The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
BU«. ABM.
LIBRARY
Volume
170
Number 4848
New
York, N. Y., Thursday, October 20, 1949
All's Well With the Mailtel
:
211949
OCT
ESTABLISHED IS39
Price 30 Cents
a
Copy
The Business Outlook and Our
By JACQUES COE
Philosophy of Government
Senior Partner, Jacques Coe and Co.
Market economist maintains year-end will witness higher security
■
By JOHN M. HANCOCK*
•prices, reaffirming past cycles of business trends and human be¬
haviorism.
States there will be
>
Every
kets
so
when
often there
tremendous
dominate the
scene.
monly known
as a
occasion for caution until
no
comes
public participation
experience what is com¬
we
Within the writer's memory,
|
I
as
1928-1929__._._Unrestrained
1925-1926
u
Active
1949
•
■Jy.
In the past
i
sion"—or
in
As
year
tops
1926,
another
cycle
the
top
spacings,
10
are
also
years
apart, 1919,
1929, 1939 and
1949.
now
•
forecast¬
In
ing this spring
that
should
1949
be
up-year,
an
Jacques
those
who .have
been
reading
.,
1
t
our
should
.cycles
Coe
r
,
previous articles
phenomena
of
various
the
on
.
also
in
be
aware
that
we
up-period for the
shorter spaced 40-to-44-month
cycle.
are
an
Even
though stock market be¬
havior during the first six months
of 1949 seemed to question the
validity of
havior
forecast, the be¬
our
the
of
since
market
then
we
and Power
with
the
of
re¬
future time when
some
the situation has cleared.
gibles
v
Modern Politics at Its Worst
dividuals
tied up
they
are
and what is much worse, we
means
basis for
or
find it difficult to discover
reaching any conclusions in the matter.
few weeks must have caused wide
uneasiness throughout the length and
and
disgust
deep
do
not
But
this, of course, is not the only instance of
"playing politics" with vital public questions, or the only
case
where in the long run the rank and file must
realize
position,
problems—
own
there
of other
millions
might
people in
who
liquidating
40 Wall
also
almost
a
Philadelphia
Providence
(Continued
securities—also
on page
on page
Government
Head Office: 26, Bishopsgate,
Burma, Ceylon,
Zanzibar
Subscribed Capital
Paid-up
Reserve
The Bank
Capital
Fund
£4,000,000
£2,000,000
Canada
Bonds
Monthly Commercial Letter
.
upon request
tiie
Bond Department
CANADIAN BANK
THE NATIONAL CITY BANK
UTILITIES FUND
INCOME (BALANCED) FUND
Prospectus on
FRANKLIN
request
OF NEW YORK
,
Head Office: Toronto
DISTRIBUTORS, Ine.
Bond
Dept. Teletype: NY 1-708
Street, New York 5
99
WALL
New York
Agency: 20 Exchange PI,
NATIONAL BANK
CITY OF NEW YORK
THE
OF
Portland, Ore. San Francisco Loa Angeles
Michigan Gas
CANADIAN
STREET
& Electric Co.
bonds & stocks
NEW YORK 5, N. Y.
Underwriters and
COMMON
•
and
Corporate Securities
SUGAR
/•'
Raw
—
Refined
—
•
Liquid
Exports—Imports—Futures
1899
-
Dominion Securities
Gkporatiom
banking and exchange business
New York
also undertaken
Cincinnati
Chicago
Columbus
Denver
Dallas
Toledo
Buffalo
DIgby 4-2727
•
Members New York Stock
and other
40
CLEVELAND
Trusteeships and Executorships
-
IRA HAUPT & CO.
(Incorporated)
conducts every description of
4
•
■■■■■!■'/■
otis & co.
Established
CHASE
THE
OF COMMERCE
LAMB0RN & CO., Inc.
£2,500,000
Municipal
BOND FUND
Kenya
Colony, Kericho, Kenya, and Aden
and
State and
Distributors of Municipal
London, E. C.
Branches In India.
by Mr. Hancock
Duquesne Club, Pitts¬
burgh, Pa., Oct. 14, 1949.
in
Kenya Colony and Uganda
,
26)
before the
34)
across
inc.
of INDIA. LIMITED
the
on page
by
un-
address
33)
NATIONAL BANK
to
loans
Either the
certainly pay through the nose for this substitu¬
politics for real statesmanship.
A per
Seattle
Bankers
(Continued
*An
550 Branches
64 Wall
Amsterdam
London
business
in
of cheap
tion
have
COMMON STOCK FUND
Street, New York 5
Chicago
contraction
commercial banks.
Franklin Custodian
White,Weld&Co.
Boston
Well, what were the outstanding
signs of industrial decline, in the
past 12 months?
One was a sharp
breadth of the land.
Jl A Mutual Fund
Exchange
any
The events of the past
PREFERRED STOCK FUND
Members New York Stock
our
past,
and later look
The
self-centered—so
so
with their
Funds,
share
per
in
recent
informed about what is
Light
yield 3.90%
eco¬
Yet, strange but true, most in¬
Preferred Stock
to
(of course)
(Continued
Company
Price $51.25
idea
entering at
been
,
Discretion
trends.
price
$2 Cumulative
.
some
^
nomics tan¬
still
see
being the better part of valor, he
decides to "get out" of the market
similar
Connecticut
We Se
It
-•
a
at
thoughtful citizen who makes it a practice to keep at
the
ingoing on in this country of his can tangibles.
and human behaviorism.
scarcely fail to have arrived at the conclusion that we are They may
give us the
at this very moment witnessing "modern
politics" at its basis for
a
Public's Timidity
very worst.
One startling example of it is to be seeft in weather
Reluctance of the public to par-,
the controversies ;Vathin the allegedly "unified" defense forecast
for
ticipate, in fact a strop# tendency
the months
on
the part of the rapk dnd file organization of 'tl^e country.
About ""all' the ordinary Iman
ahead.
It
to sell, rather than to* buy, during
is able to make of .it is the fact that the
organizations to
John M. Hancock
might
be
the first third of a bull market which
defense of this country has been entrusted are now
helpful
to
is an historical fact. World affairs
headed by an individual with rather obvious political am¬ determine how badly our eco¬
and
labor
difficulties
probably
bitions. We do not profess to have the most distant notion nomic craft was pitching and
seem
extremely confusing to the
as
to who among the various professional antagonists in rolling under the glowering skies
average investor at this time—he
of early 1949.
i
just cannot translate them into these controversies is
right—or whether any of them are—
future
be
1,000 Shares
should
let
take
look;.; first
<$>-
'
1936 and 1946.
In
appears.
us
higher
security prices all around, thereby
again reaffirming this unique cycle
of the repetition of business trends
1916,
year or so,
now
^inflation,
suggests that before the end of the
find
we
spending.
:
cycle
one
ernment deficit
;
?
^
intervals.
year
In
>.
it
so
An analysis of the time elements between the
tops of these
various boom periods discloses two distinct cycles with approximate
spacing of 10-
■
America has been weathering the 1 storm of a business "reces¬
In- the past few weeks, before1 the steel strikes, a rift had
appeared in the clouds over the economic horizon. Since I want to look at this problem of
,
Active
Mild
Buoyant
1939
1945-1946.
.
future is threatened by government undertaking too much. Says this hampers free enterprise sys¬
our form of government.
Attacks planned economy as impractical and destruc¬
tive of American way of life. Stresses a free market as key to our
economy and warns of further gov-
tem, which is basis of
these
follows:
1935-1936
.
,
After discussing tangibles of current business situation, prominent investment banker points out longrange
widespread
That is the time
"bull market."
1908-1909—
Mild
1915-1916—w__Active
1918-1919—...BuoyantV
f
J
boom period in our security mar¬
a
of
waves
outstanding phases in various degrees have been
'"f
public
market in big way.
reenters
y
Partner, Lehman Brothers, Members, New York Stock Exchange
Exchange Place, New York 5. N.Y.
111
Broadway, N. Y. 6,
WOrth 4-6000
Teletype NY 1-702-3
WHltehall 4-8161
Exchange
Principal Exchanges
Teletype NY 1-2708
Boston Telephone;
Enterprise 1820
THE
(1546)
2
Welfare-Statism Abroad
The Course of
IN
MARKETS
TRADING
Mr., May reports devaluation crisis has made British manreal not academic, and has accentuated general disillu¬
sionment with "spoils system." Predicts near-term easing of controls. Pictures self-contradictory trends
ruling Continental countries, with conscious efforts toward promulgating free enterprise obstructed by
political advantages of retaining state subsidies and controls. Hence expects secular continuation of
AT NET
first-hand observation abroad,
On basis of
and Electric
in-tbe-street
RIGHTS
COMMON AND
PRICES
Hanseatic
Corporation
New York
New York 5
dictionary definitions are
which it is being used for
give
conference raised a question about statism, saying that
confusing, and indicating there is no such term in the sense in
political purposes. I hope that the results of my talk will be to
least
at
<3>
you some
definition,
Specialists in
welfare
stat¬
abroad,
England as
well as on the
Eft ppNNELL & TO.
Members
York Curb Exchange
120
REctor 2-7815
Tel.
American Air Filter Co.
Common
Black Star Coal Corp.
Common
Kentucky Stone Co.
5%
Preferred
BANKERS BOND
lot Floor,
CO.
Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY
Bell Tele. LS 186
Long Distance 238-9
fiiiiiiiiiiiiiiiiiiimmiiiiiimiimiiiw
by all means let's have
of them." Getting a higher
newly-emerging other side
of the medal, I also must report
my findings in a British "Pub,"
which indicates how the reaction
of the man on the street has re¬
cently
changed—the "Pub," as
you know, being traditionally the
best
Gallup
polling-ground
in
England.
There I most surpris¬
ingly found, one night two weeks
ago, severe griping at the govern¬
ment, and enthusiasm, not at all
uncommon in England today, for
the
on
Trading Markets
American Furniture Co.
Alabama Tenn.
Natural Gas Company
Dan River Mills
Scott, Horner &
Mason, Inc.
a
LD
83
Griping in Britain
33
Typical of this new widespread
were the so-called
dissatisfaction
CREEK, COLORADO
Send tor NEW, Free Booklet
"LOOKING AHEAD AT CRIPPLE CREEK"
&
-
on
-
the
on
technical grounds at
all,
*Transcript of
address
by
Mr.
May before Annual Convention of
Ohio Savings and Loan League,
Columbus,
Oct.
12,
1949—from
material gathered in Europe.
which
Trading Markets
under
those
National
the
BOLIVIA
'surprising Truman victory, a party
or
housing subsidies, and free
education greatly enlarged under
vast
Education, which
nothing — despite all
the Ministry of
.cost them
this, the voter in the'Pub — the
man
in the street—is perversely
concentrating
and
more
shilling
-
on
attention more
little four-
his
his
eleven
-
own
pence
his
defeated.
be
ever
invincibility
opponents can
Santa Claus
contribu¬
the
for se¬
hand attitude is analogous to
earlier yearning
Exchange
Board"
Chicago
.
Trade'"
of
New Orleans Cotton
#
Inc.
exchange,
Exchange
V
And other Exchanges
N.
Y.
Cotton
Exchange Bldg.
YORK 4, N. Y.
NEW
GENEVA, SWITZERLAND
the
to
right
goes
PITTSBURGH
DETROIT
CHICAGO
question of "me, toothe opposition party, as
heart of the
ism"
in
ing,
the negative reaction of the
of
the-man-on-the-street category, is
Britisher and other foreigners,
I
important.
very
very,
am
not
making
I
prediction.
1
any
LAMB0RN & CO., Inc.
99
STREET
WALL
NEW YORK 5, N. Y.
SUGAR
Raw
—
Refined
—
Liquid
Exports—Imports—Futures
:
election
DIgby 4-2727
certainly not
do I feel that the
am
predicting, nor
British Labor government will be
thrown out if there is an election
next month, but
certainly I would
predict that the majority will be
greatly reduced for reasons such
$35
these.
as
In the continental
countries, this
split-personality in the individual
worker
seems
to be duplicated
Perhaps this biting-the-feedingin the
split-personality in gov¬
citizen's
Exchange
Cotton
York
candidate who out-promises or
out-subsidizes
nursing;
home
and
Curb
ogy
costing 259 million
pounds—free hospital treatment,
free doctoring, medicine, optical,
don't
elements—I
know
whether
call them quirks—this resent¬
ment
against the hand that is
feeding him; the same perhaps as
borrowers resenting the lenders—
in
line
with
Shakespear's fa¬
you
mous
caveat.
The
State,
like the individual,
direction
ernment,
policy
and
in practically every
which exists
INVESTED in
a
full year's
subscription to the Monday
of the
and Thursday issues
"Chronicle"
ideas
will
galore and
give
yon
liberal
pay
dividends.
tivism.
As
Ernest Bevin
and frankly
has definitely Commercial & Financial
said on more than one
United States is
only a few jumps, ten years or
so,
behind
the British Labor
Party." Witness the comings and
goings to London of American
labor strategists and leaders, and
the
trans-Atlantic similarity of
the union movements and of the
"The
occasion,
will
pattern
political
not
be
Chronicle
New York 8, N. Y.
25 Park Place
REctor
2-9570
Over-the-Counter
scoffed off.
CORPORATE BONDS
Major
LOCAL STOCKS
of
Quotation Services
Disillusionments
What has been
the major point
for 36 Years
disillusionments
and general
to welfare statism on -a
reactions
Issues
scale than those of our
men-in-the-pub?
far larger
| '
New
study
on
request
a The Robinson-Humphrey Company
ZIPPIN & COMPANY
^—
208 South La Salle St., Chicago 4
Tele.
RAndoiph 6-4696
Tel. CG 451
RHODES-HAVERTY BLDG.
Teletype AT 288
First, the general
1, GEORGIA
Long Distance 421
disillusionment
on
National Quotation Bureau
Incorporated
of
the
(Continued on page 32)
Established
the
entire great middle
class, throughout not only Engpart
ATLANTA
statement can
there has
certainly be made that
been broad
Established 1894
4
must be interesting as bound
up with the question whether, per
our
last election here with "the
Stock
York
Commodity
the entire
psychol¬
Exchange
York
New
,
.
In its relationship to
Members
:•
New
r T;
related them.
Service,
ambulance
'
New
campaign arguments, to whom I
democratic, process, this.
1856
H. Hentz & Co.
.>
Conserva¬
ten
tives, who will be facing re-elec¬
tion -and
worrying - about their
Health
;
COLOMBIA
All
about
to
Established
political democracy
term course of
a
STATE AND MUNICIPAL BONDS
j
gratitude for its
extremely signifi¬
and also for the long-
us
-
the actual event of devaluation
—not
COMPANY
Newport St., Denver 7, Colorado
Firm
cant for
theses"
of
Dealer in Securities
1650
efits
branch offices
.
Interesting, factual, up-to-date
MILLER
against
Santa Claus, is
curity, emotional as well as physi¬ country, including even Switzer¬
cal, of the maternalistic state, and
land and Belgium, forcing them
then, after the incubation period, to
pursue self-contradictory ideo¬
after he gets used to it, looking on
logical directions — that is, go¬
the security-giving state not afing in two directions, right and
fectionally as a mother needed to
present earnings extremely vague.
left, at the same time.
take care of him, but perhaps in¬
Although obviously enjoying the
I
have led off with the dis¬
stead scornfully as a tyrannical
cussion of Britain, because it is
bar, they were remarkably coher¬
and "ornery" governess.
ent
in
castigating their Labor
today the world's laboratory of
There just seems to be with the socialism and, if it exists any¬
government.
/•»; ■ •
U.
passage of time and psychological where
the
backdoor
to collec¬
Their criticisms were first based
America's Richest Gold Camp
W.
vations
of two of my
moment, one a
truck driver, earning seven pounds
a
week, and the other an exconvict with the amount of his
"political
buddies
FRED
Mobile, Ala.
statism, with its strong reser¬
fare
v
NY 1-1557
Birmingham, Ala.
Direct wires to our
tion.
Jlllllllllllimilllllllllllllllllllllllllllk
CRIPPLE
under Anthony Eden.
coalition
Lynchburg, Va.
Tele. LY
Another concrete peg on
Wilfred May
that this split-
me
paternalistic gov¬ practiced by Governor Dewey last
year and
by most other candi¬
ernment is doling out to him or
more
dates, and may go to the question
pay-check than ever beforehand is otherwise collecting for him of
your next year's crucial cam¬
for less work, he has been view¬ from his employers in the way of
paign In Qhio< by Senator Taft,
ing his country's budgetary diffi¬ benefits, suc|i as sickness, unem¬
who presumably is
not a "meculties and such things as balance- ployment benefits, family allow¬
tooer" and who has a chance of
of-payment problems, as academic, ances and national assistance for
being reelected.
theoretical, and assuredly none of the relief of distress, industrial
Certainly in this question of
his concern.
injury compensation, all under the
Santa Clausism and out-promis¬
National Insurance Ministry; or
On the other hand, or rather,
Incorporated
!.
A.
crisis,
a
m
Complaints About Cost
to
goes
to
seems
New York 4, N. Y.
HAnover 2-0700
New Orleans, La. -
personality attitude of the public
toward the spoils system and wel¬
nificant.
some¬
which
the habitues of Pubs ;;hang their
the
heart of
;'
*
the whole
question; that is, to anti-government griping is, be¬
point out to you that the British lieve it or not, the cost to the
workman, who is the key voter benefitee of his social security;that
in the world's welfare state "la- is, my
truck-driver,*friend was
.bor-a-tory," as, it. is pronpunqed complaining of the four-shillingsin England, perusing his news¬ eleven, or about 63 cents in Amer¬
ican
money,
weekly
deduction
paper accounts of his country's
Far 'from
crises while sunning himself - on from his pay-check.
conscious of the critical
the beach at Brighton, has in the being
past—that is, up until recently- barbs against free wigs and spec¬
been
typically reacting with a tacles and other government gen¬
self-assured thought running erosity which are so widely cir¬
something like this:
"If this be culated, or of the long list of ben¬
think
BROADWAY, NEW YORK 5
^
/
crisis.
thing which I
York Stock Exchange
New
Aid
It
25 Broad St.,
not.
across or
come
Exchange
Stock
York
New
Members
generally.
;
[ For example, in England these
wrong and that it is
than just academic reservations expressed by the man
V'
' .• .''-y/'fi on the street were extremely sig¬
more
now
like
to start off by
saying
that
as
finally gone
continent.
I would
you
& Co.
Stei ner, Rouse
way—whether
gets blamed either
they called it, consti¬
tuted
major external — and I
emphasize the word "external"—
evidence that something really has
alms,",
in
Since 1917
a
important was their feeling
devaluation, like "Marshall
of these proc¬
esses
the
complaint
that the pound rate was fixed too
low, that it should have been $3.50
instead of $2.80—but much more
ism, and some
of the angles
Rights & Scrip
up
open
with
conversation
some
-
did
they
although
or
concept, of
statism
and
New
Bought—Sold—Quoted
*
socialization.
President Truman in a press
Teletype NY 1-583
BArclay 7-5660
Louisiana Securities
that his nation's crises are
aware
mixed economies and unwitting
120 Broadway,
Alabama &
MAY*
By A. WILFRED
American Gas
Thursday, October 20, 1949
& FINANCIAL CHRONICLE
COMMERCIAL
46 Front Street
CHICAGO
1
;
1913
New
York4, N.Y.
8 AN
FRANOIBOO
Volume 170
Number 4848
THE
COMMERCIAL
Articles and News
\/-7
Proposed Frear Bill outlined.
page
M.
Hancock-....
—Cover
All's Well With the Market—Jacques Coe
Cover
—
The Course of Welfare-Statism Abroad—A. Wilfred May..
2
The Technique of the Sales Interview—Kelso Sutton.....____
4
Devaluation and U. S. Exports—Alexander N. Gentes__
Devaluation—A
sion of its powers.
__
12
Morgan
13
Foreign Aid and Foreign Trade—Wm. McChesney Martin, Jr._ 14
Government Housing—Threat to Private Mortgage Lending
—F. Raymond Peterson
:
Open Letter to Congress
—Emmett
Corrigan
15
Mutual Funds Advertising
on
,
17
,
For
Coming Rebirth of the Incentive System
—Nathaniel
Stone
Chadwick...
Will Insurance Shares Continue
—Wallace
A Plea for
Falvey
'I-':'. *":v '• ■'
■
'
fc
__i
C.
Davis
••
7 .*
t
•
V.
v'*
j
i
_
'•
V:
a
»».
For
18
__
'
*'•
.
v7
7
The Penchant for Power (Editorial)
3
Chairman Hanrahan Resigns From SEC
5
Hugoton Production Company (Brief History of Company arid
Operations)
5
has
recommended
what is
see
market.
These have been
never
20
Cites Widening Spread Between Yields
Bonds and Stocks-.
on
World Bank's Bonds Going Into Strong IIands__
U.
these
Royal Bank of Scotland
Incorporated by Royal Charter 1727
contemplated.
HEAD
characterized by
our
Gold
SEC
Price
...
21
many
LONDON
country has
3
49
Continues Unlisted Trading
r
V
•
..r
39
; -
.
7'
-
/"
-t V.;!
7 %7.-'V;:- 7/71/'v
''W' 7
' '
Regular Features
As We
Bank
See
and
It
(Editorial)
Insurance
Business Man's Book
Canadian
Cover
...
the SEC and
Stocks
,
1
....
_
Securities
Smilhfield, E. C, 1
;
Charing Cross, S. W. 1
»
64 New Bond
TOTAL
44
vidual
From Washington Ahead of the News—Carlisle
Bargeron
36
Funds
16
:
....
...
News About Banks and Bankers.,
Reporter's
Our Reporter
42
...
Governments..
22
Prospective Security Offerings
...
Public Utility Securities
21
Salesman's Corner
14.
/
Securities Now in Registration..
40
To
The State of Trade and Industry
—
Washington and You
on
Twice
2.
1
Weekly
Drapers'
land,
The
COMMERCIAL
FINANCIAL
and
Gardens,
it
•r
B.
DANA
REctor
HERBERT D.
WILLIAM
WILLIAM
25,
ary
York,
COMPANY,
Publishers
Place, New York 8, N. Y.
2-9570
to
9576
8,
1942,
N, Y.t
<■
Other
Chicago
SEIBERT, Editor & Publisher
D.
SEIBERT,
President
RIGGS, Business Manager
news,
bank
111.
135
S.
Territories
Possessions,
Union.
Canada,
Other
'Telephone:
$25.00
Salle
State
of
Countries,
at New
March
St.,
0613f;
s
and
per
and
powers
been
has
placing
per
$38.00
$42.00 per
year;
per
year.
per
Note—On
rate- of
(Foreign
Earnings
year.
„
made
in
of
the
—
York
Current Price About $1.75
Memorandum
SEC
seems
to
on
on
PETER BARKEN
Inc.
32 Broadway, New York 4
Tel. WHitehall 4-6430 Tele. NY 1-2500
us
the securities industry.
page 39)
>;•
*
offerings of
'
'
•;
—
MAKES CONTACT
with
7
..
your
best prospects
7.7
■
■
■
' '■
■
advertising in The New
tells
financial
your
advertising story to the whole
1
financial
community
The Times
cludes
Spencer Trask & Co.
:
Members
extra.)
in
New
25 Broad
Monthly,
.
request
on
Member Nat'l Ass'n of Securities Dealers,
broad
.
.
.
because
audience
banking officials,
tion executives,
Monthly,
extra.)
fluctuations
funds.
over
7 $3.00 per share.
iu-
corpora¬
professional and
year.
"7
postage
1949
of
exchange, remittances f.or for¬
New
the
in
eign subscriptions atr* arf'^Msements must
be
to
PREFERRED STOCKS
postage
Record
(Foreign
account
—
interested in
are
-
S.
Members
$35.00
Quotation Record
year.
ending July 31,
current
months
9
«
U.
States!
over
for
why the Commission through
High Grade Public Utility and Industrial
Other Publications
Monthly
$25.00
clearings,
the
La
of
•
7:7 7. ;l
United
Dominion
,,
city news, etc.).
Offices:"
Act
;
in
Current assets
York Times
We
7
.
office
post
the
Pan-American
DANA
corporation
3,
the
under
Subscriptions
Bank
and
at
As to
.
CORPORATION
" liabilities
Financial
matter Febru¬
Subscription Rates
Every Thursday (general news and ad¬
vertising issue}*and every Monday (com¬
plete statistical issue ■*— market quotation
state
second-class
1879.
Thursday, October 20, 1949
records,
as
corporation.
C., Eng¬
.
_
Reg. U. S. Patent Office
25 Park
E.
the
GLASS
Smith.
Copyright 1949 by William B. Dana
Company
■
,
CHRONICLE
Reentered
WILLIAM
London,
c/o Edwards &
Bank, Ltd.
In
(Continued
Published
to
increasing instances prices do not reflect the
real values and we attribute much of this to the constantly
enlarged powers of the Commission and the innumerable
34
44
page
additional
ridiculous.
restrictions
;
Deacon's
securities
give
5
—
Tomorrow's Market /Walter Whyte Says)
"See article
41
10
Railroad Securities
Securities
Associated Banks:
penalize such management as to overby forbidding the owner of more
than 10% from treating his holdings in the same way as any
other member of the public may handle his.
The extension
of this penalty from listed to over-the-counter securities is
unwarranted because existing legislation has shown it to be
unsound and undesirable.
Certainly, in a market which
already is exceedingly thin these additional restrictions will
not serve to promote liquidity.
*
Report
on
•••
Williams
applies regardless of the size of their
"777'■''-7 ,7.7
;
•
the-counter
Our
'.
the Frear Bill seeks to
15
Observations—A. Wilfred May.
over
stances it is difficult to realize
8
...—1
—
'
ASSETS
field of business.
6
Indications of Business Activity
'
Glyn, Mills & Co.
Competent management is a truly vital factor in the
Improvement in corporate stature is de¬
pendent thereon. Ownership by management of the equity
securities constitutes a ready incentive to directive
profi¬
ciency. The enhancement of that equity is one of the rewards
resulting from excellent performance. Under such circum¬
22
Notes
turned
holdings.
Einzig—"Britain's Declining Gold Reserve"...
Mutual
than
officers and directors it
8
NSTA
rather
11
Dealer-Broker—Investment Recommendations
Street, W. 1
£155,175,898
.'-.-.7.77'
six months'
a
20
:
Coming Events in Investment Field..
j
OFFICES:
Burlington Gardens, W. 1
>
of
holding period before accruing
profits from securities sales may be retained by the indi¬
18
Shelf
away
The Frear Bill would also make applicable tp the
directors, officers and principal stockholders of the instant
corporations, the provisions of Section 16 of the Securities
Exchange Act of 1934.
This means reports of beneficial
holdings in equity securities exceeding 10% of any class to
Privileges of Absorbed Ex¬
changes in Mergers
prelude to the planned whittling
C
Bishopsgate, E. C. 2
8 If est
intended to
:
throughout Scotland
We do not take a position in favor of
any one market as
against the other. ,,Both have a distinct place in our economy.
22
...
a
OFFICE—-Edinburgh
Branches
this invasion of the over-the-counter
the over-the-counter market.
Rumor of Proposed Rise in
on
only
was
SAVINGS
S.
BONDS
imagine that after this "grab" the SEC would
But no,
content.
field
21
Joseph Stagg Lawrence Warns of Dollar Devaluation.
Rep. John Taber Comments
One would
be
20
YORK
BUY
,
Let's Make It That Way! (Boxed)
A
WALL STREET, NEW
grown and
the auction market* and the over-the-
economy,
jolly
Telephone: WHitehall 4-6551
place in the SEC
any general jurisdiction covering the over-the-counter mar¬
ket.
To gain some control in this
sphere the Commission
fathered the Maloney Act
enabling it in considerable measure
to do through the National Association of Securities Dealers
what it was powerless to do
directly.
19
Business Trend
on
to
ruse
The Securities Acts
11
Boston Merchant Optimistic
Commission
trade customs and usages and under them
flourished and we were served well.
>
,<
U. S. Supreme Court Reinstates Otis & Co.-SEC Case__
99
decades, vis-a-vis, two markets have
our
counter
19
•'
«!«
examine this
us
graced
National Monetary Commission
a
—Chester
Let
Prime Investments?
as
the
years
your
a
7
7
changes under the beguiling nomenclature of "equalization."
17
for
and
—
good price too!
Exchange Act of 1934.
Under this proposed
amendment, this by-product of SEC
propaganda, corporations having $3,000,000 in assets, the
securities of which are held
by 300 persons or more, and
are
traded over-the-counter., will be
compelled to file a
complete registration statement with respect to their securi¬
ties, and supplementary data, including periodic reports,
etc., and the proxy rules applicable to listed securities will
thereafter apply to such corporations.
How Advertising Increases Securities Values
—Stanley Harold
7
obsoletes
Frear Bill to amend the Securities
9
Warning—Francis Adams Truslow
We'd be delighted to buy
Evidencing again this "pull of power" is the pending
8
The Business of Education—Roger W. Babson
YES, M' LORD!
thinking that
constantly strive, regardless of consequences to the
public and to the securities field, for a widening and exten¬
6
...
AND COMPANY
it must
Debt Management and Government Bond Outlook
Craft-
Un¬
axiom in SEC
an
3
llCHTfim
B. S.
propaganda.
juggernaut must be stopped.
4
_________
H.
Product of SEC
We believe there exists
We Must Broaden Investment Base of American Industry
—Robert P. Boylan..
;
—Robert
(1547)
justly penalizes management. Imperifs over-the-counter market.
Impairs market liquidity and is against the public interest. Com¬
mission's opinion in American Power &
Light case as evidence
of its thrusts against the over-the-counter market. Administrative
The Business Outlook and Our Philosophy of Government
—John
FINANCIAL CHRONICLE
The Penchant foi Power
INDEX
77/;.;
&
■7-'^
7
'
v
-
Exchange
Street, New York 4
HAnover 2-4300
77./.
Albany
York Stock
.
.
7
Chicago
-
-
V
>
security buyers, arid
individual investors."
(
York Curb Exchange
Members New
50 Congress Street, Boston 8
7
Hubbard 2-8200
^Teletype—NY
Glens Falls
institutional
1-5
-
*
,
-
Schenectady
-
.7
- y
7
Worcester
'All
the News That's
Fit to Print"-
.
4
SUTTON*
By KELSO
.
We Must Broaden Investment
Sales Inteiview
The Technique of the
Base of American
Consultant in Salesmanship
Industry
By ROBERT P. BOYLAN*
overloading customer in an interview by giving him too much at one
methods of conveying selling points to listener. Advises salesmen give cus¬
tomer opportunity to ask questions and interpose objections.
Stresses importance of personal side of
salesman and favorable material setting in interviews. Discusses problems involved in closing interview
and
against wandering away in conversation from sales talk. Urges salesmen cultivate complacent attitude as psychic factor and also to analyze mental attitudes of their customers.
cau'joning against
Mr. Sutton, in
Thursday, October 20, 1949
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(1548)
Chairman, Board of Governors, New York Stock Exchange
time, describes various
Asserting unless investor base of American industry is broadened,
end of capitalistic system, Mr. Boylan
American busi¬
ness.
Says we must find additional sources of equity capital with¬
out government funds, and reveals work of New York Stock Ex¬
change in encouraging shareholding plans for employees and other
activities for expanding corporate ownership.
we
We
are
of the interview. When we left off last time we were
discussing the analysis
talking about certain features of the approach, when ycu first walk through the door and
come in contact with your buyer.
You remember we discussed preparing yourself for a
good
Qh
inter-
view
before
the
were
you
talk¬
is
concerned.
that
We said that
:
in¬
he
Kelso
to
One way
to.
being
to
the point where you are going
to try to get an order, is not to
try to overload your listener by
giving him too much at one time.
If
you
overload
his mental
from
k you
liable to con¬
are
him and he will
back away
discussion of the
subject. When you are selling you
from any further
advance certain
tain selling
reasons
and cer¬
points why the buyer
buy what you have to
and you have 4to time the
should
sell,
if
so
a
what
of
ance
you
just rush
you
securities
that
you
are
offering him.
You will do well
,
to pay
tion to the timing of
ment
of
After
atten¬
the advance¬
these
various
reasons.
put forth one selling
point, don't go to the next one
until you are pretty sure that he
has digested the first one. You
have got to get acceptance and
agreement on every selling point
that you present.
Do
not
acceptance from one point to the
the
just
This is
for
a
good time to consider
moment
a
the
of
role
your
prospect. A salesman should real¬
ize that as a salesman he has a
role
certain
sale
play
to
but
solicitation,
during
that he
a
is
only one of the parties involved,
that there is a buyer there, too,
and that the buyer also has a role
play, or a certain action that
to
talk
your
selling
at a
very
cuss,
briefly,
role is,
prospect's
certain
things
is
buyer
tation.
doing
what
what
that
are
during
your
these
your
solici¬
a
.
The first
is that
he listens to
proposition.
That
seems
very simple, and you all know it.
But is he really listening? There
your
is
difference between
a
and
absorbing what
you
are say¬
ing. and just sitting there and
waiting for the moment to turn
you
''
down.
on
every
You must make sure that he is
you
build
really listening to what you are
saying, that he is accepting the
toward an order. That is the way
acceptance of your¬
self.
Vl-V..''
Remember that
with
said
we
in
the
that
points
you
discussing
are
him.
tention
By arousing
and stirring up
his
his
at¬
in¬
beginning that
selling is putting
terest, make sure that he listens
forth
of
to
an
to
because he hasn't
evaluate
things,
have gone too rapidly.
There again, we go back to that
principle that this is an old story
stitutional in¬
to
vestors.
idea
our
own
that
to
but it may be brand new
your customer, that you think
terms of finance and
you
too low
in
him
of
your
him
allow
will
along. I'
thing that the pros¬
what you say, as you go
The third
P.
Robert
Boylan
buy
yields
much
as
he
you.
usually goes one way or the
other.
;
appreciate that all
the time this solicitation is going
You
gov¬
bond
a
trial community can be served by
maintaining the importance of the
individual stockholder and by af¬
fording him a market where he
may beneficially invest on both a
long-term and a short-term basis.
more.
or
„
the
part of the buyer.
One way to
get it is by having him ask ques¬
tions. He asks questions, for vari¬
ous
reasons, one being when he
fails to understand
Let
us
that
say
on
be had by investing in
income-producing shares of
American
industry.
It has not
been
customers
go
you
in and
talk to Mr. Jones, and you are go¬
regular con¬
and
you
are
discussing some points about se¬
curities,
or
mutual
funds,
or
something like that. If you don't
ing
along
at
versational
your
pace,
give him time to ask you a ques¬
tion about a point, he may not get
it, and that point is lost, as far as
your buyer is concerned.
So pace your
that if
in and
ask you a question. Also, set this
social atmosphere of your inter¬
delivery
just to/prpvide
our* member
undertaken
new '
firms.
That is
for
influenced largely by the
for stocks already out¬
standing. A good market for is¬
stocks
sued
essential
is
to
the
a
good reason, but
so
he gets stuck he can come
in
fore
the
the
select
to
financial
ever
be¬
community
investments
which
meet the needs of the new inves¬
and
tors
attention will be
the part of industry
ownership both attrac¬
great
important consideration
of inves¬
tors is broadened we are likely in
time to see the end of the capita¬
required
listic system.
that the Association of Stock Ex¬
Administration and
preceding one in Washington
have convinced great numbers of
American people that a
"more
abundant life" is possible for all;
that an annual national income
change Firms can serve an im¬
portant function.
For example:
realizing the need of the investor
the
more
that unless this base
The present
the
$300,000,000,000 is within easy
reach; that we can expand the
American
economy
until,
by
of
point.
a
is
ing
market
skill will be needed than
thing that a buyer
does is to ask questions.
A one¬
sided solicitation is no good.
You
participation
The market for new stock financ¬
the
Buyer Asks Questions
have
The best interests of the finan¬
tions to
is
must
holders.
obtaining of an adequate supply
of new equity capital.
Greater
that you are being judged fpr
yourself a^nd for you, as repre¬
senting the investment house for
which you work.
next
companies
expanding their lists of stock¬
are
funds in the benefits and satisfac¬
on
The
stock
company
ways
cial community and of the indus¬
All of which leads me to a brief
must
The
giving
by
bonus; in other
as
can
comment on the reasons why the
New
York
Stock
Exchange
is
organization. We have been talk¬
ing about that.
We have been placing so much emphasis at this
time upon its campaign to broad¬
talking of the value of your ap¬
en the investors base of American
proach in his eyes, that he is
This campaign to in¬
either going to like you or else industry.
terest more people having surplus
not want to do business with you.
It
others
corpo¬
ernment
which
by
bonds
when
evaluate
to
to
rate
field, and when
discuss your subject with him
must
take it
at
a
pace
that
the
inves¬
small
tor
are
to at-
tract
eight hours a day but he may
just think for half an hour a week
about them.
You are way ahead
of them are encouraging it
adding company funds to the
funds
invested
by
employees;
some
Mon¬
rates
ey
securities
for
listening
time, and convince him
point. Thaht is the way
up
time
are saying
along. If you rush him
gets behind you and
able
been
During the first half of the present century, we have seen the
credit and banking shift from New York to Wash¬
ington and Federal taxes become a predominant influence on invest¬
ment habits. We have seen a corporate bond market, once participated
in by millions®——
—
of
individual dition to its advertising program
investors, be¬ with which you are all familiar,
come
one
in the Exchange seeks to encourage
which
the corporations
to
develop share¬
principal in¬ holding - plans
for
employees.
terest
is
on
Many companies are heartily in
the part of in¬ favor
of / employee 1 ownership;
pect does, he judges you and your
chase.
one
build
that
way
you
pur¬
points. Put them forth,
to
a
see
control of money,
of
what you
lose him,
you
you
other which builds up to
you
.
end
to have the
able
you go
money.
your
too much he
on and give
don't get that
pyramiding of those points,
,^' 3
You must; remember that sell-* hejias to fake. *4'
From the point of view, as the
ing is not simply reciting, that it
is putting over certain particular seller, you must appreciate what
his role is and give him the opreasons why it would be a good
idea for that customer to invest | portunity to play it.
Let us dis¬
some
be
as
you
r
in
will
evaluate
sell,
to
have
you
fast canvass
the accept¬
to
added
has
which
point
that
is
It
point?
selling
V
interview
an
capacity,
what is it that is called a
Just
Sutton
-
stopped before you have come
fuse
really a
can
stop it at any
time he wishes
keep
that that particular
What Constitutes a Selling Point?
terview, be¬
cause
a
run
in
is
is the one who
an
convincing
point
selling point.
such
in
to
he discussion in such
le
should be
put forward
you
manner
the buyer
rules
you go
handled
in the long
run
as
spend
to
wants
have
You
,
along in any one
sales solicitation,
you put forth
various ideas to build up to the
final one of the purchase. Every
immediate
idea
and suggestion
But
factors, as far
as
the sales
he
way
to
you.
human
interview
agrees
the basic idea being, of
course, that it would be well for
him to buy his securities through
ing about cer¬
tain
and
accepts
buyer
upon,
get into
office, and
we
the
likely in time to
are
points to need of $8 billion annually for expanding
warns
will be serving a
1960, business
domestic
market
which
in
con¬
will spend at least $160,-
sumers
000,000,000. or 75% more than
they spent in the big boom year
1929.
of
is
This
fine, and I hope
it all
true; but here is the rub;
and it is. a. big. one. In order to
serve
such
a
market, business
would have to expand at the rate
come
on
make
to
tive and
sound.
is in situations such
It
facts
sufficient
for
with
values
as
these
to
appraise
reasonable
accuracy,
firms have enlarged and
strengthened their research de¬
many
partments and brought these fa¬
cilities to the attention of
There
that
a
lareer
general public.
is much in their experience
portion
of
can
be
the
drawn
for the
upon
member firms that
benefit of all
business with the public.
do
The
knowledge, skills and techniques
thus acquired might be utilized to
solve
firms
.
house
problems of many member
through a sort of clearing
of information provided by
the Association.
*
It is the nature of the invest¬
$8,000,000,000 a year
for the next ten years; and if it ment business that when one firm
''Stenographic report of lecture does is to -evaluate your propo¬
cannot get money from the pri¬ increases its volume of transac¬
He is doing that all the view so that he will feel free to
given by Mr. Sutton, fifth in a sition.
vate investor it will have to get tions, it contributes to the volume
series on Investment Salesman¬ time that you are talking to him. come in and take part in the con¬
3
it from the government, which, of of other firms.
ship sponsored by the Investment He is relating your proposals to versation and free to stop you and
course, would mean that eventu¬
I believe the New York Stock
Association of New York, New many, many other things that in¬ ask you questions.
ally- private / capital
would be Exchange is fulfilling competently
terest him in his life, and in the
York City, Oct. 13, 1949.
He will ask questions for fur¬ eliminated from our enterprises. its
primary function of providing
The next thing that your
buyer
of
at
least
.
information.
ther
some
are
FOR BROKER-DEALERS
ticularly
ONLY
,
Maybe
there
points that he is par¬
interested in jhat you
have not covered. You don't know
that.
GENERAL CRUDE OIL COMPANY
you've, got to give him a chance
ttoask1 for that kind of informa¬
tion.
(solely producers of crude oil and gas)
possible future INFLATION
•
on
is
reason
going
over,
do.
So
/. W. Gould &> Co.
we
can
you
tain
things
:them
that
difficult
expan-
government assistance unless we
find additional millions of--sources
of
equity capital.
pression
political and eco¬
successfully
and
nomic change and.has
and
strains of
great proportions/; By . constantly
improving its facilities and by
public responsibili¬
ties, the nation's market place has
Stock
done
much
to
merit
the
respect
Stock Exchange,
the second half of the century in
consequently, reached the conclu¬
sion some time ago that, to assure
a
continuance of the American
good health, prepared to serve a
The New York
: He doesn't
thinking it
questions which
system, the
have
to
of
profits from it would
through stock
with a much larger
ownershio
population. In ad-
talking to has cer¬
if he does
will be good for the
to do and
23)
■
*
:;:Remarks
by
Mr.
Boylan
at
given by the Association
of Stock Exchange Firms. Atlan¬
dinner
tic City,
N. J.,* Oct. 12,
1949.
the
country
and
nation of investors.
it will enter
-
-
With E. F. Hutton & Co.
be shared
portion of our
are
on page
buyers
The Ex¬
change has calmly met war, de¬
Accepting .its
'
*
Work of New York
the
for
withstood stresses
aporeciate that the
(Continued
place
ques¬
him to decide.
man
I
some
going to be increasingly
to finance the necessary
meeting
a
and sellers of securities.
Exchange
himself, he wants to be able
will help
to
want to decide just by
Request
Broadway, New York 5
asks
he
stocks and
from
help him decide what
to
to ask you
120
solicitation
on.
Another
tions is
"
Up-to-date Reports available
your
that point
he
BOUGHT—SOLD—QUOTED
it tells you which way
direct
to
companies' substantial crude oil reserves
be considered suitable—as a hedge—against
any
When you let him do ; that,
oftentimes
The above
may
what his
specific personal interests are. j In
order to find out. what they are,
ARGO OIL CORPORATION
...
don't know
You
Even with bouyant markets for
a high level of confi¬
dence as to future profits, it is
;•
'
(Special
LOS
to The
Financial Chronicle)
ANGELES,
CALIF.*
—
Vernon C. Badham has joined the
staff of E. F. Hutton & Company,
623
South Spring
Street. He
was
previously with Dempsey-Tegeler
& Co.
Volume
170
Number 4848
*>v'-'i
THE COMMERCIAL &
FINANCIAL
CHRONICLE
Chairman Hanrahan
:
Resigns From SEC
Carloadings
Retail Trade
State of Trade
Edward T. McCormick selected
I
till
Commodity fVice Index
Food Price Index
and
Auto Production1
Industry
'
Despite the fact that industry has been confronted for the past
]
four weeks with
strike
called
near
ago.
The main reason to date for the
ability of industry to continue
production without undue interruption was the fact that no serious
material shortages were in evidence in those industries
dependent
-
on
steel, although
some
The situation at
slight production cutbacks
present, however, has taken
with a spokesman for the automobile
industry giving a warning thai
if steel shipments are not resumed
by next Monday, several hundred
thousand auto workers will be idle.
.Many
supplies
or
and truck manufacturers because of dwindling steel
faced with possible early shutdowns of three weeks
l,vV;•.
^
'
car
are
more.
r
/« On Monday of this week the national strike picture
further
was
confused by the walkout of CIO steel workers from the Aluminum
Co, of America plants. The deadline was set at
midnight on Sunday,
Oct. 18, and the company
failing to reach an accord with the union
over
company-paid welfare benefits totaling 10 cents per hour, 20,000
employees at nine of the company's plants failed to report for work.
Present benefits enjoyed by Alcoa's employees consist of
employerfinanced
mately
social
The
/
insurance
cents
seven
harmful
and
hour.
an
effects
pension
costing
programs
approxi¬
J
of
1
these
strikes
are
-y'
:
fast
becoming more
obvious each day the strike continues and
Secretary of Commerce,
Charles Sawyer, at the close of last
week, found it necessary to
labor
warn
that
the
summer's
"definite
upward
trend"
in
business
and
employment has been halted by "strikes and threats of strikes."
Calling attention to the losses to all stemming from the present
steel strike, Mr. Sawyer stated that should the
walkout continue
/
until Dec.
man
and member of the Securities
Exchange Commission
as
and
expected
1, unemployment will result for about five million per¬
Approximately one million workers already are without work
because of the steel and ooal strikes, with
production in the former
industry reduced to less than 10% of capacity.
V
beginning of the strike
Oct. 1,
on
inventories in the hands of steel consuming industries
average
estimated
to
be
sufficient to
until
last
Nov.
15.
If
were
the strike con¬
tinues until that time, he
asserted, shortly after that date, about 80%
of the production of the
steel-consuming industries will be lost,
"with serious damage to the nation's
economy."
As to small
-
business, Mr. Sawyer had this to
"Current
small
many
"
reports
firms
coming
will
be
to
forced
the
to
-
say:
their
.-
•
'
„
suggest
plants
if
that
ap¬
far
too
reopen."
of
many
these
steel
elected its
t
or
firms
will
not
have
the
capital
to
He also nominated Donald C. Cook
,4 '
On
'.
Tuesday of this week the Federal Mediation Service inti¬
mated
that
strikes
are
President
Truman
will
intervene
if
the
coal
and
steel
not settled this week.
former SEC
a
respect to the 39-day Missouri Pacific Railroad
strike,
negotiators working towards a settlement announced on
Monday last,
that trains should be in
operation over the railroad's 11-state system
next
Saturday.
*
PRODUCTION
*
CURRENT WEEK, SCHEDULED AT
9.3% OF CAPACITY, UNCHANGED FROM WEEK AGO
V
Both
naugheyl
not
Mr.
almost
certainly
hit
to
purchasing
five months.
power
so
A
badly
longer
that a
sharp business setback will result, states "The Iron
Age," national
metalworking weekly, in its current review of the steel trade.
Not counting losses to coal miners and
employees of fabricating
companies, lost wages at the end of this, the third week of the steel
strike, will add up to about $100,000,000 in basic steel
alone, the
magazine adds. ",;:
v
:'•: Lypini-j,[
■
The
zero
hour is
at hand for many steel users. Some have
already shut down. Others will be idled this week. Fabricators who
turned to aluminum when steel was struck
need not now be too
concerned over supplies because of the
strike called this week at
some Aluminum Co. of America
plants. Alcoa's
now
ingot capacity has
""
-
'
(Continued
•
on
page 31)
Hemphill, Noyes, Graham, Par¬
sons & Co., 15 Broad
Street, New
York City, members of the New
that
Stock
Tristam
associated
son,
Exchange,
B.
with
is
Mr.
Bought
Trenton
now
offices,
of
assure
you,
that this step is
great reluctance and
with
only because I
justice to
can no longer, with
family and myself,
my
devote my
time to public service.
Substantial
progress^. Has
been
made during your Administration
toward
attaining the objectives for
the
In
Commission
The
successful
confidence
of
In
a
.
construction
fulfill its contract with
order to
was
function¬
in
which
I
'
the
Kansas Power & Light Co.,
wells in 1950 and approximately 23
that
Hanrahan
the
with
he
told
Mr.
"familiar
was
considerations
which
desire to return to
private business. In justice to you,
prompt
your
therefore, I feel that I have no re¬
but to accept." In addition,
Mr. Truman expressed his "grati¬
tude and appreciation for faithful
■ service."
The Hanrahan
resignation 'becomes effective on
public
tinuously
McCormick,
with
1934 and
drafting
signed
who
present capitalization consists of 810,000 shares ($1
stock and $2,500,000 2%% promissory notes. The notes
incurred on Sept. 7, 1949, under a bank credit agreement per¬
common
were
mitting total borrowings of $4,000,000 until Sept. 1, 1950. These notes
are due at the rate of $500,000 on Sept. 1,
1951, and $250,000 on each
March 1 and Sept. 1 thereafter to Sept. 1, 1955.
Hugoton's gas acreage
ter's
cost
only
a
the
The
yet
■»
v
the
to
took
Securities
In a report issued last year
Panhandle stated its belief that gas reserves in the large southwestern
fields were worth about 2^c per Mcf. and the reserves which were
transferred
at
to Hugoton have been estimated by the latter company
approximately 750,000,000 Mcf. On this basis the Hugoton proper¬
ties have
$23
value of around $18,750,000 which is equivalent to about
a
on 810,000 shares of Hugoton common stock.
These
figures do not take into account any additional reserves which may
per
share
on
the Hugoton leases.
^
4
,
Hugoton has not published any estimates of earnings but it is
expected that its revenues from the sale of gas under the Kansas
Power & Light contract will aggregate about $2,000,000 in 1950, and
increasing amounts during succeeding years and that further revenbefc
will be obtained from the sale of additional gas and other products.
The credit agreement
covering the company's 2%% promissory
requires the first $500,000 of net income to be retained in sur¬
plus and then'permits 50% of net income to be paid in dividends until
surplus equals 50% of the notes, after which 100% of net income can
be disbursed.
Inasmuch as Hugoton was formed to facilitate the
prompt development of its properties, it is the stated opinion of wellnotes
legalize
to
effective
be
a
liberal
consideration has been given
restriction, the company's dividend policy will probably
:
one.
members
own
of
of
$
Hugoton
registra¬
of the
SEC
Production
elect
chairman, and have not
the successor to Mr.
i
'
;
'
'
chosen
Hanrahan.
■■'\v
de¬
solicitation
date
to the above
amend¬
Act
Bought —i Sold
—
Quoted
w:ri w
With Hess & McFaul
PORTLAND, ORE.—George A.
Bruce is now with Hess & McFaul,
American Bank Building.
Bankers
—
Sold
—
Troster, Currie & Summers
Members
York
New
Security
Dealers
Association
Teletype Numbers NY 1-376, 377, 378
Trading Markets in
Hugoton Production Co.
Quoted
Common Stock
Laird, Bissell & Meeds
Members
Telephone:
"Trust
•
Company.
New
York
Stock
G. A. Saxton & Co., Inc.
Exchange
120 BROADWAY, NEW YORK 5, N, Y.
BArclay 7-3500
♦
Bell
Teletype
..T'iO (A. Gibbs, Manager Trading Dept.),
NY
(
,
Teletype NY 1-.C09
1,1248-49
V
approximately $J135,000, but.this apparently represents
of
major role
a
the proposed
-
acquired from Panhandle at. the lat-
small fraction of its present value.
tion statements.
their
was
Commission
the
securities transactions in advance
of
Hugoton's
par)
informed circles that after the necessary
T.
hails from Arizona, has been con¬
in
during the period 1951 to 1958. Hugoton also expects
produce and sell gas in excess of the quantities required under the
Kansas Power & Light contract and it may also engage in other
phases of the oil and gas business.
be discovered
President
more
additional wells
replying to his letter of resig¬
nation,
was
formerly with the municipal bond
department-
engaged
John¬
who will specialize in munici¬
and
"I
Hugoton Production Co.
pal bonds through the firm's New
York
now
announce
Johnson
them.
in
program which for
$3,200,000 and which includes the drilling of
wells, the laying of 80 miles of gathering lines and the building of
a dehydration plant.
Deliveries of gas to Kansas Power & Light Co.,
are expected to begin about Nov. 1, 1949.
I
resignation, Mr.
stated:
Trading Markets in
Hemphill, Noyes Firm
York
are
President,
taken
ments
shortage of steel for from four
All of.such gas will be produced and
1949 is estimated to cost
expire until 1954.
since
will
McCon-
nominees
In his letter of
Hanrahan
a
tieup
C.
Mr. Cook's term will
Democrats.
By the end of this week the steel strike will have cost the nation
4,300,000 tons of steel. If the strike should last a month it will mean
severe
heating
the
cubic foot.
to
Robert
Nov. 3.
«
FOR
that
per
1950
Commissioner
Edward
STEEL
provided
956 Btu.
50
mem¬
course
With
Hugoton could then .obtain from
hydro-carbons
Hugoton. plans to drill 10
'
,
extract
ber, to fill the vacancy created by
the resignation - last summer
of
have worked."
The Secretary further stated: "I
am;particularly concerned for
the more than 200,000 small manufacturers
and the additional thou¬
sands of service establishments which
depend upon frequent steel
inventory replacement for their existence."
*'l*V
'V"4'
to
Hugoton is
of
Michigan,
as
sold by Hugoton within the State of Kansas.
E. M. Hanrahan
the SEC's Division of Corporation
Finance, to'-fill the term of Mr.
Hanrahan, which expires in 1952.
of
right
approximates 300,000,000 Mcf.
Assistant
e c
1949.
permitting the
The
to be delivered under this contract starts at 15,000,000
and increases to 24,000,000 Mcf. in each of the last two
and the total quantity to be delivered over the 15-year period
years
T.
Cormick,
D i r
June 27,
ll"
Mcf. in
ately nominat¬
the
on
contract
amount of gas
immedi¬
Edward
price
value of the gas is not reduced below
PresidentTru-
c
a
its natural gas production to outside i interests until
1, 1965, after which Panhandle has the right to purchase Hugo-
ing the
Chairman.
ed
distribu¬
Hugoton subsequently contracted with Kansas Power & Light Co.
for the sale of gas from Nov. 1, 1949, to Nov. 1, 1964, Hugoton reserv¬
spring of 1948
M
This
sell
to
Others.
June,
in
and
declared
was
stock at rate of one
of Panhandle.
Hugoton entered into
SEC
phere
•'/
and
ton's entire output at such
man
common
stock
originally scheduled for Nov. 17, 1948, but was postponed
a temporary restraining order obtained
by the Federal
Power Commission. The litigation was finally decided by the U. S.
Supreme Court in favor of Panhandle and the distribution of Hugo-
Jan.
was
common
was
Panhandle
ing of this Commission has been
due in no small part to the atmos¬
inventory replacements do not become available before Nov. 15,
and
,
pointed to the
in
Panhandle
,
1948, all of Hugoton's
ton stock was made to Panhandle stockholders
in
which
"
f
I
\
October,
latter
1946,
by
and oil leases covering approximately 97,000
of Hugoton for each two shares
City. Mr.hanwas
1948,
the result of
York
created.
department
close
^
.
is
law
practice
New
and
lo
resume
September,
dividend to holders of Panhandle
a
share
sons.
Mr. Sawyer added that at the
as
tion
iahan
reported.
were
turn for the worse
a
In
on
on
gas
part of the state.
'
-
•
in
in Grant and Stevens Counties, Kansas. This acreage is located
the center of the Hugoton natural gas field in the southwestern
acres
Edmond M. Hanrahan announced
Oct. 12 his resignation as Chair¬
bituminous coal
a
strike, as well as a nation-wide
Sept. 30, last, over pensions and other social
security benefits, total industrial production the past week managed
to remain steady and at a level
only moderately under that of a year
steel
summer.
*
of Company and Operations
formed
was
$675,000 cash and
Connaughey, who resigned last
-x
company
Eastern Pipe Line Co. Shortly after formation Hugoton issued 810,000 shares
($1 par) common stock to Panhandle in exchange for
and Donald C. Cook,
vacancy
! nated to succeed Robert C.
"
I
The
to
former SEC member, renomiMc-
la
Business Failures
..
Brief History
!
5
Hugoton Production: Company
Steel Production
Electric Output
(1549)
70 PINE ST., N. Y. 5
.
•*'
WHitchall 4-4970
C
Government Bond Outlook
Debt Management and
1
Thursday, October 20,
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(1550)
From
Washington
By ROBERT II. CRAFT*
New York
Vice-President and Treasurer, Guaranty Trust Company,
Ahead
fix interest rates and have complete
control of government bond price level, predicts interest rates will be kept low because of current need
for deficit financing and large amount of short-term government obligations. Reviews present govern¬
ment
debt-management policy and denounces it as following the ''compensatory economy theory,"
through excessive government spending. Sees threat of further inflation and urges support of the
economy bloc at Washington by arousraj public opinion to inflationary dangers.
Mr.
Craft, asserting monetary authorities now ha
power to
e
people to come into
tion of the member banks which
an
understanding
Central
and
these
of
Reserve
Cities
the various
and
factors and
of
so
called
-
For
agement deci¬
by
set
case
to
come
conclu¬
sions
about
the
for
bond
V
market.
Beyond
fact that
such
of your total
to
assets is committed
bonds—the
figures I have indicate that
latest
government
thing
50% of
over
invested
so
some¬
assets are
your
debt
—
Federal
and
the
large percentage
a
of
the radio and from many public
of discriminat¬
ing against Catholics and Jews. Mr. Truman has
frequently made this accusation and I have yet
to see a single
editorial favoring the measure
that
did
not
say
the
opponents were
anti-
forums.
nec¬
the
that
statement
my
the
about
doubt
1
ability
monetary authorities to
effectively the price level
the
If
government bonds.
we can
City Banks and from 14%
for Country Banks against what level of interest rates the
demand deposits and from 6% to monetary managers deem to be in
3% for all member banks against the best interests of the economy
v.{
savings deposits.
At present, re¬ at any given time.
quirements against demand de¬
Why Interest Rate Was /
posits are 22% for Central Reserve
Kept Low
'
»
City Banks, 18% for Reserve City
The present historically low in¬
Banks, 12% for Country Banks
and 5% for all banks against sav¬ terest rate level of government
bonds obviously stems from, the
ings deposits.
to
7%
,
Expanding Bank
for
Medium
policies
Credit
at
undertaken
'
In the
cost
a
a
as
mini¬
effect
inflationary
of
mum
low
as
consistent with
possible
-on
At the present time, overall
Various temporary ex¬
requirements for all member prices.
tioned, with their almost complete banks against all their demand pedients were adopted to facilitate
influence on the level of govern¬
the borrowing of war expendi¬
deposit liabilities are estimated to
ment bond prices, they in turn
tures such as a low rediscount
average about 17% and if these
are .the
controlling factors, over requirements were reduced to the rate, establishment of a low pref¬
the rates at which you employ the minimum
erential
borrowing rate to the
permitted by law, the
other funds at your disposal.; Of
system against shortrequirement would' be about 10%. banking
more importance
term governments and later on, a
to you as sav¬ This system provides for a great
ings bankers is the profound ef¬ multiplication of reserves through put and take privilege on Treas¬
fect that debt management exer¬
the medium of expansion of re¬ ury bills at a guaranteed % of 1%
cises on the economy overall and serve and member bank credit. rate.
But, as was mentioned pre¬
more specifically, on the purchas¬
Without
going further into the viously, the most important factor
ing power of those dollars that mechanics of the manner in which was the heavy purchases of gov¬
yo.ur depositors have entrusted to
it operates, it probably will be ernment securities by the Federal
your
care,
: Thus,
today, I am sufficient to say that based on the Reserve Bank for System account.
first place, as I have already men¬
dividing
subject into two gen¬
present deposit liability and note
The
the influence of
debt management and particularly
circulation of the Federal Reserve
$50
Banks and the present reserve re¬
quirements of the member banks,
deposits in the member banking
peak
eral
my
parts;
one,
Federal Reserve policies on inter¬
est rates in
with
you
gauging
effort
to
provide
general guides for
an
some
the economy
on
Monetary
-
Authorities
Interest
overall.
Control
other
this
approximately
Rates
place
In
pursuing
the
like to
first
state
at
point
the
I
outset
member bank
that the powers now vested in the
ments
hands of the debt managers, in my
minimum
opinion, leave
would
no
doubt about the
ability of the monetary authorities
to control effectively within
rather narrow limits the prices of
.government bonds at
level
that
almost
any
fit.
It might
be well to review briefly the me¬
chanics of the handling of the debt
and to explain the reason for my
statement
they
see
confidence
of
in
the
ability of the monetary authorities
control the level of bond prices
under
our
rather complex mone¬
tary system.
|As
you
know, the Federal Re¬
to maintain
readily
than sufficient to ab¬
sorb all of the
As
method
scale
finance
to
Reserve
Federal
by law
are
required
enabled
in
a
circulation,
that
is,
currency
outstanding, and 25% in gold
cer¬
tificates against deposit liabilities
of
the
Federal
Reserve
Banks,
which
Member
banks in turn by law are required
to maintain at the Federal Re¬
Bank
The
varies
a
certain
percentage
liabilities as a
these
deposits.
percentage
amount
deposit
against
latter
a
com¬
were
period
same
net amount of
to
nearly $76
billion of government bonds with¬
out any general rise in rates.
Of
represent member course, depletion of our gold stock,
accounts.
reserve
absorb
the
depending
upon
the loca-
large increase in currency out¬
standing, a substantial increase in
a
the
the
extension
of
other
pansion
would
this
figure,
like
expansion
to
potential
but
stress
the
-is
possibilities
impairment
that
great
total
.*An, address by Mr, Craft before
the
Connecticut
Savings
Banks
probability and I have
Association,
insufficient,
Whitefield,
Oct. 17, 1949.
N.
H.,
credit
that
if
would
the
be
ex¬
point
I
that
the
are
so
is
not
no
doubt
a
present powers were
additional measures
adopted to provide the
enabled
the
Immediately following the war,
was no relaxation of con¬
as the economy con¬
ignore the predictions
and
forebodings of government
economists and continued upward,
trols,
but
tinued
to
measures were
adopted
looking toward curtailing exten¬
sion
as
OPA
of
the
With
following
prices
in
rise
the
credit.
bank
of
sharp
and
controls
great pent-up demand for
goods continued to manifest itself,
restrictive
the
credit
measures
first took the form of the elimina¬
of
The
ting short-term rates to rise.
more
drastic
action
of
reducing
support level for government
bonds, as we all remember, came
the
as
a
proportions.
As these
measures
had
no
curtailing the spiralling
effect
econ¬
they were followed in 1948
by increases in the rediscount rate
in
January and in reserve re¬
quirements in August.
With a
omy,
continued rise in business and as
bank
Now, throughout this intense agitation
ahd abuse of those who were opposed to
;
in its behalf.
agitating for it and smear¬
ing its opponents, that only a small percentage of Jews would be
affected.
Yet the whole campaign for the bill revolved around the
charge that the present act is discriminatory to those of that and
the Catholic faith.
. ;
r
What concerns me is that those Senators who have considered
the proposed liberalization not in the best interests of the country
have had to suffer the abuse and smear in silence or without defense.
As a whole they constitute by far a better element of citizens and
public servants than those Senators and other interests who have
been vociferously for the bill.
v
That they are a higher type is shewn by the fact that they didn't
fight back in the same manner as did the proponents, that is, by
an appeal to religious and racial emotions.
This is what those behind
the bill did.
In a knock down and drag out fight on religious and
racial grounds there are more votes on the other side.
;V '
%1'This so-called Displaced Persons bill was an issue in several
States in the last Presidential campaign.
It figured largely in the
West Virginia campaign in which Senator Revercombe was defeated
for reelection. Revercombe was at that time chairman of the Senate
Judiciary Committee and he was accused of bottling up the bill in
repeatedly read, from editors
I have
.
committee.
loans
continued
to
expand,
the rediscount rate was again
creased
to
the
(Continued
in¬
present level and
on page
28)
f
•
State and to a
lesser extent in other States on religious and racial grounds, pointedly
snubbed the Senator by way of showing his displeasure of the Sen¬
ator's treatment of this bill, particularly after the Governor had
appealed to him. Revercombe went through his campaign without
referring to Dewey's action and without seeking to capitalize upon
his opposition to the bill. With West Virginia's population he could
very easily have exploited his opposition in the same way Dewey
was seeking to
cash in on his attitude. Revercombe was too much
Governor
of
seeking votes in New York
Dewey,
gentleman to do this.
a
Far
more
emotions
have ont sought to do
who
are
days.
-
be
aroused against the bill thanV Can
tribute to the opponents that they
It is a
this. But the question seriously arises
behalf.
be aroused in its
agitation
•
can
'
•
.•
_
•
the bonds will yield 2.60%
Kuhn, Loeb and
turity.
the
group
Associates Offer
Oct.
18.
Duquesne Lt. Bonds
bonds
An
underwriting
group
com¬
Co.,
(Oct. 20)
Inc.
a
.
offering today
issue of $15,000,-
are
new
000 Dunuesne Light. Co.
gage
first mort¬
2%% bonds. Priced at 100.52,
•
to ma¬
The issue was awarded to
at
competitive sale
a
.
Proceeds
posed of Kuhn, Loeb & Co., Union
Securities Corp. and A. C. Allyn
&
in this
well as in similar agitations of recent years, as to just
the bigots against whom we hear so much inveighing these
as
Christmas present in 1947 as
sales to the Federal assumed large
in
act was not
present
by which the measure was
vote, 36 to 30,
the
preferential discount
rate and the unpegging of the %
of 1% Treasury bill rate, permit¬
tion
by
banking system would tend to
diminish
bonds
there
reserve
thus created,
savings banks
placed
banking system, the
elimination
poured
1942 to $24 bil¬
lion at the end of 1945.
On the
in
their
The
war.
the beginning of
base
of
a
the
ing their holdings of government
billion at
and
reserve
on
the
modest
was
funds into the market by "increas¬
reserve
serve
this
to the
Treasury to place a good portion
of the debt in this manner.
restrictive
outstanding debt.
know,
employed
you
mercial
of
by $580 billion
level.
As you
this is an amount
can see,
more
ratio of 25% in gold
bank
banks
the present
above
much
it
law,
by
member
holdings of gov¬
ernment securities
certificates to the amount of notes
most
the
securities from about $2
Banks
serve
permitted
enable
to increase their
to the
reduced
be
to
were
were
-
deemable
require¬
reserve
accom¬
course,
inflationary "effects of the borrow-,
irig were minimized.
Sales of
non
risk, non - marketable, re -
additional
government bonds over
and above their present holdings.
If
noteworthy
bonds
the
outside
amount of
would
machinery that took
a
that
extent
of $27.f
1945
Catholic
outset
the
the
rejected.
.•«...»\J, *:« }
for the bill and of smear
it, I have not seen one
sihgle editorial defending them, nor heard any radio commentator
or any other public speaker.
They, themselves, have said very little
in their own behalf and what little they did say, has been given
little or no oublicity. The committee hearings are replete with argu¬
ments that liberalization of our DP immigration would be unwise
and they were not made by bigoted groups, by the Ku Klux Klan
or based on any racial reasoning.
Certainly worth considering have
been the go slow admonitions of our consular officials abroad who
have to deal with these people.
Little publicity has been given to
♦these argument! The attitude »of those nofc whooping it for the bill,
not having ^iy axe to grind in its passage, has "been to keep hands
off.
They have felt it involved something dirty which they could
best leave alone.
Yet the matter is of tremendous importance to
the country.
The number of additional DP's whom the bill would
have permitted to come in would constitute a good sized city.
Far be it from me to pass upon the merits of the bill.
It has
been too beclouded in propaganda.
A lobby has spent some $600,000
on this
carried out with
of disturbance to
plishment and, of
means
that
was
of
anti-Semitic.
from
insisted
have
borrowing
be
could
the financial
that
member banks by full use of Fed¬
eral Reserve credit could purchase
words,
end
'That
minimum
the
system could be expanded by at
least $290 billion over and above
bonds and second,: the present deposit level.
Or, in
lh£ effect that debt management
exercises
the
at
scale
price trend outlook
the
for government
Yet
public debt rose from about
billion, just prewar, to the
billion.
and
authorities
discrim¬
inatory to members of their faith. And the fur¬
ther fact is that Senator McCarran who as chair¬
man
of the
Senate Judiciary Committee, has
borne the brunt ot the smear campaign, is, him¬
Carlisle Bergeron
self, a Catholic. The Senator has been charged
with bottling the bill up in his committee and a most unusual pro¬
cedure was resorted to to get the bill out. In his absence in Europe,
the committee under pressure from Truman voted to let the measure
come
to the Senate floor without recommendation. - It was most
unusual to send a measure to the floor like this and it was a viola¬
tion of the traditional Senatorial courtesy. That McCarran had not
been acting-arbitrarily
or dictatorially against the wishes of the
people, as was repeatedly charged, is evidenced by the decisive
the financing of which was
war,
on
They have been accused
Catholic
.
should have at least two important
aspects of interest to you.
if
accept this premise, it would seem
to resolve itself into a matter ol
management
Reserve
for
no
control
City
Reserve
serve
outlook
the
Craft
Central
of
Banks, from 20% to 10% for Re¬
any
sound
H.
of
varying from 26% to 13% in the
be difficult to
Robert
have
law
sions, it would
in
Senators who
to
opposed
and
press
tremen¬
deposits and
fundamentally
is
—
reason
or
limitations
certain
essary
lower these
requirements within
member bank
man¬
-
expansion
dous
those
year
a
the measure have been
unmercifully smeared in certain portions of the
the
—
than
more
been
have
a
substitute other measures
the Federal Reserve System is
veming permitted to raise
debt
create such
to
the nature of this pressure.
about
assets in the banking system or to
Country
of Governors
The Board
Banks.
philosophies
go
ability
categories,
Cities, Reserve
This
latitude.
necessary
divided into three
are
to know more
public is entitled
the
that
seem
policies
Without
most intense pressures that
against, the Senate has firmly
Persons Act to permit an
up
for my
reason
Congress has ever
rejected the bill to amend
additional 135,000 of these
the country. Under the circumstances it would
Against one of the
the Displaced
choice of the subject "Debt Management and the Outlook for Gov¬
ernment Bonds" is, I think, obvious to all of you, and that is, that the outlook for govern¬
ment bonds is dependent almost entirely up m debt management
and Federal Reserve
The
of the News
CARLISLE BARGERON
By
been
1949
will
from
be
the
used
sale
of the
by the
com¬
$12,000,000
for the prepayment of outstanding
bank loans and the balance will
pany
to the extent of
be available for
purposes,
general corporate
including payment of a
portion of
the cost of the com¬
pany's construction program.
■
Volume
170
Number 4848
THE
COMMERCIAL
FINANCIAL
&
CHRONICLE
(1551)
New Issue
$43,365,000
■
State of New York
Housing Bonds
Dated November 1, 1949
The State
reserves
1951-991, incl.
Due November 1,
the
privilege of redeeming, at
thereafter, all of the bonds then outstanding,
or
par
value and accrued interest,
all of the bonds of
November 1,1989,
on
or on any
interest payment date
single maturity beginning in the inverse order of their maturity.
a
Principal and,semi-annual interest (May 1 and November 1) payable in New York City. Coupon Bonds in denomination of $1,000,
registerable
Interest
In
$1,000, $5,000, $10,000 and $50,000.
7
Exempt from Income Taxes under Existing Federal and New York State Statutes and Decisions
opinion, these Bonds meet the requirements as legal investments for Savings Banks and
Trust Funds in New York, Massachusetts, Connecticut and certain other States
j
our
f
to principal and interest in denominations of
as
These Bonds
0
.
acceptable to the State of New York as security for State deposits, to the
Superintendent of Insurance to secure policyholders and to the Superintendent
of Banks in trust for Banks and Trust Companies.
are
These Bonds will constitute, in the
New York, and the
opinion of the Attorney General of the State of New York, valid and binding-genjeral obligations of the State
of
full faith and credit of the State will be pledged for the payment of the principal of and interest on the bonds. *
AMOUNTS, MATURITIES, COUPONS, YIELDS OR PRICES
Yield
Due
$885,000
1984
1.65
885,000
1985
1.65
885,000
1986
1%
1.70
885,000
1.70
1972
13/4
1%
1973
13/4
100
885,000
1974
1%
.885,000
,1975
885,000
1976
885,000
1977
885,000
1978
885,000
1979
134 'f»
1% 1%
•:
1%
1.95%
1.95
Due
$885,000
1967
.65
885,000
.75
885,000
4
.85
1955
4
885,000 i; 1956
4
885,000 :i
1957
4
885,000
1958
4
or
2% '
1.60%
1968
2
1969
2
885,000
1970
.95
885,000
1971
1.00
885,000
885,000
Due
:
1951
4%
.55%
885,000
1952
4
885,000 1
1953
4
885,000
1954
885,000 j
,
•
Coupon
r
■
1.15
I
4
885,000 K 1959
:
I.IO
4
-
4.
4
1.25
i
1960
885,000 ;
1961
885,000
i
1962
885,000 I
1963
21/4
1.40
885,000 l : 1964
21/4
1.45
885,000
•
-
1.35
21/4
2
;
885,000
1982
99
2
98%
1987
2
98 '.u
1988
2
97%
1989
2
97
1990
1991
*885,000
1992
885,000
97l/2
!
2
r
2
*
iii:;
2
-h/'riki-
1994
.
96%
96%
96
96
#
l»/4 )/• 2.20% (72.96)
,
885,000
1995
U/4
885,000
1996
•1%
885,000
1997 /
iy4
885,000
1998
885,000
1999
W4
w* •
97
■:
.
1993 ""'2
885,000
98
2
1983
2
-
100
2
885,000
99%
885,000
/
981/2
•
Yield
2
100
2
885,000
1.55
1980
1981
v
2
885,000
1.50
1966
885,000
1
1.30
2V4 r
"21/4
1965
j
885,000
,13/4
■
or
885,000
9^/2
99
£
'
885,000
100
,,
Coupon
885,000
-
'
■
Price
Coupon
)
$885,000
f
Price
Amount
Amount
Yield
Amount
2.20
H
(72.61)
2.20
(71.94)
2.20
(71.61)
2.20
•
(72.27)
2.20
v.
(71.29)
(Accrued interest to be added)
The above Bonds
by
us
•
Harriman
yy' y
_
Y
' "y
y
.
,
.}
■
of
Goldman, Sachs & Co.
r..
-
-
' '
t
r
Incorporated
Moncure Biddle & Co.
\
y,J'-ir-y.
-
;»
! The
.
:;'
..
J.'j-yr'rS.
Robert Winthrop
Kirsch & Co.
•
City, Mo.
Bacon, Whipple & Co.
Laird & Company
Minsch Monell & Co.
Ira Haupt & Co.
Newburger, Loeb & Co.:
D. A. Pincus & Co.
19, 1949.
\
-
•
*
Tripp & Co.
Rand & Co.
.
- •
r
•
;
Harris,(Incorporated)
Hall & Company
•
,
American Securities Corporation
Alex. Brown & Sons
'
;
Wood, Struthers & Co.
:;y
Central Republic Company
•
,
G. C. Haas & Co.
-
;
(Incorporated)
Bramhall, Barbour & Co., Inc.
Incprporated
...
Trust Company of Georgia
Tucker, Anthony & Co)
H. M. Byllesby and Company
Baker, Weeks & Harden
s
INC.
Hall & Company
•
Wm. E. Pollock & Co., Inc.
& Co.
Kansas
^
Roosevelt & Cross
>
City National Bank & Trust Co.
G. H. Walker & Co.
r.
Eastman, Dillon & Co.
Oregon
Lee Higginson Corporation
>
.
of St. Louis
-
-
Incorporated
Incorporated
.
Boatmen's National Bank
Eldredge & Co.
Laidlaw & Co.
Coffin & Burr
;
Dominick & Dominick
Y''vr.
-
V Dick & Merle-Smith
Stroud & Company
pui atcu
Incorporated
incur
Union Securities Corporation
of Portland,
.
Phelps, Fenn & Co.
The First National Bank
Chicago
Merrill Lynch, Pierce, Fenner & Beane
Paine, Webber, Jackson & Curtis
Braun, Bosworth & Co.
Lehman Brothers
V-
/-
■ -
Continental Illinois National Bank and Trust Company
7
•
J. P. Morgan & Co.
Halsey, Stuart & Co. Inc.
i Smith, Barney & Co.
The First Boston Corporation
Lazard Freres & Co.
Drexel & Co.
of definitive bonds.
:Incorporated
■/; !
Glore, Forgan & Co.
October
and if issued and received
General of the State of New York.
Bankers Trust Company
First National Bank
Bank of New York
Ripley & Co.
Incorporated
offered Subject to prior sale, for delivery when, as
Interim certificates will be issued pending the delivery
"
:
The National City
are
and subject to the approval of legality by the Attorney
(Incorporated)
"
Andrews & Wells, Inc.
F. S. Smithers & Co.
R. D. White & Company
Incorporated
•
-
.
Sulzbacher, Granger & Co.
:
Singer, Deane & Scribner
E. F. Hutton & Company - Mackey, Dunn & Co.
/
John Small & Co.
Byrne and Phelps
Incorporated
Starkweather & Co.
7
8
CHRONICLE
COMMERCIAL &■ FINANCIAL
THE
(1552)
Devaluation and U. S. Exports
leading
effects thereof
U. S. foreign
on
Recommendations and Literature
of New York
Vice-President, Guaranty Trust Company
New York banker reviews developments
Dealer-B roker Investment
GENTES*
By ALEXANDER N.
devaluation and discusses probable
is now geared to large export volume,
to currency
up
trade. Says, since our economy
Thursday, October 20, 1949
)>;.
firms mentioned will be pleased
It is understood that the
of export subsidies through ECA and other agencies is advisable, but warns
keep present high level of exports, so that a balancing with imports is required through
modification of U. S. trade policies.
literature:
send interested parties the following
to
temporary continuation
nation cannot
Associated Electric Co.—Memo¬
Dividend
issues randum— Goodbody & Co., 115
which have excellent prospects for Broadway, New York 6, N. Y.
months of speculation in the United States and other parts of the world
when England would devalue, and after a number of rather vehement
After many
to whether and
as
denials
the part
on
him
18
by^
made
was
Sept.
on
the
of
de-
valuation
of the
British
pound
from
to $2.80
$4.03
decrease
—a
of
value
in
30.5%.
While
the
general1
feeling
in
most
quarters
that Eng-
was
jand would be
forced at
some
in
time
future
Gentes
N.
A.
be
to
chronic malady of
a
to attain.
Furthermore, American
importers will receive the full
few
in
The
full
if at all.
instances,
301/2%
cut
applies
to
standing, and as evi- British f.o.b. prices, whereas dol¬
lar charges for duties, freight, etc.,
dence, your attention is called to
must be taken into consideration.
our export and import figures for
We must also have in mind that
1948.
In that year we exported
$12.6 billion and imported $7 bil- England imports much of its raw
material for fabrication from hard
lion, giving us a favorable balance
of $5.6 billion.
The reverse side currency countries and a certain
of this picture, however, shows percentage of the additional cost
that the world at large was short of 44% due to devaluation must
approximately $5.6 billion to pay necessarily find its way into price
structure. While the
price of
some
imports, and this
British
goods
will
be
less
to
largely offset by
American
importers because oi
grants of dollars through ECA.
For the period 1940 through 1948, devaluation, prices on other non¬
dollar
its
for
was
competitive
realistic
commodities
have
j we sold to foreign countries over been moved
up to
bring in the
prove her balance of trade with $50 billion more than we bought
same
amount of pre-devaluation
hard currency countries, the tim- j from them, and this differential
ing and the extent of the devalua-' was to a great extent offset by dollars, and while there may be
more
tion came somewhat as a shock to
States
loans,
gifts
and
Notwithstanding our high
United
engaged in inter¬
national operations. The devalua¬
tion of sterling carried with it all
currencies in the
sterling area,
grants.
of those
many
degree of prosperity in the United
present national
income of about $225 billion an¬
and
States
and the proces¬ nually, we are still operating on
sion soon was joined by other the basis of deficit financing.
I
countries, such as Belgium, Lux¬ leave to your judgment the addi¬
embourg, France, Netherlands, the tional length of time we can con¬
Scandinavian countries, West Ger¬ tinue adding to our present over¬
debt without seriously
many, Greece, Portugal, Canada, sized
Argentina,1 affecting our own economy and
with general expec¬ cheapening the value of the dollar
Thailand.
Egypt and
in accordance
the first of the Latin
countries to announce
official devaluation on Oct. 3, lqst,
to
and, concurrently, the government
prices and temporarily sus¬
Hill
tation,
was
American
froze
rates also have been announced in
Chile and Uruguay and Spain.
the
that
believed
is
devaluation in
It
Argentine
a
forerunner of
number of other
a
countries
material producing
raw
in the Latin American area which
now
have cause for increased fear
sales
of
devalued prices from
at
competitors in the sterling area.
should
main
of
the
made here of the
be
for the devaluation
reasons
which
led to the
succession or devaluations by other
countries. First: Britain's gold and
pound,
dollar
exchange
reserves
were
being drained away at an acceler¬
ated pace
hard
was
because of her growing
of imports over exports to
excess
currency
countries and it
recognized that drastic meas¬
ures
were
immediately
necessary
to enable the
even
country to maintain
minimum reserve require¬
ments, which are now believed to
fee
well below the £450,000,000
set
recently by Sir Stafford Cripps
the irreducible minimum.
editorial
recent
a
"It is
time for
that there
conflicting
us
two
are
very
sire
to
recognize
fundamentally
in
at work
pressures
One is
the United States.
de¬
our
big surplus of exports
The other is our
a
imports.
over
desire for
a system of free-wheel¬
ing trade around the world. We
have
cannot
both
wish
taxpayers
unless
as
we
subsidize
to
Which do
Nation Geared to
our
ond:
The
high
Large Exports
markets.; In other words,
rency
commodities
markets
that
were
sought
foreign
over-priced
as com¬
with United States com¬
modities; markets abroad became
narrower, and the sorcalled dollar
pared
complete
perhaps
export
that
for
of
taken
present
volume,
reason
world
and
and
in
political
concurrently.within the
are going to be
than the
act of devaluation.
mere
through
ECA
or
other
agencies is advisable.
costs, must
eliminate
..abroad
ances
be
in
imported
and
gap.
mention
ticularly
as
representatives
to
our
cost
of
establish
sential
raw
to purchase es¬
material, machinery,
services, etc., in the United States
fore
Club,
the
New
by Mr. Gentes be¬
Overseas
York
Automotive
City,
1949.
Oct.
13,
of
seem
country.
own
substance:
other
In
words,
the
British buyer now must turn over
at
30.5%
less
than
pre-
devaluation
price, for 1 - pound
formerly cost the American
importer
or
$4.03,
now
costs
but
30.5% less.
At least in theory, the devalua¬
income
and
gap between
dollar
dollar
expenditures,
but whether the result will follow
practice, remains to be deter¬
mined.
England
By reason of devaluation,
now
must export. 44%
than
pre-devaluation vol¬
of dollar
to equal the amount
exchange previously obtained, and
under
Corpora¬
tion, 100 Broadway, New York 5,
N.-vY.
Consolidated
of
1949 Legislation Affecting Eligi¬
Government
of
bility
and
York
Legal
as
115
Over
Stock
the
-
Index
recording
Booklet
—
New
Williston
Broadway, New York 6, N. Y.
Production
Co.—An¬
alysis—W. C. Langley & Co., 115
Broadway, New York 6, N. Y.
10-year performance of 35 indus¬
trial stocks—National
Quotation
Bureau, Inc., 46 Front Street, New
York 4, N. Y.
R.
Hentz
Company—
& Co.,
Brewing
Ilugoton
Industrial
Counter
-
Street,
60 Beaver
4, N. Y. j
Goebel
Angeles 13, Calif.
Los
York—Study—H.
Bulletin—J.
Company, 510 South Spring Street,
Company
Edison
Co.,
Mu¬
Invest¬
ments for Savings Banks in Cali¬
fornia—Digest—R. H. Moulton &
Bonds
nicipal
New
&
J.
P.
Morgan
&
Co.,
•
Incorpo-
rated-rAnalysis—Laird, Bissell &
Meeds, 120 Broadway, New York
5, N. Y.
Public Utility Stocks for income
and
capital
growth
New
Leaflet-
—
William R. Staats Co., 640 Spring
Street, Los Angeles 14, Calif.
Central—Analysis—
15 Broad
Street, New York 5, N. Y.
.
I
1
*
York
Eastman, Dillon & Co.,
Oregon Portland Cement—Late
\
American Meter Company—An¬
data—Lerner & Co., 10 Post
the
of
"No
existing circumstances that
goal is going to be very difficult
Black,
International
mit themselves
of
grams
have the
but
welfare
of
cost
immediately
if
free
results
are
in
accumulation
old
of
new
and
or
for
in¬
plant equipment,
am
nearing the ,home plate—in
fact, I am on it. It is my wholly
personal belief that many of those
adopted
will
or
not
and
cannot
be
corrected, and if that
is the case, any
advantages gained
by devaluation, in not too long a
(Continued
on
page
35)
Woodard-Elwood & Co.,
First Nat'l Bank of Minneapolis.
will
serve
as
of St. Paul.
J. M. Dain & Co., the retiring President,
National Committeeman for the association.
NEW ORLEANS SECURITY TRADERS ASSOCIATION
The
New
following
Orleans
new
Security Traders Association has elected the
officers:
B. Wheeler, Wheeler & Woolfolk.
President: Macrery
Vice-President: G.
Shelby Friedrichs, Howard, Labouisse, Fried-
richs & Co.
Secretary-Treasurer: Arthur Keenan, St.
Jackson A.
Denis J. Villere & Co.
Hawley, Equitable Securities Corporation, the retiring
President, and Wm. Perry Brown, Newman, Brown & Co.
as
delegates, with Joseph P. Minetree, Steiner, Rouse &
bert Hattier, Jr.,
White, Hattier & Sanford, alternates.
will serve
Co., and Gil¬
7
SECURITY DEALERS OF THE CAROLINAS
but in mentioning these factors I
measures
Delaney & Company, Minneapolis.
Rand, Jr.,
Secretary: Donald M. Anderson, First National Bank
which
tendency to discourage
capital
H.
..
Bernard L. Decheine,
it";
might be mentioned, such as
high taxes and a top-heavy gov¬
ernment personnel, both of which
prevent
Arthur
Treasurer: Robert K. Pillsbury,
also
a
John J. Delaney,
President:
Minneapolis.
services
factors
other
officers have been elected by the Twin City
new
pro¬
higher
taxes, and higher taxes inevitably
result in higher production costs
and higher prices.
There
following
Vice-President:
in
they
to undertake
means
the
;
can
to extensive
social
i
De¬
and
dispute
the right of governments to com¬
one
The
Security Traders Association:
in
recently remarked
velopment,
TWIN CITY SECURITY TRADERS ASSOCIATION
par¬
State"
Mr.
only $2.80.
ume
Sept. 30,
First Boston
1949—The
Zippin & Co., 208 South La Salle
Street, Chicago 4, 111.
a
determined
44%, as one pound, which
formerly bought $4.03, now buys
up
in
elected
our
Bank for Reconstruction
more
*An address
Stocks—
City Bank
Comparative figures at
Britain of
President
in
Colombia Bolivia—New study—
York
New
must
results
a'"Welfare
narrowing the
dollars necessary
Camp Manufacturing Company.
currency
experiments,
some
stallation of
the
Inc., Beck's City Bakeries, Craddock Terry Shoe Corporation, and
instances
that
the cost to
modernization
and
of
Company,
backlog
hard
this
socialistic
States and decrease imports, thus
services
studies
are
Furniture
or
widening of the dollar
Lastly, I hesitate somewhat
gap
and
N. Y.
available
further
immediate consequence of
the
many.,
;
from
gap is
modities
firm
sterling
materials
raw
have
became wider.
This dollar
the difference between the
of dollars created by a
country through sales
of com¬
held
be
the
tion of the pound should increase
British
exports
to
the
United
amount
Also
American
Lynch¬
Building,
Mason, Krise
burg, Va.
&
Horner
Office
alysis—Boenning & Co., 1606 Wal- Square, Boston 9, Mass.
even
Lladelphia 3, Pa.
reduced,^; goods m u st be, rnit Street, Phila
!
styled for $>reign markets, and;
Rockwell Manufacturing Com¬
the art of salesmanship must be
Argo bil Corporation — Up-to- pany—Discussion—Scherck, Richrevived, for the days are gone
date
report for broker-dealers ter Company, 320 Nortl\ Fourth
when the world will beat a path
only — J. W. Gould & Co., 120 Street, St. Louis 2, Mo.
to the door to buy a better mouse¬
Broadway, New York 5, N. Y.
trap.
The large
backlog of
Shatterproof Glass Corporation
Also available for broker-deal¬
blocked pounds also is a deterrent
—Memorandum
Peter Barken,
ers is a report on General Crude
to recovery, and efforts should be
32 Broadway, New York 4, N. Y.
Oil Company.
made to effect a solution perhaps
by a gradual refunding operation
over a long period of years, or by
other means that will effectively
tion
devaluation,
an
$2.80,
Co., 1 Wall Street, New York 5,
*
example, the rate of produc¬
tivity must be increased, produc¬
U. S. goods to British buyers went
that
revisions in
suggested portfolio—G. H. Walker
&
Inc.—Analysis—Scott,
for
Program
Current
—
For
her
goods
Stock
Common
Investors
Industries,
Furniture
Bassett
siz¬
a
& Co.,
trade.
much more difficult of attainment
to
conditions, a tempo¬
continuation of export sub-*
British
of
country, and they
rary
As
England's
imbalance
of
declaring
M. Kidder
Street, New York 5, N. Y.
Wall
Numerous other measures must be
and economic
sidies
to
answer
problem
countries,
large
a
be visualized.
can
Devaluation is by no means the
to
Sec¬
cur¬
increase
contain
price
United States and other hard
from England, no spectacular
quarterly
regular
or
extra—A.
from commercial operations. Brit¬
ish goods sold against these bal¬
wdnt?"
we
to his bank, 1.44 pounds instead
level and of 1 pound for the purchase of
over-valued currencies of England $4.03 U. S.
On the other hand, if
(and
other countries)
made it the American importer received
virtually impossible to sell on a full advantage of devaluation, he
competitive * price ' basis
in the should be able to purchase British
as
ume
For some years the economy of
the United States has been geared
view
1
rate
67
List of
—
for
exports.
For the sake of sequence, men¬
tion
in
pertinently remarked:
Changes in
pended all imports.
devaluation is but
.point where it will be under4
in terms of sterling and
other world currencies.
McGrdwa
valued
increase in our import vol¬
some
our
except Pakistan,
dividend
—
the
increasing
able
benefit of the 301/£% cut in prices
only
many years
shortage
place her currency on a
basis and to im-
It
adjustments.
about by postwar
seems
brought
innovation
recent
the
in
The dollar gap is
dollar payment.
no
demanding
countries
other
and
de¬
to
value,
order to
Chancellor of the Exchequer, an announcement
of Sir Stafford Cripps,
Extra
for
Candidates
Declarations
the Carolinas
J""',T;-/
Newly elected officers of the Security Dealers of
are:
President:
John T.
Warmath, Equitable Securities Corporation,
Greensboro, N. C.
Vice-President: Vivian M. Manning, Greenville, S.
Treasurer:
N.,C.
Robert B. Dixon,
C.
McDaniel Lewis & Co., Grensboro,
-
Secretary: H. T.-Mills, Jr., Greenville, S. C.
i
Volume 170
Number 4848
THE
COMMERCIAL
the automobile, airplane, and
motion picture.
excessive
ray,
The Business oi
But
one
inventions
Babson,
asserting
present-
day education ought to feature
history and romance of profes¬
sions, industry and commerce,
and
that
high school graduates
should know functions of invest¬
ment of
private capital, contends
could be
Crystal clear,
made
that unless business
develop
can
seems
into
industries.
Mr.
it
no
told them what has
By ROGER W. BABSON
should
developed the
American
great
that
of
it
in¬
the
was
private
capital,
the
intelligent management of indus¬
try
the
and
workers
sweat
pulling
that
team
of
willing
together
made
-
America
as
a
great.
They should know that American
free
enterprise with all of its
weaknesses
for
them
standard
has
should be
Vacations
study
made
living
it
possible
the
have
to
of
it has in the past, future eco¬
nomic advantages will be less.
back, at
are
Youngsters
school.
they learn this
them
over.
will
that will make
year
happier,
What
better
taxes
discourage
CHRONICLE
ven¬
capital and the initiative that
us great.
It should be made
crystal clear to students that
Our
high
highest
in the world.
of
school
less
to have
High school graduates
know
vestment
ever
as
are
FINANCIAL
(1553)
graduates
given, in addition to a
the various "isms," an
business, big and small,
un¬
can
Phila.-Baltimore
Exchange Lectures
Exchange, and Howard W. York,
Drexel & Co., speakers.
Nov. 15:
"Stock
Boyce, President
Philadelphia-Baltimore
thority and
dependence
treasury
greater
upon
are
really
and
greater
the
Federal
dan¬
more
gerous to our form of government
than any external threat that can
possibly
be
arrayed
against
What
businessman's
us."
munity teaching about this?
are
the schools in your com¬
speakers.
Nov. 1:
Bryan With King Merritt
"The Trust
Company,"
(Special
representatives of Fidelity-Phila¬
delphia Trust Company, Girard
Trust
Company, Pennsylvania
Company for Banking and Trusts,
tion,"
8:
G.
Regula¬
Barclay, Jr.,
K.
Financial
Chronicle)
Most
of
Brashears
&
Company for
number of years.
integrated
our
youngsters
will learn that
the
Pilgrims
landed
"We've
in
Plymouth.
They
have
heard
comfort
about the bat¬
tle
of
Bunker
Hill.
They
know
some¬
thing
about
Paul
But
set
to
or
Catcil
Few will
them
the
of
ro¬
I bought
production.
have contrasted for
ever
in
from dividend-paying stocks
the
spirit and
American
the income
with
plant,
small,
large
of
the
in my wage-earning years'*
schoolroom
public
American
independence
have
foot inside
any
mance
and
Revere.
they will
never
Roger W. Babson
gained
will
worker's
standard
living, working hours, and
con¬
ditions with those of the workers
of
Britain,
Russia,
or
even
so¬
TH0MAST0N, CONN.
cialistic Sweden.
But
Caesar
and
ancient
Socrates and
will
make
learn
will know
Tacts
our
"I landed in this country June 1, 1900, at
about
Rome
and
age
Aristotle.
And they
attempts to
abortive
Latin
and
French.
I
the clothes
until my
did!
by drawing meaningless geo¬
metric figures on a blackboard
and by stating geometric
propo¬
E. D.!
But
be
ness
report,
unable
make
or
or
add
or
write
to
speak
busi¬
a
accurate
grasp
political
make
problems
them
to
intelligent voters?
of
history and
American
try,
to which
merce
their
world.
very best
Our
matics,
and
indus¬
and
com¬
of
in the entire
mathe¬
ought
to
be
paid on common stocks provide "second incomes" for
of people; in many cases their entire incomes. Your sur¬
plus funds
integrated into these teach¬
ings
and
not
taught
separate
as
subjects.
I
most
am
few of
barrass
concerned
children
our
the
adults)
how their city,
is
tion
run.
state
They
that
(I won't
can
or
so
em¬
explain
even
don't
enough about the history and de¬
velopment of
derstand
great.
about
in
our
what
country to
really
income,
one
that contrasts favorably
made
us
vulcanizing of rubber
1839, the early sensitized pho¬
Exchange
today
a
stocks, a risk inher¬
ent in ownership of any form of property. Member Firms invite
all who would put their funds to work, producing income, to do
ownership of
with the benefit of facts that
can
be had without obligation.
The
companies that have met the requirements necessary to
the New York Stock Exchange list com¬
prise America's greatest industries. These companies are owned
by people in all walks of life; their average share-holdings are
modest.
representing whatever number they choose to own,
whether 5, 42 or 100 shares. The names of these companies are
known nationally; hundreds of them have paid dividends annually
without exception for over 25 years, many for 50 years and more.
place their securities
on
.
on
1940
They
electric
and
phonograph
motors,
the
X-
.
consideration, that the stocks
Exchange
were
listed
judgment, buying
bonds whenever
to spare.
0
or
the New York
selling for less than they
worth. I've backed my
or
on
we
a
had the money
[•]..;(:vj,.
"Everything
"The result is that
we
need
or
want"
have many different in¬
we
vestments—all my own
selections, and most of
them
common
come
from them today. We receive about 7.5%
stocks—and
we
the money we
crease
are
get
on
have invested, not counting the in¬
in market value of the securities
still
entire in¬
our
investing, and expect to do
"My wife and I spend
our
so
we
all
hold. We
our
lives.
winters in Florida,
in Connecticut, and I do some
fishing in Maine. We are not rich, but the invested
our summers
we
need
have working for us provides everything
or
want."
provides food for thought for everyone with surplus funds.
Oct.
1940
1941
1942
1943
1944
1945
1946
D£7
6.1*
9.3*
7.8*
6.1%
5.0*
3.6*
4.8*
6.3*
7.8*
Invest
1948 j; 1949
The New York Stock Exchange urges
investment decisions
tunity to help
YOURS
FOR
you
THE
on
investors to base their
facts. Member Firms welcome the oppor¬
find the facts to fit your personal requirements.
ASKING:
"Making the
articles and data of
Most of Your Surplus
free
copy,
write
a
selection of
special interest to investors. To obtain your
to
20 Broad Street, New
New York Stock Exchange, Dept.
York 5, and ask for "Special Issue."
wisely...
8.2%
by the New York Stock Exchange, containing
telephone
were
money we
yield of all dividend-paying common stocks listed
the New York Stock Exchange computed for each year since
The average
first Atlantic cable in 1866.
know, too, about the invention of
of
Stock
-
I've frequently felt,
common
Funds,"a special issue of THE EXCHANGE Magazine, published
the
careful
convenient, simple procedure...and also help you appraise
the risk that attends
tographic plates in 1851, and the
and
>
years,
bonds of certain companies
few shares
un¬
They probably have read
the
can earn you an
na¬
know
since,
supplying factual information help make informed investing
.
well
ever
at my trade
comfortable income.
owe
standard
literature,
science
millions
so
the students
high
present
living—the
romance
professions,
merchandising
after
Dividends
for
Present-day education ought to
the
thrifty
The facilities of Member Firms of the New York Stock
Civilization
a
us.
"During the last 16
with the return from so-called "riskless" investment.
Education for American
feature
Facts for the
Even
sufficient
years ago,
a good many
years ago my wife and I
looking ahead to the day when I could
working for
grammati¬
change.
few
a
We decided that could be done only if I put part
of my wages into companies that would then be
column of figures
a
back. I've worked
stop work and still have
Q.
important, will they have a
of our social, economic, and
more
started
they cannot spell; they
will
cally,
corollaries.
my
"Back
ened
citing
on
retirement
the
"with nothing but
says,
of ironworker.
They will have their minds dis¬
ciplined and their brains sharp¬
sitions and
of 17," Mr. Johnson
O 2,
through
—
pany, Inc., Chamber of Commerce
Building. He was formerly with
"Government
William
The
ANGELES,' CALIF.
Walker P. Bryan has become af¬
filiated with King Merritt & Com¬
speakers.
Nov.
to
LOS
personalities? What will our schools
teach them about the
greatness
of their country and what made it
great?
of
Stock
Exchange Or¬
PHILADELPHIA,
PA. — The
ders." Inspection, at 5
p.m., of the
Philadelphia-Baltimore Stock Ex¬
Philadelphia-Baltimore Stock Ex¬
change is sponsoring™ a series of
change, with illustrations of exe¬
workers
and
investors
as
they lectures on Tuesday evenings on
cuting orders and clearing trans¬
the subject of "Invest in
have been for past generations.
America." actions
by the Stock Clearing Cor¬
Subjects of the lectures are:
poration, and at 6 p.m. closing re¬
Conclusion
Oct.
25,
"Business
Trends
and
marks by Mr.
Barclay, to be fol¬
Portfolio
No less a person than General Forecasting,
Planning, lower by a buffet
supper.
Investment -Trusts,"
D.
Moreau
Eisenhower has
said
that
"the
Enrollment fee is $5 per
person.
Delaware Fund, and
army of persons who urge greater Barringer,
A. Mayer Kulp,
and greater centralization of au¬
Wellington Fund,
develop in the future as it has in
the past, the economic
advantages
will not be as great for future
impartial report of the American
point of view that
9
Stein Bros. &
the
made
Education and Business
Education
ture
&
a Member Firm
ofthe
a
10
(1554)
the
For
Missouri Brevities
8, Stifel, Nicolaus & Co., Inc., and Metropolitan St. Louis
Co. participated in an offering to the public of 100,000 additional
shares of common stock (par $10) of The Empire District Electric
On Oct. J
Co. at $17.12^
the
of
tributions
cents per share
this issue on Sept.
share previously
quarter. The territory
served by the utility firm is lo¬
cated in a compact area embrac¬
ers
offering
if
Arkan¬
The company
total popula¬
tion of the territory served is in
excess
of
300,000.
For the 12
months ended Sept. 30, 1949, net
the
on
six
for the
previous 12 pionths' period. Cur¬
-
souri
of July 31,
$2,213,028, and
current liabilities were $1,908,055.
Stern Bro¬
thers & Co., and Stix & Co., and
45 other underwriters on Sept.
22 publicly
and accrued
$5,124,000, equal
after preferred dividends-to $1.55
per share on the average number
after taxes, were
offered at 102.526%
interest $31,000,000
fu n d
trust bonds, due Nov.
,
collateral
I; 1974 of
sinking
■
The West Penn Electric Co.
of
July 31, 1949,
$18,296,000,
earnings
were
first
$18,000,000
equal to $5.91 per share, against
mortgage bonds, 2%% series due $17,155,000, or $5.82 per share for
1969, of The Gas Service Co., Kan¬ the preceding 12 months. These
sas City, was publicly offered on
earnings, for all periods, were cal¬
Oct. 6 at 100.75%
and accrued in¬
culated
last-in first-out method
on
terest, the net proceeds to be used
as
follows: $14,800,000 to prepay
of
loans from insurance and banking
erations of The T. S. Martin Co.,
firms, and the balance to be added
to the company's treasury to re¬
imburse it in part for construction
work completed and to provide
the
for
and
construction
improvements
of
to
the
com¬
Blyth & Co.,
Inc. and Kidder, Peabody & Co.
acted as joint managers of an in¬
vestment banking group which are
handling this offering.
The
Gas
12
this
Feb.
1,
is
embracing western Mis¬
northeastern Oklahoma and
communities
two
in
southeast¬
Nebraska. At June 30,
ern
1949,
the company served 361,083 con¬
sumers,
of
whom
360,342
Reinholdt
if
r
Cook
Newhard,
&
Gardner
&
i;v:,..':
Co.
on
and
Sept.
participated in the public
offering
of 200,000
shares of
Carolina
Power
&
Light Co.
21
common
stock
(without
par
at $29.50 per share.
Western Auto
cus¬
Supply Co. (Mo.)
September, 1949 sales of
$11,885,000, which compare with
$11,264,000 for the like month last
reports
year, an increase of 5.5%;. For the
nine months ended Sept. 30, 1949,
sales
were
residential and commercial
acquired,
was
an
souri, central and eastern Kan¬
sas,
company
1949.
" v'v.'.1!
V
operating public utility serving
an area
City, Iowa, only from the
Sioux
date
value)
Co.
Service
valuing inventories. The 1949
months' figures reflect thq op¬
additions
properties.
pany's
aggregated $88,264,000, and
with $91,432,00.0 for the
compare
corresponding period last year, a
decrease of 3.5%.
tomers.
three
the
months
Louis, reported a net loss of $147,187, compared with a net profit
after income taxes of $317,512 for
corresponding same period in
For the nine months ended
1948.
Commission cover¬
and Exchange
struction program.
V";
Stern Brothers &
Aug. 31 the corporation reported
Co. partici¬
pated in the underwriting of an
offering
of
to
stockhold¬
common
of Utah Power & Light Co.
ers
148,155 shares of the latter's
stock, without par
common
$23.50 per share. Of
49,932 shares were
subscribed for on the exercise
at
value,
said
stock,
of
facilities,
counter
enjoyed its most successful year
in its history.
Despite a nation¬
wide
softening
of
retail
sales
in
cash
a
Ohio
$2,600,000
Co.,
Rubber
placed
holdt
privately
Moore &
has
been
through Rein¬
and Smith,
Gardner
&
Co. of St. Louis.
;
>
Dumont Laboratories
Corp.
cumulative- prior
$1.60
(which
stock
preference
are
31,
116,440
are
first being offered to the
holders
of Minute
Maid's $2
convertible
through
Of
these
preferred
stock
1955).
Oct.
shares
and
common
stock at $30 per share, the
scripton
warrants to
sub-
expire 011
25, 1949.
if
$
the rich Texas area, Texas
the most popular of the stocks coming
out of American Power & Light.;
It is probably the only holding
company specially created in recent years to acquire utility oper¬
ating companies, and which is expected to receive a clean bill of
health (exemption under the Holding Company Act) after American
stock
to
the
Rockwell
outstanding common stocks of Texas
& Light Co. and $17,400,000
in 1945, issuing common
in exchange for all of
share earned for the
fiscal year ended Nov. 30,
the $5.11
per
;i.
With Frank D. Newman Co.
to The
Financial
Chronicle)
bonds 48%, debentures
Howard
Sold
—
•
Stix & Co.
INVESTMENT SECURITIES
Quoted
509 OLIVE
STREET
SCHERCIi, RICHTER COMPANY
St. Louis l.Mo.
Landreth Building
Loufs 2, Mo.
Garfield €225
L. D. 123
President of American Power
Adler, Chairman and
&
Co., recently gave a
talk on the latter company before a capacity gathering at the New
York Society of Security Analysts' Luncheon Forum. He stated that
Texas Utilities serves over one-quarter of the area ^f Texas and
one-third of its population.
He was not disturbed by the presence
of several Federal hydro projects in Texas; his company has estab¬
lished friendly relations with them, buying substantial power when
it is available. Due to the irregular flow of Texas streams, this power
is available at a low annual use factor and hence can best be used to
supply short-term seasonal peaks on systems having steam generating
Light
also
and
President
of Texas Utilities
The
Texas
Members
St. Louis Stock Exchange
Utilities
System
has grown
very
rapidly—the five
served have grown about three times as fast as the
S. population since 1900, and even faster since 1940.
The revenues
Texas System, projected back to 1938, show an increase of 120%
largest cities
U.
of
electric and are
commercial, 24% industrial and 3%
government and municipal.
Thus despite the emphasis on indus¬
trial expansion in.Texas, revenues are still heavily weighted with
residential and commercial sales—a stabilizing factor in the unlikely
event that industrial expansion might prove to have been overthe
past decade.
System's revenues are entirely
residential and rural, 33%
40%
rapid.
r
_
.
.
[
growth of demand for electricity
in recent years, the System has had very little spare capacity.
This
should be remedied by 1952 when the $141 million construction pro¬
Due
to
the
extremely rapid
is completed.
Utilities has a big
companies in its supply of natural gas
as fuel.
Gas for the various plants is purchased in a range of 3V20,
to 100 per 1,000 cubic feet mainly on contracts running to 1955-60.
When these expire, if the new prices for gas prove too high the
company can reopen its big lignite mines which can furnish many
years' supply of cheap and convenient fuel for some of its plants.
At present these mines are closed.:
In the 12 months ended July 30, 1949, the subsidiary companies
earned $9,130,000 net equity for the parent company, and after itsown
expenses and taxes a balance of $8,670,000 remained.
It is
estimated that expenses and taxes may increase about $100,000 after
the dissolution of American Power & Light so that the pro forma
balance would be $8,570,000 or nearly $2 a share on the 4,400,000
shares of Texas Utilities. Present dividends are at the rate of $1.12
but with the passing of time a higher dividend for the new stock is
some
advantage
Mfg.
f
in cash.
equity basis.
The System capital structure is now
gram
Southwest Gas Producing
The company was organized
American Power & Light Co.
Texas Power
in
Ingraham Building.
Southern Union Gas
St.
holding company in
a
is dissolved.
1949, indicated that they exceeded
Texas Eastern Transmission
Teletype
it is
Because
Like
SL 456
up only 25% of his cost
is consummated and deliveries
put
plants.
was
(Special
Delhi Oil
Bell
need
Utilities seems likely to prove
locally reported about
three weeks ago that an unofficial
estimate
of the earnings of F.
Burkhart Manufacturing Co. for
the nine months ended Aug. 31,
It
Tennessee Gas Transmission
—
buyer
made.
(formerly Vacuum Foods
Corp.)
MIAMI, FLA.—Olaf G. Somdahl
is with Frank D. Newman & Co.,
Mississippi River Fuel
Bought
the
account
initially—the balance when the plan
about as follows: mortgage
9%, preferred stocks 15%, minority interest
1%, and common stock equity 27%. These percentages are after
elimination of all intangibles; before such adjustment, common stock
increase of 26.6% over the 1948
equity approximates 30% and will probably be kept around that
record sales of $26,624,711. Profits
level during the next two years.
1
\
'*•
after taxes were $1,101,288, equal
The operating subsidiaries of the company form an intercon¬
to 46 cents per share on the out¬
nected and integrated system, wholly within the State of Texas. At
standing 2,385,866 shares of capi¬ Dec. 31, 1948, the subsidiaries served 471 communities With popu¬
tal stock,
which compares with lations of 100 or more, and the population of the area served, in¬
$39,625, or 35 cents per share, for cluding rural areas, was estimated at approximately 2V* million.
:
the year ended July 31, 1948. At
Dallas Power & Light Co. renders electric service in the Greater
the close of July 31, 1949, current
Pallas area with an estimated population of 507,000. Texas Electric
assets totaled $6,639,435, and cur¬
Service Co. renders electric service in 117 communities in West
rent liabilities were $1,653,836.
Texas, including Fort Worth, Wichita Falls, Odessa, Big Spring,
V
1
Midland, Sweetwater, Grand Prairie, Lamesa, Monahans, Arlington,'
Reinholdt
&
Gardner
and
Breckenridge, Colorado City and Eastland. The estimated population
Stifel, Nicolaus & Co., Inc. on
of the territory served is 696,000.
Texas Power & Light Co. renders
Oct. 13 participated in the un¬
electric service in 349 communities in North, Central and East Texas,
derwriting of an offering of
including Waco, Tyler, Paris, Temple, Denison, Sherman, Corsicana
120,000 shares of Minute Maid
and Cleburne.
The estimated population served is 1,065,000.
if
414%
first
mortgage sinking fund
bonds due Aug. 1, 1964, of The
of
issue
An
Black, Si vails & Bryson
••
sales rewards, to
Utilities out of speculators' hands
to Southern and other investors.
This seemed; to work well with
Southern Company during the few weeks that that stock remained
over-the-counter.
"WD" purchases also have a special appeal, since,
hit a record
high of $33,696,757, which was an
1948.
.
their substantially larger
net. sales
volume,
entire
1
with
effect the "distribution" of Texas
warrants which
subscription
ended
Aug. 31, 1949, Rice-Stix, Inc., St.
the
Sept. 30 filed a registra¬
on
tion statement with the Securities
Oct.
For
Electric Co. of Mis¬
period will prove necessary; a month's delay after the decision
might suffice, it is thought, before the new stocks are issued.
The SEC has permitted American to defer the listing of Texas
Utilities for a year, but the common stocks of the other subsidiaries
are to be listed as soon as the plan becomes effective.
Apparently
American was able to make out a good case for using over-the-
Electric Service Co. and
It also acquired
91.3% of the outstanding common stock of Dallas Power & Light Co.
of common, shares outstanding,
expired on Oct. 5, 1949.
from Electric Power & Light Corp., and from a minority stock¬
compared with $6,475,000, or $2.11
holder, for $17,401,000 in cash.
During 1947-9 Texas Utilities has
per common share for the corre¬
During the year ended July 31, made substantial additional investments in the subsidiaries, the
sponding period last year. For the 1949, National Bellas Hess, Inc., funds
being obtained from American Power & Light, all on an
12 months ended
net
issue
12 months ended
and
July 31, 1948. Net earnings for the
six months ended July 31, 1949,
Co., Inc.,
&
the six
for
M.
I.
Gardner,
with sales of $183,321,$382,617,000, respectively,
000 and
*
*
*f
This
compares
to
Reinholdt
July 31, 1949,
$180,075,000 and for
ended
to
the volume was $404,020,000.
rent assets at the end
amounted
months
amounted
$2.39 per common share
An
if
*
if
The Union
the 12 months ended July 31, 1949,
•
at
ing 150,000 shares of no par
$961,967, equal to $2.19 per
common share, against $1,030,283,
3J4%
cumulative
(without par
$100 per share, plus
stock
accrued dividends.
Snider Co.
taled
Simon
court of jurisdiction has ordered a
court action in the Electric Power &
Light case and the Supreme Court decision in the Engineers case,
an
early decision is anticipated.
"When delivered" trading in the
five new stocks will probably be initiated as soon as the court's
decision is handed down, and it appears unlikely that a 60-day appeal
the SEC, and the Federal
hearing Nov. 7.
Based on the
Telephone Co. $5.50
value)
dissolution of
been approved
by
30 participated in the
public offering of 10,000 shares
of
Southwestern
Associated
preferred
indicated in the forthcoming
Utilities Company stock in the
& Light Co. The American plan has
of Texas
American Power
-
Sept.
on
Utilities Company
Texas
distribution
Co., Mc-
Breckenridge & Co.
Stix & Co., all of St. Louis,
Courtney
ELY
Considerable Street interest seems
value
%
*
tf
preferred stock which will be of¬
Consolidated net sales of The fered at competitive bidding. The
before deducting divi¬
May Department Stores Co. of net proceeds are to be applied to¬
the preferred stock, to¬
St. Louis and subsidiaries for the ward the cost of the utility's con¬
income,
1949
Jones &
D.
Edward
Utility Securities
By OWEN
#y:
Edward D. Jones &
Co., Newhard, Cook & Co., A. G.
Edwards &
Sons, Metropolitan
St.
Louis Co.,
Reinholdt &
Gardner, Stix & Co., O. II. Wibbing & Co., and Prescott, Wright,
share:
per
extending approximately 105
miles north and south and 115
or
if
preferred stock (par $10) at $15
sas,
dends
convertible
cumulative
t
c e n
ing southwestern Missouri, south¬
Kansas, northeastern Ok¬
that
on
shares of
eastern
estimates
in the public
Sept. 21 of 100,000
Liberty Loan Corp. 90-
participated
Public
year.
and
paid each
miles east and west.
net
Missouri bank¬
The following
with 23 cents per
lahoma, and northwestern
a
$1,654,712 for the same period
preceding fiscal year.
compared
last,
15,
June
and
ended
$905,968, or $1.81 per share, for
the corresponding period of last
in the
31
made on
were
against
net of $181,686, as
a
of
Quarterly cash dis¬
lion program.
15
construe-'
of the latter's
cost
of which are to be used
share, the net proceeds
balance of'f
per
in part the
finance
to
months
eight
31, 1949, Illinois Terminal
Co., St. Louis, reported a net
income, after charges and Federal
income taxes, of $445,880, equal
to 89 cents per share, as against
Aug.
RR.
over
other
southern companies, Texas
northern
envisaged by the Street.
Volume 170
Number 4848
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(1555)
Investment
Field
Oct. 20, 1949
(St. Louis, Mo.)
.Annual meeting and election ol
officers of Security Traders Club
of St. Louis.
writing
latters
New
.
ment
the
Bankers Association
; dinner and
Pierre.
election
at
annual
the
Hotel
(New York City)
of Stock
Exchange
Association
firms annual
meeting and election.
Dec. 4-9, 1949
-•
(Hollywood, Fla.)
j
Investment Bankers Association
Annual Convention at the
Hollywood Beach Hotel.
•
•
j
must
ment
out
an
in
refusing to
underwriting agree¬
with
the
Corporation,
Kaiser-Frazer
because
material
litigation against - the automobile
company
developed
before
the
consummation -of
Under
the
the
terms
of
view until the
place.
under¬
had been
case
com¬
of
Otis
&
Company will
(Special
to
The
Financial
who have been in the
thereto
Supreme Court ruled that
defendant in an administra¬
was
tainment is
Castera
and
Co.
and
annual event. Wil¬
an
liam S.
Gray, President of Central
Hanover, will address the guests.
A. T. Galloway, Assistant Vice-
Chronicle)
officer
an
em¬
ploy of the bank for 25 years dir"
longer, and the dinner and enter¬
LOS
Co.
meet tonight "at ti e
The Club has a
of
393
men
an'I
Hotel Roosevelt.
Conrad, Bruce & Co.
-
Meeting
Quarter Century Club ol
Central Hanover Bank and
TiwSi
W. W. Woods, Jr. Willi
The
the
Hold
The
membership
ANGELES, CALIF.—Wil¬
liam W. Woods, Jr. has become as¬
On the basis of this
sociated
with Conrad,
Bruce &
contention,!
the SEC undertook an
investigar Co., 530 West Sixth Street. Mr.
tion with a view to
suspending or Woods was formerly with Baterevoking
the
dealer-broker
li¬ man,
Eichler & Co. and prior
cense
Central Hanover
Group
To
women
pro-!
was
the
as
resulting from the hearings.
litiga¬
SEC. con¬
tended that the litigation was in¬
stigated
by
Cyrus
S.
Eaton,
largest stockholder of Otis & Co.
contract.
the
it
such
against Otis & Co.,
appeal for judicial re¬
case
not
pleted/ Otis & Co., therefore, will
have the right to appeal to the
Circuit Court any SEC decision
cancel the contract if such
tion
developed. The
proceedings from consideration of
alleged improper conduct on the
Co.
agreement,
-proceeding,
SEC's
could
vided that the underwriters
could
year.
decision,
prohibited in its
was
part of Otis &
Nov. 15, 1949
last
lower court's
SEC
carry
:
stock
common
Under the
Group of the Invest¬
York
-
The United States
Supreme Court, on Oct. 17, handed down a de¬
cision setting aside a ruling of the Circuit
Court of Appeals, which
restricted the action taken
by the Securities and Exchange Commis¬
sion against Otis &
Co., investment bankers, in their dispute with the
Kaiser-Frazer
Corporation
that«»grew out of the offering of the
(New York, N. Y.)
Oct. 27, 1949
^
Highest tribunal rules Securities and Exchange Commission
complete its proceedings before a judicial review can take
EVENTS
In
tive
Supreme Court Reinstates Otis Case
COMING
-11
President of the
Bank, is the
tiring Club President.
,
,
Riley & Walter, Inc.
r
Hipp & Hipp
(Special to The Financial
of
Fox,
Edgerton.
re¬
*
,
MILLERSBURG,
Chronicle)
\ •
OHIO—R/ PI
Hipp and G. R.~ Hipp are engag¬
ing in a- securities business.
/ •
•
-
!
Dec. 9, 1949 (New York
City)
New York
Security Dealers As¬
sociation 24th Annual Dinner at
,
the Hotel Pierre Grand
r
HE.
T
F
U
T
U
R
E
H
,
O
L
D
S
GREAT
Ballroom
PR
O
M
I
S
E
New York IBA
Group
Meeting
To Hold
1.
The annual meeting of the New
York
Group
Bankers
.
will
.
on
.
be
of
the
Investment
Association
held
the
at
Thursday,
of
America
Hotel
Oct.
27,
Pierre
1949
at
5:30 p.m.
j:''* The Nominating Committee, of
Stepping Ahead
which John W. Valentine,
Harris,
Chairman, will offer
Hall & Co., is
the
-
following
.
for
officers
and
"
.
with Television
Vice-Chairman: Amyas Ames of
./
Kidder, Peabody & Co.
Secretary-Treasurer: Robert E.
Broome of Guaranty Trust Co.
;
Ex-Officio:
of Lehman
Stitzer
Corp.
;
t
A.
h<
Thomas
f
Brothers; Raymond D.
of
Equitable
One-Year
.
Joseph
Term:
Securities
Duncan
R.
Linsley of The First
'
Boston Corp.
Two-Year Term: David W. Lov-
-
ell of Laurence M. Marks & Co.
„
Three-Year
Term:
Walter
Jf
Schoellkopf, Hutton &
Pomeroy, Inc.; William M. Rex of
Clark, Dodge & Co."
'
-
'
Monro 'of
-
;
The
'
.RADIO
:
.
j
'
-
BELL
SYSTEM'S
PART
IN
THIS
of Salomon Bros. & Hutzler.
fer of B. J. Van Ingen & Co.
:
„
J
t
v
,,
.
Y\;
'
*,,*<
*
;
"
<
*>';
'
t
,
*
*' '
Nominations
■
the IBA
<
«of
for
Governors
-t.
•
j
•
**>■'
'•>*
f l
•
-
.•
'
Equitable Securities Corp. and
R. Linsley of The First
?
.
•
Boston Corp.
""
1
Norman
Chairman
Co., Inc.
:
•
.
Legislation
The
'
'
Chairman
Cheever
J.
/
'
.
•
''
••
■
'
i'r
•
"f!
'
.**
Bell System has
Television
!
Commit-
tee: Alvin J. Schlosser of
-
.,
vs
to areas
Pierce, Fenner & Beane.
r
,'t
,
*'
'
'•
-
*
•'
v
:
.
Blyth &
,
'i
-
'
•
•
•
.
■
part in Television.
.;
miles of Bell
Hardwick
m
.
totaling
more
are
being used
way
and proceeding rapidly.
System channels for transmitting
Television stations will be
more
to carry
than 48,000,000 population. The
East Coast and Midwest networks have been
joined.
'pansion is under
.
Municipal Securities:
of
Smith,
Barney & Co. *
?
Representative National Municipal Securities Committee: Orlan-
important
an
Already its Long Distance facilities
Chairman Education Committee:
Smith of Merrill Lynch,
•
INDUSTRY
Raymond B. Stitzer
are:
Duncan
f
.
'•
'
:.
of
'
'
'
1
•'
•
FAST-GROWING
*
Two-Year Term: James G. Couf-
•
••
following members, of the
opposite their names:
/ One-Year
Term.: Rudolf Smutny
.
-
•
fOWERS
RELAY
;
_
present Executive Committee will
continue to serve for the terms set
■
Further
ex-
The number of
programs
between
than doubled this year.
.
■
do
:
S.
Brewer
CO.
of
Both coaxial cable and radio
Phelps, Fenn &
■;? Chairman Public Education
Committee;r Frank M. Stanton of
,
•
relay
Section of COAXIAL CABLE
'
,v..•
The First Boston Corp.
.::
At this meeting reports will be
! received covering the activities of
systems are
programs
from
between radio
various
Committees.
Action
of
the
Rico in
Territory
that covered
of
through the
Puerto
'
.,
:
It's all
-
greater
Edwin D. Berl Adds
•
(Special
to
The
Financial
cable
are
or
or
Television
the countryside;The distance
25 miles.
thicker than
no
being used. The radio
a
*
:
man's wrist but 1800
six Television programs
at one time/.
;
,
;
•.
'
;
FRANCISCO,
.
go
:
Chronicle)
quite wonderful but it is only the beginning of still
things
to come.
The Bell System is stepping right ahead with
Television in both research and
building.
'
SAN
can
v
by the New
York group.
>
one
across
averages
Long Distance conversations
by-laws to provide for the inclu¬
relay
beam telephone calls
to
tower to tower
^The coaxial cable is
,
will be asked to amend the group
sion
designed
relay towers
.
the
CALIF.
—
John D. Berl has joined the staff
of
Edwin
D.
Berl
&
Sen, 333
"Montgomery Street, members of
the
San
Francisco
Stock
Ex¬
BELL
change.
»
•.
members of the Executive Com¬
mittee for the ensuing
year:
Chairman:
Clarence E. Gold¬
smith of White, Weld & Co.
.
-T
'i
*
JiXij
1
//
'
i I
i I
I
b i !
i
M
TELEPHONE
SYSTEM
T
VF» W
Devaluation—A Warning
Connecticut Brevities
Directors of Travelers
Insurance Company
By FRANCIS ADAMS
have voted to recom¬
dividend on the company's capital stock. Stock¬
Oct. 31 to vote on the proposal to raise the
authorized capitalization from 200,000 to 400,000 shares of $100 par
stock. If approved, the additional *)
~
~
"
shares are expected to be distrib- portable
typewriters have only
gone up 24%
and 38%, respec¬
uted on or about Dec. 15 to stock¬
tively. Royal had about 8,600 em¬
holders of record Nov. 25. The in¬
ployees and 2,710 stockholders at
crease, which is the first by the
the year-end.
company since 1929, is intended to
#
ff
n.
mend
\
Thursday, October 20, 1949
FINANCIAL CHRONICLE
COMMERCIAL &
THE
(1556)
12
Wa P,
TRUSLOW*
:
Exchange
President, New York Curb
'
100% stock
a
meet on
will
holders
,
policy of free currency convertibility at rates determined by open market would 4)ase world
honest values and reestablish trust necessary for international investment, Curb Exchange ►,
warns current arbitrary devaluations do not set currencies free to find their market levels.
more stringent controls, and advocates free international market for money.
Holds constant ! ?
Asserting
trade
a
on
executive
Foresees
lowering of purchasing power "is blowing our wealth away," and pleads for more
Hints return to gold standard "may be good path to take."
individual freedom.
rebuild world
a reasonable proportion
For a long time many of us have believed that our nations cannot hope to
United Aircraft Corporation has
capital to the increased size of
announced that it will accept bids trade or expect substantial international investment until we
the companies and the increased
volume
of
business.
Directors for its plant at Stratford between of official rates of exchange and allowed the free market to evaluate the ever
r e 1 ationships^have also stated the intention of Oct. 6 and Nov. 21. The plant was
in dollar prices), or if imports
between our laboratories might upset your rub¬
used
by the Chance
declaring quarterly dividends of formerly
are
cut
more
than
30J/2%
(or
monies. We ber trade with the Far East? In
Vought Division which is now lo¬
$3 a share after the distribution.
through some equivalent com¬
who
knows
even
now
felt sure that fact
On the present stock a total of $22 cated in Texas. Part of the plant
bination), we can imagine the
whether they will or not?
is owned by the Navy which is
free converti¬
has been declared for 1949.
multiplicity of internal controls
*
#
h
disposing of its interest in the
bility of cur¬
What our dollar is worth in
and
repressions which must be
rencies would terms of sterling today is not what
plant through the General Serv¬
A meeting of Connecticut Power
added to devaluation to accom¬
ices Administration.
alter the unit was worth on Oct. 19 last year,
Company
stockholders has been
plish its aims.
We don't need to
v".
*
*
*
realistic nor what it will be worth on Oct.
called for Oct. 24 to act on the ac¬
imagine all of them; some of
values
to
Casco
Products
Corporation's
19, 1950. Unless trade is allowed
ceptance of two amendments to
them
have been announced
in
which gov¬ to
adjust continuously to changing
the company's charter. The amend¬ plant at Bridgeport is now oper¬
London already.
ernments had
relationships which are reflected
ments were approved by the 1949 ating some of its departments 24
If England,; or any other one
been
desper¬ in a free international market iot
Legislature. The first will allow hours a day, seven days a week.
ately clinging money, we can expect another of the radically devaluing coun¬
the company, subject to approval The number of company employ¬
tries is, as they assert, on a fujl
in the face of
of the Public Utilities Commis¬ ees has risen about 10% in recent
yawning gap to develop between
basic
trade the official fiction and the unJ employment basis, where will this
to the
present level of
sion and the stockholders, to in¬ weeks
increased productivity come from?
forces. It was
crease
its capital stock without about 1,800.'The increased rate of
derlying reality.r We can expect
Francis A. Truslow
What
incentives will drive the
obvious that another shock on another Sunday
limit. It also authorizes the issu¬ operations is to supply the Christ¬
the. value of
people, already fully employed,
ance of preferred stock.
evening.
The sec¬ mas season orders for newly-in¬
to greater efforts and greater pro¬
ond will permit the issuance of troduced steam irons, sealed beam the pound in terms of dollars, if
If these statements seem to you
heating pads left to the free market, would fall too general, let me insert one duction? Production cannot be
stock without giving stockholders spotlights, electric
induced
by increased wage or
and hobby tool kits.
to a level substantially below the
subscription rights.
reference to the particular. In the
profit incentives. That would be
4
ff
V:' /■//; *
*
*
old official rate.
last
month
26
countries have
inconsistent with
the need for
Electrolux Corporation has an¬
No advocate
of free market picked new rates for conversion
Aspinook Corporation's annual
curbing the inflationary effect of
report covering the period from nounced that it has1 awarded a valuation had any illusions as to of their monies in and out of dol4 devaluation.
Taxes on
incomes
to expand the difficulties which a return to lars.
Of these, 18 have followed
Dec. 18, 1948, to June 30, 1949, re¬ construction contract
must be raised sharply, as pres¬
veals that earnings for the period its main plant at Old Greenwich free convertibility would create. England in selecting the identical
ently promised, and wages must
were
equal to $1.54 per share of and to build a recreation building The gap between pretense and percentage for their devaluation.
be frozen
though costs of -im¬
common
stock.
At the year-end for the use of its employees.
reality had widened so far—in a Between each of these countries
ported goods from dollar areas
*
*
*
cash
and working capital were
sense, the patient had been kept and the United States, and be-?
must go up.
Connecticut Power Company has under dope and isolated from tween each two of these coun¬
equal to $4.39 and $5.55, respec¬
The warning that devaluation
tively. On Sept. 9 the company called for redemption on Nov. 1 facts so long—that the adjust¬ tries, great differences in trade
announced that since the fiscal at par and interest $60,000 of its ment back to
real values -was exist, yet all have reduced the brings to all of us is not merely
that the paper standard is a fail¬
year tenders had been accepted on first and general E 3s due Nov. 1, bound to be harsh. But at least a
expression of these relationships
$434,000 par value of
its 5% 1973. Payment will be made at policy of free convertibility at by 30V2%. All that would be ure but, more serious by far, that
human freedom must be further
bonds due April 1, 1952, leaving the Hartford
National Bank & rates determined by the open necessary to balance out this eco¬
Trust
market would base world trade
nomic absurdity^ would be for^ my repressed in the devaluing coun¬
$1,792,400 outstanding.
tries to ihake devaluation work.
** :
*'
*
„
once
mor e on fionest values and
preserve
of
have dropped the false front
changing
'
;
^
*"
*
.
^
*
ending June
For the fiscal year
30, 1949, Locke Steel Chain Co.
reported sales of approximately
$4.0 million against $3.2 million
the previous year. Net per share
earnings were $4.17 compared to
year
During the fiscal
dividends of $2.40 per share
were
paid
$4.18 last year.
■
'
fi i
on
'
the'common stock.
For the
*
*•>
*
fiscal year ended
July
31,; 1949, sales of Royal Typewriter
million, sec¬
ond largest in the company's his¬
tory. Net income for the year was
equal to $3.19 a share compared to
$4.98 the previous year. The an¬
nual report stated that during the
past 10 years the national price
average of durable goods has risen
95%, while the price of the com¬
pany's most popular office and
Company were $45.2
cbuntry, as Some have suggested,
shares of reestablish the trust necessary for to add the fool's cap of an equiva¬
Associated Spring Corporation was international investment.
lent devaluation
of the dollar.
offered on Sept. 29 at 27
The
However, currencies were not Then we would all truly resemble
stock was owned by the estate of set
free
to
find
their market the king who is remembered only
a former director and did not rep¬
because:
levels. Instead, so-called "devalu¬
resent new financing. At the time ation" was selected as the method
"Up the hill he marched his
of the offering the management for bridging this gap. Devaluation
men,
stated that earnings for the first has many things in common, at
And then he marched them
eight months of 1949 were equiva¬ the start, with free convertibility.
down again."
lent to $1.41 per share of common It drops the official rates of con¬
stock.
It is, of course, possible that the
version
into
at
least the
area
where free economic forces might governments which have / recog¬
A
meeting of Phoenix
State have placed them.
It calls for nized the unreality of their old
Bank & Trust Company stockhold¬
many adjustments.
It may, at rates and resorted to devaluation
ers has
been called for Oct. 25, least temporarily, give price ad¬ have done so as a first step to¬
1949,
to vote on the proposed vantages to the trade of the de¬ ward free convertibility and val¬
change in par value of the capital valuing countries in dollar areas. uation
by free market
action.
stock from $100 to $25 per share
But a policy of repudiating one
Certainly some lip service has
and
increase
the
capitalization artificial rate of exchange and ar¬ been paid to this idea.
We may
from 16,000 to 64,000 shares.
At bitrarily selecting another differs be hopeful of such intentions, but
the same time, the stockholders
we
have reason to be skeptical.
fundamentally from a policy of
will also be asked to approve the
allowing the open market to ex¬ Even after the warning of whole¬
merger with Capitol State Bank &
press what the rate is.
It estab¬ sale devaluation—a warning that
Trust
Members
New
York
Associate Members
f.;
;
New York Curb -
Exchange
>
•
/?
w.^
• ' .W
•
Vis "'4
■
; -
Primary Markets in
Hartford and
•
Connecticut Securities
New
f
/
7-3191
Hartford
York:
,
,
Bel! System Teletype:
lishes
A
new
Stock
York
New
than
Ex¬
change partnership to be known
as Wm. M. Rosenbaum & Co. will
a
new
fixed,
by
more
rate
official guess dic¬
the political and
strategy
commercial
is no more
of the
mo¬
by
the underlying
be formed Nov. 1 with offices at facts of world trade, it is bound
285 Madison Avenue, New York soon
to become
a
new
fiction
City. Partners will be William M.
Rosenbaum, Albert F. Rosenbaum,
Louis
Goldstein,?; and ' Julius D.
Schlein, the firm's Exchange mem¬
ber. Mr. Schlein was formerly a
other
partners!
Co.
associ¬
ated with the predecessor partner¬
ship of Wm. M. Rosenbaum & Co.
The
HF 365
more
that
tated
momentarily
realistic; but, be¬
rate,
new
a
cause
Partnership
partner in Jerome Melniker &
7-3542
BArclay
New
Boston Stock
1 ,
'
'
and
Exchanges
Company.
perhaps
Tifft Brothers
:
were
ment
than
the "managed paper money
broken
has
ard"
corollaries of
•V..
:
«.
'
•
•
a
•
fruit
The
UTILITIES
—
INDUSTRIALS
long
with
payments.
of
records
-
unbroken
dividend
between
individuals.
below
New
London
Hartford
2-4301
7-2669
Canal 6-3662
Teletype NH 194
*
a
New Haven 6-0171
Waterbury 3-3166
Danbury 5600
the
.
:
that
knew
Who
our
by Mr. Truslow at
An address
dinner meeting
of members and
partners of Montreal Stock Ex¬
change and Montreal Members of
the Investment Dealers Associa¬
tion of Canada,
tut-
Expected
will
.
,
people of my country and
yours have grov/n great and in¬
dependent in a tradition of free¬
The
that
tradition
dom—a
from our mutual
we
drew
mother-country.
hasten to add that both
(Let
me
of
also inherited a part of
us
continent.
that
aunt on the
In fact, that aunt gave
from
tradition
our
country strong support when
with our mother on
this same subject of freedom a
my
differed
we
century and a half
ago.)
Smothering Our Freedom
But the sad fact is that
v
freedom
being smothered in our
No good can come
pretending that English¬
still enjoy the same liberty
is today
1
■;
family.
own
from
our
men
stringent controls.
of money
It suggests expe¬
diency rather than a willingness
to face facts.
Sir Stafford Cripps
quoted as saying thai
the purpose of devaluation could
be summed up by the statement
that "lower exchange rates will
make it possible for Britain to
sell more of her goods in dollar
"m
«■-
Oct. 19, 1949.
m
m
i*
m
m
m
We
just
are
few of the people
free. We must
a
less
who
will
be
dare
to hear this warning
before
it is too late.
been
Today
by
representatives
our
in
lands profess to be ridden
many
the
the
their
to live within
throw
only suc¬
ceed in this sales objective if pro¬
ductivity in England for dollar
our people, - if
truth and asked
that
fear
with
faced
markets."
their
means,
would
freedom
and
troop
Since devaluation can
CHAS. W. SCRANTON & CO.
New York
Who knew two
the porous reefs
surface
of
Alberta
nations.
ago that
might balance your needs in my
NEW YORK STOCK EXCHANGE
,
determination
market
has
country?
MEMBERS
'i •
'
to see.
The very
relationships.
many
specific recommendations of issues
,
\r
that
devaluation.
It is
this threat that we must not fail
implicit in
,
years
Write for
v
the
It is this threat to freedom
is
admit
of, devaluation
indeed be more
pacity of its government to order
stability by decree in the trade of
;
.;•*
Stringent Controls
More
Why can we not see that it is an
infinitely * greater
absurdity to
base a nation's future on the ca¬
Connecticut Secu rides
stand¬
.
v
and
down
behind must be enlarged.
the
"paper standard."
V
■
must
stick
donkey
the
before
trimmed
be
their citizens which are
over
en¬
must
will increase. The
that production
carrot
abolish the controls
failure and to
sterner
replace what little personal in¬
centive remains in the iron hope
down—govern¬
will be reluctant to
ments
and
controls,
forcement of those controls,
they passed down to us and which
artificiality of the pol¬ we have each asserted in our, own
icy indicates that it is primarily way. I can see, at the heart of de¬
a political and a commercial pol-j
valuation, a warning that still less
icy intended to push exports into of that liberty will remain in
No Stability by Decree
dollar areas and not part of a England and in our world when
policies / have- run
their
long range monetary program. It these
We are well aware that it is
::.C
?•••"•!'1
J//
nonsense
to talk of stability of does not have the appearance of a course.
forces, .or permanence of economic first step on the path back to free
You and I are not politicians.
propped above, or pressed below,
reality.
It creates an appearance
of stability in a situation which is
inherently subject to change.
relations,
PUBLIC
Mofe
62,418
of
block
A
export
44%
full
is
in
stepped
tonnage
30 V2%
up
more
.'(assuming
decrease
than
the
is reflected
away
off like little children be¬
hind the evil Pied Piper of Mos¬
cow.. It
seems - thai
there
are
leaders in our
with
the
best
world who would,
of intensions,
(Continued
on page
38)
lead
/
Volume 170
Number 4848
THE
COMMERCIAL
&
.
CHRONICLE
FINANCIAL
tracted
How
Advertising Increases Securities Values
Maintaining advertising is
This
it
earnings,
may
have
natural to
g a r d
re-
In
this
the
iuncuonastne
end of
tising's
use¬
panies
a
and
investment
follows:
iirms worded as
"Do
to
at
sides
Stanley
When times
are good the atti¬
be that
advertising
justified,
ditions
Qbecause;; more
not needed.
are
attitude
advertising
forded.
But
viewpoint
When
depressed
the
scarce
Morgan
cycle.
tude seems to
is
not
are
H.
seems
cannot
there
of
and
con¬
money
to be
be
is
af¬
another
importance
to
the
advertising agency, the advertiser
and the stockholder.
The
yardstick
of
any manage¬
is not excel¬
ment's achievement
lence of product, volume of
sales
even the amount of
earnings
alone.
The yardstick is a
"Business Week" reports that it
"discovered that one of the major
influences in creating and sus¬
taining the value of
securities is
An
.
company's
advertising."
.
.
investment
basically
like
a
a
a
banker
merchant and behaves
merchant.
permanently
capital
in
He
invest
does
his
enterprise.
an
simple
Has
creased
the
the
management in¬
value of thp stock¬
holders' ownership either
through
dividends
or
long-term
capital
gains?
His
funds
are used only for the short
period of time that his underwrit¬
ing contract may continue—if he
assumes an
underwriting contract.
securities of
wilich
is
vestment banker
miauieman.
is
ilar
to
that
of
be
that
of
any wholesaler of
He wants goods—
merchandise.
securities
retail
in
his
dealer
tribution
to
economic
risk.
This
no
function than to
reward the stockholders for their
is
reward
payable
in
And, of
like
for
dis¬
individual
the
dealer,
in¬
course;
all
the retail
retailers,
wants
goods—securities in his case—that
his
customers
,
easier
will
buy
readily
and without resistance.
for
wise
different
from
of
other item of
in
are
those
in
or
capital.
commerce.
Investment
Trusts
Use
The portfolios of the 87
investment
open-end
largely composed of
ties
of
nances
securi¬
enterprises which
are
more
so
through their years
heavy advertising as to have
their
names
words
of
severe.
and
household
it
its
chusetts
mains
investors
lowing:
Trust
of
as
included the fol¬
ing
Pont
de
Nemours
Co.;
'lnis
Power Co.;
Monsanto Chemical Co.
ing,
re¬
is
1948
these
in
the integrity of the company. The
the
investment dealer did not in turrt
principal
have to sell the
.
means
simply
that
pany
more
or
its
name
integrity
of the
to
years
funds
As
and
more
com¬
in
ment
This announcement is neither
ownership itself.
advantages to the
unsuccessfully, it has
increasingly apparent that
The
promoting
an
the
;
equity
'
''
.•;/
offer to sell
attention
throughout the financial
One
phase
of
this
subject
enterprises
have
(Continued
on
page
solicitation of an offer to buy any of these Shares.
The offer is made only by the Prospectus.
value for its stockholders in
every
and
ethical way are
substantial.
Such
expect
these people.
position
a
solid
management
support
from
Management's
should
profitable and
become
more
/
own
tutes
secure.
excellent
an
base when
new
The
Public Service Electric and Gas
Company
marketing
4.08% Cumulative Preferred Stock
capital is required.
1
•"
>•'"
•
L*4--
^(Par value $100 per
The Investment Aspect
Let
look
us
aspect first.
tising record
concrete
as
at
the
0 ,052, Shares
more
opportunities of such management
are
likely to be widened, as a
loyal stockholder group consti¬
Share)
'
'—
*
investment
An effective adver¬
is
widely regarded
evidence
of
a
com¬
Price $102
pany's progressive
management
policies. This view is widely held
among
investors,
investment
Share
and accrued dividends
commercial
bankers,
a
bankers.
.1
,
i
Hard-hitting
advertising,
mer¬
chandising and sales promotion
give
first
rate
evidence
of
Copies of Hie Prospectus
the
company's determination not only
preserve its position in its in¬
dustry but to improve it.
offer these
to
;
Investors do consider the
map
be obtained
Shares in
only such of the undersigned as may from
legally
the securities laws of the
compliance
with
States.
pres¬
tige and brand preference which
enterprise develops through
advertising.
Many investors to¬
day
practically
disregard
the
tangible assets of an enterprise
and give the balance sheet little
MORGAN STANLEY & CO.
DREXEL & CO.
GLORE, FORGAN & CO.
an
or
is
no
on
attention.
Their
THE FIRST BOSTON CORPORATION
Incorporated
the
American
Central
Morgan be¬
Council
Association
of
of
KIDDER, PEABODY & CO.
STONE &WEBSTER SECURITIES CORPORATION
:
'
fore
I
And
they pay as high a ratio or even
higher
ratio
for
earnings
de¬
veloped largely from advertising
*An address by Mr.
HARRIMAN RIPLEY & CO.
■
SMITH, BARNEY & CO.
attention
the income statement.
BLYTH&CO.,lNC.
WHITE, WELD &
UNION SECURITIES CORPORATION
LIREM-.OC LYNCH, PIERCE, FENNER & BEANE
the
Adver¬
October 19,
19$.
,
:
1
**
y
tl'
.
tising vAgencies,1 Chicago, 111., Oct.
14, 1949.
>
■'
■
'
fre¬
quently acquired lesser-advertised
American
legitimate
may
is:
shown by the fact that better-ad¬
vertised
Telephone
&
Telegraph Company is an excel¬
nor a
ij
and business press.
good
using
v
own
stockholders was over 99%;
subscribed by them.
The offering
was so successful that it attracted
advertising and the integrity thai
good advertising implies.
of
■
recent offering by Liggett:
Myers of 784,000 shares to its
'
manage¬
own
The
&
Second,
by enhancement of the value of
The
com¬
.
more
more
ways: First, the payment of
dividends to the stockholders for
the hire of their
money;
the stockholders'
it's
clientele.
tation of the public for capital. No
effective means
exists to
win public acceptance than
billion in¬
market
a
enterprise must win public ac¬
ceptance in advance of its solici¬
Even in the gen¬
adverse
acute
of
the!
the company did not have to ac¬
quaint investment dealers over tHe.
country with the Heinz name or
public
an
support since 1940
vested in them.
death
;;
rapidly declining prices,
but they readily over-bought
some
otcome
have received! over $1 bil¬
have ovef $1.6
become
-
a
stock of the H. J. Heinz
Company.'
The investment bankers
serving
true
still
had
time
market at
as
company
es¬
badly frightenedpublic was throwing the stocks
o^;
many
good companies into
the,j
panies have sought public financ¬
These
funds
using
securities
largely of well-advertised enter¬
and
has
the
well
■
public.
Union Carbon and Carbide Cor¬
1947
At the
of the capital must come from the
poration.
lion of public
could
owner.
&
Hercules
erally
or
If
event of the
i
,,
now
closed
is
a
investing public to participate.
closed the need for public financ¬
.
ration;
and
the': company
financing.
Allied Chemical & Dye Corpo¬
Du
This
having
advertising trade-mark
clearly demonstrated by the
trolled enterprise for many years
but when the need for funds arose'
the company invited the general'
management every
establish.
can
under-'
severely declining market in thq!
of 1946.
The company had
previously been a closely con-1
placed
strong
even
Fall
their .fi¬
as
investment
an
low
very
a
this
increasingly
there
of
use
a
without
offering of stock by the
J. Heinz Company, makers of
the "57" brand
foods, in the face of'
matter of real¬
a
at
successful
additional capital
As
credit
whether
31, 1948,
of
•
H.
enterprise needs the path as open
as possible to the financial
market
currency.
For instance, some of
the chemical stocks in the Massa¬
Dec.
found
grow
istic financial
well-known
of
for
to
stockholders
was
sorely strained.
continues
funds
force
solidly
,
have
The need
leading
trust
are
many
companies
Well-Advertised Companies
the
particularly justified
The valtie of
year
Under
pressure
Leading
their well-advertised vehicles at¬
two
growing
advertising in¬
tablished
and
by year forc¬
ing
business enterprises to use
larger and
larger
amounts
of
the
-
machinery
fhanage-
writing house.
been
plant to give an individual worker
job.. Inflationary pressure had
been
seems
rate of interest and
greatly increased
in
its huge
the
—
a
oi
no
cigarettes
make
investment
have
>
of
$360,000,000—three hundred and
sixty million dollars
from its
World War II
forced to
dis¬
to
principles
securities
merchandising
any
retailer
of
enterprises
universally
in the difficult market
existing in
the Fall of 1947. The
company was
able to borrow the great sum
of
the
Since the end
business
im*
judgment
in
ance
Favorable
on
of
vestment to secure public
accept-^
Basis
an
basic
The
own
Funds
long-term,
advertising. The
•
completed.
ment
declined
Public
retail
known
the
The
distributing
case—%hich the prises
will .accept
well
tribute.
any
position is sim¬
ms
the
materially
Enterprise Today Must Win Pub¬
lic Acceptance if It Is to Secure
enterprise
through a
iong
and
successful
advertising
record the securities are
likely to
He may act upon an agency basis.
The business function of an in¬
vestor.
-Actually, management has
other
not
business
or
one:
is
show
can
dealer
those of lesser known compa¬
nies?"
of
the business
pro¬
banker
of
use
respected enterprise seems to feel
that its advertising
jou is never
needlessly under
small volume of liquidation.
it is clear that when the invest¬
ment
over
extreme
both
a
advertising by a company
gives its securities an advantage
of market stability and demand
this
points
feel that such
you
gram ol
seems
carry
that
"Business
number of prominent New York
underwriting
com¬
viewpoint
sales
'Bid,'"
versus
on
agement
some
to
under
questionnaire sent the partners in
the
financial
man
of
published
"We Lifted the Lid
Week" magazine reported upon a
enterpr ise.
The
booklet
a
title,
'Asked'
adver¬
fulness to
earnings produced largely
physical assets.
from
13
example- of'the
management
the
un¬
dollars of equity values held
by
stockholders of these well-adver¬
tised companies.
Prices may not
—
for
as
seem
contributed
the comparative price
stability
many of these stocks and has
protected
probably
billions
of
advertising dollar spent for product adver¬
tising can produce, in addition to income, lo.ig-term capital gains without further cost to
the enterprise. Because of the
indispensable contribution of advertising to the creation of
and
lent
heavy
to
The basic premise of this address is that tlie
—
$147
of
"
*
and
financial
doubtedly
a
sales
millions
support in
public securities markets has
Research Chicago
major influence in creating and sustaining value of a company's secur¬
ities, Mr. Morgan points out holdings of leading investment trusts
comprise securities of well adver¬
tised companies. Says
advertising builds up asset values, and a well advertised company is likely to
have its earnings capitalized at
higher rale than comparatively unknown company.
produce
$178
millions, respectively.
By STANLEY HAROLD MORGAN*
Financial Analysis and
(1557)
...
I
/'■
W
34)
14
Fereigst Aid and Foreign Tirade
Michigan Brevities
By WILLIAM McCHESNEY
King-Seeley Corp., Ann Arbor, for the year ended
July 31, 1949, amounted to $21,455,406, or $1,927,278 below the alltime peak sales of the previous year. Net income after charges and
Federal income taxes was $1,836,187, or $4.52 per common share, com¬
Sales
of
Assistant Secretary
pared with $1,964,304, or $4.84 per*—
1 a t i v e
convertible preferred
share, before provision
of
$350,000 for inventory con-! stock (par $10) of Liberty Loan
Corp., Chicago, at $15 per share.
lingerie ies, for the year ended
of the company's.
of any part
use
?f
>r
'
The Dow Chemical Co. of Mid¬
land, and its subsidiaries, l'cr the
stock
^were !
acquired ui the open maiket at a
cost
par,
retired.
preferred
the book
common
stock was
$"3
of
and
stock
equity
value
of
at
the
were
the
deducting
After
$21.63 as at July 31, 1949.
The
company's corporate charter now
expires on July 28, 1979, having
been
renewed
for
another
30
years.
54^
both
First
Co.,
&
Moore
-
and :
Corp.
Michigan
of
First
on
Sept. 14 participated in the pub¬
lic
offering 250,000 shares of
Louisville. Gas
Co.
Electric
&
(Ky,j common stock, without,
par value, at $30.37 M> per share.
The
net
proceeds will go to
Standard Gas & Electric Co. The.
sale reduces Standard's holdings
from 385,308 shares to 135,308t
shares and reduces its percent¬
s
V
value of $2,484,225.
a
to
all
of
investor
in
this will always
be welcome and it is my hope to
hear
from
many
of you from
time to time as to any suggestions
and
credit control,
is
vital
to
citi-
Wm. McC.Martin.Jr
important changes in the structure
of world commerce, and we must
the task of raising
of
squarely lace the new responsibil¬
ities which the changing character
of the world economy has thrust
this
country.
Dif¬
zen
1974, of The
Penn Electric Co. at 102.-
bonds, due Nov. 1,
ficult
was
as
staggering sums, it is likely,
in retrospect, to prove child's play
compared with the complexities of
management the Treasury now
these
526% and accrued interest.
Hayes Industries, Inc., Jackson,
for its fiscal year
1949 reported net
month
the
of
September
Common wealth
trcit
Cleveland
&
Co.,
De-
Navigation
Sheller Manu¬
Consumers
The
("w.d/')
and
Cd;
Power
stode;
common
Kaiser
Friars
Cor
Frazer
-
Brewing
Ale.
Co.
t
•
#
.
'
Continental
-consolidated
Service
Gas
City,
Motors
Corp.
subsidiaries
and
had
net
against
totaled
$18,123,468.
$33,368,470.
against
$11,522,635,
working capital of
liabilities
current
'leaving
net
of
$21,845,835. This was an increase
-of $1,209,005 over the total a year
ago.
%
t
*
••
troit,
in
*
#
Simonds
among
the
■
Ralph
McElvenny
T.
Sept.
on
21
of
A
Growing
In
a
Company
Growing Industry
Member
1051
Detroit
Stock
Exchange
Penobscot Building
DETROIT
Bay City
—
26,
Lansing
MICH.
—
Muskegon
approach
World
War
reflected
I.
In
the
of
end
this
is
clearly than in the
more
contrasting
with
area
no
con¬
war
the
at
taken
the
toward
attitude
repayment problem after the two
wars.
After World
without
War I,
insisted!
we
to the feasi¬
regard
any
bility cf repayment in real goods,
our European allies repay for
United States aid, even for
that
all
the shot arid shell which had been
expended
field
the
on
of
battle.
After World War II, in contrast,
there has
been
recipient
growing
a
appre¬
repay
and how the grow¬
importance
of our foreign
trade is directly connected with
our
Federal
budget,'
We in the Treasury, like your¬
selves, are looking forward to an
of
the
fact
that
we
can
approach the whole foreign lend¬
ing problem only from the point
ol view-of a true appraisal of the
countries'
capacity
to
the case of Europe, there is
increasing recognition that we
In
an
cannot reasonably expect Europe
to repay all, or perhaps even a
major part, of the total economic
aid
required
from
the
United
States. It was the original hope of
this. government that the emer¬
people enjoy, receiving on such a' gency reconstruction process
through
basis, Let us not iail to recognize, could be^ met entirely
nevertheless, the crucial impor¬ loans. As we all recall, a large
measure
of dollar aid was ren¬
tance of our postwar aid and the
in
1946
and
1947
on
a
vital necessity of continuing the dered
Economic Cooperation
Adminis¬ straight lean basis. There were the
British loan of $3,750,000,000, Ex¬
tration
until
Europe
is
more
port-Import Bank reconstruction
credits of over $2,000,000,000, and
surplus-property and post-VJ-day
early end of United States extraor¬
dinary economic assistance. No
one
likes to give away money
indefinitely, nor; do self-reliant
000,000.
middle
the
By
over
$2,000,-
'
of
1947,
how¬
had
become generally
recognized that some new way of
suggestion that someday may come in handy if you
too are faced with a similar situation.
There are times when you
must make two sales in order to make one. In this instance a certain
is
Here
salesman of
a
our
acquaintance had spent almost two hours in the home
financing the dollar aid require¬
ments of Europe had to be found,
and that they would have to be
met directly by the United States
Government.
Accordingly,
the
prospect explaining the merits of his proposition.
made in the evening and it finally wound up where the
of
Automobile
Mutual
a
aid
then.
him
Chair¬
Arbor Bank, and
this put the salesmanHn a very awkward position.
all the prospect had to drive about 20 miles to see the
As you can see,
operating committee
of Arhus, Inc., Ann Arbor.
»
grants
to
France,
and
Italy,
Austria, in the Winter of 1947 and
the
EGA
grants and loans now
doubtful if he could conveniently contact the being utilized. The emergence of
the European Recovery Program
No set time could be made when the salesman
could call him either. Sizing up the situation the only thing left to reflected the conviction of the
Branch and Congress
do was to suggest that the salesman might join his prospect the next Executive
morning and they should go out to see the nephew together. This was that the remaining postwar dollar
requirements might extend
arranged and the salesman met his potential client the next morning aid
over
a
further four-year period,
and they drove out to see the nephew.
v
During the ride together no mention was made of business and might amount to as much as $17,the conversation was kept on an informal and friendly basis. Arriv¬ 000,000,000 and would have to be
ing at the destination the salesman was introduced to the nephew and met largely on a grant rather
the purpose of the mission was related by the prospect to the nephew. than a loan basis.
Then he turned to the salesman and asked him to explain the propo¬
First
of
nephew,
and
it
was
salesman the next day.
Northern Engineering Works,
Detroit,
10
that shipments
ended Sept.
reports
for
1,
the
1949
like
months
to $2,322,000,
amounted
to
compared
$2,441,000
for
the
1948 period.. Profits for the
nine months ended Aug. 1, 1349,
were
for
$409,257,
the
against
$465,531
corresponding period in
As of
Sept. 1, 1949, the order backlog
amounted
$1,185,000
to
a
year
>K
sition
Here
before.
'
;T
if!
$15,646,244,
all-time record.
ing fiscal
year,
■.
'
a
new
For the preced¬
sales amounted to
$14,074,597. Net profit, after taxes
and, all charges, was $633,967, or
83 cents per share
(including a
non-recurring profit of $241,155,
or 31
cents per share on sale of
machinery and equipment), which
or
with
a
net
of $652,494,
85 cents per share, for the fis¬
cal year ended June 30,
corporation's
30,
1949
net
worth
1948. The
at
June
$4,040,404, or $5.26
per
share, against $3,649 952, or
$4.75 per share on the correspond¬
was
ing date in 1948.
once
against
$668,000,
!'i
totaled
compares
Moreland & Co.
after
favorably
most
ing
By JOHN DUTTON
of
Mr.
of' the
man
1949,
CORPORATION
this
Government
trasts
ever,' it
Sales of Gerity-Michigan Corp.
for the fiscal year ended June 30,
WELDER
whole
that the
me
The call was logical and necessary bulwarks to
prospect said the Export-Import Bank recon¬
he would go ahead but that he wished to discuss' the "matter with his struction credits and the British
Insurance Co.. Howell;
Counsel
nephew the next morning and he would let the salesman hear from line of credits were the interim
for the Ann Arbor Trust Co., and
Citizens
the
| 160,000 shares of 90-cent cumu-
RESISTANCE
to
seems
aid programs,
Securities Salesman's Corner
who has resigned.
Burke has practiced law in Ann
Arbor since 1907, is Counsel for
the Board of Regents of the Uni¬
versity of Michigan; President of
■
*
H.,
It
approach taken by the American
lend-lease credits of
the preceding fiscal year.
,
Co., De¬
&
others, participated
offering
N.
1949.
100.75%
♦
.
Baker,
j
Oct. 18,
Edison Co. to
Detroit
The
of
tor
succeed
22% less than at the
in 1948, amounting to
'.Current assets, including $11,225,#03 cash and marketable securi¬
ties,
Whitefield,
Connecticut,
of Michigan's best known at¬
the Ann
date
Savings Banks Association of
the
-George J. Burke, of Ann Arbor,
391,-compared with $85,592,860 a
C. J. Reese, President,
stated that inventories at July 31,
$14,175,077,
Martin
present.
ciation
torneys, has been elected a direc¬
year ago.
-same
Mr.
by
Company,
at
Mo.,
Chicago,
were
address
before 47th Annual Convention of
interest.
accrued
earnings in the nine months ended
July 31, 1949 of $1,701,005, or 52
eents per share on the 3,300,000
■common shares outstanding.
This
compared with $2,536,129, or, 77
cents per share in the like period
last
year.
Sales
for
the nine
months this year were $58,693,-
1949
,
2%% series due 1969, of
Kansas
one
Hf
>'.!
"v'.:' V
,
Co., De¬
nearly self-supporting than it is at
Accordingly, I
want
briefly to review with you this
morning what the United States
has been doing with its foreign
us.
upon
p.,
and
Avco Manufacturing Corp.
'■■■,
,/
::'An
bel Brewing Co.,
p.,
'■
C
&
on
bonds.
Cor
$1.
![»
Oct. 6, together with
others, publicly offered an issue
of $18,000,000 first mortgage
troit^.
Co., McGlanaban Oil Co., Goefacturing
par
1;(
Watling, Lerchen
were:
Southern
&
Edison
Detroit
Corp.,
4
>!:
as
may
you
concern
every
such
have toward furthering
this objective.
World War II has brought about
matter of
a
that the
groups
and
relationship to
monetary
s ee
policies which will ultimately re¬
duce the strain on our own budg¬
et.
The advice and criticism
of
the
needs
ly off e red $31,000,000 314 %
sinking fund collateral trust
of common stock,
monetary
its purpose is
money spent in our
foreign financial activities is ex¬
pended wisely and to promote
dis¬
meet
Lerchen
The 10 most active traders for
and
to
ended July 31, faces. The advice and understand¬
sales of $7,550;-:
ing of the entire financial com¬
316, and net earnings; after Fed¬
munity is needed, as never before.
eral income taxes, of $5.37,165, or
age of voting power from 19.97%
My particular sphere of respon¬
$1.61
per
common
share,, com¬
to 7.01%.
pared with sales of $5,735,106 and sibility in the Treasury, however,
The Detroit Stock Exchange re^ net earnings of $439 218, or $1.32 is in the field of International
ports that trading volume in Sep¬ per common share, for the previ¬ Finance and its relation to the
tember was 252,393 shares having ous fiscal year.
At July 31, 1949, problems of our fiscal and mone¬
a dollar
value of $3,311,627. For current assets amounted to $2,- tary policies. The Office of Inter¬
August the volume was 268,943 257,262, and current liabilities to¬ national Finance in the Treasury
the
shares with a dollar value of $3,- taled $736,256.
There were 1,667 advises
Secretary
on
the
305,804,
and
for
July* 204,839 stockholders owning 3.33,000 shares formulation and execution of proshares* with
policies in the inter¬
financial
national
field. In doing this,
possible,
and
Corp.
and
grams
f
o
tribution
& Co., were
among the group
of 49 under¬
writers who on Sept. 22 public¬
West
m
whe never
A
Michigan
of
r
groups,
jjj
How effectively the
is
reduction,
periods.
Watling,
McDonald
t e
>
grotip like this has a priirary interest in the management of a Federal,
of $250 billion. The policies pursued cut across the fields of money, credit,
a
handled in
'
9
1
share, for the corresponding pe¬
riod of 1948. These earnings were
after
deducting
dividends
of
$625,000 on the preferred slock
excess
debt
common
per
or
looks for increasing imparts of foreign
prices, wages, taxes, interest rates, and the formation of capital.
compared with net sales of
953^543 ancj net profit of $6,-
393445
Naturally,
debt in
u
preferred
of
shares
heavy investment abroad fer long time to cane, and
tion of
♦
j
?'
goods and services into U. S. Opposes however, sacrificing our vital expert interests or permanently
subsidizing Europe, but favors relaxa'aen of U. S. barriers to international trade.
three months ended Aug. 31, 1943
000, with The Manufacture is Na- ( reportec( consolidated net sales of
0
? °1
D
?" ! $47,557,730 and net earnings, after
troit -^ank, and Ami Arbor Bank, j
c^argGS anc} income taxes, of $5,Durr.ig
tae
fiscal
year,
4,897 957148^ 0r $1.04 per common
CS
MARTIN, JR.*
of the Treasury
Asserting goal of U. S. foreign aid is self-sufficient Europe by 1952, Treasury official says serious prob¬
lem is restoration of balance in our international trade. Holds U. S. creditor position requires continua¬
common
July 31, 1848.
The report states
that "it was not necessary to make j
Thursday, October 20, 1949
FINANCIAL CHRONICLE
COMMERCIAL &
THE
(1553)
again.
is where
.
the salesman
>
took
a
V
chance and it worked.
1 *
this time thoroughly sold on going
ahead. He also guessed correctly that he had done a complete enough
job of explaining the highlights of his proposal the preceding eve¬
ning, so that the prospect could do the selling job on the nephew. So
he said, "You know, I think you can almost do a better job of ex¬
plaining what this is all about than I can, why don't you tell your
nephew about it. Then if you need any assistance, which I don't think
you will, I'll be glad to help along." Within five minutes the nephew's
O.K. was granted. All he said was, "Why, if you think it is O. K. and
you feel this way about it, surely we ought to go ahead."
believed that the prospect was by
pitch the ball to the other fellow as was done
Surely it was more effective to have the uncle tell his
nephew why he thought the proposition was worthwhile than for the
Sometimes you can
in
this
case.
Goal—A
Self-Sufficient Europe
The United
He
States
cannot shirk
its responsibilities as the
economic
creditor
power
nation
greatest
and the greatest
in
the
world
to¬
The goal of our foreign aid
program
is
a
self-sufficient
Europe by 1952.
While the Euro¬
pean
countries have .made sub¬
day.
stantial advances under the Euro¬
pean
Recovery
remains
gap
to
to
be
Program,
much
if the
dollar
done
is to be closed and they are
to stand on their feet.
be able
Recent adjustments in exchange
rates should help many of these
explaining the night before
countries to improve their dollar
had soaked in, and there was no doubt in the salesman's mind of the
position and to move toward a
prospect's sincerity, after he had consented to their going, together
higher level of trade in both di¬
the next morning to see the nephew. It was also obvious that the
rections.
However,
this
action
nephew had a very high regard for the judgment of the older man
does not constitute a cure-all for
and closing the sale in this manner was not only effective but also,
(Continued on page 39)
complimentary and pleasing to them both.
salesman to do it.
The two hours spent
Volume
170
Number 4848
THE
COMMERCIAL
&
FINANCIAL
To Private
CONSOLIDATIONS
NEW BRANCHES
Bankers
and
OFFICERS, ETC.
REVISED
-f'
ABA
Vice-President
of
the
Chemical
Bank
&
since
1947, has been appointed
Trust
Co.
Vice-President,
of
New
according
charge of the FHA di¬
vision of the bank's
York
to
is in
partment.
Mr.
mortgage de¬
Gardner
is
in
charge of the bank's appraisal de¬
a
partment.
an-
*
The
*
Bank
*
for
Savings of New
York opened its new Peter
Office
at
the
2nd
Oct.
17.
dent
of
southeast
Avenue
Cooper
corner
of
23rd
Street, on
DeCoursey Fales, Presi¬
the bank, states that the
office
new
and
"will
venience fox
be
great
a
con¬
the thousands i"n the
residential
sections
which
have developed to the east of the
new
neighborhood served by our main
office, 4th Avenue at 22nd Street."
This
is
Bank
Robert
B.
O'Brien
nouncement
N. Baxter
Maurice
T.
made
Oct.
on
ber
13
day the election
as
a
mem¬
of
the board of directors of
Chemical Bank & Trust of
Maurice T. Moore of the law firm
Cravath, Swaine & Moore.
Prior to joining the Chemical
staff, Mr. O'Brien
associated
was
with the Central Hanover Bank
&
Trust Co.
and
represented that
bank in New
York, New
Jersey,
Pennsylvania and Delaware terri¬
tory.
For
.
time he has been
some
supervising the western business
of Chemical Bank & Trust Co.
Mr. Moore, who has been a
member of the above law firm
since
#
1926,
developments in mortgage credit, stresses
growing influence
keeping interest rates low and in
encouraging
borrowers to make long-term commitments
beyond their means. Holds this trend damages fabric of
personal responsibility and enterprise, and
lays tax on whole economy. Says matter is one of
deep
concern to
private mortgage lenders and is
threatening sound standards in mortgage lending.
Savings deposits in banks reflect the thrift habits of millions of
people. These deposits
have come to us in
growing abundance in recent years. The growth of
savings accounts
in
savings and commercial banks throughout the
country is impressive and gratifying. Deposits
again
new
office.
now
London,
that
announce
ginning Oct. 24 their New
office
will
be
52
at
Room 2206.
Wall
totalled
$18%
at
billion
the
ed
:Jt
V
'
.
'
;;
regular meeting of the
board of directors of The National
City Bank of New York held on
Oct.
11, Eldrich C. Campbell and
Cedric
R,
Lane
were
appointed
Assistant Vice-Presidents and Wal¬
ter Gless was
appointed Assistant
Cashier.
Lane
Mr.
Campbell and Mr.
formerly
Assistant
were
Cashiers
year.
$550
lion
located
at
42nd
Branch, and Mr. Gless is
Office, 55 Wall Street.
Street
and
mil¬
first
this
than
$8
one-third
of
the
The
have
total
%
doubled
de¬
since
of
the
American
people in banks, other
savings institutions, life insurance
and United States Sav¬
ings Bonds exceed $200 billion.
reserves,
These
savings funds represent a
tremendously important element
in the nation's economy.
a source of
personal and
nancial
reserves,
at Head
They are
family fi¬
reservoir
a
billion
bank
the
of
of
shown
a
record
of
G.
was
Economic
Cooperation
ington, D. C.
'■
•
C..
It
special assistant to
Hoffman* Administrator
'
'
*
'
Wash¬
V
#
made
was
in
State
Bank of Albany at Albany, N. Y.,
it was announced on Oct. 5
by
President
The
%
■
known
over
the
Frederick
Albany
son
turers Trust Co, of New York has
institution
.and 150th Street.
thirds of
the
Owners of two-
stock
of
the
McDonald.
"Times-Union"
re¬
ports that Mr. Roberts joined the
bank staff in 1941. while Mr. Nel¬
past week-end that the Manufac¬
arranged to purchase the assets
of the National Bronx
Bank, also
of this city, at Melrose Avenue
/
began employment .with the
;
y:
.
ir.
1933.
;
ff
v
ft
-
Irvington,
N.
the
as
J.,
.
,
_
opened
Oct.
on
latter
ark, N, .?.
The sale of the bank
to the Newark institution was
ap¬
proved by the bank's stockholders
wise
guaranties
against
lenders,
regarding
in
only
conditions.
loss
soundness
of
still
on
of
if
a
occur
in
general
The
loans
is
protec¬
as
excessive
mental
the
on
vices
Hi tellings. President of the
Irving¬
ton institution, was
2,035 shares in
to
National
the
stockholders
Bronx
of
the
Bank, Harvey L.
Schwamm, Chairman
of the Board
and President of the
bank, stated
that under the terms of the con¬
tract entered into, the Manufac¬
turers
Trust
deposit
Co.
will
liabilities
assume
of
the
Bank, and will continue
ate the branches of the
taining its personnel.
to
all
we
do to further
greatly to
the nation's financial strength,
Accompanying the growth in
savings deposits this year, there
end
sented
of
the
It
war.
has
serious problems for
very
buyers, builders, and mort¬
gage
lenders.
scarcities and
and
There
,
have
•v:There has been
high cost of labor
dence
materials. The de¬
mand for homes has been without
It
has
been
real
greatly
in
new
struction
far
and
existing
beyond
prices
"areas
many
Builders
Bronx
oper¬
latter,
re¬
The present
board of directors of the National
Bronx Bank have
agreed to serve
as
an
advisory board for the lat-
ter's offices. The Bronx Bank has
a
capital of $1,000*000
of $10 each) and its
reported
It
in
excess
(in shares
resources
of
are
$49,000,000.
formed in 1931 through the
consolidation of the Melrose Na¬
was
tional Bank and the Port Morris
Following the consumma¬
Bank.
tion of the present
plans, it is un¬
derstood that Mr. Schwamm will
devote his banking interests main¬
ly
to the business of the Pan
American Trust Co., in
which, it
is said, he owns a 90% stock interest.
(
;
,
»
The
vote
■*
47th
Annual
con¬
of
cost homes
have
declined.
large
some
develop¬
difficulty in sell¬
and
newr homes
price them
more
have
Mr. Peterson at
Convention
,
at
a
Denton,
Manhattan
President
by
Roy
A.
Bank
965
were
Law.
Fortunately,
techniques
have
been
of
one
mortgage
credit
extensively developed
Among these
principal
and
are
constant
is
confronted
dence
'
is
that the supply of
catching
housing
with the immediate
it. The pressure of
emergency buyers on the real
tate market has disappeared. Thhi
es¬
is 'one
the
of
the
main
downtrend
during
faster
the
in
past
reasons
home
year
prices
although
construction;methods
(Continued
on
page
37)
Internal Revenue
Bureau and
demption
preferred
the
not
was
voted
was
20%
held
of
the Executive
National
State
Bank
the
meeting and voted
directors
of
who
form
will
committee
ship.
a
were
all 12
Assistant Vice-Presidents. Mr.
Ly¬
Copies- of the Prospectus
and others
Irvington bank
special advisory
under the
new
may
as
be obtained in any Stale only from such of the Undersigned 1'
lawfully offer these securities in such State.-
may
owner¬
.
"The
to
the
sell
shareholders
on
voted
Kuhn, Loeb & Co.
iden¬
two resolutions, the first
the
bank
and
the
second
to
appointed
been
100.S2% AND ACCRUED INTEREST
of
two
have
PRICE
Newark, according to Mr. Hitchings. Among those who attended
Within
Gardner
Due October 1, 1979
Committee
be
Alan
OFFERING
by Julius S, Rippel, Chair¬
man
would
and
Dated October 1, 1949
Irvington bank for $510,000.
"The 'largest
single
block
of
shares in the Irvington institution
C.
Lyman
(Interest Rate 2%%)
in the
liquidate the assets. Mr. Hitchings said the first disbursement
Bank
Mortgage Bonds, Series due October 1, 1979
re¬
stock
Norman
Savings
Duquesne Light Company
$1,022,681, plus a tax adjust¬
ment being worked out with the
of
an offer of these
securities.
$15,000,000
of
made
to
weeks and
(Continued
on
Union Securities
stockholders
the entire
page
42)
Corporation
:
A. C. Allyn and Company
Incorporated
October 20,
1949.
"for
and
steadier supplies of building ma-
is not, and is under no circumstances to be construed as,
securities for sale or as a solicitation of an
offer to buy any of such
The offering is made only by the Prospectus.
First
a
up
NEW ISSUE
The
by
hand, there is increasing evi¬
new
in
recent years.
amortized
of
number
a
nation
paradox in the housing field. On
Not
shares."
of New York, has announced that
C.
"
mated $340.89 for each of the
3,000
common stock for a total
the
to
high level.
The
demand ,for
This advertisement
!>hares of
of
had
attractively, but
construction volume has continued
'
portfolio
supervision.
the Savings Banks' Association of mortgage
Connecticut, Whitefield, N. H., They provide a remarkably high
Oct. 18, 1949.
degree of protection and control
"Evening News" further reported*
"Fidelity Union paid an esti¬
tically
K.
"announced
the National
which
passed
ing
reasonable
New Techniques in Mortgage
Credit
'
•
-* '
favor of the merger, only 35 votes
more than the two-thirds
required
.
,Vf:-
Williard
of
ark
the
by
that
year
have
ments have had
low-cost housing credit. All these
factors ; combined
to
raise
the
prices of
confirmed evi¬
during the past
estate
higher cost and lower
by government meas¬
provide
abundant* and
to
value
their postwar peak. Prices of both
stimulated
ures
the
the
of the loan.
been
building
precedent.
based
property behind the loan
the willingness and,
capacity
of the borrower to meet the
terms
pre¬
home
in
*An address by
According to the New¬
"Evening News" of that date
voted
funda¬
mortgage
and
development adds
Oct. 14.
27,
the merger, it is
planned, becom¬
ing effective Nov. 10. In his ad¬
:
mortgage
are
Fidelity Union Trust Co. of New¬
stockholders of the Bronx Bank
will act on the plans on Oct.
v
successful
from foreclo¬
Irvington branch of the
have, it is stated, consented in
writing to the transactions; the
.
bilities. Whatever
its
the
The Irvington National Bank of
17
Bank
business
total.
.
Mr. Moore
remarkably
freedom
-
-
Paul
by the
Administration
or
in¬
by the FHA have thus far
very great decline should
real estate values or in
trust
is Chairman of the
long term credit, and a wellspring levels. As a
result* many mort¬
'
-of purchasing power that can
Time,, inc.;,director of.
u*
* ,'i >fii
help gage loans made after* the war
'
a;
stabilize the swings of the busi¬ were
[ Studebaker Corp. and of the Penn¬
based
ori inflated values*
; WArthur C;^ Roberts and A: Gor¬
sylvania; Glass Sand Corp., etc. don
ness cycle. To encourage thrift is
measured by any standard.
Nelson have been appointed
From April to
one of banking's major
September 1948, Assistant Cashiers of the
responsi¬
Board of
mortgage
Veterans
sured
tion
mortgage loans provided
15%
to
safety. Delinquen¬
only very slightly
this year. Loans
guaranteed
these
total,
and
greatly
cies have risen
struggle for adequate hous¬
ing has been a difficult one since
more
total
savings
$52
add
soundness and
sure.
The
*
1939.
the
and
however,
war.
commercial
another
posits of all banks in the United
1939.
$8 billion for the year,
increase of $22
billion
of
company
F. R. Peterson
they
They
long term
Mortgage loans by
savings banks amounted
15%
and
more
States.
an
mutual
to
year,
in
of
since the
half
are
billion
of
area
savings banks play
important part. Total mort¬
very
crease
during
the
the
gage
loans
outstanding
by
all
lenders at the end of last
year
amounted to $52 billion, an
in¬
Savings accounts represent
'
„
the
a
the. middle
of
further large increase
volume of mortgage lend¬
a
credit in which
than
more
been
ing. This is the
banks,
they
were
York
Street.
.
a®
'
At
in
sav¬
than
be¬
'
,
—
has
highs. In
and
ited,
new
nave
ings
of
resentatives of Lloyds Bank Lim¬
on
reached
mutual
£
J. H. Fea and E. J. Stanley, rep¬
.
the
the
of
Manager of the
by
Vice-President, commenting
'
-
J.
of government in home
mortgaging and its power of
Savings,. New* York's They increas¬
bank,
Jackson, Chairman. Mr.
on
for
office of The
oldest mutual savings bank, char¬
tered in 1819. Albert A. Ii.
Bliss,
Assistant Comptroller of the
is
Jackson also made known
same
Moore
the fourth
Mortgage Lending
Vice-President, American Bankers Association
Chairman, First National Bank & Trust Co.,
Paterson, N.
<
man
15
By F. RAYMOND PETERSON*
..
CAPITALIZATIONS
Robert B. O'Brien, an Assistant
(1559)
Government Housing—Threat
News About Banks
NEW
CHRONICLE
j
16
THE. COMMERCIAL
(1560)
Thursday, October 20, 1949
CHRONICLE
&. FINANCIAL
Europe Looks at the
Mutual Funds
NATIONAL
===s====s
INVESIMENT PROGRAM
An
Details
of
&
SECURITIES
120 BROADWAY, NEW
woman
Even
advice.
free
proves costly.
"I wanted
CORPORATION
RESEARCH
a
am
YORK 5, N. Y.
invest. I took my time and
shopping' before I took a dime out of the bank.
friends what to buy as I didn't think much of
when given with the best intentions, it often
,
_
_
,
.
,,
investment paying a good and dependable
income to help meet the rise in living costs.
I wanted my invest¬
ment to increase in value and secure profits for me over the years.
"I didn't know one stock or bond from another. But I know a good
bond yielding 3% wasn't paying enough for today's high living costs
or for the future, if these costs continue to rise.
,
"I knew I could get a good income from some stocks but realized
I was no exnert on securities and needed professional advice.
I
found investment counsel firms don't handle accounts under $50,000.
As I was a person of moderate means, I had to look elsewhere.
"I consulted a leading investment dealer in my community and
asked him what: was the best thing to do.
He told me the best way
for me to get a dependable income and protect and increase my
savings was through Balanced Mutual Funds.
.
"He showed me how the good bonds and preferred stocks in these
Funds would protect my principal in declining markets and the
common
stocks would give me a better income and a chance for
profits, if the stock market should .advance.
He showed how my
savings would be reasonably secure and my income dependable
because they were invested in so many different securities."—From
"Wellington News."
"
,
sound
.
Prospectus
may
;
,
be obtained
Texas Fund
SELECTED INVESTMENTS COMPANY
135 South La Salle Street
Uft
W
CHICAGO 3, ILLINOIS
send
today
on
the
given to emotional and wishful thinking.
European financiers are not
The
Scot,/ the objective British, the deliberate Dutch, the
survived centuries of major political, economic
canny
cautious Swiss have
upheavals by maintaining a truly objective approach
Europeans generally appreciate that, by con¬
trast with their own hard experience of recent years, the American
financial
and
to their
investments.
healthy in spite of all the
cite.
"Typical is the current position of the American-Canada Trust
Fund of Zurich, the largest diversified European investment com¬
pany operating exclusively in American common stocks today.
The
astute Swiss bankers who run this $40 million Fund now have 90% of
its a'ssets invested in high-grade U. S. equities, about 6% in Canadian
stocks and only 4% in cash.
This is the heaviest invested position the
Fund has taken since its organization in 1938—compares with a cash
position of 12%% at the end of 1948—one of 18% two years ago.
economy
fundamentally strong and
is
obvious short-comings and deficiencies that anyone can
revealed the truly
during which period it
there has never been one
"Our recent visit to America-Canada Trust Fund
remarkable fact that in its 12-year existence,
has
to
grown
th3nT^$40
more
million,
redemption.
; v
"This is striking testimony of the solid growth of the
company
; \
investment
thrifty Swiss investors."—from Arthur Wiesen-
idea among
berger's "Investment Company News."
'
.
.
from authorized dealers, or
bargain counter. The contrast to the hesitant,
doubtful, uncertain attitude here was striking.
"And it was more than a case of the next field looking greener.
considered
who had money to
v
a
through the Continent American stocks were
Parish, Zurich, and all
did plenty of 'window
"I did not ask my
request
upon
NATIONAL
"I
and
program
prospectus
By IIENKY HUNT ■
A Woman's Story
Inv^mBO^count
Open
United States
"Everywhere in Europe—in England, France, Holland, Belgium,
Switzerland, Italy—our senior partner, just returned from a 10-week
trip abroad, found the greatest of interest in the United States and in
American ideas, trend and developments.
In every country people
expressed the keenest interest in our stock market—'If only we had
the dollars we certainly would buy American stocks'.—In London,
Organized
Group Securities Comments
'
•„
for strength in stock prices is the persistence
fastest-growing prodigy in U. S. finance hooked itself to the of the high rate of return which leading stocks provide," according
Southwest's button-popping prosperity recently when a handful of to the October Investment Report of Group Securities, Inc.
"The
Houstonians announced the organization,of the region's first invest¬ return from good stocks is presently at record levels—2% to 3 times
ment trust.
'
>
the yield from high-grade bonds.
It can be explained only by the
"The founders of the Texas Fund, with an idea of their own to add widespread expectation, that has now persisted for over three years,
to one shyly started in 1924 by Bostonians, will make all their invest¬ that present dividend rates cannot be maintained.
Yet the evidence
ments :n Southwestern businesses and industries.
continues to mount that the largest portion of the postwar drop in
"To most Texans, as to most Americans, an open-end invest¬
earnings has already occurred, that any further decline will be slow
ment trust sounds as exciting as a lesson in Sanskrit and is nowhere and of modest amount, and that, in the main, present dividend rates
near as understandable.
will prove to be conservative and will persist for a considerable
"But investment trusts, in the past two decades, have made it
period 'of .time.
possible for small investors to put their cash in the stock market
'Business is improving/ the Group Report continues, 'and there
with comparatively small risk and with returns averaging between is
growing evidence that the adjustment of prices and of inventories
4% and 5%.
These trust have made investors of many a man who is reaching its conclusion. We do not believe that the coal and steel
otherwise would have had no truck with Wall Street.
strikes will seriously upset this favorable situation/ "
"With an original capital of $150,000, the Texas Fund was cleared
"The basic
reason
"The
"
for the latest
and other
prospectus
descriptive material about
by the S£C andjs.now in
Fundamental
>
Investors, Inc.
[A Registered
Available
from
Company
authorized
any
investment dealer
1
J
or
from
,
Dudley* Crawford Sharp, President of thg^Texas Fund and
President also of the Mission Manufacturing Company and the HoweBaker Corporation:
:
Investment
operation.
"Said
u
'We
which
we
believe is not through growing.
and
Company
"What he meant
was
that anyone who makes enough money
48
Street, New York 5
Wall
a
savings account in
with
a
return of about four times as
a
bank
can now
bank and with little more risk.
INCORPORATED
The purpose of the fund
provide a medium through which investors—small as well as
large—can get the benefits of diversified security investments in
companies doing business in the Southwest.'
is to
have
Hugh W. Long
as
•
"The Texas Fund will go on
to
invest in his own region
much interest
he gets at a
„
the market at about $11 a share.'
Quoted from The Houston "Post"
l.OS ANCELES
CHICAGO
A. group headed by The National City
on Oct. 18 $43,365,000 State of New
chased
limiting the investments of the Texas Fund to a region
are
$43,365,000 Hew York Stale Housing Bds. Sold
—
Bank of New York pur¬
York housing bonds due
1, 1951 to 1999, inclusive. The group's bid was 100.0769 for a
of 4s, 2V4S, 2s, l%s, and VAs, a net interest cost of
1.8950 %. Re-offering of the bonds was made at prices to yield from
0.55% to 2.20%, according to maturity.
Nov.
combination
The bonds
are
being issued to provide moneys out of which to
make loans to cities, towns, villages and
authorities for and in aid of
housing for persons of low income, or for the clearance,
low-rent
replanning, reconstruction and rehabilitation of substandard and in¬
sanitary areas and for recreational and other facilities. They will be
general obligations of the state which will pledge its full faith and
credit to the payment of principal and interest on the bonds.
Other
participants
included
Lehman
Brothers; First National
& Co. In¬
Incorporated; The First Boston
Bank, New York; Bankers Trust Company; J. P. Morgan
corporated; Harriman Ripley & Co.,
Affiliated
Phelps,
of Chi¬
& Co.; Goldman, Sachs & Co.; Union Securities
& Co.; and Continental Illinois National Bank
Corporation; Smith, Barney & Co.; Halsey, Stuart & Co. Inc.;
Fenn & Co.; Lazard Freres & Co.; The First National Bank
Glore, Forgan
Corporation; Drexel
cago;
Fund, Inc.
Prospectus
Keystone
THE
LOBD-ABBETT
INVESTMENT
Paine, Webber Adds Two
(Special
COMPANIES
to
The
CALIF.—Mor¬
ris S. Rich and Samuel Welsh are
Lord, Abbett & Co.
New York
Chicago
—
—
Los Angeles
now
&
with Paine,
Webber, Jackson
Curtis, 626 South Spring Street.
Welsh
was
formerly with
Mr.
Buckley Securities Corporation.
Certificate* of Participation in
INVESTMENT FUNDS
Bickerstaff With Tomlin
A
Diversified Investment Company
investing their capital
(Special
to
ATLANTA,
BONDS
Tomlin.
staff
was
now
Mr.
&
Bacon
Street,
256
Co.,
members
Francisco
Stock
change. Mr. Casebolt was former¬
.
With Priester & Co.
(Special
formerly with Hancock,
to The
Financial
DAVENPORT,
A.
Priester
is
Chronicle)
with
Priester
Co., Davenport Bank Building.
(Series K1-K2)
s7/ie
Seor-qe
COMMON STOCKS
(Series SI-S2-S3-S4)
may
PUTNAM
las obtained from
FUND
Tke
Keystone Company
Prospectus
of Boston
.
50
your
Congress Street
Boston 9,
Massachusetts
THE
may
be obtained from
|
<J /Jjo-itcn
local investment dealer, or
PARKER
200 BERKELEY
CORPORATION
ST., BOSTON 16, MASS.
'prospectus from
your
investment
.
Putnam Fund Distributors, Inc.
dealer
or
PHILADELPHIA 2, PA.
50 State
;
IOWA.—Robert
PREFERRED STOC
Prospectus
of
Ex¬
ly with Da vies & Mejia and Wil¬
son, Johnson & Higgins.
V
Bicker¬
Blackstock & Co.
(Series B1-B2-BS-B4)
San
—
become af¬
Casebolt has
with
Montgomery
—
Samuel
i
filiated
the
CALIF.
FRANCISCO,
Bernard
J. Rankin
representing
GA.
is
S.
(Special to The Financial Chronicle)
SAN
The Financial Chronicle)
Bickerstaff,
IN
Casebolt With Bacon Co.
Chronicle)
Financial
LOS ANGELES,
Custodian
Funds
& Trust Co.
upon request
Street, Boston
&
•
Volume
170
Number 4848
THE
Open Letter to Congress
Mutual Funds
COMMERCIAL
verge
funds when 90%
v
f
v
amendment to Securities Act
urges
restrictions
or more
to
That
in securities, which
are
Remarkable
of
large
a
the rise of
themselves exempt from such restrictions.
are
of business confidence has been restored is best indicated
by
prices since the middle of June. This rise has occurred in the face
important economic events, such as a sharp drop in production, a lower
number of
a
panies
the
on
adver-
e m n
tising
of
industry
the
our
are
modi¬
lifted
or
fied.
The
terprise, with
advantages to
the
attendant
the nation's
nomic and social well-being.
as
eco¬
The
commented-on sign of the
on*
the investment
funds the facts
these:
Emmett
Corrigan
Mutual fund
Mutual
a
the
their
in
Fund
fund
of
group
Institute
by
underwriters
a
and
fund
magazine
their
newspaper,
radio
advertising or
indeed even to identify themselves
beyond stating their names, ex¬
tending an invitation to the po¬
tential purchasers to send for the
or
prospectus which offers the
for
giving (when
is
seldom)
the
feasible, which
price of the securities.
As an advertising
man
I am
constantly amazed at the number
of people in the financial and ad¬
vertising fields who are unfamil¬
iar with this prohibition.
30 states.
What
these
developments
to is this:
up
to
forge
ahead
at
even
a
ebb tide.
have
This growth
been
part
the
of
at
constitutes
impressive testimonial
an
American
Amend
(it would
curities
funds
require
Act
from
strictions
vided
to
exempt
the
under
that,
Act
90%
say,
funds
company
in question
curities
of
which
are
in
se¬
are
restrictions
The net effect of such
an
for
amend¬
far as advertising is
would be to place
con¬
it
has
the face
the
on
investing
been
accomplished
in
of the fact that mutual
funds
are not allowed, under ex¬
isting legislation to tell their own
story in advertising.
the
mutual
themselves
from such
under the Act.
re¬
pro¬
of
the
exempt
so
mutual
advertising
any
invested
ment,
only
brief paragraph) the Se¬
The purpose or ideal behind the
Securities Act, as it related to ad¬
vertising
of
securities
was,
of
that advertising about new
course,
issues should be limited to simple
announcements and
that in de¬
termining
whether
he
buy the securities the
should
not
po¬
or
the
tential
shares of mutual funds in the same
rected
category as other so-called "ex¬
empt" securities which are traded,
would reveal all significant facts,
good and bad, about the company
in question.
cerned,
whether
the exchanges or overA dealer is free to
on
the-counter.
since
new
they of industrial, railroad, public
utility or commercial enterprises,
to
state
the
ommends the securities.
descriptions
he
reasons
of
the
rec¬
As long
securities
factually correct—in other
words, are not deceptive in intent
the
to
should
funds
must
rub—because,
perforce
are
bought
and
do
not
conceal
the
dealer's
position (if any) in the securities
—the
dealer
is
free
to
tell
his
story.
tual
companies
advertising freedom
should be extended to the mutual
funds.
That this would be
ice to the
familiar
investing public,
with
the
record
a
serv¬
no one
of
the
funds under the Investment Com¬
Act of 1940 can well deny.
As
previously
indicated,
the
strongest evidence that the funds
pany
do
perform
a
needed and valuable
service to the public is their rec¬
ord of growth.
It is this growth,
achieved in spite of the "muffling"
of their advertising, that testifies
most directly and
convincingly to
the need for the reclassification of
the funds in the eyes of the Fed¬
eral laW. '
As everyone
in contact with the
industry knows,
recognition
has
mutual
funds
J'.'-J;
<
in
important
been
accorded
more
the
than in all the years
past year
since enact¬
ment of the Investment
1940.
Mutual
Company
Act
of
funds
now
being featured editorially in
are
by
mu¬
classified
are
"new issues."
as
*
j
hardship
a severe
the mutual funds—an
—for
in
their
stocks
common
Enactment
the Securities
not
are
of
unjust
sense
the
and
on
one
fact
issues.
new
amendment
the
funds
unfair burden.
of
;
to
this
-
the
worth to hundreds of thousands of
investors.- One company this year
its
25th
anniversary
celebrated
many
others
are
almost
as
well
established, and several funds
sponsored by investment man¬
agement
organizations
of
long
standing, one of which was estab¬
are
lished
great
far
as
as
back
as
1894.
Berlin
was
Yet
the growth of these funds
been,
flict.
This
sians
of
one
non-profes¬
sional investor's money than they
do at present, especially of the
investor
life
have
who
may
owned
never
in
his
by
the
exists
prise.
in
fixed
Those
capital invested
investments will
income
suffer again as they have in such
past changes.
On the other hand,
since dollar sales and dollar in¬
will rise with a
consequent
price rise, stock prices will prob¬
ably rise
as
they have
since
March 4,
1933 when the Dowcome
Jones
Let
37
Average
at the 55 level.
was
recall that after the
us
rise the next low
level
1933-
of the
about
make
The
de¬
new resources
richer
a
better
a
condition.
world
to
its products and
benefits
come
such
over,
event
an
world-wide
purchases
would
areas
receive large in¬
therefrom. More¬
put
been
mate
and
for
these
buying power into the countries
having weaker currencies.
riods,
1949).
Domestically,
ficial
it
price
will
of
cause
is
further
S.
of¬
increased,
increase
to
inflationary
1938), (1942
pe¬
to
V
:
Climate
In
February, 1946 the govern¬
inaugurated a program of re¬
ducing government debt and fol¬
lowed
a
policy which existed
June
1949
-
of
(1)
the
in
un¬
restraint
stock
on
market
through higher margins; (2)* in¬
creasing bank reserve require-
in
:
(Continued
page 30)
on
This is not
an
offering of theie Shares for sale, or an offer to buy, or a solicitation of an offer to buy,
any of such. Shafts. The offering is made only by the Circular.
ing
the latter part of 1948 and
the early part of this
year, while
not
entirely dissolved, has faded
into
the
background,
longer
peril.
considered
is
and
a
1,199,554 Shares
no
pressing
Bank of America
The psychological relaxation co¬
incident with the great reduction
of this peril has enabled the
capi¬
talistic
world
to
take
up
such
important matters
of
foreign
currencies
realistic figure.
NATIONAL TRUST AND SAVINGS ASSOCIATION
*•
Common Stock
to
a
was
Italy, and
the last two weeks there
has occurred in that
country what
Price $45.25 per share
forerunner of real
a
currency
stabilization.
Italy
bought $396 million of gold (127
tons) from the U. S. Government
at
,
it-
within
well be
.ij
more
The first of these
countries to devalue
may
P.
($12.50 Par Value)
devaluation
as
Copies of the Circular
the undersigned may
may be obtained from the undersigned only by persons to whom
legally offer these securities under applicable securities laws.
price of $35 per ounce, al¬
though the black market price for
gold in Italy at that time was $48
per ounce.
This purchase from
a
the
U.
S.
Government,
together
$100 million of Italian
ear¬
marked
gold, is to be used as a
securing the Italian
currency, and will be equivalent
gold
to
reserve
25%
a
behind all Ital¬
reserve
ian
old gold standard
This
to
other
with
reserve
operation
is
forerunner of gold
the
countries
United
that
States
have
de¬
valued and reached enough mone¬
tary
stability to enable them to
acquire gold and establish a re¬
behind
serve
Such
the
reserves
their
currencies.
have been
and
are
crying need of the monetary
world
since
the
world
panic of 1929-32.
cies
with
the
financial
Sound
basic
toward
monetary
of
to
to
commerce.
normal
commerce
boon
return
a
will
be
first
a
re¬
international
a
tremendous
this
be
Just
how
distributed
the Fort
Knox
•
..
Lehman Brothers
Eastman, Dillon & Co.
Glore, Forgan & Co.
hazard Freres & Co.
,
Incorporated
.
Merrill Lynch, Pierce, Fenner & Bcane
Stone & Webster Securities
Corporation
M
Smith, Barney & Co.
Union Securities Corporation
Dean Witter & Co.
Blair & Co., Inc.
Walston, Hoffman & Goodwin
First California Company
Ilallgarten & Co.
Hornblower & Weeks
Drexel & Co.
Lee Iligginson Corporation
Schwabacher & Co.
Paine, Webber, Jackson & Curtis
Brush, Slocumb & Co.
Pacific Northwest Company
A. G. Becker & Co.
Incorporated
.
William R. Staats Co.
Central Republic Company
Incorporated
(Incorporated)
W. E. Hutton & Co.
Hayden, Stone & Co.
Carl M. Loeb, Rhoades & Co.
Shields & Company
Pacific Company of California
Shuman, Agnew & Co.
A. C. Allyn and Company
t
E. F. Hutton & Company
W. C.
McDonald & Company
Langley & Co.
E. H. Rollins & Sons
Incorporated
Spencer Trask & Co.
Crowell, Weedon & Co.
Hill Richards & Co.
Weeden & Co.
,
Lester & Co.
Elworthy & Co.
Mitchum, Tully & Co.
.
Bear, Stearns & Co.
i
:
-
Coffin & Burr
Sutro & Co.
Davies & Mejia
Incorporated
Estabrook & Co.
Laurence M. Marks & Co.
R. W. Pressprich & Co.
Salomon Bros. & Hutzler
Reynolds & Co.
Stroud & Company
The Milwaukee
Company
L. F. Rothschild & Co.
Tucker, Anthony & Co.
Incorporated
G. H. Walker & Co.
Irving Lundborg & Co.
Bateman, Eichler & Co.
Revel Miller & Co.
Davis, Skaggs & Co.
Stern, Frank Sc Meyer
*
much
in
Harriman Ripley & Co.
normal
The
country. The U. S.
the chief supplier of in¬
numerable
products, which
we
will
Goldman, Sachs & Co.
curren¬
metal behind them will be
step
-
ra¬
Italian
probably a
being sold by
Blyth & Co., Inc.
The First Boston Corporation
Wertheim & Co.
currency outstanding.
.
This proportion is in line
the
this
Wagenseller & Durst, Inc.
gold
will
manner
reserve
is
v
of Business
ment
speculation
if the U.
gold
(1933
Political
til
Domestic
Average to date has
161, indicating the approxi¬
doubling (if stock dividends
rights are allowed for) in
each of these two
through
dollars of
more
rise the next low level of the
Dow-Jones
the
and
ter than others.
ican
bringing
which the United States could sell
of
fication and professional manage¬
participate in the Amer¬
system of corporate enter¬
will rise.
Rus¬
have the know-how to make bet¬
ment can,
sales
con¬
security but
who should, and through diversi¬
a
countries
developing
trade
would
war
with Russia,
principal' worries dur¬
our
turn
the
affairs
by the
veritable keg of
could easily and
longer
no
imminence
international
of
crowded
into these
velopment of these
blockade
blockade
larger
share
a
that
they still hold only a
tiny portion of American savings.
They could and should handle a
nas
that
quickly have caused armed
tios.
Mutual funds are no longer on
trial; they have proved their true
and
pessimism
of
move
-
dynamite
Act, proposed above,
relieve
past
reverse
international
as
dollar
46
would
concerned, it is well to recall
with
This works
would
Similar
sold
investors, the shares, sold in
are
and
issue
securities and liquidate them
they
as
di¬
be
prospectus,■ which
And there is the
advertise the merits of the securi¬
ties of these other companies,
be
purchaser
recent
fundamentally
A*__.
a very
things
many
Foreign
Insofar
Russians
other phase of the
business
as
has existed not
only domestically
but also throughout the world.
virtually
every
hand,
widespread
that
securities
well
as
happened in the
time when interest and activity in
^public to the vitality and useful¬
edy this situation? Sh&ply this:
nes*s 0f tjie mutu^larfcl concept-
as
On the other
are
(Mr. Tru¬
and
Dow-Jones Industrial Average was
98 in 1938 and that after the 1942-
trouble, has not interfered notice¬
ably with the rise in stock prices.
the
de¬
rately dollar wages, dollar salaries
with accumulated
Point 4)
it would better
distribute world population as the
Chadwick
S.
world
that could
dollar
of the world
areas
areas,
have
such
productive basis in the back¬
labor
quite
that
the cost of living and commensu-
people
N.
threat ened
tion that mutual funds have been
able
devalua¬
man's
with the steel
general recogni¬
a
a
ward
together
add
What should be done .to rejn-
ly
on
strike and the
mutual
a
conference, the first of its
type, held a short time ago in
New York City by 300 represen¬
tatives of the industry from some
secu¬
sale, and
large attendance at
dollar
valuation may occur will arise.
In addition, if money is invested
in
present
strike. But
widely spread
forbidden to describe
domestic
climaxed
ether
sponsors are
of
dollar devaluation, if it occurs, is
impossible to project. However, the
strikes
the recent formation of
of
re¬
coal
automobile
are
measure
tion. The extent of such domestic
comingof-age of the investment company
industry. Other indications of the
widespread
interest
in
mutual
re¬
funds
tion
funds
vertising
strictions
the
dollar, combined
with the greatly increased debt of
this country, will raise the ques¬
expectation
this,
much
occur,
American
output finally
of the funds also has been
ad¬
the
the
a
such
the
stricted
entrance of many stock exchange
houses into the retail distribution
those
the
all
such
If
but the size
should be large.
large exports
1949.
more,
of
export
Further¬
continued
unacquainted
and
July,
"middle millions" into stocks and
en¬
estimation,
of
month
bonds of American industrial
Act of 1933
rities
the
are
amended.
are
as
great force for prudently chan¬
neling the scattered savings of the
Securities
with
magazines
a
contained in
For
newspapers and
stock
in
re¬
strictions
the
received
<§>-
measure
common
loyment
during the
level, and
a
need met by these
companies—the fullest potentialities of the funds 'very low level
of new orders
hardly can be realized until the
extraordinary restrictions imposed
has been the growth of mutual investment com¬
past few years—an evidence of the investment
as
17
reviewing domestic and foreign developments, Mr. Chadwick contends world's commerce is on
of being rehabilitated and there will be rebirth of incentive system. Looks for further inflation
to be reflected in higher
prices of common stocks rather than higher commodity prices.
exempt
advertising of mutual investment
of their holdings
(1561)
Vice-President, National Securities & Research Corporation
After
"tombstone"
CHRONICLE
By NATHANIEL STONE CHAD WICK
Advertising
By EMMETT CORRIGAN
from
FINANCIAL
Coming Rebirth of the Incentive System
on
Chairman of the Board, Albert Frank-Guenther
Law, Inc.
Advertising executive
&
be
from
beyond
October 20
1949,
Wulff, Hansen & Co.
*
By H. E.
As Prime Investments ?
JOHNSON
By WALLACE FALVEY*
insurance com¬
the attention of investors .interested in
insurance
shares.
for
the time when most companies review
their operations and make changes in payments reflecting operations
of the year as well as the outlook for the coming 12 months. In view
of results for the current period and the favorable outlook for 1950
in the fire insurance industry, numerous dividend increases and extra
payments are expected in the coming months.
.
Two weeks ago three of the large companies, Hartford Fire, Fire
Association, and Insurance Company of North America, which have
declared stock dividends so far were discussed briefly.
Since that
time another of the major units in the industry has acted similarly.
Stockholders of the Great American Insurance Company are
scheduled to meet at a special meeting on Nov. 29 to vote upon the
proposal of the board of directors to increase the capital of the com¬
pany to $10,000,000.
If the proposal is approved, a stock dividend
of 25% will be declared and paid.
~
,v
For over 12 years Great American has been
paying regular
annual dividends of $1.20 per share. Last January, an extra of 10 cents
was paid in addition to the 30-cent quarterly payment.
According to an announcement by the management, it is antici¬
pated that after the payment of the 25% in stock, the regular $1.20
annual dividend will be continued. However, the extra dividend of
not
agement with respect to the pay¬
the profit
particularly from Boston, which is
the Hub of New England, and the
from
as
finance
to
growth of the
this is,
build
up
companies and to
backlog
a
future
the
greater
of
Coming from New Englahd, and
Yields, there¬
fore, from insurance shares are
ordinarily
lower
than
returns
investment
from
from
or
has
not
arrived when su&
last
At the same
of the
time, the increase in the premium volume
capital. With the change
it becomes clear that
permanently higher level of insurance business will be available.
*
For these reasons, it is logical to expect that other fire insurance
companies may use the stock dividend method of increasing the stock¬
on
his investment.
"* " *
»
Over the next four months many
is almost certain
look forward to
'
„
companies will meet for year-
dividend action and hold annual stockholders',
This
meetings.
an opportunity to increase cash payments and extras
some .cases and in others for shareholders to consider increases
capital stock,
wilJtj present
most recent
The
in
increase
distribution
cash
a
was
in
in
that an¬
by Security Insurance of New Haven. An
in addition to the regular quarterly payment
nounced earlier this week
extra of 20 cents a share
of
cents
35
Nov.
payable
declared
was
This brings total
1949.
1,
payments for the year to $1.60 a share as against $1.40 for 1948.
Continuing the list of two weeks ago, several other companies
which
scheduled
are
for
action within
dividend
next
the
several
i."
months
are
presented below
Current
Fire
Aetna
"
American
Boston
1948
Percentage
Approximate
Annual
Investment
Paid
Next Dividend
Dividend
.Income
Out
$2.90
(Newark)_
1.27
Fireman's
Hanover
Home
4.64
2.60,
Fund
.
1.40
New
Dec. 19
'
'
53.1
for
dividends the wider will be
s
attracted
Ownership of
stocks;!: has been par¬
the number of investors
business.
our
insurance
.
ticularly strong among fiduciaries,
such as universities, religious and
charitable institutions, and foun¬
dations of all kinds.
These fi¬
duciaries have a very substantial
stake in our business, and we are
3.23
Dec. 12/
:
ful that insurance will be able to
industry has
of
public
and
equities.
surance
»
Insurance
•
.
Stocks As Prime
Investments
I
with
S. K. Butterworth Is
have
the
been
recently
of several
talking
managers
our
leading
told to me which led me to be¬
lieve the stocks of some of our
highly respected fire and
York City, members of the New
casualty
companies might lose
York Stock Exchange, it is an¬
favor as the prime investments
nounced.
been
Mr.
actively
business
Butterworth
engaged
for
the
has
In
for this I
they have been for many years.
the trying to find a reason
past 30 was driven to the unpleasant
7;;
years.
most
in
'
Prior to World War II, he was
the sole proprietor of S. K. Butter¬
on request
of
.
metal
Incorporated
several
concerning the future of in¬
surance
stocks as prime invest¬
ments. Certain things have been
Bache & Co., 36 Wall Street, New
J. P. Morgan & Co.
of
cers
K.
Butterworth
has
metal department of
an
that
"conservatism"
has been used
as
Members
New
Turk
120 BROADWAY,
Stock
Exchange
NEW YORK 5, N. Y.
Telephone: BArclay 7-3500
*
Bell Teletype*—NY 1*1248*49-
"
con¬
it is caused by the
over-conservative policy of man¬
clusion
that
175
(L. A. Gibbs, Manager Trading Dept.)
same,
tion
Production
in
the
Civilian
Administration.
posi¬
State
than
more
programs,
100 have appeared since 1932, and
five of them iiv the? past five years.
Third,
ness.
as
to the amount of busi¬
It is impossible to state
this
because of incomplete
reporting., So far as Federal in¬
surance
is concerned, some pro¬
precisely
grams have been financed by gov¬
unwillingness to pay out
ernment
appropriation,
others
a fair share of our profits to the
partly by employee contributions
owners
of our business. One Of
with the government making up
our
colleagues who is head of
the difference when contributions
another insurance association re¬
are insufficient to pay losses and
cently termed shareholders as "the
expenses.
Methods of operation
forgotten men."
vary widely, as do methods of re¬
I realize quite well that some¬
porting.
There is no question,
one
may point* at my own jtomhowever, but that enormous sums
pany, sincere* are paying divi¬
of money are involved./Annual
dends equivalent to about twopremium or other income of the
thirds of our investment income, Federal
programs
apparently
but it seems to me the determi¬ amounts to more than four billion
ceal
an
nation of the amount of dividends
paid should be predicated
primarily on two considerations:
(1) the amount that can be dis¬
tributed after providing adequate
to
be
dollars,
assets
total
and
various Federal funds
forty
over
billion
of the
amount to
Total
dollars.
State funds
which information is available
assets of some of the
on
capital funds for the protection of
amount
policyholders, and (2) the amount
dollars.
' '
The 1947 statements of the
income
investment
of
available
of
"slack
during
capacity"
the
past two years as a result of the
abnormal growth of our business.
For the time being it seems that
to
Federal
alone
two
some
billion
•
i
two
insurance programs
States Govern¬
National Service
life
—
United
Life
ment
Life—show
to
increase
alty and- Surety, Agents,; White
Sulbhur Springs, W. Va., Sept. 26,
based upon
market and
good
insurance
and
$40
billion of insur¬
a
the
continuing
stocks.
considera¬
however, is the function of
the various Federal and State in¬
We
surance
The
programs.
programs
competition at
As I view it, it
from another
Federal
have three overall func¬
tions:
(1) To protect government em¬
regulated in¬
ployees
and
other groups not
coming within State jurisdiction.
And that, industry, gen¬
dustry.
most important
tion,
for this contingency.
moment?
comes
ledger
Insurance
The
popularity for
common
in force and some $8
total
capital
Now what is our
tlemen,* is the public utility in¬
dustry. It is now possible to buy
shares
of
strong
public utility
tion in time of war.
companies yielding from 6% to
7% and the marketability, as a
to
rule, of public utilities' shares is
far better than that of insurance
It is my be¬
companies' equities.
lief insurance stocks
tinue
for
long
on
cannot con¬
their
present
basis and still attract
type of venture capital we
need perhaps all too soon.
low-yield
the
will
The
second topic
I would like
has to do with the
extent to which our Federal and
to touch upon
governments have come into
insurance
business, and to
State
the
draw to
..
1949.
ance
in
funds, through the sale of addi¬
tional stock. Such sales, in turn,
Government in Insurance
Company of New York,
*An address by Mr. Falvey be¬
specializing in non-ferrous metals.
During the war, Mr. Butterworth fore the joint convention of the
was
Deputy Director of the Tin, International Association of Casu¬
Lead and
Zinc Division of the alty and Surety Underwriters and
War Production Board and, sub¬ the National Association of Casu¬
sequently, he.held.the
t
Federal programs, nine have been
established since 1932, and of the
worth-
Laird, Bissell & M«e<ls
pro¬
Second, as to trend. Of the 12
cloak to con¬
a
also twelve
are
insurance
every
the 48 states.
impression
frequently
unavoidable
have
must prepare
banks
Spencer
joined the
of 64.
been jua the
have
may
12
are
State has at least
one
in operation at the present
time; and most States have sev¬
eral, to a total of about
175 in
process of making a hackneyed
word out of "conservatism" and I
must be
i
Vice-President of
Dillon, Read & Co., New York
City, died at his home at the age
of us in the insurance
necessary
apathy
large trusts and foundations and
I have also talked with trust offi¬
Karl H. Behr Dead
tra¬
when I have
two
There
billion
assets. The Old
done during good years. This con¬
Age and Survivors Insurance prosideration is another one for the
grain
shows total receipts of
regulatory authorities to consider the rate of growth has leveled
$1,900 million for the fiscal year
in their rate-approving delibera¬
off but we certainly have reason ending June 30, 1949, and total
tions so that we will not run into to believe our business will con¬
assets of over $11 billion* Assets
an
era
of impatience and de¬ tinue to
grow.
Such growth may of 66 of the 80 State Retirement
mands from
without.
We also mean we shall come upon an¬
funds total a billion and a half
would like to see a wider distri¬ other
period when numerous com¬ dollars.
•
bution of our shares in the hands
panies in our industry may find
or
more
people to offset the it
Functions of Government
increase dividends as
Nov. 23'
44.7
a
There
State
of
grams;
about it.
But they, like >for dividends.
:
everyone else, have been pressed
The first obligation to policy¬
for income in order to meet their
holders obviously must be ful¬
higher costs, and they are hope¬ filled.
We have taken up the
Jan. 19
61.9
1.79
r
kinds
happy
charitable institutions toward in¬
Karl H. Behr,
Analysis
naturallr 'the more money we
available and actually use
Nov. 29
0.80
New York Fire..
and
paying
have
present
Nov. 14
59.1
■
i
7
65.1
2.00
Hampshire
Dec.
'61.4
2.15
2.37
•
2.00
National Union
Dec, 15
3.77
: 1.40
National Fire
!,
62.4
'
2.28
1.40
—.
!
Dec. 15
51.7*
4.17
Fire ..J
Insurance
9
Dec. 13
53.3
•
4.13
2.40 ;
Fidelity-Phenix
4
75.2
'
7
Feb.
v
3.19
2.20
Continental Insurance
Dec. 12
63.0
■
~1
.2.40
Insurance
Meeting
58.5%
$3.42
0.80
—
;!
stocks still
tend to sell at the highest levels,
best
The
to
Regardless of this consideration, however, it
that the stockholders of insurance companies can
more liberal dividend treatment in the future.
end
receive from our in¬
we
vestment portfolios.
company is recognized,by augmenting the
in the price level over the past two years,
holder's return
income
or
year
business
.
the shareholders are given a larger return
is
every
felt some
cessfully operated companies
their investment.
veneration for the
* New Englander from
childhood. However, I must admit
that there have been times in the
of
1 am wondering if the
industry.
time
trusts
great
Let us
to the number of gov¬
as
operation.
dition that is dinned into the ears
have
word "conservatism"—.it
•
on
First,
ernment programs.
seat of conservatism, backed
a long and excellent rec¬
ord of financial enterprise, this is
a broad statement for me to make.
I
holders' protection.
sufficiently alert.
Federal insurance agencies now in
by
up
the stockholders a tan¬ should give a greater share of
gible participation in the substantial increase in capital and surplus their income from interest, divi¬
.which has occurred over the past ten years.;During the period, divi¬ dends, and rents to the owners of
dends have been restricted because of the need of reserve funds to the companies. I would bd the last
one
to advocate a swerve away
carry the'larger volume of premium underwritings. Capital positions
have been under pressure and although investment income has con¬ from conservatism in our divi¬
tinued to increase, cash dividends have in general been maintained dend-paying
policies, but evi¬
-at conservative levels, /}
.
'
•'*>;*•'.
{-■ dence is at hand indicating that
some of our owners a.re becoming
p.:. ■+
The stock dividend is, in a measure, a recognition of this condi¬
tion and by continuing to disburse the same annual cash payment restless for a greater share in the
Ion the: additional shares
disregarding the earn¬
become
very
equity for our shareholders and
larger surpluses for our policy¬
i
:
I would like
as
look at the picture.
of dividends.
ment
underwriting profit, is main¬
our
the standpoint of the
.
investments,
our
tained
.
•
our
from our business proper,
of paying stock dividends and then maintaining the
annual cash payment on the increased number of shares out¬
standing, has certain advantages from both
company and the stockholders.
.
In the first place, it. is a means of giving
popular
unique position in management, as we voluntarily ignore
very
insurance risks. Our
dividends by and large are related
solely to the income we derive
This policy
same
a
profits of our own business in dealing with our stockholders, in
of
ing
•
repeated.
com¬
ings realized from the underwrit-
,
10 cents would not be
We maintain
them.
see
the
of insurance
sees
Insurance shares investment-wise at the moment are not as
to
>
need for larger dividends if these securities are to become more popular investments. Pleads
more liberal regulation of insurance rates and decries
rapid trend toward government-insurance as
giving private companies opportunity to prove their availability as underwriters. Deplores police lax¬
ity in permitting reckless driving.
'
panies,
Normally the year-end is
-
Insurance Co.
though favoring conservatism in dividend policies
Prominent insurance executive,
prospective dividend changes of fire
Recent and
President, Massachusetts Bonding and
.1":
This Week—Insurance Stocks
panies continue to occupy
Thursday, October 20, 1949
FINANCIAL CHRONICLE
Will Insurance Shares Continue
Stocks
Bank and Insurance
&
COMMERCIAL
THE
(1562)
18
attention the ques¬
in the
casualty business have
your
tion of whether or not we
fire
and
(2)
,
To provide special protec¬
(3) To provide greater security
special population groups. f
i
Under the first group are Fed¬
eral Workmen's Compensation In¬
surance
and
Civil Service Re¬
tirement and Disability Insurance,
established
in
1916
1920
and
the second
group are the two life insurance
programs, established in 1917 and
1940 for veterans of the first and
Under
respectively.
world
second
three
are
programs,
wars.
all
Under group
other
eight
of
them
Federal
estab¬
lished between 1933 and 1939
mid
variety of pur¬
poses, ranging from insurance 011
bank deposits and loans to pro¬
viding old age, unemployment ahd
serving
a
wide
(Continued
on page
33)
Volume 170
Number 4848
THE
COMMERCIAL &
•
•
"
'
"
„
Boston Merchant Optimistic on Business Trend
ing
current economic
problems
serious than
more
are
In
ence
an
ence, expressed
despite
the
current
ous
<$
*
economic
being placed
tions.
a
sperity.
the
on
o
O' C
I
11
of
found
that
faced
that
a
with
at
"In
any
A.
P.
O'Connell
lems
going organiza¬
21st year the prob¬
our
facing
than
us
are
serious
more
The
business picture
becomes more confused
with
strikes, devaluation of currencies,
increase in taxes, shorter work¬
ever.
.
day and shorter work-week, in¬
in
crease
increase
million
social
in
a
is
security
postal
rates
taxes,
of
$130
free pensions, in¬
of war, inflation,
year,
surance, Ithreats
atom
bombs, armament demands,
it
wonder that indecision
and confusion exist in the minds
any
of business men?
a
"After a decline in business for
period of eight months the Fed¬
Reserve index of production
eral
showed
a gain in August of seven
points to 169 with 1935-39 as 100.
This brought the index to that of
last June and only 12% below that
of August, 1948.
^
% "Employment
increased
in
August to approximately 60 mil¬
lion, the highest since October,
Then
comes
the steel strike,
the coal strike,
throwing put of
still
Commission
as
a
essential
services.
has
been
recommendations.
going
up.
$41,-
As to World War II,
States
has
written
United
off $25
billion.
of Commons
This fact is
on
Dec.
Dec.
on
sive of grants and
countries.
loans to other
"The demand for goods contin¬
high and and will be further
increased by the outpouring of
$2,800,000,000 cash to 14,000 000
veterans early in 1950, some of
which may be paid by Christmas.
ues
•."This
where
fall
from
there
will ^be
any¬
59,000*,®00 tO; 60,000,-
000
people employed in civilian
jobs, reflecting a personal income
of
than
more
$100,000,000,000,
a
mil¬
"What effect will currency de¬
valuation have
upon
our
econ¬
should make for good business.
"Inventories have been adjusted
omy?
to
a
at
a
more
than
one
lion workers.
The direct effect will not
be too great.
6.3%
of
imports
Our exports
are
total output and
our
but
only 3.8%. Some in¬
industries will be seri-
ouslv
affected, particularly the
textile industry.
With the reduc¬
tion of 30% in foreign currencies
and
possible lowering of the
tariff we will be unable to com¬
a
pete with English textile workers
who
onlv
earn
30
cents
compared with $1.32
workers in the
"The
effect of
hour
an
hour for
an
United
on
terials
such
will
be
in
mostly
affected,
wool, cotton, rubber, fats
as
and oils.
of
and
are
merchandise
basis than after World
is
England, France and Italy.
whiskey,.they say, is not
cut.
They can sell all they
to be
produce at present prices.
French
"The
to
buy
until
250
different
which
has
public,
items,
not
yet
their
demands
but for the first half of
will
probably show
5
6%
or
creating
plan¬
about
the
list
of
made
competition
for
American made goods.
in dollar
measure
a
1950.
icits
are
about
running
$15
billion
at
a
a
rate
year
of
which
must be
paid for by taxation, de¬
stroying confidence in the future.
"Senator Byrd
the
in an article in
August issue of 'The Ameri¬
Magazine' says we are being
pushed toward disaster by differ¬
can
ent
kinds
Some
of
powerful
groups.
plain greedy and want
to get all they can.
Everybody
else is getting it, they
say, why
are
shouldn't
money
we
get ours
is all gone.
before the
■*
the
you
make the laws. Two-thirds of
the
Senators, 54% of the
members
the
of the House in the 80th
p r e
C.
Davis
fact
com-
a
in
such
lawyers. So I speak to you
with growing confidence not
only
as
our
actual or potential legis¬
lators, but as men with real in¬
hensive
study
Increase
study persists.
a
Over 40 years ago, following the
panic
money
created
a
of
1907,
port
the
Act
of
1913.
dimensions,
revival
of
sales
due
Since
the
involved
then
nature
even
conferring
to
power
was
Money
Scene in U.
p Today I
and
ask you to take
inadequate look at the
in
scene
the
United
won
the
the
problems
money
the
to
nation.
Federal
Reserve System
is the central bank of this
Like other central banks
money
no one
dreamed of check book
money in
the modern sense.
Today bank de¬
posits account for $140 billion of
ences
vides
the
the
an
note
volume
of
credit,
currency through
issue
of
the
Reserve
meeting in St. Louis this week
unique leverage on public
opinion in this country, and I
think, you also have real reasons
to be actively ; interested in this
at
subject.
ferences
is
nave
Most
of
you
directly
or
home.
organization. It is privately owned
Internationally, too,
nomic
difficulties
Address
Tax
by Mr. Davis before
Section
and
Section of
Cor¬
show
recognize
iifficulty.
unique.
field.
-con¬
fact
that
in serious financial
are
In
the
eco¬
their
symptoms in the monetary
The
Washington financial
he British
*
basic
this
There
is
Britain
a
is
world
not
dollar
shortage and the dollar apparently
Law of the American Bar Associa¬
is
tion,-St. Louis, Mo., Sept. 6, 1949.
by the member banks but except
for the 6% dividend on their stock
fixed by law they do not share
in earnings which, after
reserves,
pass into the U. S. Treasury. Thus,
the system is operated in the
pub¬
lic
interest.
nost of other currencies beside the
undervalued
in
relation
to
a
The
Board
(Continued
page 30)
on
$3,975,000
Northern Pacific
To
mature
Railway
Equipment Trust Certificates
annually $265,000
on
each November 1, 1950
000
Other
members
offering
to
L.
F.
nois
inson
the
of
Company; McMaster
&
Co.;
Illi¬
Hutch¬
Co.; and Wm. E. Pollock
& Co. Inc.
.
Priced
Issued under the Phil¬
to
yield 1.20%
to 2.525%,
Proceeds from
tificates
will
be
the
used
sale
of
cer¬
to
provide
for new standard-gauge railroad
equipment, estimated to cost $5,005,100, consisting of 18 Dieselelectric
switching locomotives.
+
according
to
.
maturity
Issuance and sale of these Certificates are subject to authorization
by the Interstate Commerce Commission.
The Offering Circular may be obtained in any State in which this announcement is
such
of the undersigned and other dealers
adelphia
the
certificates
plan,
were reoffered, subject to authori¬
zation by the Interstate Commerce
Commission, at prices to yield
from 1.20% to 2.525%, according
to maturity.
1964, inclusive
To be guaranteed unconditionally as to payment of par value and dividends
by endorsement by
Northern Pacific Railway Company
group were Otis &
Rothschild & Co.; The
as may
circulatedfrom only
lawfully offer these securities in such State.
HALSEY, STUART A CO. INC.
OTIS & CO.
L. F. ROTHSCHILD A CO.
THE ILLINOIS COMPANY
(INCORPORATED)
McMASTER HUTCHINSON & CO.
October 17, 1949
of
Gov¬
in Washington is appointed
by the President and is respon¬
sible
to
the
Congress. The 12
ernors
(Philadelphia Plan)
equipment trust of 1949,
Series, 2Vg% serial equip¬
certificates, due $265,annually Nov. 1, 1950 to 1964,
pro¬
elastic
in
2%%
trust
The
responsibility
for
managing the money supply has
been delegated in
large measure
Equipment Trust of 1949, Third Series
Third
money
States.
governmental
Oct. 14 of $3,975,000 Northern Pa¬
ment
-
short
economy
a
award
S.
a
Congress it exercises
certain natural cen¬
and tral
banking functions—it influ¬
on
coin
to lower prices."
Inc.
coal
Banks, rediscounts for member
our our astronomical
money supply of
have
changed around $165 billion; currency out¬ banks, holds their reserves, acts
as a nationwide
clearing house for
radically, but there has been no side banks, for $25 billion. In the
bank checks, and serves as fiscal
deliberate, studied overhauling of year the Federal Reserve Banks
agency for the U. S. Treasury and
the machinery through which gov¬ were
organized, total bank de¬
other government agencies. In or¬
ernmental responsibilities with posits were less than
$20 billion,
ganization it is not quite
respect to them are .administered. money
li^e any
in
circulatioh
outside
other central bank in the world.
A topsy-like
growth of agencies banks lesS than $4 billiorf£'Then,
It is peculiarly a United States
has been our answer to new prob¬ only 35 years
ago, the public debt
institution designed to work in
lems as they appeared.
of the United States was less than
this country.
Man for man and in the mass, $1 billion; today it is over $250
the
It is a Federal system—a na¬
members of
the legal pro¬ billion, it is growing, and it dom¬
fession whose national association inates the monetary picture here tional institution with a
regional
of
of
in
tue
industries, to mention
few.
a
The
which
Constitution
regulate the value thereof,
re¬
impetus for the Federal
came
Reserve
the
Check Book Money
the
adopted,
Congress
study and
in
When
National Monetary Com¬
mission from whose
only
were
of our
1
money mech¬
anism
in
by a
national monetary terest
the
stability
of
our
commission is long overdue but is money, and its
cost, availability
not
likely to be undertaken as and controllabliity.
long as the present lack of public
mterest
textile
headed by Halsey, Stu¬
Co.
&
British
Congress
that
Chester
and
We
decline
cific Ry.
inclusive.
"Deficit financing presents an¬
problem upon which the
Administration is embarking. Def¬
other
solve
are
Halsey, Stuart Offers
Northern Pac. Equips.
art
is
on
been
rom
1 am
moderately optimistic not
only for the balance of this year
A group
Administration
will
whether de-
met.
wines will be cheaper.
ning to reduce the tariff
valuation
And
They insist upon better quality
goods at lower prices and refuse
Woolen goods are being offered
at lower prices, so are automobiles
from
f
poration, Banking and Mercantile
War I.
"The consuming public are very
rritical
about
their
purchases.
large
Scotch
are con-
sterling.
estate
standpoint,
"Money is plentiful and cheap.
currency
prices
spending
excellent, quality has greatly im¬
proved, prices are lower.
"We are on a much sounder
States.
deval¬
general will
be mildly deflationary. Raw ma¬
uation
for
buyers' market. Savings
new high of $68 billion.
"Selection
our
are
dividual
ready
money
pound
slow
cer¬
13, 1945, and
18, 1945
and approved by the U. S. Con¬
gress July 13, 1946.
This is exclu¬
Lords
of
with
cerned
.
manage-
my
tified by ratification in the House
House
help business
shape policy; many
is
"Since World War I the British
alone have received in the
way of
loans and grants a total of
800,000,000.
ment
or con¬
_____
itxdirectly
though
reason,
;
this go on?
the
un-
is created and extinguished, its supply expanded
management; financial crisis is another
ques¬
con-i and where
you are active players tion. No
legerdemain with money
sequences
in-1 in a game you are properly in¬ can erase
certain stubborn factors
fluence
t h eN^erested not
only about its rules, —loss of the foreign income
which
personal
and but
about
the
umpires
and before the war
England received
business lives whether their
set-up is workable, from her
shipping and her invest¬
of all of us.
| their authority adequate.
ment abroad, since then
liquidated
But a more
And finally, on that
point, above by the war; high production
costs;
compelling any other class in this country, and the
study
longer
can
probably isn't
money
t<8>
understood
even
September expenditures in¬
about $900
million,, and
are
long
the
exhaustive
these
a r
well
not
a
any
by which
tracted,
debt
^eduction in income of about 5%
from fall of 1948.
That is a lot of
employment
The processes
so.
born
a
\
is
reasons I
thought I would talk to you about money. Everyone is interested
knows too much about it, and much of what is
generally known
the
"Thus far these deficits have
been met by the
taxpayers of the
United States.
How much
.
1948.
no one
creased
they
20 years as a
our
of
child
a
consideration
given to
during
tion but in
their
of
Little
problems
time
it,
saving of $4 billion
could be made without re¬
year
duction
serious
than
Hoover
result
were
more
share
debt, while
"The
year
stated
we
in
of only $12.
remarked:
"Last
today inherits
her
or
President, Federal Reserve Bank of St. Louis
For several
burden is
generation ago assumed
a
Mr.
o n n e
;
the averSge of $1,-
on
his
as
Federal
situa-
n,
Sk/ttery
future genera¬
A child born
liability
720
Commenting
upon
Monetary Commission
By CHESTER C. DAVIS*
monetary system arising in
Decries topsy-like growth of agencies to meet new
problems and predicts, should inflationary conditions again arise, Federal Reserve will again be in
strait-jacket and unable to remedy it.
Stresses effect of national debt on bank reserve
requirements and opposes further debt increase.
1
"A great and terrific
threatening
t i
T.
of the Confer¬
-r
seri¬
problems
pro
E.
19
last 40 years.
optimistic view of the immediate business outlook,
an
:.
Contending comprehensive study of our money mechanism by a national
monetary commission
overdue, Federal Reserve Bank executive points out new problems in our
introductory talk opening the 21st Annual Boston Confer¬
Distribution, P. A. O'Connell, President of
Company, specialty store in Boston, who is Chairman
National
a
/■
,»■"
,i
year.
on
(1563)
:
A Plea fox
Vv';:
before,
ever
foresees good business outlook
through next
CHRONICLE
*
.
P. A.
O'Connell, President of E. T. Slattery Company, in opening
Twenty-first Annual Boston Distribution Conference, though warn-
FINANCIAL
*"
WM. E. POLLOCK &
CO., INC.
20
THE
(1564)
COMMERCIAL
Thursday, October 20, 1949
CHRONICLE
FINANCIAL
&
5.88%, well below the figure
for August of 1949.
A
was
Let's Make It That
arranged by
handicapped. Loss
how doubly
are
of" imperial preferences comes as
a
further
setback
to Canadian
following
trade
agreement
on
Washington
the
the curtailment of
Canada and
economic
doubt regarding
no
the
this country.
should not be entirely
foreign trade position
United States thus
Canada's
vis-a-vis
the
becomes
than
important
more
ever,
For this reason it is little
surprising that Prime Minister St.
Laurent during the course of a re¬
speech at Troy, N. Y., made
unusually forceful plea for the
restoration of a peacetime "Hyde
cent
an
The Dominion
Agreement."
Park
Prime Minister bluntly stated
Canada
can
the
make
not
that
most
effective contribution to the secur¬
ity of the North American conti¬
nent without "some arrangement
reciprocal defense purchasing
the United States."
Mr. St.
for
with
Laurent
deplored
existing
U.
legislation
S,
stands in the way of
of
that
fact
the
now
the operation
peacetime "Hyde Park Agree¬
a
As matters now stand the
ment."
Bu,y-America Act of 1933 prevents
purchases of arms abroad.
U. S.
clear that, in view of
It is now
increasingly serious nature of
Canada's foreign trade problems,
the
vital decisions on long-range eco¬
nomic
policies can no longer,be
Following the break¬
U. S.Briiish-Canadian
exchange
tri¬
postponed.
of the time-honored
down
deprived
angle Canada has been
of her economic sheet-anchor.
since been necessary to steer
has
an
It
indeterminate course which has
been
outside
largely dictated by
It
influences.
clear
not
/was
of
absence
developing strength from within.
During the war the "Hyde Park
Agreement" removed all Canadian
concern with regard to the inter¬
balance
national
wheat, have all served to smooth
the Canadian economic path. ,
greater regard to internal
measures
devised to
strengthen
With
wealth
to 'have
wards
Under
events
/./J;
appear
economic
Canadian
are likely to be oriented.
present circumstances the
Dominion
great
however
decided the direction to¬
which
policies
Common¬
with this country.
or
Recent
British
can;
southern
-economic
and
"only
turn
to
neighbor for
financial
its
the
coopera¬
independent of external aid
always be forth¬
coming when required. It is pos¬
come
when
the
at
standsiill
a
prices
and
Stocks
advanced
sessions
ier
1946.
the paper issues
tries and notably
the
were
the
highest levels
The indus¬
the
to
since
reached
performers but
leading
Western oils
base-metals
and
also well to the fore. Profit-
were
in later sessions caused a
and the full development of
Dominion's
of natural
enormous
wealth
further
metals
depressed follow¬
price-cuts.
ing the repeated lead
resources.
hoped that this will
the
golds which
rise
was
of
rumors
in the U. S.
stimulated by
impending
an
gold price.
CANADIAN BONDS
Sully Joins
Daniel
Rice
F.
and
members
of the
Exchange,
F.
Sully
on
Bulletin" sees growing dis¬
parity between yields, with current spread rarely exceeded in past
50 years.
The
October
issue
of
the
"Business
Bulletin" of
the
Cleveland
Trust
Co., Cleveland, takes note of the widening spread between
yields on bonds and the yields now oifered by common slocks.
"In August, common stocks were yielding 2.9 times as much as
high-grade corporate bonds," the^~
"RucinQSO
Dllllfi+ivl"
m.4
k
"Business
Bulletin" /points
out. bond yields beginning with 1900.
"During the 50 years 1900-1949 For stocks, the curve represents
such
a
ratio
was
previously the average yield of all common
reached only twice: first for sev¬
stocks regularly traded in on the
New York Stock Exchange.
eral months in 1942, and second
The
in June and
^
July of this
year.
"To put it another way," con¬
tinues the "Bulletin,"
age
yield
dends paid.
their
as
New
that
on
"the aver¬
all dividend-paying
Robert
formerly
reau
office,
existing
now
bond
1
Gem. Placed
a
partner
in
Car-
First
NEW
WALL
YORK
STREET
5,
N.
Y.
Boston
&
York
M.
publicly Oct. 17 100,COO ad¬
par value, of the Empire
trict Electric Co. The stock
4-2400
NY
1-1045
was
completion of the
construction program
cost approxi¬
mately
$11,000,000
during the
three-year
period
ending 1950.
The principal item
in this pro¬
gram is a new 30,000 kw. steam
turbine generating unit at Rivertoward
yield for any given montn is ob¬
tained by dividing the sum of all
the dividends paid per share dur¬
ing
the previous
12
months, by
the
company's
which is expected to
ton, Kansas.
dividends
quarterly
Regular
paid
been
have
on
since the stock was
the common
distributed in
September, 1944. The June and
September dividends in 1949 were
rate of 31
is
an
operating public utility en¬
gaged principally in the manu-facture and',sale of electricity to
97 communities in southwestern
Missouri,
southeastern
Kansas,
northeastern
Oklahoma
and
northwestern
Arkansas.
During
paid
at
cents
an
increased
share. The company
per
Over the
the index of Standard and Poor's
the twelve months
Corporation. Both bond and stock
yields are plotted for the middle
month in each quarter.
'/ '
"The diagram shows that the
prevailing
range^ for
common
stock yields has been between 4
1949, the company
the New
on
in
was
only 2.60%.
on
the high
while the-second has been
less frequently exceeded on
low
shows
side.
accompanying
diagram
the changes in stock and
the
and
sum
7%.
of
all
The
50-year
average
ating revenues
ended July 31,
reported oper¬
$7,243,715 with net
of $973,083.
income
Giving effect to
this financing,
will have outstand¬
ing $17,196,000 of funded debt;
39,018 shares of 5% cumulative
preferred stock, $100 par value;
and .450,000
shares of common
stock, $10 par value.
the
company
Joins Revel Miller
S.
Conklin has become
Revel
Miller
&
associated
Co., 650
Spring Street, members
of
Angeles Stock Exchange.
Los
Conklin, in the past, was
with
Wyeth, Hass & Co. and $chwa-
York
City.
Stock
Partners
Strauss,
Richard
bacher &
Co.
Ex¬
are
L.
Ungerleider to Admit '
Ungerleider
&
Co.,
George
Himme,
Samuel
Leavitt.
All
were
Staff
ANGELES, CALIF.—Dean
LOS
Street, New York City,
ners
Dis-,
priced at $17,125 per share.
Simon, member of the Exchange,
WORTH
and G.
Mr.
Formed
of the New
Burton
Corp.
Co., jointly headed
the
Simon, Strauss & Himme, mem¬
New
Market
underwriting group which of¬
with
change, will be formed shortly in
TWO
on
Walker
Wall
Simon, Strauss & Himme
bers
and
stock
between
yields."
South
Be
impor¬
Empire District El. Go.
Mr. Sully
& Co.
To
an
associate manager of
York
was
INCORPORATED
was
Exchange was 7.48%
August,? while the average
yield
on
high-grade
corporate
stocks traded
York Stock
"The
associated
become
Street, New York City.
A. E. AMES & CO.
This
tant factor in the wide difference
prices.
The
curve
for bonds represents the
average yield to maturity of highgrade corporate bonds, based on
common
the
Stock
York
New
announce
has
with them
CANADIAN STOCKS
Widening Spread Between Yields
Cleveland Trust Company "Business
even
Company,
PROVINCIAL
CORPORATION
business
periods of rising
business activity were customari¬
ly
accompanied
by
advancing
stock prices and declining stock
yields. However, this time there
was no long-sustained rise in the
stock market averages, but rather
a series of fluctuating price move¬
ments confined to a relatively
narrow
range—despite a steady
increase in the amount of divi¬
postwar
great
Earlier
boom.
Proceeds of the sale will be ap¬
side,
Daniel F. Rice & Co.
MUNICIPAL
the
of
ditional shares of common stock,
seldom been exceeded
Robert
ai
the years
were
bonds
steady demand for
a
was
persistent
GOVERNMENT
These
formances.
past 50 years the first figure has
There
It is to be
exhibited
an
«/
v.-'
the influence
Line debentures.
strongly in earl¬
provincial Pipe
stock:',
common
1946-1948
notable divergence from past per¬
plied
buying of Inter-
of continued U. S.
.
H.
remained
which
funds
^
;
mean¬
were
subsequent decline with the base-
ards
The
animation in the market
free
doubt about the
hope the Senator will help to make it so.
-
of
trend
in
yields
pre¬
the business cy¬
to
§10
mostly unchanged. The corporatearbitrage rate was also uncnanged
at
12V2%-ll3/4%.
There
was
strong largely under
the
cle,
fered
and
taking
the
We
internal
sections of the market was almost
external
both
sharp and
activity .in
week
"As related
The
'/to.;
.vTtj»
the
so
ing of the results.
will play a
valuable role as a stabilizing fac¬
tor in world economic affairs.
economy
During
year—and made
no
yields of less than 3% have
vailed in the past ten years.
Labor and Public Wel¬
certainly not in the House."
clear that there could be
independent
and
strong
a
Canadian
on
the govern¬
policies,
a
easy-money
long decline in bond yields com¬
menced in the
early 1930s and
pro¬
certainly like to have these things
the real issues next
will come
sible also that the time
tion that is essential for the main¬
■
We should most
which might not
tenance of Canadian
living stand¬
fare in the Senate and
Dominion
the
lor
the
of the radical Committee
develop the economic fabric,
would readily be¬
and
Deal
"Then there was his plan for providing universal
compulsory health insurance — that is the socializa¬
tion, nationalization of medical profession, medical
care.
That can't even get approval of the majority
Canadian
of
purchases
Fair
development of
ment's
was his
(the President's] plan to re¬
the Taft-Hartley Act and restore arbitrary
powers and special privileges to the labor union
bosses, which was defeated in the Senate and the
House," Mr. Taft said.
purchases, British liberality
concerning Canadian conversion
of sterling balances, and U. S.¬
British accommodation with re¬
to
the
"Then there
shore
spect
■■
peal
ECA off¬
of high-grade cor¬
case
yield was consistently above 4%,
occasionally above 5%. With
ments to farmers.
payments.
of
Since the war, generous
greater
with
eco¬
policy undue reliance has
been placed on external assistance
in times of emergency instead of
whether Canadian interests would
ship
independent
an
nomic
best be served
by closer relation¬
that in the
tory has demonstrated
and
yield was 4.26% as against the
August figure' of 2.60.
During
the first half of the period the
gram,
subservient
external influences. Recent his¬
to
"In the
the Democratic Congress
pushed most of it aside.
As examples,, he mentioned
the President's request last Jan¬
Robert A. Taft
uary for price-wage controls and
for
authority to build steel
plants. He said this had been dropped. He cited
rejection of the Brannan plan for production pay¬
general interest that Canada
British imports from
stocks
and
President's
the
the
of
been
partly by a moderate gain in the
dividend paid.
Associated Press, the
in
tion
price
average
has
decline in the
a
porate bonds, the 50-year average
Senator Robert A.
Continuing, according to the
Onio Sen¬
ator said that, far from accepting
the
then
since
partly by
average
Taft.
of U. S.-Canadian collabora¬
all fields but it is also to
gree
—
the yield was 6.56%, and
rise
caused
details of
industry, commerce, agricul¬
and
daily lives of the
people/'
possible de¬
wisdom of the fullest
the
ture
thatN arises.
problem
is
There
all
the
directs
ernment
trading nations of the world deals a further vitsfl blow at the
British system of preferential tariffs for members of the Common¬
wealth. Considered in conjunction with the decisions reached during
the ABC talks at Washington last^
September, Canadian exports to not lead to blind dependence on
British Commonwealth countries external assistance to solve every
S3
7.48
year ago
(chief 1950j issue is whether the
people want to take up this Fair Deal program and
turn this country into a labor-socialist government
very much like Great Britain's, in which the gov¬
By WILLIAM Jf. McKAY
Annecy Agreement covering tariff reductions
Way!
think the
"I
The
of
and
Lilian
B.
formerly part¬
in Wm. M. Rosenbaum & Co.
ited
Ungerleider,
partnership
Nov. 1.
in
41
Broad
will admit
Jr., to lim¬
the
firm on
Volume
170
Number 4848
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(1565)
World Bank's Bonds Going Into Strong Hands
By
WASHINGTON, D. C.—Coincident with
World Bank Bonds
are
more
institutional portfolios, it
in
conference
a
here
was
Oct.
and
their
market
j
finding their way
revealed by President Eugene R. Black
a group of New York financial
<t>—
———
—
—
we'd all like to know. The
largely
the
depends
world
hoping
that
taken place
the
on
the
at
answer
state
time.
We
of
are
recovery will have
by that time, if not it
be that the limit of the bank's
may
capacity will have been reached.
But,
with our present rate of
lending of two to three hundred
millions
quite
a
a
such
'year,
off."
way
There will be
limit
'is
'
sales of bonds
no
for at least another year, it was
Indicated by Mr. Black. "We have
$300 million of unused funds on
Rc'oert L. Garner
writers.
Eugene
Savings
R.
banks
hand now; and we of course
Black
are
use
the
now
securities, their holdings in
New
alone
$250
York
metropolitan
Questioned
Institu¬
ident's
outstanding. Insur¬
companies take second place
lines
.
[ It was developed at the con¬
ference that some explanation for
the
to
as
relationship to Pres¬
"Point 4". proposals, both
officials envisaged the possibility
of major expansion along these
totaling $89 million out of
in the categories of holders.
will
before
tion's future
area
million
ance
first
money
asking for additional funds and
paying interest on them.""' \
the largest holders, of the Institu¬
tion's
this
up
after
termination
the.
Marshall Aid.
year.
Northern
14, with
•
making
i
strength,
into the
more
of
The Bank has for
considerably
known
|f.
Commenting
numerous
proposals for merging the
current
Replying to the question
the
on
to
Bank with the International Mon-
what would be the market effect
tafy Fund, Mr. Black stated that
when the
United
tion of $2y2
used
as
States subscrip¬
no
purpose would be served by
this, in view of the ample amount
billion will have been
Robert L. Garner, Vice-
up,
President,
said:
of loanable moneys now
to the Bank.
what
"That's
available
1
notably
a
is
considerable
a
i
;
■
...
,
amount
stock
as
of
one
of
oil
in
r.
!
-
parts of
•
New York,
it is much easier
says
for Administration
now
to
expedient of devaluation to meet opposition of critics of fiscal
policy than in 1933.
the soundest and most attractive
"Empire Trust Letter," published by
the Empire Trust Company of New York City, Dr.
Joseph Stagg
Lawrence, its Vice-President and economist, in discussing the after¬
math of British currency devaluation, concludes that in view of
heavy
spending by
the
Truman
fiscal
tion
in
along
with
policy.
other
conspicuous
a
developments
increase
there is grave
to
of the
company
succeed
that
as
cept
ultimately the intrinsic value jof the stock must inevitably be
reflected in market performance.
It may be that oil developments
will supply the necessary
fillip that has been missing for so long.
Northern Pacific has not done such an
outstanding debt job as
l^as its: sister road, the Great Northern. One factor was that the
company was entirely free from any maturity problems.
Thus it
not under
was
as
Mr.
Wa
to
the
present decade to around $10.3 millions at the
present time, a really significant reduction.
Over the past 10 years
earnings on the stock have averaged $4.48
a share.
During that period they ranged from a low of
are,
the
in
to
a
a
just a few
1939, when charges were materially higher than they now
high of $10.29 in 1943. Last year the earnings amounted to
share.f These figures do not,; however, give
potential
earning
under the existing
do not reflect the undistributed profits of
power
wholly owned and jointly
owned subsidiaries.
I
a true picture of
conditions. .They
"/'"c};■;;v-:\."v' v:-
Northern Pacific
shington
University, St.
much pressure as many other roads in this
respect.
conditions, and with indicated earning power sufficient
the debt charges comfortably, the management was more
Alfred S. Kissack
inclined to utilize its earnings to improve the
property, acquire
new equipment, etc.
Even at that it was able, with the help of one
refunding operation, to cut its fixed charges from over $15 millions 1928, becoming
start
Louis, Mo,, and
joined the Na¬
staff
of
tional
that
lar
the
dol¬
will
in
member of the
a
Harriman
Ripley & Co.,
Inc.,
in
January,
1937." Since
March, 1947, he has served as As¬
sistant Secretary and Director of
Personnel.
,
.
Halsey, Stuart Group
Offers Erie Equips. <
and Great Northern
own, in equal shares, vir¬
Halsey, Stuart & Co. Inc. and
tually all of the stock of the sound and highly profitable
Chicago,
Burlington & Quincy. Over the past 10 years the Burlington paid associates on Oct. 11 were award¬
ed $4,300,000 Erie RR. l7/s % serial
out an average of less than one-third of
its earnings in dividends.
Northern Pacific's share of the undistributed
earnings of Burlington equipment trust certificates, due
for the 10 years
1939-1948, inclusive, were equivalent to an average $430,000 annually Oct. 15, 1950 to
of some
1959, inclusive.
The certificates,
$2.70 a share per annum on the
outstanding Northern
issued'
The company's
year.
Maintenance
i
gross
revenues
have
.
held
.
up
.
well
,
far
so
.
this
outlays have been very heavy, however, and
the transportation ratio has been
higher than that of a year earlier.
a result, net income for the
eight months through August dropped
to $1,635,000 compared with
As
plan,
.
the
Philadelphia
reoffered, subject to
under
,
Also, Great Northern and Northern Pacific own all of the nonequipment bonds and all of the stock of Spokane, Portland & Seattle.
Despite good "average earnings the latter has paid
interest, to the
parent companies-0fily spasmodically and no dividends have been
paid on the common for many years. Finally, the wholly owned
Northwestern Improvement
Company, which was such a bulwalk
during the depression years, has paid a dividend in only one
year
(1945) in the past eight years.
;
*
were
Interstate
Commerce
authorization,
at
Commission
prices
to-..yield
1.20% to 2.20%, according
to maturity. Associated in the of¬
fering were R. W. Pressprich &
Co.; A. G. Becker & Co., Inc.; Otis
from
&
Co.; L.'F. Rothschild & Co.;
Michigan' Corp.; Freeman
Co.; Wm. E. Pollock & Co. Inc.;
First of
&
McMaster
Hutchinson
&
Mullaney, Wells & Co.
The
certificates
will
Co.; and
■
be
"The
ever
ey.
not
government
a
toward
of
de¬
valuation,'1'
Jos. Stagg
Lawrence
states,
"is
clear and, politically, impressive.
An important election looms. De¬
valuation
by 27 other countries
will change the competitive posi¬
a
unavoidable.
time
when
adjustments
levels
of
jobs.
It
will
in
at
fewer
has
al¬
It
a
unemployment during the
and
summer
which
is
spring
hardly visible to
has done
this
the
naked
gold.
low
metal
If
eye.
from-
tion
and
1933.
now
economically
to
un¬
than
infinitely less
urgent.
"A
rise
in
in
a
the
the price of gold,
substantial apprecia¬
dollar
value
nation's gold
an
answer
of
the
stocks, will provide
to opposition critics of
Equipment Trust of 1949
cur¬
l7/s% Serial
Equipment Trust Certificates
(Philadelphia Plan)
To
to
To be guaranteed
$430,000
on
each October 15, 1950 to 1959, inclusive
time
to
write
unconditionally as to payment of par value and dividends by
endorsement by Erie Railroad Company. /<
up
Priced
to
yield 1.20%
to
2.20%, according to maturity
successive
is
to
The
narrow
real
for
reverse
marked
mature
gold and prohibits
in
cause
public
The
is
Certificates are subject to authorization by the Interstate Commerce Commission.
Offering Circular may be obtained in any state in which this announcement is circulatedfrom only •
such of the undersigned and other dealers as
may lawfully offer these securities in such state.
that
deception
corruption
this
Issuance and sale of these
English
unduly the
country
no
HALSEY, STUART &, CO.
less
than
in
R.
England.
W.
PRESSPRICH
&.
CO.
INC.
A.
(
G.
BECKER
&
CO.
incorporated
"In
the
event
that
unemploy¬
ment and pressure from
adversely
affected industries become factors
OTIS
importance in the fu¬
ture, the government may reverse
its
nolicies
tariffs.
will
The
then
circuit."
on'
free
hands
have
trade
and
the
their
CO.
L.
F.
ROTHSCHILD &. CO.
FREEMAN
V
McMASTER
&
COMPANY
HUTCHINSON
&
clock
completed
&.
of
FIRST
OF
MICHIGAN
CORPORATION
(incorporated)
of political
producing
tion
and
it
The provocations to
such action need be
the
propensity
'
orthodox but politically innocuous
in
the yel¬
paper
devaluations.
To say that this is one of the
pos¬
sible consequences of the
action
was
our
Third
foreign
time
cause.
expedient of devaluation
between
and
the
value, to credit itself with
this
'appreciation' and-continue
blithely down the road of inflar
oper¬
the
discover
this
when
embrace
Erie Railroad
undervalued,
general ownership and free trade
in the metal, it will be tempted
still
'
is
competition is
unfair,
presumably
because
of
exchange manipulation,
let the
rency.
time
"It will be much easier
0 0,|0?3,4$
expedient of
market
relation
proper
a
at
weasel
If gold
free
a
generally is
ating at boom levels.
business
the
need
deliberate mark-up in the price
hoards all
postwar
leading to lower
government
mon¬
cause
necessary
are
V
'■
serious
a
Some
ready gone into the red to halt
rise
be
trade balance tell the story/
"As
long as the government
occur
production* and
The
will
*
tion of American products.
unemployment due to this
is
public,
The American economy does
let
Dr.. Lawrence
now
a
blow to the cause, of honest
ts
this
pushing
public debt
seem
literate
logic
even
the
-
issued
$4,222,000 realized a year earlier. Final to
provide
for
new
standardresults for the year will naturally be
importantly influenced by the
gauge
railroad equipment, esti¬
amount of non-operating income
brought in. This makes it difficult
mated to cost
to judge the probable results for the
$5,390,033, consist¬
full-year-. - It appears logical,
however, to look for at least between $3.00 and $3.50. On this basis ing of 28 Diesel locomotives and
a duplication of the
$1.50 dividend declared last December, payable 30 steel
baggage cars.
trick, however clever
to its authors, how¬
plausible to a financially il¬
it may
be
devalued also.
of
in
"Such
City
Company
taking place.
i b ility
p o ss
Co.
Kissack
attended
to support
the
position
Balance
Under such
at
a
Treasurer
of The Torison
,
Such
appreciation
national asset
may be used by artful political
propaganda as an offset to the
Administra¬
that
conr
Harry C.Coles,
Jr"., who has
resigned to ac¬
,
In the Oct. 15 issue of the
-
been elected
the
Secretary of
analysts have long
,
pany,
policy of
distribution a
Harriman Ripley Co.
Elects A. S. Kissack
.
I
use
one
•
stodgy
Pacific stock.
Dr. Joseph Stagg Lawrence, Vice-President of Empire Trust Com¬
likely, Since
priced rails. It is this widd approval of the company and
optimism as to its prospects that have made the desultory action of
the stock, over the past few years so
surprising and so disappointing.
Long term students of railroad securities are convinced, however,
revealed.
against
been
only
>■
lower
$4.97
million
there
Regardless of the oil prospects, many
cialized agencies to explore future
possibilities along these lines, they
guarantee—$649
$2YZ billion.
which'has
last
couple of years, has been attracting
speculative interest in recent weeks. In part this
more
that
sidered the
the amount of the United States'
-
common,
for the
territory involved,
outstanding- still total far less than
persistent demand for the
Bank's securities is that its loans
appears
renewed activity may be traced to rekindled
hopes of important oil
profits; The company still holds a large amount of acreage from its
original land grants and has retained mineral rights on additional
Harriman Ripley &
Co., Inc., 63
acreage that has been sold over the years.
It is impossible to say
Wall Street, New York
just how much in dollars and cents this will eventually mean to the
City, an¬
nounces that Alfred S. Kissack has
company but apparently the prospects are promising.
At least it is
cents
the
Pacific
market performer
time been working with the
United
Nations
and
other
spe¬
some
1949,
of dividends with
a
.payment of $1.00 in 1943 the
com¬
pany
has followed a
Staff Correspondent
a
President Black discloses major holdings by savings banks and
insurance companies. Institution studying cooperation on "Point 4."
Vice-President Garner discusses "U. S. guarantee-limit."
r
'
Feb: 1,
resumption
21
October 13, 1949
•
CO.
WM.
E.
POLLOCK
&.
CO., INC.
MULLANEY, WELLS &, COMPANY
22
longer
depend on
dollars
them at Britain's expense, be¬
They
Britain's Declining
to
000,
than it
it
the
valuation
it
possibility
augment dur¬
ing the last 12
of
days
Dr.
Einzig
Paul
of
Britain recovered some $80,000,000 of gold-following on the
was,
devaluation.
TJhis recovery must
attributed almost exclusively
to the covering of short positions
in
sterling.
Those importers of
British goods and other debtors
in sterling who deferred the pay¬
ment of their liabilities in
the
be
being able to pay in
sterling have now paid
Possibly the amount
invojved was bigger than the in¬
crease
of the gold reserve be¬
tween Sept.
18 and Oct. 1, for
during that period the gold drain
of
hope
cheaper
their debts.
There is
bound to
be
time lag
a
devaluation
the
before
unabated.
continued
probably
balance
trade
adverse
to
due
can
pro¬
imports and ex¬
duce its effect on
ports, and an even longer time
lag before this effect influences
volume of payments for im¬
the
ports and exports.
Possibly deferred sterling pay¬
ments may continue to be made
for
some
time, and the dollar
from
arising
gains
this
source
in
net
earned
the
of
reason
what
than
more
she
were
pound, owing to distrust in
currencies, and to confi¬
in
the
fundamental
im¬
to the
other
dence
substantial
profits
services
to
nothing like the increase experi¬
enced in the '30's.
Possibly there
respec¬
tive governments, even though the
latter
always
righteously dis¬
claimed
devaluation
be
countries
may
in substantial
have
amounts of dollars.
tivity and
-
that
deficit
our
current fiscal year
of
the
Truman
working
for
the
is bound to be
on
a
Administration
is
scheme to increase
dollar.
This will make
for the
foreign gold producers."
us
suckers
on
ing program.
for
following the
the following
telegram was sent to the members
of the House and Senate Banking
and Currency Committees by Wal¬
ter
E.
Spahr,
Executive Vice-
more
for
It
the
Mr.
increases
for
that
in
so
many
our
deficit
fiscal
year
is
$5,500,000,000."
Taber
average
from
calls
current
President
ment
program," he said,
expenditures that
bound to be
made
Truman's
he
reference
recent
if not impossible,
real¬
workmen
so
to
Na¬
Monetary
Associated
an
of the cost of living through
have
Indeed,
the new formula put forward by
various unions as an alternative
devaluation
the
to the
cost
of
to
seems
little response.
met with
adjustment of wages to the
living is that the lowest-
paid
from
the
protected
must be
workers
effects of
devaluation
a
by fixing a minimum of £5 per
week..
Although this would no1
majority of wage-earn¬
those who would be affected
would benefit by it to an extent
far in excess of the probable in¬
crease in the cost of living.
Few
ers,
the
longest partially-exempts, the more distant taxable 2s,
2%s due 1956/59 and the 2%s due 9/15/67-72 with the latter
the
the
Whether
taxable
seen.
York
New
City banks will move out into the longer
volume, remains to be
market, in more sizable
of the
end
*
...
Nonetheless, the
-
purchases of the eligible 2\is and 21/4s so
of these deposit banks have been large enough to
make some money market followers sit up and take notice. . . .
There has been some switching and some new money involved
in these commitments.
The swap have been mainly from
far by certain
.
.
.
partially-exempts.
earlier taxable 2s and the near-term
the
.
.
♦
SIDE
INSURANCE COMPANIES ON SELLING
to 25%, or even more.
14, Repre¬
sentative Taber says that the Tru¬
satisfaction of their claims at the
Administration is working on
plan to raise the price of gold
would wipe out a
of the advan¬
tage gained through devaluation.
man
you
not
country
this
devalue
the
dollar.
give the people
such protection
Will
of
this
against
by calling Secre¬
taries Snyder and Martin before
your Committee for an explana¬
as
you
considerable
can
part
It is because such measures are
considered
has
not
nearer
that
feeling
spread
there
that
brought
the
is
a
of
her
much
eco¬
tion and demand that they assure
the public that no such program
nomic difficulties. And it is large-
will be recommended?
flight
the
facts
now
Cripps surprise."
»
■-——
and
Let
not
us
get
have
a
Iv because of this
in
to
the
feeling that the
pound experienced
likely to repeat
+*>e '30's is not
itself.
-
.
.
.
ISSUES
along with a few of the dealers, readily
been of
ineligible issues and,
absorbed the tap bonds that
by the large life insurance companies.
sold
were
sional market with its not too sizable
some
to the savings
use
.
.
.
The profes¬
price changes has nevertheless
banks, because they have been
able
the range. . . •
Traders and other quick-turn operators as a whole have not had
enough confidence in the trend to compete with the savings banks for
the eligible issues which have come into the market for sale.
.
.
•
This has left the situation pretty much to the savings banks on the
most of their
to make
purchases at the low point of
buy side and they have been able to
somewhat
issues.
.
»
matter of fact, traders have in some
a
than prevailing
positions at lower
buyers.
for
.
.
important demand around
savings
there is no tendency yet among
purchasers to go out and bid up
bank
.
.
Sizable
.
quotations because they
it cagey in a dull, not too active,
doing too well by playing
market.
instances unloaded
quotations on savings banks
There is, however, still an
.
the ineligibles but
are
make use of nominal bids or
acquire needed
prevailing market prices to
than
lower
•.
As
might,
blocks
however,
bring
better
prices.
FOOTNOTES
market continues to get attention
The equity
and
investors
niarket
in
as
there
:
have
funds that
as
out of it.
.
.
.
been
some
fairly
conditions
equities.
.
.
„
there will be considerable
.
.
quarters the coal and
.
settled within the next fortnight or
deflationary pressure on the economy.
A business turndown
curity prices.
government
of the problems should not be
It is believed in some
steel strikes will have to be
.
...
continue to dominate the
market, but the answer to many
long delayed.
not been too sizable yet,
good-sized disposals in order to get
being used to buy
Economic
from both traders
from the government
Although liquidation of Treasuries
into the stock market has
go
are
this is taking funds away
and
well
order to
wide¬
devaluation
Britain
solution
will
least not until there is further
Savings banks continue to like the longest
stage
present
too fine, at
of
increases
workers
uo
drawn down
be
SAVINGS BANKS ACQUIRING
expect
by
of'
companies in government securities in most instances
clarification of the economic situation.
to increase
sands
position of life insur¬
According to advices, the short-term
ance
the cost of living
more than 10%.
A
minimum wage level of £5 would
bring to many hundreds of thou¬
people
Although these underpaid work¬
ers
deserve every sympathy, the
Press dispatch of Oct.
com¬
many more expen-
gravity
anything
"According
.
to
a
on
Policy:
and
family to $3,500 a
family. "The objective of that in¬
crease is very subtly concealed,"
said the Republican Congressman.
"The Truman program calls for
enormous
increases in spending.
It calls for
Committee
to
hopes to
Economists'
President of the
a
raise the
income of U. S. families
$1,350
statement,
tional
onerous
spending.
spend¬
4
"The Truman
"calls
Truman's
Commitments are being made by a
m
it will be
money,
industrial
the
ize
affect the
Immediately
Taber
attack
business again extending maturities. . . .
few of the large urban institutions
institutions in the deposit
Government to make the
the
British
the price of gold and devalue the
an
eligible and restricted obligations. . . . Commercial banks continue
to take selected issues out of the market, with some of the largest
not
absence of an in¬
the
flight
difficult,
very
for
$5,500 million.
In order to help
create the inflation, increase the
poor man's taxes, and reduce his
purchasing power, I understand,
in
Despite a considerable amount of professionalism, which moves
prices of Treasury obligations up and down within restricted limits
on light volume, there has been good investment buying of both the
of produc¬
induce the country
to
in
Even
flux
;
ditures
Spahr
.
BANKS ALTER BUYING POLICY
government's effort
accept sacrifices.
crease
Walter E.
.
devalued
not
of the situation.
The Chancellor's appeal that there
Administration was "working on a scheme to increase the price of should be no demands for higher
gold and devalue the dollar." This statement was made by Mr. Taber wages in connection with the in¬
Dr.
dominating the
Even
to
Dr. Spahr asks Congress Banking and Currency Com¬
call Secretaries Snyder and Martin for explanation.
Taber
are
.
Rep. John Taber (R.-N.Y.), on Oct. 14, issued a prepared state¬
ment in which he revealed that there was a rumor that the Truman
John
Investors
non-bank
Life insurance companies, that is, the large ones, have again
sufficiently,
beei\ sellers, in a not too substantial way. . . . These eliminations
so, it wou|d be idle to ex¬
according to reports were made to cover higher income commitments
Now that no profit can be made
pect an inflow Jof large amounts
which were made in private industry. . . . The Victory bonds were
any longer through the acquisi¬ of "flight" money.
This is all to
tion of sterling under the official
the good, for, even though such sold in the heaviest volume by these institutions although the 21/4s
rate, Britain's gain through the an inflow would result in a tem¬ due 1959/62 were also let out in fair amounts.
.
.
It had been ex¬
stoppage of the loophole will be porary increase of the gold re¬
pected that short Treasuries would be used by life insurance com¬
the loss of the continental and
serve, such gain would
soon be
other governments concerned. The
lost.
-While it lasted it would panies to meet needs in non-government investments. . . . This was
question is, will these governments generate a false feeling of se¬ the case for a certain amount of the funds recently required, but it
accept their loss without a fight? curity, which
would be detri¬ was also decided to let out and take profits in some of the longs. . . •
transactions which
prepared statement, Rep. John Taber from New York hints
conceal its spend¬
■
.
nor
in
scares
which have not fol¬
lowed Britain's example, or which
knowledge of the
brought them
any
but
balances,
sterling
rendered
their
.
market at this time although they are the leading
forces in the picture.
.
The whole market has been too small
an affair to be affected by the operations of any one group.
.
.
.
provement of
Truman Administration has devaluation in view to
41
before
lost
Britain's economic
countries in need of dollars. The
position. This time there may be
merchants engaged in such trans¬
some
slight increase of foreignactions, at the same time as mak¬ owned
useful
.
.
bank
.
two
the suspension of the gold stand¬
purchases a rather radical departure for some of these banks from
ard. was that there was a flight the
previous policy of buying only the near-term end of the list. . . „
Reports Rumor of Rise in Sold Price
mittee to
history
gained so much gold, considerably
to achieve an increase
ing plans.
of
would repeat itself.
The
why after 1931
Britain
of 1031
mental to the
In
be
days after
the
that
devaluation
the
12
within
$80,000,000
poison is, however, another man's
meat.
The dollars thus lost by
Britain were the gains of other
ing
Neither
gold
for many people might
inclined to infer from the gain
One man's
to Britain.
loss
the need for income.
be no
can
active market.
too
not
Britain
this,
acquisition of cheap ster¬
ling it was profitable for conti¬
nental
importers of Australian
wool, of Siamese importers of
Malaya rubber, etc., to re-export
their goods to the United States,
a
securities are still on the defensive in a
.
There does not seem to be
any unusual amount of uncertainty in the picture that would account
for the lack of action and most holders of Treasury obligations are
not concerned over a substantial downslide in quotations. . . . There
is, however, considerable hesitation on the part of purchasers of gov¬
ernment securities, because they are evidently trying to catch a bot¬
tom which usually makes for small and spotty buying. . . . It is be¬
lieved by some money market followers, prices are making a base
and will rebound shortly and those that are trying to get the last
drop out of the situation might miss the boat. ... It is pointed out
money will be easy for a long time to come and because of deficit
financing, interest cost will be kept at a minimum. . . . This means
no long-term high coupon Treasury issues.
.
.
.
Despite outside com¬
petition funds will have to be put to work in the government market,
eventually, and all of it will not be invested in shorts, because of
and
government
question of a
drain such
experienced after the
suspension of the gold standard
in 1931.
It is well to emphasize
There
•
~
Prices of government
thin
last two quarters.
reversal
w
^
CHIPPENDALE, JR.
By JOHN T.
likely to be
the
and the dollars thus
though its amount is
smaller than in the
even
oss,
result
a
will disclose a further gold
year
much
markets at rates
below the official rate. As
Sep¬
As it
tember.
sterling
buying
of
unofficial
In all
continue to be substantial.
considerable; they
very
anybody's guess. It seems
probability the last quarter of the
for the most part due to the
were
to
continued
been
has
an
probable that in spite of the de¬
valuation the dollar deficit will
is
have
would
In
reasonable to
improvement, but its
the trade balance.
course,
extent is
The extent of such losses
control.
determining
gold drain is,
the
of
extent
expect
through various methods
circumventing the exchange
of
ae-
less
be
this respect it seems
losses
been
not
for
of
to
bound
factor
main
The
the
is
before devaluation.
was
■
'*
Reporter on Governments
prevent them from
the re-export trans¬
abuses
such
devaluation is the decline of gold
had
and
Our
has
in order to continue to
benefit by this source of dollars.
Even so, the gold drain through
Another favorable effect of the
$300,000,-
this
"
<
But there
profitable.
subsidizing
LONDON, ENG.—The announcement of the quarterly gold fig
confirmed pessimistic rumors about the extent of the gold drain
that were in circulation in August and early September. It is true,
the actual loss during the third quarter of this year was $220,000,000
only,
commay go some way towards off¬
pared
with
setting the losses arising from
$260,000,000
the adverse trade balance of the
during the
United Kingdom and of the Ster¬
second
quar¬
ter.
But
on
ling Area in relation to the Dol¬
lar Area.
Sept. 18
the
loss amounted
lines
most
actions,
ures
'
to ~ earn
is nothing to
solution to Britain's difficulties.
no
in
cause
Britain's gold and dollar reserves,
Dr. Einzig contends devaluations effect may be beneficial because
it put an end to gold losses arising from circumventing exchange
controls. Looks, however, for higher wages and prices to offset
advantages of devaluation, and reports feeling is that devaluation
is
no
ceased to be
recent decline in
on
merchants
for
By PAUL, EINZIG
Commenting
can
their
Gold Reserve
Thursday, October 20, 1949
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(1566)
should mean higher government se-
,
._^*i
I
Volume
THE
Number 4848
170
COMMERCIAL
&
FINANCIAL
CHRONICLE
that
The
and
4)
page
for the sale.
good
Another thing that the prospect
should
is
do
participate in
demonstration.
that later
when
on
talk
We'll
are
we
your
aoout
talking
he
deliberates
purchase.
line,
the
upon
Somewhere
along the
good salesman,
the point where
if you are a
him
get
you
to
he is thinking, "Well, now, I won¬
if
der
I
not?"
and
had
better
buy
this
or
You've got him up that far,
certainly
want to take it
you
that far and follow
through
cor¬
that before your
remember
must
salesman first,
before you accept the idea of buy¬
ing a policy from him. That is
true in almost every line of sell¬
ing, that the customer asks him¬
self, "Do I want to do business
with this person?"
him
accept
is
a
ss
of
one
that
first
the
deci¬
before he has made the
even
decision
buy investments
You must
will
the
anticipate these objec¬
they come up during
of any interview, and
when
course
be able to take
erly.
We'll also
talk
Then he makes
to
he's
make
that
and then he either
somehow
or
to you
then
decision,
signs the order
other he indicates
or
that, "Yes," he will buy.
Look
this sales interview
upon
objectively and think of that
son
bit
later.
decision,
voice
to
got
per¬
the desk from you, that
certain actions he has to
across
has
he
take
if you
going to make a
are some of the
are
sale, and these
things that he must do.
Selling is certainly
1
not
one¬
sided. The salesman doesn't do it
all.
It
of
has
be
to
mutual
a
piece
action, where the seller
tributes
who
much
so
the
and
con¬
person
is
going to buy contributes
much, to that interview.
so
Think
about
selling
technique and ask yourself if you,
in the past, have been giving
enough attention to the role of
your buyer, and what you want
your
own
to have him do in order to make
a
purchase from you.
Be Prepared to Do Your Part
Up to
in this subject
now
on
we
the
prospect. You have got to
make sure that' when you are
talking to your customer that you
wholly-prepared to do your
part, to do a good selling job.
Before a lecture, such as this
one, the speaker may sit here and
experience changes in the v/aves
of feeling which come over him.
Perhaps at one minute he would
at
very
do
okay!"
enthusiastic. "I could
start to go at this right now and
if
But
And
waiting to
prospect's office is
get
into his
like that, too. When you want to
make the right opening you can
if you have control over your¬
self.
If
you
will
think
back,
haven't
been' times
there
when
have been sitting out there
waiting to see a new customer—
maybe there is a salesman in
you
there ahead of you—and you have
wait
to
while, and you say,
"Well, what am I going to say
when I get inside? I wonder how
I'll open this interview? How do
I feel, myself"?
;
a
Well, you must
actly right when
feel
just
you
Have
ever
hit that
watched
door.
you
ex¬
people playing golf? They'll move
all about and make motions, then
suddenly they feel they are ready
and they sock the ball. They con¬
dition themselves, get their nerves
and mind and everything to the
point
where,
"All
right,
now
they're going to hit that ball."
It is the
same
interview.
You,
! human
factor
as
with
a
half
way
in
of
that
have to condition
I
go,
say
to
sales
the
interview,
yourself to feel
yourself,
this is it. I
can
"Yep,
going
are
to find
of securities from you, he
unable to use that $2,500
is then
some¬
where else. If he commits himself
with
that
you,
really put
my
you
be able to make
office.
he
means
can't
And
as
soon
can
where
you
are
cause
that
is
Do you
obligated with him. You may
glad that you are obli¬
gated with him, but you are, any
way,
for when you have made
that ^commitment you can't
go
somewhere else, so -that* the re*
sponsibility of the seller in rela¬
tion to the buyer is quite sub¬
stantial.
or
it?
going to sell securi¬
ties to Mr. Jones and he buys from
you,
you
then his commitment with
is very important to him, so
before
he
that
makes
with
ment
you
commit¬
he has to pretty
well accept you in person, so that
he won't regret
doing business
with
after he has
Because
you.
placed >the
order, he can't say,
"Well, I wish I had gone to some¬
else."
He has made up his
mind, he has bought the invest¬
ment, and he is obligated with it.
one
Personal Side of Salesman Is
Important
So that the
personal side of the
himself, in selling,
terrifically
important.
That
is
is
about all the
time
devote
can
we
to the
subject of the human factor
in sales solicitation at this point,
but remember that it's the people
who
do
everything in the world,
and it's the
natural
You
to
the
(the seller)
people who make the
final decisions (the buyers).
people who persuade
the
and
In analyzing what a sales inter¬
is all about., we have the
view
factor
of
place, the place
the interview
remember
control
can
should
be
the
about
to
in
be
you
interview
a
manner
yourself
must
You
factor
every
handled
favorable
as
sible.
First of all,
occurs.
that
where
pos¬
as
little
a
bit
selfish in that regard.
As far
the
as
transaction
elements of
your
concerned,
are
the
buyer is going to be sure to take
care
of himself, making
vorable to himself.
things fa¬
But you, as a'
salesman, have to watch out for
yourself, too, in making some of
the
favorable
circumstances
■
y'':
\v
.
to
Material
-
•
Setting of the Interview
One of those
things is the ma¬
terial setting of the interview, the
4.
*-i
*••■€.
■
..
./
sell
about
are
walking in there
move
is
are
a
few
things to remember:
place, where on the
top of that desk is the most clear
space to be found?
It is not a good idea to place
the telephone side.
When you take things out of your
briefcase^ the telephone may cause
on
you
to be restricted in the room
you
have
place your papers.
would probably
to
you
jumping down histOroat.
yourself, probably
chance in disrupting the
a bit. Or else you might
find it necessary to move things
somewhat.
doesn't
man
moved
on
Well, maybe
anything
want
his desk.
first decision concerns
your
sitting some place where there is
room enough for you to do what¬
ever you want to do, as far as your
The
next
room
side
as
a
desk?
one
You
have
sit
you
get
can
possible.
pretty
how
see
We
much of him
going to talk,
about attitude, and
soon,
you
as
are
find out what
can
a
per¬
son's
evolving
attitude
is
watching him rather closely.
Sometimes, if
you
are
by
doing, then
be limited. If
drumming with his
you may
is
man
hands, or if his foot is moving ner¬
vously, those are little signs that
a smart salesman looks
for, and if
you
know what they mean, use
them. But at least, you have to sit
somewhere
where
you
can
see
Take into consideration the eyeDo not take a low seat, so
the
buyer
is looking down
That is bad. You don't
want him
that
you
in
any
are
to consider
way
any
lower than
can
be eye-to-eye with the
buyer, and that will make it easier
you
balance
the
social
situation,
also.
"Don't Take the Lounge Chairs"
When you are selling, you are
putting forth positive statements.
You
space
are
tions
making
about
strong declara¬
the
value
the
and
good quality of what you are
selling. If you are slumped away
in
down
a
.
\
no
appearance, you can not
alert, or give the appearance
of
the
aggressive kind of sales¬
that I know you
are, so don't
take the lounge chairs when
you
go into these offices, and you will
find quite a few of them in
there,
but take th'e straight-backed
chair
men
that you can sit up
in, that keeps
you alert and keeps you
right iit
there pitching all the time.
tainly, if
chair,
you
are
comfortable
a
Sometimes you get into an of¬
fice and find yourself
looking at
the customer, and there is a win¬
dow
behind
the
your
seat,
circumstances to be construed
him, through which
shining directly into
is
sun
Never
eyes.
because
take
such
that situation
a
will
prevent you from knowing what
is going on.
If he motions you
to
a
chair
whore
strong
a
there
would
light
glaring into
your
eyes,: just
remember that
you are not under any inquisition
and just say, "I wonder if I might
move
my
chair
little bit?
a
light is bothering
eyes."
Don't allow them to place
in
such
careful
The
my
you
disadvantage,
a
and be
not place
that
you
do
yourself in such a disadvantage- ;
ous position, either.
There
are
other
factors, the
temperature, for instance.
If the
temperature is not right for a
good solicitation, try to do some¬
thing about it if you can. Maybe
you will be able to suggest that a.
window
be opened, or if
it
freezing and you are in there
with your teeth
chattering, and
talking to some Eskimo, ask him
if the window might be closed
for a while so you can talk.
Continued
lounge chair
a
Cer¬
slumped deep
lounge chair
you will be handicapped as far
as an
aggressive delivery is con¬
into
he
is, and I mean tfyat even in the
physical sense, that he has an ad¬
vantage over you if he is up there
looking down at you. So sit where
to
com¬
be
be
level.
that
a
fortable
cerned.
unable to
what the prospect's hands are
see
a
a
person you
that you have decided has
23
as an
on
24)
page
offering of IheSt securities for sale,
or as
dn offer
to buy for as a solicitation of an offer to buy, anydf such securities.
.
The offer is made only by means of the Prospectus.
to
certain amount of space.
find that the
move
that
you
going to talk with. You ought
to be able to
This is under
thing tb' Consider: Is
enough tb sit, on either
the
of
have
on
advise
where
good look at the
very
solicitation is concerned.
there
would
are
move
around
So
I
somewhere
a
interview
that
your
close that the impression
that
you're
almost
so
upon you.
In the first
yourself
hear
created
and
mind where you
sit. Here
to
going
proper
can
what is going on.
up your
If
is cramped
NFAV
ISSUE
October 18, 1949
side of the desk, be sure to
toward the other side of the
desk.
s.
^
100,000 Shares
'
,
Or should you
sit in front of the
desk?
Well, that sometimes pre¬
sents an extra problem which has
caused
some
salesmen
make
to
The
a
Empire District Electric
mistake, not in sitting in
front of the desk, necessarily, but
in placing himself so that his con¬
versation is hampered by a lamp
standing between the buyer and
himself. That's a
very
stupid
thing to do, but we've seen it hap¬
pen time and time again.
Another reason why it may not
be well to sit on the opposite side
of the desk is that when you have
prime
occasion
to
prospective
show
Company
Common Stock
($10 Par Value)
to the
everything
and
reading or
r
•
;
'
'
■
papers
customer
Price
will have to be turned around,
if you
$17,125
per
share
intend to do any
pointing out of facts on the papers
you will have to be adept at read¬
ing upside down.
have decided
You
of
the
desk
there
of
How
your
you.
are
to work.
importance
particular pref¬
a
it make any difference
If that is the case, take
position which seems more
above the importance of what you
the
quite
right?.
your
sell
is
sit, be¬
important.
Does
the
buyers and the sellers,
that make business, and over and
to
to you?
you
are
going
selling toward
would you rather
toward
are
very
setup is,
to decide
for
erence
left,
have
to
be
the
rather sit in front of the desk,
lacing the man?
taking
buy a new
finally decide that
you are going to buy it from this
builder over here, after you have
made that purchase with him, you
in there
you are
you
have
If you are going to
toward
Usually, there is a desk there.
Well, where are you going to sit?
Do you like this side, or do you
prefer the other side?
Or would
penditure is concerned, with any¬
house and you
as
immediately start
you
means
else.
start
what
see
That
one
You
Or, if it is in a home,
start into a living room.
commit himself, as far as that ex¬
let's
story across, right now."
How will
fail to receive that
acceptance
the going
very, very rough. Remember that
if the person buys $2,500 worth
you
just right, when you go in. You ■yourself.
can
proposi¬
salesman,
salesman
the
your
3tou-> are
either not going to be permitted
to give a complete solicitation, or
People
like that.
are
,
minute."
a
sit
to dis¬
you
open
a
he
speaking too
loudly, but at the same time don't
desk.
making
you
personal
Then
at
another
feel, "Well, it's
wait
to
length
some
moment he might
best
let
you.
$fV;y T
are
feel
with
he'll allow you
cuss
If you
have been thinking of the buyer,
he'll
Then
and
to
wants
not. First, he
you, whether he
or
business
do
"Okay"!
down
decision. He's
a
that
to
tion.
little
a
about objections
more
got
of them prop¬
care
decide
wants
he
whether
of
the buyer will raise an objection.
tions
the
and
That
Also, somewhere along the line,
ter
the
where
going to take
the door and en¬
is
and
without
you
physically,
interview
place. You
accepted. Somebody
comes into your home to sell you
insurance and I think you will
become
sions that he makes. He may make
Buyer Raises Objections
this
you
rectly.
The
arrangement,
offering is accepted by a prospect,
you
about the demonstrations.
Next
yourself feel just that way? Weil,
ihat is composed of a lot of the
things weshave been talking about
so far during these sessions. You
make
can
demonstration
Technique of the Sales Interview
(Continued from
interview
you
(1567)
is
seems
sufficient
that
one
side
pretty ' clear,
Copies of the Prospectus
may
in which
writers only in stales in
which such underwriters
room
close
are you going to get that chair to
your prospect? That may not seem
to be important, but it is.
:> If
move very close to the
practically right on him,
that's not good. In the first place,
men don't want to get too close to
any
of the several under-
qualified to act-as
legally tie distributed.
are
nray
you
don't try to get too
close to a prospect.
Very close
proximity is no good.
another,
so
In the second
place, if you work
buyer, he teceives
the impression that you are forc¬
ing him. You don't want him to
too
Prospectus
it
The First Boston
man,
one
be obtained from
dealers in securities and in which such
All right, now, how
close
to
a
G. H. Walker & Co.
Corporation
Harriman
Blyth & Co., Inc.
Ripley & Co.
Kidder, Peabody & Co..
Incorporated
Merrill
Stone & Webster Securities
Lynch, Pierce, Fenner & Beane
A. C.
Eastman, Dillon & Co.
Central Republic
Altyn and Company
Incorporated
W. C.
Langley & Co.
;
Corporation
Company
(Incorporated)
™
Robert W. Baird & Co.
F. S. Moseley & Co.
Incorporated
Bear, Stearns & Co.
Estabrook & Co.
Hornb'ower & Weeks
W. E. Hutton & Co.
get that impression.'
On the other
hand, don't get too
from him. If your chair
is too far away and he is sitting
way over there, the personal ele¬
ment is lost to the atmosphere. He
fails to have the feeling that he is
participating in the interview, or
that the subject is not interesting
enough for you to kind of get
together on it.
R. W.
McDonald & Company
Pressprich & Co.
L. F. Rothschild & Cow
far away
So get the chair close enough so
Stifel, Nicolaus & Company
Dean Witter & Co.
Incorporated
Stroud & Company
Lauren:e M. Marks & Co.
Riter & Co.
.
Merrill,Turben&Co.
Boettcher and Company
A. E. Masten & Company
Incorporated
Metropolitan St. Louis Company
J. J. B. Milliard & Son
Baker, Watts & Co.
The Robir.san-Humphrey Company
Scott, Horner & Mason, Inc.
Yarnall & Co.
24
&
COMMERCIAL
THE
(1568)
about
him, and in doing
show politeness
talk with
and
should
he
that
enough
afford
to
a certain
If he doesn't,
you
amount of'comfort.
have the right, ap a
guest, to make a try, at least, to
then
get it.
Maybe you are going to call on
this gentleman and
he is very
glad to see you, and he comes out
to
see
outer office,
the
in
you
where there is one of those little
with
a
it, and he stands
along,
running
fences
swinging door on
Mr. Smith—Well,
what is it that you've got today?";
and what do you do in that case?
You certainly do not try to sell
anything, out there. You can
do it.
He's just put you in
him
not
position where he's going to
rid of you fast, and yet he
wouldn't admit it, perhaps, but
that's exactly what he was plan¬
get
He's been sitting there in
have been
ning.
he says, "Yes, I
fellow."
display of being
and
know how to talk to that
makes
He
quite
not
'
glad to meet you, but
glad enough to have
very
very,
a
'
into his office. So you
talking, and the first thing
you come
*
start
know you are downstairs in
the elevator wondering what hap¬
Well, when that happens to
don't give him your canvass,
-You certainly
in the outer office.
hirn
sell
won't
investments
any
amount of time available for the
you
person
have time enough
moment to give you a
to call upon
are
that
at
time
sufficient
for
give
to
you
regular presentation?
your
all items that you try
are
to take care of in your
You
there
Is
interview?
satisfactory
tell
can
the
by
approach.
of
pressure
man's
the
can
has
enough to give you an
interview.
;77777:
y"..40
^
much
time
do
want?"
you
How about it? How much time do
call
You
telephone
have
Brown,
"Mr.
say,
to
come
to
"—I would
but how much
want?" What are you
he
see
says,
you,,
time do you
going to tell him?
As far
the
as
terview is
,
of your in¬
time
it is
concerned,
individual
how
out
and
over
little talk with you."
a
"Well—",
like
prospect on the
a
and
like
would
I
up
salesman
his
long
to
up
find
to
complete
solicitation usually takes. You will
have to experiment as to what is
usually
call,
a
the
time
optimum
to make
a
sale, for
for a second
good service call.
or
a
call,
in
first
for
or
These are the fine points of
selling. One of them is this regard
for the correct timing, as far as
to
make an arrangement for a your opening is concerned, and in
this particular topic, right now,
real interview the next day, or a
couple days later on. You've got we are discussing time, as far as
to
have
a
certain
amount
of the length of your interview is
privacy in order to sell anything. concerned.;
One fellow
If you have ever sold with a lot
says
15 minutes.
of
people
looking
over ' your Another says 35 minutes. Prob¬
shoulder- and taking things off a ably someone else may want more
desk
person's
that is not
you
time. The determining factors are
you'll know
yourself, the complexity of your
proposal, the amount of knowl¬
edge of what you are selling that
the prospect has, and numerous
pushing
and
around in the process,
ideal situation.
an
Solicit Under Conditions of
Privacy and Comfort
A
other things that we could go and
during Jiis
salesman,
good
approach, arranges things so that
he is given a certain amount of
,
;!
:"■■■) privacy and
solicitation.
comfort
his
to
run
there
Sometimes
are
other distracting influences. There
be a large and noisy fan
going, so that you can't hear him,
may
i
he
and
can't
hear
Well, in
simply sit
there and hold a very poor and
unsatisfactory conversation,
but
that
instance,
ask
him
off,
or
if
if
you
salesman
ask
to
for
won't make
The
few
of these
some
little to forward for
a
ask
for, but I
if you
because
not,
are
them
say
do
probably
you
sale.
a
basic
involved
interests,
should
your
own
range
should
know
about
you
how
long it
what you
would take you to cover
wish to cover in that interview.
Let's say it's forty-five minutes.
You have decided that forty-five
minutes is
to
make
good length of time
complete solicitation.
a
a
Then if you wanted to do a good
selling
job
you
would
have
to
break that down into the different
steps of the sale.
How much time
to
for
use
your
are
going
you
approach?
How
are you going to allot
initial presentation of
your proposal?
How much time
for
your
be
can
allowed
demonstration,
of the
or
for
making a
for examination
investment literature that
have
brought
How
over?
much time do you think you will
need to kill any objections that
the physical setting of this
interview
it
is
don't
in
such
favorable
do
a
for
way
ar¬
If
you.
it, most of the time
no
have
talked
about
the
people involved in thesfe solicita-tions, and we have discussed the
place. We will now talk for a few
minutes
about
another
im¬
very
portant factor, time.
The time of the day
that
you
make your call is very important,
as far
as
any particular account
is
concerned.
We
have
already
up?
,,
Closing the Interview
Pricing
you
will
do
it, so take these
things into you own hands and
try to do something about them.
We
may come
that
one
%
interview,
you
principle
here is that you as a salesman, for
*
that in limiting
an
of
much time
consider
things to be
not
a
\
You may
they
for
room
minutes.
a
turn the fan
can
say
the
couldn't both go to
you
other
some
you.
don't
discuss, but I
time
is
and you are
the
going to come up,
going to have to tell
prospect
;
prices
of
yield,
and
Then
that
will
you
where
about
these
you
sort
come
will
try
You should have
evaluation
of
current
issues,
those
the
and
of
thing.
some
close.
relative
steps,
far
as
evaluation,
you
are
going in there and running
a
a
well-planned job, or giving
can't
pacing
try
to
you
sell
a
hungry
man,
will have too much
competition from inside.
Also, if he is tired and
you
are
Again
in
of
termined
to time,
delivery is
regard
your
an
manager
ac¬
sent
to see, and you don't
anything about their pre¬
relationship
with 7 your
over
if
talking, you certainly are not
going to get anywhere, so you
might as well take a chance and
in there and
kill
house have been, if that
takes you by surprise, you are not
your
prepared to meet it.
On the other hand, if
found
out
something
before you got
you
about
would
be enabled to work out something
to go on
you
that would alleviate that
situation to
you
in there,
had
that
some
extent.
At least
would know that he is going
to jump you, and you would have
something ready to come back at
him with, so
it would be smart for
remember to review in
your own mind, or with your boss,
what has happened, before you
to
you
call
on a new
Another
familiarize
account.
thing that
yourself
you
with
might
is that
prospect's experiences with some
if
even
which
do
But
mend.
"Stay
Stay
have
you
I
not
in
Try
on
usually
you
or you
are
killed, fast—and
out
Lots of times during an inter¬
view the telephone will interrupt
It
seems
priority
Why that is
have
to
have
You
ment
this
a
made
week
in
gentleman
appoint¬
your
advance
to
in
10:15
at
see
the
morning.
You get in there and
doing fine.
Ten twentyfive, and the telephone rings and
he's busy talking on the phone for
10
to
minutes.
15
It
is
It's
evil,
as
bad.
far
It's
as
go.
and know
you
reason
salesman is
him along
much
interested
and
was
else, and he comes back from the
After
-you
sit down.
have
'
started
\
•
your
now
very
his
mind
is
on
telephone and may say,
something
solicitation,
stay
on
-
might be interested
in, and all of a sudden before you
person
directly by the rate of
absorption of what you say on | know it you are way around back
the part of your listener.
of the barn somewhere ..talking
You
ately:
I: "Mr.
Brown—"
and
get his attention.
will
have
to
repeat,
and
going
And you
get
review
a
doesn't
know
The
say,
is
fellow
minutes.
five
for
out
sits
salesman
think-
there
-
that had
prospect:
gets off
the phone, he knows •
right where he was. Now he's got
about the problem
come
up.
When this
ing
question.
that
to
answer
an
He
able to calm down and catch
was
and sometimes
if we
himself,
up
with
we
do bless an interruption
aren't doing too
Maybe
telephone
is
that
so
•
well.
topic
particular
the
the time the
rang was bad, and if
when he gets off the
at
discussed
being
telephone,
don't
certainly
you
that thread of the con¬
versation again, but go to some¬
thing else. So sometimes an in¬
terruption can help ycu, but in
pick
up
good-and
most cases it is not loo
sets you
back.
Attitude in Sales Work
the
For
of
rest
about
talk
one
the
day
of
the
most
portant factors involved
work, "Attitude."
we'll
im¬
in sales
"
wife and I
at the
Schrafft's
in
our
neighborhood.
The bill was 61 cents,
and the
cashier's desk was located at the
door. I had a dollar bill and, see¬
The other night, my
ice
for
stopped
cream
check was 61 cents
that the
ing
figured that I would put down
extra penny
the
in order to get even
change.
It didn't seem
as
though I was
taking too much time in finding
the extra penny but in the mean¬
time there was a man behind me
—this
about 10 minutes of 12
was
night—there was no great rush
and
this man
and I were the
at
only
call
man
.
in the line, if you can
two people a line, but this
walked up with his check
two
and money and put
it down right
top of my check. The cashier
noticed this before I did and said,
on
"Please
let this
man
pay
7
his bill
first."
Although I don't remember ex¬
actly what I said, it was
of
a
was
three
of mine, and each of the
people involved had said
something,
this
nothing
nasty nature. Now, the action,
that he had placed his check
top
on
the
right underneath '
he
and
then all of a sudden
the telephone rings and the other
to the point where he
exactly what the subject of your
call is going to be, before you get
there and
elbow
his
a
concerned.
competitor /who has been han¬
When you are talking with the
dling the account ahead of you.
customer, you are getting his at¬
If you knew how much service
tention and arousing his interest,
the competitor had been giving
developing his conscious aware¬
and some of the other circum-*
ness of the need for doing some¬
stances concerning the particular
thing with his savings. He is be¬
investment salesman who handled
ginning to feel that, "Yes, I really
the
account, then I /. think you, should be
doing something more
yourself, would know better how constructive with my money.
It
to go about your solicitation.
will give me a chance, maybe, to
There may be other pertinent
increase my capital, or at least
circumstances that you would like
to get a good income from it, as
to know about before you call on
this young fellow says."
him, anyway, the principle being
That warmth is being stirred up
that it is well for you to be aware
inside of him. You are moving
of what has gone on before you
him.
You are evolving his mind
make your call.
gradually, through your conversa¬
Another thing for
you
to be
tion, to the point where maybe,
conscious of before you get into
"Yes, I think—-—"
this interview is to ask yourself
And at that point, the telephone
exactly what is.the subject of the
rings and he's talking there for
interview.
You are not always
ten minutes.
You have lost him
going to talk about the same thing
completely. He is way off some¬
either on original solicitations or
where else entirely with that in¬
where you are going in to try and
terruption. He was almost to the
get a customer who has beerTOir
point where he was committing
your books a long time, to place a
himself, he was taking a deep
little more business with you.
interest in investments, and then
You say to yourself, "Let's see,
this thing took his mind and just
what exactly am I going to talk
threw it way off.
about, when I go in there?"
"Is
Now, after he hangs up that
this a new account, and am I go¬
telephone, here is what you must
ing to give him my usual solicita¬
do, gentlemen:
tion," or maybe, "I am going in
You have got to regain his at¬
there because the manager asked
tention
immediately.
If
you
me to go
in to talk about a cer¬
tain issue Of bonds that he thinks won't, he is liable to kill the in¬
terview right at that point.
That
this prospect would be interested
is a very good chance for a pros¬
in."
You have a particular reason pect to end the interview, where
he has an interruption. You had
for calling, each place
Just review that
hand, sometimes
just blesses
fellows got him
you're
vicious.
other
salesman
what to
personal calls.
I don't know.
,.
of 7
an inter¬
ruption. He is not doing so well.
He
floundered
down,
and the
the Subject"
over
condition
that you
the
On
a
the door.
you.
part. 4/
your
solicitation.
recom¬
case
a
the subject
on
going to be
.
you
prospect back
mental
same
interest
that
get
to
the
in
or
to
such
where
on
you were.
that sub¬
have to do just that.
into
we?" and
were
know
weakness
a
other,
had him in be¬
interrupt, fore, and then go on with your
somehow
vestments,
ting
its
.
have to know exactly where
You
ject and get to talking about in¬
immediately upon get¬
the gentleman's office,
you are met with a terrific thrust
of how bad his experiences with
house and,
don't
you
were
on
come
"Well, where
say,
you
this
an
efficient talk.
because
in upon
What do
you.
If you let him keep
the
just
hit-
or-miss solicitation and not doing
talked about the "hunger" condition that we meet sometimes. You
nickel for
de¬
their time is concerned, during
the process of a sale. If you lack
an
If you bounce
that
your
vious
a
do about it?
count
you
ing
"Well, I'm glad you came over,
subject.
Don't let the buyer wiggle away but I'm going to be very busy
now.
Maybe if you come back
and
start
talking
about
other
things. There isn't a salesman in within the next week or so—"
When he hangs up that tele¬
this room who has not experi¬
enced that situation;
phone, you say something first.
You get in there and start talk¬ Don't give him a chance to wrig¬
ing about investments, and the gle out of this talk you are hav¬
particular industry that you think ing with him. You say, immedi¬
as
such
invest¬
your
in
to the point
to
with
relations
know
want?
you
.
:.;V ment house? f
Perhaps he will ask you, "Well,
how
which
Ask him if he
in and
discuss this investment proposi¬
tion that you have.
Rather than
get killed in
a
solicitation at the
doorway, try
the
Does
interview.
that way. anyway.
you come
the
is
concerned
is
element
would
kindly let
the time
Another thing as far as
the
pened.
Element
Time
The
you
you,
unfavorable eventuality.
inate that
his inner office and you
announced,
his
visits in relation to the
fatigue element, in order to elim¬
the
have been*
you
time
a
your
These
right there:
"Why, yes,
what
work, and maybe you
ask him, point blank, if he
cime
do not then have too
chance to make a sale. So
you
good
you
bit of
saying, to get his mind back into
that groove again, to associate his
subject.
7 That can easily terminate your thinking with
investments and
can only go' as fast as
he appre¬
interview very fast.
Don't allow securities.
ciates and understands what you
him to wander all over the place.
It's up to you to do that, be¬
say.
4;
Stick to the subject.
If you get cause he will seldom do that
by*
Before you go in to call on an
off the subject during the discus¬ himself.
account, you've got to give some
sion, it is certainly up to you to
Sometimes you will be talking
consideration to the circumstances
bring it back on again.
'
to a very smart gentleman who '
that have occurred prior to your
That
will
happen
time and hangs up the telephone and, right
interview.
You
have
got "to
again. You sit there and you hear off the back he will come back v
weigh your own solicitation ac¬ this chatter going on from the
and say,
"All
right now, you
cording to them, according to fellow you are talking to, and say
were
talking about A.T.&T.
.4
those circumstances.
to yourself, "How in the world
What about that?" He knows just;
For instance,
how familiar »is did we ever get to talking about where he
was, but most
people \
this prospect with the investment
this thing? Here I am in here try¬
won't remember.
market?
How much experience
ing to sell this fellow securities
However, the person who has 4
has he had with what you are and he is telling me how he raises
to remember is the salesman. As 7
pet minks, or something like that.
going to discuss?
soon
as
there is an interruption,
I don't want to talk about that.
Another point is, how much ex¬
you
immediately make a note,
perience has he had with you, or He's been yapping away at it for
of where you
were.
20 minutes.
He's in his element." mentally,
with another salesman who pre¬
forget
where
you
were.
But you are sitting there there Don't
ceded you, from your investment
He might even come back and
house?
What is the history of tearing your hair.
It's not mak¬
tired,
to come in
He has allowed you
little
The pros¬
something else.
pect has led you away from your
Technique of the Sales Interview
The
(Continued from page 23)
Thursday, October 20, 1949
FINANCIAL CHRONICLE
other
'
almost at once. What
man
said was, "I'm
sorry," in a matter of fr.ct manner,
as he picked up his check. I said,
"All
right," paid my bill and went
out.
Suppose I had said, "Listen you,
so-and-so, get your check out
of
whether,
in
my
way!"
that
case,
calrl
"Pm
1
doubt
the fellow would have
cnrrv
"
Wp urmilrl
nrnh—
•
Volume 170
ably
Number 4848
be
scon
out
the
on
THE
street
general
brawling
to it is
That is "Attitude." It
much
the
action
established
by
but
the
not
was
the
after
so
action
far
which
the outcome of that
whole transaction. We did
not end
up out in the street
my
said
he
was
turn,
also
much
acted
ply in
principles could
general
as
attitude
is
extrovert, salesdifferently from the
this
am
far
ap¬
general
the
as
attitude, but
interested in, as
more
concrete
sale
is
con¬
hang¬
ing on to a strap in the
subway.
Here is a man
hanging onto a
strap in tne subway and
suddenly
there is a terrific
jolt, and -some¬
one
bumps intc him very force¬
fully.
-
cerned, is the other type of atti¬
tude
which
is
your
immediate
attitude.
You might call it your
However that person
looks, orwhatever he is
aomg, or wnat ne
says will determine what
you are
present.
where you are
a case
going to do.
grabs
If
your
sorry,"
he
reaches
and
arm
mood.
A mood is
tude
do
about
it,"
with
that
It
poke at
a
is the
mines
witn
is
a
of
ness
react in
as
to
act,
certain direction.
a
on
de¬
of
contents
which
psychic
either
can
Attitude
signifies an;
which
a 1 >y a y s
tion
pend
is.
operates
It" gives
to
person
expecta¬
<
selectively.
his
tried
that definite way.
or
condi¬
rarely that
attitude.
our
who
attitude.
warm
points
to
You
have
al
that kind of
up
hard it
just sit^ $er£.5T?ractfcally
impervious to
direction
The
world
and you know how
He
we
dead-pan
trying to sus¬
is
of your selling
* ~
any
suggestions.;
or
well, and they
That goes
salesman
on
to
a
attitude.
you
If
going
thing
he
how
say,
to
buying
do that,
Everything
look,
every¬
do, molds the attitude
you
nice
car
you
not
can
allow
to
happen.
attitude, mani¬
Control your own
fest it in such a way
that
it
The
is
inter
-
effect
continual
a
of
is
continual
attitude
inter-relationship
between
buyer
and
must
into such
careful
own
attitude
to
control
attitude, because
should
be
the
your
that
one
sets the mutual attitude.
It is most
necessary that
that
point.
note
you
of
It
should be the salesman's attitude
that sets the
atmosphere and mood
where
to
that
kind
of
an
let them slip
you
negative attitude that
you
give
forward
—
-
looking, af
a sale
take place.
You have got to be most careful
to exude that kind of an
attitude,
yourself,
and
to
get
him
'
accept it.
At the
try
'v
to
carrect for
sales
attitude, but you have got
keep it up during the whole
of that
course
interview.
That
is
what real
It is to influence the
person in
every way that: you can to get
them to accept your proposals thai
they buy investments from
How do
/
same
you
do it?
physical
manifestation
attitude,
your
attitude, and that is
your
seconc
point, here:
You
right
spent
come in there
attitude—that's
with
the
why
we
much time on this "im¬
mediate preconditioning," outside
the door—or, before
you pick that
so
telephone
press
too, and
and
up,
attitude
you
can
ex¬
the telephone,
over
you set the
yourself, and if
prospect is
tude, " you
not
you
in
musf5
aggressiveness,
not
abosrb
the
wrong one from him.
do
is
about
picture.
ads?
They
nice tone.
a
it
looks
very
example
an
of
tone-
setting the attitude with
selling.
hand,
you
pick
up
and
look
at
these
dress
Union Square, the type¬
on
setting certainly is
is
the
newspaper
for some of
ad
shops
just
mass
a
different.
very
black
of
and
white and figures which yell out
"Bargain!"
They are attempting
of
your
expression,
your posture
tion of your personality, so many
little things that go on all
of the
the time, such as nods of the head
and every little
thing that mani¬
fests
can
a
see
What
person's attitude that you
way across the room.
the
learn
can
to
do
in
his
per¬
sonal
contact, which is much more
important with the customers in
establishing the right kind of an
them, at least to be
in an accepting attitude, to listen
attitude with
and to
evaluate your proposal.
That
is
your
firsts objective^
when you come into contact with
buyer.
At least get
them into
the attitude that they are willing
to listen to you and give a fair
judgment
whether they should
your proposition or
not, and much of that is accom¬
plished by this business of atti¬
go
on
along with
tude.
Everywhere in life there are
opposites, light and dark, good and
bad, love and hate, high and low,
rich and poor; every phase of life
has its opposite poles, positive and
tain
a
Maybe that is to main¬
balance.
There
In
displaying this correct sell¬
ing attitude, you dominate the
attitude setting, but you do not
industry
ing, certainly the individual sales¬
man
negative.
Dominating the Buyer
advertising
has learned to do in indirect sell¬
a
it
why is the
when you come in and when
you
sit down, the general manifesta¬
right attitude,
find that your
Jthe right atti¬
facial
you.
You
in two ways. The first
time, you must no1;
be adversely affected
by his atti¬
tude, if it is a wrong buying
the
spacing and
tabloid
defeat
and
up
original attitude to be
in.
set
a
can
your own purpose in coming there.
Not only do you have to set the
a
and
time
no
those
On the other
an
a
they fall away from a possible to set an
entirely different type of
buying attitude, or mood, and sales attitude in their
advertising
also drag you down to the
point message.
—
for that
solicitation to take place
You come in there alert, pro¬
That
of
aristocratic.
and
indirect
It
At
jewels in
seen
verything
There
seller that goes on until
you leave
place you
very
have nice
setting,
the office.
be
you
bad attitude.
the
at
illustration
an
there, and also showing
fine
rich
throughout the interview.
see
some
is
the
look
and
25
advertising for Cadillac,
Have
other person.
Don't allow yourself to absorb his
by
a
doesn't
you
They had an attitude which
overreached your own and killed
you off.
That is a thing which
will
of your
prospective buyer so that
when you come into contact
with
the buyer in the first
your
Post"
you
absorbed
sell
person he has to
sale made.
no
are
morn¬
continually.
is
establish in that buyer
there is
come
things
good this
so
a
investments
_
person in the
the stone-faced,
is
individual
action in this or that
direction, or
will comprehend an external stim¬
ulus in this
It is very
suspend
sell
so
going to be
If
Evening
current
is.
kind of
some
toughest
or
get
out
in and look at
you and
not
ing,
selling aggressive¬
can
A bit of unpleasant¬
always in
are
mood.
a
factors
will
turn
to kill all your
selling is. That is what
planned, careful, technical selling
at home may determine what
We
hand, the partio
recommendation
that
you
a
short time ago—it didn't
made
your mood will be.
to
The state of readiness consists
of the presence of a definite com¬
bination
mood.
ness
ular
other
firmative, positive, in which
particular day might not be
good, and that also affects
a
too
your
or
been
lovely this
ness.
tne
home
tioned by the occurrence of losing
so much on the
nags.
Your health
being the readi¬
psyche
has
mood
be
(1569)
attitude
life.
Your
to
CHRONICLE
track
race
may not be as happy as you
have been at other times in
your
very great extent what
the
you
you
is
fines attitude
and
and lost $75 and on the way
your
On
gressive
You have been to the
each other
going to happen.
V. C.
Yung, Psychologist,
morning
mood.
are
going to happen.
Now, the same thing is true in
selling.
It is this inter-relation¬
ship of the attitude which deter¬
mines to
the
certain
a
story and it hits
you pretty hard.
It changes your
attitude which deter¬
what
in
paper
read
argue with him
and it
may even end up
taking
you
the
FINANCIAL
morning.
make
up
"I'm
be
probably likely to
not
can
their immediate attitude.
For instance, you pick
or
or
will
You
change a
person's general attitude, but you
can
change their immediate mood,
something like that,
okay.
But, again,
"Well, Joe, what are you gomg to
that
reaction atti¬
a
something that has hap¬
in
the fairly
immediate
pened
over,,
says,
to
more
&
thing is going
his
an
quite
what I
same
with
and treat them accord¬
treat
wise,
properly.
The
acquainted
way you would treat an introvert.
We are not
going to discuss too
and
sorry
had
is
their
as
You
top of
I,
up
ingly.
brawling. The
He
playing
concerned, is that he tries,
he
concerned
fellow had just
inadvertently hap¬
pened to put his check on
mine.
and
steady; customers, to type them,
attitude
determined
in
attitude
COMMERCIAL
is
that
and
mental
an
is
>:
opposite to "No,"
"Yes,"
and * every
attitude
that
is
negative
has the
ability to change to "Yes."
You can move him neither one
For every "No" there is an oppo¬
never
the perception of
actually
dominates
the
everything sim¬ way nor the other.
site "Yes" lurking somewhere in
He is just
good and by the time you were buyer, because in doing that you
ilar and inhibits the dissimilar.
stone-faced.
You know how very
the buyer's mind.
You know that,
just about ready to open up your close him up.
You hear what
When the point is
you want to hear.
diff-cult it is to deal with thai
own
expe¬
reached where you are dominating yourself, from your
canvass you know you are
A person who likes baseball likes
sunk,
kind of a person.
rience in buying things, that at a
Whether he is because'
to have someone come in and
they are all wrong for him, he is going to resent that
say
aware of it or not, he is
certain
time, "No, you weren't
trying to buying that
something about baseball.
day, and they put this and get rid of you fast.
They suspend his attitude so
going to buy anything," and later
you can'
are interested in it
If you pick up thewet blanket over you and are able
already. Tneir work with his attitude
"Saturday
and evolve
Such
conscious
a
attitudes
that
are
content
favors
commercial
toward
different.
If
atti¬
door
of
entirely
bring up the
you
him.
Their
of
baseball
there
you
won't get very far.
We all have attitudes that lean
either one way or the other.
If
we
do
we
have
like
not
certain
a
much of
very
person,
dislike
a
between
anybody
walks
into
one
impression.
If he is owlylooking, you get another impres¬
sion.
And
that
suppose
As far
ing
toward
content.
our
else
comes
praising the
along
much,
and
that
person
have disliked very
we
we
don't
along with him because that is
not consistent with
attitude in
our
tudes.
One
attitude
you
is
are
extroverted
of
atti¬
general,
the
which
whether
an
is
kinds
basic
determined
by
leaning toward
or
an
introverted
type of person; or it is based upon
the functional typing of the indi¬
vidual, as to whether he is a
thinker,. whether he feels things,
whether he is moved more by the
intuition or whether he is moved
more
by sensation.
Personal
Characteristics
Personal
characteristics
mine the attitude.
is
attitude is
is
deter¬
A person who
happy all the time, their basic
one
happiness.
a
person
feels
of pleasantness and
And
bad
on
who
all
the other side
is
the
ill-disposed,
time, who is
grouchy; that is their general kind
of attitude.
The
man
do,
as
far
26)
walks
By the
there, you
attitude pretty
nor a solicitation of an offer to buy
offering is made only by the Prospectus.
of these
any
35,000 Shares*
Blackstone
Valley Gas and Electric Company
4.25% Preferred Stock
glassy eye and starts
walking down towards your desk
and finally he gets there;
by the
Cumulative, $100 Par Value
*Of the above shares
time he lands, if your record has
been
pretty good
not
holders of
recently,
then
offer to sell,
(
the
he
has
affected
atti¬
your
the
cashier's
expire October 31, 1949.
the
at
booth
tioned?
incident
12,942 are subject to an Exchange Offer made to
6% Preferred Stock and 1,430 are subject to a Subscription
Offer to holders of Common Stock. Both offers
tude.
The
that I just men¬
inter-play of atti¬
tudes thare was all-important in
determining the outcome of the
incident.
and
Price $102.40
per
Share
(plus accrued dividend from October 1, 1949)
If I had taken the check
thrown
looked
it
at
the
him with
at
man,
or
pugnacious
a
attitude, instead of being sorry, he
might have said, "Well, all right,
what about
Copies of the Prospectus
of the undersigned
it!"
as are
may
be obtained in
any
State only from such
registered dealers in securities in such Stale.
The
interplay of attitude goes
continually when two or more
people get together, because inter¬
action
is
inevitable.
You
can't
get away from it.
When you see
a
salesman
as
analyzing
walk
in to
see
a
per¬
W. C. Langley & Co.
Hornblower & Weeks
Hemphill, Noyes, Graham, Parsons & Co.
son, or your customer comes in to
see
as
in
you
the
the
the
takes
begins,
interplay * of
also.
the
customer's room,
your
approach
contact
They
last
when
only thing that the sales¬
can
page
on
Determine Attitude
(
on
is
Remember
two
are
seller
NEW ISSUE
the boss, come in with
sales record, and he gives
you
that direction.
There
it
If
your
mind is concerned,
that
person,
when
to
someone
go
that
an
securities. The
desk,
your
arolind it and sits down.
time he is in the chair
because
as our
relative
starts
that,
This advertisement is neither
who is coming to see you is walk¬
have adjusted your
that is the tone of
A
person
much to his.
against
us
accept
we
buyer.
As
the
office, you look at
he is happy, you receive
If
says'anything to
•
people.-
your
for that person, then anyone who
person,
the
relationship
attitude
of
as
tude toward the subject is
subject
dominate
it the way you want to.
There is a continual
soon
racket.
How many times have you gone
in to see a person and felt
pretty
(Continued
receptive
subject.'
You go into another office and
they believe that baseball is just
a
.
you
react
are
they
come
that
can
see
to
it and
attitude
very
selection
place and
of
Lee
Higginson Corporation
Paine, Wehber, Jackson & Curtis
immediately
begins
happy over
stock, and
R. W. Pressprich & Co.
a
into
the
and
feel fine.
you
room
will
Every¬
October 20, 1949
Chas. W. Scranton & Co.
Adams & Peck
THE
(1570)
2€
COMMERCIAL
Thursday, October 20, 1949
CHRONICLE
FINANCIAL
&
able that much,
The Business Outlook and Our
Technique of the
The
Philosophy oi Government
(Continued from page 25)
v
on
something.
buy
do
you
We
hit a very negative
attitude, don't give up.
Just be
rations
the
willingness or inability of corpo¬
if
you
read attitude?
How do you
and
you
see
there
with
his
eyes
year
don't have his attention.
You
You talk with some
a
inventories.
of
so
or
manufactured
other buyer
and
last
a
time, instead of being in a rolling
pattern covering one field at a
time, the decline in business loans
he's
but
something
got
worrying him
whether he
As
along with you
can go
his
of
tone
voice
when he talks to you, the manner
speech, the way he sits,
what he is doing with his hands;
there are many things like that
that
can
flag
his attitude
on
whether he is going along with
his
of
whether he is not.
you or
A
his
manifests
person
char¬
too, in many ways—these
things that the buyers do.
acter,
little
The way they give an
their secretary, the way
order to
they pick
up
the telephone and hold the
conversation; it's the little things
like that, if you observe pretty
closely, you can determine what
kind of a person he is and how
going to deal with him.
you are
Just to close this subject of
atti¬
tude, it is your initial contact that
is most important.
As soon as he
looks
at
you,
will find that
evaluate you. He
you
he has begun to
is
evaluating what kind of a per¬
you are, and your- attitude,
your
sincerity, and everything
son,
,
about you.
'
It is necessary
that you make it
for him to read that you are
the right kind of a person., It is
not always easy to evaluate other
people.
Experiments were made
which have shown, where there
have been pictures judged by a
lot of psychologists, that criminals
alongside
of
college professors
could not be differentiated just
easy
It is not easy to
irom their faces.
judge people.
Therefore, when
the
it
make
you
into
come
customer,
for him to see that
of
presence
easy
your
the right kind of a person, by manifesting your attitude
and personality quite clearly, very
clearly—and you may have to
exaggerate a little bit in order for
are
you
.
himsay
ibe
to
that
see
is
it
right
and
to himself, "This is going to
all right.
I am going to be
business with this fel¬
able to do
low.
I
can
snobbish
with."
you
talk to him.
hard
or
because
to
He is not
along
get
right off
bat
the
have melted him down.
I think that
.seconds
door
just in the first few
when
is
that
you
a
in that
important
come
most
time in this business of the estab¬
lishment
attitude
of
the
and
ac¬
ceptance of yourself.
Keresey Associated
Wilis F. S. Mcseley Go.
F.
S.
Moseley
&
Co.,
ployment beginning around the
last quarter of 1948 and continu-
ward
J.
with
cannot be lightly dis¬
attempting to
ployment
pipe
wants
consumer
what
as
were
the war-time short¬
made up, the chief
production declined
profound change in
inventory policies of manu¬
facturers, wholesalers and retail¬
ers, who cut their stocks sharply,
why
reason
as
it did
was a
the
lower
the
The whole world has to learn that
If' nations cannot attain it, they
wage
pension
increases.
I
the contrary, be in¬
or
should,
clined to describe this practice in
the
words
caution
sellers
the
uttermost
rise
in
seems
where
their
Riley of radio
revoltin' develop¬
a
shall have more to say
I
this subject later; all I am try¬
the feelings one may
Whatever
entertain
about
deficit
of
sues
spending,
is¬
it
is
the Treasury's fiscal
that
certain
ultimate
the
operations at the moment are
helping to support and inflate the
spread through American industry economy. My object here is only
will result in an increase in dollar to lay the groundwork for reach¬
purchasing power in the imme¬ ing a conclusion about the prob¬
able behavior of general business
diate
t'utufe, whatever may be
ing to impress upon you at this
washed up on the
wave
has finally
of goods reached its
limits last July.
The
beach ofter the
broken.
Fur¬
the second quarter
since
Over and above his
activity in the next 6-12 months.
What may happen in the longer
range
to corroborate this view.
thirds
which
of
since 1940.
aside
of 1947.
high "savings
has
laid
been
result
a
as
the
of
blithe
spending by Washington of bil¬
lions of dollars it does not possess
industrial
the
point
a
policies become unwise, not only
economically but also politically.
point is that a wave of pensions
by
exhibited
reach
will
Mr.
of
fame—"What
ment!"
production is the job of all of us.
.
on
.
recent
a
should read into this
any approval
on my
you
conclusion
on
distribution
over-full
an
line
ages
when
missed
This is hardly
is
different problem.
a
Tangibles of Current Situation
To
all
it
sum
condition
up,
implied
the
the maintenance of
for
healthy rate of industrial pro-*
duction, namely, that the recent'
a
pattern of consumption or spend¬
not
appreciably
likely to be ful¬
filled.
It is therefore my opinion
(and I hope I shall not hang for
it)
that a review of the • "tan¬
should
ing
worsen,
gibles"
seems
of
the
current
business
indicates:
situation
most likely course of
business in general in the re¬
mainder of 1949 and early 1950 is
(a) The
sideways-to-moderately
upward;
(b) The next best bet, and still
a pretty fair one, is that business
will continue slow adjustments or
a slow downward trend.,
of a buyer who is
(c) As for the remaining pos¬
by his fingernails.
In
sible directions the economy
In
summary, it seems highly short, no serious decline in the
early 1949.
might take, it seems to me dis¬
unlikely that the rate of inventory rate of cpnsumei^spending appears
Increase in Manufacturing i
' reduction
tinctly unlikely that business will
obtaining in July will to be in the gards.
move
Unemployment
upward sharply, and still
be exceeded in the months ahead.
So far as business spending is more
unlikely that we will have a
Of all the dismal performances It therefore seems unlikely that concerned;- it is indeed unlikely
depression.
the decline in industrial produc¬
that plant and equipment expen¬
by the more popular economic
This prophecy is based on the
ndicators, however, the one which tion, about 75% of which orig¬ ditures by American corporations
inated in the policy of lightening
tangible factors in the economy
will reach the stratospheric levels
probably overshadowed all others
and not on the intangibles regard¬
in convincing the business com¬ inventories, will proceed any fur¬ of late
1948, and I freely concede
munity that something was seri¬ ther than the bottom hit in July. that, if the recent mild economic ing which America should be
more
concerned than one would
ously awry with the economy was Therefore the decreases in busi¬ recession should continue and un¬
judge it is. Every day we see the
the behavior of total unemploy¬ ness loans, manufacturing employ¬ less
business confidence in the
and
total
tug-of-war now going on in Wash¬
employment, future is
ment. The level of unemployment ment
restored, it will most
ington,
the drive for enlarged
in mid-1949 was just about double which had their origin in the drop
likely spring from reductions in
in
industrial
powers in -the Executive Branch
output,
are
also their
what it was at the corresponding
purchasing of capital goods
of the government, and the growth
time in 1948, and there can be likely to terminate—barring pro¬
by corporations. Even here, how¬
of the idea of a planned economy.
longed and widespread strikes. In
no question but that employment
ever, it is necessary to maintain
We see pressure groups backed by
is the guts of the entire economy. short, there appears to be good our
perspective.
Granted that
votes in large blocs fighting for
But what seems not to have been reason for the comparative busi¬
corporate profits provide both the
ness
short-range
benefits for them¬
optimism prevailing at the
generally recognized is the fact
ability and the incentive for busi¬ selves in utter
disregard of the
Virtually all of the ness
that the increase in manufactur¬ present time.
spending, and granted that
long-range
effects
upon
them¬
of
economic decay seem such
ing
unemployment
wholly
acr signs
profits fell from $22 billion
selves or the economy as a whole.
counted, for the increase in total about to disappear, hence the best in the third
quarter of 1948 to $15
We
see
government practically
guess anyone can make about the billion in the second
unemployment.
quarter of
powerless to
business outlook is that for the
stop grabs of all
It is, in my opinion, impossible
1949, there was no such decline in
kinds—because if it attempts to
to point out any other significant economy as a whole, the late "re¬ undistributed cash profits.
This
cession" is substantially over.
stop them, it will lose the elec¬
tangible; economic factor which
paradox has its origin in the fact
tions.
We witness a hunger to
What I have already said about that
has declined dramatically during
corporate profits were largely
undertake new and untried plans
the course of the last year other our business prospects for the next fictitious inventory profits from
on the plea that they are forwardthan those I have already men¬ 0-12 months carries the implied the end of the war through 1948.
looking and progressive. We jump
tioned.
If this be true, the reces¬ premise that the high level of as I have often pointed out. Such
to adopt plafts that have never
sion which business recently consumption or spending which illusory profits have only recently
worked in history—plans that are
underwent boils down to a sharp supported the economy during the been eliminated by declining price
year
will
not
radically levels. The real deterrent to cap¬ currently failures in Europe. We
drop
in
industrial
production past
smear men
who sound a note of
My confi¬ ital expansion on the part of busi¬
which, in turn, brought about change for the worse.
caution or dare to contradict.
It
comparable declines in bank loans, dence that the pattern of demand ness is industry's understandable
seems that a smear is a lot easier
will not be drastically altered rests reluctance to
go whole hog on its
manufacturing employment and
to concoct than a reply on the
total employment.
If I can suc¬ on what the future seems to hold capital programs in the face of an
merits of the issue.
We see de¬
in store for the four great users
ceed in explaining this decrease in
openly hostile or at least unsym¬
mands for larger obligations on
industrial output in such wise as of goods; i.e., the individual con¬ pathetic * government.
It is ad¬
the part of government.
We see
to
sumer, the businessman, the for¬ mitted that some cabinet members
the probability of
what
explain
in
the
1948
•
Late
Recession
and
happened
world
in
late
Substantially
"
Over
>
business
the
picture
hanging
on
v
its
preclude
or
recurrence
seems
to
me
continuation,
I shall have
it
justified
belief that the late and unWall lamented recession is,
probably
of
the
economic
all,
part of the pernicious institution
of an annual round of
general
that
eign buyer and our own govern¬
mental agencies.
my
14
the association
Keresey
recent
or
squandered
year through the inabil¬
foreign governments to
control their own wage levels or
to
increase
their export trade.
out of current income, the con¬
production sumer now has a cushion of accu¬
index
in
recent
weeks — aside mulated
savings
in
the
total
in industrial production and its
from the strike-bound industries- amount of over $300
billion, twocounterpart in manufacturing em¬
through midsummer 1949.
It
is obvious that the drop of 17%
ng
Street, New York City, members
the New York Stock Exchange,
Announced
our
been
of
ity
largely in anticipation or fear of thermore, we are only a few
prices.
Hence, the vital months away from the payment ol
question now is whether we can Veterans' Insurance refunds. Since
a total of $2.8 billion is to be dis¬
effected
in recent months have expect the makers and sellers of
bursed during the course of only
been comparatively mild and, on goods to reduce their stocks more
drastically than they were last six months, individual purchasing
the whole, orderly.
July, when total business inven¬ power will be given a temporary
Another reason why many be¬
tories were probably being light¬ shot-in-the-arm.
lieved that business activity was
ened
at an annual
rate of $6
With regard to how fast the in¬
headed for the same sort of col¬
billion or $7 billion.
Practically dividual consumer will spend the
lapse in 1949 as it experienced in all
of the drop in industrial out¬ income
available
to
him it
is
1920 and 1937 was the sharp drop
put has been arrested.
Inasmuch simply not true that the consumer
in
industrial
production
from
as a
$6 billion or $7 billion rate has been in as desperate straits as
September, 1948, to July of this
oi inventory
reduction is higher is generally claimed. The fact of
year.
Corresponding with and re¬
than the average rate reached in the matter is that there has been
flecting the decline in industrial
any of the last twenty years, it a fairly regular increase in the
output, there was a severe cur¬
seems reasonable to suppose that
rate of gross personal saving ever
tailment
in
manufacturing
em¬
might well have given us pause.
a matter of fact, the price ad¬
justments which the economy has
is
that
much, about
very
The
not.
or
±
American
With
You can tell
that
manufactur¬
he wants when he wants it.
by h?s face—that he is wor¬
ried.
You've got him interested,
he is worried.
and
of
one-quarter
in
experience is that, whatever the
misgivings of the makers and
sellers
of
goods
may
be,
the
broad field oi
goods in a short
over
from
drawn
Had
prices declined in a chaotic
disorderly
manner
in
the
him.
of
the
sliding price level,
part the result of a healthy
reduction
fixed
just
ahead
straight
looking
and in
sitting
credit—based
inability to borrow—
reflection of
some
him
buyer
cn
The 1949
in part seasonal, in part
was
You
with
talking
been
have
business
in
not at all
overbalance the negative atti¬
tude and count for your purposes.
'•
our
decline
opposite that can be made
exact
to
history.
pression in
about
decline
total
ing production can be laid at the
door of a softening of consmption.
Perhaps one of tne lessons to be
normal
a
collapse, one
which has accompanied every de¬
the
is
somewhere
attitude
is
feature of economic
of the fact that underlying
aware
that
borrow
to
than
more
(Continued from first page)
often change.
So
will have
ation
within
Sales Interview
if not most
reputed benefits of devalu¬
of the
over.
that
Categories of Spending
much
me
the
emphasize at this point
recent
decline in indus¬
consumer
depends
will spend in the, future
upon
decline
how much he will
view
of
currency
our
is
'
of demand in which
most
surplus,
export
individual
the
source
the
likely
over
is
particularly
recent
shake-up.
heads
few
the
our
in
world-wide
Before losing
recent devel¬
stopping to ask such a ques¬
tion
not hostile.
The
a
How
Let
Ed¬
firm.
are
as
this;
.
..;
<
/
■
:
cannot get all
the people want out of the present
governmental income, based on
the highest
national income in
history, and based on the highest
tax rates, in
peacetime history,
what are we going to do about
paying off our debt and keeping
our budget balanced, if and when
there is any slowdown in business
If
this
country
primarily due have to spend and how fast he opments in this quarter, however,
of consumption. will spend it. With regard to the it would be well to reflect that
amount of income at his disposal, our gross exports constitute but
•conducted
his
own
investment Whereas durable goods manufac¬
turing fell about 18% from last bear in mind that two-thirds of 6% of the total business done in
business.
personal
income
takes
the the United States, our net exports
September to this July, unit con¬ all
which reduces national income?
sumption of such goods fell only form of wages and salaries. If, as but 2% and our net commercial
These are some of the prob¬
Chicago Exch. Member
about half as much; and whereas appears to be the case, the level exports less than Vz of 1%.
This
lems whose settlement—if wisely
*\. CHICAGO, ILL, Oct. 14.—The production of non-durable goods of immediate or deferred wage is not to say, of course, that-the
.Executive Committee of the Chi¬ slipped about 12% from its peak rates is about to be given another psychological impact of devalua¬ made—will govern the long-range
cago Stock Exchange has elected in
1948, unit consumption reso¬ hike, the outlook is for a larger tion is anything but deflationary future, but if unwisely made, will
-to membership Harold C. Brown, lutely refused to decline at all. rather than a smaller number of or that certain individual indus¬ wreck the economy.
,
President
;
trial output was not
Mr. Keresey was formerly with
Estabrook & Co., and prior thereto
of
Harold
C.
Brown
Co., Inc., Buffalo, N. Y.
to
&
i
a
weakening
Rolling it all up in one ball of
wax, it
would appear that not
dollars
sumer
for
to
the
spend.
individual
-
Heaven
con¬
forbid
tries will not be hit hard.
be
brutal
about
But, to
it, it is conceiv¬
Let's try to
on
some
line
up our
thinking
of these matters and then
Volume
consider
THE
Number 4848
170
things
some
do
can
we
about them.
vv,-
a "fair field and no favors," a
"profit and loss" system in which
of
citizen
the
i;
Government Undertaking
As
government
development^ of
policy,
attempting
and
his
If the two
do
to
a
modest bit in formulating a sound
The second
the
Federal
policy for the proper field of gov¬
on
ing to the public, the-eittzen gets
his
rightful
reward.
On
the
Socialism
other
hand, if he doesn't do what
public wants, he pays for his
the
mistakes.* r This
own
American
the
fighting
Federal
Budget*pF$4()-odd bil¬
a system off rigid dis¬
cipline which develops* a sense of
responsibility, for it-provides an
adequate
incentive* - for a wise
a
lion.
that most parts of our-population
entirely too willing to let gov¬
are
undertake
ernment
Unless such
their
full
men
share
as
of
much.
too
you
take
can
responsibility,
the
great
danger' is
that our
people are going to lose faith in
our
form of government and all it
to them.
means
At the base of
is
ernment
system,
the
so
whether
this form of gov¬
free enterprise
must
we
action
any
Consider
proposed by
government _comes
within, the
of government and
whether
it
handicaps
the free
enterprise system. I never like to
proper
lose
scope
opportunity to be a cru¬
sader. for my beliefs as to these
an
national problems, and I hope to
get others to do all they can and
likewise become crusaders them¬
selves, particularly in their own
organizations.
I
call myself a
crusader because
in
once
Wash¬
ington Mr. Byrnes told me that
one
cannot
compromise with a
crusader, and I don't propose to
compromise on these principles.
All
of
talk
us
others
too
with
much
identical interests
we are not.truly crusaders to
the opinion and the judgment
and
win
of
having
with
men
back¬
different
interests.
To. get this job done we must
measure. the plans and efforts of
government, not only 4s „to their
probable effectiveness,; 'but as" to
whether .the acts are within the
delegated powers of the Federal
grounds
different
and
Government,,; and whether any
assumption of powers does not
tear down" our faith
of
in
our
form
the base of
individual liberty, per¬
government—at
-
which
sonal
is
responsibility and our free
>
•
enterprise system.
.
Let me try to describe this free
enterprise system as it appears to
me.
It is a philosophy, a faith,
.
thing of the spirit and soul of
America.
It is not the product of
a
It is
effort and adequate*
penalty for
unwise undertaking.
and more,
an
It is all these
too; but-these
the
seem
It is
surprisingly strange to me
in demo¬
have so
little faith in the people and their
composite wisdom as to believe
that any marT believing
cratic principles would
that
to
a
few planners
competent
are
national
economy,
or
if com¬
petent men could be found, they
the entire
that even
manage
should be entrusted with that
of all
of
people,
our
government will succeed only
in
destroying itself.
"Consumers
We in
Are
production and distribu¬
tion know that the
consumers are
bosses and that
our
don't
do
fail if
we
we
what they want.
won't argue the question
They
with us,
they won't try to reform us or to
make us do what they want. They
will let us go our own way* and
they will
sist
their
go
If
way.
we
in¬
hitting ourselves over the
head with our follies, they will
on
still go by on
It
their
takes
way..
ducers
a
have
distributors
and
known that this has been
a
"ru
of the garnet £ot:centuries*; They
think the rule is fair. The con¬
cern or the man who can give the
public what it wants at the price
it is willing to pay dosn't see any
sense in any plan that,
in effect,
says to the consumer that he must
buy what the; producer or' - dis¬
tributor wants him to buy fund
must
pay
the price demanded.
The
the
who thinks he
man
can
make
strivings of our
people and the evolutionary devel¬
high price or
buy at all is going to round
out his education on this point
before very long.
Higher costs
and higher prices are not going
opment of the last thousand years.
to
a
brain-truster,
of men
or
who
have made failures of their lives.
It represents the
It is
entirely practical idea, for
an
it has worked in America.
It pro¬
consumer
pay
a
to
consumption, and un¬
less there is higher consumption
there will be too little production
duced a standard of living and a
national prosperity not even ap¬
ment
proached elsewhere in the world.
sales organizations.
While
it
should
not
;
be
defensive
waste all
the
m
i
we
time
n o r ;
should
not
apologizing for
weaknesses
American system.
of
the
,
among
That is what
ica
until
Guard.
offered
or
to
to
form
is both too weak to wield unlim¬
with
power
and, thank God, too
it."
No one
"ringing words" for
found
has
expressing the ideas wrapped
the
in
up
the American
Way of Life, but to me it cer¬
tainly means all these ideas—
equal opportunity for all, personal
liberty consistent with full per¬
sonal
responsibility, no leading
on
a
concept of
beneficent
government
or
a
bankrupt
(the only difference
being one of time), no coercion by
any one, no favors or benefits by
government to one class of its
people because of political pres¬
sures
with
or
gaining
votes,
the
purpose
no
interference
with the economic life of the
of
na¬
tion, except when clearly in keep¬
ing with
robbing one group for giving to
another; or, in
even
simpler terms,
it means the Golden Rule and
Sermon on the Mount.
It is
a
the
7/
system based on the idea
fighting
look
at
national
Federal
a
have
been
destroy
to
war
elsewhere in the world?
it
Don't
we
also
recognize that the idea of a
strongly centralized Federal Gov¬
ernment is contrary to the entire
history of our nation and the
philosophy of life of our people?
Aren't
what
is
planning
strongly
Government
^
thought what happens when
national planner, gets the
that men
in
Washington,
comprising the government for
the moment, can do a better job
Every
one
who advocates
extensive
basis
planning on a national
first stop to inquire
plan can be made effec¬
should
how his
tive, for a necessary part of any
plan is the method for making it
effective.
There
,v
seems
to
me
only three
ways, and they represent sharply
conflicting pointed view:
First, government^'Can require
people to carry out the master
That
is - regimentation,
Fascism, or whatever .you wish to
call it, and .we have been fighting
a war in opposition, to that idea.
Wouldn't it be altogether strange
if, having fought a war about the
idea of a strongly centralized gov¬
political
by fur¬
imagine the
being created
you
stable.
—in
of that kind?
measures
For example,
stabilizing farm
sincere
insisting
enemy
countries become truly democratic
unless we are determined to re¬
the government appear to absorb
the cost: and conveniently over¬
main
look
these
ourselves?
so
the
at
that
One
domestic
recent
looking
situation
has
plenty of ground for being
skeptical about our sincerity.
The American Way of Life
The
third
people
is
cost of
That
selves—The
the
the
things
Life.
is
the
not
method
method
in
the
economics.
field
which
national
of
These planners of the
New Deal spent six years at heavy
expense
trying to create inflation
while their acts
were
in fact de¬
flationary. Their successors of the
Fair Deal are trying now to stop
inflation
but
their
acts
seem
to work.
politics in
National Interest
.777;
It wasn't many years
that
ago
the
planners
were
concerned
the alleged fact that we
have a matured economy, with no
about
frontiers and
more
advances
more
no
great
possible. That was the
a whole structure of
keystone of
governmental plannmg over late
years. It was the thinking of men
lacked
who
These
faith
America.
in
planners
did not foresee
development of the atomic
the
bomb,
television, radar, air fleets,
guided missiles, and many other
developments
of
Atomic fission
up
recent
may
years.
have opened
great fields for power produc¬
over the
years ahead.
So,
tion
wherever
thjere^ig any trace left
silly idea of a matured
economy, it
seems like a
good
place to use a small atomic bomb.
of
the
Another dream of the planners
that
prosperity
could
be
was
created
through large spending.
These planners didn't know that
such
spending
would
destroy
confidence than it
more
The
created.
preachers of
purchasing, power theory of
the
imported
to
seem
have
eco¬
found
an
idea which has taken root in thjs
-■
theory is
litical
though
one
tools
it
didn't
take
of the greatest po¬
when
adopted by a
who can gain votes
by promising its benefits when he
knows that he isn't going to be
held to account for the long-range
effects of his
promises.
These
promises of immediate benefits
will
always be more powerful
demagogue
than the threat of distant dangers
far-removed
risks.
There
isn't
anything glamorous about
balanced budgets,
sound money
policies, the competitive system,
a
large volume of. production,
hard work, or selling one's serv¬
ices
at the price
the buyer is
willing to pay—certainly nothing
so glamorous as the guarantee of
security for all. - "
•f<
*
There is nlenty of
er
its
controls
doubt wheth¬
plan wisely if
apply only in the
government
can
monetary
fiscal
and
policies many other factors must
play a part in strengthening our
economy:, wage-price policies, the
structure of markets for labor and
goods, agricultural policy, foreign
trade
and
international finance,
in
the
construction industry, sav¬
ings-investment institutions, labor
and business policies.
-
It
Pressure
vs.
national
the
i
and
interest, and to
class and terri¬
The granting of
that
the grain ex¬
to
other.
each
•
country have found
market—despite its ad¬
mitted
imperfections — operates
! efficiency
which
has
never been equalled by any other
system, and that the decentraliza¬
tion indecision-making permitted
by the market prevents the de¬
velopment of great concentration
of economic power.
Unless con¬
sumers are to
be controlled, pro¬
Appeasements in the
economic field do not appease any
more
than they did at Munich.
an
operation of these pressure
groups can only create an arti¬
ficial topsy-turvy situation that
will destroy all of the plans of
government and may go even
the wants of the consumer.
serve
each make
We
in
We
decision
individual
our
to
helps
over-all
own
our
the market and
decision
whole
must
distributors
and
ducers
The
our
or
in this
the
with
equally right in demand¬
undermine
sell
We
ing equal consideration from gov¬
ernment, and, in fact, becomes the
basis for further demands by the
to
how¬
changes. It includes all the chan¬
nels through which people
buy
advantage
to
one
pressure
only becomes the bTasis for
more
demands by
every
other
further
remembered,
the stock market
group
group.
be
that the key economic in¬
stitution of a free society is the
market. This does not refer only
to highly organized trading as in
an
group,
must
'
ever,
It is time to ascertain what is
same
today.
Besides
Groups
planners have such a
faith in their ability as to amount
arrogance? Dida't any of them
ever hear, the words of Cowper:
"When men of judgment creep
and feel their way, the positive
pronounce without' dismay,"
~
ideas
the fact.
torial pressures.
to
common
plan, and no one
foreign idea imported.
We have an ample supply of such
inflation—though
the
are far from admitting
favoring
planners
stop yielding to
the
economy
Russian
by
it cannot stop further and rMarket, a Key Economic
7 Institution
reason
in
the
of
deter^
wants that
greater maladjustments, The re¬
sult is definite pressure strongly
,don't mix? Could it be
that
the
that
in¬
formation, beliefs and expecta¬
tions, which expose the economy
to
waves
of
optimism or pes¬
simism.
The only alternative is
the economy; and it
steps aside to permit the
natural processes to bring about,
such adjustments.
For the same
Could it be
action
the
the
All
money.
decisions
influenced
seem
democracy and
a
businesses
and
their
are
seldom
clearly to be iri fact inflationary.
seems strange that their plans
that
downward
economy
money
with
individual
mine
has shown it cannot
adjustments
a
free to decide what they will
to defer it until
in
is
individuals
do
part of
any
It
never
taxpayers.
economy—the aftermath
of
and its shortages—the
government
it
are
war'
force
This
govern¬
With all the maladjustments
independent decisions-—
daily
and
to avoid the prob¬
appears
lem cr, at least,
after elections.
allow
to
the
of
source
income—the
ment's
for them¬
American
Way of
course
to' do
the
a
because
Are
in
word, to be somewhat un¬
Why? Because it is free
and competitive—because its be¬
havior is the result of millions
of
all believe in
income to some
we
countries stamp
we
makes it tend to fluctuate
perous
the program along to the
consumers.
It's far easier to have
and
,
attempt
process?
any
at such an undemocratic
ther
is free and progressive and pros¬
you
enemy
these
root in their home countries. This
than the people cari do for them¬
Can
too.
consumers
the appearance of not passing the
our
country,
selves?
the
forces
insisting that
you
idea
The very fact that the economy
made to work without coercion oi
ideas?
we
nomics
planning, have
economy.
degree, certainly enough to avoid
undue hardships.
We therefore
don't object to the effect of that
policy on consumers as long as it
is kept within fair limits. But do
take note of the efforts to give
out
ideas
Coast
replace it—usually
national
to
the
Socialism for
we
desire to avoid fluctuations in the
a
be
cannot
pressures
while
some
the national interest— plan.
the interests of all the people—no
the
by
trimmings of State Social¬
ism.
As
1
had in Amer¬
steps toward
some
centralized
ited
of
^
imported
get
let's
So
us
prospered in the idea that "man
strong to submit to
we
certain
managed
some
The* American Way of Life has
reasonably full employ¬
producers or their
mean
we
constantly on the
and
our
improved,
be
can
to
control
production
to
certainly such
to adopt State
even
add
work at all—but
Wouldn't it be strange if we
economics
producer or
distributor long to learn that he
gives the public what it* wants Or
he goes out of bu&irtess. The pro¬
never
been
the national planners want to fol¬
low. Now let's look at their own
Bosses"
Our
have
we
re¬
sponsibility.
I fear that if gov¬
ernment attempts
to underwrite
the wishes
State
and farmers can be made
ness
Can
occupying
essential elements.
is
That
busi¬
of
27
seemingly as little to holding ex¬
penditures at their present level.
The
alleged justification is the
of
plenty
—
coercion
imagine the result of
it has
sad to say,
take
to
in
war
ourselves
taking too much and,
would be for
production
whether
end.
were
increasingly clear
of
(1571)
opposition to
that idea as well, for State So¬
cialism is regimentation in the
Way does not expect to have the
become
itself.
field
doubt
course
and
a
mistakes of. management buried in
•
CHRONICLE
V
Government
job
ernment in the national economy,
to me that government is under¬
FINANCIAL
ourselves?
for
judg¬
own
&
ernment, we should adopt the idea
combine to produce a result pleas¬
who has been watching
one
the
backs
ment with his efforts.
Too Much
COMMERCIAL
the
produce
result in the economy. f
need
teach the value of
to
the market process in our schools.
economy.
As long as
allowed
to
the
at
are
We
public
the
groups
pressure
feed
need
business
trough, their pressures will create
instability in public policy, and
affairs.
the
nize
resulting uncertainties will
hamper all long-range planning
by industry and individuals. Some
may think that the government
should step in when private plan¬
ning has not produced as many
jobs as somebody wishes. My dif¬
ficulty in accepting this idea is
that
whenever
the government
to
and
of
the
about it,
stand
way-
need
We
that
that it is
of
doing
conducting our
recognize
democratic
also
more
to
recog¬
under¬
we
the better
we
can
strengthening factor
in our country's economy.
I do not mean to imply that the
market
can
operate without a
framework of rules.
We in this
it
use
as
a
free society,
of
course, oppose ar¬
tificial controls
of
prices,
wages,
production or distribution — ex¬
cept in clear cases of national
emergency. But we do recognize
the heed to protect the market
steps in it weakens private en¬
terprise and, in the end, the proc¬
ess destroys private enterprise. If
that course is right in a genuine
why must we always
such an emergency?
with
emergency,
process
be facing
laws.
appropriate
Contract and
instance.
These pressure groups
property rights, for
Rules to prevent mo¬
exist be-:
to think nopoly, and to raise standards of
of ourselves only as elements in •health, safety, and to prevent fal¬
sification in weights and meas¬
the production process.
We fail
ures and content of products, and
to
think
of ourselves
as
con¬
cause
It
sumers.
that
we
as
That
gotten
is only
are a
interests
tical.
have
we
as
consumers
united people.
are
consumers
should
be
Our
iden¬
clue
a
to
the field of government,
the field
the
interests
where
it
can
serve
It's
the
same
to
inability of gov¬
or permit ad¬
make
justments downward that creates
the
problem
of
governmental
high operating costs, with the re¬
sulting Federal deficits. Since the
Hoover Report was made public
no one
needs further proof that
government
is
wasteful
in* its
operations, and yet little is done
about it for fear that unemploy¬
ment of unneeded workers might
bring on a depression. Not only
little thought given to reduc¬
tion
in
Federal
spending
but
is
are
other .examples.
regulations, par¬
In this field of
ticularly those affecting business,
we
find the* same tugs-of-war.
We believe in the antitrust laws
as
we
understand
them,
but no
national ob¬
jectives really are. Business is in
a quandary as
to what the laws
one
of all the people.
ernment
so on,
'
knows what our
really mean, and we see an
active
to
of
to
at
to
Department of Justice trying
extend all previous concepts
the law. As a nation, we seem
want efficiency in business, but
the same time we don't want
the
hurt
The
inefficient.
against the A & P seems
case
primarily
at mere bigness in busi¬
while bigness in government
seems
overlooked. It is to^ be
aimed
ness,
noted
that there was
no serious
(Continued on page
28)
Outlook and Our;
^
Philosophy of Government
The Business
confusion in the minds
it is no won¬
der the economy is not getting
the benefits it would from a con¬
dition
of business confidence—
which rests upon a hope of a
lead up to
of businessmen, and
students and our
necessarily be
our freedom is a
the farm, our
on
intangible matters
of these
All
labor, government, and
leaders in
national policy.
defensible
situation
through action by Congress.
It
seemed far easier to attempt to
widen the application of the law
by court interpretation. That's an
example of the search for power
by the Executive Branch of our
^government. Of course the A & P
bas made the life of an inefficient
tne
meet
to
population is in¬
tion of the total
(Continued from page 27)
It must
teachers.
because
broad
personal,
individual, democratic
thing, and we each must under¬
stand not only why we are free,
but how we can remain free. We
that
recognize
must
to
be
free
and socially we must
be
free economically.
We
also recognize that in work¬
politically
profit. We can stop inflation only also
by increased production and we
must
business confidence
ing
together
on
our
common
to get more production and more
efficient production.
We need a problems we achieve strength. In
process in the world—millions of
this unity we find
our democ¬
more
helpful
attitude
toward
women giving their daily patron¬
racy's greatest strength.
business which provides the great
age, a secret daily ballot, on the
bulk of our employment.
goods
offered
and the prices
Should Not Take Our Economic
asked.
Do we really want com¬
System for Granted
Taxing Corporation Profits
petition only when no one is hurt
In our country we have been
Let's take a look at the tax
in the process? Isn't it time for
to take
our
economic
treatment of corporate profits and inclined
harder but it has
helped the consumer. It has grown
through
the
most
democratic
grocer
lot
a
define
to
Congress
must develop
objec¬
our
its effect
tives?
Is
'
Pensions
Higher Wages and
which must
be in the minds of any Pittsburgh
audience is this recent matter of
pensions for steel workers. Here's
a board of three men—a creation
problem
Another
of thu Executive
idea
where
idea
will work and that it is the
either
Socialist, has been able
to do as much for all the people.
Our present system needs no jus¬
tification, for it has produced re¬
best
idea
sional success
Government
Business Chary of
Department—pro¬
Deficits
These
and
plans
pension
the
since
done
tain
we
have
are
we
cer¬
inflation
further
create
to
as
war,
have created it in the
last few years. It does not make
sense for the worker to ask for a
just
as we
pension
steps
take
then
and
to
its value, and yet that is
inevitable result of this kind
reduce
the
of action.
This
between
tives.
the
represents a tug-of-war
two
conflicting objec¬
If current pay
principal
increases are
objective,' its at-
,tainment will reduce the buying
power
of any present pension
plan. If increased pension pay¬
ments are the objective, then cur¬
rent pay is bound to be lessened
in
its
buying power.
On
12
Aug.
before
the
Steel
Fact Finding Board, I made these
.statements:
"V
,V
.
since 1946 the prob¬
lem of wages in the steel indus¬
try has been raised for considera¬
Every
tion.
nessmen.
in
and yet could
all
year
to more debt
be so easily
higher
as
of the above argu¬
suited the advocates for
each
occasion demanded, and* the other
arguments were not even consid¬
wages
were
used
as
(and our debts are
already the highest in history),
what is going to happen to Amer¬
think about it.
history; na¬
tional income—the highest; debts
—the highest.
What would hap¬
pen to you if you were in that
position and you went out and
bought more goods than you could
pay for?
y-V
ica?
and
Stop
Taxes—the highest in
That
just
this
is
nothing
abstract—it is
simple as I state it. If
country doesn't get to think¬
as
about living within its in¬
it won't be in any different
ing
come,
position than any individual who
beyond his income. In the
lives
end, there is a day of reckoning,
and we had better plan soon how
to meet it.
Up to now we have
had no fear of our money. If we
get to that point of fear, you and
I will want to get a dog and a
gun, or a
in
tioned
of
fishing rod, and go back
the hills.
These
Such
ments
interests of the other elements of
population.
there
has
been
Over
the
years
of
princi¬
ples established on a sound, con¬
sistent basis by which to judge
the fairness of wage rates. '
In a period in world history
when a strong America is essen¬
tial to the continuity of our way
of life, to risk undermining the
entire
even
^
business
no
set
structure,
the national
transitory gains to
security,
a
small
within the frame¬
Sometimes it
the
system itself.
has
seemed as if we
a
didn't have
system as such,
I
have
men¬
reference to the cost
omit
Marshall
tional
and
for
por¬
the result of the
evolutionary
prbcess through which our
nad passed.
Plan
Aid
Preparedness, for
and
Na¬
as
or
else
nov/here
matched
sults
in
the world in its entire history. We
need not be
defensive in our atti¬
no other system stands
inspection.
people
which
I would not oppose a
system merely from an aver¬
our
sion
change, but I would take
to
hard
a
change in
look at
any
untried
new,
to be
that
sure
be found by
the desired goal.
can
reach
to
new
old
An
philosopher once said:
serenity to ac¬
cept those things I cannot change,
the
courage
to
change
those
"God grant me the
which
I
can,
and the wisdom to
know the difference."
Let
tude, for
such
as
so
me
end
on
a
cheerful note
which is simply this: The
omy
bright¬
I see in the whole econ¬
est spot
lies in the capacity and re¬
American
of
sourcefulness
cor¬
porate management.
^
Bond Outlook
(Continued from page 6)
reserve
requirements under
emer¬
gency
voked.
of
with
mained
close
at
brief
this
during
to
inter¬
period,
or
pegged prices established
the
re¬
as
you
If
the
raises
of
process
terest rates is
Reserve
Board
requirements of the
thereby
in
controlling in¬
fairly simple one.
a
Federal
reserve
banks,
ciency
the
in De¬
recall, considerable
of long bonds at or
Rates
The
at
temporary doubt existed as to the
continuation of the support level
\
Process of Controlling Interest
in¬
cember until the fall of last year
when,
Reserve account.
infuence
actions,
monetary
market
ruptions
were
the
of
Because
these
bond
controls
Credit
sumer
government securities for Federal
the
creating
reserves
defi¬
a
that
the
banking
system is required to
maintain
against
deposits,
this
deficiency has to be corrected.
banking system then sells
The
slightly above
the Federal Reserve Bank at
that time being the only buyer of
par;
bonds
their
to
the
Federal
Reserve,
being
no other willing buyer
and if the Federal Reserve drops
the price at which it buys the
The
Following the election, the bond bonds, interest rates rise.
market rose slightly and in De¬ opposite process of lowering rates
strengthening our
economy,
of cember, the peak of bank loans occurs when the Federal Reserve
knowing what we want to do was reached. With the precipitous Board releases reserves in the
with it, how w6 want it to oper¬ decline in bank loans from that
banking system through reduction
ate, and why we want it to con¬ point in August of this year and of requirements that banks must
tinue. We cannot win this objec¬
as
it became apparent that the maintain
against their deposits
tive merely by making or listen¬
Federal Reserve Board intended and as the banks seek a medium
ing to addresses, making or see¬ to deal
for
employing these additional
promptly through mone¬
ing motion pictures about free
the
Federal
supplies
tary measures in an effort to reserves,
enterprise, or by publishing or an est the decline that wasitaking bonds at advancing prices which
reading .C:newspaper
advertise¬ place in business, policy was re¬ brings about a reduction in inter¬
ments about it.
We can win it
versed
and
bond
prices
have est rates. This does not, however,
only by personally working over continued to rise since that time. affect the supply of credit avail¬
it,
discussing issues,
analyzing
Earlyi this year, margin require¬ able in the banking system for
them in relation to the common
ments against securities were re¬ other
purposes
so • long
as
the
good, and spreading the results of
duced and regulations governing Federal supplies the banking sys¬
this work to others.
extension
of
instalment
credit tem with government bonds or
Emerson never knew the fact
were relaxed.
This was followed sells government bonds to the
of regimentation, the loss of lib¬
amount
by a reduction of $1,200 'million banking system in an
erty; the fact of a leveling down in reserve requirements of the sufficient to offset the effects of
as
well as a leveling up policy
banking system.
In June, with increases or decreases in reserve
when carried out by government,
the expiration of the temporary requirements.
Certainly in the
but on this point of the right of
powers
of the Federal Reserve one case it does not, in and of
men
in
government to manage
Board, an additional $800 million itself, encourage banks to lend or
the whole economy he used these
in bank reserves were released; business
to borrow and in the
lines: "I never could believe that
additional reductions took place other, banks do not call loans
Providence had sent a few men
merely because rates rise and j;
during the summer.
into the world ready, booted and
I cite this brief history of mone¬ business is not discouraged from;
spurred,
to
ride,
and millions
tary actions
to
pointa up ; the borrowing because it has to pay
ready, saddled and bridled, to be manner in which the monetary a
slightly higher rate for the,
ridden."
authorities endeaver to influence money it uses.
I think that every man in busi¬ the course of the economy.
It is of great importance to the
I in¬
ness
owes
the obligation to his tend to discuss this in greater
portfolio manager, however, to
own conscience, his own company,
detail later, but I might call your remember that the Federal Re¬
and his own community, to un¬ attention in
passing to the fact serve Board does use the medium
derstand
the common sense of that
Federal
Reserve
policies of interest rates ostensibly for the
this situation and to explain it in
during this entire period had a purpose of influencing the course
its simplest terms
We need to pronounced
effect
on
interest of the economy and this fact, more
spread a knowledge of economic
rates, but little visible immediate than any other, provides us with
facts and how our free economy
effect on business.
However, in the best guide to the outlook for
works, and we should start with
Although the Fed¬
gauging the outlook for money bond prices.
the workers
in our own busi¬
rates and bond prices, it is impor¬ eral Reserve Board recently has,
nesses.
The need is great, if we
tant to
remember that Federal acted rather promptly in invoking
are to retain our free system. We
these measures in the hope of in-:
Reserve policies have been geared
consequence.
in business need not admit we are
rightly in the political doghouse.
We can tackle the job with cour¬
age and
problems
long
as they are so necessary, we shall
ered. There has been no attempt have to pay for them and busi¬
will gladly pay its
share.
to weigh all the above arguments ness
Both have some short-range ben¬
on
every
occasion, much less to
efits
to
business, but for such
weigh the factors affecting the
the
profes¬
only a few of the
The time has now come, how¬
the minds of busi¬ ever, for us to organize our think¬
The fact that they exist ing around ways and ' means of
are
problems
at
,
Fascist
work
was
reason
no
with devel¬
provided by our system but
without much specific regard for
settled is disturbing to business
why they should
confidence
in both
the shortnot
be.
If $12
billion can be
range
and
long-range aspects.
added in such a manner to the
Business
believes that what is
costs of annual production in this
good for the country as a whole
country, should it not be done
is also good for business—but it
-only by approval of the people
is chary of further Federal def¬
through their Congress? There is
icits caused by governmental ex¬
no
question about the desirability
cess ^spendirig
which " is not as
of sound pension plans, but the
generative of prosperity as the
inflationary effect of such a move
same money if spent in business.
to such an extent should be the
The businessman has some such
main consideration at this time.
set of queries as this in his mind:
Why do we think we must jump
If
American today, with the
at once to a system of pensions
based on ten cents per hour?
If highet rate of national income in
we
won't create maladjustments our history, with the highest level
by this step, why don't we go of taxes in our history—if, under
these
conditions, America
can't
much further?
have all it wants in the way of
If we are going to continue
social advances without going in¬
through a series of wage increases
ingly
Each of
for granted.
concerned
been
oping his own1business or
miles square on this globe
a
centralized government,
legislation were raised
above
the
previous
maximum.
us Under the same legislation, Con¬
though we did
glorify individual rights and re¬
we give too much money and ef¬
fort to building up the industrial sponsibilities. That was the frame¬
work in which we worked.
It
strength of other nations?
cost if all workers are like¬
treated—and there is seem¬
wise
system
has
corporation
our
present replacement cost of the
corporation's assets — hadn't we
better cure that situation before
posing a pension and benefit plan
aggregating a cost of $200 a year
for workers, or a $12 billion a
year
the equity capital
As
equity stocks are selling in the
public market at far less than the
historical investments they repre¬
sent—and still further below the
policies relating to basing points.
That need not be more than men¬
tioned here.
upon
market.
slightly different type of case
the uncertainty as to pricing
A
that the
high that there is no place ten
so
effort
Thursday, October 20, 1949
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(1572)
28
determination to face any
nothing in the world
to
and directed
towards influenc¬
ing the i course of the economy.
Theoretically, a declining business
fluencing economic trends, there
is always some time lag so that
ordinarily it is possible to
antici-,
at least the
can match our System.
We must ing the availability of bank credit prospective movements calculated
to ease or firm money rates.
:
I
not be on the defensive in talking and
by bringing pressure to bear
about it. We need only add a few
For example, as early as last
on money rates.
Conversely, this
converts to win in a democracy—
January there was a clue to Fed¬
we
need not win everybody to philosophy holds that boom con¬
eral Reserve Board thinking in
our way of thinking.
ditions can be curtailed and re¬
issue,
for
trend
can
be arrested by increas¬
pate in some degree
invite your attention to versed by contracting bank credit the reduction of margin require¬
ments against securities and as X
parallel
from
the
lines
of and
by raising money rates. The
benefits
alone
we
should
not Lowell, who said there is no
place
have pointed out this step was:
spend more than is wise. We must ten miles square on this globe monetary authorities deal with a
followed by other actions after
trim elsewhere.
We must settle where a man can live in
deflationary or inflationary situa¬
decency,
down to accepting conditions as
comfort and security unless the tion through one of the several the decline in bank loans had set
they are—for at least some time Gospel has gone there first and
in and after it was evident that
methods I have described or a
—and watch developments as the cleared
the
way
and laid the
combination of all; that is by rais¬ the economy had turned down.
world tackles its problems.
foundation which made decency
Thus again the best clues to the
I assume we all start with the and security possible. Just as we ing or lowering reserve require¬
conviction that our economy must have taken for granted the ben¬ ments
of
member banks, by trend of interest rates are the
May I
a
the
have the broadest possible demo¬
efits
cratic basis of understanding—an
taken fc.r granted
understanding possessed by
selves,
our
our¬
business associates, our
of
Gospel,
so
we
have
the benefits of
the American Way of Life which
has
provided
a
standard of living
increasing
or
decreasing the re¬
buying from
discount rate and by
or
selling
to
commercial
banks
trend
of
economic
trend
of
bank
nartirnlarlv
activity, the
loans
the fiscal
and
more
position of
Volume 170
the
government,
surplus
or
—
deficitwise.
In
these
several
points
should
be
molding
to
Federal
policy
Reserve
the
to
coniorm
needs
of
but since the war
high level within the
sure
that
range
has been established to date
have
of
of
the
taken
the
corner
the
decline
June;
in
bank
least,
at
from the low point of
that was reached in
addition,
loans
has
been
during
ward
weeks.
the
the
On
the
government
has
trend
mildly
past
other
several
hand, the
in
been running
the red since the turn of the fiscal
at the annual rate of about
year
$6 billion.
As to the
term outlook for
near
business, economists generally are
agreed that by reason of the pres¬
ent
high level and prospective in¬
in government expenditures
crease
for
defense
and
economic
purposes,
defense
aid
abroad, business
should continue the modest
that
ery
has
been
in
recov¬
evidence
since June. An additional artificial
to the economy will
prop
come
from GI insurance refunds in the
amount of
$2.8 billion which
are
scheduled for disbursement early
next
Thus,
year.
outlook
for
the
the
near-term
is suf¬
economy
ficiently good to warrant the
pectation that additional
bring about, easier
ex¬
steps to
condi¬
tions than prevail today will be
delayed until there is more evi¬
than
dence
money
have
we
at
present
that the level of the economy
revert
to
continuation
a
adjustments
the
that
in
carried
and
year
set
will
the
of
early in
through to
summer,
.
Interpreting
all
the
termsof
this
of
near-term
into
outlook
the
independencev that it
intended to exer¬
of
was
cise and the question is justifiably
raised as to whether the Board
continue
should
to
dominated
be
pur¬
of the Federal Reserve Sys¬
the
at
tem
ment
time
1913
in
its
of
was
to
establish¬
provide
an
elastic currency, facilities to mem¬
ber banks for discounting com¬
mercial paper, and to
improve the
supervision of banking. For some
years,
there
and during the period when
litte
government debt
banking system,
changes in the discount rate rep¬
was
held
in
the
the manifestation of
resented
policy
serve
the
toward
re¬
money
credit
situation.
The
policy of
maintaining orderly conditions in
government
the
banking
described
to
be
regula¬
tion of the money supply so
neither
is
it
small
too
large
economic
progress
that
too
nor
maintenance
for
of
stable
the long-
and
objective of the Federal Re¬
run
System is further described
to do its part in fostering mone¬
serve
tary and
able
to
credit conditions favor¬
sustaining high employ¬
stable values and
level of consumption.
ment,
It
market
will
be
con¬
Under present conditions
maintenance
of
relatively
a
rising
a
apparent from these de¬
scriptions of the functions of the
Federal Reserve System that the
is
one
Reserve
thing, the Fed¬
has
a
sufficiently
large portfolio of ineligible bonds
to permit of sales of these in order
to
restrict
price rises
securities
in eligible
savings banks and
for
insurance
companies aqd other
investors, as holders of eligible
bonds, have an opportunity to in¬
vest
at
a
favorable
more
rate
in
ineligible bonds, they would sell
fixed
pattern of rates has the to the commercial bank market
undesirable effect of absorbing re¬ more of their
holdings of eligible
serves from the market at a
time, securities and thus satisfy some of
when
the
should
a
availability
be
of
credit
increased."
carefully
ment,
but
think
of
announce¬
interpretation
certain
conclusions
be drawn from it. In the first
can
place, it must in fairness, be in¬
terpreted
as
sincere
a
effort
toward
achieving greater flexi¬
bility but I seriously question that
it will be successful in restoring
a
sufficient degree of flexibility
to the bond market to accomplish
that objective.
this demand.
which
guarded
difficult
I
The timing of the
has
permit
greater
short-term
rates
Another
proved
expedient
effective
is to
flexibility in
rate for
rise, banks
the
short-term
as
discouraged
investing in longer bonds
for a slight increase in yield. Be¬
yond this, the Treasury frequent¬
ly has expressed its intention of
tailoring securities to meet the
are
from
needs of investors. The embarrass¬
ing position of the Federal Open
Market
Committee
be
could
al¬
leviated
materially if the Treas¬
would abandon its policy of
ury
announcement coincided with the
beginning of deficit financing
the market and make available
on
considerable scale and came
time when the holdings of
Federal Reserve
termediate
and
of in¬
Bank
longer term elig¬
ible bonds had been
depleted to a
point that the Federal was unable
to
supply the demand
of the
banking
system
that
had
been
only
short
securities
to
a
supply tof
intermediate
refundings and on new
Treasury, offerings.
This would
larger
bonds
on
have the
added
advantage to the
Treasury of permitting a better
maturity distribution of the debt
than exists today.
There obvi¬
ously is an insufficient amount of
bonds
available
to
the
meet
re¬
brought about through release of
reserves by reduction of require¬
ments and by a sizable reduction
quirements of the banking system.
The scarcity that exists can sim¬
in the volume of bank loans.
ply be demonstrated from the fact
Immediately following the June
announcement, the bond market
rose
to new highs from the De¬
cember, 1947 low point and a short
period, the Federal Reserve made
no offerings of any securities but
when
with
confronted
soon
the
possibility of an explosive rise in
Board and System have taken on
prices without much change in
to themselves much broader re¬
ownership of bonds, the Federal
sponsibilities than the Act origi- again resorted to • tjje sale of
,nally anticipated,
on# *
•>,. short-term securitiesrfts a means
The most effectiverweapon that
of controlling the long term mar¬
has been added to the powers of
ket.
Again, the effect of this was
Unfortunately,
of
debt
the
philosophy
management is
ing extended
pensatory
briefly
be¬
now
include the
to
29
com¬
theory which
heavy govern¬
economy
calls
for
ment
expenditures through deficit
financing during periods of de¬
flation and pay off of government
debt during periods of
high
abnormallyactivity
through
business
surplus
There
with
government
is
only
revenues.
thing
one
wrong
this
philosophy and that is
any historical expe¬
rience, it has no chance for suc¬
—based
on
For
cess.
government to borrow
and spend
is too easy but to
tract
deflate
be
and
accepted
submit
if
too
con¬
painful
to
by the politicians, t
it
was
not
possible
to
balance the budget and provide
surplus
ing
for debt retirement
the
which
fiscal
just
year
included
a
dur¬
closed,
level
the highest
of peacetime economic activity in
,
offering
the
the
functions
have been expanded to where they
now
bonds
government
tinued.
larly since the beginning of
are
security
and the confidence of investors in
any
at a
central
primary
regard to the general business and
supply.
Over the years, as the
increased and most particu¬
debt
war,
(1573)
dilemma. For
I need not tell you that this was
Originally the announced
pose
CHRONICLE
eral
eral Reserve Banks with
by Treasury policy.
of
up¬
war,
pres¬
to the Federal Reserve Board
originally
turned
the
developed for restoring
degree
economy,
has
has
tnat
the
the
a
first
moves
since
and
temporarily
the
money
place
year
as
financing the
increasing
in
Treasury
FINANCIAL
purchases, sales, and exchanges of
the
borne in mind.
The first is that
the bond market is at a
relatively
result
by
declined
During the war there could be
no question of the desirability of
analyzing the present situa¬
&
government securities by the Fed¬
has
savings
40%.
about
The Present Situation
tion,
COMMERCIAL
THE
Number 4848
1
that
commercial
a
bank,
subject
to the full 38% corporate
tax, can
improve its net yield only about
% of 1% by extending from a
one
security
year
maturity
to
17
a
year
longest govern¬
ment bond available for purchase.
Savings
banks
and
insurance
companies are somewhat better
in
off
the
—
their tax
that
different
in
and
situation
that
is
is
there
a
history,
what
is
prospect
there
that the budget ever can be bal¬
anced?
You will recall that we
all
were
about
concerned
an
un¬
controllable
inflationary outbreak
in the thirties and later, after the
removal of
OPA
price ceilingsfollowing the war.
At a time
when the administration is press*-
ing for adoption of its various
spending
programs,
at
a
time
when domestic and foreign economic and defense aid is increas¬
ing at
rapid rate and at a time
is
demanding
in¬
creased social benefits and high¬
er
wages
for shorter hours, it
seems to me that we are entirely
too complacent about the infla¬
a
when
labor
tionary base .that
day's- economy.
.1
exists
in
to¬
Compensatory Economy Theory
y'!in Effect
There
had
been
in.
the
war
and postwar inflation would
be dissipated and that a readjust¬
hope
some
the early part of the year that
ment
to
a
realistic levekqf
more
.
for bond prices, it would /'appearreasonable to expect little change
in the immediate future.
.
Since management of the debt,
the Federal Reserve Board in
con¬
bond market but at
time rendering ineffec¬
interest rates and bond prices are
trolling the
the
the
responsibility of
a relatively
individuals who,
I have pointed out, have been
small
as
of
group
vested
have
rather
with
thority to
complete
au¬
out their task, I
carry
better
no
means
than
you
for
determining in advance the
steps that might be taken to raise
the
lower
or
We
all
interest
scale.
rate
however, that re¬
gardless of their effectiveness, in¬
terest rates will be adapted to the
level of the economy
and that
bond prices can be expected to
know,
within
move
relatively
a
narrow
in exactly opposite ratio to
the direction of business. When I
range
refer to
same
tive
functions
announced
the
of
the
System is the "Open Market
Operation."
This is described as
a function that differs essentially
from discount operations primar¬
nize
the strong
ments of
political require¬
keeping the overall cost
of
carrying the debt at a reason¬
able level. This in my opinion is
a
factor that will tend to prevent
any
substantial
rise
in
interest
rates until such time as there is a
prospect of continuing government
surpluses sufficient in amount to
permit regular and orderly retire¬
ment of debt.
Management and
Debt
the
the
initiation
System,
the
of
had
initiation
of
all know that just the reverse has
been true and will continue to be
true
long as the Federal Re¬
Bank controls the level of
so
serve
bond prices
through the medium
Market purchases and
sales, for it is perfectly obvious
that the banking system is in a
of
Open
making
their
bonds
initiation
available
initia¬
tion of the member banks so long
as
it is wedded to
stricting
a
policy of re¬
price rise as well as a
a
in bonds.
The an¬
omaly of this • situation is that
other actions adopted by the Fed¬
price decline
eral
Reserve
Board
for the
pur¬
of contracting or expanding
reserves
in the banking system
are rendered ineffective by Open
pose
second
phase of my topic which
is of much
to
greater importance to
custodians of the sav¬
ings of your depositors: that is the
you
effect
as
which
exercises
and
the
on
management
the overall economy
debt
development
philosophy with
of
a
respect to
funds entrusted to your care will
that since
and I might men¬
1934 the value of
Reserve
when the
Commit¬
issued the
Market
System
Market
that with a view to
the supolv o* funds
(June 28)
increasing
available
the
needs
in
of
the
and agriculture,
icy
of
the
market
commerce,
rates
able
Federal
The
itself in
finds
Board
Reserve
dilemma, on the
one hand, endeavoring to control
the level qf bond prices and on
the
is
volume of credit
banking system.
the
other,
available
One
a
the
to
not
compatible with the
obviously can be
There
other.
effective control of the volume
no
credit
of
the
in
banking
system
long as the Federal Reserve
Board through the Open Market
Committee adheres to a policy of
maintaining a fixed pattern of
rates within the range that has
so
established to date.
been
pathize
with
and I
position
the
that
sure
am
this
I sym¬
Board
is
not
hapnv in the paradoxical situation
in which it finds itself.
The dif¬
policy during infla¬
tionary periods is that a debt of
the size that we have today could
a
support
unmanageable.
Conversely, elimination of a ceil¬
ing on government bonds would
tend to add impetus to an infla¬
tionary movement.
At the point
easily
become
under
long
securities
and
that
a
view
to
meet
I
them
with
effectively.
large
the
government
bonds
Beyond
volume
of
not
lodged
commerce,
agriculture.
For
justification.
see
little
then
existed
lack
no
of
availability of bank credit to fi¬
business.
Actually,-busi¬
ness
loans had declined in the
nance
six
preceding
months
by
some
$2.8 billion and if the purpose of
the
action
on
lending
was
I
to bring
business
to
ment
for
borrows
agement
borrow
to
Business
for banks to lend.
expansion
represented by the V\ or V2 of 1%
The
in
higher
the
money.
rate
twenties was
late
deterrent
of
Bank
Central
in i the
a
cost
continuing
to
speculation in securities and the
lew
did
rate
is
not
today
shortage
of money
and
the
of the
should be direct¬
ing their efforts toward contract¬
ing
the
money
supply is being further in¬
flated
through
thirties
bringing
to
meet
business,
it will be the nol-
Committee .to
or
too wide
sharp
downward
price swings to take
unhappily is in the minority
but there
and
experience following the war
are
those in government
engaged
more
many
in the bank¬
ing system did not arrest
place.
There are,
ever,
production
caught up with demand, and con¬
some
direct ^dealing
it
seems to me,
means
more
,
how¬
available
adeptly
with
for
the de¬
mand for loans and continued ex¬
tension
of
the terprises.
credit
to
sound
en¬
in pri¬
vate business who are conscious
thinking
tion
groups
vigorous
your
Administra¬
governing
policies.
minded
no
of
dangerous trend of economic
the
These
are
economy-
deserving of
support.
There is
single segment of the business*
that
about
traction of reserves
out
pressure
bloc in Washing¬
The economy
ton
world
rise until such time as
financing:
rates.
money
bor¬
business
deficit
and the Federal Reserve Board is
and
is
more
concerned
responsible
more
for
protecting the savings classes of
dissipation
investors, it obviously
The
is taking place.
the country from a
is undesirable to permit too
the
just
sup»ply,
money
opposite
period the economy continued to
individual
heavy»
Treasury in the interests:
economy
which I cited earlier. During that
particularly with
a
when the Federal Reserve System
only with savings and commercial
more
but
of a
one
inflationary oversupply. At a time
The same was- true of
stimulate
not
rowings.
the
the
policy .of
the
It is quite obvious that
or
profit and that profit is not
reduction
of
problem
man¬
when it sees a reasonable chance
for
result
pressure
of the banks,
and I think you will
rates
question
agree that a reduction of V4 or
%
of 1%
affords any induce¬
not
that,
and
business
this,
There
with
supply
of
during a period and as a
shortage of money
formed
brought about by an inelastic sys¬
market
needs
the
on
tem.
increasing the
the
immediately embarked
compensatory economy theory—
is .heavy
deficit spending.
The Federal Reserve System was
that
recall
available in the
to
funds
during that period was not politi¬
cally popular and in an effort to»
reverse the trend, the administra¬
stated
taken
was
was
short
on
will
you
action
the
of
rate
noth¬
increase
and
a
announcement
the
of support
with
sharp
prices
lower
called for the problem
be difficult to deal
a
somewhat
lhat
in
resulted
than
bond
more
place but that
short-lived. Even the?
modest downturn we experienced
hope
tion
As I have pointed out, the June
policy
multiplied to the extent
avail¬
small
Credit Supply Is Ample
policy was
a
the
on
supply of eligible bpnds.
reversal of
at which
these bonds
the influence
on
prices would take
banks biiit
following statement:
"The
Federal
Open
Committee, after consultation with
debt the Treasurv, announced today
main that the future worth of the
tion
Open
new
management for it is in this do¬
be determined
tee
inaugurated
was
Federal
heavily
the
in
Board
would be
icy
of
announcement
that it would
policy directed primarily
controlling the level of the
bond market
In the latter part
of June, a new Central Bank pol¬
time, rates
same
ing
Dilemma of Federal Reserve
Market
I would like now to turn to the
but at the
borrow.
toward
Overall Economy
created
not ;at ficulty of abandoning completely
but at the
ties available to them
reserves
through reductions in reserve re¬
quirements ostensibly for the pur¬
pose
of encouraging business to
Reserve
Federal
the
at
not
the member banks. Of course, we
of securi¬
are
bank
Board
the
ily in that it is undertaken at the
relatively narrow range
position to create at will through
it is well to remember that during
sales of government bonds to the
the war economic conditions were
Federal whatever amount of credit
of lesser importance than the re¬
they choose to make available for
quirement to borrow large sums
other purposes and at such times
of money at low interest rates. So
as member banks choose to invest
long as the debt remains at as reserves
in
government bonds,
high or higher level than at pres¬ the Federal Reserve immediately
ent, it is only practical to recog¬ immobilizes the reserves through
a
immobilize
to
that
adequate suppjy
more
in
further drastic
the value of their
savings than the savings bankers
of the
in
country.
The only manner
which the danger can be
is
with
through
arousing
dealt
public
opinion to the dangers that exist
and
your
I
*rge
all
of
you
to devote
efforts in this direction.
-
30
THE
(1574)
COMMERCIAL
&
FINANCIAL
CHRONICLE
ments
A Flea foi
National Monetary Commission
a
eral
Reserve
holdings
Bank
securities
increased
instrument of central bank action.
to be effective
are
to deal
deflationary and infla¬
A thoughtful
tionary conditions resume, the tionary situations.
System will find itself back in the and impartial national monetary
could
commission
consider
the
strait-jacket which
it occupied
recently—impotent to take effec¬ current and prospective problems
tive action
to
control monetary against
the background
of
the
inflation because of its responsi¬ world today and help point the
bility for stability in the govern¬ way for effective future action.
in
time
were charged, called the discount
of rate, was an active and important
substantially if that should lated agencies
to be necessary.
prove
U. S. Government securities. Fed¬
(Continued from page 19)
regional
banks
iwun
their 24
government
branches) each has its own board
Thursday, October 20, 1949
the
future
But some¬
they
infla¬
with
should
must
be
prepared
both
more
than
$20
billion
in the Today, when
bank
borrowings
directors, two-thirds of whom
decade,
from
the
%2x/z
billion from the Reserve banks are oc¬
are
elected by the stockholders,
owned in 1939. The answer lies in casional and relatively small, the
the member banks, ana onc-cnira
that combined total increase
of discount rate is much less impor¬
appointed by the Board or Gov¬
ment bond market. I wish I had
tant.
'
over $100 billion in debt owed to
>
'
The
problem
of
guiding the
ernors.
Only three of these may
time to spell that out more clearly.
the private banks and the Reserve
country's economic forces with a
Traditionally
a
central
bank
be bankers; the others represent
I think the main thing that kept
banks, mostly by the government. works as follows: If the general
view to stability of output and
the business and agricultural in¬
us out of trouble in the past was
economic situation seems to be in¬
employment is a continuing and
terests of the community.
the horse sense and self-restraint
The Function of Bank Reserves
ever changing one.
flationary—in other words, if the
Wisdom, fore¬
Federal Reserve System policies
of the American people. We didn't
Deposits are created as bank supply of money seems to be out¬
sight and authority to act when
are
determined by the Board of
reach the point where we were
credit expands, as loans and in¬
action is called for, are required
running the supply of goods and
Governors, a public body, and by
ready to throw the dollar over¬
vestments by banks increase. De¬ services
to carry out this objective. Above
immediately available —
the
Reserve
banks.
In
certain
board in a speculative scramble
posits are erased as bank credit the central bank wishes to see that
all else, an informed body of pub¬
fields, for example the determina¬
for goods. As individuals we still
contracts, as their loans and in¬ supply
of
money
contracted. exhibit that restraint. Collective¬ lic opinion is needed. Most peo¬
tion of legal reserve ratios, the
vestments shrink. The growth of
ple, I am convinced, take money
Therefore, it attempts to put pres¬
policy decision rests solely with
deposits is made possible by the sure on bank reserves. It attempts ly, acting through government, we for granted, uninformed as to its
the Board of Governors, within
aren't doing so well. Let's take a
availability
of
reserves
to
the to reduce their volume by selling
nature and unconcerned as to its
the limits set by Congress. On the
look at the record.
banking system for loans and in¬ government securities, by making
dangers.
The problems in this
other hand, policy governing open
With
production, employment field
vestment; conversely the contrac¬ it more difficult for banks to
are not easy to discuss sim¬
market operations—the purchase
and
national income at an ex¬
tion of deposits may be caused by
ply, certainly not in a 25-minute
borrow, or it attempts to raise re¬
of government securities to in¬
tremely high peacetime level,
the withdrawal of reserves.
luncheon talk, and if I have suc¬
serve ratios so that credit can ex¬
crease
the volume of bank re¬
highest ort record except when
ceeded only in confusing you, that
The reserves which made pos¬ pand by a smaller amount on the
serves, and their sale to ; reduce
compared with 1948, the central
the wartime expansion
may be good, in a way, if it points
of same volume of reserves. This ac¬
bank reserves — is determined by sible
government is spending more than
up the great contribution
which
the Federal Open Market Com¬ bank credit, of the money supply, tion of contracting bank reserves it collects in taxes. In other
words,
a
came
thorough and impartial study
partly from the big gold tends to make interest rates rise we are
mittee, composed of the members
adding to our national could
continued through and thus deter prospective bor¬
make, if it led people to
of the Board of Governors and inflow which
debt when we ought to be paying
study and think about the subjectfive Federal Reserve Bank Presi¬ the 'thirties until the war checked rowers from borrowing. It puts on it off. Item
by item, the purposes
the brakes.
It attempts to hold
No matter what else a national
but mostly* from
deliberate
dents serving in rotation. In still it,
that call for the staggering total
to keep some of the inflationary forces in of
monetary study in 1950 by an im¬
other fields, for example, actual Federal Reserve policy
public expenditures have their
the banks supplied with reserves check.
partial and competent commission
business arrangements
with in¬
strong supporters, but we can't
in order that they might be in
might give us, it would be worth¬
dividual member banks, the Re¬
In a deflationary situation the afford them all—not unless we are
while if it only threw light upon
serve
banks
have
considerable position to finance the war to the System attempts to add to the
ready to pay a lot more in taxes
an
area
which to most of us is
extent not covered by taxation volume of bank reserves to make
autonomy. Policy thus is legally
than we are paying.
hopelessly dark and confused. Un¬
made
by the Board alone, the and by bond sales to private in¬ money easier and therefore to
more
and
more
banks alone, or by a combination vestors.
people ^
make it more attractive to borrow Not Time to Add to Public Debt til
thoughtful, well-informed citizens
of the two. In practice, of course,
That was deliberate
national to start new ventures and increase
This is no time to
of
,
,
,
.
the System works pretty
be adding to
implemented through the
Then, as always
when attempting to regulate the
Principal Purpose of Federal
supply, availability and cost of
Reserve System
money, the Federal Reserve had
Aside from its important but to depend chiefly on its ability to
routine
services,
the
principal work with bank reserves, which
purpose of the
Federal Reserve constitute
the
legally-required
System is to regulate the supply, basis of bank credit or money.
availability and cost of money Here is how it operates: each Fed¬
inventories
and
so
on.
System the pubile debt. If we can't make
restrictive action tends to be more ends meet now, what resistance
directly effective than System ex¬ can we possibly oppose to far
with
a
much as
unit.
policy,
Federal Reserve.
,
view to
pansionary
action.
Eccles
Chairman
Board
Reserve
of
As
former greater deficits under less favor¬
the
Federal
put it once: "You
—
pull
since
Federal
Reserve
action
eral Reserve member bank in the
normally
United States holds
the economy is running, the cen¬
tral bank tends to be unpopular
bank
reserves.
by
most
difficult part of my
of
a
certain pro¬
portion of its deposits as a legal
reserve with its Federal Reserve
Bank. This legally-required frac¬
tional reserve system which we
economic
If the
now?
conditions
than
public debt is going
a
contributing to the
a
high level of
employment, stable values and a
rising standard of living. As you
can see, that is a very broad
ob¬
jective. Right here I want to make
the point
that Federal Reserve
action alone obviously cannot pro¬
vide for economic stability. It can,
and we in the System believe it
should, contribute to the best of
its ability to that objective.
a
maintenance
able
piece of string back to be endlessly a one-way street,
but you can't push it where you it is time to take
inventory of the
want it to go." And another point traffic
department.
can
runs
counter to the
way
all of the time. It is always going
We
need
thorough-going
a
appraisal of the
that
cumstances
new
have
set
of
re¬
cir¬
evolved
in
the monetary field in the past few
years.
If
a
central bank' and
re-
such
as
tion
here
the delegates in conven¬
this
week — can
bo
brought
to
understand
some
of
these essentially dull but very im¬
portant
economic
facts, central
monetary authorities cannot per¬
an adequate
job. Unless we
form
move
the
soon
to take stock and make
repairs,
necessary
continue to be
with
like
will
we
the lazy man
the leaky roof — when the
is nice the:roof doesn't
weather
need
fixing, and when the storms
hit, he can't get out to fix it.
against the stream. When times
are
booming,
its
policy is to
have in effect in this nation means tighten down and hold the boom
that total bank credit, that is total to* reasonable proportions as far
loans and investments of "banks, as monetary action can affect it.
That
can be expanded to a point several
obviously is not the best
times the amount of the reserve course if one is looking for popu¬
required but cannot go beyond larity.
(Continued from page 17)
To influence the supply, avail¬ that
point unless new reserves be¬
ments
and
discount
The Treasury reported net re¬
rates, and
ability and cost of money the Fed¬ come
Must Meet Changing Economic
available.
Currently,
de¬
(3) restraining consumer credit by ceipts since June 30, 1949 to Oct.
eral Reserve depends mainly on
Conditions
posits can expand to about seven
limiting the terms and kinds Of 3, 1949 of $9,304,000,000 compared
its ability to increase or decrease times the amount of reserves held
Coming Rebirth of
The Incentive System
Successful
of any
talk
Now I
come
to the
talk,
the
In
even
today's
the
or
supply.
term
expansion
of
;,
complex
economy
is not de¬
fined
in
simple, universal lan¬
guage. In earlier figures I lumped
currency in circulation and bank
deposits together and called the
total
our
people would
;
*
J
*
money
supply.
classify
as
money
system
as
a
institutions
ntu s
t
change to meet changing economic
little
articles that could be bought. The
relaxation of these restric¬
first
complicated to conditions. Since the outbreak of
tions occurred when the govern¬
trace this process exactly so I ask
war,
because of special circum¬ ment
reduced margins on security
you merely to accept my state¬ stances, the Federal Reserve Sys¬
purchases and this was followed
ments as true; actual demonstra¬ tem has not been in
position to over
the course of the first sev¬
tion would require too much time. change as much as it would like
eral months of 1949 by lower dis¬
System action to influence the to meet the very sharply changed
count rates and lower bank re¬
volume of bank reserves is along economic conditions. And because
serve
requirements
and
relin¬
two lines. First, the Reserve au¬ these
new,
war-induced
condi¬
quishment
of
credit
controls,
thorities have the power to change tions
found
the
System
un¬
until on June 30 credit controls
the legally-required reserve ratio
equipped to deal adequately with
expired.
within a range from its minimum the
changed economic problems,
Our
domestic
legal limit to twice that minmium. the System has attempted for the
economy
con¬
In other words, it can change the
tinued to go through its postwar
past few years to get a Congres¬
legal multiple for deposit expan¬ sional
The
hazard
of
a
reappraisal
of
banking adjustment.
or
contraction
banking
whole. It is
or
article about money
—the part bank reserves play in
the money
the
Most
money
the currency and coin held out-
side the Treasury and the banks—
that's $25
billion. But you can
sion.
Given
a
legislation in general and the Fed¬ business recession became quite
reserves, a legal reserve ratio of eral Reserve System in particular. apparent and then business start¬
convert your demand
deposit at 20% obviously will support only It has asked for some extension ed to go "on the skids" in April,
the bank to currency
merely by half as large deposits as one of of its powers in the light of new May, June and July of this year.
signing your name, and 95% of all 10%.
this
time the controls
\. .. vk
problems ahead. But most of all During
above
money settlements
are
made by v.'- The other
mentioned
were
relaxed
major way in which it would like to see the citizens
and
check, anyway, so obviously the the System influences the
optimistic statements were
supply of this country, non-bankers as
deposits subject to check have to of
as
bankers, start thinking issued by government and Fed¬
money is through changing the well
the
same
volume
of
to
$9,182,000,000 in the
riod
of
spent
counted
as
part of the money actual amount of reserves avail¬
supply. That's $82 billion more— able to the
banking system. It does
or
$107 billion. You might draw this
mainly by buying or selling
the line here, but there's another
government securities in the open
$58 billion or so in savings ac¬ market—this
•'
-
we
face
a
from
that
of
Today
ferent
eral
things.
situation dif¬
a
is
made
man
year
ago.
Reserve
of
officials.
to Mr.
the
Reference
McCabe's
Federal
(Chair¬
i
called
the
pe¬
year,
so
in
the current
fiscal
year
$8,657.000 000 in the
last
fiscal
year,
period
increase of
same
an
$2,465,000,000. This huge increase
of expenditures in such a short
period has resulted in a deficit
for
this
against
in the
cal
period
of $1,818,000,000
surplus of $525,000,000
period of the last fis¬
a
same
year,
a difference of $2,Furthermore, asr of
1949,
government 'debt
or
343,000,000.
Oct.
3,
amounted
256billion
to
pared to $252 billion
These
figures
a
com¬
ago.
year
indicated
the
that
government is spending at a much
higher rate than it did last
and
year
further, that it is building
up
deficit that is likely to be very
sizable.
;
a
Reserve
The economy is no longer in an Board) statement of late Spring,
in
which he indicated a much
"open inflationary phase.
Federal Re¬
counts
which can
be converted market
operations."
When
the serve System powers to deal with friendlier attitude toward busi¬
into
currency
or
This was closely followed
checking ac
System buys government securi¬ deflation are much more adequate ness.
counts without much trouble, and
ties, it adds to bank reserves; than they were 20 years ago when by President Truman's statement
some
would
think
of
that
as
when it sells government securi¬ the
depression of the '30s set in. say that he was "bullish" on the
money, too—bringing the supply
ties, it contracts bank reserves. Or We can provide funds when need¬ economy. «
to
$165 billion. Then there are it can make direct
credit avail¬ ed by the market. A major defi¬
The U. S.v Government ended
$56 billion in savings bonds out¬ able to its
member banks by lend¬ ciency of the
banking system that its fiscal year on June 30, 1949
standing, redeemable on demand. ing on.the assets member banks
aggravated business conditions in with a sizable deficit. The Presi¬
Are they money? Let's
stop before bring
in to it. When member the past thus no longer exists. We dent issued a statement to the ef¬
we get that far.
banks
borrow,
the
funds
are have virtually unlimited means of fect that debt reduction and bal¬
On June 30 this
year, then, the placed in their reserve accounts
supplying the market with addi¬ anced budgets could not continue
rough total of bank deposits and and thus increase
reserves. When tional
reserves.
On the basis of in a declining national economy.
currency
was
$165
billion;
10 the borrowings are repaid, the existing
legal requirements
we This
signalized
a
return
of a
years ago on that day, the total banks draw
on
their reserve ac¬ could more than double our out¬ government policy of spending in
was $60 billion. How did
the in¬ counts which thus are
reduced.
standing note and deposit liabil¬ excess of receipts, -which policy
crease
come
about?
Bank loans
In the early days of the System ities.
We also can lend to banks has continued to date as exempliand investments increased
$83 bil¬ when banks borrowed heavily at on many more classes of assets
j fied by figures from the U. S.
lion
in
that
decade,
from
$50 Federal Reserve Banks to obtain than was possible before 1935. We
Treasury Statement as of Oct. 3,
billion to $133 billion,
mostly in reserves, the rate of interest they also can reduce^reserve require¬ i 1949.
is
-
about these
same
fiscal
period $11,122,000,000 compared to
.
be
previous
that the government took in $120
million more than
last year. It
Favorable
Tax
Revision
Although Mr. Truman indicated
that
a
balanced
budget could not
be
expected, there
be
a
cry
for
more
doubt will
no
taxes from the
Congress next
be
regarded
not
for
tion
of
shown
year.
This should
seriously if it were
the
fact
Congress
its
that
reluctance
the
ac¬
year
this
has
to
increase
either
corporate or personal taxes
since the leading members of the
taxing bodies are convinced that
such increased taxes would injure
business, and that such business
injury would result in lower gov¬
ernment
tax rates
even
though
increased.
On the
revenues
were
other
hand, the New York Stock
Exchange has presented its econ¬
omists' projections
on
what
a re-
Volume 170
duction
would
in
Number 4848
the
capital
in
mean
the
fHE
COMMERCIAL
FINANCIAL
&
CHRONICLE
gains tax
form
of in¬
creased securities transactions and
hence increased taxes to the gov¬
ernment. It is reported that these
contentions have been explored
the all-time high of $7,36 recorded on July 13,;. 1948,
decline of 14.0% from the comparable 1948 index of $6.48.
(Continued from
5)
page
i
Canada, this
that
they
have been' substantially confirmed.
The
capital gains tax amended
would be
a
ernment
to
big pocket for the
dip into.
portant it is the best
it to
gov¬
Most
im¬
pocket for
dip into because
reduction
a
of the capital gains tax to
say 10%
from 25% and a change in the
term
the
of
months
would
holding
instead
of
to
six
increase the incentive to
so
that
venture
market
but
In
rebirth
system,
To
Unless
distribution
many
is
the
economy.
Part of this loss
all
a
these
much
an
bring
ends
before
quiet, concludes
price weakness evident in
weeks of mill idleness may
the
the
operating
week
rate
a
capitalist
week's
rate
castings for the entire industry.
86,2%
was
year ago
production amounted to
and
prewar
being rehabilitated and domes¬
system will
probably be reborn. These funda¬
mental
can,
factors
the
to
disturbing
eco¬
problems that no doubt
the., temporary
nomic
will arise
The
the next few years.
immense
.buying
over
current
power within this country, forti¬
fied by tremendous liquid savings
and
a
tremendous potential force
incentive
the
once
indi¬
supports,
government
cate
stored.
»
system
,v*
-
-
In the meantime, the Treasury
in¬
.
in the debt indicates infla¬
tion, the increase
of
$4
and
far this year
so
in-the
billion
investments
total; loans
reporting
of the
member banks of the Federal Re¬
indicates
Bank
serve
totaled 574,228
inflation,
This
roads.
A month
ago
1,589,100 tons;
FURTHER IN
There
in
a
was
The
dicates
inflation.
inflation
This
necessarily
not
demonstrate
itself in higher commodity prices,
but will be felt in the financial
business and
per
rebirth
of
the
in
strikes
the
coal
industries adversely
steel
and
.
production
•i !
to
BELOW LAST YEAR'S LEVEL
HOLDS
for
the
second
since
time
the
of
week
BEVERLY
CALIF..; —
has joined the staff
of Wm. Van de Carr, 118 South
Beverly Drive.
HILLS,
rWith Croweli, Weedon Co.
)
(Special
1
LOS
to
The
K. Williams is
now
Croweli, Weedon & Co., 650 South
Spring Street, members of the Los
Angeles Stock Exchange. He was
with
formerly
Brashears
G.
&
If the steel
At least
and
*
j. LOS
to
The
ANGELES,
.Walter D.
Chronicle)
Financial
CALIF.
*458
built
trucks
in
other cold rolled
Spring
Mr.
Ogden
pre¬
in
the
U.
S.
made
was
and
4,133
up
cars
of 121,614
and
1,795
affect
adversely retail trade in the period ended
on Wednesday of
Despite''many aggressive promotions, shoppers bought
week.
slightly less than in the preceding week and aggregate dollar volume
continued to be moderately below that of a year ago, Dun & Brad¬
street, Inc., currently reports in its summary of trade.
Traditional Columbus Day
a moderate response as
promotions of women's winter apparel
unseasonally warm weather prevailed
in some parts.
There was a slight rise in the demand for women's
sportswear and shoes.
Handbags and other accessories wjere very
popular.
The sales volume of men's clothing remained restricted,
evoked
though purchasing of haberdashery was steady and high.
Retail
food
week with total
The
stores
sold
about
as
much
in
as
'
the preceding,
unit volume about even with that of a year ago.
demand
consumer
for meat continued
at
a
/
high level with
cuts sought by many shopper's. An increased volume,
dairy foods was sold. Housewives, bought less fresh fruit and
vegetables than in the previous week. The retail volume of canned^
demand for television
low-priced kitchenware.
high
retail volume
Total
was
in
the
incidental furniture,
bedding and?
period ended on Wednesday of last-:
below that of a year ago.
estimated to be from 4 to 8%
Regional estimates varied
following percentages:
England,
Northwest
—8;
sets,
from
South and
the
levels
of
a
year
ago
b,y the
Midwest —5 to —9; East —4 to
to —7 and Pacific Coast
v
Southwest —3
and
—6 to —9.
the
for
123,185 units and, in the like period of
was
year
to
952,488 trucks in the U. S.
is estimated
date
and
Canada.
149,572
at
4,207,517
cars
and 81,700 trucks
cars
V*../ ,V^;.rv
/
PAST WEEK
demand for wholesale merchandise increased.;
week.
Dollar volume was fractionally below
the level for the similar period a year ago.
The proportion of longrterm bookings to spot orders rose noticeably in many items and
some manufacturers expressed concern that advance bookings were
smaller than in previous years.
Department store sales on a country-wide basis, as taken from
the Federal Reserve Board's index for the week ended Oct. 8, 1949,.
decreased by 12% from the like period of last year.
In the pre¬
ceding week a decrease of 8% was registered below the like week,
of 1948.
For the four weeks ended Oct. 8, 1949, sales registered a
decrease of 8% from the corresponding period a year ago and for
The
slightly
aggregate
in
the past
„
I
Commercial
Oct.
ended
13
and
from
industrial failures declined to
182
in
172 in the week
the
preceding week, Dun & Bradstreet,
Inc., reports. Almost wice as many casualties occurred as in the
comparable week of 1948... when 94 concerns failed;nearly three
times as many succumbed as in the comparable 1947 week.
However,
failures remained considerably below the prewar total of 237 which
occurred in the similar week of 1939.
involving liabilities of $5,000
or
decreased to
rpore
130 from
145, but exceeded the 81 of this size reported
a
Concerns
failing with liabilities under $5,000 increased
to
37 and
were
All
trade
a
about
three times
as
numerous
as
42 from
last year.
industry had declines in failures the past week except retail
which
rose
to 87 from
78
the week before.
In
the like
week
35 retailers succumbed.
The Middle Atlantic, Pacific, East South Central and West South
States failures
the .year to
ago.
year
year ago
were
year ago prevailed in nearly all regions; it was slight in the Pacific
States, while the Mountain States had fewer casualties than in 1948.
date
a
decline of 6%.
Retail trade volume here- in New York last week was char--
with the. corresponding,
for the decline were, un¬
demand for cold weather ap¬
acterized by sagging tendencies compared
week
last
year.
The
chief
reasons
seasonably hot weather and poor
parel
on
Columbus Day.
Reserve Board's index, department
the weekly period to Oct. 8, 1949,
decreased by 11% from the same period last year.
In the preceding.,
week a decrease of 7% (revised) was registered below the similar
week of 1948.
For the four weeks ended Oct. 8, 1949, a decrease
According to
the
Federal
store sales in New York City for
of 8%
was
reported under that of last year.
by 7%.
For the year to date,-
volume decreased
WHOLESALE
NEW
FOOD
PRICE
THREE-YEAR
Downward
pressure
INDEX
ESTABLISHES
FURTHER
LOW
fell
pany.
a
in foodstuffs continued last week and
the
food price index, compiled by Dun & Bradstreet, Inc.,
1.4% to $5.57 on Oct. 11, from $5.65 a week previous.
Marking
new
three-year low, the current figure represents
page of this issue the reader will find thecomprehensive coverage of business and industrial statisticsshowing the latest week, previous week, latest month, previous .year,
NOTE—On another
most
wholesale
viously with G. Brashears & Com¬
of production of
rise of 503,000 bales
total
or a
WEEK OF 1948
New
Output a year ago
1941, 85,600 units.
Street,
was
a
Unfavorable weather and unsettled labor conditions combined to
week
said.
Ogden has been added
South
>
RETAIL AND WHOLESALE TRADE MODERATELY UNDER LIKE
trucks in Canada.
members of the Los Angeles Stock
Exchange
the report
a
—
jio the staff of Gross, Rogers &
Co.,
agency
output for the current week
20.281
unem¬
some
soon,
down, while in four regions, the New
England, East North Central, West North Central and Mountain
States, increases were reported during the week. An increase over
Gross, Rogers Adds
(Special
sheets used for roofs, and
specifications, the
The total
cars
result
may
producer is nearing the end of its supplies
one
steel
extra-wide
of
sheet
Central
•
continues for another week,
strike
ployment in the automotive industry
Company.
V
indicated
Agriculture
goods and pantry staples continued to be large.
Casualties
affiliated with
of
Retail purchasing of furniture and household goods decreased'
slightly last week and continued to be moderately below that of the
comparable 1948 level. Among home furnishings there remained a
Chronicle)
Financial
ANGELES, CALIF.—Fred
loan rate,
average
of
"Ward's Automotive Reports" for the past week,
production of the United States and Canada dropped
147,823 units from 148,443 units (revised) in the
previous period.
BUSINESS FAILURES LOWER IN
W. R. Gay nor
the
estimated
Chronicle)
Financial
The
comparatively steady the past week
were
vehicle
Production
(Special
partment
last
.'
.
According to
an
and
With Wm. Van de Carr
con¬
to
incentive
correction
world finances, the
combined effect can be a dynamic
economy—domestic and through¬
out the capitalistic world.
fed steers
motor
warned.
in
on
Lower grades of steers
inexpensive
together with the
going
mixed affair.
a
15,446,000 bales of cotton for this year,
AUTO OUTPUT OFF SLIGHTLY THE LAST WEEK
system is in the immediate offing
and
was
showed marked weakness while choice
resistance and sold sharply lower for the week.
preceding week, 1.295,000 kwh. lower than the figure reported
for the week ended Oct. 16, 1948, but 534,645,000 kwh. in excess
of the output reported for the corresponding period two years ago.
prices for common stocks,
The
cattle market
values levelled
period.
strong and equalled the previous week's 1949 top of $35.50
hundred pounds.
Sheep and lambs met considerable buyer
the
has been, in higher
r
Subsequently
days.
OPA
above the Sept. 1 forecast.
Aug. 3, 1946 showed a decrease when compared with the corre¬
sponding period in 1948. The amount of electrical energy distributed
by the electric light and power industry for the week ended Oct. 15
was estimated at 5,480,735,000 kwh., according to the Edison Electric
Institute.
This represented an increase of 30,838,000 kwh. above
should be reflected,
it usually
as
pound.
tinued
decrease of 83,900 cars, or
PRODUCTION
Electrical
prices since
heifers
a
Contrary to trade expectations, the Oct. 1 report of the De¬
freight for tine week ended Oct. 8, 1949,
according to the Association of American Rail¬
loadings.
ELECTRIC
net rise of about 2 cents
first quarter of next year.
and the further gains by labor in¬
will
lowest
a
sharp slump in hogs early last week, resulting
a
revenue
cars,
Widespread
affected
was
off and held fairly steady for the rest of the
LATEST WEEK
40% under, the similar period in 1947.
or
eaqs,
small with demand restricted to current
very
Cocoa prices scored moderate advances aided by
market recovered and closed with
at 1,281,210 tons.
year
12.7% below the pre¬
ceding week.
It represented a decrease of 317,423 cars, or 35.6%
below the corresponding week in 1948, and a decrease of 382,634
is re¬
deficit indicates inflation, the
crease
Loadings ol'
economy
and probably will, outweigh
RECEDE
were
scarcity of offerings from primary markets.
Trading in the spot
market was light and mostly for nearby needs.
The advance, in
coffee prices appeared to be checked for a time last week, but the
CARLOADINGS AFFECTED BY WIDESPREAD COAL AND STEEL
STRIKES
pick-up in export flour sales but domestic flour
some
and nearby needs.
of
tically the incentive
was
activity featured spot markets with total sales in the
ten spot markets reaching 488,200 bales in the latest week, against
485,000 bales the previous week and 316,200 in the corresponding >
week a year ago.
There was some improvement in export demand
but sales volume was relatively small.
Mill buying increased for
both nearby and forward delivery, reflecting short covering in the
spot month and hedging operations against commitments into the
it stood at 99.1% and 1,786,300 tons, and for the aver¬
week in 1940, highest
age
There
bookings again
Seasonal
172,000 tons of
operating rate is equivalent to
ingots and
legislation.
Government purchases of wheat were in good volume and mill
demand was fairly active.
Offerings of corn were smaller and prices
held firm most of the period before reacting in the latter part of the
Spot cotton prices
1949, unchanged from the pre¬
beginning Oct. 17,
somewhat unsettled last week, reflecting
were
at levels slightly above
of steel
ceding week.
the verge
Grain markets
in part, uncertainties over farm
Steel Institute announced this week
companies having 94% of the
steel-making capacity of the industry will be 9.3% of capacity
the
on
strike
coal
market is generally
scrap
The American Iron and
that
Conclusion
the
the
with no outstanding
though a few more
testing. r,
price
This
is
steel
Age,"
some
for
commodity price index, compiled by Dun & Bradstreet,
Inc., touched the lowest level in over a month last week. The index
closed at 241.94 on Oct. 11, compared with 244.69 a week previous,
and with 274.05 on the corresponding date a year ago.
return, more of the same production problems are
and
iron
Iron
too
wholesale
to
off-grade coke, the three-day coal
Unless
Reflecting declines in prices of some metals and foods, the daily
and
steel
commerce
blamed.
steel making grades
tone of confidence.
conclusion,
from
came
was
steelworkers
"The
of
week
work
The
opti¬
However,
some
good
progress
will be made toward
them and the public psychology
will, reflect anticipation of this
progress with a greatly improved
In
on
enough
a
week.
states.
paper
cripple business, the
quota basis will be here for some time,
long
ahead.
mistic.
world's
lasts
'The Iron Age"
aggressive
an
that
manner
steel
of
late January, the trade
or
strike
the
mine
busi¬
things will be accomplished in
ideal
shipped until mid
oe
ises.
our
believe
'■(; ; v.'"
•
people
restore
philosophy to
,
capital
what
kinds of
the return to the good
American
way,
and would
thereby
''::.K < ' :iv'.
; <,,
so
domestic
as
old
.
be the
the
or
refer to
■
receiving orders for steel with the volume
at about the same level as it was before the strike.
Ordering by
steel buyers is on the theory that when production is resumed the
mills will schedule and produce all the old orders first and then
enter and quote shipping dates on orders received since the strike
started.
On this basis, most orders placed since Oct. 1 would not
venture
whole
in .all
truth,
of
■'
still
are
it would
the
would be greatly invig¬
not only in the securities
ness.
mills
points out. The warehouses and the few steel mills
still operating are using quotas now; otherwise they might leave
some of their best customers high and dry.
On steel sheets the industry is now as much as two months
behind at the pre-strike demand level. Before the end of September
a number of the big mills fell as much as a month behind on prom¬
economy
orated
The
time before the aluminum
some
Shoe. pinches, the magazine observes.
three
months
that it will be
means
and
LEVEL IN OVER A MONTH THE PAST WEEK
Senate and
and
31
WHOLESALE COMMODITY PRICE INDEX TOUCHES LOWEST
<
been cut in half but the other two
by economists and statisticians in
toe
Administration and in the
House
(1575)
:
from
The State
producers, Permanente and Rey¬
nolds, which account for a little over 50% of American aluminum
capacity, are still operating. With material also available from
,
'
a
drop of 24.3%
etc,, comparisons for determining the week-to-week trends of con¬
ditions, by referring to "Indications of Current Business Activity,"
a
regular feature in every Thursday's issue of the "Chronicle."
COMMERCIAL
THE
(1576)
32
Planning
the
but
continent,
fighting two wars, one
against the Tories, and one against
the solid labor front to reestablish
as
«mjoyed in the past, has been un¬
dermined—not to forget quanti¬
On
situation
This
has
for
discern
have
time
been
food
point
is
statism,
interested
but
yes;
in
welfare
apathy
British
in¬
planning
to have gone
seen
In
other
many
are
view¬
off the
budget was
the
1946,
which knocked out all fiscal
and
1947, the government's
embodiment
high
of
level
plan¬
convertibility trouble and resulted
in marked curtailment of the cap¬
investment
Now
program.
has
1949
seen
a
startling
fiscally unexpected,
most water-tight and the
antipathy to
nationalization is surprisingly true
phase of the
in labor union circles.
most
and
even
in
the
efficient
and
complex
ex¬
Exemplifying this is a recent change
control
in
the
world,
railway workers, an-! which in practice didn't hold be¬
.swering the query put by the j cause, as so frequently happens,
vote among
government
found
their
whether
to
as
jobs
interesting
more
they
i
less
or
satisfying after
Only 10% found
and
nationalization.
there
unforeseen psycholog¬
factors.
I am talking about
ical
principle followed right aown the
line, which was enunciated by the
minister,
Aneurin
Bevan
who,
with
a
personal arbitrary doc¬
trinal statement, but which is con¬
trolling, just laid down the prin¬
ciple tnat there shall be only one
house for every
four built by the government—
which
proportion is rigidly ad¬
hered
to
right down the line.
built
privateiy
There
fore
been
has
never
any
ex¬
to the why or where¬
this one-to-four propor¬
planation
oi
as
tion, except as just a product of
Mr. Bevan's socialist principles.
obstacle
Another
to
private
building is the comparatively new
regulation of the so-called devel¬
eco¬
upset by the exchange
was
licensing is limited by the
opment charge.
This works out
like
this:
A
builder wants vo
calculations.
This1
moves.
major
predictable fuel crisis, which re¬
sulted partly from natural causes,
steel! ital
imminent
the
of
several
thrown completely off by the un¬
ning,
hardly at all—a very vital
point in view of the political im¬
portance
buying of
nomic survey, which is the official
tion
nationalization
things
restricted
more
where
track.
In
nationaliza¬
in
into
run
there
the' could be
factor to the nationalizes that the
public
field
can
For example,
wrong.
a
stances
nettlesome
tne
has
From
clearly
was
this
in
street
fiascos.
for then,
Tnen there
that
gone
the
in
man
he knows that the bulk
clarified
by this devaluation step
which they knew the government ;
tock against its will. This deval-i
nation has been an extremely im-!
portant political step.
first
the
even
Difficulties
Building
The
the average voter level,
' .•/■/ '''■"/]/'/'■;/
■./"■.;■
,
were
the
let-up of devaluation.
That
is, foreigners as well as domestic
build, say,
obsolete
While
only,
block of flats where
a
houses
land
the
say,
calculated
stood
before.
be
may
worth
10,000 pounds now, it is
tnat the development
improvement will raise its
value to 25,000 pounds, but in¬
stead
of
letting the developei
make that difference, even subject
to taxes, or having a chance to, he
of the
has. to pay this 15,000 pounds
of
ference
profits
possible
advance to the central
dif¬
in
authorities
levy before he gets a license.
Surely—heads you win; tails 1
as
a
jobs
is
There
no
ceiling
more
selling
on
<
.said
ing going on now, practically, for
rental—only for sale.
was not capable of
unioh relationship, as it is devel¬
So the result is that
(1) the
dealing flexibly with unexpected
oped,
is
more
private building of houses
is
interesting and events.
stopped by the licensing difficul¬
surprising. The very existence of
Devaluation Lessons
a
Labor
ties, and .(2) the private building of
government
combined
So the twofold lesson from de¬
with nationalization has had the
apartments is stopped by rent re¬
valuation is, it seems to
striction
me, (1)
plus the licensing, so
quite unforeseen result of causing
that controls don't work, particu¬
a fundamental
there
is no private building to
split within Labor's
larly when applied to a far- speak of at all any more.
ranks.
The rank and file labor
The operations by private con¬
membership is more, and more flung area, as is concerned with
tending to split away from the sterling, and (2) it brought home tractors that were going on to a
of
ness
and
entire
The
control
government-labor
management.
group
labor leaders, in¬
cluding the high TUC trade union
ripper
officials] with the feeling, and in¬
creasingly so,- that the latter—
that is, the upper echelon of their
•own
labor leaders—are in some
account
and,
with control,
to
the
the
always, planning
as
public
the
realization
of
shortcomings of fiscal control
planning against a free mar¬
and
Also
there
specific
are
some
major
which
important
of
areas
plans
not
are
working out as
ment.
They suspect that their expected and which are gradually
leaders are really disinterested or being so realized by the public.
of this is the housing
&ct in a way as hostile govern¬ Typical
land of cahoots with the govern¬
ment officials.
In the
extent
until the
1949
legislation was passed, have now
practically ceased.
■
Public building—that is, build*
limited
,
ket.
public
under
ing
much
ing,
direction—:s
slower than private build¬
average
of 12
completion ♦ against
taking
an
for
months
_
eight months, partly because of
the rigidity of the authorities in
a
same
.
way.
British
mistrust of the actual
and
because
coalition between the upper labor
officials who are playing ball with
cently been epitomized in
tical
with
labor's
by
way
the
nationalized
demands
the
So
ever.
rrecognize
the
no
no
have
over
no
pro¬
lord
by
members
the running of the roads
the pre-labor days of 1945.
have
undermined
the
giving
for
unions.
against
it
fighting for them.
example of that is that the
unions
lated
own
are
a
with
mostly appointed
Minister
and
are
the
rise
in
cost;
of
cumbersome.
enterprise.
this
their' prerogatives
I
am
talking
builder for pri¬
licensing
there
reason-for-being.
is
He is'subject to
system, of which
terrific complaint,-both
as to the number
over-all result is that the the
about
sympathies and generally
no upping of rents com¬
vate
!
;The
rules
or
about the private
by the government because
and their
land¬
example, to correlate with the
and
definitely coming out
minimum wage legis¬
undermines
the
the;' price of fuel
which has taken place.
The keynote of the home build¬
ing
situation
is
the
licensing
system to which every builder is
subjected
for - every
individual
unit and which is extremely strict
by the government instead of
An
are
Health
doubling
great extent undermined by social
.services which are being handed
by their
the
mensurate
They feel that their authority and
their
reason-for-being is to a
•out
They
get
time, it
of licenses and
takes
Public
housing is also suffering
because of increased costs and
cause
of
the
which
burdening,
pensive.
bureaucratic
In
a
is
be¬
over¬
more
ex¬
10-year period end¬
ing in 1949 the government costs
increased by 340%
and private
building by only 250%.
of land to be developed as a
the
to
get
them
Town and Country
This leads
ing that
proposed
ter
of
me
to cite the Minis¬
Town and
explain, but was extended under
the
MacDonald
government
in
1932 by the power of refusal to
build for any purpose. Previous¬
ly there were only restrictions
versus
certain things, which ap¬
plies in any country.
,
It was gradually extended dur¬
ing and after the war until the
Consolidating Act of 1947 was
passed in 1948, bringing every¬
thing up to date, introducing na¬
tionalization.
'Don't,
New
forget
that under
Aptof .1946.;
Towns
Minister
of
,
Town
as
new
further
was
and
the
the
Country
empowered
to
corporation under the
a
chairman,
with
a
direction
of
to acquire the land and do
power
anything
to build the
corporation will
necessary
The
town.
new
the site of the
town. The minis¬
area
establish
be financed by
advances from the
minister,
repayable
over
such
periods ana on such terms as
might be approved by the Treas¬
urer.
Nine towns have already
been so designated.
Financing
all
of
this
comes
from getting direct grants from
the Treasury, not
through bor¬
rowing.
So
housing,
a
there
field
growing
Is
scicusncss
results
coupled
other
these
experiments,
devaluation
with
con*
results.
question is whether
of
factors,
greater
public
abortive
of
But the larger
the
factory,
where
and
home
chief
represent
all
and
leading toward
are
whether
is
there
(1)
a
sweeping Labor victory, (2) La¬
bor's reelection by a small ma¬
jority and a possible coalition,
Conservative victory.
In any of these events, it seems
to me that in the early juture
there will be a relaxing of con¬
(3)
or
of the people's
have indicated.
because
temper,
as
we
This will occur both
the
on
do¬
mestic and international fronts, a
straw
in
the latter
front being the successive releas¬
ing of import controls and at least
j;he
wind
domestic
toward
gestures
in
econ¬
omies.
Over the
Under
ent.
the
long pull, however, I
will
the; trend
believe
be
differ¬
Labor government.
a
on prices,
laboring man.
inflationary effects
and
hence
will
bring
the
on
more
on
and
severe
the
Queuille
week,
but
govern¬
while
sin¬
committed
to
stop
encroachments
and
cerely
cialistic
so¬
to
the free system through
iheir continuing acts, mostly be¬
preserve
consideration
their
of
cause
of
domestic
politics, they are defi¬
nitely,
if
unwittingly
shoving
their people** along the road to
the welfare
It
^tate.
realized
be
must
that
countries differ
continental
the
from
Britain in this regard, because of
doctrinaire
the
principles of the
just as we dif¬
British Laborites,
Britain.
fer from
For
in France it can
simultaneously
trending to the right politically
and to the left economically. The
people who are harboring indi¬
vidualism don't realize they actu¬
ally have the welfare state. They
sincerely don't want it in prin¬
instance,
be said that she is
ciple, but they do like the bene¬
fits
will
and
keep
on
voting for
them.
examplq, if General De
were
by any chance to
Gaulle
take
his brand of
political
rightism
would be accompanied by an al¬
even
over,
third-degree
ready indicated radical economic
program, outperforming Mr.
ray and
the CIO.
a
trols, partly following the ex¬
perience of their not working and
of
last
For
be
to
even keel of freedom
enterprise, at least until
an
fall
ment
less controls.
or
Controls, of course, will depend
on
election
results — that
is,
There
assuredly in
are
Mur¬
France
important rightist factors,
split economic person¬
many
in France's
taxation
of
in the field
For example,
ality.
there
was
substan¬
a
tial cut effective this year
in the
levy of income tax on securities,
to 18% from 30% in 1943-45. The
total tax burden
directly and in-
d irectlv,
of the French citizen is
estimated at barely 40%
of the
Britisher's
There
American's.
or
are
other manifes¬
many
tations of the swing toward free¬
The government-
in France.
dom
decreed double standard of
prices
has been
aban¬
provision for with¬
petroleum
on
The
doned.
drawing the foreigner's capital in¬
vestment has been liberalized, and
the number of government em¬
enlarged controls, for instance, on
ployees on the bureaucracy pay¬
prices or wages or both; and in
roll has been decreased. Govern¬
the international fiscal field, par-,
ment
ticularly with
ration
further
a
the
of
export
direction
changed
the
of
eco¬
nomics from sterling to hard cur¬
areas.
rency
London
In
had
I
the
nrivilege
of
asking Mr. Bevan, "If things
don't go right, will you be laying
controls?"
more
on
"Of course: tint is the
He said.
socialist
wrong,
and
In
,
principle.
If
has to
one
things
put on
controls."
more
of the election of
case
go
more
a
Con¬
Coalition
regime
domestically, I would say that
only a 25% slice of the welfare
state pie would be at stake at all:
that
is, even the Conservatives
servative
would,
have
or
the
this
in
as
not
country,
political nerve to
take
from the people more than
the benefits t^at have
away
25%
given to them
In
";:v..; / >
•
/.,.
op¬
\:
believe
that. in
as in all other
I
short,
England,
by their
well
as
European countries, there will be
a
mixed
economy,
a prediction
which
I must hedge
by
a
proph¬
sta¬
still many mani-»
intervention as si.
are
of
partly
state,
spoils
because
the
government has the bear by the
tail,
as
in
other countries, and
partly because of political neces¬
sity. Nationalization includes the
Bank of France, plane manufac¬
railways, gas and elec¬
companies, coal mines, a
cat* comoany and four big
turers, the
tricity
motor
the
and
denosits,
nation's
the
of
55%
with
banks
radio
broad¬
casting companies.
Social
main
high,
in
were
p^vments
security
at.
25
practically
1948.
Government
re¬
34 billion francs,
times what they
with sick benefit
having
payments
30-fold.
risen
emnlovees
a
were
few months ago given a gratuitous
bonus—all "for considerations of
domestic politics.
of
been
Testations
been
have
expenses
further deterio¬
bilized.
position,
But there
controls will be
sterling
tried, possibly measures to force
Planning '
Country Plan¬
ning as another important plan¬
ning and controlling body. This,
too, is not a new idea, except
under its present powers.
It had
genesis in a limited way in 1919,
its officials are very careful
to
try
new
town, to make an order designat¬
ponents. ' V:--";
rentals, under
income
landlord
by the government also is deemed
to
discre¬
consequently largely polical boys,
of course, with tenant rather than
man¬
The extension of social services
-
autocratic
of
should
rents.
agers or
asince
amount
wage
increase what¬
union
complete
stated basis of rules governing
the
finally
change in the
These Rent Tribunals
tion in the fixing of
railroads,
after
workers
•ended up with
prac¬
experience
for-
example, where
tracted
negotiations
re¬
Tribunals.
a
entry
laws, every¬
thing built since 1939 is fixed with
a
rental set
by the local Rent
'
has
government's
Under the present
really satisfying his needs.
dissatisfaction
the
into the rent control and housing
field is not new.
the government; and in any event
that the Labor government isn't
Such
and free
field. '
passing on necessary changes in
Housing and also Town material. Every time a contractor
Country Planning exemplify wants to make a change, he has
government officials of their own
-Labor Party.
In other words,'as how governments gradually get to go through all kinds of getting
into complex planning and control
was
certainly unforeseeable, the
permission from government bu¬
laboring man feels that he is and the subsequent difficulty of reaus to make any kind of minor
withdrawing.
I said
"gradual" changes.
being "sold out" by a sort of joint
.
they have
sincerely desirous of main¬
taining
partly
lose.
interesting; 45% citizens disbelieved in the ex¬ houses, but only on rentals, so
what is being built is done for
"no
difference"; and 45% change rate that was fixed.
said "less interesting."
So 4hat
The latter
Because of the inflexible ex¬ selling and not renting.
said that they had a
feeling of change rate under planning, there does not help the apartment situ¬
frustration through the remote¬ was no room to
ation.
There is no private build¬
take this into
their
been
the national interest for any area
through and the political factors
entailed.
\
in¬
cluding particularly the middle
class, there is also disillusionment
about raw materials controls, and
factors, sucn as
wage-price squeezes, etc. Witnsuch
a
community group as the mid¬
dle class, qualms over a nation
living beyond its means and other
so-called
"platitudes"
are
now
taking
root
instead
of
being
.scorned as academic. They do feel
the cost and they do know that
the soaking of the rich is at an
end, and that any further cost will
be borne by them, in taxes, in¬
cluding excise taxes, and in price
rises.
is
its authority.
definite
tative,
it
ing
the
on
that middle class life,
ground
government is actually find¬
Labor
(Continued from page 2)
given power, if he
expedient in
was
is satisfied that it is
The Couise oi Wellare-Statism Abroad
land
Thursday, October 20, 1949
FINANCIAL CHRONICLE
&
I
So
Right
of
and
is
that
while the
want to go to the
want to g^t rid
State
items,
mror,
Welfare
some
this
further
mention
might
mramoles showing
French .people
very
difficult
if not im¬
possible for political reasonSf Once
they
are
of real collectivism on a large
scale, should Labor unexpectedly
on
the books. /
ecy
be
a
given a renewed mandate by
large majority at the coming
election.
of
situation;
split-personality
is, simultaneous
left within
countries, the pull to
as
a
that
Italy also there is the twosided
situation,
ascribed ; with
lini
free
fact
being
largely due to the
political
difficulty
under
the
spoils system of withdrawing ben¬
efits from the voters once they
have been granted. It is a ques¬
tion of having a-bear-bv-the-tail,
and
.
not
The
being, able to let go.,
Italian
| ernments, I
French
gov-
convinced,
have
and
am
from
the
Musso¬
Government offi¬
cials, high and low, as well as the
voter in the street, really want
individual
left
justification to the Socialist
hand-me-down
trends to the right and
the
^
In
some
Throughout the rest of Europe
we
are
seeing
what
can
be
thought
The Italian Dilemma
regime.
enterprise. They point to the
there is no nationaliza¬
that
in railroads, telegraph,
and munitions. But—most
significantly—there is broad gov¬
ernment participation in business
through the medium of what is
called the IRI (the equivalent of
tion except
radio,
our
RFC), which they got into
.during, the; 1933 depression and
through / which
the,government
Volume
170
Number 4848
THE
COMMERCIAL
&
FINANCIAL
i*
has
stock interest and
a
control
banks
on
panies.
usually a
scale, of the
vast
a
and
industrial
many
dom, at the
Blocco
Conclusions
ex¬
The
freezing
of
number
this,
Italy they have the
Lavorare, which is a
di
man
into
tremendous
is
because
rate
control
rent
no
on
there
are
of
To
to
sons
on old structures there
price and rent controls, so no
repairs
all
that
the
we
can
say
take away
welfare-statism
been
given.
from
individual
people
at
least
in
ad¬
should recognize where they
going, while there is still time
prog¬
under
democratic
welfare
state
benefits
ceeding
regime
the-tail
have
'
and
suc¬
bear-by-
a
cannot
the
on
the
or
have
them—possibly in
Once the
are
books, the government
rea¬
to
processes
make their free choice?
that it
they
apart
get
rid
of
country.
any
being made and many
century build¬
ready to fall into the
seem
Will Insurance Shares Continue
salaries,
turns.
Yet
under
the
be
can
security is
It takes 30% of
without
worthwhile
(Continued from
re¬
since ' its
expansion
regime little
Fascist
done
its
toward
disability
curtail¬
to
"//"•"
;
The
'/v"./
Indicative
situation
the
of
is
the
of
Commerce, Mr. Lombardo, who
held forth at great length about
the evils of government bureauc¬
racy against business enterprise,
yet in the next breath he de¬
is another
but
has
which
they
these
it
socialist
by
j
cannot
rid of
the books.
are' on
once
Switzerland
income
lower
considerably
housing subsidies.
After the
there
well
is
rent control
war
government.
rent control
on
Now
newas
old buildings, so in order
as
to encourage new
face
of
rent
building in the
they have
control,
had to institute subsidies.
done
on
regional
a
This is
basis.
The
subsidization
of
amount
from
was
all living quarters by
on
central
canton
to
*
varies
there
canton,
two
Federal'programs
one — Federal Workmen's
Compensation and the Civil Serv¬
group
cial wartime needs. In addition to
the
life
two
in
now
surance
the War
insurance
operation,
programs
Property'In¬
program, administered by
Damage Corporation, was
a
abolished
in December, 1947, and
Shipping Insurance pro¬
gram, administered by the War
Shipping
Administration,
was
War
a
abolished
the
life
in
194C.
insurance
The
of
effect
has
programs
sonnel
cantons
advancing capital to
the builders at nominal rates of
cost
through taxes, and selling their
obligations.
Sometimes the
own
themselves
loss.
,
,
build,
leasing at
a
.
Then also subsidies are needed
,
to
supplement the effects of rent
control and to support it—that is,
to
prevent rent control from ob¬
structing ; new
building—so , in
many cases
tax exemption for 25
is offered by the authorities
the capital Invested in con¬
years
on
struction for rental.
,
-
though
in
these
even
not
are
•
(al¬
increasing
There
federal aid
pensioning.
7
is
also
toward old-age
/V;
■.
Somewhat similarly,
in the in¬
ternational field the planners are
time
same
convertibility at the
as
they
are
urging
stringent
import control and
strictive
taxation
countries.
have
a
In
in
other
their
words,
re¬
scious and has stimulated the buy¬
ing of other insurance generally.
one good side of the pic¬
ture.
ance
you
of
the
a
so-
about another
and
May I
remarks
to
from
capacity,
efforts
to
prevent
affect
and insur¬
have
trying
one
let
so
us
already
period
lend
road
in
repeaters
have had
jail
killer
off the
tragedy could
a
mention
I
occur.
this
one
ruled
or
before such
the
as
we
not
the
Massachusetts
Commissioners—"Give
been
there
like
do
we
On
driver
states
have
would
the
that
know
of
other
are
action
taken.
other
in
hand,
the
entire
licensing there
is
proud record
the
on
which
On
the
other
it is also
evident
that 7 government
itself
has
become
increasingly; insur¬
ance-conscious during the past 15
years, and wherever a need
for
coverage has been shown, govern¬
,
hand,
been «quick to supply
that need. Is not this our fault?
ment
has
j
If .private
insurance
does
its
job and does it well, the role of
in
government
be
held
to
a
should
insurance
minimum
inter¬
of
ference in
employer-employee re¬
lationships.
Properly
regulated,
private insurance is already ex¬
perienced in its several fields arid
should be given the opportunity
to prove that it can properly serve
the needs for social and other in¬
being conducted by
governments. If we should
prove unequal to
this responsi¬
now
our
bility then, naturally, the govern¬
ments, State and Federal, would
required to continue such ac¬
tivity. When insurance perform¬
ances
become less than the prom¬
ise,-dissatisfaction
.
.
'
j-t
;
ensues
{■:,
°
*
and this
)
-
i *
i-'
ately upon
profit.
Let
to
beyond possible in¬
go
State.
a
home
op¬
the high¬
.
Only a short time ago Margaret
Mitchell, authoress of "Gone With
struck
was
"I
in
of
takes
my
down
ten
in
of 22
of
many
With her death, this driver was
indicted and will undoubtedly pay
heavy penalty for his trans¬
gression, but is he solely respon¬
a
sible for the accident? My answer
is "no" for the simple reason that
record such
a
his,
as
with 22 offenses, should have been
barred from the highways long
There is
crying need of a
closer cooperation of our insur¬
ance
regulatory authorities with
ago.
such
a
bodies
enforcement
American
Association
Administrators
of
the
as
Motor
and
the
International Association of Chiefs
of
Police, all to the end of spotting
the
incompetent driver or the
driver with impaired sight, hear¬
ing, or reflexes, and eliminating
him from the highways of this
country. One of the chief physi¬
defects
cal
In
of
recent
a
vision
the
on
three
million
a
a
him.
Only
stringent
tion
can
such
,
have
States to sponsor
on
throttle." Every
a
are
for
Thank
i
)
:
i
: a,
?
7
underbidding
be
counsellor
com¬
and
,
ex¬
i
.
companies, for the
honor of being your President for
the past two years, and thank
you, agents, for your constant co¬
operation. •/'"
'■"/
] ; •
gentlemen, this Conven¬
a very high spot.
Com¬
President of this Conven¬
me,
you,
All's Well With the Market
(Continued from first page)
waiting to get back into the mar¬ rency inflation of 1878-1894. This
potential tremendous inflation
ket when the skies have cleaned.
The answer of course is that by within our monetary system thus
and
are
out suf¬
:
the sort
of
Something
taking
right now.
place
should
market
there
To
been
to
t
..
been at
have
there
Since' 1938
ex¬
put it simply—
no
velocity—no
certain
imponderables
full expression
of capital to its speculative im¬
pulses.
First it was the fear of
war—then actual j war—-£pllowed
all
times
which prevented a
by
fear of war again. Then be¬
by
the
unanswerable
devilled
strike question
as to what widespread
devaluation might do to
constant crop of
than
it was three months ago, strikes
disputes—disorders — all
when the rise was just beginning. kinds of labor troubles, and last
Stocks have been passing from but far from least, a continuous
weak into stronger hands and we heavy taxation program which ex¬
do not fear any kind of a serious ercises a burden on the average-
than
higher
posi¬
technical
The
currency
tion of the market is stronger now
our
economy—a
—
collapse for a long time to come.
There will be plenty of time to
become concerned—when brokers'
investor
and
a
restraint
the
on
7
speculator.
average
.
>
Gradually, one by one, we seem
instance,
are
much to be in the process of eliminat¬
higher—when the volume of trad¬ ing these various fear complexes
ing -has dpubled—and stays that or reconciling ourselves to a
way
for months —when every¬ new viewpoint. Far-sighted people
thing is "going to 300." Putting it looking
into
the
future - evi¬
simply—when the public is back dently have been taking-se¬
for
loans,
in the market in a big way.
; curities
of
out
the
market
in
a
the cycles big way, while the public, largely
and their curious but inexorable 'concerned
with
the
immediate
repetition of stock market booms view, has been on the selling sideand busts, what are the funda¬ Fears of a
major business recesr
/Having
mentals
dealt
with
which
on
we
base our ex¬
pectation of higher security prices?
Bullish
::
Fundamentals : i
currency
the matter of
inflation which has been
with
now
Let
7
is
take
us
us
up
for
so
many
years
people accept it as being
without realizing or appraising
that most
so
its impact on our economy.
Every¬
knows there is so much
around, but because it has
been passive rather than active,
no
one pays any
attention to it.
Nevertheless it could spring into
body
money
put
a
7
powerful force at any time.
Since 1934, we have had an in¬
crease
of
culation
428%
in
against
population.
a
currency
cir¬
14% increase in
This
is
very
much
greater than the greenback infla¬
they
iit
has
.
the
much
the
when
itself.
another
or
chance
a
rapid turnover.
has been
By the
be
had
press
to
reason
one
has
never
satisfy the average
man,
the security -markets have
moved sharply forward, and the
buying opportunities have disap¬
peared.
This pattern is as old as Wall
Street itself and will never change.
ficiently
for
far
political
straightened
economic
time
tion of 1861-1865
■
must
hardly measure up as
can
insurance
pert in this line."
This is my swan song as
pany
merits alone
its
on
petitors
tion will mark
did not even see.
i.
said,
He
ago.
;
sell except by
modern, high-powered cars, then
more
people
years
and I quote:
laws which will
permit only the fit to operate our
license require¬
physical examina¬
people be spotted
killed
over
an
through visual tests. There have
been too many accidents where
drivers
-organ
lacking, and the agent who cannot
driver
ments of actual
by my
sire, writ¬
sold
drivers
through
producers
house
movement. If we can
Commissioners and
their coordinating agencies to do
all they can "in their respective
visual handicap that
horse has when blinders
on
our
our
cause our
highways whose vision is
"tunnel" vision which gives
the driver
in
safety
our
the
meap
only
the
driver.
statement
"blind"
loss, and
the
this
made, which is grimly supported
by accident statistics, that there
are
of
measure
"Competitors we may be,-onecompany with another and agent
this terrible annual slaughter. V j against agent, but the competition,
I was gratified a year ago to should be purely on a basis of
find out the splendid manner in service—not on price.
The com¬
which you agents have taken up pany whose protection cannot be
of Motor Vehicle
Administrators
tides
flow
twenty-five
report of the Ameri¬
Association
can
drivers is
our
"tunnel"
so-called
a period of profit
better combat the
beloved and honorable
enforcement agency and
threatened.
them serious.
driver with
may
law
all of the
daily newspapers; .must increase
their cooperative efforts to stop
his hand
stock
convictions,
prone
toward
take up a little of
us
to
message
locomotive before he puts
a
by
record
tide
business cycle.
,•
And to our friends the agents—
can quote nothing better than a
I
for
the streets of her beloved Atlanta
a
system
immedi¬
rates
flood
a
better
may
time the steel strike is settled,
driver with
we
hurricane
where
driver's license
a
that
so
25c, .when it
fireman 20 years in the
a
cab of
of
Missouri
buy
drugstore
a
ashamed
am
State
anyone can
cooperate
inating the unfit from further
a
enterprise
profit. Be less
reduced
tides of any
very
closely with other govern¬
ment bureaus having to do with
licensing of drivers and of elim¬
previous
order
the slack tide of
events
a
but it must depend,
free
means
to
the
Wind,"
but
agents.
us
this
mean—do not fear to openly state
that the insurance business has a
but
where
ties
on
or
it,
my heart, and this is an
appeal to the regulatory authori¬
to
"V.-Ps."
Commissioners
our
mentioning a^sjjuatiop
business
vice-presidents:
the
day our daily bread"—by which I
close to
the
than
us
control
can
because of my close contact with
I do not wish to conclude with¬
our
here:
sential to
either
period.
of
last two
my
two friends
they would
such
doing all we can to
minimize another such
or
direct
our
who killed Margaret Mitchell, and
period of inflation
We
unrest.
emerged
of
vitally
reserves
payments* A further devalue
of
the
dollar
will
bring
ation
Vehicle
be
own
mixture of crying for free¬
per¬
vital
and
surance
crying for increased productivity
and currency
forces
armed
protection to
their beneficiaries, but it has had
the additional effect
of making
many
.veterans
insurance-con¬
are
have been turned down
referendums).
some
there
subsidies
agricultural
some
and
Switzerland
in
Also
to
This is
i.
of
ways.
spe¬
the
municipalities
insurance
our
portunity to drive
developed to meet
conditions
<
will
dollar
our
from time to time. Those in group
and
zation is sometimes done through
the
(evidence
outcome
more
Retirement
been not only to provide low-cost
insurance under extra-hazardous
meeting
The
Disability —
have remained farily stable over
the past 25 or 30 years since their
inception, except for liberalization
ice
more subsidization in the
industrial centers.
This subsidi¬
and
of
out
in
being
interest
further
us
two were
Switzerland has gone in for rent
instituted
spe¬
employees.
from .private insurance sources.
The
Presi¬
ington also gives us plenty of food
for thought. A further devaluation
vide insurance already available
rates
despite the de¬
centralization of her government
and in spite of her "un-bureaucracy" and her people repeatedly
turning down socialization and
subsidization proposals when put
to popular vote, nevertheless even
the
State
surance,
ours,
control and
of
of
low
very
taxation,
than
pro4
programs
"double standard."
this
her
Teachers
Life
Insurance,
Bank
Guaranty
Funds,
Workmen's
Compensation, Second Injury and
Security Funds. All of these pro¬
socialist desert—we also find evi¬
Despite
other
groups
of
called "Dollar" meeting at Wash¬
Under group three are Hail In¬
Even in Switzerland—that cap¬
oasis in the worldwide
of
give
trend.
Employees Retirement
and
viding retirement benefits to
italistic
dence
includes
two
State
Funds
cial
Socialism in
.
Insurance,
Public
Official Bonding Funds and Pub¬
lic Deposit Guaranty Funds.
;
and
decision
recent
employees* ^ng pensions and retirement funds
highway
em-3 all to be paid
by the employer
Property
Group
measures
Recommendations
Fact-Finding Board
of the Steel Industry in suggest-
Under 1he first group are Pub¬
lic
Italy
get
The
the public directly;
serve
the
dent Truman's
To provide retirement and
(3) To
rightism,
.
Board
other benefits to State
country that wants to
in the direction of
move
of
between
Implications of Steel Fact-Finding
etc.j
fire,
by
loss
teachers, judges,
ployees, etc. 7 ^
price-fixing in sugar, vege¬
table oil, and even such industrial
So
States against loss
property
against
(2)
and
aluminum.
hunt
"to
substance:
employer
and
employee
relationships —>
which are receiving so much at¬
tention today. V j
three overall functions:
funds
government subsidization
as
officials
tion.
Truman, at the last
President's Highway Safety Con¬
ference
in
June, made a very
telling statement when he said in
18)
page
tensions
programs
burglary, embezzlement, etc.
of
products
insurance
insure
public
and
conversa¬
tion I had there with the Minister
scribed
State
(1) To
contradictory
recent
Massachu¬
President
dissatisfaction results in increased
groups
also have
The Contradictory Elements
-
benefits, and insuring
against loss due
drought, hail, etc.
j
selected
ment, because of the political fac¬
tor.
<
33
first, to the Insurance Commis¬
sioners, here as our guests, and
secondly, to our agents more es¬
down
come
As Prime Investments?
the regular life -social
high.
highway
of
ing should
It is frankly stated by the gov¬
ernment officials that the cost of
too
policy
much to be desired. Driver licens¬
Roman Forum.
much
current
setts
(1577)
pleased to state that it is
am
field
nineteenth
the
ings
]
the
are
the benefits of
once
I
the
vance
econ¬
great extent the
a
that
have entered
is most difficult for political
ings, but
are
from
is
me,
of Europe
unwitting, and
build¬
new
to
and
go,
and apart
the people want
causes
way
political bias, would not the prin¬
ciple surely be uncontrovertible,
toward socialization has been
ress
at
on
conclusion
seems
highly mixed states of
omy.
of workers.
Building in Italy is going
a
basic
it
countries
the
and
power
Apart from the
from which
to
tremely difficult to withdraw.
in
for your
as
com¬
Once in, they find it
Also
time
same
brands of control., >7
own
CHRONICLE
/
...u
•
or
the silver
cur-!
which dominated
sion
lines
only
ago
year
a
the
head¬
have dis¬
appeared into thin air.
:
.
j
which has a
more
cumulative or stimulating
effect on rising prices than aa
actual
demonstration
that
the
There
market
is
nothing
go up.
Since June of
it has become increase
ingly evident that an Administra¬
tion which since 1933 used Watt
this
can
year
Street
feels
as
the
more
whipping boy, mm
friendly toward the
"money changers in the
It may
temple.^
well be that the Fair Deal
strategists have embraced an old
theory that a rising stock market
breeds confidence
business.
and
stimulate*
After all, let us not lose
sight of the 1950 elections^—whiclk
are
only 12 months away/*
34
COMMERCIAL
THE
(1578)
.
left
Tomorrow's
move
Markets
CHRONICLE
Thursday, October 20, 1949
I think, this one
spot to be in or to boast about. about 28-29.
It
FINANCIAL
&
one
knows—and, of course, leave them generally compulsory
others, will instead of voluntary. If this sort of thing continues to de¬
all buying levels or sell off, though I haven't de¬ velop, the Lord only knows how much the productive ele¬
up
in
alternatives:
two
me
with
common
buy them at the market. Both termined how low it should ments in the population may presently be paying out to
were decided against because go
an
before a danger point is individuals who choose to "retire" at 65
age which
bitter experience has taught reached. So my suggestion is appears to have become sacrosanct
although until recently
me that
chasing stocks is one to hold on until further ad¬ it was supposed that men and women of such an age were
- • •
of the surest ways to financial vices here..
still, or could be, quite productive. Such programs, however
—
Walter
Whyte
Says—
=
.
By WALTER WHYTE S
of
confirmation
Dow
market may
lead to in¬
now
But this didn't
I'm
that
answer
The former
what and when.
I'll try to answer now. The
latter I don't know the answer
termittent reaction.
.
❖
little understood or however much
misunderstood, have voteavoiding catching potentialities, or are thought to have. Who else
the mention of other stocks
among the political big-wigs cares much about anything else?
for the time being.
I think
Of course, the President has not been able to
get
most of their prices are now
very much of his Fair Deal through the 81st Congress,
too
high, and the levels I
despite the fact that that body wears his own political
think they can react to may
label, but it is evident enough that he has not given up..
be
*
*
*
bull
*
*
obliteration.
deliberately
that the rails have to at this
writing. The only
too low. So until I can ar¬
through their old highs clue I have is that a wide¬
the arguments about whether
spread bull signal, widely rec¬ rive at some satisfactory con¬
or not
this represents a full
ognized as such, may bring clusion, I refer you to the list
Now
gone
confirmation of the Dow The¬ about
hot and furious. There
many arguments pro and
ory are
as
are
as
con.
reversal that
For the sake of
backing out
be of
can
panicky in its implications
signal was
.v,
❖
The
:
:
''
*
*
only stock
i
:
lief ;
the tape
fell behind, piling up
a
large ' backlog and finally
finished the day with 1,790,000 shares, one of its most ac¬
[The
held by
Denver, Rio
now
article
time
tive
days since last March.
in
are
that the belief
now
a
we
bull market is almost
universal, any setbacks should
logically be described as mi¬
nor
.
reactions in
a
bull market.
of many
not
do
necessarily at
those
coincide ' with
Chronicle.
in
expressed
They
are
those of the author
controversy
the nation.
What is
$
reverberations
may well be
strike today
largesse to the farmers of
been of
We had almost said
dent Truman
so
—
a
should
#
v
many
the
concern
than
reader
about
arguments
not reached and
most
victory into
*
That left
a
*
me
.
a
*
Since then
a
actually voted for Presi¬
of them, in fact, that if they
the election, they at least turned
Bow
position; hardly
a
profitable
thinks) be fed in increasing amounts from the public
trough.
This lack of
occur,
notwithstanding
into
the
a
Orders Executed
Pacific
on
Coast Exchanges
any
statutes,
on
provisions which
or
it
being regimented.
remains that these
Securities
about regimentation may arise
too much of it will actually
concern
Members
New
New York Stock Exchange
York Curb Exchange
(Associate)
San Francisco
Stock Exchange
Chicago Board of Trade
14 Wall Street
programs
political one) to stand
on
people of the nation
may
simply
may
mean
be
that
Private
Wires
Principal
Offices
Monterey—Oakland—Sact amento
Freeno—Santa Roaa
And
surviving
the
worst
of
it
regardless of regimentation.
is
that
And
There
are
social
many
Social
has made its
well
hance the cost of old
age
through
the
or
issue
of
mergers
stock
un¬
constitute a trend,
may be expected to con¬
tinue in the years ahead. The tax
which
factor
will,
tinue to
tive.
without
serve
"
.
as
a
Certaintly
doubt, con¬
strong incen¬
\
-
there
•
little
be
can
doubt that the financial power to
attract other enterprises into the
fold
corporate
name
to
was
the
for
which
shall
I
in substantial part due
investment. It
apparent that the company
advertising
an
unannounced
shares of its
common
number
of
stock..
Better-advertised
Textron, In¬
acquired' lesser-ad¬
corporated,
vertised
Esmond
ment for
139,508 shares of its pre¬
Mills
in
pay¬
ferred stock.
trade-mark
These
doubtedly
Better-advertised
Monsanto
Chemical
Company acquired "lesser-advertised I.^F. 'Laucks, In¬
corporated, in payment for 26,174
shares of its
common stock/:
'
The tax advantage in expansion
through stock issuance is clear:
(1)
The
surviving: enterprise
not required to use net
is
"earnings in
cash after taxes—for which'earn¬
ings the enterprise
have to
may
produce nearly $2.00 before taxes
to
bring $1.00 down to net; (2) The
stockholders of the merged com¬
pany are not required to pay taxes
until they liquidate their stock Of
the:
then at the lower long-term capi¬
tal gains rate.
:
A
stock.
poration
;
no
lesser
-
adver¬
Products Com¬
pany in payment for 81,250
of its common stock.
Better-advertised
shares
-
acquired
Electromaster
common
stock.
"
Better
-
advertised
Minnesota
Mining & Manufacturing Com¬
pany, through a
subsidiary, ac¬
quired lesser-advertised Lee Lar¬
son Company in payment for 21,315 shares of its common stock.
Better-advertised Koppers
acquired
Coke
Freyn
lesser-advertised
Engineering Company in payment
to
v
Its
at
a
Is
Earnings
Rate'
Higher
Comparatively
a
known
Company
Have
Capitalized
Than
Un¬
Company
The
equity capital to be ob¬
by calling common stock,
of course, varies
greatly with the
tained
the
of
the
record
eral
likely
specific enterprise,
of
business
the
company, gen¬
and the
conditions,
of
response
the
investing
public to the issue.
In
Cor¬
Philco
lesser-adver¬
Company in
payment for 68.212 % shares of its
tised
en¬
Wall
corporation—and
Well-Avertised
nature
acquired
Marsh
surviving
Likely
Company
common
tised
One of them is the
pension schemes—how much
name
known.
Better-advertised Masonite Cor¬
Security, Too
other instances.
has
usually been, if not invariably, a
relatively heavy advertiser and
its
in
security bill which would enormously
company
("Toastmaster")
acquired lesser - advertised Man¬
ning,
Bowman
Company
and
Bersted Manufacturing Company
in payment for 153,000 shares of
legislative halls
where such programs are chosen or shaped, about the
only consideration of significant weight seems to be how
many farm votes this or that program will fetch.
so-called
The
poration
San Francisco—Santa Barbara
4
Securities Values
enterprises and have repeatedly
expanded their businesses through
the simple device of the issue of
their own stock alone.
tric
are
convince himself that the country as a whole benefits
from such procedures, it is indeed difficult to under¬
Teletype NY 1-928
to
Advertising Increases
Better-advertised McGraw Elec¬
But, of course, the fact
have no leg (other than
simply called upon to pay
the man who works a farm a special sort of
"tip" once
every so often — and it is definitely not a "tip" of ordi¬
nary dimentions.
How any one—that is, any one who
is not blinded by selfish interest in the matter — can
New York 5, N. Y.
OOrtlandt 7-4150
political situations had
which has entrentched its market¬
stand.
Schwabacher & Co.
It
steel
any
ing position through the long-term
heavy use of advertising will be
likely to continue to occupy the
commanding position in these ac¬
quisitions through stock issuance.
the farmers have counted the costs and have concluded
that they would rather have the cash and will "take their
The
be
(Continued from page 13)
seems
general belief that not
chances"
Pacific Coast
similar
would
politics is not inspiring.
the
The fact that almost
any
a
there
rout.
back these
from
strictly political circles.
Certainly, Mr. Murray could well
;n»>
written
bull without
these and
Battling for the Farmer
of the
stocks recommended for pur¬
chase weren't available.
if
different order.
a
"Modern"
of the schemes now being trotted
out, most particularly that which has now received the
bull or bear markets.
*
*
❖
•*
stamp' of the Administration, would not only be costly and
A
few weeks
ago
when unfortunate, but quite catastrophic—in the absence of a de¬
things looked bleak and there gree of control over the operations and even the lives of
individual farmers which would never have been tolerated
were more
pessimists around,
this column forecast a low of for a moment prior to the rise of the New Deal—seems to
trouble the agriculturist little if at all. It
certainly does not
approximately 175 and gave
a list of stocks to
buy at levels appear to disturb the politician. It may even please this
latter gentleman since it would mean a
good many more
approximating that figure. As
it developed that figure was "jobs" on the patronage list. g;';V>
more
than
his purpose, that he has had an able ally
Mr. Lewis is unpredictable, but it is cer¬
tainly a fact that he is more likely to win his current fight
by reason of the political atmosphere now existing.
battle has been on to keep or to win
agrarian elements. The arrangement which had
What the market
doesn't been voted by the Republican 80th Congress was in all conScience open-handed enough to suit almost
answer is the two
anyone — or at
important
all events
anyone except the farmer who has been so pam¬
questions: what and when,
And it is such questions that pered in the past decade or two that he must now (or so he
s{«
other
say, if it suited
in Washington.
many
did not turn the tide of
•jf.
in
doubted whether
expected
and
everything nice
The market is
strong; the public is bullish
and
the signs all point to
higher prices.
•
the Republican ticket
vote
This i makes
cozy.
largest
political situation, an outgrowth of the
New Deal, and
particularly an outgrowth of the extension
of these same tactics last
year with a political success which
was as unexpected as it was
great, is, of course, creating
billions to buy the farm vote, and had we done so we
should not have been wide of the mark. In the 1948
election many, many farmers who had been
to
the
Reverberations
as
is that many
in Congress.
way
in
number of votes.
,
only.]
billions will be
expended to supply subsidies to the politically powerful
agricultural elements in the population no matter who
his
1.
This miserable
over
worse
every reason to expect n£xt
fighting
a
bring
any
of the
jpresented
now
active and
year in Washington,
but the fight will, we fear, not be over what is
really best
for the country, but what will
this
billions of dollars is involved in
the current
has
So
views
There is
an
.
It is furthermore clear that Capitol Hill
of all this, and is playing its own cards
aware
to be
year
Whyte:
(Continued from first page)
cost
annum
is well
accordingly.
Thursday*
—Walter
.''''gg/
substantial number of Senators must stand
a
^for reelection.
As We See It
r:
active that
so
House and
a
This be¬
apparently widely
shared when last Thursday's
was
market became
recommended
contrary, it is clear that he is laying careful plans
push the fight next year when all members of the'
to
w.
to become involved
f blown bull market.
I
More next
argument I don't want this column is
in, I'll ad¬ Grande. It came into the list
mit that according to the Dow between 22 and 23 and is now
Theory, we are now in a full
an
stocks
few weeks ago.
the former bull
bullish.
/1
of
a
On the
times
and
the
that
best
;
general
increasing
sible
the
of
prosperity
profits
it
is
pos¬
common. Stocks
known
of
companies'■'With,
good prospects may be sold on a
basis which capitalizes their earn¬
ings
as
high
as
-Common
known
12 to 16-times.
stocks
companies
their
earnings
lower
rate.
*
of
.
would
capitalized
In; other
•-
less .wellhave
'
at
a
words, the
investing public would not
pay as
much per dollar of earnings of a
comnarativelv
as
they would
unknown
pay
for
a
company
dollar cif
.
Volume 170
Number 4848
earnings
of
company.
Depending
the
record
general
stock
well-advertised
a
of
the
largely
company
of
known
a
earnings
capitalized
The
rate
low
of
earnings is capitalized becomes
matter
of
vital
of
owners
to
concern
a
per
earnings
times
of
rate
If
year.
then
realize five
attractive
the
to
the
Standard
$1,000,000
or
total holdings.
In other words,
for
$1
&
at
to
e
Valuation
t
Paint &
tric
has
for
each
$1
of
Delivers
-
Ad¬
Excellent Example
chandise
Sherwin
Factor.
vertising to Women Constitutes
the
on
Multiplication
$76,000,000 to the stockholders of
increasing
Dollar
the Public the Economic Benefit
tion of
advertised
Wagner
to the Individual Enterprise and
margin of $8.26
individual
the
reason
attractiveness
of
the
Obviously,
benefit
of
multi¬
a
tising dollar.
most
A
significant example of
multiplication factor is the
in
emergence
women
in
ers
recent
of
years
the majority stockhold¬
as
numerous
enterprises.
leading American
Women
increas¬
are
been
increase
no
difference
The
depends
in
in
solely
capital
value
the rate at
earnings have been capi¬
which
talized.
•
on
,
.
,
Better-Advertised
Comp
i
a n
e s
Consistently Have Their Securi-
;
'
ties
More
Favorably
by 'I Investors
Comparable Lesser
\
Companies
1 Here
which
-
;f
the
primary
func¬
advertising is to sell
at
profit.
a
mer¬
it
But
period, stand the chance of being
On 10-year a^.erage,
better- completely nullified.
its earnings valued at ap¬
proximately $13.07, and lesseradvertised Philip Carey has had $1
of its earnings valued at approxi¬
$1
of
mately $5.84.
each
basis
,
-
.
,
favorable
This
for
.
of
margin of $7.23
of earnings, on the
1948 earnings for Johns
Women
$15,440,475,
indicated
to
be
is
of
the
greatest
food,
clothing and
household products.
Most adver¬
tising is
them.
directed
to
urally advertising to
effect
vestors
gard
their
on
by
has
women
interest
in¬
as
heightening their
in
respect
and
Nat¬
re¬
well-adver¬
in
worth
more
less stressed
or
I
can
in this dis¬
States
origin,
doubt that it will
maintain
to
us
I seriously
possible for
be
high average
more years.
The high
cussion- because of its importance
the -world picture and because
for
level of U. S. exports
it has felt
the impact of postwar
maladjustments more than any
exhausted
other
reserves
country of the world.
one
many
world
Devaluation
U.
Perhaps
Consequences to
S.
now
has
countries of the
maintained
been
only
Economy
should
we
of many
and
already has
substantially
de¬
gold
and
dollar
or
the
creased
en¬
because of dollar loans or
grants by the United States. When
we reach the bottom of our finan¬
you
,
comparisons
company
are
on
the use of the 10-year
period of 1939 to 1948,' inclusive
based
The
average price per share for
period was determined by
averaging the high and low of the
price range each year, adding the
average prices, and then dividing
by 10.
The total earnings per
share for the period were added
the
advertised Corn Products has had
$1
its earnings
of
valued
at
ap¬
period.
..
.
each
basis
$1
earnings, on the
earnings for Corn
of
1948
of
Products
of
$12,870,000,
is
thus
advertised International Harvester
has had $1
of its earnings valued
at
Better
Advertised
-
Cellucotton
Lesser
-Pak
International
Company
Advertised
-
San
Manufacturing
'"1 Superior
Versus
Market
-
Nap
-
Company,
Valuation
$30,000,000
On
10-year average, betterInternational
advertised
Cellu¬
cotton Company has
had $1 of its
earnings valued at approximately
$8.79, and lesser-advertised SanNap-Pak Manufacturing Company
has had $1 of its earnings valued
at approximatelv $4.53.
'
This favorable margin
for
each
basis
$1
1948
of
of $4.26
of earnings, on the
earnings for Inter¬
national Cellucotton Company
of
$7,101,000, is thus indicated to be
worth
the
in
excess
of $30,000,000
stockholders
International
tised
to
of better-adver¬
Cellucotton
approximately $13.29, and les¬
Oliver Corp.
has
had $1 of its earnings-valued at
approximately $6.59.
This favorable margin of $6.70
for each $1 of earnings,'- on the
basis of 1948 earnings for-Inter¬
national Harvester of $55,679,000
ser-advertised
thus
is
excess
holders
*
•
r
Versus
Brands
tised
-
Market
Standard
Lesser-Adver¬
Camp.
Su¬
Valuation
$47,-
Sf<^ely-V««i
perior
.000,000
'
On
10-year average, betterStandard Brands has
advertised
had
$1
better
of
The examples
on:
worth
in
-
advertised
could go on and
^ a-vaa.
of it-: earnings valued at
approximate!" *10 97, and lesser-
imme¬
the
devaluation with
lesseradvertised Steel Products Corp.
Better
Stove
-
Co.
Co.
vs.
advertised
vs.
-
advertised
Honeywell
vs.
American
Minneapolis-
lesser-advertised
lesser-advertised
Busch
vs.
lesser- advertised
advertised
-
lesser-advertised
advertised
countries
and
in
Latin
the
American area, will decline in the
immediate future, and some ex¬
porters will feel the impact more
than
Countries
others.
sterling
in
the
will make more de¬
termined efforts to buy within the
Empire, thus conserving dollar
area
exchange.
In the Latin American
off
to
point
a
somewhat
than our prewar volume
higher prices and our in¬
higher
due to
creasing volume of imports, but a
great deal depends on the state of
affairs.
own
our
in the
Manufacturers
United States who have
vital interest in export operations
will
well
be
advised
watch
to
carefully developments within our
own country
and their effect on
our economy,
for it is axiomatic
that
times
in
perity
while the
internal
of
reverse
pros¬
substantially
import
we
•
is true during a
depression period.
ultimate
The
the
is
trade
free
countries,
between
goods
movement
of
which
entails principally the elimination
of
exchange
import
and
restric¬
agreements, and
of world
bilateral
tions,
rary
advantage 'in selling raw
materials to devaluing countries
currencies.
The
over-valued
currencies
and
in that direction.
buying
certain
consumer
products at lower prices.
I
In
par¬
emphasize
convertibility
free
the
the
devaluation
is
of
Wrigley Co. vs. lesser-advertised
pub¬
throughout
firms
share.
per
This
fered
the
of
block
large
publicly
2,336,321
American stock owned
america
of the
of¬
stock
represents part of
shares- of Bank of
Corp.
by Trans-
completion
Upon
sale, Transamerica and its
owned
subsidiaries will
International
substantial
the dollar-deficit countries, how¬
additional
orders
are
received, particularly by England,
delivery
already
dates,
lines
long
may
have to be extended further.
Be¬
cause
devaluation
of
cost
United
our
and
raised the
goods imported from the
already
States,, requests
been
received
friends for
be
may
has
a
some
of
price-cut, and it
necessary
to
by
sharpen
for some
their
report
the recent an¬
at
meeting of the Fund and the
"Action
Bank:
by
soundly conceived and vig¬
on orously executed, will not suffice
merchandise,
of
Black's
nual
ex¬
pencils
reduce costs to hold business
to solve the dollar
the
United
problem unless
takes
States
attitude
recent
are
shift
remarkable
rather
of
years,
still
United
the
comple¬
For despite a
mentary measures.
the
in
States
in
of its policies
some
basically
inconsistent
with its position as the great cred¬
itor nation of the world.
cations of these
Modifi¬
policies, like those
riod.
injure particular groups or inter¬
.
Exports out of the United States
the
period
seven-year
through-
point
1948
$11.5
was
averaged
ests
are
in Europe,
necessary
within
this
country,
may
but
in
1942
my
judgment such modifications
yearly
are
essential
billion,
and
the high
$14,475 billion in 1947.
Notwithstanding
the
liking
of
stock
common
are
stock.
Proceeds
from
will
stock
america
loans
be
the'
of
by
Trans¬
to liquidate bank
provide additional
Corp.
and
sale
the
used
to
working capital. Bank of America
will
receive
not
part of the
any
proceeds derived from the sale of
this stock.
Bank
of America, in terms of
deposits and resources, is the
largest bank in the United States.
According to published statements
total
of
condition of banks
30,
as
deposits
total
1949,
of June
and
of Bank of America
sources
that date
re¬
as
of
$5,407,671,570 and
$5,845,128,669 respectively.
were
The Bank
organized under
on Aug. 10,
was
the laws of California
1904, and began business on Oct.
17, 1904, as a state bank
under
the name "Bank of Italy." It was
organized under the leadership of
P.
Giannini,
late
founder-
A.
chairman.
surplus
Italy
Original capital and
$150,000. Bank of
was
into
converted
was
tional
bank
which
time
March
on
the
1,
a
na¬
1927, at
"Bank
name
of
Italy, National Trust and Savings
Association"
was
adopted.
The
present name was adopted Nov. 1,
1930, when Bank of Italy, National
Trust and Savings Association and
of America California were
consolidated.
is
bank
The
branch
States.
As
the
banking
of
in
June
leader
in
the United
30, 1949, it
had banking offices established at
536 locations, represented by 520
branches
at
and
"facilities"
16
(all
miltary centers), operating in
than
communities
300
throughout the State of California.
more
branches than
bank in the country
and is the only statewide bank in
other
any
California.
paid its first dividend
The bank
on
the
Since
common
time
that
in
1905.
dividends
have
stock
ever
that
'
shares
widely distributed, being held by
approximately 150,000 stockhold¬
ers.
The bank has no preferred
The bank has
conclusion, may I again take
liberty of quoting from Mr.
the
words
"temporary advantage," as it is
likely that prices in devaluing
countries will edge
up,
and if
ticularly
over
William
world's largest
ing offered to the public at $45.25
more
step
a
-
Fal-
the
banking
Bank
sought
by those engaged in international
objective
area, those countries which have
not devalued may find a tempo¬
for
Anheuser
st?ff Brewing
Better
tries
level
during this present transition pe¬
Securities Acceptance Corp.
-
belief is that export volume,
particularly to sterling area coun¬
porters
Better-advertised Household Fi¬
Better
However,
my
Stromberg
Carlson Radio.
vs.
requests were
cases
received later to ship.
have
Johnson Service Co.
nance
in these
even
lesser-advertised
Tappen Stove Co.
Better
sterling area were asked to post¬
pone shipments temporarily, but
some
Better-advertised Iron Fireman
Manufacturing
-
.
Advertised
-
be
to
International Harvester Co. *'
vs.
Better
indicated
of $373,000,000 to the stock¬
Better-advertised Zenith Radio
Company.
of
-
by 10 to determine indicated to be worth in excess
average earnings per share.
The of $148,000,000 to the stockholders
better-advertised Corn Prod¬
average of the price range for the of
period was then divided by the ucts.
average
earnings per share for
Better - Advertised Internationa
the period to determine the aver¬
Harvester Versus Lesser-Adver¬
age
price-times-earnings
ratio.
tised
Oliver
Corp.
Superior
The result is the average sum in
Market Valuation $373,000,000
dollars which earnings of $1 for
On 10-year average, betterthe given company commanded in
the securities market during the
discussed
effects
$16.25, and lesser- a number of our export clients
advertised A. E. Staley has had $1 and
we
cannot
find
any
great
of its earnings valued at approxi¬
amount
of f order
cancellations,
mately $4.75.
«*,' '' -' ■
although some have occurred, In
This favorable margin of $11.50 some
instances, shippers to the
divided
and
have
We
diate
proximately
for
America,
owned bank. Blyth & Co.,
Inc. is manager of the syndicate,
the
.
"All
of
licly
731
prove
show
to
propose
Bank
ing shares. The remaining 7,901,-
of $111,000,000 to the stockholders deavor to prognosticate the con¬ cial
barrel, and the* bottom is
for himself. of better-advertised Johns Man¬ sequences of devaluation on the already in sight, our export vol¬
the fig¬ ville.
ume
unquestionably will more or
economy of the United States, and
ures of six typical cases to indi¬
particularly the effect of devalu¬ less balance out with the amoun:;
cate the superior market Valua¬ Better-Advertised Corn Products ation
of
on
our export trade.
dollars, we
create
by
our
How
Versus Lesser-Advertised A. E.
tion
of
the
better - advertised
will it affect our export volume imports plus dollars created by
Staley.
Superior Market Valu
company
as
against - a
lesserfor the nearby period—say six to travelers,
service payments, in¬
ation $145,000,000
advertised company in the same
12 months—and after that period, vestments, etc.
I believe that our
field, with which it is compared
On 10-year average, better- what -may we expect?
export
volume
eventually wil
statistician
the
1,136,767 shares of Bank of
America stock, or approximately
11.10% of the 10,238,053 outstand¬
desire abroad for manufactures of
in
thus
excess
ciation,
wholly
tised companies.
company
any
of
National Trust and Savings Asso¬
the United States. The stock is be¬
also
are
purchasers
purchasers
as
right.
own
United
:
England's problem has been
$1
of
stock
which is comprised of 240 invest¬
markets
(Continued from page 8)
advertised Johns. Manville has had
Manville
dealing in facts
treasurer or
are
we
Regarded
Generally
Advertised
Than
-
secondary
offering of a bank stock, is offer¬
ing to the public today (October
20) 1,199,554 shares of common
a
ment
its
Superior Market Valu¬
ation $111,000,000
earnings.
syndicates
formed to make
ingly becoming important in the
Devaluation and U. S. Expoits
Versus Lesser-Advertised Philip
Carey.
nationwide
largest
banking
own
Better-Advertised Johns Manville
additional
an
the
of
ever
economic
liams.
capitalized rate of 5 to 10
earnings the owners receive
$500,000. There has
times
One
the
Wil¬
issue
a
Blyfh Heads Syndicate
investment
.
the
from
Offered at $45V4;
enterprise and the public receive
in their
Advertising
of
Bank of America Shs.
securities
of 1948 earnings for Sher¬
win-Williams of $9,283,800, is thus
indicated to be worth in excess of
-
V"-r ;
A;.':1-
-lesser-advertised
vs.
The
basis
their
Chem¬
Dow
lectric.
Varnish
earnings,
this
this
Better-advertised General Elec¬
earnings valued
favorable
vs.
Dr. Pepper Bot¬
Co. '
son
force.
plication factor from every adver¬
ical vs. lesser-advertised Richard¬
approximately $4.54.
This
Morrell
.
Better-advertised
earnings valued at
advertised Cook
Co.
&
tling. ;.
^Varnish.
Sherwin-Williams
of its
Swift
advertised
-
esser-advertised
.
has had $1 of its
better
by
k
r
-
approximately $12.80, and lesser-
times
ten
Sherwin
Lesser-Adver¬
Paint
Ma
advertised
had
owners
lesser
vs.
5;
10-year average, better-
On
times
receive
then
Cook
76,000,000
this
underwriters
Versus
Superior
same
$100,000
Better-advertised
General
.,.v;j.:\
Better-advertised Coca-Cola
Advertised
-
tised
the
of
advertised
-
iPacking Co.
Williams
earnings capital¬
ized at a 10 times earnings rate in
the
same
1 market,
the owners
would
excess of
advertised
-
Better
$100,000
$500,000 for their total equity.
; If the owners of this company
could make the issue sufficiently
the
For
Better
Brands.
or
have
Car Co.
better
a
the
capitalized at five
were
earnings,
would
While performing its in¬
dispensable primary function, its
power flows over adjacent areas.
us take the
with earn¬
current
company
Transportation Co. vs.
lesser-advertised North American
company
ings of $100,000
in
an
American
$47,000,000 to the stockholders of
enterprise when
selling part or all of their equity
or when capital is
being raised.
instance of
almost equally basic
establishing value for
enterprise as an institution.
Advertising is an economic
an
function
vester Co.
an
■J For example, let
Co.
&
indicated to be worth in
as
dollar
a
Deere
lesser-advertised Detroit Har¬
margin of J&6.53
'or each $1 of earnings, on the
Dasis of 1948 earnings for Stand¬
ard Brands of $7,277,725, is thus
lower.
even
which
at
CHRONICLE
performs
Better-advertised
favorable
This
its
;as
three to five time—or
.
vs.
un¬
have
may
FINANCIAL
approximately $4.43.
the
company
&
American Chicle Co.
and
conditions,
comparatively
COMMERCIAL
advertised Stokely-Van Camp has
had $1 of its earnings valued at
on
business
THE
•
both
to
restore
the
health of the world economy and
to
maintain America's
and perity."
own
pros-
paid in every year with the
single exception of 1932. The cur¬
rent $2.50 dividend rate was es¬
tablished in June, 1948.
been
Earnings of the bank per com¬
share for the 1939-1948 pe¬
mon
riod, after adjustments for stock
dividends, have ranged from $1.55
per
share
share
in
in
1948.
to $4.59 per
the six months
1939
In
period ending June 30, 1949, earn¬
ings
amounted
to
$3.00
per
share.
Capitalization of the bank, ac¬
to
the
last
published
statement of condition on June
cording
30, 1949, was as follows: Capital
(10,238,052 common shares) $127,975,650; surplus, $111,650,000; un¬
divided
profits, $57,653,373 and
reserves
$4,778,310, or a total of
$302,057,333.
COMMERCIAL
THE
(1580)
36
Thursday, October 20, 1949
CHRONICLE
FINANCIAL
&
Indications of Current Business Activity
statistical tabulations cover production and other figures for the latest week or month
are either for the week or month ended on that date, or, in cases of quotations, are
The following
available (dates
shown in first column
Latest
Week
.Oct. 23
9.3
Oct. 23
(percent of capacity).
steel operations
Indicated
Week
STEEL INSTITUTE:
AND
IRON
AMERICAN
'
86.2
172,000
1,589,100
IRON
AMERICAN
INSTITUTE:
PETROLEUM
115,335,000
4,890,800
5,493,000
18,107,000
18,381,000
Oct.
8
1,812,000
6,962,000
6,455,000
7,514,000
7,808,000
8
2,180,000
7,131,000
■Oct.
8
7,363,000
5,248,000
5,598,000
18,270,000 i
(bbls.)
at—
—
_
Total U. S. construction-.
construction
Private
8
102,707,000
103,895,000
104,375,000
27,548,000
27,196,000
26,608,000
26,946,000
8
85,800,000
83,495,000
78,231,000
68,222,000
67,955,000
69,161,000
58,997,000
Federal
—
$574,223
Oct.
8
$541,204
$624,197
$658,128
$519,010
8
.Oct.
'
INDEX
FAMILIES
,
891,651
$522,766
items
725,330
foods
All
FOR
IN
of
construction
S.
U.
construction
Private
LARGE
CITIES
and
bakery
_
State
Federal
•—
-
anthracite
coke
Beehive
$156,021,000
$170,174,000
13
13
13
13
78,779,000
66,175,000
87,937,000
77,370,000
73,621,000
89,846,000
82,237,000
Fats
59,959,000
53,537,000
84,226,000
58,628,000
17,411,000
15,084,000
5,620,000
23,609,000
(tons)
8
2,210,000
1,825,000
5,980,000
68,000
788,000
;;,
8
"3,700
800
-
•
*
-r
i
Oct.
'
"J.
\
•
:
v.;
1
*302
297
8
•
336
273
U.
BOARD
;
Corn,
5,449,897
5,480,735
Oct. 15
(in 000 kwh. )„
5,482,030
5,579,105
All
(COMMERCIAL
STREET, INC.
steel
Finished
iron
Pig
v'-
«1
''
1
-
11•
lb.)
(per
•'*'
\
*
•
.,s«*
V'51
185
gross ton)—_———_—
(per gross ton)—
—
196.3
152.4
3,538,257
3,650,548
1,129,081
1,131,830
894,874
1,288,408
234,207
236,956
40,472
193,735
42,278
194,678
253,566
1,314,258
1,308,608
1,491,752
233,395
232,787
317,037
18,831
18,831
4,810
26,383
REPORTING
OF
AGRI¬
(in thousands):
'—
--——
;
——
3.705c
3.705c
3.720c
Barley (bushels)
Rye (bushels)
$45.83
$45.88
$45.88
$46.91
Buckwheat
$26.58
$26.92
$25.75
$43.16
._
(bushels)
4,862
————
(bushels)
41,569
•
■; Rice i(bushels)
Electrolytic
tin
Straits
(St.
York)
(New
Lead
MOODY'S
.———
._
at——,—-.
'■
—Oct.
Oct.
—.Oct.
Oct.
1
—
—.
—__
Louis)
St.
at
at__
at
Louis)
(East
—
York)
(New
Dead
Zinc
at
—
i
4
17.325c
—Oct. 11
Oct. 11
at—.
reiinery
reiinery
Export
QUOTATIONS):
M. J.
&
copper—
Domestic
1
(E.
PRICES
23.200c
17.325c
17.550c
17.550c
23.425c
96.000c
11
11
11
96.000c
103.000c
103.000c
13.750c
14.250c
15.125c
14.050c
14.925c
19.300c
.
9.250c
9.250c
15.000c
10.000c
PRICES DAILY AVERAGES:
BOND
103.92
163.84
100.69
Sweet
115.04
115.04
111.07
Tobacco
-Oct. 18
120.84
120.84
120.84
116.22
Sugar eane for sugar and seed
__Oct. 18
119.00
119.00
119.20
114.27
Sugar beets
114.27
114.27
114.27
110.34
Broom
106.56 I
104.31
106.74
Peaches
119.41
119.61
115.04
Pears
2.22
2.90
2.61
2.61
2.70
2.69
2.94
3.36
3.49
3.20
3.18
3.35
2.83
2.83
2.84
3.06
2.68
2.68
2.67
2.90
335.7
337.6
350.7
406.0
2.94
3.36
_Oct. 18
Oct. 18
Oct. 18
/r
3.20.
.Oct. 18
INDEX
Month of
.Oct.
8
282,832
214,138
201,544
206,834
214,291
172,955
157,135
.Oct.
8
-Oct.
8
92
94
72
8
440,721
360,897
380,248
395,953
DRUG
AVERAGE—100
REPORTER
PRICE
;
for seasonal variation—
239
*232
306
299
*237
316
TRANSACTIONS
DEALERS
LOT
FOR
THE
Oct. 14
ODD-LOT
SPECIALISTS
AND
EXCHANGE—SECURITIES
ACCOUNT
ON
EXCHANGE
THE
N.
OF
Y.
;:v. July
of
Number
of
126.7
127.4
shares
Dollar
Odd-lot
value
of
of
dealers
Customers'
short
sales
Customers'
•
other
of
18,580
18,841
13,231
19,791
1
537,896
555,001
368,146
506,045
1
$20,753,844
$21,200,032
$14,620,408
$21,923,552
Oct.
1
24,496
24,446
16,132
export
Oct.
1
1
24,377
24,205
15,975
18,584
Oct.
1
637,455
668,105
430,572
525,682
Oct.
1
4,640
9,024
5,860
7,552
sales—.
short
Customers'
other
Oct.
1
632,815
659,081
424,712
518,130
Oct!
1
$20,224,962
$21,092,564
$13,494,269
$18,454,276
sales
sales
value
241
119
157
of
Number
shares—Total
Short
sales
Oct.
sales
PRICES
WHOLESALE
1
Oct.
;
__
Round-lot purchases by dealers—
Number of shares
1
Oct!
I
sales
Other
1
Oct.
1
274,410
331,540
183,960
161,300
274,410
33L540
1831960
IVWOO
SERIES—U.
S.
DEPT.
OF
202,480
r
188,010
132,670
218,900
y
commodities
/_
products
;
Foods
All
Textile
Fuel
other
products
and
Metals
;
lighting
and
metal
than
farm
___:
materials
products
Building materials
All
;
other
and
Qct. 11
III—Z—-Oct!
1—III—Oct!
_
—
commodities
foods
_
Oct
I
IZIZ Oct
IIIIII
Illoct
I'oct
IIHIIIIIIIIIZII IOct!
—H Oct!
„
ounce)
52.298d
43,727d
45.932cf
$3.43929
$4.02522
$4.02756
11
New
York,
Gold
(per
0ct
Meats
152.1
*152.3
165.0
161.3
160.1
154.6
—
Hides
and
skins.
—
Revised
figure,
{tears 1941 to date.
1916 to 1948
lilncludes 454,000 barrels of
foreign crude
Srn ot'tf'oldV week
S.
165.6
10.000c
15.000c
103.000c
103.000c
$35,000
______
(per pound 1,
$35,000
~
J:
$35,000
$72,800
(E. & M. J.)
$74,556
$75,040
41.780c
Quicksilver (per flask of 76 pounds)—;
UAntimony
102.400c
102.000c
101.087c
(§§),
price)
41.730c
38.170c
35,000c
Antimony
(per pound),
38,500c
38,500c
Antimony
(per
39.000c
39.000c
35.500c-
Nominal
Nominal
Nominal
$69,000
$69,000
$93,000
bulk, Laredo—
pound), in cases, Laredo—
Antimony (per pound), Chinese Spot—;
Platinum, refined (per ounce)
tCadmium (per pound)
ICadmium
(per
pound)
SCadmium (per pound)
Cobalt,
97%
Aluminum, 99% plus, ingot (per pound)
—
RR.
ingot
pound)
(per
:
—
CLASS
$1,900
$2,075
$1,956
$2,150
$2,000;
$1,800
Not avail.
Not avail,
17.000c
17,000c
16.000c
$2,000
20.500c
20.500c
40.000c
40.000c
$742,876,747
587,115,711
$700,648,360
$868,089,236
79.03
81.33
73.42
$75,603,805
$66,172,895
$99,827,934
65,727,317
39,000,000
50,337,002
115,709,714
27,200,000
85,000,000
18,856,000
18,961,000
20,705,000
8,355,000
91%
20.500c
^
40.000c
—
—
EARNINGS
$2,000
$2,075
$2,150
—
>
(ASSOC.
of August:
I ROADS
184.0
OF
11
160.0
*159.7
165.3
176.7
Total
operating
revenues
145.1
*145.0
145.4
153.4
Total
operating
expenses_____
11
138.5
138.4
139.6
148.4
Operating
11
131.1
*130.7
130.0
137.3
Taxes
11
169.2
*169.2
169.5
172.1
Net
railway operating
11
189.4
189.5
189.1
203.8
Net
income
11
116.4
116.7
118.5
135.8
,
AMERICAN
156.4
159.0
157.6
172.1
195.5
202.8
214.2
244.8
Oct. 11
217.5
218.4
237.7
252.5
Oct. 11
207.8
199.9
198.9
203.0
jgfct mST*
revised for the
'"C"1SlVe a"d
2—
cent
after
income
charges
CEMENT
before
charges
(est.)
569,818,427
August:
18,715.000
(bbls.)
23.633.000
19,320,000
Stocks
14,395,000
*19,313,000
from mills (bbls.)
(at end of month) (bbls.)
Capacity used
the
87%
figure,
tBased
producers' and platers'
or
more
Colbourne,
637,361,854
(BUREAU OF MINES)—
Shipments
tons
^
:
~i
♦Revised
}The weighted finished steel composite was
RRS.)—Month
ratio—per
Production
u
iuns
U.
11
Oct. 11
—
10.005c
102.087c
rnin.
99%
ounce
Month of
_
per
Straits
York
8pecial indexes—
Livestock
(pence
(per pound)
New
PORTLAND
Grains
75.345c
St. Louis__/_i_J____.
Sterling ExchangeNew York (per ounce)—
London
""Nickel
1926—100:
Farm
19.300c
71.891c
pound)—
Magnesium,
LABOR—
"
All
19.500c
14.791c
j
refinery
—
::'0 i
NEW
23.425c
15.032c
September:
refinery
Sterling
178
sales by dealers—
Round-lot
23.200c
17.551c
73.214c
31__
and
Silver,
Tin
Oct.
total
17.325c
14.854c
July
Exchange (Check).._
Zinc (per pound)—East St. Louis
18,762
sales).
sales
;—.——
Customers'
Dollar
1
;
shares—Customers'
17.325c
at
Common,
Oct.
sales—.
Number
"
total
41,793,951
17.550c
customers
Common, New York-
Oct.
(customers'
19,367,345
$348,380,100
39,726,494
(E. & M. J. QUOTATIONS)—
domestic
Silver,
;
by
ultimate
19,904,101
$371,446,400
of
„———
Sliver
Oct.
orders—Customers'
19,960.312
$375,418,900
41,954,412
omitted)
customers—month
Electrolytic,
STOCK
_
j
purchases
Number
consumers—
15.050c
ultimate
from
Electrolytic,
ODD-
—
_
ultimate
to
(OOG's
Average for month of
Copper (per pound)—-
144.0
129.6
COMMISSION:
orders
of
INSTITUTE:
sales
July
METAL PRICES
•Odd-lot sales by dealers (customers' purchases)—
Number
adjustment
ELECTRIC
Lead (per
JJTOCK
(FEDF^AL RE¬
Average=l«)(»)
seasonal
Number
192,340
INDEX —1926-36
——
—
SALES
September;-
Kilowatt-hour
'
AND
968
96
_Oct.
PAINT
177,667
803
Without
Revenue
of
Percentage
24?
139,238
3,044:,
214/
Adjusted
ASSOCIATION:
(tons)—:
received
216
,
SERVE SYSTEM)—(1935-39
month
PAPERBOARD
230
136,872
————
STORE
DEPARTMENT
EDISON
COMMODITY
(pounds)
Pecans
3.15
3.36
3,051
216
88,407
2.94
2.94
26,334
230
(tons)
65,352
34,208
3,050
—
(12 States)
75,063
35,505
—ul—_
148,865
127,823
75,729
(3 States) (ions)—
Cranberries (5 States) (bbls.).____
2.84
2.70
49,621
Apricots
3.11
2.61
6,847
9,422
30
49,816
V&'J-
129,423
:
(bushels)
(bushels)
Grapes (tons)
2.45
2.90
;
—
(pounds)
Apples/commercial cropi (bushels)-—
112.00
.Oct. 18
OIL,
43
106.56
2.21
-Oct. 18
Orders
9,758
43
116.22
2.90
.Oct. 18
NATIONAL
9,865
(tons)
49,806
1,981,736.
8,032
109.79
2.22
.Oct. 18
Aaa
MOODY'S
51,924
2,018,597
109.42
.Oct. 18
363,061
7,808
(tons)
116.41
.Oct. 18
220,201
2,338,476
445,850
(ton3)
corn
3,584
202,386
1,776,910
362,534
51,904
(pounds)
106.56
YIELD DAILY AVERAGES:
BOND
7,627
20,833
3,256
1,994,183
(bushels)
potatoes
Cherries
MOODY'S
7,927
19,756
204,207
119.41
Industrials
12,848
34,083
29,303
25,224
3,418
116.41
•
12,682
36,906
:i
8,039
Hops
-
99,846
19,650
109.42
"i
-Oct. 18
G
Utili
Public
97,953
12,339
"1
103.92
Railroad
81,170
131,644
1,792,100
115.04
Aaa
52,533
41,924
88,165
25,678
lespedeza (tons)
1
(100 lb. bags).,
Peas, dry field (100 lb. bags)
Soybeans for beans (bushels)
•
6,324-
113,780
36,940
Beans, dry edible
Oct. 18
.
44,742.
98,077
Peanuts, (pounds)
Potatoes (bushels)
'■*
298,308
-
90,139
Hay,
19.500c
13.550c
11
*'•••
17.325c
17.550c
990,098
V,
118,754
—
Sorghums for grain (bushels)—
Hay, ail (tons)——•_————_—
Hay, wild (tons)Hay, alfalfa (tons)
-X.
Hay, clover and timothy (tons)
.
METAL
137.3
186.8
(bushels)
spring
13.705c
Flaxseed
94.5
190.1
139.9
894,874
1
(bushels)
Oats
96.9 *
183.1
3,525.741
CROP
—
DEPARTMENT
S.
(bushels)—
Other
136.8
154.3
(bushels)
Durum
94
".
Oct. 11
Oct. 11
Oct. 11
—
(per
Scrap steel
182
172
——~—Oct. 13
Ci4
.,! a'' *
i
BRAD-
PRICES:
COMPOSITE
AGE
IRON
\i»
&
—
——
_
/.
INDUSTRIAL)—-DUN
AND
FAILURES
117.7
154.8
(bushels)
spring
199.7
120.7
135.6
184.8
-
-----
Wheat/ all (bushels)
Winter
172.8
188.5
97.1
(bushels)—
all
197.8
176.2
183.1
—
PRODUCTION
CROP
-i
141.0
141.1
__
Housefurniskings
EDISON ELECTRIC INSTITUTE:
output
-
—
fuels
Other
Ice
CULTURE— As of Sept.
Electric
__
199.S
205.3
135.8
—
__
Miscellaneous
SYS¬
RESERVE
STORE SALES INDEX—FEDERAL
TEM—1935-31) AVERAGE—100
DEPARTMENT
220.2
204.1
210.2
187.4
.
208.2
144.0
__-
electricity artl refrigerators
Gas and electricity.
153,400
11,300
170.8
208.8
—
.
Sugar and sweets
1,190,000
211.0
176.5
vegetables..
and oils
Clothing
12,336,000
1,099,000
Oct.
—-*i
...
and
Fruits
Rent
Oct. 8
267.0
182.2
201.9
Beverages
(tons).
236.0
120.8
$152,400,000
66,327,000
.—Oct.
Bituminous
Pennsylvania
216.6
169.5
222.2
$143,697,000
Fuel,
OUTPUT (U. S. BUREAU OF MINES):
coal and lignite (tens)
COAL
,,
Oct.
Oct.
Oct.
-Oct.
construction
and municipal
Public
—
products
174.5
201.7
239.5
--
products.
168.5
169.4
184.9
—
168.3
202.6
--
Eggs
.
_
77,803,000
15:
—
—
Cereals
Oct. 13
—
—
282,983,000
74,163,000
304,031,000
MODERATE
Aug.
—
-
-
Dairy
>^
RECORD:
Total
335,813,000
90,541,000
—
'
PRICE
INCOME
ENGINEERING NEWS"
—
360,786,000
316,290,000
—
Meats
CONSTRUCTION
ENGINEERING
CIVIL
$665,417,000
409,976,000
cf
—
Municipal
1985-1939=100—As
Revenue
$781,416,000
371,440,000
EN¬
—
CONSUMER
All
ASSOCIATION OF AMERICAN
Revenue
5,329,060
73,713,000
8
and
State
91,411,000
8
—
Month
—
construction
Public
.Oct.
RAILROADS:
freight loaded (number of cars)
„—
freight received from connections (number of cars)—
7,424,844
4,534,855
alloy
August
September:
7,131,000
8,770,000
Oct.
at.
oil
fuel
Residual
*6,714,745
406,831,000
NEWS-RECORD
GINEERING
2,415,000
Oct.
(bbls.)
6,572,284
$310,303,000
including
4,918,314
403,473.000
of steel products,
stainless (net tons)—Month of
CIVIL ENGINEERING CONSTRUCTION
17.045,000
.Oct.
Kerosene
Ago
5,534,800
1,992,000
•Oct.
output (bbls.).
fuel oil
Residual
4.956,150
8
8
Oct.
Year
Month
INSTITUTE:
ingots and steel for castings produced
(net tons)—Month of September———
1,786,300
4,850,550
8
Oct.
.Oct.
(bbls.).
stills—daily average
Gasoline output (bblsj
Kerosene output (bbls.)
to
runs
STEEL
AND
Steel
and
Crude
Previous
Month
Latest
99.1
Shipments
AMERICAN
of that date):
Ago
Ago
//-Z///;' 9-3
172,000
Equivalent to—
•
as
Year
Month
Previous
but less
N. S.,
on
than carload
U. S.
87%
tBased on the average of
quotations.
{[Domestic, five
lot packed in cases, f.o.b. New York.
**F.O.B. Port
the'producers'
quotations.
duty included.
quotation1.
§Based on
platers'
§JTin contained.
■
Volume 170
Number 4848
THE
COMMERCIAL
LAICHRONICLE
CNANIF.cS
Government Housing—Threat
To Private
(Continued from
terials
have
prices.
On
the
other
hand, constant
being put on Congress
provide
sponsored
more
government-
housing credit
at lower
pilvately
cooperative housing projects on
government-sponsored or direct
loans, at 3% interest for a term
of 60
veterans
who
cannot
terms
country's housing prob¬
longer
chiefly
term
credit
serves
to increase the demand for
housing. It
tends
to
keep
prices
higher than they otherwise would
be.
It
borrowers
encourages
to
make long term commitments
be¬
yond their
of GI
Real Estate Credit
Government is exerting an in¬
creasingly powerful influence on
the market for
the
real
rates
estate
and
credit.
terms
on
illustrate
constantly
dramatically
effort
has
become
housing merely by liberal¬
able
easier
on
more
bid
into
the
against each
market.
other
for
They
the
long
the
borrowers
are
credit.
gage
lies
the
In
government
rect
at
background
threat
itself
mortgage
terms
the
constant
the
for
rates
if
longer
private
lenders do not make them.
In
this
control
a
growing
over
centralized
real estate credit lies
challenge to mortgage lenders.
In the past, the flow of
mortgage
money into housing has been de¬
termined by sound economic
prin¬
ciples and practices. These are the
availability
of
and
the
for
mortgage
mortgage
credit;
and
appraisal of the property; careful
judgment
the
the
to
as
capacity
of
borrower
to repay and con¬
for his future financial
safety,
and the needs and welfare of
his
cern
family and community.
These
lending standards have always
helped develop personal and fam¬
ily initiative and responsibility.
Today, however, the inroads
of
government in the field of real
estate credit threaten these estab¬
lished
principles
of
mortgage
lending. The credit and borrowing
capacity of the government is in
effect
being
credit
and
substituted for the
financial capacity of
individual citizens.
The
insidious
because
thing about this
trend is that it is hard to
grasp in
its
true
perspective.
At
first
glance, it
The
the
would have authorized direct
gov¬
ernment
mortgage loans. Presi¬
dent Woollen expressed the
opin¬
ion
of
bankers
throughout
rect
upon
a
a
individual
In
units
of
war
concept of a system of free
enterprise. It leads step by step
to
a
complete
socialization
of
credit."
He further declared:
"When
to
government
undertakes
directly into the lending
field, it means the setting up of
large bureaucracy; entanglement
in red tape; and, worst of
all, the
ever-present danger of political
considerations
entering
into
the
granting of loans."
Fortunately, the provisions for
direct
60-year, 3%
cooperative
credit
were
House
version
the
ever,
eliminated
this
to
to
of
for
housing
from
bill.
of
the
How¬
further
mortgage
be
a
source
of
deep
private mortgage lend¬
In future sessions of
can
and
credit
government loans will
direct
ers.
we
of
possibility
liberalization
and
loans
government
expect
more
construction
low-cost
of
rental
810,000
In this trend lies
a
Congress,
vigorous leg¬
threat to the
country's efforts to build adequate
housing. The threat is that direct
government
and
lending
further
competition
government
liberali¬
housing.
zation of mortgage terms tends to
this law, short term gov¬
ernment-sponsored loans to fi¬
discourage construction of pri¬
vately
financed
housing.
This
point was very effectively brought
Under
this
nance
to
are
be
Public
when
low-rent
refunded
40-year
Housing Authority bonds
housing is completed.
the
These bonds
teed
construction
into
as
to
are
in effect guaran¬
principal and
interest
by the government. The rental in¬
from the
come
will not
nance
be
its cost and mainte¬
expense. The difference will
paid
can
cover
housing admittedly
by
exceed
the
government
$12 billion in 40
and
years.
The
subsidy will be paid eventu¬
ally by the taxpayers, not by the
renters. This is socialized
Housing Amendments
A
bill
known
as
housing.
of
the
1949
Housing
Amendments of 1949 went through
a
stormy career during the recent
session of Congress.
Among othe *
provisions, the original version of
out
in
recent
Congress
by
testimony
the
life
before
insurance
companies.
The
insurance
Congress
billion
that
of
available
companies
from
told
approximately
mortgage
credit
$3
was
the
companies to
large
housing projects.
pointed out, however, that
finance
They
the proposal for
extremely liberal
government-sponsored
loans
housing cooperatives would
front
it
if
we
direct-lending
a
the
government
almost
lending
unlimited
well
as
as
our
The
great
goes
for
con¬
the
direct
ernment
that
Threat
even
sound
a
basis
borrower, lender, and
for
is
need
no
and
provide
terms.
will
mortgage
The
banks
continue
reserves of
Since
the
than
more
of
of
ade¬
and
large
home
was
But
Housing
owners
a
days o£
through the
practical, self-liqui¬
do
we
not
want
to
see
housing.
of
troubled
of
the
families
bring to life again the
happy days of the HOLC.
may
We
vide
Brit¬
to
have
an
credit for
un¬
obligation to pro¬
people who want
buy homes, and
obligation
we
accept that
always have.
obligation to seo
now as we
We also have
an
to it that the people who
It
has
not
for
them,
billion
total,
of
It
the
harmful
to
re¬
has
economic
borrow
well-being.
standards.
It
We
do
the
not
nation's
moralize
future
about
our
responsibilities to our country and
its people. We seek to fulfill them
by providing adequate real estatecredit and by
trying to maintain,
the lending and home
financing
were
her history.
have
produced
living
the
mainstay of Britain's
strength through the long years of
standards that
we
know will pro¬
duce the soundest and most satis¬
Socialized housing in
this country will not
produce the
better life for our own
fying
people.
home
ownership
for
the
greatest number of people.
ap¬
proximately
$4 billion was
in
loans to veterans for the purchase
of
homes.
During the first six
months of this year, the banks
Morgan Stanley Group Offers Public Service
made
than
more
home loans. This
Electric & Gas Preferred Stock Issue
50,000 veterans'
that
means
more
than 1,900 veterans received home
loans from the banks every week.
The banks made more than
240,-
Morgan Stanley & Co., Drexel & Co., and
Glore, Forgan & Co.r
jointly head an underwriting group that offered Oct. 19
250,000 shares;
of
Public
stock
gage
this
loans during the first half of
This means that these
year.
borrowers obtained
000
mortgage
banks
more
loans
than
from
11,the
The total of all mortgage credit
in the United States at the
begin¬
ning of this year was $52,343,000,000.
Of this total, $50,492,000,000 was supplied by private
mortgage credit lenders, including
the
banks.
Government
lending
agencies
Net
proceeds
of
pany
amounted
$53,000,000.
increased
tional
These figures illustrate the ex¬
tent to which the banks and other
fulfilling their
responsibility to private mortgage
The
volume
of
strate their
to
number
make
these
and
loans
dollar
demon¬
willingness and ability
real
estate
loans.
Yet
coupled with this responsibility is
one. This second
respon¬
another
sibility is three-fold. It is to
tect
the
that
go
pro¬
bank
depositors' funds
into these loans, to pro¬
tect overenthusiastic home buyers
from
saddling themselves with
too much debt
on
houses that may
rapidly depreciate in value in fu¬
ture years,
and to help safeguard
country against the dangers
the
of
unsound
may
in
cession
on
credit
some
extension
future period of
become
that
re¬
paralyzing drag
vitality.
a
its economic
the
capital
authorized.
of the
to
com¬
approximately
amount
future
will
as
be
addi¬
expenditures
are
The approximate
the program is estimated at
000,000
for
additions
to
for
PJant
additions
to
the
the
and
$20,-
the
Generating Station
400,000
Se-
and
and
$4,im¬
Camden Coke
Harrison
Gas
Except
callable
for
58
shares
of
non-
7%
preferred stock, the
250,000 shares of 4.08% cumula¬
tive preferred stock will constitute
the company's only
outstanding
preferred stock issue.
The new
stock will rank
pany's
shares
preference
stock and
mon
prior to the
6,057,386
dividend
of
5,509,112 shares of
stock
com¬
the most satisfac¬
1
000 and that served with
gas was
approximately 3,060,000. A sub¬
sidiary of the company operates a
comprehensive
intrastate
masstransportation system With motorbuses
most
and
of
terstate
in-(
an
extending hitoCity and Philadelphia.
the
company's
months
ended
$126,850,637,
derived
operating;
$173,218,960 in the*
of
revenues
12
serve-
Jersey, - and
service
New York
Of
streetcars S that
New
or
from
June
its
30,
1949,.
73%,
about
were
electric
opera¬
tions
and
$46,368,323, or about
27%, from its gas operations.
$1.40
(Special
to
before
Sept. 30,
thereafter but
on
or
The
Financial
Chronicle)
BRIDGEPORT, CONN.—LowelL
Mason has become associated withL
Hincks Bros. & Co., Inc., 872 Main.
Street. Mr. Lowell in the past was.
with A. W, Benkert &
Co., Inc.
and Robert C. Buell and
1954;
Company.
With Smith, Ramsay
outstanding at June 30,
The new preferred stock will be
redeemable at $106 per share on
or
Mason With Hincks Bros.
(Special
at
$104
Sept.
share on
before
to
The
Financial
Chronicle)
BRIDGEPORT, CONN.—Ned D.
Johnson
staff of
has
been
added
the
to
Smith, Ramsay & Co., Inc.,.
2.07 State
Street.
30, 1959; and at $103 per
after Oct. 1, 1959; plus accrued
or
dividends in each
With R. F. Griggs Co.
case.
Public Service Electric and Gas
Co. is engaged primarily in the
production, purchase, distribution
and
sale
of
electric
energy
and
manufactured gas in New Jersey.
The area served by the
company
(Special
and
more
state,
southwest
at
the
the
1940
Federal
census, the
population of this territory served
with electricity was about 3,250,-
The
Financial
Chronicle)
CONN. — AIphonse J. LaBonne has joined the
staff
of
The
pany, 35
R. F. Griggs Com¬
Leavenworth Street.
With Leason & Co.
populous sections of the
state, extending from the north¬
to
WATERBURY,
includes most of the larger cities
to
are
preferred,
dividends.
com¬
1949.
is good
loans
cumulative
common
River,
across
ing through the years of our mort¬ the state to Trenton and Camden
gage lending. We know that what at the Delaware River. According
gage
4.08%
accrued
—
Works.
That is the goal eastern part of the
for the nation is good for
banking. Sound real estate mort¬
Co.
cost
principal items included in
Hudson
factory housing.
to
This
in
provements
provided only 3.5% of the total
mortgage credit outstanding, while
the banks and other private lend¬
ers supplied 96.5% of the total.
Gas
share and
added
construction program. As
June
30, 1949,
the current
Most of their mortgage loans were
farm property. Even
so, they
on
credit.
be
current
waren
are
will
&
per
the company's
funds, out of which
it expects to finance in
part its
supplied only
$1,850,000,000 of direct mortgage loans.
private lenders
Electric
construction program of the
week.
every
Service
(par $100) at $102
toward which We have been striv¬
deprived of $3 billion of
government's
to
emergency
measure
great value to the country.
has impaired their
willingness and
capacity to produce the things
they want and need. It has under¬
mined the virtues of
self-reliance
and
personal responsibility
that
sponsored loans for a 60-year term
at 3% would force the insurance
would be
dark
their
We want the people of this na¬
tion to have abundant and satis¬
companies to lay aside their plans
the projects they were
ready to undertake. The country
the
the
difficulties
Socialized
socialized
cialism.
companies with mort¬
gage competition they could not
hope to meet. Large government-
to finance
In
depression,
duced
banks
real estate loans. Of this
veterans.
the
in pro¬
of loans
life
very
$10
with
better
mortgage loans.
1945,
cooperated
Administration
no
funds available for in¬
vestment in
govern¬
housing field. The
real
be
have
now
have
to
have
of
reasonable
on
splendid examples of
further
for
credit in
amounts
minimum
construction
self-reliant, the money are not being granted
highly productive people of Brit¬ loans in amounts
or on terms that
ain sought
security through so¬ will prove disastrous to them or
questioning of the ability
willingness of the banks to
quate
and
home
dating
ain's
experiences
in
trying to
achieve "the better life"
through
socialism are a
warning to other
nations.
The
once
economy.
government liberalization
estate
credit. There
can
valid
are
HOLC
maintenance
the
Private Bank Credit Ample
There
loans
of
standards
cost
willingness and ability to do
they can to keep mortgage
on
home
standards
aid
not sound at their
are
been
the
We do not want to see
credit of
the United States used to
finance
the construction and
all
tized
loans
deeper than the question of meet¬
ing government competition. The
challenge is essentially a test of
credit
agency's
to
governmentcredit to all who want
behind
has
soundly. This
development of amor¬
viding billions of dollars
and
guaranties
loans
of mortgage
begin¬
lending so
ning;; and by making credit avail¬ reduced, or the basic
soundness of
able
at
extremely low interest mortgage credit so impaired that,
rates for excessively
future distress and the
long terms.
financial
to
challenge to private
however,
home
administered
Veterans
or
to
borrow,
regardless
of
their
capacity to repay; by placing gov¬
dictate mortgage lending terms
by
law. This is not fair
competition.
lenders,
of
sponsored
for
power
housing that does
justify the price they paid
voirs
would
funds
the
down
the burden of debt
they carry. The
surest
way
to
encourage
these
troubles is by opening tire reser¬
But
can.
tied
owners
of
surance
ment aid in the
not
Compe¬
obliged to do
are
a
We do not want to
government has taken to help
country produce and finance
and better housing. FHA in¬
the
more
banks
000 non-veteran real estate mort¬
enter
home
,-
is not consistent with the Ameri¬
can
islative efforts in this direction.
July, Congress passed the
Public Housing Act of 1949. This
law provides for slum clearance
projects and also for governmentsponsored
of
economic
activity
enterprise. Its final cost is
as
making of di¬
emergency,
is not a proper function of
govern¬
ment. Such a government
laid
economy
the
loans, except in times
extreme
tax
the
have
made
believe
continue
as
the
country when he testified before
Congress. He stated:
concern
upon
v;-
we
meet
petitor,
guaran¬
provisions
of
the
Housing Amendments of 1949 that
and
whole, as well
taxpayers.
government
against C the
may appear to benefit
those • in need of homes. In the
last analysis, it
damages badly the
fabric of personal
responsibility
If
competition.
help
nation of
our
them to live in
a
com¬
their
American Bankers Associ¬
testified
in
Washington
ation
or
intelligent
loans.
carry
is
com¬
loans, their fellow taxpayers must,
"We
credit
demand for housing
cannot
tees the loan.
make di¬
may
loans
lower
that
of their
years
to
country
will
their
terms, only brings
buyers
They
type
competition ought to be fair
to
izing the terms of housing credit.
Housing cannot be legislated by
liberalizing credit. It must be
built. Making more credit avail¬
this
petition. As
housing loans. They also show how
determined by legislation and
not in the open market for mort¬
-
loans.
best
growing trend toward
the
of
part and parcel of the
enterprise system in which we be¬
government-sponsored hous¬
ing credit and direct government
intense
this
that
37
We have
no
criticism of the
many sound and worthwhile
steps
through many years of their lives
by heavy burdens of mortgage
overindebtedness. We do not want
is
lieve, and
easy,
whatever
housing is available.
They also acquire heavy financial
burdens they must
carry through
ernment
tition
the
types of private and gov¬
sponsored mortg age
The rates and terms it es¬
tablishes are artificially low.
many
Challenge to Mortgage Lenders
government
FHA mortgages.
bill
financing
kind
liant families.
Legislation
the
encourage and de¬
of housing
and
make
The
provisions of this
create
on
liberalized
and
means.
Government Influence
fixes
further
The terms and
Unfortunately, this policy of
easy,
It
also
to
the
satisfied, prosperous, and self-re¬
con-
challenge to all mortgage lenders.
challenge is not solely that of
obtain
all for the
lem.
housing
want
the
see
A
4% GI loans from private lenders.
It
financed
struction.
The bill provided for
direct government home loans to
all
We
velop
home
years.
rates for longer terms. This is
re¬
garded by some people as a cure-
.
■
of
helped- reduce
source of earnings for
savings accounts in banks.
tory
Mortgage Lending
the bill provided for construction
15)
page
-V:/
pressure is
to
also
(1581)
(Special
to
The
CHICAGO,
Toutloff
Leason
Salle
with
&
is
Financial
Chronicle)
ILL. —Chester
now
associated
Co., Inc., 39 South
Street.
He
was
R.
with.
La
formerly
Shillinglaw, Bolger
Inc., and Straus & Blosser.
&
Co.,
38
COMMERCIAL
THE
(1582)
incentive to work and save
ourselves the secur¬
drawn
shakes
leadership, which
of
We
to
inspire
basically does not trust
and which
its
recent
will
leadership
give
not
be¬
defined, and prob¬
countries during the
our
past several years. We have seen,
on the one hand, a rising thirst for
millions can be
planned out by a few. We cannot
disagree with them, because we
of
lives
daily
have
it done. We know that
seen
daily
Czechs
pits
to the
herded
are
so
that the life of their country may
conform to
plan.
a
today
probably
was
of
dreamed
Lenin
that
state
in
not
of
Cripps,
a
Beveridge
a
Wal¬
or a
lace, The fact remains that a vast,
cruel
whatever
crawled
has
racket
have
may
of
out
the
been
dreams of Lenin and has clutched
Russian
the
with
I raise
people.
the question whether this will
not always be so. Is it not peril¬
ously probably that when men,
for whatever motives, adopt the
you
principle that the lives of millions
can be planned for by a few, they
do no more than prepare the way
for
men
them
of force who will succeed
as
their plans inevitably go
astray?
praisal
his
of
He
into
can't
his
money.
outsider
the
force
price
disagree
cannot
ruled
be
can
(or,
to
men
the
use
modern
phrase, "planned for") by
few men or even by one man.
a
I
But
one
do
not
think
find
can
we
example in man's long history
where
for"
have been
men
or
their
ruled
and
freedom.
exorable
so
"planned
still
retained
is
There
an
in¬
in this process.
and an appeal to
pattern
At first, reason
humanity is sufficient to introduce
"the plan." Reason is gently suc¬
ceeded by persuasion and then, as
the
plans grow
and
fit more
tightly, economic sanctions are
substituted. Finally, as individuals
or
of
still do not conform and
to
bulge out of "the
groups
continue
statistics
the
many
despotism and slavery in the past?
counts and investments in govern¬
of the
warnings I find in the events of
the past few weeks.
But whether
or not they have troubled you, as
they have troubled me, I believe
that I can guess at your next re¬
country alone.
the
that
know
do
we
depreciation of 50% in the true
value of our dollar since 1941 has
placed these losses at a staggering
total. These losses are in sad con¬
people
their faith in dollar
savings. A simple illustration may
serve to focus this fact.
Only a
flict with the hopes of our
who
few
placed
ago
years
annuities
the slogan "You too
on
retire
can
$100
on
depreciation
forced
of
We
tisements.
month." The
a
now
has
money
our
change
to
us
sold insurance
we
adver¬
"You too
our
say
month." Per¬
haps another illustration is not
inappropriate. A month ago the
world was asked to value sterling
retire
can
$4.03,
at
a
$2.80.
asked
are
we
now
to
Yet coincident with
these warnings we are constantly
blown
away.
further ventures
that promise further security to
be ladled out by government and
embarking
on
in
measured
the
of
terms
same
depreciate.
Think
the ^problem
the
of
who must make money
behave. His job within his coun¬
planner
try
is
make
to
his people
tinue to trust the money
con¬
he issues
while he continues to make it less
valuable. But
than the task
abroad from
trust of his
his impossible
even
is far more simple
of preventing people
reflecting their mis¬
job at home
policies in their valu¬
parts of
by expanding and contracting that
shadow of money which we still
hardest
to squeeze into a plan.
Perhaps the most recalcitrant ele¬
ment is the monetary
system of
a
free
nation. It is totally incom¬
patible with central planning so
its squeals are loudest. Our mone¬
tary system will
liberties
are
warn
us
threatened.
Unfor¬
it cannot make
tunately,
our
as
us
pay
attention to its alarm.
"
-
To
most
people
absolute of value.
unchanging
is
money
It furnishes
like
measure
hours of the day. This
an
an
the
assumption
money
call
home
at
and
print
can
At
home, when his
manipulations are not successful
in
quieting
mistrust,
and
the
people with goods and labor to
offer
demand
more
depreciated
and
paper
startling change, like devaluation,
makes us look
deeper into the
of
more
in
ex¬
worth in his money. It
to
think
about
what
us
bother
it
really is.
Unless we
are
so
aroused, we
spend our time tryirig to earn it
or
keep
it
without regard to
whether
its
real
dissipated. We
like
the
value
seem
is
being
willing to be
Danaides, who spend all
their time in Hades pouring water
into
ingj
a
bottomless jar. If the warn-
that
devaluation
carries
Jabor
their
their
money—makes
sapped
and
what
of
and
goods
are
is up to his
people then to accept not only his
money but his values. In fact, it
does matter what his
for there
comes
catch
to
on
a
people think
time when they
what he is doing and
stop working and producing. When
that
time
planner
weapons
to do.
the
the
comes,
the
But when that time
man
honest
reaches the end of his
and doesn't know what
of
system
steel
the
will
comes
succeed
to
humanitarian
"five year plan."
no
only be an infinite
number of alternatives along the
can
The answer will develop, as
way.
go, in the continuing demon¬
stration of how well we apply the
we
experience of the past to the end¬
less decisions of the future.
We
not in
are
position
of
sense
any
is lost because we know
rity to our systems
of
fund
enormous
have
we
knowledge
apply in making our decisions
they arise.
If our guides are
not familiar with that knowledge,
to
as
ignore it, we should put them
or
to other work.
Should
Path
We
at
where
i
have
want to go for
least,
world
we
men
who have
faith that we can be trusted with
our own lives and the lives of our
countries — men who themselves
in freedom,
passionately
believe
and will not seek to
buy the votes
people with unfulfillable
of weak
drawn
promises
treas¬
our
on
uries.
ideals" you say, "hard to
"Fine
apply."
and still harder to
create
That is
true, but freedom too was
hard to win.
Our fight for it has
stretched
back
over " centuries.
Freedom will never stay won. But
freedom
is
worth fighting for,
-V
.!
Individual
because, in our
not lost
are
in our
seek
must
We
Fourth:
representatives
forever.
■;/
More
Be
abroad.
the route
and
followed
have
we
an
in the
expedition which
an
we
known
a thou¬
Langley & Go. Group >
Offers Blackslone Pfd.
sand years,
spirit good.
our
have done has
we
capacity
individual
our
integrity
individual
our
to
even
to
want to stand alone. But many
of
stand
motives
our
their
feet
own
our
on
or
have been good and
is
humanity
deep
too
an
would
retrace
rather find
We
steps.
our
our
must
to an¬
way across
path
and
head
forward
again.
We
must
realize
that
our
present
path
ends
in ? a
other
box
canyon,
path
are
though it is a
lush valley.
We
even
up
a
belief that there
our
better lands beyond
and
new
What
be done is to do our best to
out of the experience of the
vidual
must
distil
the mountains
ahead; but we must
free?"
more
men
I
not
am
I
and
moralist
a
ing because it is easy. There is an
route over many mountains
easy
walking,
that
convinced
will
not
get
but
where
us
I
am
present route
our
want
we
and that our strength will
be lost in the place to which it is
to
go
taking us.Much better a switch,
while
it
can
be
made,
even
though it is
switch to a harder
a
longer route if that route is
and
likely to "go."
*
If I may press
created in us,
has made
us
try to
forget that we don't know where
we
going—that
are
we
are
mak¬
first ascent and cannot know
where we are going.
We have
ing
question.
have adopted this ap¬
we
proach to the problem of what to
do. we should refrain from in¬
creasing the confusion by our an¬
swers.
Until we have related the
to the objective
freedom, we should
purpose of money
human
of
mankind from our momen¬
spare
solutions.
tary monetary
If
course
a
ceive
of conduct will de¬
out of the work
man
of be¬
ing self-reliant by promises that
can look forward to a pension
in dollars which those promises
he
to
with
those
experience
aims.
warning
passed
want
so
We
a
this
have
a
aims
lost the
We
that
into
not
heretofore." We
even
we
want
will
one
deceive
accepting
one
gold only as a stand¬
of money, or
against which to measure the
value of
different monies, will
ard
impose on governments a work¬
able restraint in their traditional
attempt to be unhamperedby lack
of cash and will, therefore, pro¬
tect the economic freedom of men
who
willing to work and save,
a good path to take.
are
then that is
principles as free men are
clouded by the myopia
of nationalism, of personal ambi¬
tion and by the curious desire to
Our
usual
as
particular men at the ex¬
pense of mankind.
This isn't go¬
ing to change; but we won't even
be
able
to
recognize our own
help
short-sightedness unless we work
for ourselves the principles
out
which
that
the
I
proven
present in wise deci¬
themselves
In
have
believe
we
sions in the
past.
area
have
human
of
tried
affairs
search
to
a
statement of
pose
principles.
four for your
First: We must
I pro¬
consideration:
re-establish
1,430
;
are
of
share
each
the basis of one
preferred stock for
stock held
on
new
share of common
Oct.
19. •
Both
the
of
offers
expire Octt 31, 1949.
Proceeds of the offering are to
outstanding
to retire the
used
be
preferred stock of the com¬
pany and the balance will be used
to provide for construction expen¬
6%
ditures.
—
'•:
.-
Blackstone Valley Gas
.
and Elec¬
incorporated in Rhode
1912, is engaged in the
electric and gas utility business
and in the sale of electric and
tric
Co.,
in
Island
and by-products
manufacturing op¬
appliances
gas
its- gas
from
company's service
throughout {■ the
in north¬
Rhode Island and the prin¬
The
erations.
.
extends
Blackstone River Valley
ern
cipal communities are Pawtucket,
Woonsocket
and
Central Falls.
Operating revenues are approxi¬
mately 80% electric and 20% gas.
The stock being offered may be
redeemed
at
$105.40 per - share
prior to Jan.
1, 1955 ; and at
$104.40 per share on or after Jan.
1, 1960, plus accrued
each
dividends in
case.
For
the
,
12
-
months ended July
31, 1949 the company had .net in¬
come of $1,202,804.
Annual divi¬
dend
requirements on, the new
$148,750.
preferred stock will be
With Norman F. Dacey
(Special
to The Financial
Chronicle)
CONN.—Robert A.
Smith has become connected with
Norman
F. Dacey & Associates,
STAMFORD,
322 Main
Street.
-
...
to¬
night, it seems to me that the an¬
swer to what we must do must be
guide
has
"Thou
way
map.
badly
ourselves
as
accept the lonely, Bib¬
courage to
lical
with
discontented
become
tion
on
and
adjustment,'
subject to a subscrip¬
offer
to ■: certain
common
shares
area
adoption of gold coinage
If the
of old pre¬
19, 1949 plus
cash settlement of $12.60 and a
stockholders
a
and
a
Oct.
on
human
do
object to the road we are tak¬
not
held
ferred
share of new
share
each
for
stock
dividend
over onto the perhaps harder,
perhaps more rocky, paths along will make worthless, then that is
a bad course to-pick even though
the ridges before the presently
rising walls beside us funnel us it gives man a fleeting sense of
forward into a trap.
future security.
get
the basis of one
on
past, as we live it, standards by
which we may make our deci¬
sions consonant with this basic
Until
seeking what must be done
be wasteful folly to try
In
it
to
indi¬
this make
"Will
question,
cast aside.«
this analogy from
change, he still has an ace up my memories of mountain climb¬
his! sleeve,
if his people permit
ing, our fault lies in our insist¬
him to play it. He can impose ence on a
map.
The insecurity
price ceilings on their goods and which war, the geographical con¬
services. At that stage it doesn't
quest of a planet, and the deep
matter what people think of his scratches we have made into the
money, he
has told them what physical secrets of the world have
of- permanence persists until some
nature of
but
wrong
comfortable
he
manipulate its value
"credit."
his
been
Much
the ignorant guide or the
intentional
Alpinist
takes
the
harder
one.
I
don't object to
Ceilings
least
be
can
There
Freedom
and only
Money Control Leads to Price
At
integ¬
must restore
We
,
must retain
of
give us out
jail.
Third:
A group headed by W. C. Langwhich is a long time
ley & Co I is offering today (Oc^
as men measure time for them¬
tober 20) 35,000 shares of 4.25%
selves. We have turned and twist¬
cumulative /preferred stock, $100
ed but we have moved toward
action—"What can be done?"
greater
freedom for
individual par value, of Blackstone Valley
There is,
of course, no one men and women—-freedom for Gas. and Electric Co. at $102.40
answer to what can, indeed must,
their minds and for the expres¬ per share plus accrued dividends
be done.
We have moved, in my
sion by them of their opinions from Oct. 1, 1949.
y
opinion, a long way down a wrong and their
Of the 35,000 shares being of¬
peculiarities above all,
road, but we have not gone en¬ but freedom for their bodies too.
fered, 12,942 are subject to an ex¬
tirely in the wrong direction. It
What must be done is to- test change offer ma'de to holders^ of
seems to me that our method has
the company's 6% preferred stock
all our decisions by the single
soft
dollars which those ventures will
There
weary
are
be issued.
waiting for one to
or
"What Can Be Done?"
No doubt you
expression of people's hopes to be
*
warnings at home and
our wealth is
being
are
that
abroad
$200
on
ation of his money.
free society which it is
of
purchasing power once repre¬
sented by the individual holdings
of insurance policies, savings ac¬
plan," physical force is applied to
the bulges.
In the unfolding of this ancient
process
there are warnings all
along the way. Those warnings
may be heard in the squeals of the
a
we
we
as
institutions
the
from
turned
doctrine
this
from
will
When
men?
innocent
turn
if it is preached by
even
the
These
the
with
proposition that the lives of
We
how
its citizens from the
cradle to the grave is a cruel de¬
protect
can
ception
billions
dollars have disappeared from
value it at
Dangers of Planned Economy
:■
have
not
However,
Certainly a police state is
contemplated in the visions
1917.
do
determine
to
ment bonds in my
in Rus¬
not the
The police state we see
sia
is measured.
security
We
lives of millions
of
Russians are planned for by the
Politburo. We read our daily press
with horror as thousands of free
the
security
for
the money in which
and debased
that
thirst
this
whetted
geographical knowledge we have
accumulated on the long road we
of
of money to
protect this incentive and our
have come.
and another
freedom; we cannot do this unless
When men of honesty and in¬
born.
■ ;''1' ;
r
we deny to our representatives in
telligence address themselves to
But
the
job
of the planner
government the power to hide
the question "What can be done?",
abroad is much harder. He has
unsound policies behind arbitrary
the
first
decision
must
be
to
no power to
prevent an outsider
controls of price at home and
waste no time looking for a map
from
expressing an honest ap¬
artificial
expressions
of
value
with freedom which is our
and wage controls. He can't pre¬
deepest desire.
, r
government-granted security, for vent "devaluation."
If
leadership can make men pensions, for medical aid, for re¬
Why do we refuse to see this
slide austerely down into a hope¬ lief of various sorts from uncer¬
pattern unfolding in our world?
less and regulated existence, then tainties
which men have faced
Why will we not realize that the
braver leadership can give back independently in the past. On the,
planner can no more stand the
to men the freedom to work their other hand, we have for several
impartial
valuations of a free
way
toward
independence and years experienced a falling off in market than the quack doctor can
the
peace.
purchasing
power
of
our stand
an
examination
of
his
There are
many
sincere men monies. In many ways the same credentials?
When will we real¬
who
believe
that
the
complex policies of government have both ize that the doctrine that the state
peace
though it disregards all the
even
will apply
He
do.
to
ity which no state can
by men who know as little
do.
seem satisfied with their map,
•
conflict
cruel
a
tween two well
fairs of
the
us
is
There
ably closely related, trends which
have been developing in the af¬
people, did not give us
victory. That kind cf
own
the
by
what
know
he will
and
up
and services
police state will be
Evils of Devaluations
unfulfillable
promises of stability and security
seeks
has set
planner
and seek for
force to obtain goods
Nazareth.
out of
might choose slavery.
That kind
good will again have come
some
fear that we
for
into serfdom
us
out of this apathy, then
us
sonal
about the terrain ahead as we
Devaluation—A Warning
(Continued from page 12)
20,. 1949
Thursday, October
FINANCIAL CHRONICLE
&
our
Lawrence Leeby
LAUDERDALE,
FT.
Adds
FLA.
E. Hudson is with Law¬
R. Leeby & Co., First Fed¬
George
rence
eral Building.
faith in the ideals of independence
and
our
freedom, and we must
belief
that
these
revive
ideals
can
study,
personal integrity and work.
only be sought through hard
v
Second:
W_e must
laws to restore
reshape our
to us all the per¬
Joins Adams,
Sloan
SARASOTA, FLA
George B.
Drummond has joined the staff of
Adams, Sloan & Co., Inc.,
Hotel Building.
Colonial
Volume
170
Number 4848
THE
COMMERCIAL
&
CHRONICLE
FINANCIAL
The Penchant for Power
Foreign Aid and Foreign Trade
(Continued from
the
difticulc
lems
and
page 14)
prob¬
in interna¬
complex
currently faced
tional
depletion of domestic supplies of
many
such
items.
Who
would
have
thought,
for
example,
smaller national income with sub¬
stantial
that
payments.
Exchange ad¬
justment is but one step, albeit a
copper,
most
lower
short supply in the United States?
important
clear
to
one,
way
obstacles
some
and.
the
effective
the
to
fluid
and
which helps
by removing
functioning
of
a
world price system in accordance
with
free enterprise incentives.
Foreign
maiket
about
a
and
have
to
year
exporting
billion of goods
It is clear that they
us.
continue
level
current
our
sustain
to
of
their
imports from
us
unless they can earn more dollars
their exports of
services to the dollar
is to be hoped—the
volume of imports into the United
by, increasing
goods
and
area.
If—as
increases
States
significantly,
result
whether
as
tion
simply
a
devalua¬
of
zinc,
would
scrap
iron
have
ever
been
standard
in
countries
ef¬
their sales
increase
forts in this
foreign
because
market, it is possible
that avfew industries will ask for
the
I
of
raising
tariff
our
rates.
would like to ask you to con¬
sider this question in the broadest
possible
perspective
from
the
point of view of the long-term in¬
terest of the economy as a whole.
We are faced with a very seri¬
ous problem in attempting to re¬
;>•
store international trade to a satis¬
balance.
We
cannot
maintain our exports at a high and
factory
at
imports
our
definitely
level' in¬
continuing to
low
a
without
gap with funds
the
finance
vided by
If Europe
pro¬
the American taxpayer.
is to be self-sufficient,
must allow the European coun¬
we
tries
to
need
to
pay
the
earn
dollars
they
American
for the
goods and services which are es¬
sential to their economies, if they
to avoid social unrest and po-
are
2 litical
/
a
instability. Trade will soonlater
or
er
to
back
go
on
self-balancing basis.
more
But
have
is
this
not,all.
position will require
Ournown
to con¬
tinue to invest heavily abroad for
a long time to come.
Investment
of European funds was the key¬
stone of expanding world trade in
the 19th century, and investment
of U. S. funds—I hope primarily
on
a
over
us
private basis—must now take
this role in order to make
possible that expansion of produc¬
tion here and abroad which will
rising living standards and
assure
economic
progress
in
tive
the dollar * pressure on
foreign countries in the near fu¬
ture, eventually we will have to
be prepared to import goods and
services in larger amounts as the
mitigate
return
fall
i
their
As
ments.
due
,
invest¬
service
charges
incountries
future
and
past
on
vestments,
capital
our
on
borrowing
will have to develop a surplus on
above
in the
United
States;
otherwise,
they
will either have to restrict pay¬
current
account
over
and
their essential requirements
,
obligations to us
drastically curtail their future
ment
or
their
on
Tending
products,
exists
may
substantially witn continuing
national
here
income
are
several
pansion of
foreign, .trade^pn
both the import and export side,
the
our
expansion of
vestments,
ANGELES, CALIF.
velopment
which is normal for
dustrial
foreign .^in¬
our
expenditures
substan¬
increase
tially in the postwar world, if for
no other reason than the fact that
our
national income has risen
so
substantially above prewar levels.
In any
that
event, it seems very likely
American
tourists
out to be an even more
source
will turn
important
of dollars for foreign coun¬
tries than in the past.
munity
Fi¬
com¬
Secondly, imports of raw ma¬
should be at substantially
for the securities before these
thus served to
financial
Americans would observance, said the financial inconsciously favor not only sacri-1 dustry-has been overwhelemed by
ficing our vital export interests the response of the business and
but also encouraging an indefinite^ civic groups to early announce¬
continuance
of
foreign aid
with
prospect of eventual ^repay¬
ment,
merely
curtail
to
creased inflow of
Dec.
inr
an
imports into, this
of- the
ments
15^1949).
Libraries,
15-
(Nov.
event
rs
n
1
n
their dependence on economic aid
from the United States. It would
L
.
A
involve impeding the processes by
our
investors can receive
which
the
yield on their investments
abroad through the normal move¬
ment of
goods to the United States
The met upshot of such
restrictionist policy would be
long-term drain on our national
market.
income
with
and
_
t_ 1 •
_1
quid pro
it, along with the
of
quo
cratic world.
cial
trade,
because of its
pioneering charac¬
and
ter. lends itself to the best in the
American tradition of private en¬
terprise. It is in this field, no less
than in our domestic production,
that the U. S. opportunity lies to
demonstrate
to
the
world
the
achievements
way of
brilliant
dustry
the
of
life.
In
1
men
of
American
American
for initiative, inventive¬
efficiency, I think we
Robert H. Parsons,
clude:
Bingham,--Walter
ry,
Bureau;
Speakers
&
Richards
Hurry,
&
Arcadia,
Road,
Rancho
1410
Murray Ward,
South
251
Co.,
Beverly Hills, Spe¬
Committee; Willis H.
Bedford Drive,
cial
Events
Durst, Wagenseller & Durst, Inc.,
202 Oaklawn Avenue, South Pasa¬
dena, Public Relations Committee;
and
Donald
Royce, William A.
Staats & Co., 1123 San Vicente
Boulevard, Santa Monica, Chair¬
man of the Banquet Committee.
With Link,
(Special
Gorman, Peck
to The
Chronicle)
Financial
ROCKFORD, ILL.
James A.
Chicago, members of the Chicago
wforld. I feel
in the markets of the
strongly
that
the
United States
gain than to
has
much
lose
by the relaxation of existing
to
more
associated
become
Link, Gorman, Peck
& Co.,
Woodburn
Mr.
Exchange.
Stock
was
has
—
formerly Rockford represen¬
for
tative
H.
Carter
Harrison
&
with
Co.: and
Dempsey & Co. and Sills, Minton
designed to
action
raise
on our
such
bar¬
economy
thereto
prior
was
to
our
as
a
is
less
no
to
whole.
interest than
our
the
interest
of
our
economic
With Carl K. Ross & Co.
(Special
Douglas
which makes
with
decisive contribu¬
tion to maintaining a
rising living
minimum of
standard with
higher levels as a result of higher
national income and the wartime
employment, and that without it
there
is
a
a
real
possibility
un¬
of
a
to The Financial
Chronicle)
MAINE
PORTLAND,
rately possess..
Our foreign trade seems small
percentagewise. It may be only
5%, or 7%, or 9% of our totalbut it is my conviction that it is
a crucial segment of our economy
a
listed
or
the
make
plan of reorganization.
a
administrative
can we
stand?"
Absorbed
Alters limitation to
comprise
y.V
y."'
of
"in
a
and
—
V.
Exchange
"
•H,v, v
the
to
The Financial Chronicle)
BOSTON, MASS. —Mildred G.
has
become
Freeman
Boardman,
Incorporated,
75
associated
& Co.,
Federal
Street.
.
Miss Douglas was
previously with
Chace, Whiteside, Warren & Sears.
■■ ■■
' '
"HM"
has
1934; adopting a proposal published for comment
Exchange Act Release No. 4294.
to
X-12F-6
that in
of two
provided
of
event
.
a
merger
the
changes
surviving
could continue
Rule<£
amendment
the
the
the
,
ex¬
exchange
unlisted trad¬
ing privileges of the absorbed ex¬
change, without further order of
the Commission, only if the ab¬
sorbed exchange and the surviv¬
ing exchange were located "in the
same
metropolitan
area."
The
to
.■
•'
announced
an
.
on
Aug. 22, 1949,
'
,
———
■„,
,
.
exchange or exchanges without
interruption when the conditions
of the rule
can
be met.
As amended, the new
"Rule X-12F-6.
Unlisted
rule reads:
Continuance of
Privileges
Trading
on
Merged Exchanges.
Subject to Section 12 (f),
"(a)
require¬
be lo¬
amended, and the rules and
regulations thereunder, a national
securities exchange which has ab¬
sorbed
another
exchange
may,
metropolitan
without further order of the Com¬
provides that the surviv¬
mission, continue unlisted trading
privileges
(1)
in any security
which was admitted to such privi¬
amendment removes
that
cated
as
Securities Exchange Act
in Securities
Prior
so
i\
Commission
X-12F-6 under
the
in
and
the
the
exchanges
same
ing exchange may, without further
order of the Commission, continue
unlisted trading
privileges in
any
as
leges
on
the
absorbed
exchange
security which was admitted to
such privileges on the absorbed
pursuant to Clause (1) of Section
12
(f), and (2) in any security
exchange pursuant to Clause (1)
of Section 12 (f), and in any se¬
which
curity which was admitted to such
privileges on the. - absorbed ex¬
change pursuant to Clause (2) or
was
admitted to such
privi¬
the absorbed exchange
pursuant to Clause (2) or (3) of
Section 12 (f) if the vicinity of
leges
the
on
surviving exchange includes
vicinity of the absorbed ex¬
(3) of Section 12 (f), if the vicin¬
the
change.
exchange. For the purposes of the
rule the
Zeruah
With Boardman & Freeman
(Special
metropolitan area"
same
"geographic area."
'■
■■
Securities
The
amendment to its Rule
Privileges of
Exchanges in Mergers
mergers
"vicinity of the surviving
exchange" is defined to include
the "vicinity of the absorbed ex¬
across the seas that we work out
A. Merrow has joined the staff of
change" if the vicinities of the
and promote ways and means of
Carl K. Ross & Co., Inc., Bank of absorbed and surviving exchanges
sharing the special talents, skills
are
located within a single geo¬
and
resources
the nations sepa¬ Commerce Building.
to
should
be imposed as a condition
never
ity of the surviving exchange in¬
cludes the vicinity of the absorbed
& Co..
entail substantial net
loss
auction
to
Management
SEC Continues Unlisted Trading
area
Woodburn
also
themselves
lend
not.
no
ference
ment
with
but
does not
but
juggernaut must be stopped or
telling what new bedevilments of the securities
industry it will sponsor.' Our Congress must be made aware
of these dangers which beset us.
Small wonder the question
is being propounded, "How much more administrative inter¬
there is
-
Vice-Chairman; Emerson B. Mor¬
in
market
approval of
This
Pacific
ally advantageous terms not only
domestic
to the
do
Hence it should
decision.
Company of California, 105 North
Van Ness Avenue, Los Angeles, as
need never worry about our being
able to compete on fair and mutu¬
the
securities
others
Committee Chairmen named in¬
in¬
and
ness
to cover every
light of the
the
record
finan¬
phase of
the celebration.
Hill
Overseas
under
up
market,
a
the direction of prominent
real danger
very
increasing economic instability
throughout the demo¬
romantic
set
merely designates
one.
trading;
budget
and tension
It
securities.
assure
]
gan, Morgan & Co., 426-B South
Spaulding, Beverly Hills, Arrange¬
to show for
ments Committee; Harry W. Hur¬
Federal
our
no
have' been
mittees
Particularly dangerous is the implication that somehow
Some
public
buildings and 'business houses are
■
a
owners
listing is in the public interest and adds to the value of the
>
museums,
country. A sustained, low volume planning anniversary displays and
of
imports and the .consequent exhibits, the chairman said, and
Hmronnirirt
P
j nl 1
""
worsening of the dollar position of a committee has been established
the European countries .would-In
by
the
Exchange
to
provide
evitably involve an increase in speakers for business, civic and
unemployment as a result of- our service organizations. Actual an¬
falling exports. It would involve niversary date is Dec. 7—Pearl
greater
difficulties
for
'
foreign Harbor Day.
■'
countries in their efforts'fo reduce
Harbach said that other com¬
a
delivered to their
making plans to cele¬
lieve that many
little
were
deprive the stockholders of those companies,
through their representatives, of their rights to choose for
themselves whether or not they wanted their shares listed
at all or when or on what exchange.
This constitutes a
of-Southern California's
-industry.<• Edwin
L. usurpation of rights which will vest in the new managements
general chairman for the of those companies.
:
are
Therefore, I find it hard, td be^ Harbaehy
terials
California
Southern
every
matured^hH founding
a
economy.
neighbors in this hemisphere and
.travel
—
nancial and business leaders from
and the eventual
brate the 50th Anniversary of the
of the import surplus, Los Angeles Stock Exchange, the
and services:
should
interna¬
of
Angeles Exchange
It
First,
Findings and Opinion of the Commission in the
Light Company case is another demon¬
stration of SEC thrusts against the over-the-counter market.
There the Commission approved a proposed plan1 of
directed to¬
be
expansion
the
ward
long-run factors which will tend
increase our imports of goods
to
abroad
The
American Power &
a large extent
artificial, govern¬
basis, and that our
should
endeavors
and
riers would
there
country and has impeded the flow of capital into trade
reorganization of American Power & Light Company with
the proviso that certain securities to be distributed to its
progressive recovery abroad.
tional trade within the framework stockholders be listed on a recognized stock exchange forth¬
Moreover, our expanding popula¬
tion will consume larger quanti¬ of a reduction of extraordinary with in the case of three companies and within one year from
assistance and of the effective date of the
ties of goods which are not pro¬ governmental
plan as to a fourth company.
greater reliance on the private
duced here at all or not in ade¬
The principal purpose of this reorganization was to
capital market for foreign capital
quate quantities.
comply with the Death Sentence Provision of the Holding
The only real hope I see for requirements.
Company Act. Implicit in that sentence is the principle that
future normal world trade, the
the segregated parts of the Holding Company would become
re-establishment of a functioning
Los
multilateral trading system with
independent with non-interlocking directorates and with
exchange convertibility, and-.-the
different general ownership.
long-run solution of the dollar re¬ To Celebrate 50 Years
The selection by the SEC of a designated market place
payment problem, lies in the ex¬
LOS
high
part
Imports
Fortunately,
an
on
ment-financed
our
3)
page
Securities Acts has been inimical
and industry.
that conversely any
Increase
to
to
barriers to international trade, and
imports from this country.
Factors
The
present time still to
only partially competitive
or
with United States
under-de¬
veloped areas.
It is a role'which
creates a major policy issue for
the
United
States.
For
while
such investment will undoubtedly
living.
Its administration of the
pends in part on the re-establishment and development of sound
>
or
of
(Continued from
a
American productive machine de¬
and
ore
and
Thirdly, imports of luxury and two-way foreign trade. It is ob¬
semi-luxury items, noncompeti¬ vious that foreign trade at the
rise
been
in
a year
been
$6 to $6V2
cannot
have
countries
spending $12 billion
lead,
unemployment
39
(1583)
graphic division or adjoining geo¬
graphic divisions of the United
States
as
classified by the United
States Bureau
For
the
purpose
vicinities of the absorbed and sur¬
exchanges
are
located
a
single geographic divi¬
adjoining geographic divi¬
sions of the United States as clas¬
viving
within
sion
or
sified by the United States
of the Census."
Bureau
of the Census.
purpose of the rule is to
make it possible, upon the merger
The
or
of this
surviving
exchange shall include the vicin¬
ity of an absorbed exchange if the
"(b)
Rule the vicinity of the
consolidation
of
exchanges, for the
two
or
more
surviving
ex¬
With Tifft Brothers
SPRINGFIELD, MASS. —Wil¬
liam W. Vogel is now associated
with
Tifft Brothers,
1387 Main
unlisted Street, members of the New York
trading privileges of the absorbed and Boston Stock Exchanges.
change
to
continue
the
40
•
Inc.
American Trusteed Funds,
•
determined
Anchor
•
Inc.,
Mines,
Los Angeles, Calif.
296,000 shares (25c par)
Underwriter—Hunter &
Co., New York. To rehabilitate mill and mill machinery
stock.
struction
Ohio
notification) 5,000 shares ($25 par) com¬
No underwriter. To buy a
elevator from the Anderson Elevator Co.
Bankers National
•
;•'■
underwriter.
of
one
$102
Oct.
pany
To be sold for R. Howard Webster,
iSanada,
■,
/,
-
Albuquerque,
and 61,000 shares by E. T. Chase, Silverton, Color,
No underwriter.
To develop a
Office, 214 Rosenwald Bldg.,
company.
Oil
Colorado
;
—To redeem
Gas
&
$40,000,000 of outstanding bonds, with other
New York
notification) 440 shares of capital stock
(par $100). Price, par. Working capital, etc. No under¬
Oct. 5 (letter of
writer.
Co., of Florida, Miami, Fla.
(letter of notification) 12,000 shares ($10 par)
common stock.
Price—$25 each.
Underwriter—Atwill
Sept. 7
Oct.
5
Fia.
■/;/.
•
writer.
To
Combined Locks
Colo.
Canam Mining
&
Co., New York.
and not by company.
Aug. 29 filed 1,000,000 shares of no par value common
shares to be offered publicly at 80
cents per share; the remainder are registered as "bonus
shares." Underwriter—Israel and Co., New York, N. Y.
Proceeds—To develop mineral resources.
n
,
stock. Price—800,000
•
Consolidated
.
of
preferred sold.
Power
19 at rate of
share.
Probable bidders include Smith Barney & Co.;
Lynch, Pierce, Fenner & Beane and Kidder,
Peabody & Co.; Harriman Ripley & Co.
Proceedsding.
Merrill
Construction.
Interstate
Telephone
Nov.
8.
Detroit Edison Co.,
14
Detroit
shares ($20
9 at
filed
$20
share on the basis of one new share for each
Rights will expire Dec. 5. Underwriting-r-None.
per
10 held.
at $100
Proceeds—To repay bank
Proceeds—To reduce
loans for construction and for
additional construction.
•
bidding.
first and general mortgage bonds,
be decided by competitive
Probable bidders: Halsey, Stuart & Co. Inc.;
an
Underwriter—To
•
Central
'
.
Maine
Co.
Power
*
-
u
<v
(11/7)
Octf 12 filed 200,548 shares ($10 par) common stock and
30,QOO shares ($100 par) preferred stock. Offering—Com¬
mon to be offered for subscription by common and pre¬
ferred
stockholders.
New
England, Public
Service
Co.
(holder of 68.53% of outstanding common) has waived
its right to subscribe for 131,518 common shares. Under¬
writers—To be decided under competitive
bidding. Prob¬
able bidders: Preferred—Salomon Bros. & Hutzler; Harrkftan Ripley & Co.; W. C. Langley & Co.; Blyth & Co.,
"Inc. and Kidder, Peabody & Co. (jointly). Common —
Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly);
Harriman Ripley & Co. Proceeds—To repay bank loans
Insurance
Agency,
office building.
Gulf
Coffin & Burr and The First Boston Corp.
(jointly);
Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly);
"White, Weld & Co., and Merrill Lynch, Pierce. Fenner
& Beane (jointly); Otis & Co.; Shields & Co. Bids ex¬
pected Nov. 7.
Empire
Inc.,
Atlantic
'
-
Transportation
incurred for
construction
program
and to further
N.
M.
>
Co., Jacksonville,
Florida
:
May 31 filed 620,000 shares of class A participating ($1
par) stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares of common will be offeree) for
subscription by holders on the basis of one-for-two at
25 cents per share. Underwriters—Names by amendment,
and may include John J. Bergen & Co. and A. M. Kidder
& Co.
Underwriters will buy the
remaining 135.000
shares plus unsubscribed shares of the new common.
Offering price of class A $5. Proceeds—To complete
an
ocean ferry, to finance dock and
terminal facilities,
to
pay
current obligations, and to provide working
capital.
,
•
Hallicrafters
Co., Chicago
■
■
'
Oct. 12 (letter of notification) 2,000 shares of common
stock, to be sold by Raymond W. Durst, Vice-President,
at market
(about $4.25).
& Co.
...•
.
Underwriter—Doyle, O'Connor
•.
■
,
struction. Bids expected Nov.7.
Hobbs,
Oct. 5 (letter of notification) $200,000 worth of common
stock.
Price-—$25 a share.
No underwriter.
To build
(11/7)
Co.
bidders: Halsey, Stuart &
Probable
bidding.
Inc.;
Blyth & Co., Inc.; Glore, Forgan & Co.; Harris, Hall &
Co.
(Inc.); Lehman
Brothers; Harriman Ripley & Co.,
White, Weld & Co. (jointly);
Union Securities Corp. and
Securities Corp.; The First Boston Corp.;
Smith, Barney & Co. Proceeds—For electric and gas
Equitable
-
con¬
Hawaiian Electric Co., Ltd., Honolulu
>
•
facilities
construction.
Bids—Bids for
pur¬
($20
up
suite 2200,
(CST) Oct. 25.
to 11 a.m.
Phoenix, Ariz.
'* ***
45,000 shares of common
(letter of notification)
6
Price—$1 each. No underwriters. To develop an
Office, 214 N. Central Avenue, Phoenix, Ariz.
stock.
well.
,
Keller Motors Corp.,
Huntsville, Ala. (10/24-27)
Under¬
Price—
$1 per share. Proceeds — To purchase additional plant
facilities, tools, dies, jigs, etc.; the balance for working
capital.
Statement effective Oct. 3.
Expected week of
May 10 filed 5,000,000 shares (30 par) common.
writer— Greenfield/
Oct.
Lax & Co., Inc., New York.
17.
Kentucky Utilities Co., Lexington, Ky.
Oct. 4 filed 165,500 shares ($10 par) common stock and
25,000 shares of 4%% cumulative preferred stock ($100
par). Common stock will be offered for subscription by
stockholders and employees at $10 a share and will not
be underwritten.
Underwriter — For preferred: To be
determined under
Kidder,
&
Becker
competitive bidding. Probable bidders:
& Co.; Union Securities Corp. and
Pierce, Fenner and Beane (jointly); A. G.
Peabody
Merrill Lynch,
Co.; White, Weld & Co. Proceeds—For con¬
struction.
•
Kistler's
Radar
Sandwiches
Ohio
(letter of notification)
of
America,
Inc.,
Akron,
Oct.
14
4,000
shares
($50
par)
preferred stock. Price, par. To finance the purchase of
heating and production equipment to be sold to licensees.
Kittanning
Telephone Co.
(Pa.)
(letter of notification) 3,000 shares of capital
stock (par $25). Price, $45 per share. Stock will be of¬
fered Oct. 1 to stockholders of record Sept. 17 in ratio
14
Sept.
one-for-eight. Rights expire Nov. 1, after which shares
to employees and un¬
subscribed shares will be offered Nov. 8 to public' in
of
not subscribed for will be offered
area
June 21 filed 150,000 shares of series E cumulative
St., Chicago,
K-W Oil Co.,
Oct.
oil
699,743
par) common stock.
Offering—To be offered to stockholders of record Nov.
Oct. 5 filed $5,000,000
1979.
1979.
105 W. Adams
Oct.
corporate purposes. Underwriting—None.
*jiue
(10/25)
$10,000,000 of first mortgage bonds, due
Underwriter—To be decided under competitive
filed
Sept. 23
chase of bonds will be received by company at
indebtedness resulting from construction and for general
Central Maine Power Co.
phy Favre, Inc., and Richards & Blum., Spokane, Wash.
outstanding $6 preferred stock at $110 a share.
To redeem
distribution
(letter of notification) 200 shares ($1* par) com¬
stock.
To be sold at $14.50 per share to Alfred J.
Proffitt, Altadena, Calif.
Mr. Proffitt will resell these
shares through Hopkins, Harbach & Co., Los Angeles.
For working capital.
j
/
Tarboro,
two' new shares for each five held
Wash.
Spokane,
Co.,
(letter of notification) 1,321 shares of $5.50
cumulative preferred voting stock ($100 par). Under¬
writers—Pacific Northwest Co.; Paine, Rice & Co.; Mur¬
26
mon
/i:
:
•
.
Rights expire
Pasadena,
*
& Telegraph Co.,
(11/1)/
Iowa
Dubuque,
Co.,
filed
10
Oct. 7
Sept. 28 filetj 29,750 shares ($100 par) common capital
stock. Offering—Offered to stockholders of record Oct.
per
Engineering Corp.,
California
e
Carolina Telephone
North Carolina-
376,250 shares
.
4*v; Capita! Airlines, Inc.
Oct. 42\filed $3,700,000 series A 4% debentures due 1960
and $3,700,000 of series B 4% convertible income deben¬
tures, due 1960. Offering—Series A and series B deben¬
tures arevto be offered in exchange for the $7,400,000 of
outstanding 3%% convertible income debentures, due
1960. Underwriting — None. This exchange offer is to
/
filed
30
(no par) common stock.
Price—$2.50 per share. An additional 50,000 shares will
be sold to the underwriter at $1 per share for invest¬
ment.
Underwriter—William L. Burton & Co., New
York. Proceeds—To develop mining properties.
Tem¬
porarily postponed.
"
\
<
;
.
;
v
notification) 2,500 shares ($50 par) 4%
Oct. 12 (letter of
Iowa-Illinois Gas & Electric Co.
Consolidated Caribou Silver Mines, Inc.
March
Corp., Ltd., Vancouver, B. C.
liberalize indenture terms.
Underwriter—Hemphill, Noyes, Graham, Parsons
Proceeds—Offering by stockholders
par).
..Blue Ridge Insurance Co., Shelby, N. C.
'Ocp. ,10 (letter of notification) 12.560 shares ($10 par);
Capital stock.
Price, $17 per share.
No underwriter.
Foi* working capital and general corporate purposes,
c'•
/
■„
preferred stock, to be offered at par, and 12,500 shares
(no par) common to be given away with the preferred
at the rate of 10 shares of common with each two shares
Sept.
Sept. 28 filed 50,000 shares of class A common stock ($1
•
i'<'
■'
Denver, Colo.
300,000 shares ($3.50 par) common stock.
Underwriters—To be determined under competitive bid¬
(10/26-28)
Paper Co.
k/--'
Insurance Shares Inc.,
•
Co., New York. To lease properties, drill wells, and for
working capital.
„
.
.
($100 par)
No under¬
3,000 shares
Price, par.
acquire stores in the South.
of notification)
(letter
To complete formation of a stock
Office, 139 N. E. 1st Street, Miami,
Miami Beach.
& Co.,
insurance company.
t
3% cumulative preferred stock.
premiums.
Corp.,
Products
Molded
Inlet
•
Interstate
Co., Alamosa,
bid of 101.5298 for a 2%% coupon.
21 at 102to yield 2.77%. Proceeds
funds added to pay the
company
/
pany and 50,000 shares for N. O. Yeakley, a controlling
stockholder, at $1 each. Underwriter-p-W. C. Hitchman
.V;, .v:
VGeorgia
v
Co.,
Aug. 30 (letter of notification) 250,000 shares ($1 par)
common stock, of which 200,000 will be sold for com¬
Department Stores, Inc., Tifton,
-Black & White
'#
/y/v
Goldman, Sachs & Co. and The First
a
on
To be offered Oct.
Oct.
Underwriter
at market (between $13 and $15).
—Gordon Meeks & Co., Memphis, Tenn.
.
Metals
&
Mines
Albuquerque, N. M.
Montreal,
Corp.
Boston
general mining business.
r?. Berry Motors, Inc., Corinth, Miss.
.Qqt.,5 (letter of notification) 6,600 shares (no par) com¬
stock.
a
Wash.
Mexico
President of
unit. Underwriter—Sterling, Grace & Co., New
To acquire oil leases and drill wells.
cents
Seattle,
Moore,
(letter of notification) 216,000 shares ($1 par)
stock, of which 155,000 shares offered by com¬
11
common
•
mon
^
New
common
Price—12 y2
rights.
Louis
equipment, buildings and mine opera¬
i
Colorado
•
a
York.
voting
equal
with
Underwriter—John
tions.
•
value preferred stock and 6,000
stock. To be offered in units
share of preferred and two of common stock at
par)
Osburn,
1979.
Lehman Brothers,
Insurance
share.
par)
($100
($1
Co.,
Mining
(letter of notification) 500,000 (5c par) assessable
stock,
Barclay Oil Co., Inc., Mt. Carmel, 111.
Oct. 13 (letter of notification) 2,000 shares of non-con¬
shares
Fork
West
d'Alene
For development,
•
vertible
Co.
programs.
Coeur
Oct. 13
of common
Askins. No
14
&
Freres
16 filed $40,000,000 of first mortgage bonds, due
Underwriters—On Oct. 19 issue was awarded to
Sept.
Idaho
Insurance Co., Phoenix, Ariz.
(letter of notification) 8,641 shares
stock. To be sold by Jack H. and Marie O.
Oct.
•
Price—$50 each.
concrete
new
Lazard
and
(jointly); Blyth & Co., Smith, Barney & Co. and HarriRipley & Co. (jointly); Carl M. Loeb, Rhoades
& Co.
Proceeds—To buy additional common stock in
two subsidiaries as a means of helping them with con¬
Oct.'3 (letter of
mon
Probable bidders
bidding.
Brothers
(10/21)
Indianapolis Power & Light Co.
man
indebtedness.
Anderson-Farmer Corp., Maumee,
•
competitive
by
Lehman
include
Sept. 26 (letter of notification)
common stock.
Price—$1 each.
end to pay current
ISSUE
725,567 shares ($5 par) common stock. Of¬
fering—To be offered common stockholders at the rate
of one share for each 10 held.
Underwriters—To be
filed
17
PREVIOUS
South West Corp.
&
Oct. 13 filed
800,000 "Lexington Trust Fund shares."
General Distributor—Corporate Leaders Sales Co., New
York.
Business—Investment company, r . -;
,
Oct.
Central
SINCE
ADDITIONS
INDICATES
•
Registration
in
Now
Securities
Thursday/ October 20, 1949
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(15841
in
gram.
which company serves.
Finance expansion pro¬
'
No underwriting.
:
par) preferred and 50,000 shares of ($20 par) common.
Offering—Preferred will be offered to preferred holders
at
^
^booY
l-for-3 rate and
common
stockholders at l-for-9 rate.
will be
offered to
common
Underwriters—Dillon, Read
& Co. Inc. and Dean Witter & Co. will buy unsubscribed
preferred: unsubscribed
public auction
common
will be sold either al
to the underwriters.
Proceeds—To pay
off short-term promissory notes and to carry merchan¬
dise inventories and receivables or to replenish treasur)
funds.
stock
ani
W10"
The
purposes
Escl""9
balance
would
be
used
for
other corporate
construction.
or
Power Co.
Illinois
C^csC
or
Oct. 6 filed 239,601
shares (no par)
common
stock.
Of¬
fering—To be offered to stockolders of record Oct. 20 at
rate of
one
expire
Nov.
and Merrill
new
3.
share for each eight shares held. Rights
Underwriters—The
First
Boston
Corp.
Lynch, Pierce, Fenner & Beane; Proceeds—
Construction program.
v"
New York
Bostox
Philadelphia
Pittsburgh
Sax Francisco
Private Wires
to
all offices t
Chicago
Cleveland^
{
,
Volume
THE
Number 4848
170
COMMERCIAL
one
1*
♦
Illinois Power Co.
October
1949
-Common
—
_
_
1949
21,
sidiaries
1949
25,
Susquehanna Mills, Inc., 11 a.m. (EST)
Resort
1949
1, 1949
November
__
.Common
''
1949
9,
•'
•
;
'
'* .*
—Common
Co
Bonds and Stocks
Associated
November
•
1949
15,
November
pre¬
1949
29,
—,
•
To build
a
nitrator
.
bills and drill
•
anew
tunnel in
McCormick & Company,
Oct. 12
an
ore
vein.
v,
Inc., Baltimore, Md.
(letter of notification) 600 shares of 5% cumula¬
stock ($100 par) and 6,000 shares (no par)
non-voting stock and 10,000 shares nonpar) voting stock.
Price—Preferred, par; voting and non-voting stock, $15
tive preferred
share. Underwriter—Alex. Brown & Sons, Baltimore
non-voting common stock for
per
working capital.
•
Maryland Jockey Club of Baltimore
Oct. 11 filed voting trust certificates for 4,540 shares of
common stock (par $100).
.
istration
Uranium Development, Inc.,
Salt Lake City, Utah
Oct. 5 (letter of notification) 1,000,000 shares of capital
stock.
Price —10 cents
each
Underwriter — Arthur
United Minerals Reserve Corp., Chicago
July 27 (letter of notification) 270,000 shares of commorr
stock. Price—$1 each. Underwriter—Edward W.
Ackley
& Co., Boston. For development of
mining properties.; *
Upper Peninsula Power Co.
Sept. 28 filed 154,000 shares of common stock (par* $9)„
Underwriters—SEC has granted exemption from 'Com¬
petitive bidding. An investment banking group man¬
aged by Kidder, Peabody & Co.; Merrill Lynch; Pietccw
Fenner & Beane, and Paine, Webber, Jackson &
Curt&,
may be underwriters. Proceeds—Will go to selling stock¬
holders.
Consolidated Electric & Gas Co. and Middle
West Corp. will sell 120,000 shares and 34,000
shares, re¬
spectively. nv-'.'
'■ ■■•■•! : ■
:
Western Arkansas Telephone Co.,
No under¬
plant and install necessary
Russeliville, Ark.
Aug. 16 (letter of notification) 1,000 shares of 6% cu¬
mulative non-participating preferred stock (par
$100
per share).
Underwriter—Lewis W. Cherry Co., LittleRock, Ark. Proceeds—To pay indebtedness for equip¬
ment and supplies.
.
,
Western Oil Fields, Inc., Denver,'Colo.
~ Y*
May 19 (letter of notification) 800,000 shares oi commons
capital.
Price, 250 per share.
Underwriter—John.,GV
Perry & Co., Denver, Colo.
For working capital ftndT
drilling of wells.
•
Blake
ern
Marysvale
expenses
drilling.
and
Statement
Public Service Co.
other minerals.
and
•
To prospect for. uranium
Massachusetts
Public
shares of beneficial interest to be
Saunders & Co.
offered at market. Distributor—Vance,
Proceeds—For investment.
of
Mercantile Acceptance
•
effective
crease
homa
•
For general corporate purposes.
City, Okla.
City, Okla.
for 5%%
common
and
bonds, due 1979,
($100
par). Underwriters—To be decided under competitive
bidding.
Probable bidders: Halsey, Stuart & Co. Inc.
(bonds only) ; The First Boston Corp.; Glore, Forgan &
Co.; White, Weld & Co. and Shields & Co. (jointly);
Kidder, Peabody &.€o^(bonds only); Equitable Securi¬
ties Corp. (bonds only); W. C. Langley & Co.; Harriman
Ripley & Co.;-Salomon Bros. &;Hutzler (preferred only).
Proceeds—To retire unsecured promissory notes and re¬
20,000 shares of cumulative preferred stock
share
<
Nash Finch Co., .Minneapolis, Minn.
(letter of notification) - 800 * shares of common
Price, between $15 and $17. To be sold by W. K.
Nash, a Director. Underwriter—J. M. Dain & Co., Min¬
Oct.
3
stock.
neapolis.
e.
Oct.
New England Electric System, Boston.
14 filed 669,508 shares ($1 par) common
;
—Funds will be
•
stock.
Oct. 7 reported company
plans sale of $4,000,000 15-ye&r*
sinking fund debentures with Allen
writer.
Co.
&
under¬
as
,
•
American Natural Gas Co.
Investment banking firms have been forming into groups
to compete for the underwriting of an
offering by com¬
of 276,805 shares of common stock. It is expected
that this additional stock will be offered first for sub¬
pany
,
applied to the purchase Of equipment,
construction, exploration and development. ■
J
Textoma Park, Inc., Denison,
Texas
Tri-Wheel Motor Corp., Oxford, N. C.
Black Hills Power &
Light Co.
•
Oct. 11 company filed plans for issuing 33,730 additional
shares of common istock which will be offered to." Stock¬
s-holders under subscription rights.
Dillon, Read
Co.,/
-
Inc., will underwrite the offering.
will be used for
Proceeds of the issue
plant improvements and for repayment
of bank loans.
.
»
Butterfield
(W. S.) Theatres, Inc.
The Paramount Pictures Inc. invites offers for the pur¬
chase of the following stock which it now: owns: 37,50$
shares
of class B stock
Inc., and
6.940
of W.
shares of
class
S.
B
Butterfield
Theatre^
stock of Butterfield
/ ;
r Oct. 14 (letter of notification) 99,900 shares of class A
common stock. Price—$3 each. No underwriter. To retire
Michigan Theatres Co. Inquiries should be addressed to
Sidney M. Markley, Paramount Pictures Inc., 1501 Broa<&£
bank indebtedness.
way,
•
■<)ffej;ip£—To be .offered to stockholders .at the rate of
X
/
Sudore Gold Mines Ltd., Toronto, Canada •;
June 7 filed 375,000 shares of common stock. Price-rSl
per share (U. S. funds). Underwriting—None. .1 Proceed!
•
-
:
'
Prospective Offerings
Airlines, Inc. (11/1-4)
(letter of notification) 54,000
second mortgage 10-year notes.
To build a resort, in¬
cluding lodge, pavilion, clubhouse, etc.
Office, Grandpappy Point, Denison, Texas.
♦ ■
tal and to
improvements, extensions, etc!! Not under¬
American Bosch Corp.
bought from Portland Plywood Corp., for working capi¬
complete plant. Office, 800 Pacific Building,
Portland, Ore.
Multnomah
For
written.
Southeastern.
'
Oct. 6 (letter of notification) 1,000 shares ($1 par) com¬
mon stock to be
offered at $1 each and 1,000 of $50
•
Nov. 1.
cumu¬
common
Plywood Corp., Portland, Ore.
Oct. 111 (letter of notification) 120 shares of $2,500 par
value common stock. ' No underwriter.
To pay for assets
•
Underwriter—Gear-
.
road
purposes.
cent per warrant.
.
Missouri Power & Light Co.
construction
one
$100)
1
Smith, Inc., Fargo, N. D.
scription by shareholders in the ratio of one for 10 heldL.
notification) 2,000 shares of 6% cumu¬
American Natural Gas was formerly known as Americas,
lative preferred stock ($25 par) and 15,500 shares ($5
T ight & Traction Co. Probable bidders include;
Blyth &
par) common stock.
Price—Preferred to be sold at 'Co., Inc.; Lehman;Brothers; Glore, Forgan &Qo,and
$25 and common at $7.75. Underwriter—W. R. Olson Co.,
W. C. Laughlin & Co, (jointly).
:
*
Fergus Falls, Minn. To retire bank loans. 1
Associated Telephone Co., Ltd. (11/15)
•
Southern Colorado Power Co. (11/7)
Oct. 6 company applied to the California P. U. Commis¬
Oct. 17 filed 170,336 shares (no par) common stock.
sion for permission to sell $9,000,000 first
mortgage
Offering—To be offered stockholders at the rate of one
bonds due 1979.
T|ie bonds are to-be sold at competitive
new share for each three held.
Underwriter—Boettcher
bidding. Probable bidders: Halsey, Stuart & Co. Inc.p
& Co and Bosworth, Sullvan & Co., Denver, and Hutch¬
Paine, Webber, Jackson & Curtis; White, Weld & Co.,
inson & Co., Pueblo, Colo.
Proceeds—To repay bank ; Kidder, Peabody & Co. and Shuman, Agnew & Coloans and for construction.
"
'
(jointly). ■
•: ; >
Oct. 14 filed $2,000,000 of first mortgage
imburse treasury for
exchange
Oct. 12 (letter of
„
and
for
(par
at
•
'
\
Minnesota
Mining & Manufacturing Co. /
Oct. 19 filed
75,000 shares (no par) common stock.
Offering—To be sold to employees of the company and
five wholly-owned subsidiaries. Underwriters — None.
Proceeds—To buy in debentures or $4 preferred stock.
•
stock
shares ($1 par)
common stock, of which 50,000 shares offered by com¬
pany and 4.000 shares by George B. Wilkinson, Charlotte,
N. C.
Underwriter—Marx & Co., New York. .Price—
$5 per share. To be used for equipment and additional
working capital in connection with the company's air
cruise service. Expected week of Oct. 24. \. \/(
July 27
(letter of notification) 1,500 shares of preferred
Price—$100 per share. No underwriter.
To in¬
capital.
Office, 212% N. W., 15th Street, Okla¬
stock.
Indiana, Inc.
Resort
Corp. of California
Midwestern Insurance Co., Oklahoma
6
Service
in
Co.
common
hart, Kinnard & Otis, Inc., New York City. For working:
capital.
■ v
[']■ ' ' s't. .
York (Pa.) County Gas Co.
/
Sept. 23 (letter of notification) 6,000 shares of common
stock (par $20). To be offered for subscription
by stock¬
holders of record Oct. 14 in ratio of l'/5th of/a new share
for each share held, at $50 per "share.
Rights expire
Underwriter—None.
"
Sept. 8 (letter of notification) $100,000 4% 10-year de¬
bentures.
Underwriter—Guardian Securities Corp., San
Oct.
Power
preferred
,
(letter of notification) 140,000 shares ($1 par)
stock to be offered at par, and 150,000 3-year
option warrants for purchase of a like number of shares
stock
(par $10) on basis of 4% shares common Public Service
for one preferred share Southeastern and
V/z shares
Investment Trust
Oct. 11 filed 1,409,792
Francisco.
Indiana
lative
~
13
common
Sept. 12 f-iled 81,744 shares of common stock (no par).
Offering—To be offered to stockholders of Southeast¬
-
Thomas, Salt Lake City.
of
Wilcox-Gay Corp., Charlotte, Mich.
Oct.
June 27.
•
Price, $3 per share. Corporate purposes.
*
:
' >
'
Power Petroleum Ltd., Toronto Canada
April 25 filed 1.150,000 shares ($1 par) common of which
1,000,000 on behalf of company and 150,000 by New York
Co., Ltd.
Price—50 cents per share.
Underwriters—
S. G. Cranwell & Co., New York. Proceeds—For admin¬
will offer 1,000 shares of
1
.
stock (par 30c).
No underwriter.
Pennsylvania Electric Co.
$11,000,000 first mortgage bonds, due 1979,
70,000 shares of series D cumulative preferred
stock ($100 par).
Underwriters — Competitive bidding.
Probable bidders for preferred: Kuhn, Loeb & Co.; Kid¬
der, Peabody & Co.; Smith, Barney & Co.; W. C. Langley
& Co., and Glore Forgan & Co.
(jointly); Harriman
Ripley & Co. For bonds: Halsey, Stuart & Co. Inc.; Har¬
riman Ripley & Co.; The First Boston Corp.; Equitable
Securities Corp.; Kidder, Peabody & Co.; Kuhn, Loeb
& Co., Lehman Brothers and Drexel & Co. (jointly).
Long Canyon Mining Co., Ogden, Utah
(letter of notification) 325,000 shares of common
Price—200 per share.
No underwriter.
To pay
$14,600,000 of the company's 3% deben¬
i
.
.
United Cigar-Whelan Stores Corp.
Oct. 10 (letter of notification) 4,144 shares of common
and
stock.
partial payment
•
equipment.
Oct. 7
to be issued in
•
>stockv
tures due Jan. 1,1967.
Oct. 6 filed
•
>
.
common
a limited number of institutional
investors. Proceeds of the sale of the notes will also! be
utilized to retire
10
writer.
are
(
($25 par)
promissory notes to
•
('
•
(Calif.)
600,000 shares
filed
price is $22,400,000 in cash. This will be
obtained from the sale of $40,000,000 of 2% %
25-year
each, and 75,000 of 5% first mortgage bonds.
.
—-Common
Southern Co.
.
17
of the purchase
(letter of notification) 750 shares ($100 par)
second preferred stock, 6% cumulative dividends, at $100
—Bonds
Telephone Co., Ltd
v
/.
(11/1)
for all of the 35,000 outstanding shares of
capital stock*
of the Los Neitos Co., an oil producing company. Balahce
Pacific Powder Co., Tenino, Wash.
Oct.
Missouri
Proceeds—For construction. Bids expected Nov. 1.
Proceeds—The shares
California
($10 par) common stock. -Of¬
fering—To be sold at $18 per share under a stock op¬
tion plan for which options were issued on May 2, 1947,
Underwriter—None.
Proceeds—For general
corporate
purposes.
-
Co. of
Union Oil Co.
Oct.
Pacific Finance Corp. of
1949
11,
Central Maine Power
•
determined
be
Electric
Co. Inc.; Blyth & Co., Inc.; White, Weld & Co. and Shields
& Co. (jointly); The First Boston
Corp.; Lehman Bro¬
Oct. 7 filed 19,750 shares
__Equip. Trust Ctfs.
Wabash RR.___
November
to
To
,
30 filed 150,000 shares of cumulative preferred
stock (no par). Underwriter—To be determined under
competitive bidding. Probable bidders: Dillon, Read &
Northern Ohio Telphone Co., Bellevue, Ohio
Sept. 23 filed 13,575 shares 4V2% cumulative preferred
stock ($100 par). Underwriters—Lawrence Cook & Co..
and Cunningham & Co., Cleveland.
Price, par. Pro¬
ceeds—To reimburse company for funds spent to buy
22,574 shares of common capital stock of Star Telephone
Co., Ashland, Ohio.
1949
7,
Southern Colorado Power Co
Detroit Edison
Underwriters—Names
Union
.
thers.
Jersey Power & Light Co.
filed 20,000 shares ($100 par) cumulative
stock.
equipment.,
promissory note due
buy cameras, film
a
1950. No underwriter.
41
Sept.
year.
..Preferred
Union Electric Co. of Mo._
31,
and
Clock & Watch Co.
Common
Airlines, Inc.,
November
(Conn.)
Common
Co.
$2,500 loan evidenced by
Dec.
of
through competitive bidding. Probable bidders: Kidder,
Peabody & Co.; Smith, Barney & Co.; W. C. Langley &
Co.; Lehman Brothers. Proceeds—Will be applied to the
payment of the cost of, or in reimbursement of payments
made for, construction of additions and betterments sub¬
sequent to April 30, 1949.
Sale deferred until later this
...Common
•
Interstate Power
(1585)
each
t
finance construction programs.
(letter
9
ferred
Combined Locks Paper Co.______
November
13
June
Trust Ctfs.
Southern Pacific Co., noon (EST)__Eqp.
26,
be
New
Bonds
Iowa-Illinois Gas & Electric Co
October
Underwriter—To
notification) 6,600 shares ($1 par)
common stock, to
be sold by Lawrence J. Rubenstein,
Roxbury, Mass. No underwriter.
.-.Common
October
can
New Haven
Oct.
Keller Motors Corp
,
•
1949
24,
held.
10
under
Bonds
Indianapolis Power & Light Co.———
October
each
CHRONICLE
competitive bidding.
Probable bidders;
for common include Merrill Lynch, Pierce, Feniier &
Beane, Kidder, Peabody & Co. and White, Weld & Co.
(jointly); Harriman Ripley & Co. and Goldman, Sachs
& Co. (jointly); Blyth & Co., Inc. and Lehman Brothers
(jointly). Proceeds—For additional investment in the
common stock of subsidiary companies so that the sub¬
NEW ISSUE CALENDAR
20,
for
FINANCIAL
,
decided
October
share
new
&
Tynar Corp., Los Angeles, Calif.
Oct. 12 (letter of notification) $102,500 common stock
(oar $10)! and 6% promissory notes, in units of .6%
shares of common which can be purchased along with
New York 18, N. Y.
W. S. Butterfield
sents 25.8079%
-
,
,
-
Theatres, Inc., class B stock
of outstanding
j;;, ; *: f
repre¬
stock and is all of tho
outstanding class B stocky This stock is entitled.to elect
(Continued
on page
42)
42
ects should
W. S. Butterfield
one-third of the board of directors.
try and Cuba of a single bond issue rather than a
Theatres, Inc., owns and/or leases 65 theatres in 18 of
the larger towns of Michigan, except Detroit, and has
•
subsidiary in two theatres in one similar town.
issue and sell
(no par)
Food Fair Stores, Inc.
30 stockholders will vote
as
SEC's competitive
underwriters.
on
York to Florida.
f
<
President, stated company con¬
sidering plans involving long-term financing to provide
funds for plant consolidation and to strengthen working
Harriman, Ripley & Co.; Shields
Co.; Halsey, Stuart & Co. Inc.; Equitable Securities
Corp.; Otis & Co. Offering expected in November.
&
debt of about $60,000,000.
The road asked the ICC to approve issuance of $25,-
760,000 of first mortgage 5-year 3Va% bonds, series B,
to be sold or pledged against a short-term loan.
Pro¬
Beane; Kidder, Peabody & Co. and White, Weld & Co.
(jointly); Stone & Webster Securities Corp.; The First
of the sale
or
loan
will
be
used
redeem
to
Boston Corp.
all
outstanding first mortgage series A bonds on Jan. 1,
1950r at 104% and interest to redemption date, a total
of $27,436,305. The company asked to be relieved from
ICC rules requiring competitive bidding because, under
the first mortgage, it must publish the first offer of
redemption on or before Nov. 1, this leaving insufficient
time for steps incident to competitive bidding.
Cleveland Electric
Sept. 28
Consolidated
Gas
Electric
•
\
by a fifth supplemental indenture to be
Nov. 1, 1949. The issue would be disposed
dated about
of by private
offering and direct sale. Proceeds would be used in a
construction and improvement program.
Gas
into
Baltimore
new
including depreciation
.
t
Southern
Co.
will be
the funds needed
sources,
,
j
*
,
r
(11/29)
Electric
&
lower cost securities.
Southern
Pacific
Co.
(10/25)
Bids for purchase of $15,780,000
series CC, to
cates,
equipment trust certifi¬
mature in 15 equal annual instal¬
by the company at Room 2117,
ments. will be received
Co.
Oct. 7 reported company has plans under
for refunding its outstanding $36,000,000
Light & Power Co.,
balance of
internal
18 reported four investment banking groups are
preparing to enter competition for a probable offering
by company of from 1,250,000 to 1,500,000 additidnal
common
shares.
The groups
are:
Lehman Brothers;
Harriman Ripley. & Co., Inc.; Morgan Stanley & Co.,
Kidder, Peabody & Co. and Merrill Lynch, Pierce, Fen¬
ner & Beane (jointly); Union Securities Corp. and Equit¬
able Securities Corp. Expectations are that the additional
shares will be ready for public bidding about Nov.' 29.
up
Louisville
The
from
Oct.
23/4% series due Feb. 1, 1977, or (2) as a new 23A% series
of 30-year bonds due Nov. 1, 1979, to be provided for
(jointly); Blyth & Co., Inc.; Halsey, Stuart & Co. Inc.;
White, Weld & Co.
1953.
to
reserves.
to $12,000,000 in first mortgage bonds.
The
said the bonds would be issued either (1) under
the third supplemental indenture to its Oct. 1, 1937,
mortgage and deed of trust as additional bonds of its
credit of $15,000,000 to finance construction costs.
Long-term financing
of either bonds or preferred will be undertaken later,
depending upon market conditions.
Probable bidders
on bonds:
Glore, Forgan & Co. and W. C. Langley & Co,
•
*
;
1949
obtained
company
Illuminating Co.
South Carolina Electric & Gas Co.
1952, the proceeds to be used to finance in part its
$34,000,000 expansion program in the five years from
Idaho Power Co.
company nas arranged a bank
,
Co.
in
Sept. 29 company has asked the FPC for authority to
issue
Service
11, company announced plans to issue and sell
$10,700,000 in bonds in 1950, 1951 and 1952, $3,000,000 m
equity securities in 1950 and $3,000,000 in common stock
Co.
Sept. 27 reported company plans sale in November of
$10,000,000 first mortgage bonds.
Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Lehman Brothers; Merrill Lynch, -Pierce, Fenner &
ceeds
Public
On Oct.
Gulf States Utilities
Chicago Rock Island & Pacific RR.
Oct. 13 the company placed before the ICC for approval
an "interim"
step in its plan to refinance its funded
10
Ohio
•
capital.
•
;
(Minn.)
Co.
Oct. 14 Cities Service Co. asked SEC to exempt from
competitive bidding its proposed sale of 2,000,000-shares
common stock (par $7.50)
of Ohio.
i '
Gerity-Michigan Corp.
Oct. 8 James Gerity, Jr.,
W. C. Langley & Co.;
//v;-'-/.//v
.
•
;
*
'
Power
from
the authorized indebtedness from
Aug. 11 requested SEC authorization to issue and sell
$6,000,000 of convertible debentures. Probable bidders:
Union Securities Corp, Salomon Bros. & Hutzler and
Spencer Trask & Co. (jointly); The First Boston Corp.;
Drexel & Co. and Stroud & Co. (jointly); White Weld &
Co. and Stone & Webster Securities Corp. (jointly);
States
company requested SEC authorization to sell
1,357,918 to 1,584,238 shares of its common stock,
no
par value.
It is intended to make the initial pro
rata offering to present common stockholders. Probable
bidders:
Smith, Barney & Co.; White Weld & Co.
and Glore, Forgan & Co. (jointly); Lehman Brothers and
Riter & Co. (jointly). Proceeds—To be used to retire
$15,000,000 of 2% promissory notes due on or before
Dec. 30, 1949.
'
.
$
Aug.
will yield
a proposal to raise
$5,000,000 to $12,000,000.
The increase is designed to finance expansion of
company's supermarket chain which extends from New
Dec.
Hudson Gas & Electric Corp.
Central
shares
common
about $295,000. Sale is exempt from
rule and shares will be sold through
Theatres Co. owns and/or leases 20 theatres in 10
the smaller towns of Michigan, and has an interest;
a
number of
such
•
Northern
Derby Gas & Electric Corp.
Oct. 14 requested SEC authorization to
gan
of
companies.
•
class B stock repre¬
sents 33%% of the outstanding stock and is ail of the
outstanding class B stock. The stock is entitled to elect
one-third of the board of directors.
Butterfield Michi¬
Butterfield Michigan Theatres Co.
11
first mortgage bonds, due
series
offerings. It is reported that The First Boston
Corp. will head the American investment banks han¬
dling the American share.
similar towns.
through
company expects to replace its $2,125,000 4%%
1966, with a longer issue bear¬
ing interest at 3%% and due 1975.
It is expected that
company will sell the bonds privately to two insurance
Oct.
of bond
theatres in nine
26
subsidiaries in
through
New York & Richmond Gas Co.
public works proj¬
the flotation in this coun¬
be done through
Thursday, October 20, 1949
CHRONICLE
FINANCIAL
&
ment's flew $100,000,000 program of
(Continued from page 41)
interests
COMMERCIAL
THE
(1586)
165
Broadway, New York, up
to noon (EST) Oct. 25.
Halsey, Stuart & Co. Inc.; Salomon
Hutzler; Harriman Ripley & Co. and Lehhnan
Brothers (jointly).
consideration
bonded debt
bidders:
Probable
Bros.
Probable bidders if sale
&
is not negotiated:
Halsey, Stuart & Co. Inc.; Lehman
approving a proposed
Brothers and
Blyth & Co., Inc. (jointly).
Susquehanna Mills, Inc. (10/25)
amendment that would permit company to issue more
The
Attorney General of U. S. invites bids ] for
mortgage bonds for capital requirements.
Presently
Middle South Utilities, Inc.
the purchase, as an entirety, all of 11,422 shares of the
the mortgage provides that not more than $100,000,000
Oct. 6 Electric Bond Share Co. announced a proposed
common
stock (par 250) of company, with principal
of first refunding mortgage bonds may be outstanding. 1
offering to its common stockholders of rights to purchase
office at 404 Fourth Avenue, New York, N. Y. AH bids
If stockholders approve
the limitation will be revised
at $12 a share, 656,000 shares of Middle South, Utilities,
"?■ must be presented
at the Office of Alien Property,
to permit the company
to increase the outstanding
Inc., common stock at rate of one share of Middle South
/ Department of Justice, 120 Broadway, New York, on or
amount of bonds from time to time as needed to $200,common for every eight shares of Bond
& Share com¬
before 11 a.m. (EST), Oct. 25.
"
•
000,000. The revision would obviate the need for issuing
mon.
Record date and offering price period will be
second mortgage bonds or debentures, which would cost
announced after SEC approval of the program.
Wabash RR.
The
(11/9)
more in financing than the continued sale of first mort¬
Oct. 10 reported company planning the sale of $3,465,000
rights offering will not be underwritten. One right will
gage bonds.
be distributed for each share of Bond & Share common,
equipment trust certificates. Probable bidders: "Halsey,
•
and each right will be worth approximately 64 cents at
Cuba, Republic of
Stuart & Co. Inc.; Salomon Bros. & Hutzler; Harris, Hall
Oct. 19 Enrique Godey, President of Banco
the Oct. 6 closing market price of 17% for the Middle
&
Co.
Godey-Sayan
(Inc.); Harriman Ripley & Co. and Lehman
of Havana stated that financing of the Cuban Govern¬
South common.
Brothers (jointly).
Bids expected about Nov. 9.
* <
Nov. 17 stockholders will vote
on
,
has been quoted
The
other
five
the issue with
a
in
time.
some
bidders
sought
2%% coupon. The
general
marked
easing
which
rates since
interest
Coast
and
Wall
of
writing
firms,
market
a
the
shares
Street
in¬
News About Banks and Bankers
under¬
slated
was
block
the
of
syndicate,
of the major West
many
has
lower rate is definite evidence
the
nationwide
A
cluding
of
to
1,199,554
big bank's stock
for the account of the
Giannini
Treasury,
holding company.
some
months back, plumped for
renewal of easy credit policies as
By this operation the holding
a
means of helping
to curb the company, which has been subject
recession then ruling in many di¬ to Federal Reserve Board
pressure
Federal Reserve and the
xj
rections.
The underwriting business this
showed the first real signs
The
over
successful
group reoffered
price of 100.52 to
week
the bonds at
of renewed activity since the long
lull which started back in the
yield about 2.70%,
new
corporate- issues, some of the sec¬
ondary
variety,- some
in
the
"standby" classification, and New
York State's big housing
issue
served to stir things up after the
long hiatus.
cycle,
money
ported
A
number
of
Investment bankers and those
who assist them in distributing
securities naturally were
new
In
a
more
optimistic frame of
mind despite the spread of the
strike trend and the threat of a
long deadlock in the steel and
Strangely
enough, under the
circumstances,
equity offerings
appeared
well
as
to
fare
indicated
oversubscription
bit
a
the
on
exceptionally
by the quick
which
marked
the offering of a block of 100,000
shares of common stock of Empire
District Electric Co. on Tuesday.
treading
issue
was
the
from 22.9%, the portion of
bank's
stock
held
now
by
Transamerica and its subsidiaries.
Offerings
take
President
Among the week's largest issues
was
that
of Public
Service
Elec¬
& Gas Co., involving 250,000
shares of new 4.08%
$100 par
tric
value cumulative preferred stock
brought out yesterday and which
was reported well received.
The company will add the pro¬
ceeds to its general fund for fi¬
nancing new construction.
Co.
Power
opened bids
&
Light
yesterday
for
$40,000,000 of new first mort¬
gage
bonds to mature in 30
years.
Proceeds here
marked,
with
funds, to take
tion of
a
were
ear¬
other corporate
of redemp¬
care
similar amount of out¬
additional
ratio
of
one
new
shareholders
been
pro¬
the. curtailment of its interest; in
first time that low interest rater
Bank of America "NTSA;<
v
Nov.
9, it
right
to
subscribe
to
699,743
new
share for each
sale
Northern
of
the
assets
of
&
Trust
Co.
Bank
Pa., ,,to
National
for
.
the
of
the Lancaster
Bank, also of
,
ten
eral Reserve
that
as
System, which stated
result
a
established
at
branch
a
the
office
Northern Bank & Trust Co.
held.
This
is
part
of
a
new
capital
which
calls for
the ultimate sale to institutional
program
of
notes
$40,000,000
of
un¬
which will not
&
Trust
of
(Special
ST:
to The Financial
LOUIS, MO.
continues
Bank
as a
member bank of the Reserve
System pending consummation of
rtytybust: activities.
.
bW/.-,
(
>
George S.
accounts
from
an
interest in the J. M. Guf-
fey Petroleum Co. and to acquire
and
develop huge tracts at Beau¬
mont, Texas, and to establish the
Gulf Refining Co. at Port Arthur,
Texas, in its time one of the larg¬
in the world. Among other
things said the same advices he
est
was
a
director of the Mellon Na¬
tional Bank, the Union Trust Co.,
the
Union
Savings
Bank,
the
Standard
Steel
Car
Co.,
the
Ligonier Valley Railroad, and the
Westinghouse Electric arid' Manu¬
facturing Co. A merger' of the
j#
was
Larimer
.j,
Mellon
later effected under the
the
of
Trust
Mellon
Co. iW.
nephew
Mellon
the
of
National
L.
Mellon
late
and cousin
name
Bank
was
Andrew
&
a
W.
of Richard K.
Mellon, Chairman of the Board of
the Mellon National Bank & Trust
Co.
The election by the directors of
Jerome C.
of
Oct. 8 at the
age of
81 years. In the "Post
Gazette? ' nf. Pittsburgh
it was
noted vthat* W. L. Mellon turned
on
Christopher
as a
Vice-
President of the Fidelity Trust Co.
of Baltimore, Md., was announced
Oct. 7 by President W. Bladen
Lowndes, according to an item
appearing in the Baltimore "Sun"
on
of
William
Chronicle)
Co.
tyomithe banking house of his
Bangert, Jr., is with KinMerritt grandfather, Judge Thom&s Mel¬
& Co., Inc., 403 Olive Streets.
lon, toward Western Pennsylvania
—
said
cooperated,
Press
Pittsburgh with other Mellons to
the
North¬
be
With King Merritt
he
also
the .traction
was
ern
raising
business,
United
having
with
Mellon National and Union Trust
The
Lancaster, became effective on
Oct. 1, according to advices of the
Board of Governors of the Fed ¬
has
at par of $20 a share in the ratio
one
in
slightly more'f than $23,000,000.
The Fidelity's deposits June 30
were reported at $332,292,290.
County
shares of additional capital stock
of
Union
Fidelity Unions assets by
creases
Pittsburgh, died
largest bank stock
history - is due on
the
of
Fidelity
Fidelity Union."
The transaction, it is stated, in¬
Lancaster,
convertible into stock.
Bank of America NTS A
of Transamerica Corp;
each
announced, will have the
investors
posal
for
Meanwhile Detroit Edison Co.
secured
the market today under
share
new
construction.
premiums.
One of the
common
eight shares held, is slated to get
under way tomorrow, with bank¬
ers "standing
by." The company
will use the receipts for financing
standing bonds at the required
transactions in
offering to
239,600 shares of
stock, in the
of
of
of the
"Rights"
on
ings, John I. Middleton, VicePresident, and Herbert A. Berghof, Cashier, was appointed. Mr.
Hitchings will become a Vice-
identified
been
Newark, Mr. Middleton will be
Manager of the Irvington branch
and
Mr./ Berghof
will become
Assistant Secretary and Treasurer
Besides
fields.
liquidation proceeding should be
completed fcv the end of the year.
"A
three-member
liquidation
committee, consisting of Mr. Hitch-
Illinois Power Co.'s
shareholders
fixing * price to the, company
of 100.14 for a 2%% coupon, the
11.1%
re¬
Meanwhile
Duquesne
Light
Co/a offering of $15,000,000 of
new
30-year
first
mortgage
bonds brought out a total of
six bids with the winning group
of months, would
reduce its interest in the bank to
the slow side.
Other Large Issues
Indianapolis
coat industries.
and
ground for the current easy
new
mid-sUmmer.
a
period
a
oil
(Continued from page 15)
Oct. 3 by
J. S. Armstrong^ Fi¬
nancial Editor of that paper. Mr.
Christopher entered the employ of
the Fidelity as a Tunner in 1919,
says the advices in the-/:Sun," and
after serving in various depart¬
ments
was
-
named -Treasurer
in
1947, continuing in that post until
Volume
his present advancement.
B.
since
William
served
who
Alexander,
Comptroller
THE
Number 4848
170
as
January,
last
succeeded
election
created
nounced. Mr. Muir had been Gen¬
forces
eral
sioned in the field in
Wirgman and Cobb
T.
while
Comptroller,
Scheikert
Further
in
reported
wore
Mr.
succeeds
Auditor.
as
elected
William F.
the
Stegman
promotions
"Sun" as
follows:
"Arthur
serve
J.
John
A.
Hepburn,
an
as
Assistant
Spilman
Auditor.
elected
was
Rhein
Assistant
elected
was
an
Secretary and Assistant Treasurer.
Charles W. Eackles and G. Elmer
Klein
J.
G.
Atkinson
executives of th^bank along with
Manager.
Mr. Miller.
tives
to
as
serve
The shifting of
execu¬
partially caused by the
resignation ot Wallace M. Davis,
Executive Vice-President, who ac¬
the
cepted
President
of
post
of
Davis
Mr.
as
President of the Hibernia National
Bank
in
noted
was
of
issue
our
Mr. Wirgman,
Sept. 8, page 952.
John
Assistant
elected
Officer."
of
the^f latter
since the consolidation of the Cit¬
National
Union
izens
of
dent
Z.
the
National
Illinois
Continental
Bank
-
Vice-Presi¬
Henkle,
Co.
Trust
&
of
Fidelity & Columbia Trust Co.
1944.
Previously,
says
the
"Courier-Journal," he was Presi¬
dent of the Fidelity & Columbia
in
Chicago, in charge of the savings
Trust
department, died on Opt.. 3.
Ac¬
cording to the Chicago "Daily
dent
Tribune," Mr. Henkle had been
with the Continental Illinois bank
and its predecessors for 29 years,
and
became
Vice-President
in
The
1941.
quoted further
paper
that he was the son of Wil¬
liam H. Henkle, Secretary of the
old
Illinois
Trust
and
Savings
says
of the constituents of
the present Continental bank.
It is likewise stated that Charles
Bank,
one
Henkle
Z.
was
veteran of both
a
World Wars.
He served as a Com¬
bat Infantry
Captain in France in
in
awarded the Pur¬
the first war and was wounded
action.
He
was
ple Heart and the silver star for
In
the
second war,
he
served as a full Colonel in the
valor.
command in Chi¬
deputy director of per¬
then 6th Army
cago,
as
sonnel.
'
*
Co.
Mr.
Ringland,
President
Northwestern
National
Joseph
F.
the
early in
light
electric
sign,
Minneapolis
of
Bank
October threw the switch to
the
bank's
claimed
new
the
be
to
largest
spec¬
sign ouside of New York
tacular
City. A fire-works display marked
the occasion and at the same time
helium-filled balloons
250
carry¬
ing $300 worth of savings account
certificates
were
released
from
the
root
of
feature
A
of the
is
sign
huge
a
glows in va¬
ball which
weather
building.
bank's
the
weather.
This spectacular sign, it is an¬
nounced, was designed by Douglas
heigh, Broadway sign creator, re¬
sponsible for most of the spectac¬
rious colors to predict the
Citizens
James P. Hickok
will, it is an¬
Na¬
Union
1939.
Chairman
mittee
of
Taxation
the
American Bankers'
of the
Association
Com¬
the
and
Legislative
Committee of the Kentucky Bank¬
ers
Association.
Mr. Cobb, who
:
entered the Union. National Bank
as
in
clerk
a
1907
was
named
Vice-President in 1919 of the new
institution
service
of
He
National.
of
dent
formed
through
the
became Vice-Presi¬
He
Citizens
the
1944.
:
-
Fidelity in
/
The
third
staff
his
For
contribution to the
re¬
construction of Italy, L.
nini,
M. Gianof* the Rank of
President
of
Office
India
Chartered
the
of
in
in
Canada
to
tered
The
1912
and
three
become
to
Italy's highest ci¬
*
Order 5 "Stella
Italiana," first
Solidarieta,
class.
the
of
name
Italian
of "the
President
by
Benedetto
Consul General., for
Republic
d'Acnunzo,
Italy in San Francisco.
As
a
T. H.
distribution
its
and
distressed Italian people in
the liberated portions of the coun¬
try during the war and in the na¬
tion
as
a
whole at the conclusion
of hostilities.
been
was
a
*
•'
*
The
of
Ilead
were
Bank
Royal
-
of
Office,*
announced
of
Board
The
this
of
Directors
Y.
on
company
13, 1949 declared the regular quarterly
dividend of $1,375 per share on the outstand¬
ing 5V2% Series Cumulative Preferred Stock of
October
January 1, 1950 to stock¬
close of business on
the company, payable
of record at
the
holders
December
1949.
20,
this
of
Directors
of
Board
company
on
the
13, 1949 declared a dividend of 15 cents
share on the Common Stock outstanding of
record
1949.
of
stockholders
on
payable
company,
November
3,
November 15,
at the close of
1949 to
business
and
to
Citizens
Oct.
5
Co.
of
man,
of
f
of
per
on
v/hc-
was
Board.
James
S. G. Dobson
Muir
Fidelity
Bank
a
share
dividend
close
ber
1949, to stockholders
21,
ness
payable
1949 to holders
15,
of record October 28,
1949.
November 1,
17,
1949.
Checks will be mailed.
WARREN W. BELL,
JOHN
E.
McDERMOTT,
President.
1949.
Secretary.
NATIONAL SHARES
dividend of $2.00 per share on the De¬
benture Stock will be
to
CORPORATION
paid Nov. 1,1949,
Earnings Statement for the
stockholders of record Oct. 24, 1949.
1 weive ivionlh Period Ended
September 30, 1949.
"A" COMMON and VOTING
Pursuant
COMMON: A quarterly dividend of
share
Nov. 15, 1949, to
one
dollar
to
its
agreement
Underwriters of its
the "A" Common
and Voting Common Stocks will be paid
25 cents per
on
in
accordance
the
common
with
Section
with the
stock, and
11 (a) of
S.curide? Act of 1933, as amended,
Corporation has made
National S.iares
stockholders of record
generally
Oct. 24, 1949.
holders
Newhall, Treasurer
an
available
its
to
security
earnings statement of the
for the twelve month period
ended September 30, 1949.
Upon request addressed to it at
14 Wall Street, New York 5, N. Y., the
company will mail copies of such state¬
ment to its security holders and to
other interested parties.
company
Framinghum, Mass.
NATIONAL SHARES CORPORATION
F. WILDER BELLAMY, President
($1.00)
share
Dated, New York, N. Y.
October 18, 1949.
■
1949
declared
a
&
: Ti
■
Wirgnamed Chairman
elected
dividend
J#
10(* per share has been declared on the Common Stock
Corporation, payable November 23, 1949 to stockholders
7, 1949.
December 2,
Common
Stock
order
In
reach
you
at
your
(1)
,
share upon its Common Stock,
olders
Kayable of record 29, of the toclose of
November
1949
stockas
business
November
2,
H.
G.
your
J. P.
of
an
York
8, N. Y.
Dobson, President of the bank
1946, was elected Chairman
was
pending before the Securities and Ex¬
application to pay a special capital dividend of
Furthermore, the Company has
change
,
Commission
an
l/10th share of Niagara Hudson Power Ccrp^ration Common
each share of United held. It is important that your stock be
in the correct name and address so that, if this application is
your
allotment of Niagara Hudson stock will reach you
Stock for
registered
approved,
promptly.
1949.
THE
WILCOX 2nd,
UNITED
CORPORATION
By WM. M. HICKEY, President.
Wilmington, Delaware
since
authorized agent, and
correct address is on file with our Transfer Agent,
Moraan & Co., Inco.porated, 23 Wall Street, New
Atkinson
of the Board of Directors. He
be correctly issued -to you and
IT IS IMPORTANT that you make
may
present address,
Secretary.
T.
Stock in 12
stock is reaistered in your own name, or in the
your
name
t
Board
of
Directors
of
Hooker
Electrochemical Company on October 12,
1949 declared a dividend of Thirty Cents
per
dividend checks
that
(2)
of
The
($.30)
be paid on United Common
certain that
1949.
Dividend
to
It is possible that many shares of stock held by present owners may
registered in some different name.
dividend),
payable December 28,
1949
to stockholders of record as of the close
business
COMMON STOCK
of
This is the first dividend
be
$1,125 per share upon its Cumulative
Second Preferred Stock, Series A, ($4.50
ANSLEY
Louisville
quote, likewise stated:
Cobb, an Executive Vice-
quarterly
of
years.
Board
of
Directors
of
Hooker
Electrochemical Company on October 12,
-Iff
Vice-Presi¬
CORPORATION
of record November
The
i
President since 1944, was
of The United
Preferred
Second
owners
A dividend
Dividend
Stock, Series A, Dividend
jLji
Menefee
The
UNITED
To the
to stockholders of record as of
of business December 2, 1949.
Cumulative
*
of
cents
standing common stock of the
Company, payable on Novem¬
the Common
on
a
one-half
J (121/2C) per share on the out¬
has
dividend
quarterly
a
and
twelve
of record at the close of busi¬
Board
28,, 1949
on
Ky.,
we
"W. R.
15c
of
Directors
of
Hooker
Electrochemical Company on October 12,
1949 declared a- quarterly
dividend of
■the
t
of
Stock of the Company,
$1.0625 per share upon its $4.25 Cumu¬
lative Preferred Stock, payable December
"Courier-Journal" of Oct. 6, from
which
of
Directors
of
Board
declared
has
November 18, 1949.
the directors
Lee P. Miller,
the
COMPANY
Bay Mining
Stock
$
Louisville,
succeeding
Directors
Manufacturing
Company
Dividend Notice
$4.25 Cumulative Preferred
The
He
dent since 1944, was elected Pres¬
ident
of
Board
TIDE WATER POWER
Secretary
FRAHER,
Hooker Electrochemical Company
of
the
The
Wentworth
THE
.
of
Treasurer
GINSBERG,
H. E. DODGE, Treasurer.
1943.
turers Bank in February
Trust
President
1,
shareholders of record at the close
of business
jjL
of
October 28, 1949.
on
20,
has been de¬
clared on the Capital
Stock of this
Company, payable December 19, 1949,
and
%
October
to
SALVATORE GIORDANO,
Smelting Co., Limited
Dividend
A
(Canadian)
later he became President,
became head of Manufac¬
v
declared
was
The
enterprises.
meeting
HARRY
A. B.
EDWARD
DIVIDEND NO. 40
utive Vice-President in 1933. Two
a
Regular
a
Con¬
November
record
of
share
per
1949, payable
National
of
payable
1949,
stockholders of record October 18,
DEBENTURE: The regular quarterly
COMPANY
NEW YORK 4, N.
STREET,
25 BROAD
pa
At
Stock
4,
DIVIDEND NOTICES
Hudson
chester Bank of St. Louis as Exec¬
then
October
Quarterly Dividend of Twenty-Five
CONTAINER
stockholders
in 1911. On
18, Sydney
on
worked at
banks in HGt Springs, Ark., and
.Clayton before coming to Man¬
years
On
1949.
dividend of $0.296875
the 4%% Cumulative Con¬
Preferred
Maspeth, N. Y.
to
1949
15,
Montreal,
Oct.
10,
Treasurer
GINSBERG,
Corporation,
to
native of Newcastle,
CITY INVESTING
per
Major changes in the executive
branch
witty
Company.
November
ap¬
October
*
Virginia
formerly
1949.
to
Atkinson, the new General
a
South
23
was
DIVIDEND NOTICES
The
in St.
Vice-President.
Missouri
1949
October
Mr. Giannini aided
in the collection of food, clothing
funds
and
B., joined the bank
na¬
among
1947
since
Manager,
N.
for Italy, Inc.,
graduated from the Univer¬
of
declared on
was
man¬
pointed Vice-President in 1948.
tional director of American Relief
and
Muir has
Mr.
Manager.
director
The decree and medal were
presented to Mr. Giannini in the
December
payable
declared
General Inspector
Naylor
Container
National
CORPORATION
Branch and
later was appointed
years
Co.,
California
regular quarterly
A
Winnipeg
of
ager
returned
He
1928
R.
CORPORATION
the bank's business in Central and
in
Chronicle)
Exec. Office: 5801 Grand Ave.,
Assistant Supervisor of
America.
Financial
associated with J. A,
He
Cents
*
South
The
FEDDERS-CtUIGAN
a
of
NATIONAL
three
for
per
Stock
HARRY
in 1945 General
the
First
en¬
transferred to the bank's New
as
&
Street.
regular quarterly
share was declared on
1949,
all stockhodere of record November
tainer
serving
10c
Corporation,
vertible
years
Harris
NEV.—Jack
become
Hogle
He
branches, in the Inspector's
Winnipeg and at
Montreal. In 1925 he
munity Chest campaign and is an
officer or director of many civic
sity
of
12,
Common
eral Manager and
isatfie paper states that Mr. Hickok
is Chairman of the current Com¬
was
the
Department in
office,
Fourth
Mr.
C. Connett
that, William
charitable
dividend
at Moose
Royal Bank
October
On
The
honor,
General
has
CORPORATION
in Montreal. In
Assistant Gen¬
della
to
RENO,
NATIONAL CONTAINER
Head Office,
was
West
are
DIVIDEND NOTICES
of
Jaw, Sask. Subsequently he gained
experience in a number of Cana¬
dian
117
DIVIDEND NOTICES
a
Bank
England.
London,
came
at
Partners
Manager in 1943.
1935 lie became an
vilian
super¬
branches, and
Assistant
an
offices
With J. A. Hogle & Co.
the
from
up
;will -continue also, however, to
serve
the "First National as an
and
made
was
Association of San Francisco, has
awarded
he
Office,
New Brunswick
and Eastern Ontario
America National Trust & Savings
indicating this, the St.
Louis "Globe-Democrat" of Oct. 1
Executive
visor of Quebec,
con¬
Pine
1924
In
appointed
was
in
Royal Bank.
member
work
to
junior's desk to the highest execu¬
tive post. Born in Scotland, Mr.
Muir
served
his
banking
ap¬
Canada
In
poted
with
the
is
bank's
of the Union and Citizens York
merger
he
1938
Harris
and Gordon G. Brown.
department five years later.
marks the culmination of 38 years
prenticeship with the Commercial
Louis, Mp., to become an Execu¬
tive Vice-President and a director
First National Bank
1946.
Bank of Scotland and at the Head
who
facturers Bank & Trust Co. of St.
Louis.
In
formerly
T.
being continued by a
partnership, Harris & Brown Co.,
Street.
Super¬
Head
to
L.
is
from
the
ROCK, ARK.—The inbusiness
by
Bluff
Mr. Muir's election as President
nounced, relinquish on Jan. 2 the
office of President of the Manu¬
of the
bond
1939.
in June,
the
in
later
in
ducted
Montreal, and was responsible for
the
organization of the bank's
Vice-President in
elected
was
since
Bank
the
of
Department.
served
transferred
was
the
Miller,
entered
Mr.
and
visor's
Van¬
to
first
he
branch
post he held for 11
Dobson has been a
a
was
where
banking field in 1911 tys an Audi¬
tor for the Fidelity Trust Co., is
Canda,
ulars in Times Square.
narked Presi¬
was
in
Bank
been
of
the
of
tional
and
Halifax
1942 and President
and
Bank
the
Charles
He
*
*
*
•
President
been
had
shortly after moving to Halifax,
Nova Scotia, served in
from
Manager,
LITTLE
vestment
1916. Later
49
with
in the Supervisors' De¬
partments and at Head Office. In
1934 has was appointed General
years.
Trust,
Bank
service
43
Now Harris & Brown Co.
the
commis¬
was
the
to
some
couver,
director
Fidelity
elevation
follows
of continuous
branches
of
election
bank
in
served
and
overseas
the
from
he
won
Royal Bank of Canada. He
joined the bank in his native town
leans."
absence
promoted to Captain and
the Military Cross. He re¬
sumed his banking career in 1919,
%
of Sydney,
1914-18,
he
General
The
Hibernia National Bank, New Or¬
The
H.
of
from
an¬
T.
1945.
appointed
was
Chairmanship
years
also
was
since
Dobson's
Mr.
war
Citizens
Jr.,
Macatee,
President
Manager
who has become Chairman of the
Palen
TTust
of directors. They
made Assistant Treas¬
was named Trust Officer and
B.
were
leave
by James Muir, whose
as
Edward
were
urers.
continue
by
active
William
Assistant Vice-President.
F.
will
Jr.,
(1587)
Messrs.
held
now
will
been
CHRONICLE
positions
at the meeting
has
FINANCIAL
&
Vice-Chairman of the Board. The
has been elected Treasurer. Milton
Stegman
COMMERCIAL
October 13, 1949
44
Thursday, October 20, 1949
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(1588)
to
BUSINESS BUZZ
to
and FDIC
old
the
to* 1
10
ratio of prewar years.
•
•
to
up
more
years
bank
total
bring
capital
on
several
and
few
take a
It would
coipe.
billion
(This column is intended to
Behind-the-Scene Interpretations
from the Nation's
.
You
Capital
pretation from the nation's Capital
and may or may
sound, there was
1945-46
that
framed
really go¬
the Congress.
got together and
Act.
ing
of
They
were
reorganize
to
going to modernize it.
going to provide busi¬
systems.
Legislation
thereafter not only would be con¬
sidered
deliberately, thoroughly
and
expertly, but it would be
handled with dispatch.
They
They
were
were
nesslike
4 One
the
of
Legislative
Act
Sen¬
Representatives were
reduced.
A
Senator
not
was
supposed to serve on more than
committees,
Rep¬
more
no
on
a
than
Simultaneously
one;*
the
reor¬
ganizes cut down the number
<ot committees, wiped out ob¬
sel¬
(which
committees
solete
that the
of Congress would not
anybody),
dom hurt
members
so
have to serve on too many com¬
mittees.
,
Then,
two,
House, with the
the
of
members
that
there
would be
enough work for the hiring of
persons who could more or less
study the issues before Congress
and give their members a fill-in
on
the
background
of
issues
about which they would have to
take a
position.
In the upper
chamber, so-called, the Senators
■were explicitly authorized to hire
thought
what
called "administrative
were
to do
•assistants" at $10,000 a year
the
work, book reading, and
leg
general boning up which a Sen¬
ator might need and use profit¬
ably to help with the big mass of
subjects
upon
which he must
decisions.
make
would
House
get
of
either
assistance
avoid dispersion of effort
promote concentration of at¬
tention.
Fewer members would
and
concentrate
heavily
more
upon
fewer
decisions, so of course, it
followed
theoretically
the
de¬
would
cisions
ered and
of
consid¬
more
expert.
Legislative
the
process
Re-
by which the members
the
of
taxing
committees
together
the
cut
and
and
were
by
measure
spending
to
supposed
each
15,
Feb.
cloth,
tax revenue
the
suit
spending
to
match.
Finally, the Congress, ruled the
reorganizers, should get out of
town not later than July 31 each
unless there was a war or
national emergency. There
no
sense
in prolonging the
year,
grave
was
sessions.
It
just
meant
more
and trading with no
consequence of reaching a sound¬
bickering
All
and
the
this
its
made
Congress
own
adopted
"law"
in
the
Legislative Reorganization Act of
•
•
11
^T946,
Leaders
p.m.
will
three
be
*
that
sion
is,
act,
in
6
and thereby foreclosed
careful consideration.
that
notion
The
Laird, Bissell
.■•-•<•
Schroeder
Boulton,
Baker,.
of
\
Joseph Mindell, of Marcus & Co«
Chairman
will
who
the
of
committee*
the
conduct
meetings
two weeks for the Associa¬
during the coming year is
every
tion
Nicholas F.
Novak, of Drysdale &
Company.
-
law
a
fim
mak¬
;
assistance
in
legislation, w o u 1 d
available
ing
"I'll be late tonight,
to
want
to
Congress
cause
what they were doing,
did not,
of course, prove up.
Administrative assistants were
familiar
study
for
compulsory
less
or
more
however, have
often rewarded faithful friends
with the job. In the House many
members
suspected
are
of finding
hire to the pay¬
burdening them¬
some
one
getting
without
with
selves
work. By
information or doing
Congress
giving
chance
a
to
Legislative
the
"experts"
hire
usual
as
to add the ad¬
ways
clerk
ditional
roll
Reorganization
Act
did
not
abolish the national favoritism
phrases and easy so¬
catch
for
country's im¬
the
and
lutions,
disturbing facts.
That any
committee system de¬
promote a balanced
budget could do so in the face of
a
firm decision to spend to the
limit
of
Congress'
willingness,
simply has not worked out. Con¬
gress cannot budget successfully
signed
in
to
the White
of
face
the
Honeybunch—I want to get
with
the
determination
House
and put
spend
to
budget-minded Congressmen on
the spot with pressure groups.
which many commercial and mu¬
successful.
tual
So FHA Titles I and VI of FHA
were
continued in force until next
March,
that
so
lime next year
there
for
an
would
It
develops that the postpone¬
the
of
controversial
more
income"
only in
those pro¬
phases of the "median
housing bill was made
part because a fight on
visions would further delay
want
did not
leaders
another
ad¬
Democratic
Senate
journment.
to
allocate
three of four days to
an
argument in the Senate about
direct government loans to vet¬
direst loans for housing at
educational institutions, and co¬
erans,
be
effort to get
these other innovations enacted.
savings
bankers
believed
beyond the bounds of
legitimate .^competition, allowing
the savings and loans to identify
themselves with ordinary banks.
Whether these
charges were or
stepped
not
were
The Home Loan Bank Board is
probably the
only agency
which
this year,
having requested several
legislation from Con¬
gress, got none of them, yet got
three bills reported out which it
opposed.
There were various propositions
pieces
of
favored
by HLB, among them
bills to provide for retirement of
capital of the Home
government
Loan
Banks, provision of govern¬
ment
money
these
banks,
to $1 billion for
provision of three-
gressmen
to
the
House
reported
was
ap¬
insurance
of
Banking
out
the
bill
a
savings
Sen¬
ate Banking Committee voted to
Instead,
fect.
HLB
savings and loans,
circumstances, to
state-chartered
tual savings banks.
mu¬
>
prepositions
were op¬
*
Little
its
that
Board
happened
approved
is
new
*
noticed
the
in
it doesn't
Lewis.
«
the
was
annual
proposi¬
report
of the
Deposit Insurance Corp.,
resources
part
a
are
Clinchy—The Founda¬
tion for Economic Education, Inc.,
J.
Irvington-on-Hudson,
York:
New
—paper—single copy, no charge;:
10
copies,
$1.00;
lower
rates oru
Your
Security
Social
J.
—
losing
the
maximum
the
the
theory
present
minds
of
ses¬
elder
money-
benefits due you and your
family
—paper—Simon & Schuster, 1230'
Sixth Avenue, New
York 20, N. Y.
—paper—$1.00
Since the ratio of equity capi¬
that
the
regulations
loans
investments
and
in
decreased
years,
the
last
10
due to the war inflation,-
and since the ratio of
risk
assets
naturally
which
a
has
assail
any
at¬
tempt to cut the assessment rate
for
Coplay Cement Mfg.
Glens Falls Portland Cement
in¬
beautiful position
to
Oregon Portland Cement
capital to
creased in the pastwar era, this
offers FDIC
Riverside Cement
Spokane Portland Cement
of the FDIC.
to
Cement Stocks:
LERNER & CO.
Investment
10 Post Office
Securities
Square, Boston 9, Mass.
Telephone HUbb&rd 2-1996
deposit insurance for
Teletype BS 69
years
operative housing.
At least another consideration
in the
postponement, it
plained,
was
HAnover
2-0050
Teletype—NY 1-971
Hill, Thompson & Co., Inc.
was ex¬
Firm Trading Markets
that the "liberals"
NEW YORK S
backing these innovations, want
more
time
as
so
Meanwhile,
a
to
give
better
their
chance.
few Senators
a
FOREIGN SECURITIES
are
ment
expense
cooperative
70 WALL
to allegedly study
housing.
Executive A Underwriting
All Issues
traveling to Sweden at govern¬
Offices
STREET
TeL WHitehall 4-4540
r.ABl MARKS 4 r.O- MC,
Besides
a
Senators
fine,
free
hope
to
trip,
these
bring
back
arguments in favor of
tive
housing
from
a
coopera¬
FOREIGN
where,
at
least
by
Trading Department
120
50 Broad Street
country
reputation,
SECURITIES
SPECIALISTS
___
members, the craziest, most dis¬
K.
avoid
Lasser—what to do now to
of
capital. The report stated
that the capital of the banking
system is made up of two parts.
One part consists cf the banks'
own capital; the other, the capital
from
posed by HLB.
What
finding
is
have the power of a John
has
All three
Committee
hostility, and put them into ef¬
tal
to
Collectivism-
to
Paths
Two
Russell
in
ahead
HLB went
the face of Banking
savings and loan branches, and
under certain
New
cloth—$3.50
Street,
larger quantities.
restrict IILB's power to charter
to allow the
Fund, 330 West 42nd:
York 18, N. Y.—
Century
bank
reducing the assessment rate for
convert
could be studied by the
Brazil—An Expanding Economy
—George Wythe-Royce A. WightHarold M. Midkiff — Twentieth
consideration.
Federal
Corp., and others. None
proved in committee.
new
committee, which had them under
tion
Instead
these
defer
until they
up
Savings and Loan Insurance
asked HLB
regulations
Committee
Banking
eral
Committee
justified, many key Con¬
were
convinced they
The Chairman of the Senate
were.
quarters of a billion for the Fed¬
share
*
*
little more
a
Department!"
cooperatives have been the most
and loan associations. The
ment
Statistical
who,
Senators
having
*
the beautiful
the
on
,
Depute
of
year;
deliberate,
propositions
judgment.
er
one
gad¬
ganization
Act
was
the
socalled
"Legislative Budget," a
3:45
authorities
the President offered
a
legislative agenda so large as
to exceed
the capacities for a
deliberate body to handle by any
stretch of the imagination in any
*
known
Fri¬
Finally,
,
better
Another
get
be
the
of
Exchange,
Weeks & Harden.
jurisdiction at least equivalent to
separate committees.
in
studying the merits of issues put
before him, and by reducing the
number of his committee assign¬
ments,
& Meeds.
with
separately
patience with people who offer
member
the
Thus
Market"
Room
H. Biel, of
Heinz
an¬
technically major committees, be¬
came in fact members of several
studying
was
money
more
"clerk hire" for the
allocated for
or
enlarged
of the
subcommittees
21,
"The
on
Stock
market:
members of
ators and
resentative
device
one
most
the
discussion
the
well-known
members, instead of being
more than one or two
Hence
Rep-
-committee assignments of
major
by
Oct.
in
symposium
Curb
York
of Cus¬
inaugu¬
be
It had to be
amount of business.
So
a
For
Governors'
day,
assign¬
ments, the act did not reduce the
By reducing committee
handled
the
New
lative Budget was
committees to get the work done.
jresentative and Senator. So the
two
bills. The Legis¬
ditched, and
the session was prolonged.
appropriation
committees simply split into sub¬
individual
the
of
Outlook
at
will
Brokers
with
rated
finally completing action on all
other.
of the Association
tomers'
without
October
through
The 1949-1950 Educational Pro¬
gram
near¬
gone
premises of
that too much was ex¬
was
pected
had
Congress
Education Program
lifetime,
a
Reorganization
first
the
The
ly
in
witnessed
have
F
Brokers
Customers
supposed to be a session of Congress as zany as that which is
drawing to a close (or is it?), because Congress passed a law to end
such foolishness and to incorporate the latest professorial doctrines
of
sound
legislative
manage-'^-—
——
organized, erratic session they
agement, in the Legislative Re¬
never
organization Act of 1946.
Some of the bright minds
not coincide with
own views.)
"Chronicle's"
the
WASHINGTON, D. C.—Strange as it may now
re¬
flect the "behind the scene" inter¬
New York 4, N. Y.
AFFILIATE: CARL MARKS & CO. Inc. CHICAGO
_____
BROADWAY
TeL REctor 2-2020
@FedFRASER