1

Inner

Depreciation (way <& structure & equipment)

111.3

40.0

39.7

of)—

322,870

111.3

39.2

of)—

5,340,790

Sept. 23

74.26

39.4

1,255,497
.

Inventory

875,000

90.3

89.06

(Number of)—

_

18,437,590
19,312,590

117.7

$82.80

89.83

*75.47

.3,637,899
15,489,569

678,420

92.5

$83.50

90.52
75.46

of)—

.

13.455,480

•„

104

BRITAIN
of

554,170

*93.2

135

v

ASSOCIATION,

11,766,890

92.3

110

97
133

RESERVE

.

Sept.

Sept. 23

99

105

2.28

__Sept.

118.7

192,931

1.622,012

136

1.93

THE

Production

Income

119.0

107,522

242,781

•

Truck and Bus Tires

Income

118.9

128,480

77,523

OF

-

BANK

Miscellaneous

Sept. 23

110,130

1,645,486

$83.53

Shipments

Month

349,370

-

107

:

Passenger Motorcycle,

—Sept.

86,982

.

Inventory

crude

288,910

FED¬

;

Production

1, 1957 basis of 133,459,150

(Prime Western

pound.

138,626

FEDERAL

...

MANUFACTURERS

Dividend

;

962,000 barrels

SECOND

goods

Production

241,040

OF

other than farm and foods
Includes

$316,200

INC.—Month of July:

On

;

•Revised

$751,300

of August:

earnings—

MIDLAND

100):

foods

All commodities

SALES

DISTRICT,

ESTIMATE —U.

CAPITAL

On

Meats

$302,000

SYSTEM—1947-49=100—Month of August:

Other

:

products

Processed

81,049
149,296

215,560

Shipments

sales—

NEW SERIES

STORE

Passenger Tires

STOCK

commodities

Farm

84,166

60,187
257,911

(tons

—

goodes

ERNORS

NEW

389,420

_

„

Seasonally adjusted
Unadjusted

Commodity Group—
All

65,119

69,309

■

manufacturing

029,22c

Sept.

=

62,927

251,529

INDUSTRIAL PRODUCTION—BOARD OF GOV¬

Other

(1947-40

79,258

100,640
;

-,

earnings—
manufacturing

Hourly

794,790

—Sept.

SALES

r—

manufacturing

2,612,850

Sept.

PRICES,

25,994

August:

(DEPT. OF COMMERCE):
bales)

RESERVE

Durable

—Sept.

sales

—

25,611

YORK—

_

of

Inventory

Other sales
Total sales

WHOLESALE

2,928

8,758

Hours—

2,118,840

by dealers—

ROUND-LOT STOCK

NEW

Month

(running

Durable goods
Nondurable goods

1,715,080

EXCHANGE AND ROUND-LOT STOCK TRANSACTIONS
FOR ACCOUNT OF MEMBERS (SHARES):
Total

15

Tubes

Other sales
Round-lot purchases
-Number of shares

OF

omitted)

2,000 pounds)

LABOR—Month

349,070
1,366,010

dea^rs—

of

BANK

(tons of 2,000 pounds)

AVERAGE

Weekly

293.390

value

Round-lot sales by

,

376

2,113

FACTORY EARNINGS AND HOURS—WEEKLY

1,495,370

COMMISSION:

value

sales

1,773
.2,151

7~601

of August:
monthly), unadjusted
daily), unadjusted
(average daily), seasonally adjusted

1,201,980

Odd-lot purchases
by dealers (customers' sales)—
Number of orders—Customers' total sales

short

32,738,000

tons)-

Durable goods
Nondurable goods

(customers' purchases)—t

Customers'

252,525,000

5,679,000

Average=-100—Month

110.30

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT DEALERS AND
SPECIALISTS ON N. Y. STOCK
sales by dealers
Number of shares

*257,358,000

7,058,000

Sales (average
Sales (average

394.1

members—■

sales

EXCHANGE

253,902,000

RESERVE BANK OF NEW YORK—1947-49

Sept.

sales

Odd-lot

Sept.

Sept.

Total purchases
Short sales
Other

13,764,000

OUTSTANDING—FED¬

(000's

COTTON GINNING

All

the floor—

—

:

(net

—

Sept.

.

tons*)

Refined copper stocks at end of period
of 2,000 pounds)
!_•

MEM¬

sales—

round-lot

35,045,000

*17,699,000

23,228,000

anthracite
(net

,

A.

S.

Nondurable

floor—

sales

31

(tons of

In U.

4.98

4.55

30

purchases

Total

28,972,000

MINES)—

Refined (tons of 2,000 pounds)
Deliveries to fabricators—
;

4.46

Sept.

"

Other sales

24,000

28,802,000
19,600,000

(000's

tons)

PAPER

Aug.

ERAL

4.43

sales

Short

(net

America

1

Sept. 30
Sept. 30
-Sept. 30

Sept.
,—Sept.

OF

INSTITUTE—For

Crude

Sept. 30
Sept. 30

87.59

..

—

:

Other transactions initiated off
'

26,000

Copper production in U. S. A.—

91.62

purchases

Total

.

August

and Central, Amorica

RESERVE

of

COPPER

93.500c

89.09

—

the

Asia
South

26.000c

Sept.

on

To
To

10.000c

10.500c.

88.40

.

Other-transactions initiated

213,203,000

60,000

S. DEPT. OF

of

Pennsylvania

Europe (net tons)

24.700c

10.500c

(BUREAU

North

10.000c

Sept. 26

Other sales
Total

_

To

24.700c

89.51

-

sales

236,454,000

193,215,000
23,125,000

Undesignated

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists in stocks in which registeredTotal

S.

10.000c

88.13

—

TRANSACTIONS

216,366,000

190,240,000
22,258,000

of

COMMERCIAL

ASSOCIATION:

AVERAGE ===109

ROUND-LOT

-

(net tons)

OIL, PAINT AND DRUG REPORTER PRICE INDEX—
1949

212,558,000

undelivered

and

_

DEPARTMENT

1

activity
Unfilled orders (tons) at end of period

.

cars

order

To

10.500c

89.23

(tons)

Percentage

92,800

■

delivered
on

July:
exports of

24.700c

Sept. 30

Group

MOODY'S COMMODITY INDEX

Production

freight

cars
cars

S. CORPORATIONS—U.

24

Sept.
;

PAPERBOARI)

new

of

Sept. 24
Sept. 24
Sept. 24

__3ept. 30
-Sept. 30

Group..

received

for

omitted)

V-kv

Group

Utilities

Orders

6.188c

Sept. 24

Baa

NATIONAL

6.196c

23.900c

——

Public

_

-

278

AVERAGES:

Aaa

Industrials

246

26.475c

'.

*'

Aa

Railroad

262

26.100c

.-.Sept.

PRICES DAILY AVERAGES:

BOND

116,100

export

(barrels)

zinc smelter output all
grades (tons of
2,000 pounds)
v
Shipments (tons of 2,000 pounds)—
Stocks at end of period (tons)

11,697,000

24.800c

Government Bonds

A

12,272,000

26.100c

Group

Industrials

12,240,000

25.600c

—

at-

Utilities

MOODY'S
S.

135

26.100c

Jept. 30
Sept. 30

U.

; *

553,000

25.850c

.....Sept.

Public

13,000

95,400

Slab

10,065,000

24

-Jepfc.

Average -corporate

Railroad

4.850,600

14,900

AMERICAN ZINC INSTITUTE INC.—Month of
August:

24,506,001

—Sept. 24

Government Bonds

S.

and

(end of month)

QUOTATIONS):

Zipc )[®ast St~ Louis). at———————.
Aluminum (primary pig. 99%) at
.
Straits tin (New York) at——_——;.—

MOODY'S ROND

stocks

freight

Backlog

'

268

6.196C

—

at__

all

domestic

COMMERCE—Month

Lead:( New York) at
(St.

12,342,000

Sept. 23
Sept. 23

Export refinery at——

U.

New

PRICES:

M.

(barrels)-

AMERICAN RAILWAY CAR INSTITUTE—
Month of August:

copper-

Domestic

.

Increase

COAL EXPORTS

lb.)

&

output

(barrels)
—
imports (barrels) ———
Refined product imports (barrels)
'

&

—Sept. 25

__

AGE COMPOSITE

Finished

DUN

—

Scrap steel (per gross ton)

h

175,705,000

4,956.400

4,944,700

13,300

CASH DIVIDENDS—PUBLICLY REPORTED BY

FAILURES -(COMMERCIAL AND

.

202,311,000

gasoline

Indicated. consumption
(barrels)
!

ELECTRIC INSTITUTE:

EDISON

tZinc

;

SALES INDEX—FEDERAL RESERVE

SYSTEM—191?-49

Lead

246,776,000

186,388,000
155,886,000
131,380,00,

5,075,700

4,751,600

Ago

gal-

—

oil

Orders

$342,274,000

195,490,000

4,860,300
f

Benzol output

Crude

165,762,00,

$397,801,000

216,180,000

Pennsylvania anthracite (tons)——

;

.

36,190,00C

109,042,000

Sept. 25
25
—Sept. 25

-

IRON

174,058.00C

$332,367,000
223,325,000
201,133,000

COAL OUTPUT (U. S. BUREAU OF MINES):
Bituminous coal and lignite (tons)

DEPARTMENT

557,921

Sept. 25 $370,670,000
3ept. 25
123,894,000

—

construction

State

*29,648,000

Year

Month

June:

—-

,

construction—

S.

Private

Public

172,891,000

of that dates]

Previous

INSTITUTE—Month

Total domestic production (barrels of 42
Ions each)
——
Domestic crude oil output (barrels)—

AMERICAN RAILROADS:

OF

freight loaded (number

Revenue

Sept.

—

—

PETROLEUM

Natural
19

are as

Month

(M' therms)
sales (M therms)

gas

AMERICAN

28,212,00

Stocks at refineries, bulk terminals, in transit, in pipe linesFinished

sales

gas

Manufactured gas sales (M therms)—
Mixed gas sales (M therms)
;

6,839,765

Sept. 19

—^—Sept. 19

either for thi

are

AMERICAN GAS ASSOCIATION—For month, of
July:
Natural

(bbls.

average

gallons each)—

42

of quotations,

cases

Latest

Equivalent to—

Steel-ingots and" castings

in

or,

Year
*

Ago

production and other figures for thf

cover

Dates shown in first column

that date,

on

57

DIRECT

4,689,679

AND

omitted):

2.534%

The Commercial and Financial Chronicle
58

Mutual Funds

its

of

stockholders

to

for

$16.25 per share

at
of

one

new

on

share

for

(with

an

held

shares

By ROBERT R. RICH

todian

Scudder Fund to Make

each

The several

15.

underwriters, headed

by Kuhn, Loeb & Co., have agreed,
subject to certain conditions, to
purchasek any unsubscribed com¬
stock.

to be used to
make additional investments and
for general corporate purposes.
The proceeds are

of The Penn¬

The stockholders

Corp. are to vote on Oct. 15
changing the corporate name of

road
on

the company to

Madison Fund, Inc.,

to reflect the diversified nature

the

diversified

corporation's

of

ac¬

tivities.

M. Ferer Sees. Formed
MIAMI, Fla.—Mikki M. Fere is

engaging in
from offices

securities business
in the Ainsley Build¬
a

under the firm

ing,

Ferer

name

of M.

Securities.

Files Registration

registered under
States
Investment
Sharehold¬
ers
recently approved a 4-for-l
stock split, and in, anticipation of
ment

Ltd.

Canada

of

Fund

Scudder

registration statement
with the Securities and Exchange
Commission for the purpose of
has filed

Company Act of 1940.

carrying into effect its new pro¬
gram
to offer continuously its
shares to the public.

its

Street

Sales, Inc., as dealer man¬

agers,

will distribute the Fund's
through members of the

308

West

City,

30th

Street, New York
the firm name of

under

Future

Mr.

Funds.

Swartz

approved the increase
authorized capital

gram,

Fund's

poration and Bache & Co.

William

der Fund of Canada Ltd.

Street

Sales,

owned

by

#

distributor

Canada

of

Ltd..

diversified

The Fund

is

a

is not subject to

United

income taxes. The

Federal

Fund including

dividends.

as

There

American Business

was

increase

ll1//2%

of

42

cal

President

&

re¬

cents

of companies

tors.

Gas

growth in principal and income.

The

T

1033 THIRTIETH STREET, N. W.
WASHINGTON 7, D. C.

Oct,

that

in

sev¬

.

.

shown
ment

indica¬

sales

reached

a

i

.

registration state¬

filed with the Securities

Exchange

two

The

that
has

million.

new

the

ferson

close

new

sev¬

months;
and
new
orders
by manufacturing com¬
panies have shown worthwhile
expansion.
received

business

on

for

of

Broad

Street'

in addition, granting the
of subscribing, subject
to allotment, for any shares not
subscribed
for
through the ex¬
ercise of rights.

expire

fund

the

plan

is

Investing

The

tax-free

both

Jefferson

to

Investing

going

operation

back

The

fund's

provide

proposed

announced

offering

date

similarity to the announced
policies and objectives of Jeffer¬

son

Purchase

of

the

assets

of

Jef¬

■'■'V/'.-v-'*

reflected

mainder

was

accounted for

increase

in

outstanding.

Co.; Reynolds & Co.; and

Dean Witter

&

Co.

•

on

\

first

to

light last March 14,
when the Securities and Exchange
came

the

asked

District

CUSTODIAN

Of GROUP

District

directors
tual

Court
of

the

for

:

..

.

asset

value

Fund

rose

the

of

from

Value: Line

$5.02

a

share

to

of $1.62 or 32.3%.
The Value Line Special Situations
Fund rose from $2.06 to, $3.07—a
gain

gain

of

$1.01

a

share

or

,

49.0%.

The Value Line Income Fund

allowance

and

about this series of Mutual Funds

seeking

possible growth and income through investment in Amer¬
industry.

common

of

of the

requested
a

for

tribution of 7c

of 29.5%.

a

rose

a

capital gain dis¬

share, the Value
a gain

:

;

MIT Growth Stock

York

New

of

receiver

the

fund

of reorganization

Jefferson

Custodian

action

its

Frnid

at

ap¬

hold

to

New Higlis
o

mu¬

the

•

•

In All Ca tegories

for

or

shares

"should

not

reflection

on

announcement

be

Net

assets

by the fund.

$185,362,515,
$136,538,456
on
yalue of their shares."-In the in¬ Aug. 31, 1957. Net asset value per
terim, the affairs of the fund have share was $11.09 which*, together
been under the: d i re c t i o n * of with a special capital -gaindis^
Thomas J. Aheafn, Jr., temporary tribution of 21 cents in December,
receiver, and the asset value of is equivalent to $11.30 per, share,
its shares has.risen from $4.40 to compared, with a net asset value
about $5.10.
r__1
"
per share- of $10.61
a ypar
ago.
construed

founded in 1933,

ican

.

Total
net
the
assets, shares out¬
liq¬ standing and shareholders of
uidation, as subsequently direcetd Massachusetts. Investors'. Growth
by the court. At the time of its Stock Fund were at record highs
action,- the SEC advised holders on Aug. 31-, 1958, according to an
purpose

that

A mutual fund

officers

and

fund

assets

the

of

FUNDS

SECURITIES, INC,

possibilities of '

„

United

injunction against certain

an

pointment

FRANKLIN

now

.

.

During the same period, the net

,

'

Get the facts

Find out

-

re¬

by the

number of shares

Bache &

prospectus

an

the

Lina Income Fund showed

States

investment in
the growth

higher value

holdings and the

from $4.14 a share to $5.29—after

for

Shares

the

of the Funds'

.

Southern

Petroleum

on

priced, as pre¬ ferson Custodian by Broad Street
at
$10 per Investing and the distribution of
share.
Broad Street Investing shares to
shareholders will bring an end to
The underwriting group will be
the problems
of Jefferson Cus¬
headed by Kidder, Feabody <£ Co.;
todian and its shareholders that
announced,

bookletdescribes

Total

$72.7 million

More than two-thirds of the in¬

$6.64—a

Custodian.

Funds

1957 to $101.0 million on

Sept. 24.
crease

investment

objectives

Line

Sept. 24.

on

from

rose

Dec. 31,

24,000 individuals and institutions
located
throughout
the
United
States and in a number of foreign
and

time

first

assets

Its assets currently total
$122,000,000, and its 5,152,shares
are
owned
by over

countries.

Value

three

the

28 years.

policies

of

passed the $100 million mark for

about
000

Watson, President

Distributors, Inc.
that the total assets of

reported
the

than

more

H.

Value Line Fund

successful

of

record

a

Stock

Value Line Funds

largest mutual fund in the group
ol'
investment
companies
with
aggregate assets of about 8575,000,000,. sponsored
by J. &
W.
Seligman & Co. It is a diversified
with

York

$101 Million for

the

is

the New

on

Gavin
Street

diversified

are

todian and its shareholders.
Broad

a

Exchange.

Cus¬

close

also

listed

is

receipt of satisfactory assurances
by Treasury Department ruling
that the transactions involved

corporation is

management investment company
of the closed-end type. The stock

the

to

warrants.

the

divi¬

subsequently

conditional

The offer¬

ing will be made only by means
of
a
prospectus which will be
mailed
to
security holders with

dend, redemption and other rights.
Custodian

The rights would
approximately two weeks

after the date of issue.

value equal to that of their
former Jefferson Custodian Fund

Jefferson

share for each two shares

one

privilege

a

shares and with full voting,

as

or

the

as

becomes

held and,

rata basis for shares of Broad

with

1958,

15*

registration
effective,
transferable subscription warrants
entitling the holder to subscribe

holders may then exchange their
Custodian shares on a

shares

Oct.

on

thereafter

soon

Jefferson

Commission

selected

oi

holders

statement

shareholders of the completion of
the
transaction, and the share¬

been advanced to about Oct. 7.

viously

eral

which offers

Mr. Macdonald said it was pres¬

ently proposed to issue to stock¬

Promptly thereafter Jef¬
Custodian
will
notify its

The shares will be

high in August; personal income
has risen in each of the last

was

from

Board

housing starts have
good increase; depart¬

store

0m

Commission
by
Wellington
Equity
Fund,
Inc.,
boosting its proposed initial stock
offering to ;three million shares

new
a

,

amended,

An
ment

Production,
risen several

has

capital stock.

that

of

asset

at

the

at

10.

fund

Initial Share 1 Otal

Industrial

example,

points;

Atomic Development Securities Co., Inc. Dept C

states

upturns

Federal Preserve

of

Corp.

Fund Increases

and

important' economic

Index
for

been

shares

for

valued

made

stock of N. Y. State Electric

Wellington Equity

or

year.

Prankard

have

there
eral

active in the atomic
possible

fiscal

last

stocks selected from among those

field with the objective of

exchange

value, free
of any sales charge.
It presently
is anticipated that valuations for
the purpose of the sale will be

and the com¬

preferred 4%%

mon

stock.
Net assets were
equivalent to $4.05 a
share, as compared with $3,63 a
share on Nov. 30, 1957, the end of
the

additions to the

Kaiser Aluminum & Chemi¬

were

of shares of

value

in the

no

2nd, President

Prankard,

an

were

National

offering to stockholders of 540,OOdj
additional shares of the company's

The plan provides for the sale
the assets of Jefferson Cus¬

will dissolve. Final consummation

fund's portfolio during' the recent
nine-month
period; eliminations

capital

holdings of

,

Of

of

$26,739,090,

than 75

States sources,

from United

capital gains are retained for
reinvestment and not distributed

that for the nine-month
period ended Aug. 30, 1958 there

more

Macdonald, President
Shares Corporation,
that
a
registration,
outstanding were voted in favor
of the court-approved reorganiza¬ statement has been filed with the
Securities
and
Exchange
Commis¬
tion plan; only 0.9% were votedsion with respect to a proposed
against.

Custodian will become holders of

States

Rights Basis

Ranald H.

of

announced

pro

net

invest¬

management

On

to

Canadian

non-resident

a

net income of the

organized in 1953 by the in¬
vestment counsel firm of Scudder,
Stevens & Clark.

fund

mutual

Street Investing Corp. At
special meeting, 82.2% of the
226,127 Jefferson Custodian shares

corporation, having no taxable in¬
come

ports

fund has

investments

the Fund

Fund

$1,150,000

540,000 More Slis.

Broad

Investing.
Via
this
ex¬
change shareholders of Jefferson

As

shares of The One William Street

H. .1.

i

which* i

reorganization

Street

the

of

the

fund

policy

its

of

in

Canadian industrial resources.

is

Brothers,

Lehman

exclusive

the

of American Business Shares,

r

of

approved

todian to Broad Street Investing

and

organized

Inc.,

The

limit

Reports
Quarterly Progress

ATOMIC

fund's stockholders."

the

National to Offer

Cus¬

Jefferson

to

20,000,000 shares.

Shares

Interested

plan

of

Inc. have

Fund,

of

was

formerly with First Investors Cor¬

We will be glad to send, you a free
prospectus describing Atomic
Development Mutual Fund, Inc. This

pro¬

of the Fund is to
to the se¬
National Association of Securities
curities of issuers deriving their
Dealers,
Inc.,
as
participating 'income from sources outside the
dealers for a predetermined in¬
United Slates. The Fund concen¬
itial period, probably extending to
trates its investments in the se¬
the year end.
At the end.of the curities of
companies organized
initial
period,
William
Street in Canada which in the judgment
Sales, Inc. will become the sole of the
management of the Fund
distributor of the shares of Scud¬
will reflect the development of
shares

Scudder

is

Swartz

offering

continuous

new

•the

William

and

Brothers

Lehman

company

United

fthe

a

was

conducting a
securities business from offices at
Arthur

of

tage

a

Statement with SEC

Fund, Inc.

Forms Future Funds

a

Continuous Share Off erings

four

over-sub¬

(New York City time), on Oct.

time

same

significant economies in

operating expenses to the advan¬

provides for the sale of the assets

the basis

scription privilege). The subscrip¬
tion offer will expire at 3:30 p.m.

mon

Shareholders

record

of

subscribe

effect

Custodian Assets

common

Oct. 1 rights to
1,286,619 additional
shares of common stock (par $1)

stock

Acquire Jefferson

Corp. is offering

The Pennroad

the

of the fund and at
to

1,286,619 New Slis.

.

Thursday, October 2, 1958

.

superior investment record to that

Broad Street to

Pemiroad Off ering

I

.

.

(1382)

as

a

the

compared

were

with

-

Stocks of the oil

-

and gas industry.

The plan of
recommended

FRANKLIN CUSTODIAN FUNDS, INC.
64 Wall

and

Street, New Verfc S, N. V.

mation concerning the Franklin Custodian Funds.

C*ym

C|MtA

DISTRIBUTORS GROUP, INC.
63 Wei Str—t, New York 5, N. Y.




I

to

ADDRESS.

I

CITY
■« mm

_ZONE_

-STATE.

receiver
on

Sep¬

In his recommendation

the receiver pointed
"the pro¬
combinaton with Broad

that

in his opinion

The
31

shareholders on. Aug.
16,715,025 sharesboth
highs—compared with 45,690

63,741
held

new

shareholders and 12,865,656 shares
a

year

ago.

Purchases

and

sales

of

securi¬

ties, other than U. S. Government
the threeInvesting presented an op¬ securities,, during
months
period totaled $9,394,665
portunity for the shareholders oL
Jefferson Custodian to continue and $2,289,053 respectively.
under
During the three months, the
experienced
professional
in
investment management having a fund made>new investments
Street

|

the

the court,

out

posed

KAME

I

L

infor-

by

adopted by the court

tember 3.

Please send me, without obligation, the Prospectus and other

reorganization was

,Volume

Number 5782

188

.

.

.

The Commercial and Financial Chronicle

(1383)

.Aetna

Casualty

&

Surety,

ConT

Vance, Sanders Makes Award to Campanella

General

Lifer lnsurance, y
Societyand .Texas
Instruments; while additional in-": I
necticut

Grolier

The

vestments

made in

were

12 other

to

$161.45.

During the same pe¬
Energy Fund shares out¬
standing increased 8% to 30,515.

•

riod,

25,000

held

total

37% to $4,927,866
$3,601,765 at the beginning of

Stockholders

total

now

1,137,

an

increase of 23% during the period.

■

Loomis-Sayles Has

cal and Outboard Marine.

In

i

;

Group

Net assets of the United

.

mutual' funds—United

of

anniversary

the. -i8th
Of its;'founding. The

fund

was

United
^

at-

was;

Group

'

attributed

Reed

an

income,

average-

nizes the need for

Jf

money.
*'

413,000

United

the

■>': In

Group will reach

Ltd.,

United

the

United

the

Group

In

one

;•;

includes

-

Accumulative

Fund,
United Spi-

Income Fund,

Fund. Waddell &

.

Reed, Inc;r.Kan-

City, is principal underwriter,
125 sales offices in 46

with

Alaska and Hawaii;'".*'
.

.

.

states,

,

.

The

rvv*'■.-.i.-'viA;.,.

,

smiling

( (rear)

Set's "Headaches5'

halt to

annual increases

materiallv

in wage

announced by Clinton

imnrnvp-

above

materially^ apove improve

ment

in.

productivity;
necessity
necessity

'under
the
under .the

raising

sively

tne

,

will

it

of
of

.
Chairman.

oi

•

Board

of

both

the

Banque

x-."CL _1.1,1AWCI

qpOIO ftllHrdlOldC^rS
Directors

an

of

Enerev

Fund

ine directors oi energy tuna,

go^rLanConstru?tS^gBe^u°m.

securities profits realized by the

r.Although his interests and.

investment income.

and distribution will be paid

lm

30
-

17

be.resolYed.^- ,.

.

pean

and Magnum Fund, Ltd.

pres-

v

.

Mr.

<

Baron

Davidson

pointed out that

Lambert's

knowledge

,;pCTS^tivea.''7o?^!tCthat ,i°te'rnat5onal banking

the;, 1959 models will be'^still '.:_L
longcr, wider, lower, more power-:.'
ful
and
probably more', costly than previous models."
♦;
•; Commentmg;
on ^ the
trucking ; '
industry, a fairly ; good level of
heavy truck demand would,seem 5
likely, basedi on the longer term
outlook for general construction
and the expected increase in the
truck
proportion
of
inter-city
freight.";,
'
In summary, it considered that

ended Sept; 16, 1958, total net as-

more

future

than the usual problems for

investors* i»t auto

of - sets of Energy Fund, managed and

to-

peared

influence

attitude

ties."4-*-

•

has

toward

not

-

ap-.?

DIVIDEND NOTICES




.

clared
30

•

quarterly dividend' of
share payable on the
Company

a

cents

per

Common Stock of the

November 1', 1958, to share¬

on

holders of record at the elbse of
on

October 10*1958.

Amphenol Electronics Corp.
a

VINCENT T. MILES

September 24,1958

shareholders

of record at the close of
business October 17, 1958. The trans¬
fer books
will not
be
closed.

Dated at

OTIS

Chicago, September 23, 1958.
FRED

ELEVATOR

G.

PACE,
Secretary & Treasurer

COMPANY
Common Dividend
A

ers

NOTICE

The Chase Manhattan Bank has de¬

-

dividend of 60c per

-

Chase
Manhattan

share

on

13,090,000 shares^of the capital

The

Board

Consumers
has
of

of

dividend

share

owners

Company

the
of

payment
60

cents

on

PACIFIC
FINANCE

CORPORATION'

DIVIDEND ON

the

authorized
a

the

DIVIDEND NOTICE

payment

quarterly dividend
Preferred

share

December

Stock

as

on

fol¬

of

owners

record

books

will

not

be

declared

5, 1958.

CLAS£
14.50

tion,

of-

Stock

ferred

payable

to

this

corpora¬

stockholders

of record October 15,

PER SHARE

.

regular

quarterly dividends Oit Pre¬

1958,

as

follows:

Rate
Share

1M-58

$1.25

Preferred Stock,

$1.13

$100 par value

$1.04

Per

Payable

$1.12'/2

the close of business October 15,1958.

in connection with the pay¬

Oh September24,1958, the Board
of Directors

Date

$4.16

ment

••••••••••9

of record October 17,

$4.52

transfer

September 24; 195$.

of

the outstanding
Common Stock, payable
November 20, 1958 to share
per

payable Novem¬

closed

of

close

October 3, 1958.

on-

New. York,

Directors

Power

authorized
a

14, 1958 to holders of record at

stock of the Bank,
ber

record' at' the

H. R. Fardwell,. Treasurer

ON COMMON STOCK

to

■chartered 1799'

of

Checks will be mailed.
DIVIDEND NO. 183

lows, payable January 2,1959

a

on

been

The Board of Directors also

DIVIDEND

the

share

business

of

clared

No., 208.'

quarterly dividend oi $.50>

the* Common. Stoek
declared,- payable
October 24, 1958, to stockhold'

has

BANK

equi¬
-

DIVIDEND

COMMON! STOCK

PREFERRED STOCK

The
-

materially
auto

QUARTERLY

The Board of Directors has de¬

1958.

DIVIDEND NOTICE

THE

but ob¬

stocks,

served,, "sa far this

their

hold

may

LONG ISUND LIGHTING COMPANY

group

Metal-Climax.

can

and finance distributed by-Ralph E. Samuel &

.

immediate

in

they
Limited, Alu¬
minum Company of
America;
American Smelting; Phelps
Dodge
and
St. Joseph Lead; and have
increased their holdings in Ameri¬

,

the

increases

this

oi recora d p.m., bept. 1/, iw>».

developments.
In the nine and one-half months

tun
-uixv"

Aluminium

In

iq^R

Ltd., Five Arrows Securities Ltd.;

wilt

Secretary-Treasurer
September 25, 1958

per

cpnf

with the realities of the situation.

indication of how this matter

stock, payable

common,

Neil A. MacDonalo,

has

nrn

duction, generation, transmission,
marketing, control and measurement, as well as companies whose
operations indicate the adoption
and application of new eneigy

ent

substantial

5% Series

Preferred Stock,

CONSUMERS POWER COMPANY
JACKSON, MICHIGAN

$25 par value
4%% Sinking
Fund Series

11-1*5$

$0.29"/,*

of this dividend.
MORTIMER J. PALMER
Vice President and Secretary

a

per

November 7, 1958, to stockholders
of record October 10, 1958*.

Sept.

q

companies, including Petrofin'a & Cie; Manufacture Beige de
Lampes et de Materiel Electronique; Societe d'Investissement du
Nord; Belgian Overseas Corp.,

was

concentration on

Unfortunately, there is little

the

on-

cents

on

tQ the 1137 shareholders

rPf>nrfj

bigger cars-as in the past, or a
greater emphasis on more economic cars—is adopted by management, and how this accords

—

appreciation.

The dividend

Energy Fund, shaies of which

of

automobile company securities for

philosophy

share

dividend* of 5

the

stocks in the non-ferrous

specializing in the energy industries, have declared 1958 annual

are offeied at net asset
concerns itself principally with
companies active ,in energy pro-

evaluation

was

Common. Stock-

on

9,600 to 10,000.
quarter, the Fund

open-end investment company

He also attended Oxford Univerthe longer pull will depend con- sity and the University of Geneva,
siderably* upon which market
He is a director of several Euro-

that

grow

meeting of the Board of Directors
of Amphenol Electronics Corporation
held
today a quarterly dividend of
thirty cents per share was declared,
payable October 31,
1958,
to
the

graduated from Yale in 1947.

added

last

Dividend

stockholders in¬

added

At

golaise de Constructions, Belgium.

pressure

headquarters are in Brussels, he
is at home in the U. S. A. He preswing toward emphasis on econ- pared for College at Canterbury
omy and practicality.
The pub- School, New Milford, Conn, and

-lication

the

HOOD CHEMICAL CO., INC.

Lam^rt'ancTthe'Comnaenie^Conof $3.55 nor
per .hnr»
share from
from
Lambert and the Compagnie Con- dividends of

(September) issue.'
from excessive
•wage-increases it would be difficult for individual companies to
Under

market

field.

important assettoThe
investment
policies of

lillCFgy A1 (!• tO 1

Davidson,

...

-

the-

its

ftated; in

its current

increase

metal

an

overseas

tnanmanBar0« Lambert is Chairman of

be

nrosrresprogies

prices

DIVIDEND NOTICES

semi-annual

to

from

the fund.

fory board of Townsend U. S. &
International Growth Fund was

with the unions which will call a

~rates
rates

will, be

and* Treasurer*

formerly with. Fidelity-

The Board of Directors; has declared

seven.

his nationally televised "This Is Your Life" program.

Appointment of Baron Leon
Lambert of Brussels to the adv*-

agreement

an

on

Belgian Financier
On Townsend's Bd.

Unless the automobile indicts try
able to work out

fund

Secretary

were

business

Automobile Stocks
is

received: the y educational

All

an

>

For Investors in

i

Campanellas

seph H. Wilson and Jules D. Brad¬

pur¬

Vance, Sanders & Co., prominent mutual fund sponsor, Wednesday
night (October 1). The presentation was made by Ralph Edwards

-tv p-'

•

$10,080 SMILES— Shown here are Roy Campanella, former star
of the Los Angeles Dodgers, who was seriously injured in an auto' mobile accident early this year, and his three youngest children
(left to right), Roy, Jr., Ruthe and Tony with certificates of a
$10,000 trust in shares of Boston Fund for the children's education,

-

'

sas

of

common

Fund and United Continental

ence

the

creased from

*v;.

:

new

continued

number of

reported

addition;; to } United r Funds

'Canada

of

result

Mr.

years,

to 55.8%,

due to

»

who recog¬
tangible plan

next five

dollars.

on

thirds

Reed predicted, total net assets of1
billion

on

427,800

V;v.< i'-:

Within the

;

a

are

■ ,

nine month period,
advancing from $53,Oct. 31, 1957 to $65,July 31, 1958. Two-

.

long-term management of his

for

the

assets

Total

Bradley* President; Jo¬

Officers

position in¬

eliminated

Fund

during

growth to the acceptance of mutuai funds by the individual with

sr

business.

Robert D.

gain of 9.9%.

a

stock

and

The

rapid'

the

$43.59

eleven

others

total

Gay Street* S. W. to engage in
securities

it Bankers Trust
Company* Mr. Rob¬

$3,350,000.
Under in¬
policy this fund has
new stocks to
port¬
folio, increased investment in 10

•

Invest¬

ert D. Bradley as manager of the
$39.66
bond department.
as of

from

vestment

'

'£■ Mr.

to

—

of

added

observes

established Oct.
8, 1940, with:net assets of $123,000.'
group

31

from 49.0%

chases

before the.

month

a

Oct.

increase of 6.8%

ahpburiced;-;:>sVi^^.e'vV--.^

about

last

creased

—

The' half-billon: figure

Fund,

share

Common

Group

-Funds;; 'K

Inc.,1 and "United''Funds Canada
-Ltd:
reached the $500,000^00 -i
mark this week, Cameron It. Reed,

'tained

Mutual

of

stated that the net asset value

increased

KNOXVILLE, Tenn.

ment Corporation of Fidelity has
been formed with offices at 502

Goins,

report

was

July 31, 1958,

"

President,

quarterly

per
on

United. Fds.

the

Loomis-Sayles

Attained by
:

Fidelity Formed
'

ley, Vice-Presidents; and Bath D.

Net Asset Gain
Half-Billion Mark

Investment Corp. of

the year, while net asset value
per
climbed 26%, from $128.18

Pan-Am., which raises1-' E
to"; 125,800^ shares.,
'The * fund reduced its holding in "
Dow Chemical and elirtiirrated* 5
Burroughs- Corp.," Lincoln National- %
Life Insurance,; Monsanto -Chemi¬
of

Ithe

increased

share

J

companies, including the"purchase

Co.,
from

<59

ScwlH$Out4t*U7Mic6£Q*K
9. c. Reynolds-,

Secretary

The Commercial and Financial Chronicle

CO

.

.

Thursday, October 2, 1958

.

(1384)

BUSINESS BUZZ
on.

hud¬
dled recently in Lexington, the
heart
of
Kentucky's fabulous
bluegrass
country.
For
four
days, either informally or for¬
mally in the Phoenix Hotel, they
talked about their own thorny
problems, received a series of
Yegional reports, heard
some
glowing
reports
of
Dixie's
march of progress, and accepted
.some of the warmest
hospital¬
ity a contingent of chief execu¬
Southern

■

*

tives

governors

received.

ever

integra¬

The emotional school

problems caught the head¬
lines, and hit the radio and television spots. But
the big
economic story of the confer¬

tion

=

completely ig¬

either

was

ence

nored, or barely mentioned in
passing. What is the story? The
South is continuing to roll up'
tremendous chapters of progress
with
industry
after industry

>

in

expanding,
state after

these

companies

locating

either

plants

existing

or
„

state.

of

Many

listed

their stocks

have

the
Stock

on

and New York

American

Exchanges. The chief executives
heard
formal
discussions and

reports on nuclear energy, tim¬
ber pud mineral resources, oil
and natural gas.

.

.

of Southern

ization, among other things, the
recent recession, the most se¬

World
felt in some
Facts and figures were

vere

since

War,

was

statfes.

second

the

barely

overall the in¬

that

presented

continuing its
great upward swing. Not all of
the progress has been made in¬
dustrially.
For
instance
the
commercial forests areas are in¬
creasing all the time. A total of
dustrial growth is

commercial

10,000,000 additional

future

supply

to

acres

paper,

and pulpwood

hardboard

10 years.

in the past

hospitality of Governor A. B. ;
(Happy)
Chandler, the chief
-executives
and
their
official
parties

Delaware

from

went

Grande

Bio

to

the

into the

out

countryside with its great and
with
miles and miles of ruler-straight
horse

rich

laced

farms

white-painted plank fences. On
the
bluegrass
horizon
were
hundreds
of
fine
horses,
or
white-faced Herefords

or

Black

"

Angus beef cattle grazing on the
and luxuriant grass.

lush

While

the

sun

was

bright in Old Kentucky, some of

members of their parties,
on mint juleps, had some

and

♦iipperl
of

the

finest

bourbon

made

in

nearby distilleries. For instance

Spendthrift

at

they

farm

saw

•nighty "Nashua,** world's cham¬
pion money-winning thorough¬
bred, who earned 81,288,565. To¬
day

the

horses

«tallicn barn at
worth

^

Mr.

nearly S19.OOO.OO0.*

the

At

stabled at the
Spendthrift are

and

1,100-acre
Mrs.

Frederick

of

Van

Xennep (Mrs. Van Lennep is the

-;former Ann Dodge of the Dodge
!Automotive
•ernors

ate

family),-the
a

buffet

roast

ilawn.

beefa

and

tent

the

beautiful

There they saw "Winged

.'Commander;' the world's five-

gaited
seven

grand

champion

consecutive

years,




*

for
and

New York

ment Insurance Laws as of Jan.

Practices, and Legal Considera¬
tions
American
Management
—

Association,
1515
Broadway,
New York 36, N. Y.—paper—$3.

talked

states

the

of

rights

through investment institutions
—Amos Tuck School of Busi¬
in

-All

"40-39-38-37-

Governor

reverse—just

like

Conference,

College, Hanover, N. H.—paper
—$1.

accept

tions.

While

would-be

several

were

vice-presiden¬

and

at-

in

1960

in

candidates

facts

and more Negroes

more

voting

are

presidential
tial

are

South,

the

overwhelming

ma¬

the

in

an

jority of them are registering as
the

Democrats,

said

governors

conference

privately. North Carolina, with
approximately 150,000 Negroes

Republican Governor McKeldin

qualified to vote and nearly all

For

tendance at the conference.

at

instance

press

a

politi¬
certainty that Vice-President

said
cal

he thought it

was

a

Richard M. Nixon would he his

party's standard bearer in 1960.
"The Commercial and Financial
Chronicle" representative asked

avail¬

Mr. McKeldin if he were

able

the

for

vice-presidency,

the

whereupon

Maryland

Gov¬

replied: "Thank you so
much for asking that question."
ernor

At

the

Mansion

Governor's

palatial

at

stone's

Frankfort,

throw

couple

a

the

from

im¬

State

Capital, the gov¬
their wives, on Sun¬

and

before the conference for¬

day

favoring

them

of

cratic

party,
voters

tered
than

Of

of

other

any

the

has

Demo¬

regis¬

more

the

Negro

race

Southern state.

people of the Negro race

race.

of the

One

reports presented

predicted, that the South's pop¬
ulation,

estimated

now

at

40,-

000,000 will increase by 16,000,000

by 1975.

The

Two

other

J,

and
in

are

Republican

Caleb

nors.

Boggs

Cecil

the

H.

Dela¬

Underwood,

16-state

Governors'

gover¬

of

Southern

Conference.

Three

J. Lindsay Almond,
of Virginia: James E. Fol-

governors,

Jr.,

of

Alabama,

Long of Louisiana,
to

The

K.

unable

were

attend for various

Gov.

Earl

and

host

chief

executive,

B.

(Happy)

Chandler,

A.

the

field,

It

the world
better

peaceful

life

con¬

to

see

because

a

of

nf atomic energy.

ment

series

research

in Dixie

amount

these
terest

the

to

their

various

states and

consumption is likely to
with¬
15
to
20
year
period

Coal

Gasification

tion of coal through use of

and gas reserves are
become

since oil
expected to
problem by

serious

a

and

develop¬

Americans

hand¬
mat

reanze

has

region

nuclear

a

a

whole

activities

un¬

be

de-salted

brackish in¬
purified;
under¬
rivers can be charted

economically
land

will

and

water

ground

thus

and

tapped

more

effec¬

tively: water movements above
and
below
ground
can
,be
studied and sources and replen¬
ishment of water supplies better
understood; purification of pol¬
luted

der

tion

rivers

and

streams

is

un¬

study; economical steriliza¬
of

sewage

is foreseen, and

high-brightness,
and

lasting

long

markers

for

high¬

1956

is

states,

from

safety will be available.

[This column is intended to re¬

flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's"

owns

views.]

anxious

Democratic

to

standard

•

be

governors

is

little

sentiment

in

a

the

today
for
a
third
It is unfortunate for the

way,

according

Democratic governors.

to

request.

Studies of Automatic Technology:
A

Case

Study of

U.

an

Reservation

Airline

AutomaticSystem

*—

S.

Department of Labor,
Bureau of Labor Statistics, 341
Ninth

Avenue,

N. Y.

York

New

1,

(on request).

Undervalued
Stocks

1957

Net

Current

Asset

Stock-i-Statistics,

—

Inc., P. O. Box 4411, Miami 27,

Fla., $5.00.
"What

About Mutual
—

Funds?—Re¬

John A. Straley

—Harper & Brothers, 49 East
33rd Street, New York 16, N. Y.
—cloth—$2.95.

~

a

Report

'

•

•

-

:

•

-

.

:

;

..

&

P!o. Inc

Copies

on

request

FOREIGN SECURITIES SPECIALISTS
20 BROAD STREET

TEL: HANOVER 2-0050

the

-•

NEW YORK 5, N. Y.

TELETYPE NY 1-971

LERNER & CO.
Investment Securities 1

18 Post Office

sentiment has lost ground in

big

Street, Albany, N. Y.

that

Republican party, but Republi¬
can

State

Botany Mills

Southland

party.

112

— New
Review,

Economy

Commerce

—paper—on

'

in

Carl Marks
maintain

Retail

State

Studebaker-Packard

c&C^1

I960.

The

Y.—paper—$5.

comparing and evaluating

the

GOP Losing Out

N.

Shopping Centers and New York

We have prepared

other

bearer

—

■

conven¬

six

Fact Book 1958

*

including. Kentucky's and
votes

Plaza, New York 20,

vised edition
way

Vol. 2

Savings Banks Trust Company,
14 Wall
Street, New York 5,

State's

water

—

'

*

Savings Bank

especially

purposes,

;

•N. Y.

of Consumer
— Life, 9

Coverage

Rockefeller

high

temperature
nuclear
reactors
will bring important advances
■■'.for utilization of coal for energy

Develop¬

Economic

for

711 Fifth Avenue, New
22, N. Y.—paper—50c.

Expenditures

fluidiza-

or

of

Development—Com¬

U. S. Area

Magazine

-

-

of

,

Economics—Problems

York

be increased substantially
the

Department

1, N. Y., $2.00.

mittee

political subdivisions:

who rolled up 3612 dele¬

gate votes in' the

York
"Little"

ment,

of

is currently un¬

Perhaps only

of

radiation,

told, include,
potentials that are of in¬

signals
tremendous

atomic

whole

tion,

of

usp<?

of

ernor,

Au¬

States and

destined

are

way

the

clear that he has his political
lightning rod and he hopes that
lightning will strike. The gov¬

in

authorities

tend that the United

ful

it

back

was

the

Now

fare.

United

made

of

learned of atomic power in war¬

derway.

Senate,

to

utilities
science and

gust, 1945, that the world first

who twice has been elected gov¬
ernor and
twice elected to the

States

the

Conference,

field

medicine.

A

reasons.

the

to

atomic

S.

U.

—

York

those in the power and

of

report

tance

of

use

Sea

Americans.

ware

The

the governors were

Energy

Regional
Advisory Council on Nuclear
Energy was of marked impor¬

ham,

terms

and a glossary* of
industrial relations

Labor, Bureau of Labor Statis¬
tics,'341 Ninth Avenue, New

*1970,

Atomic

Stress

Oak

at

Tenn., Aiken, S. C„ Paducah,
Ky„ and St. Petersburg, Fla.

ahead.

and heard
Governor Chandler join with a
Negro choral group in singing
some of the favorite songs of all

country

Ridge,

Commission

Selected

in

Relations

current

than any of the

that

Bargaining, Labor-Manage-

ment

Industries,

hut

percentage of its population of

tive
;

Federal

activities of the Atomic Energy

in

Southern states,
Mississippi has the greatest

region.

whole

the

rate and apart from the

Georgia have the greatest num¬
ber of

in

derway

These things of course are sepa¬

Carolina and

North

course,

mally opened, ate fried chicken,
and

reports 011
Trade Union Activities, Collec¬

more

.

in

Relations

the United States—31

responsibil¬
ity with their growing popula¬
must

Management

Labor

Maryland, put it: the states

of

Administration, Dartmouth

ness

wife's

my

birthdays!"

and
Theodore R. McKeldin

Governors'

Growth

Corporate

Financing

National

who is chairman of the

Policies,

Pricing:

Competitive

in

being
gradually trimmed and taken
over
by Washington. As Gov¬
ernor Leroy
Collins of Florida,
the

of

Department

S.

Labor, 341 Ninth Avenue, New
York 1, N. Y.—45c.

Lexington, the gov¬
informally about

downtown
ernors

1958—U.

1,

win¬

Back in the Phoenix Hotel

Unemploy¬

State

of

Comparison

bluegrass

Politics

Business and

Uni¬

Press, 2960 Broadway,
27, N. Y. r-

versity

at

on

>

Cata¬

Press

logue, Fall 1958—Columbia

course

race

one

York 20, N. Y.»

r

University

Columbia

ner.

govlunch of

Kentucky ham

on

least

foaled horse having been a

there

-under

American

at

scattered

estate

sets

never

sun

one

without

She chief executives, their wives
,

45£ per year.

a

the

that
least

1958—Catalogue—British
Informatloh Servrces, 45 Rocke¬

July,

feller Plaza, New

tremendous business.
Lexington
boosters
maintain

som

shining

.

first

the

for

learned

have

to

ernors

the warm

r :■

War Admiral,'
Whirlaway, and a dozen others.
Raising horses in the bluegrass,
most of the governors appeared
time, is

Government Publications,

British

War,

'O

Man

as

Twenty, Grand,

posing

accept most of

such

turf

1,

York

New

Avenue,

Y.—50c.

N.

with limestone
the all-time rulers of

have come

the

pas¬

Legislation^ 1957—

Department of Labor, 341

U. S.

Ninth

verdant

these

on

underlain

tures

of

Chandler the Host
To

Here

State and Fed¬

Digest of
Labor

eral

$300,000.

oper¬

in trees

ations has been planted

Annual

The barn
alone, completed in 1951, cost
horses.

fine

There

comparative
industrial¬

the

of

Because
newness

with its

toured the stallion barn
many

•

,

_

g"k-Wg

A f/IX

XTl I llA

CapiUl

Washington, d. c.—Thir¬
teen

\(

J||W

BeWnd-the-Scene Interpretation*
hm the Nation's

•

•

I
^i'hi

1'

■

'Vti'i'

Square, Boston 9, Mass.

Telephone
1

in 1

rttitt nilii.i'uV1

HUbbard 2-1990

""

-

Teletype
BS

69

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